Johnson Controls International plc · NYSE:JCI
Johnson Controls International — Q3 2012 Earnings Presentation
14 slides from Johnson Controls International's earnings presentation, Jul 19, 2012
Slide 1: Quarterly update FY 2012 third quarter
Quarterly update FY 2012 third quarter July 19, 2012
Slide 2: Agenda
Agenda Introduction Glen Ponczak, Vice President, Global Investor Relations Overview Steve Roell, Chairman and Chief Executive Officer Business results and financial review Bruce McDonald, Executive Vice President and Chief Financial Officer Q&A FORWARD-LOOKING STATEMENT Johnson Controls, Inc.
Slide 3: 2012 third quarter
2012 third quarter* Sales: $10.6 billion 2012 third quarter vs. $10.4 billion in Q3 2011 Challenging macro environment, weak foreign currency Segment income: $615 million Revenue growth less than vs. $541 million in Q3 2011 expected - Negative foreign exchange Net income: $441 million impact
Slide 4: Challenging macro environment
Challenging macro environment North America auto production up 27% in Q3, but expected to be up just 4% in Q4 European automotive industry production lower than expected -- down 5% and weakening Non-residential building markets not recovering – N.A. institutional market: declines in education
Slide 5: 2012 third quarter Positives
2012 third quarter Positives Despite market challenges, market share gain and significant profitability improvements in Building Efficiency – Segment income up 28% • Double-digit increases in all five segments – Segment margin up 160 basis points Good opportunities in Asia for building and autom
Slide 6: Taking action to reflect market realities and to improve profitability
Taking action to reflect market realities and to improve profitability Restructuring Revised Q4 outlook – Q3: $52 million 0 – 5% year-over-year underlying • Automotive ($11M) earnings growth Reflects softness in key markets • Building Efficiency ($41M) ─ Continuing battery trends: soft – Addit
Slide 7: Our mid- to long-term strategies and outlook are intact
Despite short-term challenges and disruptions Our mid- to long-term strategies and outlook are intact Strong market position in SLI batteries; ability to drive higher margins through vertical integration Investments in AGM battery technology to support customer demand for start- stop vehicles
Slide 8: 2012 third quarter Building Efficiency
2012 third quarter Building Efficiency 2012 2011 Commercial backlog Net sales $3.8B $3.9B (2%) (at June 30, 2012) Revenues up 1%, excluding foreign currency Record $5.3B, up 7% (ex. currency) Higher revenues in Asia, GWS Europe, Latin America lower Residential up 24% Segment income $264M $
Slide 9: 2012 third quarter Power Solutions
2012 third quarter Power Solutions 2012 2011 Net sales $1.3B $1.3B (3%) Revenues up 2% excluding foreign currency Shipments up 2% – OE up 4%; aftermarket up 2% Demand lower than expected – Overall weakness in N.A. automotive aftermarket Segment income $149M $163M (9%) Higher cost of purchasi
Slide 10: 2012 third quarter Automotive Experience
2012 third quarter Automotive Experience 2012 2011 Return on sales by Net sales $5.5B $5.1B 7% geography* 31% increase in North America vs. 27% higher N. America: industry production 6.6% (vs. 3.8% in 2011) – 2011 quarter impacted by Japanese tsunami Europe: Europe revenues flat (excluding c
Slide 11: Third quarter 2012 Financial highlights
Third quarter 2012 Financial highlights % 2012 2011* 2011 (in millions) (reported) (excluding items) change (reported) Sales $10,581 $10,364 2% $10,364 Gross profit 1,537 1,550 (1%) 1,550 % of sales 14.5% 15.0% 15.0% SG&A expenses 992 1,065 (7%) 1,094 Equity income 70 56 25% 56 Segment income $615 $
Slide 12: Third quarter 2012 Financial highlights
Third quarter 2012 Financial highlights 2012* 2011* (excluding (excluding 2012 2011 (in millions, except earnings per share) items) items) (reported) (reported) Segment income $615 $541 $615 $512 Restructuring costs - - 52 - Financing charges - net 59 43 59 43 Income before taxes 556 498 504 469 Inc
Slide 13: 2012 third quarter Balance sheet
2012 third quarter Balance sheet Cash provided by operations of $619 million Increased capital spending to $447 million, 22% higher than 2011 60 bps improvement in trade working capital as a percentage of sales (6.7% in Q3 2012 vs. 7.3% in 2011) Continue to focus on improvements in trade wor
Slide 14: Adjusting to changes in market conditions
Adjusting to changes in market conditions Focus Right-size headcount and underlying cost structure Divestment of underperforming/non-core businesses Footprint changes in certain geographies Consolidation of operations Improve profitability FY 2013 analyst meeting New York December / Ja