33 slides from Johnson Controls International's earnings presentation, Jan 29, 2016
Slide 1: First Quarter Review
First Quarter Review 29 / January / 2016
Slide 2: Important Information
Important Information NO OFFER OR SOLICITATION This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisd
Slide 3: Important Information
Important Information Statement Required by the Irish Takeover Rules The directors of Tyco accept responsibility for the information contained in this communication relating to Tyco and the directors of Tyco and members of their immediate families, related trusts and persons connected with them. To
Slide 4: Forward-Looking Statements / Safe Harbor
Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. In many cases forward-looking statements are identified by words, and variations of words, such as "anticipate", "estimate", "believe", “commit”, “confident”, "continue", "could", "intend", "m
Slide 5: Compelling Strategic Rationale
Compelling Strategic Rationale Global, industrial leader with in revenue SMARTER uniquely positioned to provide PLACES portfolio of building and Smart Homes energy solutions Smart Buildings Transaction combines innovation Smart Cities pipelines for devices, controls, sensors, data analytics
Slide 6: Value Creation for Tyco Shareholders
Value Creation for Tyco Shareholders Tyco Shareholders Tyco Shareholders Have Post Merger and Spin Have Today Tyco + JCI Adient 100% ownership of Tyco 1 Premium of 13% to the 30 day volume 3 Own 44% of Adient equity weighted average share price exchange ratio 2 Own 44% of combined company equit
Slide 7: A Solid Start To The Fiscal Year
9% A Solid Start To The Fiscal Year Demonstrating Tyco’s Ability To Perform In An Uncertain Environment Better than expected results across all segments Solid quarter of operational execution Continued focus on productivity and “self-help” initiatives Strategic portfolio enhancements 7
Slide 8: Mixed Macro-Economic Environment
Mixed Macro-Economic Environment North America Commercial Industrial Institutional Retail Asia POG Commercial POG Hospitality Retail Infrastructure Latin America Europe Commercial Pacific Retail Govt / Institutional Commercial Residential POG Commercial Industrial Industrial
Slide 9: Remixing The Portfolio
Remixing The Portfolio Signed definitive $150M investment in $175M acquisition agreement to sell strategic UAE JV Builds upon existing Retail Australia Fire IS&S partnership platform (inventory visibility & loss prevention) Underperforming Expands IS&S business with limited capabilities
Slide 10: Q1 2016 Results – Financial Overview
Q1 2016 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco ordinary shareholders) ($ in millions, except per-share amounts) Q1FY16 Q1FY15 Change Revenue $2,376 $2,478 (4%) Organic Growth* flat 3% Segment Operating Income before special items* $306 $327 (6%) Segment
Slide 11: First Quarter Highlights
First Quarter Highlights Revenue of $2.4 billion declined 4% year over year on a reported basis, including 6% headwind from foreign currency exchange rates • Acquisitions contributed 3%, partially offset by 1% decline related to a divestiture • Organic revenue* was flat vs 1% to 3% decline expected
Slide 12: First Quarter Highlights Continued
First Quarter Highlights Continued Orders growth of 3%, excluding impact of foreign currency and divestiture • Products +5%, Service +3% and Integrated Solutions +1% YoY Total Orders Growth 7% 6% 5% 4% 3% 3% 3% 3% 1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Backlog of $4.56 billion incr
Slide 13: First Quarter – NA Integrated Solutions & Services
First Quarter – NA Integrated Solutions & Services Organic revenue* increased 2% ($ in millions) Q1FY16 Q1FY15 Change • Service increased 1% • Integrated solutions increased 2% Revenue $953 $951 0% Foreign currency rates negatively Operating Income* $132 $131 1% impacted revenues by two percentage p
Slide 14: First Quarter – ROW Integrated Solutions & Services
First Quarter – ROW Integrated Solutions & Services Organic revenue* decreased 1% ($ in millions) Q1FY16 Q1FY15 Change • Service increased 1% Revenue $812 $916 (11%) • Integrated solutions decreased 4% Operating Income* $77 $91 (15%) Foreign currency exchange rates Operating Margin* 9.5% 9.9% (40bps
Slide 15: First Quarter – Global Products
First Quarter – Global Products ($ in millions) Organic revenue* decreased 1% Q1FY16 Q1FY15 Change • Driven by decline in Life Safety Revenue $611 $611 0% due to tough compare with prior year Operating Income* $97 $105 (8%) Operating Margin* 15.9% 17.2% (130bps) Acquisition growth of 6% was offset b
Slide 16: Other Items
Other Items Corporate expense before special items* was $52 million in the quarter • Outlook: Expect Q2 corporate expense before special items to be similar Tax rate* excluding special items was 17.2% for the quarter • Outlook: Expect Q2 FY16 tax rate before special items to be approximately 17% Adj
Slide 17: Guidance Q2 FY 2016
Guidance Q2 FY 2016 Q2 2016 EPS Bridge Outlook ~$2.3 billion $0.50 $0.44- Revenue ~4% decline YoY $0.46 $0.01 on reported basis $0.03 $0.46 ($0.04) Organic Change Relatively flat ($0.03) ($0.02) ~$120 million FX (5%) headwind Net M&A Activity ~$20 million benefit Incl. Divestiture ~13.7% – 13.9% Seg
Slide 18: Appendix
Appendix
Slide 19: 2016 Full Year Foreign Exchange Impact
2016 Full Year Foreign Exchange Impact Original FX Current FX Guidance Guidance Q4’15 Earnings Call Q1’16 Earnings Call 2016 Revenue ($310M) ($480M) Headwind (~3%) (~5%) Top Foreign Currency Exposures 2016 EPS ($0.07) ($0.12) Original FX Current FX Headwind Rates* Rates* Variance EUR/USD 1.09 1.08 (
Slide 20: FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact
FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact Q1FY15 Q2FY15 Q3FY15 Q4FY15 YTD Actual Actual Prelim Prelim FY15 Revenue NA IS&S 951 944 972 1,012 3,879 ROW IS&S 916 847 842 827 3,432 Global Products 611 639 675 666 2,591 Total Revenue 2,478 2,430 2,489 2,505 9,902 Operat
Slide 21: JCI + Tyco Proforma Share Reconciliation (Approximation)
JCI + Tyco Proforma Share Reconciliation (Approximation) (in millions, except stock split ratio) Tyco diluted shares 430 Reverse stock split x 0.955 Tyco post-stock split diluted shares 411 A JCI diluted shares 653 Less: expected share repurchase ($500M) (13) Less: $3.9B cash to JCI shareholders (11
Slide 22: Consolidated Statements of Operations
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) Quarters Ended December 25, December 26, 2015 2014 Revenue from product sales $ 1,408 $ 1,488 Service revenue 968 990 Net revenue 2,376 2,478 Cost of product sales 962 1,022 Cost of services
Slide 23: Results of Segments
TYCO INTERNATIONAL PLC RESULTS OF SEGMENTS (in millions) (Unaudited) Quarters Ended December 25, December 26, 2015 2014 Net Revenue NA Integrated Solutions & Services $ 953 $ 951 ROW Integrated Solutions & Services 812 916 Global Products 611 611 Total Net Revenue $ 2,376 $ 2,478 Operating Income an
Slide 24: Consolidated Balance Sheets
TYCO INTERNATIONAL PLC CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) December 25, 2015 September 25, 2015 Assets Current Assets: Cash and cash equivalents $ 301 $ 1,401 Accounts receivable, net 1,719 1,732 Inventories 647 624 Prepaid expenses and other current assets 853 754 Deferred income
Slide 25: Consolidated Statements of Cash Flows
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) For the Three Months Ended December 25, December 26, 2015 2014 Cash Flows From Operating Activities: Net income attributable to Tyco ordinary shareholders $ 76 $ 162 Noncontrolling interest in subsidiaries net inc
Slide 26: Free Cash Flow Reconciliation
Reconciliation to "Free Cash Flow": Net cash provided by operating activities $ 189 $ 95 Capital expenditures, net (68) (65) Acquisition of dealer generated customer accounts and bulk account purchases (4) (4) Payment of contingent consideration — (23) Free Cash Flow $ 117 $ 3 Reconciliation to "Adj
Slide 27: Organic Growth Reconciliation - Revenue
TYCO INTERNATIONAL PLC ORGANIC GROWTH RECONCILIATION - REVENUE (in millions) (Unaudited) Quarter Ended December 25, 2015 Base Year Adjustments Adjusted Net Revenue for the Fiscal Net Revenue for the Quarter Ended Divestitures / 2015 Base Quarter Ended (1) December 26, 2014 Other Revenue Foreign Curr
Slide 28: Earnings Per Share Summary
Earnings Per Share Summary (Unaudited) Quarter Ended Quarter Ended December 25, 2015 December 26, 2014 Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $ 0.17 $ 0.38 expense / (benefit) Restructuring and repositioning reversals (FY15 and prior) (0.01) — (Gains) / losse
Slide 29: Quarter Ended December 25, 2015 Reconciliation
Tyco International plc For the Quarter Ended December 25, 2015 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $953 $8
Slide 30: Quarter Ended December 26, 2014 Reconciliation
Tyco International plc For the Quarter Ended December 26, 2014 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $951 $9
Slide 31: Non-GAAP Measures
Non-GAAP Measures Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income and segment operating income, in each case “before special items,” are non-GAAP measures and should not be considered replac
Slide 32: Non-GAAP Measures Continued
Non-GAAP Measures Continued The limitation associated with using these cash flow metrics is that they adjust for cash items that are ultimately within management's and the Board of Directors' discretion to direct and therefore may imply that there is less or more cash that is available for the compa
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