25 slides from Johnson Controls International's earnings presentation, Nov 8, 2016
Slide 1: Quarterly Update FY16 Fourth Quarter
Quarterly Update FY16 Fourth Quarter November 8, 2016
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Johnson Controls International plc Cautionary Statement Regarding Forward-Looking Statements Johnson Controls International plc has made statements in this communication that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statemen
Slide 3: Non GAAP Financial Information
Non GAAP Financial Information This presentation contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include mark-to-market for pension and postretirement plans/settlement losses, transaction/integration/separation costs,
Slide 4: Agenda
Agenda Introduction 1 Antonella Franzen, Vice President, Investor Relations FY16 commitments & fourth quarter highlights 2 Alex Molinaroli, Chairman and Chief Executive Officer Merger and integration update 3 George Oliver, President and Chief Operating Officer Business results and financial review
Slide 5: Delivering on our FY16 Commitments
Second Quarter 2015 Financial Highlights (continuing operations) Delivering on our FY16 Commitments Major portfolio transformation to multi-industrial complete Johnson Controls Hitachi joint venture has exceeded expectations Tyco merger closed September 2nd and integration is underway Adient
Slide 6: FY16 Fourth Quarter Financial Highlights: EPS vs. Guidance
Second Quarter 2015 FY16 Fourth Quarter Financial Highlights (continuing operations) Diluted EPS from Continuing Operations vs. Guidance Q4 FY16 Full Year FY16 FY16 Guidance* $1.17 - $1.20 $3.95 - $3.98 Adjusted EPS* $1.21 $3.98 YoY Increase +16% +16% *Non-GAAP, excludes Tyco results as well as tran
Slide 7: FY16 Fourth Quarter Highlights
FY16 Fourth Quarter Highlights* Organic growth of 4% (ex. Automotive Experience) Building Efficiency sales up 2% (ex. FX and M&A) Power Solutions sales up 8% (ex. FX and Lead) Hitachi joint venture profitability and integration continuing to exceed expectations Strong order momentum (order
Slide 8: FY16 Fourth Quarter Earnings from Continuing Operations
FY16 Fourth Quarter Earnings from Continuing Operations* NET SALES DILUTED EPS $1.21 $9.4 B $8.7 B +7% $1.04 +16% Level Ex. FX and M&A FY16 Q4 FY15 Q4 FY16 Q4 FY15 Q4 SEGMENT EBIT $1,085 M Segment EBIT margin $939 M +16% +90 bps *Year 3 run rate synergies / productivity are estimates of future amoun
Slide 9: Integration underway: $1+ billion in cost savings
Integration underway Committed to achieving $1+ billion in cost savings Executing our “Day One” plan Early signs of traction on cost synergy plans Productivity Plus Deal Synergies = $1B+ Opportunity Johnson Controls Tyco Deal Synergies Productivity ~$300M* Productivity ~$100M* ~$650M* ~$1B+ Ma
Slide 10: Organized Around Strategic Platforms
Organized Around 2 Strategic Platforms Buildings Power FY16 Sales: $23B FY16 Sales: $7B Building Tyco Efficiency ~$10B ~$13B Conventional AGM (Start-Stop) Lead-Acid Lithium-Ion Energy Storage *Year 3 run rate synergies / productivity are estimates of future amounts 10 Johnson Controls, plc. — Novemb
Slide 11: Building Efficiency: Continued order momentum
Building Efficiency* Continued order momentum NET SALES Third party sales (ex. FX and M&A) Systems and Service NA level $3.6 B +25% Products NA +3% Asia +8% $2.9 B Orders secured +6% (ex. FX and M&A) +2% Systems and Service NA +6% Products NA +7% Ex. FX and M&A Asia +7% Backlog $4.
Slide 12: Tyco
Tyco* NET SALES Represents September results $828 M Includes $21M incremental recurring purchase accounting amortization SEGMENT EBIT Conforms to Johnson Controls accounting policies $86 M Solid momentum entering FY17 * Non-GAAP excludes transaction / integration / separation costs and other
Slide 13: Power Solutions: Higher volumes and significant margin expansion
Power Solutions* Higher volumes and significant margin expansion NET SALES Higher volumes in all regions $1.8 B $1.7 B Global shipments of start-stop +30% +7% China +136% Americas +87% EMEA +3% +8% Ex. FX & lead impact Growth in OE (+2%) and aftermarket (+9%) shipments FY16 Q4 FY15 Q4 SE
Slide 14: Automotive Experience: Strong profitability
Automotive Experience* Strong profitability NET SALES Growth in Asia offset by lower North America $4.2 B and Europe volumes $3.9 B -5% China sales (mostly non-consolidated) +26% to $2.9 billion (+31% ex. FX) FY16 Q4 industry light vehicle production North America +2% Europe -2% FY16 Q4 FY
Slide 15: FY16 Fourth Quarter Financial Highlights
Second Quarter 2015 FY16 Fourth Quarter Financial Highlights (continuing operations) Financial Highlights (continuing operations) % 2016 2015 (in millions) 2016 * 2015 * Change (reported) (reported) Sales $9,390 $8,749 +7% $10,198 $8,749 Gross profit 1,927 1,715 +12% 2,065 1,559 % of sales 20.5% 19.
Slide 16: FY16 Fourth Quarter Financial Highlights
Second Quarter 2015 FY16 Fourth Quarter Financial Highlights (continuing operations) Financial Highlights (continuing operations) 2016 2015 (in millions, except earnings per share) 2016 * 2015 * (reported) (reported) EBIT $1,085 $939 $295 $628 Restructuring and impairment costs - - 289 397 Financing
Slide 17: Balance Sheet and Cash Flow Highlights
Second Quarter 2015 Balance Sheet Financial and Cash Highlights Flow operations) (continuing Net debt to capitalization of 39.4% at 9/30/16 Assumed Tyco debt of $2.2 billion (weighted average interest rate of 3.7%) Tyco debt issuance of $4.0 billion (interest rate of 2.3%) Adient debt issuan
Slide 18: Pro Forma Net Debt
Pro Forma Net Debt $16.4 ($3.5) ($0.7) ($1.5) $10.7 Gross Debt - Adient Debt Cash Cash in Pro Forma Net 9/30/16 Escrow* Debt * $1.5 billion Adient distribution received in fourth quarter; $1.5 billion received from escrow in October 2016 18 Johnson Controls, plc. — November 8, 2016
Slide 19: FY17 Financial Matters of Interest
Second Quarter 2015 FY17 Matters Financial of Interest Highlights (continuing operations) Adient to be reflected as discontinued operation beginning first quarter FY17 Buildings reportable segment change Corporate reported separately Finalize purchase accounting related to Tyco merger Spec
Slide 20: Analyst Day in New York December 5th
Analyst Day in New York Mandarin Oriental Hotel December 5th 20 Johnson Controls, plc. - November 8, 2016
Slide 21: Appendix
ine fc oe ek Johnton Wi Controls
Slide 22: Fourth Quarter Special Items (Continuing Operations)
Second Quarter 2015 Fourth Quarter Financial Special Highlights Items (Continuing (continuing Operations) operations) In millions, except EPS impact numbers Pre‐tax Income Tax (Expense) NCI (Expense) After‐tax Income 2016 (Expense) Benefit Benefit (Expense) EPS Impact Transaction, Integration & Sepa
Slide 23: Free Cash Flow (continuing operations)
Second Quarter 2015 Free CashHighlights Financial Flow* (continuing operations) Q3 YTD Q4 FISCAL YEAR FY16 FY15 FY16 FY15 FY16 FY15 Cash provided by operating activities $ 0.7 $ 0.9 $ 1.1 $ 0.7 $ 1.8 $ 1.6 Capital expenditures (0.8) (0.8) (0.4) (0.3) (1.2) (1.1) Reported free cash flow (0.1) ‐ 0.7 0
Slide 24: FY16 Restructuring and Impairment Costs
Second Quarter 2015 Fourth Quarter Financial FY16(continuing Highlights Restructuring and Impairment Costs operations) In millions Q4 Restructuring Business Unit Charge Cash Non‐cash Total Corporate $ 50 $ 43 $ 7 $ 50 Automotive Experience 88 42 46 88 Building Efficiency/Tyco 85 61 24 85 Power Solut
Slide 25: johnsoncontrols.com/investors
johnsoncontrols.com/investors @JCI_IR