Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Q4 2023 Earnings Presentation
31 slides from Johnson Controls International's earnings presentation, Dec 12, 2023
Slide 1: Fiscal Q4 2023 Earnings Conference Call
FISCAL Q4 2023 Earnings Conference Call December 12, 2023
Slide 2: Forward-Looking and Cautionary Statements/Non-GAAP Financial Information
FORWARD-LOOKING AND CAUTIONARY STATEMENTS/NON-GAAP FINANCIAL INFORMATION 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 ris
Slide 3: Strong Sales and Order Growth, Margin Expansion in FY23
Fiscal Q4 Highlights and Full Year Summary Strong Sales and Order Growth, Margin Expansion in FY23 Fiscal Q4 Full Year +2% +8% ▪ Fiscal Q4 impacted by cyber incident; FY results strong Organic Sales Growth* Organic Sales Growth* with 8% organic sales growth* and 80 basis points margin $6.9B $26.8B e
Slide 4: A Leader in Building Solutions
Company Overview A Leader in Building Solutions ~$400B+ OPPORTUNITY1 Building Solutions HVAC & Controls ENTERPRISE Delivering • Drive Energy Efficiency Customer • Achieve Sustainability Service SOFTWARE Outcomes • Optimize Building Systems & Equipment SOLUTIONS • Direct Channel Improve Real Estate F
Slide 5: Tailoring Solutions for Long-Term Growth
Industry Leading Service Model Tailoring Solutions for Long-Term Growth Service Orders (Organic YoY % Chg) Fiscal Q4 Full Year Controls Security + 7% +11% HVAC Fire Service Revenue (Organic* YoY % Chg) Fiscal Q4 Full Year ~Trusted Long-Term Partner Tailored Building Solutions + 9% +10% ▪ ~250K sites
Slide 6: Accelerating Our Strategy
Value Creation Framework Accelerating Our Strategy Positioned to Enhanced Products, Services, and Driving margin capture secular Solutions through expansion and Disciplined trends across the adoption of executing on our capital allocation sustainable and OpenBlue productivity plan healthy buildings
Slide 7: Sales Growth Continues Despite Near-Term Challenges
Fiscal Q4 Results Sales Growth Continues Despite Near-Term Challenges Total JCI Sales ($ in Millions) $203 $56 +2% ($18) Organic Sales ($60) $6,906 Growth* $6,725 Sales Cyber Sales Growth M&A&D FX Q4 FY22 Incident1 Q4 FY23 Total JCI Adj. Segment EBITA/Margin* ($ in Millions) ▪ Positive price/cost: ~
Slide 8: Delivering Productivity Initiatives
Fiscal Q4 Results Delivering Productivity Initiatives Adjusted EPS Bridge* (Continuing Operations) +6% YoY Growth Operations $0.10 NCI $0.03 Shares $0.01 FX ($0.01) Cyber ($0.04) Incident1 *Adjusted EPS from continuing operations, excluding special items, is a non-GAAP measure. See footnotes for rec
Slide 9: Global Products Performance
Fiscal Q4 Results Global Products Performance Global Products Sales ($ in Millions) ▪ Price +5% / Volume (5%) / Cyber incident1 (2%) -2% $31 Organic Sales ▪ Commercial HVAC2 +HSD $2,436 Decline* ▪ Residential HVAC (high-teens); NA Residential ($50) ($31) $2,386 (>30%) ▪ Fire and Security (LSD) ▪ Ind
Slide 10: Broad-Based Global Reach
Fiscal Q4 Results Broad-Based Global Reach % of Organic Sales Growth* % FY23 North America EMEALA Asia Pac Global Products Consolidated JCI Sales Applied1 40% +high-teens +LSD (HSD) +MSD2 +HSD Light Commercial3 6% +low-teens +low-teens Commercial HVAC 46% +HSD +HSD NA Residential 3% (>30%) (>30%) RO
Slide 11: Building Solutions Performance
Fiscal Q4 Results Building Solutions Performance Building Solutions Orders - Organic % Growth Building Solutions Backlog ($ in Billions) Service Install 9% 8% 8% 9% +9% +9% YoY Organic Growth $11.1 $11.3 $11.7 $12.0 $12.1 YoY Organic Growth $2.4 $2.2 5% $2.0 $2.3 $2.3 Service +7% Service +12% $9.1 $
Slide 12: Building Solutions Performance by Segment
Fiscal Q4 Results Building Solutions Performance by Segment Adj. Segment Orders Orders / Backlog Sales Sales Adj. Segment EBITA/Margin* Organic % Growth Comments Organic % YoY* Comments EBITA Comments Change YoY +8% ▪ Orders +8% ▪ Service +7% +70bps ▪ Positive price/cost: ~$60M 13% ̵ Service +2% $2.
Slide 13: Disciplined Capital Allocation
Balance Sheet and Free Cash Flow Disciplined Capital Allocation Capital Structure ($ millions) Q4 FY22 Q3 FY23 Q4 FY23 Short-term debt and current portion $1,534 $1,267 $1,030 Debt and liquidity Net Debt / EBITDA* of long-term debt ▪ 92% fixed rate debt Long-term debt $7,426 $8,497 $7,818 ▪ 3.4% wei
Slide 14: Introducing Q1 and Full Year Guidance
Outlook Summary Introducing Q1 and Full Year Guidance Q1’24 FY’24 FY’24 Comments ▪ Normalized seasonality & cyber impact in Q1 Organic Revenue* ~Flat Up ~MSD ▪ GP stabilize 2H ▪ Strong backlog conversion ▪ Service HSD+ ▪ Price/cost remain positive Segment EBITA Margin* ~13.0% Up ~25bps+ ▪ Mix improv
Slide 15: Appendix
City graphic Appendix
Slide 16: Strong Sales Growth and Margin Expansion in FY23
Fiscal 2023 Results Strong Sales Growth and Margin Expansion in FY23 Total JCI Sales - Organic % Growth Total JCI Adj. Segment EBITA/Margin* ($ in Millions) ($ in Millions) $1,997 $113 15.0% +8% $4,028 +80bps ($616) $26,793 YoY Organic Growth 14.2% Adj. EBITA Margin* Expansion $25,299 $3,596 Service
Slide 17: Leading by Example
Notable Awards Leading by Example PERFORMANCE AWARDS & RECOGNITION ▪ In 2022, achieved 42% Reduction in Scope 1 and 2 ▪ Our best-in-class performance is recognized by GHG Emissions vs. 2017 baseline. Over 75% of our Corporate Knights by being named to: 2030 target of 55% emissions reduction. ̵ 2023
Slide 18: Additional FY 2024 Guidance Items
Fiscal Q4 2023 Additional FY 2024 Guidance Items FY24 Adjusted corporate expense* ~$360M Amortization expense ~$510M NFC ~$420M Tax rate ~13.75% NCI ~$215M Shares ~675M 18 *Non-GAAP measure. Non-GAAP excludes special items.
Slide 19: Consolidated Financial Results (Continuing Operations)
Fiscal Q4 2023 Consolidated Financial Results (Continuing Operations) Q4 FY22 Q4 FY23 Q4 FY22* Q4 FY23* % Change ($ in Millions, except earnings per share) GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,725 $6,906 $6,725 $6,906 3% Gross profit $2,295 $2,208 $2,269 $2,248 -1% (% of sales) 34.1% 32.0%
Slide 20: Special Items (Continuing Operations)
Fiscal Q4 2023 Special Items (Continuing Operations) ($ in Millions, except EPS) Pre-tax income Tax (Expense) NCI (Expense) After-tax/NCI Q4 FY23 EPS impact (Expense) benefit income income (Expense) Mark-to-market adjustments $(108) $28 - $(80) $(0.12) Restructuring and impairment costs $(220) $24 $
Slide 21: IR Contacts
IR Contacts Jim Lucas Vice President, Investor Relations jim.lucas@jci.com Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com www.johnsoncontrols.com © 2023 Johnson Controls. All rights reserved.
Slide 22: Condensed Consolidated Statements of Income, Three Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended September 30, 2023 2022 Net sales $ 6,906 $ 6,725 Cost of sales 4,698 4,430 Gross profit 2,208 2,295 Selling, general and administrative expenses (1,476)
Slide 23: Condensed Consolidated Statements of Income, Twelve Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Twelve Months Ended September 30, 2023 2022 Net sales $ 26,793 $ 25,299 Cost of sales 17,822 16,956 Gross profit 8,971 8,343 Selling, general and administrative expenses (6,
Slide 24: Condensed Consolidated Statements of Financial Position
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2023 2022 ASSETS Cash and cash equivalents $ 835 $ 2,031 Accounts receivable - net 6,006 5,727 Inventories 2,776 2,665 Other current assets 1,120 1,262 Curr
Slide 25: Condensed Consolidated Statements of Cash Flows, Three Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended September 30, 2023 2022 Operating Activities Net income attributable to JCI $ 549 $ 761 Income attributable to noncontrolling interests 32 48 Net income 581 809 Adjustments
Slide 26: Condensed Consolidated Statements of Cash Flows, Twelve Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Twelve Months Ended September 30, 2023 2022 Operating Activities Net income attributable to JCI $ 1,849 $ 1,532 Income attributable to noncontrolling interests 184 191 Net income 2,033 1,723 A
Slide 27: Footnotes: Financial Summary
FOOTNOTES 1. Financial Summary The Company evaluates the performance of its business units primarily on segment earnings before interest, taxes and amortization (EBITA), which represents income before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset a
Slide 28: Footnotes: Adjusted Corporate Expenses and Other Items
(2) Adjusted Corporate expenses for the three and twelve months ended September 30, 2023 excludes certain transaction/separation costs of $21 million and $122 million, respectively. Adjusted Corporate expenses for the three months ended September 30, 2022 excludes $33 million of an environmental rem
Slide 29: Share Count and Organic Growth Reconciliation
The following table reconciles the denominators used to calculate basic and diluted earnings per share for JCI plc (in millions; unaudited): Three Months Ended Twelve Months Ended September 30, September 30, 2023 2022 2023 2022 Weighted average shares outstanding for JCI plc Basic weighted average s
Slide 30: Install Revenue Organic Growth Reconciliation
The components of the change in total install revenue for the three months ended September 30, 2023 versus the three months ended September 30, 2022, including organic growth, are shown below (unaudited): Install Revenue Adjusted Base Install Install Revenue for the Revenue for the for the Three Mon
Slide 31: Debt Ratios
5. Debt Ratios The Company's earnings presentation provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. We also present below net debt to income before income taxes. The Company believes these ratios are useful to understanding the Company's
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