Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q4 2020 Earnings Presentation

36 slides from Johnson Controls International's earnings presentation, Nov 3, 2020

  1. Slide 1: Fiscal 2020 Fourth Quarter Results

    Fiscal 2020 If you can read this Click If you can read this Click Fourth Quarter on the icon to choose a picture or Reset the slide. on the icon to choose a picture or Reset the slide. Results To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the T

  2. Slide 2: Forward Looking/Cautionary Statements & Non-GAAP Financial Information

    Forward Looking/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 risks

  3. Slide 3: Remaining Focused On Execution & Positioning For Recovery

    Remaining Focused On Execution & Positioning For Recovery 2020 YEAR IN REVIEW  Year of unprecedented challenges and end market volatility; strong overall financial performance – FY20 EPS* +14%  Stayed focused on: - Our Employees & Communities… - Our Customers & Suppliers… - Improving Fundamentals…

  4. Slide 4: Q4 FY20 Financial Summary (continuing operations)

    Q4 FY20 Financial Summary* (continuing operations) NET SALES EPS $6,274M $0.78 $0.76 $5,954M  (5%) Reported (3%)  (6%)  Reported Organic Q4 FY19 Q4 FY20 Q4 FY19 Q4 FY20 EBIT & MARGIN FCF $812M $1.9B $770M $1.7B  $1.0B $1.0B (5%) Reported 12.9% 12.9% ($0.2B)  (6%) Organic Q4 FY19 Q4 FY20 Q4 FY19

  5. Slide 5: Trailing 3-month Field Orders Sequentially Improved

    Trailing 3-month Field Orders* Sequentially Improved 15% 10% 5% 0% -5% -10% -15% -20%  Backlog of $9.2B +2% YoY organic *Excludes Global Products equipment distribution orders 5 Johnson Controls International plc — November 3, 2020

  6. Slide 6: Q4 FY20 EPS Bridge (continuing operations)

    Q4 FY20 EPS Bridge* (continuing operations) $0.78 $0.76 $0.05 $0.02 $0.04 ($0.02) ($0.11) Volume Mix Price/cost + Actions + Q4 FY19 OPERATIONS, NET SYNERGIES / NFC SHARE OTHER Q4 FY20 ACTUAL OF MITIGATING PRODUCTIVITY COUNT ACTUAL ACTIONS *Non-GAAP EPS from continuing operations, excluding special i

  7. Slide 7: Q4 FY20 Segment EBITA Margin Bridge

    Q4 FY20 Segment EBITA Margin Bridge* (20)bps Organic 15.8% +40bps 15.6% (10bps) (50bps) Q4 FY19 Operations, Net of Mitigating Synergies / Productivity Other Q4 FY20 Actions  Broad based volume declines related to COVID-19; price positive with mix a headwind  Gross margin +70bps vs. prior year; dis

  8. Slide 8: Q4 Segment Results

    Q4 Segment Results* Sales EBITA Margin Comments Organic % yoy Change yoy ($M)  Service (3%) / Install (9%) $2,243 15.4%  Significant improvement in service; recurring revenue North America slightly up YoY, labor and materials improved seq. (6%) +50bps  Orders (9%); Backlog $5.9B, Flat YoY  Servi

  9. Slide 9: Q4 Segment End Market Performance

    Q4 Segment End Market Performance* % of Organic Sales % FY20 North Global Consolidated Change Sales America EMEALA APAC Products JCI Applied1 31% (MSD) (HSD) (MSD) (HSD)3 (MSD) Light Commercial 9% (low-teens) (low-teens) Commercial HVAC 40% (HSD) NA Residential 4% +>30% +>30% ROW Residential 8% +LSD

  10. Slide 10: Corporate Expense (continuing operations)

    Corporate Expense* (continuing operations)  Mitigating cost actions 400 250 $376  Realization of cost synergies and productivity 200 350 savings  Ongoing cost reductions 150 300 related to Power Solutions $269 sale $104 100 $93 $82 $90 $89  Expect FY21 Corporate $81 expense to be in the range $5

  11. Slide 11: Balance Sheet

    Balance Sheet Capital Structure Q4 FY19 Q3 FY20 Q4 FY20 Short-term debt and $511 $2,423 $293 current portion of long-term debt Long-term debt 6,708 5,671 7,526 Total debt 7,219 8,094 7,819 Less: cash and cash 2,805 2,342 1,951 equivalents Net debt* $4,414 $5,752 $5,868 Net debt / EBITDA* 1.3x 1.8x 1

  12. Slide 12: Free Cash Flow (continuing operations)

    Free Cash Flow* (continuing operations) Q4 Q4 (in $ billions) FY19 FY20 FY19 FY20  Q4 adjusted FCF from continuing Cash provided by operations of ~$1.0 billion $1.0 $1.0 $1.7 $2.5 operating activities  FY20 adjusted FCF of ~$1.9 billion Capital expenditures (0.2) (0.1) (0.6) (0.4) - FY20 adjusted

  13. Slide 13: Accelerating Shareholder Value Going Forward

    Accelerating Shareholder Value Going Forward  Portfolio aligned with strong secular trends  Well positioned for post-pandemic cycle recovery  Fast-track share gains - Successfully scale OpenBlue - Accelerate new product introductions - Drive service attachment rate & revenue growth  Improved mar

  14. Slide 14: Leading The Future Through Digital

    Leading The Future Through Digital Our Progress:  Strategic customer wins  Partnerships / Alliances  OpenBlue Singapore Innovation Center  Increasing secured orders YoY across regions; accelerating pipeline  Continuous releases and 5 new OpenBlue solution launches in Q1FY21  Accelerating IP: O

  15. Slide 15: Tailored Services For the Full Building Life-cycle

    Tailored Services For the Full Building Life-cycle Customer vision Advanced engineering Comprehensive Remote workshops & integration audits diagnostics Risk Expert Retrofit Predictive assessment installation & services maintenance commissioning Expert Comprehensive Financing Managed access consultin

  16. Slide 16: Leading Portfolio Of Products Enabling COVID Response And Healthy Buildings

    Leading Portfolio Of Products Enabling COVID Response And “Healthy Buildings” Opportunities Indoor air quality (IAQ) technology Building Management Systems Fresh air units / filtration solutions Thermal detection & scanning Enhance sterilization efficiency by adding ESP Quick response (300 people pe

  17. Slide 17: Leveraging the Strengths Of Our Portfolio

    Leveraging the Strengths Of Our Portfolio BUSINESS MIX New Construction (~50%) Installation Renovation & Products 38% 35% Retrofit (~50%) Service 27%  Large installed base generates attractive service opportunities  Depth & breadth of product portfolio is industry leading 17 Johnson Controls Inter

  18. Slide 18: End Market Expectations As We Look Forward

    End Market Expectations As We Look Forward GLOBAL MACRO ENVIRONMENT REMAINS UNCERTAIN, LIMITING VISIBILITY JCI Revenue Fiscal 21 Fiscal 21 Exposure US Construction Outlook GDP Outlook Other 3%  Ducted HVAC  Growth led by single US Residential 16%  Ductless HVAC +LSD-MSD family housing, stable  S

  19. Slide 19: Fiscal 2021 Full Year Views and Q1 Guidance

    Fiscal 2021 Full Year Views and Q1 Guidance* Views on FY 2021 Guidance Q1FY21  Market remains uncertain (5 to 7%) Organic Revenue  Continued share gains Decline  Ongoing EBIT margin expansion  Tax rate stability at 13.5% EBIT Margin +20 to +40bps  Free cash flow $1.7B; conversion ~95% (FCF / ad

  20. Slide 20: Appendix: Supplemental Information

    Appendix: Supplemental Information Click to edit text

  21. Slide 21: FY20 Fourth Quarter Financial Results (continuing operations)

    FY20 Fourth Quarter Financial Results (continuing operations) ($ in millions, except earnings per share) Q4 FY19 Q4 FY20 Q4 FY19* Q4 FY20* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,274 $5,954 $6,274 $5,954 (5%) Gross profit 1,980 1,975 2,108 2,042 (3%) % of sales 31.6% 33.2% 33.6% 34.3%

  22. Slide 22: Special Items (continuing operations)

    Special Items (continuing operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax/NCI Q4 FY20 (Expense) Benefit Income Income (Expense) EPS Impact Integration costs $(28) $3 $- $(25) $(0.03) Net mark-to-market adjustments (120) 27 - (93) (0.13) Acquisition related

  23. Slide 23: Emerging From COVID-19 With A Stronger Supply & Mfg Network

    Emerging From COVID-19 With A Stronger Supply & Mfg Network China & Rest of APAC United States & Canada Europe & Middle East ▪ Employees: >10k ▪ Employees: >10k ▪ Employees: >4k ▪ # Plants & DC’s: 14/7 ▪ # Plants & DC’s: 37/16 ▪ # Plants & DC’s: 15/12 ▪ Plant Revenue: $1.9B ▪ Plant Revenue: $2.1B ▪

  24. Slide 24: Direct Material Supply Base

    Direct Material Supply Base Americas EMEALA APAC United States Europe China  # of Suppliers ~1,100  # of Suppliers ~700  # of Suppliers ~400  Supply Chain Spend $2.2B  Supply Chain Spend $420M  Supply Chain Spend $1.0B Mexico Middle East India  # of Suppliers ~100  # of Suppliers ~100  # of

  25. Slide 25: johnsoncontrols.com/investors

    johnsoncontrols.com/investors If you can read this Click on the icon to choose a @JCI_IR If you can read this Click on the icon to choose a picture or picture or Reset the slide. Reset the slide. To Reset: Right click on the slide To Reset: Right click on the slide thumbnail and select ‘reset slide’

  26. Slide 26: 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, 2020 2019 Net sales $ 5,954 $ 6,274 Cost of sales 3,979 4,294 Gross profit 1,975 1,980 Selling, general and administrative expenses (1,453)

  27. Slide 27: 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, 2020 2019 Net sales $ 22,317 $ 23,968 Cost of sales 14,906 16,275 Gross profit 7,411 7,693 Selling, general and administrative expenses (5,

  28. Slide 28: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2020 2019 ASSETS Cash and cash equivalents $ 1,951 $ 2,805 Accounts receivable - net 5,294 5,770 Inventories 1,773 1,814 Assets held for sale - 98 Other cur

  29. Slide 29: 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, 2020 2019 Operating Activities Net income attributable to JCI from continuing operations $ 441 $ 612 Income from continuing operations attributable to noncontr

  30. Slide 30: 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, 2020 2019 Operating Activities Net income attributable to JCI from continuing operations $ 631 $ 1,100 Income from continuing operations attributable to nonco

  31. Slide 31: 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 from continuing operations before income taxes and noncontrolling interests, excluding general corporate e

  32. Slide 32: Segment EBITA Reconciliation, Twelve Months

    The following is the twelve months ended September 30, 2020 and 2019 reconciliation of segment EBITA and segment EBITA margin as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solutions Consolidated (in millions) North

  33. Slide 33: Adjusted Diluted EPS Reconciliation

    A reconciliation of diluted earnings per share as reported to adjusted diluted earnings per share for the respective periods is shown below (unaudited): Net Income Attributable Net Income Attributable Net Income Attributable to JCI plc from Net Income Attributable to JCI plc from to JCI plc Continui

  34. Slide 34: Organic Growth Reconciliation

    3. Organic Growth Reconciliation The components of the changes in net sales for the three months ended September 30, 2020 versus the three months ended September 30, 2019, including organic growth, is shown below (unaudited): Adjusted Base Net Net Sales for the Three Sales for the Three Net Sales fo

  35. Slide 35: Segment EBITA and EBIT Changes, Twelve Months

    The components of the changes in segment EBITA and EBIT for the twelve months ended September 30, 2020 versus the twelve months ended September 30, 2019, including organic growth, is shown below (unaudited): Adjusted Segment Adjusted Segment Adjusted Base Segment EBITA / EBIT for EBITA / EBIT for th

  36. Slide 36: Net Debt to EBITDA

    5. Net Debt to EBITDA The Company provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. The Company believes the total net debt to adjusted EBITDA ratio is useful to understanding the Company's financial condition as it provides a review of th

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