34 slides from Johnson Controls International's earnings presentation, Jan 31, 2018
Slide 1: Fiscal 2018 First Quarter Results
Fiscal 2018 First Quarter If you can read this Click on the icon to choose a If you can read this Click on the icon to choose a Results picture or Reset the slide. picture or Reset the slide. To Reset: Right click on the slide To Reset: Right click on the slide thumbnail and select ‘reset slide’ or
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
Slide 3: Q1 FY18 Strategic Highlights
Q1 FY18 Strategic Highlights Board changes Executive compensation aligned Solid traction on increased sales capacity Accelerating field orders and improved secured margins in Buildings Organic growth in Buildings Accelerating service growth Cash Management Office up and running On-go
Slide 4: New Product Launches
New Product Launches York® YZ High GLAS Smart Metasys® 9.0 Building Efficiency, Low GWP Thermostat with Automation Software Chiller Microsoft Cortana York® Affinity Variable AutocallTM Branded York® VRF Gen II Heat Capacity Residential Fire Detection Systems Recovery Outdoor Unit Products 4 Johnson
Slide 5: Introducing the York YZ High-Efficiency, Low GWP Centrifugal Chiller
Introducing the York® YZ High-Efficiency, Low GWP Centrifugal Chiller Next-gen low-GWP refrigerant High-Speed Hermetic (1233zd) Induction Motor Magnetic Bearings Wide range of cooling Optimized Compressor capacity: 165 to 1,000 tons Variable Falling Film Speed Drive Evaporator Magnetic bearing
Slide 6: Macro Environment
Macro Environment EUROPE NORTH AMERICA Buildings CHINA Buildings Power Buildings Power AFRICA & M.E. Power LATIN Buildings ASIA PACIFIC AMERICA Power Buildings Buildings Power Power 6 Johnson Controls International plc — January 31, 2018
Slide 7: Buildings Field Order Trends
Buildings Field Order Trends BUILDINGS ORGANIC FIELD ORDERS +5% +3% +3% +0% +0% Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Accelerating Field Order Activity 7 Johnson Controls International plc — January 31, 2018
Slide 8: Q1 FY18 Financial Summary
Q1 FY18 Financial Summary* NET SALES ADJUSTED EPS $7,435M $0.54 $7,096M +5% $0.53 +2% Reported Reported +3% Organic Q1 FY17 Q1 FY18 Q1 FY17 Q1 FY18 ADJUSTED EBIT & MARGIN ADJUSTED FCF $757M (60bps) Normal Q1 $748M Reported seasonal 10.7% outflow 10.1% (30bps) Excluding FX, ($0.3B) ($0.3B)
Slide 9: Q1 FY18 Results vs. Prior Year: EPS Bridge
Q1 FY18 Results vs. Prior Year* EPS BRIDGE $0.05 $0.05 $0.54 $0.53 ($0.04 ) ($0.04) ($0.01) Q1 FY17 SYNERGIES & VOLUME/ GROSS MARGIN INVESTMENTS / OTHER Q1 FY18 ACTUAL PRODUCTIVITY MIX PRESSURE SALESFORCE NET ACTUAL ADDITIONS *Non-GAAP excludes special items. See footnotes for reconciliation. 9 John
Slide 10: Building Technologies & Solutions Segment Structure
Building Technologies & Solutions Segment Structure Controls Fire Detection Security Building Global Solutions Products Field / Direct Channel Indirect Channel ~$15B Europe Building Management ~$8B FY17 Sales ME& HVAC/R Equipment FY17 Sales Africa Latin Chillers America Unitary Hitachi F
Slide 11: Buildings
Buildings* ($ in millions) Organic growth +4% Q1 FY17 Q1 FY18 Change - Field up low-single digits Sales $5,196 $5,305 2% - Products up mid-single digits Segment EBITA $578 $559 (3%) EBITA Margin % 11.1% 10.5% (60bps) A 4% sales headwind from M&A was partially offset by a 2% favorable impact from
Slide 12: Segment Results: Building Solutions North America
Segment Results: Building Solutions North America* ($ in millions) Organic growth +3% Q1 FY17 Q1 FY18 Change - HVAC & Controls up high-single digits Sales $1,942 $2,012 4% - Solutions up mid-single digits Segment EBITA $236 $236 - - Fire & Security modest decline EBITA Margin % 12.2% 11.7% (50bps)
Slide 13: Segment Results: Building Solutions EMEA/LA
Segment Results: Building Solutions EMEA/LA* ($ in millions) Organic growth +4% Q1 FY17 Q1 FY18 Change - Europe – modest growth in Integrated Sales $878 $915 4% Solutions – Fire & Security and Segment EBITA $65 $71 9% Controls EBITA Margin % 7.4% 7.8% 40bps - Middle East & Africa – strong double-
Slide 14: Segment Results: Building Solutions Asia Pacific
Segment Results: Building Solutions Asia Pacific* ($ in millions) Organic growth +2% Q1 FY17 Q1 FY18 Change - Strong growth in service Sales $576 $597 4% Segment EBITA $72 $74 3% A 1% sales headwind from M&A was more EBITA Margin % 12.5% 12.4% (10bps) than offset by a 2% favorable impact from fo
Slide 15: Segment Results: Global Products
Segment Results: Global Products* ($ in millions) Organic growth +6% Q1 FY17 Q1 FY18 Change - Mid-single digit growth across Building Sales $1,800 $1,781 (1%) Management, HVAC & Refrigeration Segment EBITA $205 $178 (13%) Equipment, and Specialty Products EBITA Margin % 11.4% 10.0% (140bps) • Appl
Slide 16: Segment Results: Power Solutions
Segment Results: Power Solutions* ($ in millions) Organic growth +1% Q1 FY17 Q1 FY18 Change - Favorable price/mix Sales $1,900 $2,130 12% Segment EBITA $390 $384 (2%) Sales favorably impacted 7% related to EBITA Margin % 20.5% 18.0% (250bps) lead prices and 4% related to foreign currency Unit
Slide 17: Corporate Expense
Corporate Expense* Ongoing realization of synergy and productivity 6% savings $ In millions Expect full year Corporate expense to be in the $108M range of $425 to $440 million $101M Q1 FY17 Q1 FY18 *Non-GAAP excludes special items. See footnotes for reconciliation. 17 Johnson Controls Internat
Slide 18: Free Cash Flow
Free Cash Flow (in $ billions) Q1 FY17 Q1 FY18 Adjusted free cash outflow of $0.3 billion Cash used by operating activities $(1.9) $(0.1) in the quarter Capital expenditures (0.4) (0.2) - In-line with expected normal seasonal outflow Reported free cash flow (2.3) (0.4) Tax refund of $0.2 billion
Slide 19: Balance Sheet
Balance Sheet Capital Structure Q4 FY17 Q1 FY18 Q1 debt issuances / repayments Short-term debt and - Issued €750 million, 0.0% Senior current portion of long- $1,608 $1,605 Notes due 2020 term debt - $1.9 billion TSarl debt repayment Long-term debt 11,964 10,895 - ~$300 million bond repayment Tota
Slide 20: Impact of U.S. Tax Reform
Impact of U.S. Tax Reform Fiscal 2018 - No change to effective rate of 14%* Deferred Tax Remeasurement Repatriation Tax One-time $100 million non-cash tax One-time $300 million tax charge to benefit be funded over 8 year period Fiscal 2019 - Certain provisions of Tax Reform become effective 10/1
Slide 21: Appendix
Appendix If you can read this Click If you can read this Click on the icon to choose a on the icon to choose a picture or picture or Reset the slide. Reset the slide. To Reset: Right click on the slide To Reset: Right click on the slide thumbnail and select ‘reset slide’ or thumbnail and select ‘res
Slide 22: FY18 First Quarter Financial Results (continuing operations)
FY18 First Quarter Financial Results (continuing operations) ($ in millions, except earnings per share) Q1 FY17 Q1 FY18 Q1 FY17 * Q1 FY18* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $7,086 $7,435 $7,096 $7,435 5% Gross profit 2,114 2,169 2,216 2,169 (2%) % of sales 29.8% 29.2% 31.2% 29.2% S
Slide 23: Special Items (continuing operations)
Special Items (continuing operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax Income Q1 FY18 (Expense) Benefit Benefit (Expense) EPS Impact Transaction costs ($5) $1 $- ($4) $- Integration costs (45) 6 - (39) (0.04) Restructuring & impairment costs (158) 24 - (
Slide 24: First Quarter Restructuring and Impairment Costs
First Quarter Restructuring and Impairment Costs $ In millions Business Unit Cash Non-cash Total Q1 FY17 Q1 FY18 Q1 FY17 Q1 FY18 Q1 FY17 Q1 FY18 Buildings $15 $107 $1 $23 $16 $130 Power Solutions - 2 - 2 - 4 Corporate 47 19 15 5 62 24 Total pre-tax charge $62 $128 $16 $30 $78 $158 Tax benefit (14) (
Slide 25: Reorganized Segment Financial Information
Reorganized Segment Financial Information* Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17 Building Solutions North America $ 1,942 $ 2,074 $ 2,135 $ 2,165 $ 8,316 Building Solutions EMEA / LA 878 891 889 921 3,579 Building Solutions Asia Pacific 576 562 630 677 2,445 Global Products 1,800 2,014 2,406 2,241 8,461
Slide 26: johnsoncontrols.com/investors
johnsoncontrols.com/investors @JCI_IR If you can read this Click If you can read this Click on the icon to choose a 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’
Slide 27: Condensed Consolidated Statements of Income
January 31, 2018 JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended December 31, 2017 2016 Net sales $ 7,435 $ 7,086 Cost of sales 5,266 4,972 Gross profit 2,169 2,114 Selling, general and administrative e
Slide 28: Condensed Consolidated Statements of Financial Position
January 31, 2018 JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, 2017 2017 ASSETS Cash and cash equivalents $ 552 $ 321 Accounts receivable - net 6,731 6,666 Inventories 3,459 3,209 Assets held for sale 40
Slide 29: Condensed Consolidated Statements of Cash Flows
January 31, 2018 JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2017 2016 Operating Activities Net income attributable to JCI $ 230 $ 329 Income from continuing operations attributable to noncontrolling inte
Slide 30: Footnotes: 1. Financial Summary
January 31, 2018 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 ge
Slide 31: Footnotes: Adjusted Net Sales and Segment EBITA Reconciliation
January 31, 2018 (1) The Company's press release contains financial information regarding adjusted net sales, adjusted segment EBITA and adjusted segment EBITA margins, which are non-GAAP performance measures. The Company's definition of adjusted segment EBITA excludes special items because these co
Slide 32: 2. Diluted Earnings Per Share Reconciliation
January 31, 2018 2. Diluted Earnings Per Share Reconciliation The Company's press release contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include transaction/integration/separation costs, nonrecurring purchase account
Slide 33: 3. Organic Adjusted Net Sales Growth Reconciliation
January 31, 2018 3. Organic Adjusted Net Sales Growth Reconciliation The components of the changes in adjusted net sales for the three months ended December 31, 2017 versus the three months ended December 31, 2016, including organic net sales, is shown below (unaudited): Adjusted Net Sales Adjusted
Slide 34: 5. Net Debt to Capitalization
January 31, 2018 5. Net Debt to Capitalization The Company provides financial information regarding net debt as a percentage of total capitalization, which is a non-GAAP performance measure. The Company believes the percentage of total net debt to total capitalization is useful to understanding the