Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Q3 2016 Earnings Presentation
24 slides from Johnson Controls International's earnings presentation, Jul 21, 2016
Slide 1: Quarterly update FY 2016 third quarter
Quarterly update FY 2016 third quarter July 21, 2016
Slide 2: No Offer or Solicitation; Additional 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 jurisdiction, nor shall ther
Slide 3: Participants in the Solicitation; Forward-Looking Statements
PARTICIPANTS IN THE SOLICITATION Johnson Controls, Tyco and certain of their respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of
Slide 4: Cautionary Statement Regarding Forward-Looking Statements (cont.)
Johnson Controls Cautionary Statement Regarding Forward-Looking Statements (cont.) materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: Johnson Controls’ and/or Tyco’s ability to obtain necessary regulatory approvals and shareholde
Slide 5: Statement Required by the Irish Takeover Rules (cont.)
Statement Required by the Irish Takeover Rules (cont.) Centerview Partners LLC is a broker dealer registered with the United States Securities and Exchange Commission and is acting as financial advisor to Johnson Controls and no one else in connection with the proposed transaction. In connection wit
Slide 6: Agenda
Agenda Introduction 1 Kathryn Campbell, Director, Global Investor Relations Third quarter highlights and merger updates 2 Alex Molinaroli, President, Chairman and Chief Executive Officer Adient updates 3 R. Bruce McDonald, incoming Adient Chairman and Chief Executive Officer Business results and fin
Slide 7: FY2016 third quarter highlights
FY2016 third quarter highlights* Solid organic growth Building Efficiency revenue up 4% (ex. JCH and FX) Power Solutions revenue up 5% (ex. Lead and FX) Continued y-o-y profitability improvements Segment margins up 170 bps Adjusted earnings per share up 18% Growth investments announced
Slide 8: FY16 Q3 earnings from continuing operations
FY16 Q3 earnings from continuing operations* NET REVENUES DILUTED EPS $9.5 B $9.6 B -1% $1.07 Level excluding FX $0.91 +18% +1% excluding FX, FY16 Q3 FY15 Q3 adjusted for JCH FY16 Q3 FY15 Q3 and Interiors JV SEGMENT INCOME $1,003 M +18% Segment margin $848 M +170 bps +19% excluding FX FY16 Q3 FY15 Q
Slide 9: Johnson Controls/Tyco Merger: Executing Against Our Day 1 Plan
Johnson Controls/Tyco Merger* Executing Against Our Day 1 Plan April 4, 2016 September 2, 2016 Tyco S-4 initial filing July 6, 2016 JCI/Tyco expected Day 1 with SEC legal merger Tyco S-4 effective March April May June July August September October S-4 Amendments June 27, 2016 July 14, 2016 August 17
Slide 10: Adient Separation on Track
Adient Separation on Track* July 1, 2016 Adient’s October 31, 2016 April 26, 2016 Early-to-mid Operational Day 1 Adient’s expected Legal Adient Form 10 filed September 2016 with SEC Adient Form 10 Day 1 as an independent expected to clear SEC company March April May June July August September Octobe
Slide 11: Adient Key Investment Thesis
Adient Key Investment Thesis Market Position Broadest range of seating products Unparalleled customer diversity– market leadership in North America, Europe and China (unique and longstanding position in China through JV structure); support all major automakers (190+ active platforms) Earning
Slide 12: Building Efficiency: Improved profitability and organic growth
Building Efficiency* Improved profitability and organic growth NET REVENUES Third party revenues (ex. FX) $3.6 B • Systems and Service NA +3% $2.7 B +33% • • Products NA +3% Asia +9% (ex. JCH) • +34% excluding FX ROW Level Orders secured +5%** Systems and Service NA +3% +4% excluding FX and
Slide 13: Power Solutions: Higher volumes and significant margin expansion
Power Solutions Higher volumes and significant margin expansion NET REVENUES Higher volumes in all regions $1.5 B $1.5 B Global shipments of start-stop +22% China +79% +3% EMEA +4% +5% Americas +78% excluding FX Growth in OE (+5%) and aftermarket (+1%) and lead impact FY16 Q3 FY15 Q3 shi
Slide 14: Automotive Experience: Significant business wins and record profitability
Automotive Experience* Significant business wins and record profitability NET REVENUES Growth in Asia and Europe offset by expiring $5.4 B programs in North America $4.4 B -19% China sales (mostly non-consolidated) +49% (+11% ex. Interiors JV and FX) -19% excluding FX FY16 Q3 industry light ve
Slide 15: Third Quarter FY2016 Financial Highlights
Second Quarter 2015 Third Quarter FY2016 Financial Highlights (continuing operations) Financial Highlights (continuing operations) % 1 2 2016 2015 (in millions) 2016 2015 Change (reported) (reported) Sales $9,516 $9,608 -1% $9,516 $9,608 Gross profit 1,887 1,706 +11% 1,887 1,706 % of sales 19.8% 17.
Slide 16: Third Quarter FY2016 Financial Highlights
Second Quarter 2015 Third Quarter FY2016 Financial Highlights (continuing operations) Financial Highlights (continuing operations) 1 2 2016 2015 (in millions, except earnings per share) 2016 2015 (reported) (reported) Segment income $1,003 $848 $836 $822 Restructuring and impairment costs - - 102 -
Slide 17: Balance Sheet and Cash Flow
Second Quarter 2015 Financial Balance Sheet Highlights and Cash (continuing Flow operations) Strong balance sheet Net debt to capitalization of 44.0% at 6/30/16 vs. prior year of 40.7% and 40.0% at 3/31/16 Net debt of $7.5B at 6/30/16 vs. prior year of $7.3B and $6.7B at 3/31/16 Adjusted fre
Slide 18: Matters of Interest
Second Quarter 2015 FinancialofHighlights Matters Interest (continuing operations) Expected September 2 JCI/Tyco merger closing Q4 will include one month of Tyco FY16 operating results Preliminary purchase accounting New Tyco debt of $3.9B Pull forward of FY16 Q4 dividend payment (August 5
Slide 19: FY16 Guidance
Second Quarter 2015 FY16 Guidance Financial Highlights (continuing operations) FY16 Guidance* Q4 FY16 $1.17 - $1.20 Diluted EPS +13% - +15% Prior FY16 Full Year NEW FY16 Full FY16 Guidance* Guidance Year Guidance $3.85 - $4.00 $3.95 - $3.98 Diluted EPS +13% - +17% +15% - +16% Guidance excludes impac
Slide 20: Appendix
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Slide 21: Q3 Non-Recurring Items
Second Quarter 2015 Financial Q3 Non-Recurring HighlightsItems (continuing (Continuing operations) Operations) In millions, except EPS impact numbers Pre-tax Tax NCI After-tax 2016 Income (Expense) (Expense) Benefit (Expense) Benefit Income (Expense) EPS Impact Transaction, Integration & Separation
Slide 22: Free Cash Flow
Second Quarter 2015 Financial Free CashHighlights Flow (continuing operations) Q2 YTD Q3 Q3 YTD Current Prior Current Prior Current Prior Cash provided by operating activities $ 0.6 $ 0.2 $ 0.1 $ 0.7 $ 0.7 $ 0.9 Capital expenditures (0.5) (0.6) (0.3) (0.3) (0.8) (0.8) Reported free cash flow 0.1 (0.
Slide 23: 2016 Q3 Restructuring and Impairment Costs
Second Quarter 2015 Financial 2016 Q3 Restructuring Highlights (continuing and Impairment operations) Costs In millions Corporate $ 8 Automotive Experience 43 Severance and Other Costs 51 Asset Impairment (Non-Cash) 51 Total Pre-Tax Restructuring Costs $ 102 Restructuring and non-cash impairment cha
Slide 24: johnsoncontrols.com/investors
johnsoncontrols.com/investors @JCI_IR