Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q4 2021 Earnings Presentation

33 slides from Johnson Controls International's earnings presentation, Nov 5, 2021

  1. Slide 1: Fiscal Q4 2021 Earnings Conference Call

    Fiscal Q4 2021 Earnings Conference Call November 5, 2021

  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 ris

  3. Slide 3: 2021 Year in Review: Executing on Our Commitments

    2021 Year in Review Executing on Our Commitments  Solid financial results across the board - Demand remains strong – record backlog; end Original FY21 markets continue to recover Guidance* Results* - Managing price/cost and supply constraints, offsetting significant headwinds Organic Revenue  Bold

  4. Slide 4: Leading in ESG and Continuing to Make Strides

    Leading in ESG and Continuing to Make Strides Solutions First S&P 500 industrial company to publish both an integrated Provide increasing OpenBlue Net Zero Buildings as a sustainable finance framework and issue $500 million sustainability- sustainable products Service launched linked bond. Framework

  5. Slide 5: Strategic Partnerships Advancing Our Leadership as a Smart Buildings Solutions Leader

    Strategic Partnerships Advancing Our Leadership as a Smart Buildings Solutions Leader Johnson Controls, Alibaba & Accenture MOU Addressing the Technology Partnership Accelerates Differentiation in Sustainability Needs of an estimated Multi-Billion Dollar Data Product & Services and Adoption of OpenB

  6. Slide 6: Driving Product Innovation – Focused on Digital & Sustainability

    ACCELERATING REVENUE GROWTH Product/Technology Driving Product Innovation – Focused on Digital & Sustainability Sustainability Deluxe Heat Pump High-Pressure Modular 4-Pipe Industrial Heat Pump Commercial Heat Pump Smart Buildings Concealed Fire Emergency Metasys Critical Ducted Connected Warning &

  7. Slide 7: Optimizing & Transforming Service

    ACCELERATING REVENUE GROWTH Service Optimizing & Transforming Service $6B+ Q4 Revenue +HSD Growth SERVICE REVENUE +8% in each region ~55% RECURRING REVENUE Positive on Q4 Orders 2-yr stack +7% in each region MSD ANNUAL GROWTH RATE Exceeded FY21 Attach Rate guidance of +300 to 2x MARGIN* ~40% +400bps

  8. Slide 8: Vectors of Growth Continuing to Gain Traction

    ACCELERATING REVENUE GROWTH Vectors of Growth Vectors of Growth Continuing to Gain Traction Healthy Buildings Decarbonization Smart Buildings  $10-15B1 industry through 2030  $240B1 industry through 2035  $70B1 industry through 2030  IAQaaS expands value proposition  As OEM and solutions provid

  9. Slide 9: Customer Win – University of North Dakota

    ACCELERATING REVENUE GROWTH Vectors of Growth Customer Win – University of North Dakota  Long-standing customer; second long-term performance infrastructure project  ~$220M ‘Buildings-as-a-Service’ project featuring OpenBlue Enterprise Manager  Includes the design, construction, renovation, and o

  10. Slide 10: Q4 FY21 Financial Summary

    Q4 FY21 Financial Summary* Strong Execution in a Challenging Environment SALES EPS $6.4B  +5% Organic $0.88  +16% $6.0B + Field organic growth +4% $0.76 + Increased profitability + Global Products organic revenue +7% + Lower share count + Service organic revenue +8% Q4 FY20 Q4 FY21 Q4 FY20 Q4 FY21

  11. Slide 11: Order Momentum Continues & Backlog Visibility Improves

    Order Momentum Continues & Backlog Visibility Improves Trailing 3-mo Field Orders (YoY % Chg) 30%  Trailing 3-month Field Orders +9% YoY 20% - Service orders +7% 10% - Install orders accelerating +11% YoY 0% Total Field -10% Service -20% -30% Backlog ($, billions) 10% 8% 6% 7% Org. YoY % Chg  Back

  12. Slide 12: Q4 FY21 EPS Bridge (Continuing Operations)

    Q4 FY21 EPS Bridge* (Continuing Operations) Strong Operational Performance OPERATIONS $0.88 $0.04 $0.06 $0.05 $0.76 ($0.03) Volume + Mix + FY20 actions Amort (0.01) Price/cost; FX 0.02 supply chain + NFC 0.02 disruptions Shares 0.03 FY20 actions Q4 FY20 VOLUME / PRICE / SG&A CORPORATE OTHER Q4 FY21

  13. Slide 13: Q4 Segment Results

    Q4 Segment Results* Strengthening Performance Across the Segments EBITA Sales Comments Organic % YoY Margin ($M) Change YoY  Service +7% / Install +2% North America $2,347 15.2%  Solid growth across HVAC & Controls, Fire & Security and performance infrastructure +4% (20bps)  Significant headwind

  14. Slide 14: Q4 Segment End Market Performance

    Q4 Segment End Market Performance* Continuing to Gain Share % of FY21 Consolidated Organic Sales % Change Sales North America EMEALA Asia PAC Global Products JCI Applied1 33% +MSD (LSD) +LDD +mid-teens2 +HSD Light Commercial3 8% +HSD +HSD Commercial HVAC 41% +LDD +HSD NA Residential 4% +MSD +MSD ROW

  15. Slide 15: Corporate Expense & Other Items

    Corporate Expense* & Other Items Corporate Expense Fiscal 2022 Guidance Items $83M - Reversal of temporary costs  Corporate expense $280 to $290M $58M  Amortization expense ~$450M  NFC $230 to $240M  NCI $240 to $265M Q4 FY20 Q4 FY21 *Non-GAAP excludes special items. See footnotes for reconcilia

  16. Slide 16: Balance Sheet & Free Cash Flow

    Balance Sheet & Free Cash Flow* Ample Liquidity and Strong Free Cash Flow Conversion Capital Structure ($ millions) Q4 FY20 Q3 FY21 Q4 FY21 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $293 $461 $234  97% fixed rate debt current portion of long-term debt Long-term debt 7,526 7,318 7,506

  17. Slide 17: Q1 Above Normal Seasonality

    ADJUSTED EPS PHASING* Q1 Above Normal Seasonality  Q1 historically ~15% of full year EPS HISTORICAL Q1 14.6% - Implied Q1’22 EPS ~$0.50 (+15% YoY) FY18-FY211 % OF FULL YEAR - Each 1ppt variance = ~$0.03 in EPS Q1 FY22 $0.52 - $0.54  Fiscal H1/H2 historical weighting = ~32%/~68% EPS GUIDANCE - Impr

  18. Slide 18: Fiscal 2022 Q1 & Full Year Guidance

    Fiscal 2022 Q1 & Full Year Guidance* Continuing Strong Performance in a Challenging Environment FY 2022 Commentary Guidance Q1FY22 FY22  Underlying market is continuing to improve  Supply chain constraints / highly inflationary Organic Revenue +MSD +HSD environment expected to continue - Price / c

  19. Slide 19: Growth Accelerators Ramping

    Growth Accelerators Ramping FY24 Targets: FY 2022 Commentary*  Healthy NPI pipeline; ~175 new products in FY22  Service growth accelerates, organic service growth of +6-7% in FY22; 20+ new digital service offerings  Broadening pipeline of opportunities; Decarb / Performance Infrastructure factore

  20. Slide 20: Well on Our Way to FY24 Targets

    Well on Our Way to FY24 Targets Building Long-Term Shareholder Value MSD+ Sales 250 to 300bps 100% FCF ~$8B In Capital Double Digit Growth Of Margin Conversion Deployment Adjusted EPS Expansion Potential Growth  Accelerated  Strong leverage  Continued  Organic  Revenue growth service growth  S

  21. Slide 21: Appendix: IR Contacts

    Appendix • IR CONTACTS • Antonella Franzen • Chief Investor Relations & Communications Officer • antonella.franzen@jci.com • Ryan Edelman • Executive Director, Investor Relations • ryan.edelman@jci.com www.johnsoncontrols.com

  22. Slide 22: FY21 Fourth Quarter Financial Results (Continuing Operations)

    FY21 Fourth Quarter Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q4 FY20 Q4 FY21 Q4 FY20* Q4 FY21* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,954 $6,392 $5,954 $6,395 7% Gross profit 1,975 2,191 2,042 2,137 5% % of sales 33.2% 34.3% 34.3% 33.4% SG&

  23. Slide 23: Special Items (Continuing Operations)

    Special Items (Continuing Operations) $ In millions, except EPS After-tax/NCI Pre-tax Income Tax (Expense) NCI (Expense) Q4 FY21 (Expense) Benefit Income Income EPS Impact (Expense) Mark-to-market adjustments $106 $(18) $- $88 $0.12 Restructuring & impairment costs (67) 9 - (58) (0.08) Acquisition r

  24. Slide 24: 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, 2021 2020 Net sales $ 6,392 $ 5,954 Cost of sales 4,201 3,979 Gross profit 2,191 1,975 Selling, general and administrative expenses (1,344)

  25. Slide 25: 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, 2021 2020 Net sales $ 23,668 $ 22,317 Cost of sales 15,609 14,906 Gross profit 8,059 7,411 Selling, general and administrative expenses (5,

  26. Slide 26: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2021 2020 ASSETS Cash and cash equivalents $ 1,336 $ 1,951 Accounts receivable - net 5,613 5,294 Inventories 2,057 1,773 Other current assets 992 1,035 Curr

  27. Slide 27: 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, 2021 2020 Operating Activities Net income from continuing operations attributable to JCI $ 269 $ 441 Income from continuing operations attributable to noncontr

  28. Slide 28: 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, 2021 2020 Operating Activities Net income from continuing operations attributable to JCI $ 1,513 $ 631 Income from continuing operations attributable to nonco

  29. Slide 29: 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

  30. Slide 30: Twelve Months Segment EBITA Reconciliation

    The following is the twelve months ended September 30, 2021 and 2020 reconciliation of net sales, segment EBITA and segment EBITA margin as reported to adjusted net sales, adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solutions C

  31. Slide 31: Diluted Earnings Per Share Reconciliation

    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 integration costs, net mark-to-market adjustments, an acquisition related compensation c

  32. Slide 32: Changes in Adjusted Net Sales, Twelve Months

    The components of the changes in adjusted net sales for the twelve months ended September 30, 2021 versus the twelve months ended September 30, 2020, including organic growth, are shown below (unaudited): Adjusted Net Sales for Adjusted Base Net Adjusted Net Sales for the Twelve Months Sales for the

  33. Slide 33: Trade Working Capital as a Percentage of Net Sales

    6. Trade Working Capital as a Percentage of Net Sales The Company provides financial information regarding trade working capital as a percentage of net sales, which is a non-GAAP performance measure. Trade working capital is defined as current assets less current liabilities, excluding cash and cash

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