22 slides from Johnson Controls International's earnings presentation, Jan 24, 2006
Slide 1: 1st Quarter 2006 Conference Call
1st Quarter 2006 Conference Call January 20, 2006 Johnson Controls, Inc. ("the Company") has made forward-looking statements in this document pertaining to its financial results for fiscal 2006 that are based on preliminary data and are subject to risks and uncertainties. All statements other than s
Slide 2: Agenda
Overview John Barth - Chairman and CEO Q1 Business Results Denise Zutz - Vice President, Strategy, Investor Relations and Communication Financial Review Bruce McDonald - Vice President and Chief Financial Officer Q&A Agenda
Slide 3: First Quarter 2006: Record Results
First Quarter 2006: Record Results Executing according to plan A strong quarter Record sales and earnings Sales up 14% to $7.5 billion Interiors sales outpaced industry build Substantial increase in battery shipments Double-digit systems/technical services growth in N. America Operating income up 5%
Slide 4: York Acquisition
York Acquisition Completed December 9, 2005 One month earlier than originally expected Integration process underway; progressing well The more we learn, the more we like Organizational changes C. David Myers named president, building efficiency Leadership team: Executives from controls, York, interi
Slide 5: Business Environment
Business Environment Building efficiency Higher energy costs remain a positive Backlog higher, controls orders strong Continued benefits from branch systems redesign initiative SEER 13 deadline for unitary products Commodity pressures (copper, aluminum) Power solutions Saft hybrid battery joint vent
Slide 6: Confirming Full-Year 2006 Earnings Guidance
Confirming Full-Year 2006 Earnings Guidance Consolidated net sales Approx. $32.0B (up approx.16%) EPS from continuing operations $5.00 - $5.15 Sales - 60th consecutive year of increases Earnings - 16th consecutive year of increases Originally provided October 11, 2006
Slide 7: First Quarter 2006 Building Efficiency
First Quarter 2006 Building Efficiency 2006 2005 Change Sales $1.8B $1.4B +31% Op. Inc. ex. York $39.8M $35.4M +12% Op. Inc. $36.9M $35.4M +4% Sales Incremental York revenues of $465M Controls down 2% North America systems and services growth offset by lower facility management sales ROW approximate
Slide 8: First Quarter 2006 Power Solutions
First Quarter 2006 Power Solutions 2006 2005 Change Sales $976 $720 +35% Op. Inc. $109 $93 +17% (in millions) Sales Substantially higher unit shipments North America: strong aftermarket demand Europe: OE, OE service, aftermarket Organic growth plus Delphi acquisition volume (July 2005) Operating Inc
Slide 9: First Quarter 2006 Interior Experience
Sales Higher revenues in North America (+6%), Europe (+2%) and Asia (+23%) Industry production up 3% in North America, estimated down 1% in Europe Primary source of revenue increase North America: new launches Europe: platform mix Operating Income Higher commodity costs N.A. customer restructuring H
Slide 10: First Quarter 2006 Financial Highlights
First Quarter 2006 Financial Highlights (in millions) FX impact: Euro at $1.19 vs $1.28 Gross margin level as restructuring benefits and operational efficiencies offset commodity cost pressures SG&A increase includes costs related to facility closure and FAS 123R adoption Excluding York, operating m
Slide 11: First Quarter 2006 Financial Highlights
First Quarter 2006 Financial Highlights (in millions) Net interest expense: Current period includes $14M related to York acquisition financing Miscellaneous - net: Current period reflects gain on sale of interest in an interior joint venture Tax rate: Effective rate in current quarter declines from
Slide 12: Fiscal 2006 First Quarter Earnings Analysis
Fiscal 2006 First Quarter Earnings Analysis 12
Slide 13: Fiscal 2006 Business Outlook
Fiscal 2006 Business Outlook Building Power Interior Sales Operating Margin Approx. 90% higher Approx. 20% higher Approx. 4% lower Slightly lower Level Level Lower production on key platforms Negative impact of FX Delphi acquisition Organic growth/New business Negative impact of FX York acquisition
Slide 14: Commodities Update
Commodities Update increases/surcharges Steel Assume stable pricing Foam Chemicals Expect moderate softening Resin Expect moderate softening Lead Assume stable LME prices Fuel Do not assume sustained October 2005 Outlook Current Outlook X X X X Interior: Petroleum-based exposure in N.A. Power: LME p
Slide 15: Financial Impact of York Acquisition
Financial Impact of York Acquisition
Slide 16: 2006 Q2 Guidance
2006 Q2 Guidance Earnings per share from continuing operations up 161 - 168%; adjusted for items up 8 - 11%* *Non-GAAP. See reconciliation in appendix. 2006 Q2 Earnings per share from continuing operations guidance: $0.73 - $0.75
Slide 17: Full Year Guidance
Full Year Guidance On track to deliver 16th consecutive year of record earnings.
Slide 18: Appendix
Appendix
Slide 19: Non-GAAP Reconciliation
) Non-GAAP Reconciliation Second Quarter Eamings Per Share Guidance (unaudited) 2006 2008 estimate factual % Ine Non-GAAP EPS from continuing operations $0.92- 0.94 $0.85 811% Second quarter impact of York Acquisition York operating loss (0.02) 2 Incremental interest expense 0.17) . Restructuring co
Slide 20: Debt Summary
Debt Summary JCI York Acq Bonds JCI Existing Debt 3218 2089 % Total Debt To Capital Debt Profile At 12/31/05 Fixed Floating York Acquisition Target Range Actual Projected JCI Debt Acquisition Financing
Slide 21: Balance Sheet Impact of York Acquisition
Balance Sheet Impact of York Acquisition * Measurements are not meaningful due to the inclusion of only one month of York sales and cost of sales Consolidated York Impact Consolidated JCI (excl. York) December 31, 2005 September 30, 2005
Slide 22: 2006 Q1: Key Platforms
2006 Q1: Key Platforms North America Europe North America Europe Positives Negatives Chevy Impala/Monte Carlo Chrysler 300/Magnum Honda Pilot Hummer H3 Jeep Grand Cherokee/Commander Mercedes R-Class, M-Class Toyota Tacoma VW Jetta Ford Expedition/Navigator GM Minivans Honda Accord Chevy TrailBlazer/