Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q1 2022 Earnings Presentation

32 slides from Johnson Controls International's earnings presentation, Feb 2, 2022

1. Slide 1: Fiscal Q1 2022 Earnings Conference Call

   If you can read this Click on the icon to choose a picture or Reset the slide. To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the ‘Home’ ribbon (next to the font choice box) Fiscal Q1 2022 Earnings Conference Call February 2, 2022

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: Executing On Our Commitments

   Executing On Our Commitments  Continued strong execution in a challenging environment  Demand remains strong...recovery continues  Driving value creation through Services  On track to deliver ~$230M in productivity savings in FY22  Strong FCF performance supports capital deployment opportunitie

4. Slide 4: Honored to be Recognized as an ESG & Smart Buildings Leader

   Honored to be Recognized as an ESG & Smart Buildings Leader Corporate Knights 2022 Global 100 Most Sustainable Corporations in the World  Ranked 1st among both Building Products peers and HVAC equipment manufacturers  Ranked 12th overall (up from 38th in 2021) Identified as a Sustainalytics Top-Ra

5. Slide 5: Optimizing & Transforming Service

   ACCELERATING REVENUE GROWTH Optimizing & Transforming Service $5.8B Q1 Revenue Growth across FY21 PROFORMA +5% all regions SERVICE REVENUE1 ~60% RECURRING REVENUE Q1 Orders Led by double-digit +7% growth in NA MSD ANNUAL GROWTH RATE FY Guidance Q1 Attach Rate +400 to 500bps of 2x MARGIN* ~41% improv

6. Slide 6: Buildings Play a Key Role in Achieving Net Zero

   Buildings Play a Key Role in Achieving Net Zero JCI Well Positioned and Differentiated Biden Administration announces ‘Building Performance Standards Coalition’ As an OEM and solutions provider, we have  Reinforces our vision on Decarbonization the technology and capabilities to provide complete so

7. Slide 7: OpenBlue Indoor Air Quality-as-a-Service

   DELIVERING HEALTHY & SUSTAINABLE BUILDINGS OpenBlue Indoor Air Quality-as-a-Service (IAQaaS) Why Johnson Controls? IAQ research Data-driven outcomes for better-informed OpenBlue IAQaaS Monitoring, Display, Compliance, Control Options decision making & benchmarking Technical flow Metasys Building Aut

8. Slide 8: OpenBlue + FogHorn: Intelligence @ the Edge

   PRODUCT TECHNOLOGY & INNOVATION OpenBlue + FogHorn: Intelligence @ the Edge Recognized Industry Leader with most Advanced Technology OpenBlue Platform  Edge Anomaly Detection and Predictive Maintenance – Proactive identification, alert generation in the moment  Local Control – Multi-vendor BMS int

9. Slide 9: Customer Wins Across Regions Addressing Sustainability

   Customer Wins Across Regions Addressing Sustainability North America EMEALA APAC Performance Infrastructure/Connected ESCO/Sustainability project in UAE Energy Efficiency/Controls project in Chiller project in Ontario Wuxi, China  JCI will leverage OpenBlue to power  Installed York YST steam turbi

10. Slide 10: Fiscal Q1 Financial Summary

    Fiscal Q1 Financial Summary* Strong Execution in a Challenging Environment SALES EPS $5.9B  +8% Organic  +26% $0.54 $5.3B + Field organic growth +6%; service +5% + Increased profitability $0.43 + Global Products organic revenue +14% + Lower share count Q1 FY21 Q1 FY22 Q1 FY21 Q1 FY22 Segment EBITA

11. Slide 11: Fiscal Q1 EPS Bridge (Continuing Operations)

    Fiscal Q1 EPS Bridge* (Continuing Operations) Strong Operational Performance OPERATIONS $0.01 $0.54 $0.06 $0.43 $0.04 Amort (0.01) NFC 0.01 Volume + Shares 0.01 Mix = Price/cost; supply chain disruptions Q1 FY21 VOLUME / PRICE / SG&A/COGS OTHER Q1 FY22 ACTUAL MIX ACTIONS ACTUAL  Strong and accelera

12. Slide 12: Order Momentum Continues & Backlog Continues To Build

    Order Momentum Continues & Backlog Continues To Build Trailing 3-mo Field Orders (YoY % Chg) 30%  Trailing 3-month Field Orders +8% YoY 20% - Service orders +7% 10% - Install orders +8% 0% Total Field -10% Service -20% -30% Backlog ($, billions; proforma for prospective service/install shift) 10% 1

13. Slide 13: Fiscal Q1 Segment Results

    Fiscal Q1 Segment Results* Managing Through Supply Chain Constraints Sales EBITA Margin Comments ($M) Organic % YoY Change YoY  Service +7% / Install +4%  Growth led by HVAC & Controls North America $2,152 11.6%  Significant headwinds from supply chain disruptions, material/labor availability, an

14. Slide 14: Fiscal Q1 Segment End Market Performance

    Fiscal Q1 Segment End Market Performance* Gaining Share Across HVAC and Fire & Security % of FY21 Consolidated Organic Sales % Change Sales North America EMEALA Asia PAC Global Products JCI Applied1 33% +LDD FLAT +mid-teens +high-teens2 +LDD Light Commercial3 8% +high-teens +high-teens Commercial HV

15. Slide 15: Corporate Expense & Other Items

    Corporate Expense* & Other Items Corporate Expense Fiscal 2022 Guidance Items $70M  Corporate expense $280 to $290M $67M  Amortization expense ~$450M  NFC $230 to $240M  NCI $240 to $265M Q1 FY21 Q1 FY22 *Non-GAAP excludes special items. See footnotes for reconciliation. 15 Johnson Controls, plc

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 FY21 Q1 FY22 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $234 $612  93% fixed rate debt current portion of long-term debt Long-term debt 7,506 7,437  2.7% weighted avg

17. Slide 17: Fiscal Q2 & 2022 Guidance

    Fiscal Q2 & 2022 Guidance* Continuing Strong Performance in a Challenging Environment FY 2022 Commentary Guidance FQ2 FY22  Underlying market is continuing to improve  Supply chain constraints / highly inflationary Organic Revenue +HSD +8 to +10% (previously +HSD) environment expected to continue

18. Slide 18: Appendix

    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

19. Slide 19: FY21 Re-casted Segment Results

    FY21 Re-casted Segment Results Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21  Effective at the start of the Actual Actual Actual Actual Actual Organic Organic Organic Organic Organic fiscal year, our Marine Growth Growth Growth Growth Growth business, which was BT&S - North America 2,034 -6% 2,092 -4% 2,212 8%

20. Slide 20: FY21 Proforma Service Revenue

    FY21 Proforma Service Revenue In Q1FY22, the Company began reporting certain retrofit projects in EMEALA and APAC as products and systems revenue on a prospective basis as they have evolved to be more aligned with other install offerings. The below table provides proforma amounts for FY21 to reflect

21. Slide 21: Fiscal First Quarter 2022 Consolidated Financial Results

    Fiscal First Quarter 2022 Consolidated Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q1 FY21 Q1 FY22 Q1 FY21* Q1 FY22* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,341 $5,862 $5,341 $5,862 10% Gross profit 1,728 1,891 1,728 1,882 9% % of sales 32.4% 3

22. Slide 22: Special Items (Continuing Operations)

    Special Items (Continuing Operations) $ In millions, except EPS After-tax/NCI Pre-tax Income Tax (Expense) NCI (Expense) Q1 FY22 (Expense) Benefit Income Income EPS Impact (Expense) Mark-to-market adjustments $57 $(14) $- $43 $0.06 Restructuring & impairment costs (49) 7 5 (37) (0.05) Acquisition re

23. Slide 23: 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

24. Slide 24: Condensed Consolidated Statements of Income

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended December 31, 2021 2020 Net sales $ 5,862 $ 5,341 Cost of sales 3,971 3,613 Gross profit 1,891 1,728 Selling, general and administrative expenses (1,369) (

25. Slide 25: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, 2021 2021 ASSETS Cash and cash equivalents $ 1,207 $ 1,336 Accounts receivable - net 5,671 5,613 Inventories 2,425 2,057 Other current assets 1,050 992 Curre

26. Slide 26: Condensed Consolidated Statements of Cash Flows

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2021 2020 Operating Activities Net income from continuing operations attributable to JCI $ 381 $ 327 Income from continuing operations attributable to noncontro

27. Slide 27: 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

28. Slide 28: 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 net mark-to-market adjustments, restructuring and impairment costs, Silent-Aire transact

29. Slide 29: Organic Growth Reconciliation

    3. Organic Growth Reconciliation The components of the change in net sales for the three months ended December 31, 2021 versus the three months ended December 31, 2020, including organic growth, are shown below (unaudited): Adjusted Base Net Net Sales for the Three Sales for the Three Net Sales for

30. Slide 30: Net Sales Reconciliation to Adjusted Net Sales

    The organic growth reconciliations presented earlier within this footnote contain financial information regarding adjusted net sales. The following is the reconciliation of net sales as re-casted to adjusted net sales for the three months ended December 31, 2020 and 2019, the three months ended Marc

31. Slide 31: Proforma Service Revenue Organic Growth Reconciliation

    Proforma Service Adjusted Base Service Proforma Service Revenue for the Revenue for the Three Revenue for the Three Months Ended Base Year Adjustments - Base Year Adjustments - Months Ended Three Months Ended (in millions) June 30, 2020 Divestitures and Other Foreign Currency June 30, 2020 Acquisiti

32. Slide 32: 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 view of the

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