Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Tyco International — Investor Day (June 2007)
57 slides from Johnson Controls International's investor day presentation, Jun 19, 2007
Slide 1: Tyco International Investor Day
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco International Investor Day June 19, 2007 Tyco International Investor Day Ed Arditte Senior Vice President, Strategy and Investor Relations 1
Slide 2: Forward-Looking Statement/Non-GAAP Measures
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Forward-Looking Statement/ Non-GAAP Measures This presentation contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management’s c
Slide 3: Today's Presentations
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Today’s Presentations Today’s presentation is also being webcast These presentations will be available for replay later today and will be available at www.tyco.com There will be a Q&A session following each of the company presentations S
Slide 4: Tyco International Agenda
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco International Agenda Tyco International Overview Ed Breen Business Segment Reviews – ADT Worldwide Naren Gursahaney – Fire Protection Services Dean Seavers – Safety Products George Oliver – Electrical & Metal Products George Oliver – Flow
Slide 5: Tyco International Highlights
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco International Highlights A multi-industry company with market-leading businesses in electronic security, fire, safety services and products, valves and controls, and other industrial products Attractive markets with solid growth poten
Slide 6: Approximately 40% of Total Revenue Is Monitoring and Service Revenue
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Approximately 40% of Total Revenue Is Comprised of Monitoring and Service Revenue 2006 Pro Forma Revenue = $18.6B 1 Product & $7.5B Installation 40% $11.1B Service 60% ADT generates $4.7B of revenue from monitoring and service activities F
Slide 7: Our Businesses and Brands Are Known Around the World
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Our Businesses and Our Brands Are Known Around the World and… ADT Worldwide Fire Protection Services Flow Control Safety Products Electrical & Metal Products Infrastructure Service …Have Achieved Market-Leading Positions Global leader in secur
Slide 8: We Have Strong Positions in Large, Global and Fragmented Industries
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t We Have Strong Positions in Large, Global and Fragmented Industries Global Electronic Global Fire Global Industrial Valves Security Industry Industry & Controls Industry $65+B Market $30+B Market $38+B Market Expected Market Expected Market Ex
Slide 9: Our Cash Flow Provides Significant Financial Flexibility
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Our Cash Flow Provides Significant Financial Flexibility Invest in profitable organic revenue growth initiatives Fund cost reduction and operational improvement opportunities within our businesses Make selective acquisitions to enhance o
Slide 10: We Will Focus On: Actively Managing Our Portfolio
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t We Will Focus On: Actively Managing our Portfolio Increasing Investments in Organic Growth and Making Selective Acquisitions Strengthening Our Operations Through Restructuring Driving Operational Excellence Programs Actively Managing O
Slide 11: Increasing Investments in Organic Growth and Selective Acquisitions
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Increasing Investments in Organic Growth and Making Selective Acquisitions Add Residential Customers through increased internal ADT North account generation with lower attrition America Expand Commercial End-Market Expertise and Increase S
Slide 12: Continuing to Drive Operational Excellence Programs
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Continuing to Drive Operational Excellence Programs throughout Our Company Six Sigma/Lean – Trained 950+ employees in ‘06 Six – 5+% footprint reduction in ‘06 Sigma/Lean Strategic Sourcing IT – $100+M of gross savings in ‘06 Sourcing Wor
Slide 13: ADT Worldwide
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Our Operating Leadership Team Ed Breen Naren Dean George Patrick Gursahaney Seavers Oliver Decker ADT Worldwide Fire Safety Products Flow Control Protection Services Electrical & Metal Products 2006 Revenue 2006 Revenue 2006 Revenue 2006 Reven
Slide 14: ADT Worldwide at a Glance
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Worldwide at a Glance 2006 Revenue of $7.2B – 67% Commercial, 33% Residential – 50% Recurring Revenue from ~7M customers 2006 Operating Income of $907M and EBITDA of $1.9B Broad geographic reach – 55% North America, 33% EMEA, 12% ROW
Slide 15: ADT Is the Worldwide Leader in Electronic Security
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Is the Worldwide Leader in Electronic Security Products and Services Estimated Electronic Security Revenue ADT Advantages ( Products and Services ) Brand Awareness Residential/ ADT WW Commercial Capability Secom Service Coverage Siem
Slide 16: ADT Has the Largest Base of Recurring Revenue
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Has the Largest Base of Electronic Security Recurring Revenue in the World 2006 ADT Worldwide Revenue $7.2B Install & Product Revenue 35% of Total $2.5B Recurring Monthly Revenue 50% of Total $3.6B Other Service/Maintenance 15% of Total $1
Slide 17: Business Model Changes Have Made ADT Stronger
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Business Model Changes Have Made ADT Stronger Increased level of internally Focused on internal growth generated accounts from a low of 37% to 64% today Reduced residential subscriber Upfront payment required acquisition cost by 25% over the s
Slide 18: ADT North America
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT North America 2006 Revenue $7.2B 2006 ADT North America Resi- Comm- Total dential ercial NA EMEA Revenue $1.8B $2.2B $4.0B 33% % Recurring 84% 42% 62% North America Op Inc $405M $256M $661M ROW 55% 12% % Margin 22.4% 11.7% 16.6% EBITDA $91
Slide 19: ADT North America - Residential and Commercial
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT North America - Residential $37.00 New Service Offerings ADT US Monthly Revenue per $35.00 New Residential Customer $33.00 Quality Service Program Fire Alarm $31.00 Carbon Monoxide $29.00 Cellguard Backup $27.00 Home Health Servi
Slide 20: ADT North America - Commercial
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT North America – Commercial Typical Retailer Account Loss Prevention Operations Management People Counting & Electronic Data Mining Article Surveillance Customer & Intrusion Detection Employee Safety Burglar Alarm Video & Monitoring Surveil
Slide 21: ADT North America - Standardizing Operations
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT North America – Residential and Commercial We Are Standardizing Operations Across the Business Leveraging scale and improving service through a standardized approach Fully deploying operating playbooks and Performance Management Scorec
Slide 22: ADT Europe, Middle East & Africa
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Europe, Middle East & Africa 2006 EMEA Revenue $2.4B ADT ADT 33% of Total EMEA NA Revenue $2.4B $4.0B Continental Resi/Comm Split 15%/85% 46%/54% Europe % RMR 31% 62% $1.3B UK Op Inc $148M $661M $0.9B % Margin 6.3% 16.6% EBITDA $270M $1,42
Slide 23: Continental Europe Actions and ADT Rest of the World
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Europe, Middle East & Africa – Continental Europe Improvement Actions Restructuring projects underway in 13 countries – Right-sizing operations – Consolidating back office functions – Rationalizing footprint Enhancing revenue mix and q
Slide 24: Fire Protection Services
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t ADT Worldwide - Summary The global security market is very attractive and ADT is well positioned to win in this market The business model changes we have made in recent years position us well for future top and bottom line growth We have
Slide 25: Fire Protection Services at a Glance
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Fire Protection Services at a Glance Large steady growth market (est. $30B in 2006)* – Expansion reflects global construction activity 2006 Revenue of $3.3B; 47% service revenue 2006 Operating Income of $239M Strong global presence * I
Slide 26: Fire Protection Services Strategy
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Balanced Revenues 2006 Revenues $3.3B Sprinkler Suppression $1.2B Service $0.4B $1.6B Electronic $1.7B Contracting $1.7B Electronic and Service Are the Most Profitable Fire Protection Services Strategy Electronic Sprinkler Suppression Gain c
Slide 27: Fire Protection's Competitive Strengths
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Fire Protection’s Competitive Strengths Brand recognition in industry Broad offering of fire products and services Direct contracting and service provider Largest footprint Diversified customer base – Vertical expertise in fire alarm
Slide 28: SimplexGrinnell Growth and Profit Improvement
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t SimplexGrinnell Growth and Profit Improvement Financial Performance Key Actions 2004-2006 Revamped strategic focus $M Revenue OI Margin 2,000 10% Standardized district structure $1,878 1,800 $1,708 9% $1,691 Improved project management 1
Slide 29: Leverage North America Best Practices; Fire Protection Summary
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Leverage North America Best Practices throughout EMEA and Rest of World North 2006 America EMEA ROW Revenue $1.9B $0.7B $0.7B % Electronic 58% 26% 36% % Service 54% 37% 39% % Organic Growth 10.3% -6.6% 5.0% Op. Income $168M $31M $40M Operating
Slide 30: Tyco Safety Products at a Glance
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco Safety Products Attractive Growth and Margin Outlook George Oliver President, Tyco Safety Products Tyco Safety Products at a Glance 2006 Revenue of $1.7B Sales by Geography 2006 Operating Income* of $202M Asia Pacific 9% 38 manufact
Slide 31: Tyco Safety Products Consists of Three Platforms
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco Safety Products Consists of Three Platforms Fire Suppression Protecting people and valuable assets from the threat of fires Electronic Security Securing homes and businesses from unauthorized intrusions Life Safety Protecting our firefigh
Slide 32: Expanding R&D Centers in High Growth Regions
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Expanding R&D Centers in High Growth Regions Core Technologies R&D Centers • Fire suppression chemistry and mechanics • Materials and systems for extreme duty in first responder applications • Electronic fire monitoring and safety systems meet
Slide 33: Fire Suppression Products
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Fire Suppression Products: A Broad Product Capability Engineered Clean Agent Suppression Systems High Expansion Systems Foam e.g., Restaurant Portable Sprinklers Extinguishers Number 1 in Fire Suppression Systems Source: IMS Research, Frost &
Slide 34: Electronic Security Products: Total Solution Capability
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Electronic Security Products: Total Solution Capability Access Control Digital Video Management Systems Access & Video Security Growth Strategy Current CIO Technologies Security Division of IT Market Growth Emerging Technology Chief Security O
Slide 35: Electronic Security and Life Safety Products
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Electronic Security Market Share 2006 Revenue $411M Other 18% Video 24% Access ~$9.3B Market Control 19% 8-10% market growth rate Intrusion Security 39% Strategic Opportunities Internet-based building management systems – Enterprise integrat
Slide 36: Life Safety Products and Key Growth Initiatives
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Life Safety Products Market Share 2006 Revenue $361M Compressors Instruments 3% 3% Personal Protection 9% Air Purification ~$3.1B Market 20% Self - 3% market growth rate Contained Breathing Apparatus 65% Strategic Opportunities High growth i
Slide 37: Safety Products Summary
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Safety Products Summary Positioned well in attractive growth markets Strong market position with industry leading brands Proven technology leadership in fire suppression, life safety and electronic security Deep technology pipeline E
Slide 38: Electrical & Metal Products at a Glance
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Electrical & Metal Products at a Glance 2006 Revenue of $1.9B; Operating Income of $319M 4,500 employees 33 manufacturing and service locations in North America, South America, EMEA and Asia Pacific Strong brands that are well known by
Slide 39: Markets Served Are Over $11B Annually
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Electrical, Steel Tubular and Metal Framing Markets Served Are Over $11B Annually Electrical Steel Tube Metal Framing NA Market Size: $2.9B NA Market Size: $5.6B NA Market Size: $3.1B Electrical & Metal Key Market Drivers Products Market Share
Slide 40: Margin Rates Vary with Metal Spreads
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Margin Rates Vary with Metal Spreads 1H 1H $M 2002 2003 2004 2005 2006 2006 2007 Revenues 1,258 1,163 1,579 1,798 1,949 902 992 Growth % 5.0% (7.6%) 35.8% 13.9% 8.4% 4.2% 2.2% Operating Income 222 120 371 295 319 153 67 Margin % 17.6% 10.3% 23
Slide 41: Tyco Flow Control at a Glance
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Tyco Flow Control Expanding On Our Market Leadership Patrick Decker President, Tyco Flow Control Tyco Flow Control at a Glance 2006 Revenue of $3.1B – Organic revenue growth of 13.2% 2006 Operating Income of $356M; Operating Margin of 11.4
Slide 42: We Make Valves... A Strong Global Business
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t We Make Valves That …. Are Small Enough to Put … or Large Enough to in Your Pocket … Drive Your Car through A Strong Global Business … Asia EMEA Revenue: $390M Revenue: $1,290M Employees: 2,200 Americas Locations: 10 Employees: 6,000 Revenue:
Slide 43: Serving a Broad Range of Customers: Energy Market
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t … Serving a Broad Range of Customers Oil & Gas Energy Refining Power Generation Chemical & Pharmaceutical Marine Process Food & Beverage Mining & Mineral Processing Storage Kellogg Brown & Root Water Treatment Distribution
Slide 44: Refinery Opportunity and Process Industry Market
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t An Average* Refinery Represents Market Opportunity Greater Than $140M Globe Valves Heat Tracing Rotary Valves Valve Automation * Management estimate for 150,000 barrels per day operation The Process Industry Market Is Over $19 Billion Market S
Slide 45: The Water Market We Serve Is Over $18 Billion
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t The Water Market We Serve Is Over $18 Billion Market Size = $18.3B Key Market Drivers Emerging economies build out basic Valves $5.9B water and wastewater systems Pipes $12.4B Developed countries are investing to maintain aging water infra
Slide 46: Our Markets Are Global and Local
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Our Markets Are Global and Local Industrial Valves & Controls Global Water Market Revenue ~ $38B Market Revenue ~ $18B Tyco Top 3 Flow Control Tyco Others Others Flow Control Next 9 Next 5 Large & Fragmented Markets … Tyco Well Positioned Sour
Slide 47: We Are Planning To Expand Our Market Leadership
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t We Are Planning To: Expand our position as the world leader in the design, manufacture, sales, and service of valves, actuators, controls, heat tracing and related products Our goal is to: – Grow faster than the market grows – Improve prof
Slide 48: Flow Control Summary
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Flow Control Summary Strong momentum in driving growth and profitability initiatives over the past three years – 11.4% average revenue growth 1 – Operating Margin has improved from 6.6% to 11.4% Market leading positions in attractive marke
Slide 49: All Three Companies Have Solid Investment-Grade Balance Sheets
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Two Areas to Review with You Today Tyco … Separation-related financial items – Capital Structure and Ratings – Dividend Recommendations – Sharing Agreement – Tax Rates…Initial and Long-Term – Q3 Special Charges Tyco … Financial characteris
Slide 50: The Current Dividend Will Initially Be Split Among All Three Companies
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Estimated Cash at Separation Cash Balance at end of Q2 2007 $4.0B Estimated Cash Flow in Q3 $1.0 Separation Costs ($1.0) Dividend Payments ($0.4) Legal Settlement ($0.8) Estimated Cash at Separation $2.8B Tyco Covidien Electronics $1.2B $0.8B
Slide 51: Sharing Agreements for Tax & Legal Liabilities
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t There Will Be Sharing Agreements for Tax & Legal Liabilities Among the Three Companies Certain Tax and Legal legacy items will be shared to facilitate resolution Sharing Agreements cover Tyco contingent liabilities for tax liabilities and
Slide 52: Estimated Effective Tax Rates and Special Charges
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Estimated Effective Tax Rates for Each Company Post-Separation Estimated Longer-Term Post-Separation Goals Tyco 22-25% Covidien 30-32% Electronics 31-34% Due to the class action settlement, initial tax rates are expected to be at the higher en
Slide 53: Tyco Is a $19 Billion Multi-Industry Company
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Two Areas to Review with You Today Tyco … Separation-related financial items – Capital Structure and Ratings – Dividend Recommendations – Sharing Agreement – Tax Rates …Initial and Long-Term – Q3 Special Charges Tyco … Financial characteri
Slide 54: Strong Financial Metrics Across the Business Segments
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Strong Financial Metrics Across the Business Segments $M 2006 2006 2006 2006 Revenue Op Inc Op Margin EBITDA Margin ADT Worldwide $7,205 $907 12.6% 26.0% Fire Protection $3,281 $239 7.3% 8.1% Flow Control $3,135 $356 11.4% 13.1% Safety Product
Slide 55: Interest Expense and Metal Spread Volatility
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Interest Expense and Interest Income Estimated Interest Rate Interest Expense ~$4.5B of Debt ~7.0% Interest Income ~$1.25B Beginning Cash Balance ~4.0% Interest on Shared Tax Liability ~$289M Liability to TEL and COV ~8.5% Volatility fro
Slide 56: Each Business Has Strong Revenue Growth Potential
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Each of the Businesses Has Strong Revenue Growth Potential Organic Growth 2005 2006 1H 2007 ADT Worldwide 0% 2% 3% Fire Protection 0% 5% 6% Long- Services Term Flow Control 7% 13% 12% Organic Safety Products 5% 4% 3% Growth Electrical & Metal
Slide 57: Summary: Post-Separation, Tyco Has...
Tyco_International_SHOW_FILE_FINAL.pp December 5, 2007 t Summary Post-Separation, Tyco Has … Solid revenue growth prospects Operating income improvement opportunities Strong and stable cash flow generation Solid balance sheet and capital structure Strong incremental returns on invested cap