Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q1 FY2020 Earnings Presentation

29 slides from Johnson Controls International's earnings presentation, Jan 31, 2020

  1. Slide 1: Fiscal 2020 First Quarter Results

    Fiscal 2020 If you can read this Click If you can read this Click First Quarter on the icon to choose a picture or Reset the slide. on the icon to choose a picture or Reset the slide. Results To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the To

  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 risks

  3. Slide 3: As We Look Ahead: Executing On Our Commitments

    As We Look Ahead Executing On Our Commitments  Continued momentum across key financial performance metrics  Strong start to margin improvement targets  Improving cash generation profile with better working capital metrics  Order growth improves in Q2; converting robust pipeline  Strong balance

  4. Slide 4: Field Order Growth

    Field Order Growth Organic % Change 9% 8% 7% 7% 6% 5% 5% 2% 0% Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Strong Order Pipeline With Mid-Single Digit Q2 Orders Expected Backlog Up 6% to $9.0B – Provides Visibility Through FY20 4 Johnson Controls International plc — Janua

  5. Slide 5: Q1 FY20 Financial Summary

    Q1 FY20 Financial Summary* (continuing operations) NET SALES ADJUSTED EPS $5,576M $5,464M  +2% $0.40 Reported $0.26  +54%  +3% Reported Organic Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 ADJUSTED EBIT & MARGIN ADJUSTED FCF $448M $400M  70bps Normal Reported 8.0% ($0.1B) seasonal 7.3%  80bps outflow ($0.2B

  6. Slide 6: Q1 FY20 Results vs. Prior Year: EPS Bridge

    Q1 FY20 Results vs. Prior Year* (continuing operations) EPS BRIDGE $0.03 $0.40 $0.06 $0.03 ($0.01) $0.03 $0.26 Q1 FY19 VOLUME / SYNERGIES / SHARE NFC OTHER Q1 FY20 ACTUAL MIX PRODUCTIVITY COUNT ACTUAL *Non-GAAP excludes special items. See footnotes for reconciliation. 6 Johnson Controls Internationa

  7. Slide 7: Segment Results

    Segment Results* Sales Segment EBITA EBITA Margin +3% +7% +40bps Organic Organic Organic $625M 11.2% $5,576M $590M 10.8% $5,464M Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 EBITA Margin +40bps +20bps 11.2% 10.8% (10bps) (10bps) Q1 FY19 Volume / Mix Retail Synergies / Other Q1 FY20 Productivity *

  8. Slide 8: Segment Results: Building Solutions North America

    Segment Results: Building Solutions North America* Sales  Organic sales +3% +3% - Install +3% / Service +2% $2,167M Organic $2,116M - HVAC & Controls +LSD - Fire & Security +MSD - Performance Solutions (LDD) Q1 FY19 Q1 FY20  EBITA margin flat - Favorable volume leverage Segment EBITA - Productivit

  9. Slide 9: Segment Results: Building Solutions EMEA/LA

    Segment Results: Building Solutions EMEA/LA* Sales  Organic sales +7% +7% - Install +10% / Service +5% Organic $928M $907M - HVAC & Controls +HSD - Fire & Security +MSD - Industrial Refrigeration +high-teens Q1 FY19 Q1 FY20  EBITA margin +120bps - +130bps, ex-foreign currency Segment EBITA - Favor

  10. Slide 10: Segment Results: Building Solutions Asia Pacific

    Segment Results: Building Solutions Asia Pacific* Sales  Organic sales +3% +3% - Install +5% / Service +1% Organic $629M - HVAC & Controls flat $613M - Fire & Security +LDD  EBITA margin +60bps Q1 FY19 Q1 FY20 - Favorable volume leverage - Productivity savings and cost synergies Segment EBITA  Or

  11. Slide 11: Segment Results: Building Solutions Global Products

    Segment Results: Building Solutions Global Products* Sales  Organic sales +2% +2% - Building Management Systems +HSD Organic $1,852M - HVAC & Refrigeration Equipment flat $1,828M • Global Resi HVAC (LSD); NA Resi HVAC (MSD) • Light commercial +LSD; NA flat • VRF +MSD Q1 FY19 Q1 FY20 • Applied Parts

  12. Slide 12: Corporate Expense

    Corporate Expense* (continuing operations)   Realization of cost synergies and 13% productivity savings ($ in millions)  Ongoing cost reductions related to Power Solutions sale $93M $81M Q1 FY19 Q1 FY20 *Non-GAAP excludes special items. See footnotes for reconciliation. 12 Johnson Controls Intern

  13. Slide 13: Free Cash Flow

    Free Cash Flow* (continuing operations) (in $ billions) Q1 FY19 Q1 FY20  Q1 adjusted free cash outflow from continuing operations of $0.1 billion Cash (used) provided by operating activities $(0.1) $0.5  Expect FY20 adjusted free cash flow Capital expenditures (0.2) (0.1) conversion of ~95% Report

  14. Slide 14: Balance Sheet

    Balance Sheet Capital Structure Q4 FY19 Q1 FY20 Short-term debt and $511 $1,362 current portion of long-term debt Long-term debt 6,708 5,920 Total debt 7,219 7,282 Less: cash and cash 2,805 2,160 equivalents Net debt* $4,414 $5,122 Share repurchases ~$861M ~$651M *Non-GAAP measure. 14 Johnson Contro

  15. Slide 15: Other Items

    Other Items Significant Q1 Special Items Expected Impact Cash Non-Cash  Restructuring & impairment costs – $111M $57M $54M  Switzerland tax reform – $30M $ - $30M Implementation of New Accounting Standard  Adoption of new Lease Standard (ASC 842) – balance sheet gross-up in other noncurrent asset

  16. Slide 16: Appendix: Supplemental Information

    Appendix: Supplemental Information Click to edit text

  17. Slide 17: FY20 First Quarter Financial Results

    FY20 First Quarter Financial Results (continuing operations) ($ in millions, except earnings per share) Q1 FY19 Q1 FY20 Q1 FY19* Q1 FY20* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,464 $5,576 $5,464 $5,576 2% Gross profit 1,725 1,803 1,725 1,803 5% % of sales 31.6% 32.3% 31.6% 32.3% SG&A

  18. Slide 18: FY20 First Quarter Special Items

    FY20 First Quarter Special Items (continuing operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax Income Q1 FY20 (Expense) Benefit Income (Expense) EPS Impact Restructuring & impairment costs $(111) $16 $5 $(90) $ (0.12) Integration costs (39) 5 - (34) (0.04) Ne

  19. Slide 19: FY20 First Quarter Restructuring & Impairment Costs

    FY20 First Quarter Restructuring & Impairment Costs (continuing operations) $ In millions Business Unit Cash Non-cash Total Q1FY19 Q1FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Buildings $- $57 $- $54 $- $111 Corporate - - - - - - Total pre-tax charge $- $57 $- $54 $- $111 Tax benefit - (16) Noncontrolling

  20. Slide 20: Fiscal 2020 Continuing Operations Guidance: EPS Walk

    Fiscal 2020 Continuing Operations Guidance* FY20 EPS WALK $0.33 $2.50 to $2.60 $0.15 $0.15 ($0.04) $1.96 FY19 VOLUME/ SYNERGIES/ SHARE OTHER FY20 CONTINUING MIX PRODUCTIVITY REPURCHASES CONTINUING OPS OPS GUIDANCE FY20 EPS Growth of 28% to 33% *Non-GAAP excludes special items. 20 Johnson Controls In

  21. Slide 21: Fiscal 2020 Continuing Operations Guidance

    Fiscal 2020 Continuing Operations Guidance* Consolidated Adjusted Free Cash Flow Conversion Sales ~95% $24.3 - $24.7B +2% to +3% reported Sales Headwinds Segment EBITA Margin Low to Mid-single Digit Organic Growth  FX impact (~$75M) EBIT Margin  Net divestitures (~$210M) +40 to +60bps 13.5% 11.0%

  22. Slide 22: johnsoncontrols.com/investors

    johnsoncontrols.com/investors @JCI_IR Click to edit text

  23. Slide 23: 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, 2019 2018 Net sales $ 5,576 $ 5,464 Cost of sales 3,773 3,739 Gross profit 1,803 1,725 Selling, general and administrative expenses (1,427) (

  24. Slide 24: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, 2019 2019 ASSETS Cash and cash equivalents $ 2,160 $ 2,805 Accounts receivable - net 5,612 5,770 Inventories 1,953 1,814 Assets held for sale 87 98 Other cur

  25. Slide 25: Condensed Consolidated Statements of Cash Flows

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2019 2018 Operating Activities Net income attributable to JCI from continuing operations $ 159 $ 107 Income from continuing operations attributable to noncontro

  26. Slide 26: 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

  27. Slide 27: Footnotes (continued)

    (3) The three months ended December 31, 2019 exclude the net mark-to-market adjustments on restricted investments of $10 million. The three months ended December 31, 2018 exclude the net mark-to-market adjustments on restricted investments of $21 million. (4) Restructuring and impairment costs for t

  28. Slide 28: Organic Growth Reconciliation

    3. Organic Growth Reconciliation The components of the changes in net sales for the three months ended December 31, 2019 versus the three months ended December 31, 2018, including organic growth, is shown below (unaudited): Adjusted Base Net Net Sales for the Three Sales for the Three Net Sales for

  29. Slide 29: Net Debt to Capitalization

    5. Net Debt to Capitalization The Company provides financial information regarding net debt as a percentage of total capitalization, which is a non-GAAP performance measure. The Company believes the percentage of total net debt to total capitalization is useful to understanding the Company's financi

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