17 slides from Johnson Controls International's earnings presentation, Jul 20, 2006
Slide 1: Quarterly Update FY 2006 Third Quarter
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 statements of historical fact are statements that a
Slide 2: Third Quarter 2006: Record sales and earnings
Third Quarter 2006 Record sales and earnings Sales $8.4 billion, up 19 percent EPS (from continuing operations) $1.70, up 30 percent Non-recurring tax benefits and restructuring initiatives announced June 29 Performance versus forecast Interior experience NA: lower commercial cost recoveries: commod
Slide 3: Continuing Profitable Growth
Profitable growth is first priority to increase shareholder return Great growth opportunities exist in each of our businesses Environment/energy efficiency Emerging markets Building systems and services, facility management Hybrid vehicles Automotive electronics .... And every business line and mark
Slide 4: Continuing Profitable Growth: Acquisitions as platforms
Continuing Profitable Growth Acquisitions as platforms for additional growth Integration updates July 2005 - Delphi battery Major new OE customer (GM) First presence in Asian growth markets, especially China Delphi footprint rationalization on schedule December 2005 - York International Tripled our
Slide 5: Reducing costs while improving service, quality
Reducing costs while improving service, quality Operational excellence Innovation/process improvement Six Sigma, Best Business Practices Increases capacity with little additional investment Common metrics/benchmarks Nearly $2 billion savings opportunity identified Globalization Low-cost countries Ec
Slide 6: Third quarter restructuring initiatives
Continuing Profitable Growth Third quarter restructuring initiatives Operational excellence Interior experience North America: focus on interior product profitability Europe: seating component plants to eastern Europe Building efficiency Europe: "Systems redesign" of branch offices to improve cost s
Slide 7: Achieving growth 2-3x our underlying markets
Achieving growth 2-3x our underlying markets Investing in innovation; product and process technologies Driving operational excellence to reduce costs and improve quality World-class employees dedicated to our customers and our goals Another record year for Johnson Controls + + + Continuing Profitabl
Slide 8: Interior Experience
Third Quarter 2006 Interior Experience Third-quarter industry vehicle production N.A. -1% Cars +5%, light trucks - 5% Light truck volume declines by every OE, including transplants Europe -4% Japan sales flat China production up 40+% Commodities remain a headwind 2006 2005 Sales $4.7B $5.0B - 6% FX
Slide 9: Power Solutions
Third Quarter 2006 Power Solutions 2006 2005 Sales $886M $665M +33% Substantially higher unit shipments - Primarily Delphi volume - Slight growth in European and North American aftermarket Higher unit prices due to lead pass-through Op. Inc. $119M $75M +59% Legal settlement benefit a positive $33m I
Slide 10: Building Efficiency
Third Quarter 2006 Building Efficiency Complete controls/mechanical offering winning market favorability "Green"/energy efficiency increasing in importance as energy prices escalate LEED "green" certified building projects in NA, Europe, Asia accelerating North American construction Residential HVAC
Slide 11: Financial Highlights: Operating income margin expansion
(in millions) Operating income margin expansion Margin improvement associated with building efficiency growth, York acquisition synergies Favorable benefit of legal settlements offset by lower customer recoveries, accelerated integration expenses Restructuring initiatives; positioned for future marg
Slide 12: Financial Highlights
(in millions, except per share data) Net interest expense: Increase reflects financing of the York acquisition Equity income: Continued stronger automotive production in China Income taxes: Current quarter includes non-recurring tax adjustment and tax benefit related to restructuring actions - see r
Slide 13: Income Tax Provision/Benefit
Income Tax Provision/Benefit For the three months ended June 30, 2006 (in millions) (in millions) (in millions)
Slide 14: Q3 Financial Highlights
Q1:05 Q2:05 Q3:05 Q4:05 Q1:06 Q2:06 Q3:06 Q4:06 0.333 0.285 0.28 0.279 0.465 0.449 0.42 0.392 Actual Projected Q1 Q2 Q3 Q4 2006 2005 Total Debt To Capitalization Target Range Q1 Q2 Q3 Q4 45% 42% Working capital inflow of $354 million; excluding restructuring, YTD working capital usage neutral Capita
Slide 15: Updated Fourth Quarter and Full-Year Earnings Guidance
Building Benefits of York acquisition accelerate Cross-selling opportunities being realized Strong orders momentum, including integrated (controls/mechanical equipment) jobs Rising backlog supports growth outlook Q4 Business Outlook Fourth quarter guidance $1.86 - $1.91 Prior full-year guidance $5.2
Slide 16: Appendix
Appendix
Slide 17: Key Platforms: Positives and Negatives
Positives Negatives Third Quarter 2006: Key Platforms North America Europe Chrysler: Compass, Caliber, PT Cruiser Mercedes: M-Class, R-Class, GL-Class GM: Impala/Monte Carlo Chrysler Sebring/Stratus Ford: Expedition/Navigator, F-Series GM: Minivans, Sierra/Silverado, TrailBlazer Nissan: Altima, Arma