Johnson Controls International plc · NYSE:JCI
Johnson Controls International — Investor Presentation (March 2015)
26 slides from Johnson Controls International's investor presentation, March 2015
Slide 1: Johnson Controls background and Financial guidance
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Slide 2: Clear portfolio choices
Clear portfolio choices Revenue FY14 Proforma ADT - $800M (closed June FY14) Building Efficiency $10.1B $13.9B Hitachi JV - $3.0B (late FY15) Recently Announced Global Workplace Solutions 4.1B Decision to Divest - (late FY15) Automotive Seating 17.5B 17.5B Electronics - Sold Automotive Electronics 4
Slide 3: Focus on margin enhancement
Focus on margin enhancement Restructuring and turnaround initiatives across our businesses, including headcount reductions and global footprint changes Cost reduction, pricing and procurement initiatives Manufacturing, engineering and global SAP implementation initiatives underway to leverage
Slide 4: Balanced capital allocation framework: Free cash flow
Balanced capital allocation framework Free cash flow Balanced Capital Significant Free Cash Flow (est.) Key Objectives Allocation Goals $5.8 billion cumulative Investing in $2.4 High ROI Capex $1.9 BBB+ minimum Paying a rating $1.5 Competitive Dividend Target 30 - 35% debt to capital Pursuing St
Slide 5: Balanced capital allocation framework: Capex
Balanced capital allocation framework Capex ($billion) Building Efficiency Power Solutions Automotive Experience Reinvestment 2 3 $1.8 ratio 1.8 1.6 2.5 2.4x $1.4 1.4 $1.3 $1.3 $1.2 2 1.2 2.0x 1 1.6x 1.5 0.8 1.4x 1.3x 0.6 1 0.4 0.5 0.2 0 0 FY11 FY12 FY13 FY14 FY15P 6 Johnson Controls, Inc. —
Slide 6: Shareholder returns: Strong dividend track record continues
Shareholder returns Strong dividend track record continues Dividends Per Share Consecutive dividend payments since 1887 $3.5 billion in cash returned to $1.04 shareholders via dividends over the past $0.88 10 years $0.72 $0.76 33 dividend increases in past 35 years $0.64 Recently announced F
Slide 7: Shareholder returns: Share repurchase program
Shareholder returns Share repurchase program Announced share repurchase program Repurchase philosophy in FY14; total of $3.65 billion over 3 Utilize share repurchases as means to years return cash to our shareholders $1.25 billion completed in FY14 Maintain minimum credit rating of BBB+ $1
Slide 8: FY15 underlying key assumptions
FY15 underlying key assumptions Automotive Production Construction Spending North America 17.2m up 2% Non-residential Europe 25.0m up 2% – U.S. +2% China 24.5m up 10% – Europe +1% – Asia +10% Euro - $1.30 (headwind) Commodities Minimal headwind exposure Tax Rate - 19% in FY15 (19.4% in F
Slide 9: FY15 outlook
FY15 outlook Consolidated net sales Full year ADT (+$800M) Approx $42.3B (down 1%) Continued growth in emerging markets across all businesses, particularly China Strong aftermarket volumes Deconsolidate Interiors business on July 1, 2015 (-$0.9B) Planned AE capital constraints and targeted
Slide 10: Building Efficiency (excluding GWS) FY15 financial outlook
Building Efficiency - excluding Global Workplace Solutions (GWS) FY15 financial outlook Sales growth of 9% to 11% (2% to 4% Margin expansion to 9.4% - 9.6% ex ADT) Pricing and business model changes Modest North America market – North America reorganization recovery Benefits of cost reduction,
Slide 11: Building Efficiency (excluding GWS) Mid-term outlook (through FY19)
Building Efficiency (excluding GWS) Mid-term outlook (through FY19) Sales growth of 6% to 7% Late-cycle market recovery ADT synergies Growth in emerging markets Margin expansion to 11.0% - 12.0% Average annual improvement of 40 to 50 bps ADT margins accretive Johnson Controls Operating S
Slide 12: Automotive Experience - Seating FY15 financial outlook
Automotive Experience - Seating FY15 financial outlook Sales decline of 5% to 6% Margin expansion to 5.4% - 5.7% Higher volumes in North America and Ongoing operational improvements Europe Metals and South America Continued growth in emerging turnaround programs markets, particularly China
Slide 13: Automotive Experience - Seating Mid-term outlook (through FY19)
Automotive Experience - Seating Mid-term outlook (through FY19) Sales growth of 2% to 3% Seating: Three-year backlog Strong global production volumes Impact of lower capital expenditures and $3.4 billion vs. $2.5 billion in targeted prior year new business hurdles 65% in China Margin expansi
Slide 14: Power Solutions 2015 financial outlook
Power Solutions 2015 financial outlook Sales growth of 8% to 10% Margin expansion to 16.4% - 16.6% (7% to 9% ex lead) (16.5% - 16.7% ex lead) Higher volumes across all regions and Operating leverage channels Volume increases Continued improvement in China Improving China profitability / AG
Slide 15: Power Solutions Mid-term outlook (through FY19)
Power Solutions Mid-term outlook (through FY19) Sales growth of 5% to 6% Growth in China and other emerging markets Continued market share gains Advanced Battery volumes Margin expansion to 18.0% - 19.0% Average annual improvement of 50 bps Improved product mix (AGM) Johnson Controls Ope
Slide 16: GWS & Interiors 2015 financial outlook
GWS & Interiors 2015 financial outlook GWS Interiors Sales flat to decline of 1% Sales decline of 20% to 25% Several significant new business and Deconsolidate business on July 1, 2015 renewal awards – maintain 30% equity interest in joint Commercial discipline venture FY14 divestiture of su
Slide 17: Executing on our strategies: China increasingly important
Executing on our strategies China will continue to be increasingly important Johnson Controls China revenues * * includes non-consolidated JVs at 100%, including proposed automotive interiors joint venture 18 Johnson Controls, Inc. —
Slide 18: Quarterly update FY 2015 first quarter
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Slide 19: Record 2015 First Quarter
Record 2015 First Quarter* Net revenues: $10.7 billion, up 1% Improved profitability (up 5%, excluding currency) vs. $10.6 billion in Q1 2014 7.2 percent segment income margin Segment income: $768 million, up 18% 110 basis point increase year-over-year vs. $650 million in Q1 2014 EPS: $0.7
Slide 20: 2015 First Quarter Automotive Experience
2015 First Quarter Automotive Experience* 2015 2014 Fiscal Q1 production Net sales $5.3B $5.4B -3% North America up 5% Segment income $249M $197M +26% Europe down 2% Segment income margin 4.7% 3.6% +110 bps China up 6% Revenue decline due to foreign exchange. Adjusted for currency, revenue i
Slide 21: 2015 First Quarter Building Efficiency
2015 First Quarter Building Efficiency* 2015 2014 Commercial backlog Net sales $3.5B $3.4B +5% and orders (at December 31, 2014) Segment income $201M $146M +38% Backlog $4.6B, down 4% Segment income margin 5.7% 4.3% +140 bps adjusted for FX Orders level, adjusted BE sales (ex GWS) up 1% adjust
Slide 22: 2015 First Quarter Power Solutions
2015 First Quarter Power Solutions 2015 2014 Net sales $1.8B $1.8B +4% Segment income $318M $307M +4% Segment income margin 17.2% 17.3% -10 bps Excluding lead and foreign exchange, sales up 8% AGM Improved aftermarket and OE volumes globally Americas up 2% Asia up 9% Europe up 7% AGM vol
Slide 23: Update on Portfolio Initiatives
Update on Portfolio Initiatives Automotive Interiors joint venture Regulatory approval received in most major geographies Chinese approvals expected in March with formal joint venture signing expected in April On track for July 1, 2015 closing Global Workplace Solutions divestiture Dives
Slide 24: First Quarter 2015 Financial Highlights (continuing operations)
First Quarter 2015 Financial Highlights (continuing operations) % 1 2015 2014 (in millions) 2015 2014 change (reported) (reported) Sales $10,666 $10,574 +1% $10,666 $10,574 Gross profit 1,680 1,576 +7% 1,680 1,576 % of sales 15.8% 14.9% 15.8% 14.9% SG&A expenses 1,014 1,038 -2% 1,034 1,038 Equity in
Slide 25: First Quarter 2015 Financial Highlights (continuing operations)
First Quarter 2015 Financial Highlights (continuing operations) 1 2015 2014 (in millions, except earnings per share) 2015 2014 (reported) (reported) Operating income $768 $650 $748 $650 Financing charges - net 71 55 71 55 Income from continuing ops. before taxes 697 595 677 595 Income tax provision
Slide 26: Balance Sheet / Cash Flow / Financial Guidance
Balance Sheet / Cash Flow / Financial Guidance Q1 free cash flow improved $0.2 billion from Q1 FY14 Year-over-year improvement in trade working capital as a percentage of sales, adjusted for businesses held for sale Capital spending in line with company expectations Share repurchases of $0.6
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