Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q1 2023 Earnings Presentation

28 slides from Johnson Controls International's earnings presentation, Feb 1, 2023

  1. Slide 1: Fiscal Q1 2023 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 2023 Earnings Conference Call February 1, 2023

  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: Delivered Strong Service Performance, EBIT Margin Expansion, and Adjusted EPS Growth

    Delivered Strong Service Performance, EBIT Margin Expansion, and Adjusted EPS Growth  Strong service orders and revenue growth with acceleration of digital service capabilities across our vectors of growth  Disciplined pricing approach drove significant gross margin expansion and increased profita

  4. Slide 4: Expanding Capabilities and Insights with OpenBlue

    DIGITALIZING THE PORTFOLIO Expanding Capabilities and Insights with OpenBlue Solving Customer Needs 1 2 Uniquely Positioned with Expanded 3 Delivering Results* Dynamic building modes Customer Vision workshops Energy optimization Digital Capabilities Connected experiences Q1 Updates TOTAL Q1 Predicti

  5. Slide 5: Service Growth Flywheel Accelerating Digital Adoption

    ACCELERATING DIGITAL SERVICE TRANSFORMATION | $160B Global Service Market Opportunity1 Service Growth Flywheel Accelerating Digital Adoption 1 Service Growth Strategy Outcomes as a 2 Digital Services Journey 3 Delivering Results* The JCI Digital Advantage Connected Services Service (e.g., chillers)

  6. Slide 6: Sustainability Initiatives Supporting Secular Trends

    VECTORS OF GROWTH: DECARBONIZATION RESULTS | $240B Global Decarbonization Market Opportunity1 Sustainability Initiatives Supporting Secular Trends 1 Q1 Regulatory Environment2 2 Sustainable Infrastructure Partnership 3 Delivering Results* Ecosystem Offers Comprehensive Customer California joins nati

  7. Slide 7: Accelerating Indoor Air Quality (IAQ) Growth through Innovation

    VECTORS OF GROWTH: HEALTHY BUILDINGS | $10-15B Healthy Buildings Opportunity1 Accelerating Indoor Air Quality (IAQ) Growth through Innovation 1 Finding Solutions at the Intersection 2 Unlocking Valuable Outcomes for 3 IAQ is a Critical Growth of IAQ, Decarbonization, and our Customers through Innova

  8. Slide 8: Honored to be Recognized as an ESG Leader

    NOTABLE AWARDS Honored to be Recognized as an ESG Leader I Q1 Recognitions Awarded Platinum Sustainability Rating by EcoVadis  Awarded highest distinction granted, in the top 1% of more than 100,000 companies assessed worldwide CSO Katie McGinty Named One of 2022’s Most Influential Women Executives

  9. Slide 9: Solid Execution in a Challenging Environment

    FISCAL Q1 FINANCIAL SUMMARY* Solid Execution in a Challenging Environment Sales Adjusted EPS  +9%  +24% $6.1B ORGANIC SALES GROWTH $0.67 $5.9B $0.54 + Price +10% / Volume -1% + Increased profitability + Field Solutions +10%; Service / Install +10% + Lower share count + Global Products +7% - FX Hea

  10. Slide 10: Delivering on Our Commitments

    FISCAL Q1 ADJUSTED EPS BRIDGE* (CONTINUING OPERATIONS) Delivering on Our Commitments OPERATIONS $0.11 FX (0.04) NFC (0.02) + Price Cost + Volume Corp (0.01) Mix Shares 0.02 NCI 0.01 *Non-GAAP EPS from continuing operations, excluding special items. See footnotes for reconciliation. Other items may n

  11. Slide 11: Strong Service Orders & Backlog Remains at Record Levels

    ORDER VELOCITY Strong Service Orders & Backlog Remains at Record Levels Trailing 3-mo Field Orders (YoY % Chg) 30% Orders  Trailing 3-month Field Orders +5% YoY (Organic YoY %) - Service orders +10% 20% - Install orders +1% 10% Total Field Service 0% -10% Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 J

  12. Slide 12: Capitalizing on Strong Demand

    FISCAL Q1 SEGMENT RESULTS* Capitalizing on Strong Demand Adjusted Sales Comments Organic % YoY EBITA Margin* ($M) Change YoY  Service +7% / Install +12% North America $2,367 11.3%  Double-digit growth in New Construction +10% (30bps)  Positive price/cost and the benefits from productivity savings

  13. Slide 13: Broad Based Growth, Strong Price Realization

    FISCAL Q1 SEGMENT END MARKET PERFORMANCE* Broad Based Growth, Strong Price Realization % of FY22 Consolidated Organic Sales % Change Sales North America EMEALA Asia Pac Global Products JCI Applied1 33% +MDD +high-teens +MSD +HSD2 +LDD Light Commercial3 9% +mid-teens +mid-teens Commercial HVAC 42% +L

  14. Slide 14: Disciplined Capital Allocation

    BALANCE SHEET & FREE CASH FLOW* Disciplined Capital Allocation Capital Structure ($ millions) Q1 FY22 Q4 FY22 Q1 FY23 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $612 $1,534 $1,963  92% fixed rate debt current portion of long-term debt Long-term debt 7,437 7,426 7,784  2.9% weighted av

  15. Slide 15: Q2 and High End of FY23 Guidance Reflects Ongoing Momentum

    FISCAL 2023 Q2 & FULL YEAR GUIDANCE* Q2 and High End of FY23 Guidance Reflects Ongoing Momentum FY 2023 Commentary FQ2 FY23  Q2 guidance supported by continued positive momentum Organic Revenue ~10% +HSD to LDD  Backlog and end markets remain strong Segment EBITA 100 to 110bps 90 to 120bps Margin

  16. Slide 16: Appendix

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  17. Slide 17: Additional FY 2023 Guidance Items

    Additional FY 2023 Guidance Items FY23 Adjusted Corporate Expense ~$300 - $310M Amortization Expense ~$415 - $425M NFC ~$285 – $310M Tax Rate ~13.5% NCI ~$215 – $245M Shares ~687M 17 Johnson Controls International, plc. — February 1, 2023

  18. Slide 18: Consolidated Financial Results (Continuing Operations)

    FISCAL Q1 2023 Consolidated Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q1 FY22 Q1 FY23 Q1 FY22* Q1 FY23* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,862 $6,068 $5,862 $6,068 4% Gross profit 1,891 2,091 1,882 2,092 11% % of sales 32.3% 34.5% 32.1%

  19. Slide 19: Special Items (Continuing Operations)

    FISCAL Q1 2023 Special Items (Continuing Operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax/NCI Q1 FY23 (Expense) Benefit Income Income (Expense) EPS Impact Mark-to-market adjustments $3 $- $- $3 $0.00 Restructuring & impairment costs (345) 52 - (293) (0.42) T

  20. Slide 20: OpenBlue Enables Outcomes Across All Vectors of Growth

    OpenBlue Enables Outcomes Across All Vectors of Growth Goal: Deliver Scalable Digital Growth from an integrated platform OpenBlue OpenBlue OpenBlue Connected Services Enterprise Solutions Outcomes as a Service (XaaS) Industry-Based Need-Based NetZero Buildings Infrastructure Energy & Sustainability

  21. Slide 21: IR Contacts

    Jim Lucas Vice President, Investor Relations jim.lucas@jci.com IR Contacts Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com www.johnsoncontrols.com

  22. Slide 22: 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, 2022 2021 Net sales $ 6,068 $ 5,862 Cost of sales 3,977 3,971 Gross profit 2,091 1,891 Selling, general and administrative expenses 1,571 1,3

  23. Slide 23: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) December 31, September 30, 2022 2022 ASSETS Cash and cash equivalents $ 1,509 $ 2,031 Accounts receivable - net 5,722 5,528 Inventories 2,895 2,510 Assets held for sale 418 387 Other c

  24. Slide 24: Condensed Consolidated Statements of Cash Flows

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended December 31, 2022 2021 Operating Activities Net income attributable to JCI $ 118 $ 381 Income attributable to noncontrolling interests 38 38 Net income 156 419 Adjustments t

  25. Slide 25: 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 before income taxes and noncontrolling interests, excluding general corporate expenses, intangible asset a

  26. Slide 26: Forward-looking non-GAAP financial measures

    The Company's press release and earnings presentation include forward-looking statements regarding organic revenue growth, adjusted segment EBITA margin improvement, free cash flow and adjusted EPS, which are non-GAAP financial measures. These non-GAAP financial measures are derived by excluding cer

  27. Slide 27: Organic Growth Reconciliation

    3. Organic Growth Reconciliation The components of the change in net sales for the three months ended December 31, 2022 versus the three months ended December 31, 2021, including organic growth, are shown below (unaudited): Net Sales Adjusted Base Net for the Three Sales for the Three Net Sales for

  28. Slide 28: Debt Ratios

    5. Debt Ratios The Company's earnings presentation provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. We also present below net debt to income before income taxes. The Company believes these ratios are useful to understanding the Company's

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