Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Tyco International — Q3 2016 Earnings Presentation
27 slides from Johnson Controls International's earnings presentation, Jul 29, 2016
Slide 1: Third Quarter Review
Third Quarter Review 29 / July / 2016
Slide 2: Important Information
Important Information NO OFFER OR SOLICITATION This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisd
Slide 3: Important Information
Important Information STATEMENT REQUIRED BY THE IRISH TAKEOVER RULES The directors of Tyco accept responsibility for the information contained in this communication relating to Tyco and the directors of Tyco and members of their immediate families, related trusts and persons connected with them. To
Slide 4: Forward-Looking Statements / Safe Harbor
Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. In many cases forward-looking statements are identified by words, and variations of words, such as "anticipate", "estimate", "believe", “commit”, “confident”, "continue", "could", "intend", "m
Slide 5: Johnson Controls/Tyco Merger Executing Against Our Day 1 Plan
Johnson Controls/Tyco Merger* Executing Against Our Day 1 Plan April 4, 2016 September 2, 2016 S-4 initial filing July 6, 2016 JCI/Tyco expected Day 1 with SEC legal merger S-4 effective March April May June July August September October S-4 Amendments June 27, 2016 July 14, 2016 August 17, 2016 Oct
Slide 6: Q3 2016 Results – Financial Overview
Q3 2016 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco ordinary shareholders) ($ in millions, except per-share amounts) Q3FY16 Q3FY15 Change Revenue $2,449 $2,489 (2%) Organic Growth* 1.5% (1%) Segment Operating Income before special items* $355 $369 (4%) Segmen
Slide 7: Mixed Macro-Economic Environment
Mixed Macro-Economic Environment North America Commercial Industrial Institutional Retail Asia POG Commercial POG Hospitality Retail Infrastructure Latin America Europe Commercial Pacific Retail Govt / Institutional Commercial Residential POG Commercial Industrial Industrial Re
Slide 8: Third Quarter Highlights
Third Quarter Highlights Revenue of $2.45 billion declined 2% year over year on a reported basis, including 3% headwind from foreign currency exchange rates • Acquisitions contributed 3%, offset by 3% decline related to divestitures • Organic revenue* growth of 1.5% Segment operating income* of $355
Slide 9: Third Quarter Highlights Continued
Third Quarter Highlights Continued Orders growth of 4%, excluding impact of foreign currency and divestiture • Service +5%, Integrated Solutions +8%, and Products (3%) YoY Total Orders Growth 7% 7% 6% 5% 4% 4% 3% 3% 3% 3% 1% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Backlog o
Slide 10: Third Quarter – NA Integrated Solutions & Services
Third Quarter – NA Integrated Solutions & Services Organic revenue* growth of 2.5% ($ in millions) Q3FY16 Q3FY15 Change • Service up 1% • Integrated Solutions increased 4% Revenue $1,004 $972 3% Acquisition growth of 1% was Operating Income* $148 $157 (6%) partially offset by the negative impact of
Slide 11: Third Quarter – ROW Integrated Solutions & Services
Third Quarter – ROW Integrated Solutions & Services Organic revenue* growth of 2% ($ in millions) Q3FY16 Q3FY15 Change • Service increased 2% Revenue $794 $842 (6%) • Integrated Solutions increased 2% Operating Income* $92 $93 (1%) Foreign currency exchange rates Operating Margin* 11.6% 11.0% +60bps
Slide 12: Third Quarter – Global Products
Third Quarter – Global Products ($ in millions) Organic revenue* was flat Q3FY16 Q3FY15 Change Revenue $651 $675 (4%) Revenue includes a 2% Operating Income* $115 $119 (3%) negative impact from foreign currency exchange rates, and Operating Margin* 17.7% 17.6% +10bps 2% negative impact from divestit
Slide 13: Other Items
Other Items Corporate expense before special items* was $44 million in the quarter Tax rate before special items* was 17.3% for the quarter Restructuring and repositioning charges were $15 million in the quarter Adjusted free cash flow* of $214 million in quarter – 93% conversion rate; YTD adjusted
Slide 14: Appendix
Appendix
Slide 15: FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact
FY15 Recast – To Include Restructuring & Repositioning Including Tax Impact Q1FY15 Q2FY15 Q3FY15 Q4FY15 YTD FY15 Revenue NA IS&S 951 944 972 1,012 3,879 ROW IS&S 916 847 842 827 3,432 Global Products 611 639 675 666 2,591 Total Revenue 2,478 2,430 2,489 2,505 9,902 Operating Income NA IS&S 131 13.8%
Slide 16: Consolidated Statements of Operations
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) For the Quarters Ended For the Nine Months Ended June 24, June 26, June 24, June 26, 2016 2015 2016 2015 Revenue from product sales $ 1,487 $ 1,511 $ 4,293 $ 4,457 Service revenue 962 978 2,
Slide 17: Results of Segments
TYCO INTERNATIONAL PLC RESULTS OF SEGMENTS (in millions) (Unaudited) For the Quarters Ended For the Nine Months Ended June 24, June 26, June 24, June 26, 2016 2015 2016 2015 Net Revenue NA Integrated Solutions & Services $ 1,004 $ 972 $ 2,904 $ 2,867 ROW Integrated Solutions & Services 794 842 2,374
Slide 18: Consolidated Balance Sheets
TYCO INTERNATIONAL PLC CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) June 24, 2016 September 25, 2015 Assets Current Assets: Cash and cash equivalents $ 345 $ 1,401 Accounts receivable, net 1,805 1,722 Inventories 656 620 Prepaid expenses and other current assets 883 750 Deferred income taxe
Slide 19: Consolidated Statements of Cash Flows
TYCO INTERNATIONAL PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) For the Quarters Ended For the Nine Months Ended June 24, June 26, June 24, June 26, 2016 2015 2016 2015 Cash Flows From Operating Activities: Net income attributable to Tyco ordinary shareholders $ 239 $ 156 $ 46
Slide 20: Free Cash Flow Reconciliation
For the Quarters Ended For the Nine Months Ended June 24, June 26, June 24, June 26, 2016 2015 2016 2015 Reconciliation to "Free Cash Flow": Net cash provided by operating activities $ 191 $ 249 $ 504 $ 511 Capital expenditures, net (65) (59) (207) (179) Acquisition of dealer generated customer acco
Slide 21: Organic Growth Reconciliation - Revenue
TYCO INTERNATIONAL PLC ORGANIC GROWTH RECONCILIATION - REVENUE (in millions) (Unaudited) Quarter Ended June 24, 2016 Base Year Adjustments Adjusted Net Revenue for the Fiscal Net Revenue for the Quarter Ended Divestitures / 2015 Base Quarter Ended (1) June 26, 2015 Other Revenue Foreign Currency Acq
Slide 22: Earnings Per Share Summary
Earnings Per Share Summary (Unaudited) Quarter Ended Quarter Ended June 24, 2016 June 26, 2015 Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $ 0.56 $ 0.44 expense / (benefit) Merger costs 0.04 — (Gains) / losses on divestitures, net included in SG&A 0.09 (0.01) Acqu
Slide 23: Tyco International plc For the Quarter Ended June 24, 2016
Tyco International plc For the Quarter Ended June 24, 2016 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $1,004 $794
Slide 24: Tyco International plc For the Quarter Ended June 26, 2015
Tyco International plc For the Quarter Ended June 26, 2015 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Integrated Integrated Solutions Solutions Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $972 $842 $
Slide 25: Non-GAAP Measures
Non-GAAP Measures Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income and segment operating income, in each case “before special items,” are non-GAAP measures and should not be considered replac
Slide 26: Non-GAAP Measures Continued
Non-GAAP Measures Continued The limitation associated with using these cash flow metrics is that they adjust for cash items that are ultimately within management's and the Board of Directors' discretion to direct and therefore may imply that there is less or more cash that is available for the compa
Slide 27: Tyco logo