Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q3 2022 Earnings Presentation

35 slides from Johnson Controls International's earnings presentation, Aug 4, 2022

  1. Slide 1: Fiscal Q3 2022 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 Q3 2022 Earnings Conference Call August 4, 2022

  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: Executing on our Transformative Strategy and Positioned to Capture Robust Demand

    Executing on our Transformative Strategy and Positioned to Capture Robust Demand  Record order velocity and robust demand continues to grow our backlog ― Record Field Backlog of $11.1B, increased 13% organically YoY ― Total Field Orders up 11% organically; +29% 2-year stack  Disciplined pricing ap

  4. Slide 4: Leading in Connectivity with OpenBlue

    DIGITALIZING THE PORTFOLIO Leading in Connectivity with OpenBlue Solving Customer Needs 1 2 Uniquely Positioned with Expanded 3 Delivering Results Dynamic building modes Customer Vision Workshops Energy optimization Capabilities Connected Q3 Capabilities TOTAL CHILLER experiences Predictive CONNECTI

  5. Slide 5: Continuing to Mature the Service Growth Flywheel with Digital Accelerators

    ACCELERATING DIGITAL SERVICE TRANSFORMATION | $160B Global Service Market Opportunity1 Continuing to Mature the Service Growth Flywheel with Digital Accelerators 1 Service Growth Strategy Connected Services Outcomes as a 2 Delivering Results (e.g., chillers) Service The JCI Digital Advantage • Uptim

  6. Slide 6: Growing our Sustainability Initiatives

    VECTORS OF GROWTH: DECARBONIZATION | $240B Global Market Opportunity (through 2025)1 Growing our Sustainability Initiatives 1 Q3 Actions Driving Clean 2 Johnson Controls Well Positioned 3 Delivering Results Energy Usage YTD • Call to Reduce Emissions Growing Best-in-Class Partnership Ecosystem ORDER

  7. Slide 7: Johnson Controls is Positioned to Lead in an Evolving Environment

    VECTORS OF GROWTH: HEALTHY BUILDINGS | $10-15B Healthy Buildings Opportunity1 Johnson Controls is Positioned to Lead in an Evolving Environment 1 Global governments increase support 2 Johnson Controls Well Positioned 3 Delivering results for Indoor Environmental Quality investments OpenBlue Indoor A

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

    NOTABLE AWARDS Honored to be Recognized as an ESG Leader I Q3 Recognitions Ranked Among 100 Best Corporate Citizens  One of only 19 companies to make the list every year since 2009  Moves up from #33 to #21 in overall ranking  Johnson Controls ranks second within Capital Goods sector Named Micros

  9. Slide 9: Continued Growth…Navigating a Challenging Environment

    FISCAL Q3 FINANCIAL SUMMARY* Continued Growth…Navigating a Challenging Environment Sales Adjusted EPS $6.3B $6.6B  +8% $0.83 $0.85  +3% ORGANIC SALES GROWTH + Price +8% / Volume 0% + Favorable below the line items + Field Solutions +7%; Service +8% + Lower share count + Global Products +9% - FX He

  10. Slide 10: Delivering on Our Commitments

    FISCAL Q3 EPS BRIDGE* (CONTINUING OPERATIONS) Delivering on Our Commitments OPERATIONS FX (0.04) Corp (0.02) + Price Cost NFC 0.01 Volume NCI 0.03 Mix Shares 0.03 Supply Chain Disruptions Executing in a Challenging Environment *Non-GAAP EPS from continuing operations, excluding special items. See fo

  11. Slide 11: Order Momentum Continues & Backlog Remains at Record Levels

    ORDER VELOCITY Order Momentum Continues & Backlog Remains at Record Levels Trailing 3-mo Field Orders (YoY % Chg) 30% Orders  Trailing 3-month Field Orders +11% YoY (Organic YoY %) - Service orders +7%; +20% 2-year stack 20% - Install orders +13%; +34% 2-year stack 10%  2-year Stack +29% (vs. +15%

  12. Slide 12: Capitalizing on Strong Demand

    FISCAL Q3 SEGMENT RESULTS* Capitalizing on Strong Demand Sales EBITA Margin Comments ($M) Organic % YoY Change YoY  Service +10% / Install +10%  Strong demand for Applied HVAC & Controls equipment and service North America $2,426 10.7%  Significant headwinds from supply chain disruptions, materia

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

    FISCAL Q3 SEGMENT END MARKET PERFORMANCE* Broad Based Growth, Strong Price Realization % of FY21 Consolidated Organic Sales % Change Sales North America EMEALA Asia PAC Global Products JCI Applied1 33% +LDD +MSD (LSD) +HSD2 +HSD Light Commercial3 8% +LDD +LDD Commercial HVAC 41% +LDD +HSD NA Residen

  14. Slide 14: Disciplined Capital Allocation

    BALANCE SHEET & FREE CASH FLOW* Disciplined Capital Allocation Capital Structure ($ millions) Q4 FY21 Q2 FY22 Q3 FY22 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $234 $2,284 $2,298  91% fixed rate debt current portion of long-term debt Long-term debt 7,506 7,366 7,194  2.8% weighted av

  15. Slide 15: On Pace to Meet Our Commitments Despite FX Headwinds

    FISCAL Q4 & 2022 GUIDANCE* On Pace to Meet Our Commitments Despite FX Headwinds FY 2022 Commentary FQ4 FY22  Underlying market is continuing to grow Organic 8 to 9%  FX headwind of 6 cents to prior guide Revenue 9 to 10% (+8-10% previously)  Supply chain constraints / highly inflationary environm

  16. Slide 16: Appendix

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  17. Slide 17: Additional FY 2022 Guidance Items

    Additional FY 2022 Guidance Items Prior Current FX Headwind Rev: ~($400M) / EPS: ~($0.05) Rev: ~($650M) / EPS: ~($0.09) Corporate Expense $280 - $290M $290 - $300M (1) Amortization Expense ~$410M ~$415M NFC $220 – $230M $205 – $215M Tax Rate ~13.5% ~13.5% NCI $235 – $245M $195 – $205M Shares ~700M ~

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

    FISCAL Q3 2022 Consolidated Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q3 FY21 Q3 FY22 Q3 FY21* Q3 FY22* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,341 $6,614 $6,344 $6,614 4% Gross profit 2,197 2,200 2,187 2,220 2% % of sales 34.6% 33.3% 34.5% 3

  19. Slide 19: Special Items (Continuing Operations)

    FISCAL Q3 2022 Special Items (Continuing Operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax/NCI Q3 FY22 (Expense) Benefit Income Income (Expense) EPS Impact Mark-to-market adjustments $(126) $33 $- $(93) $(0.13) Restructuring & impairment costs (121) 15 - (106

  20. Slide 20: FY21 Re-casted Segment Results

    FY21 Re-casted Segment Results Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21  Effective at the start of fiscal Actual Actual Actual Actual Actual Organic Organic Organic Organic Organic 2022, our Marine business, Growth Growth Growth Growth Growth which was previously reported BT&S - North America 2,034 -6% 2,0

  21. Slide 21: FY21 Proforma Service Revenue

    FY21 Proforma Service Revenue In Q1FY22, the Company began reporting certain retrofit projects in EMEALA and APAC as products and systems revenue on a prospective basis as they have evolved to be more aligned with other install offerings. The below table provides proforma amounts for FY21 to reflect

  22. Slide 22: 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

  23. Slide 23: IR Contacts

    Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com IR Contacts www.johnsoncontrols.com

  24. Slide 24: Condensed Consolidated Statements of Income, Three Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended June 30, 2022 2021 Net sales $ 6,614 $ 6,341 Cost of sales 4,414 4,144 Gross profit 2,200 2,197 Selling, general and administrative expenses (1,589) (1,36

  25. Slide 25: Condensed Consolidated Statements of Income, Nine Months Ended June 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Nine Months Ended June 30, 2022 2021 Net sales $ 18,574 $ 17,276 Cost of sales 12,526 11,408 Gross profit 6,048 5,868 Selling, general and administrative expenses (4,412) (3

  26. Slide 26: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) June 30, September 30, 2022 2021 ASSETS Cash and cash equivalents $ 1,506 $ 1,336 Accounts receivable - net 5,850 5,613 Inventories 2,574 2,057 Assets held for sale 394 - Other current

  27. Slide 27: Condensed Consolidated Statements of Cash Flows, Three Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended June 30, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 379 $ 574 Income from continuing operations attributable to noncontrollin

  28. Slide 28: Condensed Consolidated Statements of Cash Flows, Nine Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Nine Months Ended June 30, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 771 $ 1,244 Income from continuing operations attributable to noncontrolli

  29. Slide 29: 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

  30. Slide 30: Nine Months Segment EBITA Reconciliation

    The following is the nine months ended June 30, 2022 and 2021 reconciliation of net sales, total segment EBITA and segment EBITA margin as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solutions Consolidated (in milli

  31. Slide 31: Diluted Earnings Per Share Reconciliation

    2. Diluted Earnings Per Share Reconciliation The Company's press release contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include net mark-to-market adjustments, restructuring and impairment costs, Silent-Aire other no

  32. Slide 32: Organic Growth Reconciliation, Nine Months Ended June 30

    The components of the change in net sales for the nine months ended June 30, 2022 versus the nine months ended June 30, 2021, including organic growth, are shown below (unaudited): Adjusted Net Sales Adjusted Base Net for the Nine Sales for the Nine Net Sales for the Months Ended Base Year Adjustmen

  33. Slide 33: Organic Growth Reconciliation, Twelve Months Ended September 30, 2021

    Adjusted Net Sales Adjusted Base Net Adjusted Net Sales for the Twelve Sales for the Twelve for the Twelve Months Ended Base Year Adjustments - Base Year Adjustments - Months Ended Months Ended (in millions) September 30, 2020 Divestitures and Other Foreign Currency September 30, 2020 Acquisitions O

  34. Slide 34: Proforma Service Revenue Organic Growth Reconciliation

    Proforma Service Adjusted Base Service Proforma Service Revenue for the Revenue for the Three Revenue for the Three Months Ended Base Year Adjustments - Base Year Adjustments - Months Ended Three Months Ended (in millions) March 31, 2020 Divestitures and Other Foreign Currency March 31, 2020 Acquisi

  35. Slide 35: Net Debt to EBITDA

    5. Net Debt to EBITDA The Company provides financial information regarding net debt to adjusted EBITDA, which is a non-GAAP performance measure. The Company believes the total net debt to adjusted EBITDA ratio is useful to understanding the Company's financial condition as it provides a review of th

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