Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Q2 2023 Earnings Presentation
30 slides from Johnson Controls International's earnings presentation, May 5, 2023
Slide 1: Fiscal Q2 2023 Earnings Conference Call
FISCAL Q2 2023 Earnings Conference Call May 5, 2023
Slide 2: Forward-looking and cautionary statements/Non-GAAP financial information
Forward-looking and 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
Slide 3: Fiscal Q2 Highlights: Strong Performance
Fiscal Q2 Highlights Strong Performance Fiscal Q2 Financial Overview +13% Organic Sales Growth* Sales, Segment EBITA, and Adjusted EPS exceeded $6.7B high end of guidance $6.1B Sales Building Solutions Orders up 8% as demand remained Q2 FY22 Q2 FY23 robust; Pipeline remains healthy +120bps 13.8%
Slide 4: Accelerating Our Strategy
Value Creation Framework Accelerating Our Strategy Positioned to Enhanced Products, Services, and Driving margin capture secular Solutions through expansion and Disciplined trends across the adoption of executing on our capital allocation sustainable and OpenBlue productivity plan healthy buildings
Slide 5: Customer Segmentation
Customer Segmentation Serving Diverse Verticals with a Multi-Channel Presence Global Products ($9.4B*) Government Residential Other Indirect Channel Retail Applied Light Resi HVAC Commercial HVAC Data Centers HVAC Lodging & Hospitality Controls Fire & Industrial $25.3B Commercial Office & Bank
Slide 6: Leading the Evolution of Smart, Healthy, and Sustainable Buildings
Vectors of Growth Leading the Evolution of Smart, Healthy, and Sustainable Buildings SERVICE DECARBONIZATION2 HEALTHY BUILDINGS $160B opportunity1 $240B opportunity3 $10B - $15B opportunity4 Q2’23 Q2’23 Q2’23 Service Orders: ~$1.7B, +14% TTM Orders: ~$1B, +11% TTM Orders: ~$550M, +2% Organic Revenue
Slide 7: Honored to be Recognized as an ESG Leader
Notable Awards Honored to be Recognized as an ESG Leader Recognized as one of the World’s Most Ethical Companies for the 16th time by Ethisphere Recognized as one of 135 honorees spanning 19 countries and across 48 industries with a focus on initiatives supporting a strong value chain Recognized a
Slide 8: Delivering on our Commitments
Fiscal Q2 Results Delivering on our Commitments Total JCI Sales ($ in Millions) $589 $28 Price +10% / Volume +3% +13% Organic Sales ($198 ) $6,686 Growth* FX headwind (3%) $169 $6,098 Sales Volume / Sales Q2 FY22 Price M&A FX Q2 FY23 Mix Total JCI Adj. Segment EBITA/Margin ($ in Millions) 13.8%
Slide 9: EPS Bridge
Fiscal Q2 Results Delivering on our Commitments EPS Bridge* (Continuing Operations) Operations $0.09 +19% YoY Growth Corp ($0.05) FX ($0.03) + Price/cost NFC ($0.02) + Volume Shares $0.01 - Mix 9 *Non-GAAP EPS from continuing operations, excluding special items. See footnotes for reconciliation. Oth
Slide 10: Global Products Performance
Fiscal Q2 Results Global Products Performance Global Products Sales ($ in Millions) $200 $0 Price +9% / Volume +3% +12% Organic Sales Commercial HVAC1 +20% ($93 ) $2,468 $71 Growth* Residential HVAC (LSD); NA Resi Applied (high-teens) Fire and Security +LDD $2,290 Industrial Refrigeration
Slide 11: Resilient Growth, Strong Price Realization
Fiscal Q2 Results Resilient Growth, Strong Price Realization % of Organic Sales Growth* % FY22 North America EMEALA Asia Pac Global Products Consolidated JCI Sales Applied1 33% +high-teens +mid-teens +high-teens +>25%2 +20% Light Commercial3 9% +high-teens +high-teens Commercial HVAC 42% +>20% +high
Slide 12: Building Solutions (Field) Performance
Fiscal Q2 Results Building Solutions (Field) Performance Building Solutions (Field) Orders - Organic % Growth Building Solutions (Field) Backlog ($ in Billions) +8% Service Install +9% YoY Organic Growth $10.9 $11.1 $11.1 $11.3 $11.7 YoY Organic Growth 11% 11% $2.1 $2.1 $2.0 $2.3 $2.3 9% 8% 5% Servi
Slide 13: Building Solutions (Field) Performance by Segment
Fiscal Q2 Results Building Solutions (Field) Performance by Segment Adj. Segment Orders Orders / Backlog Sales* Sales Adj. segment EBITA/Margin* Organic % Growth comments Organic % YoY Comments EBITA comments Change YoY +8% Orders +14% Service +9% +190bps YoY Organic Growth Organic Growth 12.5%
Slide 14: Disciplined Capital Allocation
Balance Sheet and Free Cash Flow Disciplined Capital Allocation Capital Structure ($ millions) Q2 FY22 Q1 FY23 Q2 FY23 Short-term debt and current portion $2,284 $1,963 $2,659 Debt and liquidity Net Debt / EBITDA* of long-term debt 94% fixed rate debt Long-term debt 7,366 7,784 7,832 2.99% weigh
Slide 15: Introducing Q3 Guidance and Raising Low End of FY Guide
Outlook Summary Introducing Q3 Guidance and Raising Low End of FY Guide FY 2023 commentary Q3 FY23 FY23 Higher margin backlog expected to continue Organic revenue ~10% ~10% converting in 2H (previous +HSD to +LDD) Order pipeline remains healthy Adj. Segment +120 to 130bps +100 to 120bps EBITA ma
Slide 16: Appendix
City graphic Appendix
Slide 17: Additional FY 2023 guidance items
Fiscal Q2 2023 Additional FY 2023 guidance items FY23 Adjusted corporate expense* ~$350M Amortization expense ~$415M NFC ~$290M Tax rate ~13.5% NCI ~$200M Shares ~687M 17 *Non-GAAP excludes special items. See footnotes for reconciliation.
Slide 18: Consolidated financial results (continuing operations)
Fiscal Q2 2023 Consolidated financial results (continuing operations) Q2 FY22 Q2 FY23 Q2 FY22* Q2 FY23* % Change ($ in millions, except earnings per share) GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,098 $6,686 $6,098 $6,686 10% Gross profit 1,957 2,241 1,977 2,245 14% (% of sales) 32.1% 33.5% 32.
Slide 19: Special items (continuing operations)
Fiscal Q2 2023 Special items (continuing operations) ($ in Millions, except EPS) Pre-tax income Tax (Expense) NCI (Expense) After-tax/NCI Q2 FY23 EPS impact (Expense) benefit income income (Expense) Mark-to-market adjustments $(4) $1 $- $(3) $0.01 Restructuring and impairment costs (418) 35 - (383)
Slide 20: IR Contacts
IR Contacts Jim Lucas Vice President, Investor Relations jim.lucas@jci.com Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com www.johnsoncontrols.com © 2023 Johnson Controls. All rights reserved.
Slide 21: Condensed Consolidated Statements of Income, Three Months Ended March 31
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended March 31, 2023 2022 Net sales $ 6,686 $ 6,098 Cost of sales 4,445 4,141 Gross profit 2,241 1,957 Selling, general and administrative expenses (1,579) (1,4
Slide 22: Condensed Consolidated Statements of Income, Six Months Ended March 31
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Six Months Ended March 31, 2023 2022 Net sales $ 12,754 $ 11,960 Cost of sales 8,422 8,112 Gross profit 4,332 3,848 Selling, general and administrative expenses (3,150) (2,8
Slide 23: Condensed Consolidated Statements of Financial Position
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) March 31, September 30, 2023 2022 ASSETS Cash and cash equivalents $ 1,975 $ 2,031 Accounts receivable - net 6,002 5,528 Inventories 3,048 2,510 Assets held for sale 446 387 Other curr
Slide 24: Condensed Consolidated Statements of Cash Flows, Three Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended March 31, 2023 2022 Operating Activities Net income attributable to JCI $ 133 $ 11 Income attributable to noncontrolling interests 41 41 Net income 174 52 Adjustments to rec
Slide 25: Condensed Consolidated Statements of Cash Flows, Six Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Six Months Ended March 31, 2023 2022 Operating Activities Net income attributable to JCI $ 251 $ 392 Income attributable to noncontrolling interests 79 79 Net income 330 471 Adjustments to rec
Slide 26: 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
Slide 27: Six months segment EBITA reconciliation
The following is the six months ended March 31, 2023 and 2022 reconciliation of 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 millions) North Americ
Slide 28: EPS denominators and organic growth reconciliation
The following table reconciles the denominators used to calculate basic and diluted earnings per share for JCI plc (in millions; unaudited): Three Months Ended Six Months Ended March 31, March 31, 2023 2022 2023 2022 Weighted average shares outstanding for JCI plc Basic weighted average shares outst
Slide 29: Free Cash Flow Conversion
4. Free Cash Flow Conversion The Company's press release contains financial information regarding free cash flow and free cash flow conversion, which are non-GAAP performance measures. We also present below free cash flow conversion from the GAAP measure of net income attributable to JCI. Effective
Slide 30: 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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