13 slides from Johnson Controls International's earnings presentation, Apr 24, 2007
Slide 1: Quarterly Update FY 2007 Second Quarter
Quarterly Update FY 2007 Second Quarter April 20, 2007 Johnson Controls, Inc. ("the Company") has made forward-looking statements in this document pertaining to its financial results for fiscal 2007 that are based on preliminary data and are subject to risks and uncertainties. All statements other t
Slide 2: Agenda
Welcome Denise Zutz - Vice President, Strategy, Investor Relations and Communication Overview John Barth - Chairman and CEO Q2 Business Results Denise Zutz Financial Review Bruce McDonald - Executive Vice President and CFO Q&A (conclude at noon Eastern time) Agenda
Slide 3: Second Quarter 2007: Record Results
Second Quarter 2007: Record Results 5 Delivering on expectations Sales up 4% to record $8.5 billion Higher building efficiency systems, services and global workplace solutions revenues worldwide Increase in power solutions revenues Lower automotive experience sales Segment income up 24% to $351 mill
Slide 4: Second Quarter 2007 News and highlights
Second Quarter 2007 7 News and highlights Power solutions Received third order for lithium-ion hybrid batteries Capacity expansion initiatives on track Building efficiency Pace of "cross-sell" wins accelerating Year-to-date: $200 million Increase in worldwide chiller unit shipments Strong operating
Slide 5: Continuing Profitable Growth
Continuing Profitable Growth Success factors.... Deliver new value to our customers - -Smart environments: improved comfort, safety and sustainability - -Cross-selling of expanded building efficiency offering - -Increasing minority business spending to $1.5B, up 50% in 2007 Increase globalization -
Slide 6: Q2 2007 Building Efficiency
Q2 2007 Building Efficiency Non-residential industry U.S. new construction spending +13% Strength in government, office sectors Tier 2 capacity constraints Copper prices higher Residential industry Substantial decline Fewer new construction starts Q2 2006 units inflated by SEER 13 changeover 2007 20
Slide 7: Q2 2007 Power Solutions
Q2 2007 Power Solutions 2007 2006 Sales $988M $874M +13% Higher lead cost pass-through Overall unit sales slightly lower North America up slightly, Europe down Seg. Income $93M $77M +21% Continuing to reduce costs through best business practices, Six Sigma Transfer of Delphi production to Johnson Co
Slide 8: Q2 2007 Financial Highlights
(in millions) Q2 2007 Financial Highlights FX impact: Euro at $1.31 vs $1.20 Double-digit sales growth from building efficiency (+19%) and power solutions (+13%) partially offset by 5% reduction in automotive experience SG&A increase: investments in growth initiatives at building efficiency offset r
Slide 9: Q2 2007 Financial Highlights
(in millions, except per share data) Q2 2007 Financial Highlights Net financing charges - Benefit of de-leveraging partially offset by impact of higher short-term rates Provision for income taxes - Current quarter benefits from reduction in base effective rate to 21% from 23% and non-recurring items
Slide 10: Income Tax Changes
Income Tax Changes Fiscal 2007 Effective Tax Rate Reduction Revised base effective rate to 21.0% for fiscal 2007 from 23.0% Tax planning initiatives Includes $5 million ($0.02 / share) reduction for Q1 Non-recurring items $37 million in aggregate ($0.19 / share) in Q2 $1 million ($0.01 / share) net
Slide 11: Q2 2007 Balance Sheet / Cash Flow Highlights
$270 million debt reduction in the quarter Sale of discontinued operations (Bristol Compressors) fully completed in Q2 Forecasting a decline to approximately 30% by fiscal year-end Q2 2007 Balance Sheet / Cash Flow Highlights Total Debt to Total Capitalization Working capital inflow of $46M in the q
Slide 12: 2007 Outlook
2007 Outlook Q3: Earnings of approximately $1.95, up 15% Building efficiency Power solutions (+) Margin expansion (+) Cross-selling success (+) Exposure to high growth international markets Automotive experience (+) Continued benefit of operational improvements (+) Benefits of capacity investments (
Slide 13: 2007 Outlook Full Year: Increasing earnings guidance
2007 Outlook Full Year: Increasing earnings guidance Full Year Earnings Update (+) Operational performance (+) Non-residential growth (+) Tax rate (-) Weaker North American automotive, residential HVAC (-) Higher lead costs Sales +7% to approximately $34.5 billion Prior guidance: sales +6% Earnings