34 slides from Johnson Controls International's earnings presentation, Nov 7, 2019
Slide 1: Fiscal 2019 Fourth Quarter Results
Fiscal 2019 If you can read this Click If you can read this Click Fourth Quarter on the icon to choose a picture or Reset the slide. on the icon to choose a picture or Reset the slide. Results To Reset: Right click on the slide thumbnail and select ‘reset slide’ or choose the ‘Reset’ button on the T
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 risks
Slide 3: 2019 In Review
2019 In Review Completed sale of Power Solutions business Executed disciplined capital allocation Reduced debt by $3.7 billion $6.0 billion of share buybacks Executive leadership appointments Delivered all target metrics 3 Johnson Controls International plc — November 7, 2019
Slide 4: Delivering On Our Commitments
Delivering On Our Commitments* Original Target FY19 Results Field orders +MSD +5% Organic Service growth +MSD +4% Organic revenue growth +4%-6% +5% EBIT margin expansion +50 to +70bps +60bps Synergy and productivity savings ~$200M $196M Free Cash Flow conversion ~95% 99% *Non
Slide 5: Field Order Growth
Field Order Growth Organic % Change 9% 8% 7% 7% 6% 5% 5% 2% 0% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Backlog Up 8% to $8.9B – Solid Visibility Into FY20 5 Johnson Controls International plc — November 7, 2019
Slide 6: Q4 FY19 Financial Summary
Q4 FY19 Financial Summary* (continuing operations) ADJUSTED NET SALES ADJUSTED EPS $6,274M $0.78 $6,183M +1% $0.57 Reported +37% +3% Reported Organic Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 ADJUSTED EBIT & MARGIN ADJUSTED FCF $812M $750M $1.7B 80bps $1.4B 12.9% Reported $1.0B $0.9B 12.1% 80bps Org
Slide 7: Q4 FY19 Results vs. Prior Year: EPS Bridge
Q4 FY19 Results vs. Prior Year* (continuing operations) EPS BRIDGE $0.05 $0.12 $0.78 $0.06 ($0.04) $0.57 $0.03 ($0.01) FX ($0.01) Tax ($0.01) NCI ($0.01) Other ($0.01) Q4 FY18 VOLUME / SYNERGIES & INVESTMENTS / SHARE NFC OTHER Q4 FY19 ACTUAL MIX PRODUCTIVITY SALESFORCE COUNT ACTUAL ADDITIONS *Non-GA
Slide 8: Segment Results
Segment Results* Sales Segment EBITA EBITA Margin +3% +7% +60bps Organic Organic Organic 15.8% $6,274M $990M 15.2% $6,183M $939M Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 EBITA Margin +80bps 15.8% +20bps (20bps) 15.2% (20bps) Q4 FY18 Volume / Mix Synergies / Investments / Pension / Q4 FY19 Pro
Slide 9: Segment Results: Building Solutions North America
Segment Results: Building Solutions North America* Sales Organic sales up 3% +3% - Install up 3% / Service up 4% $2,401M Organic $2,324M - HVAC & Controls up high-single digits - Fire & Security up low-single digits - Performance Solutions down mid-teens Q4 FY18 Q4 FY19 EBITA margin up 40bps - F
Slide 10: Segment Results: Building Solutions EMEA/LA
Segment Results: Building Solutions EMEA/LA* Sales Organic sales up 4% - Install up 5% / Service up 4% +4% $948M Organic - Europe – up mid-single digits led by $948M Industrial Refrigeration - Middle East & Africa – down mid-single digits driven by weakness in HVAC and Fire & Security Q4 FY18 Q4 F
Slide 11: Segment Results: Building Solutions Asia Pacific
Segment Results: Building Solutions Asia Pacific* Sales Organic sales up 7% $726M +7% Organic - Install up 9% / Service up 4% $689M - Strong growth in HVAC and Building Management Systems - China up low-double digits Q4 FY18 Q4 FY19 EBITA margin down 100bps - Favorable volume leverage Segment EB
Slide 12: Segment Results: Building Solutions Global Products
Segment Results: Building Solutions Global Products* Sales Organic sales flat - Building Management Systems up low- Flat $2,222M Organic single digits, led by Controls and Fire $2,199M Detection - HVAC & Refrigeration Equipment down slightly • Global Resi HVAC down low-double digits; NA Resi HVAC
Slide 13: Corporate Expense
Corporate Expense* (continuing operations) Realization of cost synergies and 6% productivity savings ($ in millions) Ongoing cost reductions related to Power Solutions sale $95M $89M Q4 FY18 Q4 FY19 *Non-GAAP excludes special items. See footnotes for reconciliation. 13 Johnson Controls Interna
Slide 14: Free Cash Flow
Free Cash Flow* (continuing operations) Q4 Q4 Q4 adjusted free cash flow from (in $ billions) FY18 FY19 FY18 FY19 continuing operations of $1.0 billion Cash provided by operating activities $0.8 $1.0 $1.5 $1.7 FY adjusted free cash flow $1.7 billion, up Capital expenditures 25% YoY (0.2) (0.2) (
Slide 15: Balance Sheet
Balance Sheet Capital Structure Q3 FY19 Q4 FY19 Short-term debt and $521 $511 current portion of long-term debt Long-term debt 6,804 6,708 Total debt 7,325 7,219 Less: cash and cash 3,685 2,805 equivalents Net debt $3,640 $4,414 Share repurchases ~$4,122M* ~$861M *Includes equity tender of 102.4M sh
Slide 16: Other Items
Other Items Significant Q4 Special Items Cash Impact Net mark-to-market adjustments – $626M pre-tax loss Non-cash Tax audit reserve adjustments – $586M benefit Non-cash 16 Johnson Controls International plc — November 7, 2019
Slide 17: Fiscal 2020 Continuing Operations Guidance: EPS Walk
Fiscal 2020 Continuing Operations Guidance* FY20 EPS WALK $0.33 $2.50 to $2.60 $0.15 $0.15 ($0.04) $1.96 FY19 VOLUME/ SYNERGIES/ SHARE OTHER FY20 CONTINUING MIX PRODUCTIVITY REPURCHASES CONTINUING OPS OPS GUIDANCE FY20 EPS Growth of 28% to 33% *Non-GAAP excludes special items. 17 Johnson Controls In
Slide 18: Fiscal 2020 Continuing Operations Guidance
Fiscal 2020 Continuing Operations Guidance* Consolidated Adjusted Free Cash Flow Conversion Sales ~95% $24.3 - $24.7B +2% to +3% reported Sales Headwinds Segment EBITA Margin Low to Mid-single Digit Organic Growth FX impact (~$75M) EBIT Margin Net divestitures (~$210M) +40 to +60bps 13.5% 11.0%
Slide 19: FY21 EPS Framework
FY21 EPS Framework* (continuing operations) $2.50 to $2.56 to $2.60 ~$0.06 $2.66 Operational Growth & Capital Deployment $1B Impact of: • Run-rate FY20 share Power repurchases Sale • Interest income Proceeds headwind • Incremental $10M Power cost-out FY20 INCREMENTAL FY21 BEFORE FY21 WITH REMAINING
Slide 20: Appendix: Supplemental Information
Appendix: Supplemental Information Click to edit text
Slide 21: FY19 Fourth Quarter Financial Results
FY19 Fourth Quarter Financial Results (continuing operations) ($ in millions, except earnings per share) Q4 FY18 Q4 FY19 Q4 FY18* Q4 FY19* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,183 $6,274 $6,183 $6,274 1% Gross profit 2,057 1,980 2,062 2,108 2% % of sales 33.3% 31.6% 33.3% 33.6% SG&
Slide 22: Special Items
Special Items (continuing operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax Income Q4 FY19 (Expense) Benefit Income (Expense) EPS Impact Transaction costs $(4) $- $- $(4) $ (0.01) Integration costs (107) 12 - (95) (0.12) Net mark-to-market adjustments (626) 1
Slide 23: Recasted Financial Information
Recasted Financial Information* (continuing operations) Q1FY18 Organic Q2FY18 Organic Q3FY18 Organic Q4FY18 Organic FY18 Organic BT&S - North America 2,012 3.1% 2,097 0.6% 2,246 4.8% 2,324 7.7% 8,679 4.1% BT&S - EMEA/LA 915 4.0% 907 -3.3% 926 0.4% 948 5.7% 3,696 1.8% BT&S - APAC 597 2.5% 586 -1.6% 6
Slide 24: johnsoncontrols.com/investors
johnsoncontrols.com/investors @JCI_IR Click to edit text
Slide 25: Condensed Consolidated Statements of Income, Three Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended September 30, 2019 2018 Net sales $ 6,274 $ 6,183 Cost of sales 4,294 4,126 Gross profit 1,980 2,057 Selling, general and administrative expenses (1,960)
Slide 26: Condensed Consolidated Statements of Income, Twelve Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Twelve Months Ended September 30, 2019 2018 Net sales $ 23,968 $ 23,400 Cost of sales 16,275 15,733 Gross profit 7,693 7,667 Selling, general and administrative expenses (6,
Slide 27: Condensed Consolidated Statements of Financial Position
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2019 2018 ASSETS Cash and cash equivalents $ 2,805 $ 185 Accounts receivable - net 5,770 5,622 Inventories 1,814 1,819 Assets held for sale 98 3,015 Other c
Slide 28: Condensed Consolidated Statements of Cash Flows, Three Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended September 30, 2019 2018 Operating Activities Net income attributable to JCI from continuing operations $ 612 $ 592 Income from continuing operations attributable to noncontr
Slide 29: Condensed Consolidated Statements of Cash Flows, Twelve Months
JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Twelve Months Ended September 30, 2019 2018 Operating Activities Net income attributable to JCI from continuing operations $ 1,100 $ 1,175 Income from continuing operations attributable to non
Slide 30: 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
Slide 31: Twelve Months Segment EBITA Reconciliation
The following is the twelve months ended September 30, 2019 and 2018 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
Slide 32: 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 transaction/integration costs, gain on sale of the Scott Safety business, net mark-to-ma
Slide 33: Organic Growth Reconciliation
3. Organic Growth Reconciliation The components of the changes in net sales for the three months ended September 30, 2019 versus the three months ended September 30, 2018, including organic growth, is shown below (unaudited): Adjusted Base Net Net Sales for the Three Base Year Adjustments - Sales fo
Slide 34: Adjusted Free Cash Flow Reconciliation
4. Adjusted Free Cash Flow Reconciliation The Company's press release contains financial information regarding free cash flow, adjusted free cash flow and adjusted free cash flow conversion, which are non-GAAP performance measures. Free cash flow is defined as cash provided by operating activities l