16 slides from Johnson Controls International's earnings presentation, Oct 30, 2012
Slide 1: Quarterly update FY 2012 fourth quarter
Exhibit 99.2 Quarterly update FY 2012 fourth quarter October 30, 2012
Slide 2: Agenda
Agenda Introduction Glen Ponczak, Vice President, Global Investor Relations Overview Steve Roell, Chairman and Chief Executive Officer Business results and financial review Bruce McDonald, Executive Vice President and Chief Financial Officer Q&A FORWARD-LOOKING STATEMENTS Johnson Controls, Inc. has
Slide 3: In a mixed macro-economic environment…
In a mixed macro-economic environment… Record 2012 full-year revenues and earnings* External factors North American automotive recovery; offset by lower European production Weak Building Efficiency markets globally U.S. Institutional market down 10% Negative impact of weather on auto battery afterma
Slide 4: 2012 full-year results
2012 full-year results Record sales and earnings in-line with July 2012 guidance Sales: $42.0 billion (+6% excl. foreign exchange) Achieved fy2012 BE and PS vs. $40.8 billion in 2011 margin targets* Segment income*: $2.6 billion Building Efficiency Target entering 2012: 5.6% - 5.8% vs. $2.4 billion
Slide 5: Entering 2013
Entering 2013 Challenging macro-economic environment expected Mixed global auto production – North America - low single digit growth – China - growth decelerating – Europe - challenging, potentially down double-digit Global construction markets not expected to improve – Despite record backlog, order
Slide 6: Entering 2013
Entering 2013 Johnson Controls Continued margin expansion across the businesses expected – Partially offset by higher tax rate Significant restructuring activities underway – Building Efficiency – Europe and South America – Automotive Experience – Europe Focus on operational improvements in Automoti
Slide 7: 2012 fourth quarter
2012 fourth quarter Sales: $10.4 billion (+1% excl. foreign exchange) 2012 fourth quarter vs. $10.8 billion in Q4 2011 Revenue growth lower than Segment income*: $726 million expected due to macro-economic vs. $741 million in Q4 2011 factors and weak foreign currency Net income*: $526 million $500 m
Slide 8: 2012 fourth quarter Building Efficiency
2012 fourth quarter Building Efficiency 2012 2011 Commercial backlog and orders Net sales (excluding foreign exchange) $3.8B $4.1B - 4% (at September 30, 2012) Lower revenues in most segments Record $5.2B, up 3% – Asia up 7%; GWS up 2% – North America down 8% Backlog strongest in N.A. Systems and As
Slide 9: 2012 fourth quarter Automotive Experience
2012 fourth quarter Automotive Experience 2012 2011 Fiscal Q4 production Net sales (excluding foreign exchange) $5.0B $5.1B +3% North America up 13% North America up 15% Europe down 5% Europe down 3% Asia up 4% China up 8% China sales (mostly non-consolidated): up 21% to $1.3 billion Segment income*
Slide 10: 2011 fourth quarter Power Solutions
2011 fourth quarter Power Solutions 2012 2011 Q4 average LME Net sales $1.6B $1.6B +6% excluding lead prices foreign exchange 2012: $1,980/ ton Sales up 8%, excluding lead and foreign exchange 2011: $2,558 / ton Total unit shipments up 4%, split evenly between aftermarket and OEM – Continued soft af
Slide 11: Pension / Retiree Medical Accounting Change
Pension / Retiree Medical Accounting Change Adopted mark-to-market pension / retiree medical accounting method Revised current and prior year financial statements 2011 2012 Q4 Year Q4 Year EPS pre-accounting change and one-time items $0.75 $2.40 $0.75 $2.51 Pension / retiree medical expense reductio
Slide 12: Fourth quarter 2012 Financial highlights
Fourth quarter 2012 Financial highlights % 2012 2011 2012 2011 (in millions) (excluding items*) (excluding items*) change (reported) (revised) Sales $10,392 $10,788 -4% $10,392 $10,788 Gross profit 1,621 1,734 -7% 1,588 1,614 % of sales 15.6% 16.1% 15.3% 15.0% SG&A expenses 966 1,071 -10% 1,380 1,47
Slide 13: Fourth quarter 2012 Financial highlights
Fourth quarter 2012 Financial highlights 2012* 2011* (excluding (excluding 2012 2011 (in millions, except earnings per share) items) items) (reported) (revised) Segment income $726 $741 $279 $256 Restructuring costs 245 Financing charges - net 62 50 62 50 Income before taxes 664 691 (28) 206 Income
Slide 14: Balance sheet
Balance sheet Q4 cash provided by operations of $794 million compared to $587 million in 2011 Pension and post-retirement funding – $414m funded in FY12 – Net unfunded liability $1.2b at 9/30/12 Improved trade working capital performance 2013 capital expenditures to support strategic initiatives Str
Slide 15: Q4 restructuring
Q4 restructuring Restructuring charge of $245 million – $228 million after tax Cash severance – Net charge of $0.33 share Asset write-off Other cash Actions expected to be completed by the end of fiscal 2014 $120 million in anticipated net savings Europe: 81% of cash charges in 2013 15
Slide 16: 2013 outlook
2013 outlook A challenging year First half expectations Expect 2013 full-year earnings Flat / lower revenue to be flat to slightly higher than 2012 Europe softening Low business confidence First half significantly lower y/y Currency headwind Uncertain N.A. battery aftermarket demand Second half high