Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q2 2022 Earnings Presentation

36 slides from Johnson Controls International's earnings presentation, May 4, 2022

  1. Slide 1: Fiscal Q2 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 Q2 2022 Earnings Conference Call May 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: Capitalizing on our Vectors of Growth in a Challenging Environment

    Capitalizing on our Vectors of Growth in a Challenging Environment  Our value proposition is resonating with customers, translating into robust demand and a record backlog with strong margins  Continued outperformance in our shorter cycle Global Products segment  Digitization at the center of our

  4. Slide 4: Temporary Challenges Impacting Backlog Conversion

    NORTH AMERICA SOLUTIONS Temporary Challenges Impacting Backlog Conversion Our value proposition is resonating Component shortages impacting our ability to achieve full margin potential with our NA customers in Service and Install: - Order growth +13% 1 Supply Chain Disruptions 2 Cost Absorption Impa

  5. Slide 5: OpenBlue is at the Center of Our Enterprise Strategy

    DIGITALIZING THE PORTFOLIO OpenBlue is at the Center of Our Enterprise Strategy MAJOR LAUNCHES (FQ2/FQ3) Communication device that connects JCI OpenBlue and non-JCI devices at the edge. Ability Gateway to connect OT devices with Foghorn Edge AI and Zero Trust security Leverages the Gateway to collec

  6. Slide 6: Service Growth Flywheel Accelerated by Digital

    ACCELERATING DIGITAL SERVICE TRANSFORMATION Service Growth Flywheel Accelerated by Digital 1 $160B 2 Johnson Controls Connected Services Outcomes as a 3 Delivering Results (e.g., chillers) Service Global Service Market1 Well Positioned • Net Zero • Uptime 50% Start • Repair costs 20% • Indoor Air Qu

  7. Slide 7: Leading in Sustainability – Providing a Path to Net Zero

    VECTORS OF GROWTH: DECARBONIZATION Leading in Sustainability – Providing a Path to Net Zero $240B Global Decarbonization Market Johnson Controls 1 2 3 Delivering Results Opportunity (through 2035)1 Well Positioned Energy price pressures including inflationary Game-changing top talent YTD ORDERS envi

  8. Slide 8: Leading Health, Wellness & Productivity in the Built Environment

    VECTORS OF GROWTH: HEALTHY BUILDINGS Leading Health, Wellness & Productivity in the Built Environment 1 $10-15B Healthy Buildings 2 Johnson Controls 3 Delivering Results Opportunity 1 Well Positioned HEALTHY BUILDINGS OpenBlue Indoor Air Quality as a PIPELINE Service (IAQaaS) released FQ2 $1B+ Unfac

  9. Slide 9: Honored to be Recognized as an ESG Leader

    NOTABLE AWARDS Honored to be Recognized as an ESG Leader Top Score from the Human Rights Campaign Foundation  Achieved a score of 100% in the Foundation’s 2022 Corporate Equality Index  Designated as one of the Best Places to Work for LGBTQ+ Equality CDP Supplier Engagement Leader  Earned a posit

  10. Slide 10: Continued Growth…Navigating a Challenging Environment

    FISCAL Q2 FINANCIAL SUMMARY* Continued Growth…Navigating a Challenging Environment Sales Adjusted EPS $6.1B  +9% $0.63  +21% ORGANIC SALES GROWTH $5.6B $0.52 + Price +6% / Volume +3% + Improved profitability + Field Solutions +7%; Service +8% + Favorable below the line items + Global Products +14%

  11. Slide 11: Strong Operational Performance

    FISCAL Q2 EPS BRIDGE* (CONTINUING OPERATIONS) Strong Operational Performance OPERATIONS FX (0.01) NFC (0.01) NCI 0.02 + Volume Shares 0.01 + Mix Price/Cost Supply Chain Disruptions Underlying Incrementals, Excluding Price/Cost & Supply Chain Disruptions ~36% *Non-GAAP EPS from continuing operations,

  12. Slide 12: 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%  Trailing 3-month Field Orders +11% YoY 20% - Service orders +10% - Install orders +11% 10%  2-year Stack +15% (vs. +5% in FQ1) 0% Total Field Service -10% -20% -30% Mar-20 Jun-20

  13. Slide 13: Capitalizing on Strong Demand

    FISCAL Q2 SEGMENT RESULTS* Capitalizing on Strong Demand Sales EBITA Margin Comments ($M) Organic % YoY Change YoY  Service +7% / Install +5%  Strong demand for Applied HVAC & Controls equipment and service North America $2,227 10.6%  Significant headwinds from supply chain disruptions, material/

  14. Slide 14: Broad Based Growth, Strong Price Realization

    FISCAL Q2 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 +LSD +low-teens +mid-teens2 +LDD Light Commercial3 8% +high-teens +high-teens Commercial HVAC

  15. Slide 15: Disciplined Capital Allocation

    BALANCE SHEET & FREE CASH FLOW* Disciplined Capital Allocation Capital Structure ($ millions) Q4 FY21 Q1 FY22 Q2 FY22 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $234 $612 $2,284  93% fixed rate debt current portion of long-term debt Long-term debt 7,506 7,437 7,366  2.9% weighted avg

  16. Slide 16: Outlook Impacted by Temporary Supply Chain Challenges

    FISCAL Q3 & 2022 GUIDANCE* Outlook Impacted by Temporary Supply Chain Challenges FY 2022 Commentary FQ3 FY22  Underlying market is continuing to improve Organic +8 to +10%  Supply chain constraints / highly inflationary Revenue +HSD (unchanged) environment expected to continue - Price/cost positiv

  17. Slide 17: Appendix

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  18. Slide 18: Additional FY 2022 Guidance Items

    Additional FY 2022 Guidance Items Prior Current FX Headwind Rev: ~($300M) / EPS: ~($0.03) Rev: ~($400M) / EPS: ~($0.05) Corporate Expense $280 – $290M $280 - $290M Amortization Expense ~$450M ~$410M NFC $230 – $240M $220 – $230M Tax Rate ~13.5% ~13.5% NCI $240 – $265M $235 – $245M Shares ~704M ~700M

  19. Slide 19: Consolidated Financial Results (Continuing Operations)

    FISCAL Q2 2022 Consolidated Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q2 FY21 Q2 FY22 Q2 FY21* Q2 FY22* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,594 $6,098 $5,594 $6,098 9% Gross profit 1,943 1,957 1,894 1,977 4% % of sales 34.7% 32.1% 33.9% 3

  20. Slide 20: Special Items (Continuing Operations)

    FISCAL Q2 2022 Special Items (Continuing Operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax/NCI Q2 FY22 (Expense) Benefit Income Income (Expense) EPS Impact Mark-to-market adjustments $(89) $21 $- $(68) $(0.10) Restructuring & impairment costs (384) 7 - (377)

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: Well on Our Way to FY24 Targets

    Well on Our Way to FY24 Targets Building Long-Term Shareholder Value MSD+ Sales 250 to 300bps 100% FCF ~$8B In Capital Double Digit Growth Of Margin Conversion Deployment Adjusted EPS Expansion Potential Growth  Accelerated  Strong leverage  Continued  Organic  Revenue growth service growth  S

  24. Slide 24: IR Contacts

    Ryan Edelman Vice President, Investor Relations ryan.edelman@jci.com IR Contacts Michael Gates Senior Director, Investor Relations michael.gates@jci.com www.johnsoncontrols.com

  25. Slide 25: 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, 2022 2021 Net sales $ 6,098 $ 5,594 Cost of sales 4,141 3,651 Gross profit 1,957 1,943 Selling, general and administrative expenses (1,454) (1,2

  26. Slide 26: 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, 2022 2021 Net sales $ 11,960 $ 10,935 Cost of sales 8,112 7,264 Gross profit 3,848 3,671 Selling, general and administrative expenses (2,823) (2,5

  27. Slide 27: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) March 31, September 30, 2022 2021 ASSETS Cash and cash equivalents $ 1,787 $ 1,336 Accounts receivable - net 5,689 5,613 Inventories 2,515 2,057 Assets held for sale 386 - Other curren

  28. 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 March 31, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 11 $ 343 Income from continuing operations attributable to noncontrollin

  29. Slide 29: 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, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 392 $ 670 Income from continuing operations attributable to noncontrolling

  30. 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

  31. Slide 31: Six months segment EBITA reconciliation

    The following is the six months ended March 31, 2022 and 2021 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

  32. Slide 32: Reconciliation of denominators for basic and diluted EPS

    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, 2022 2021 2022 2021 Weighted average shares outstanding for JCI plc Basic weighted average shares outst

  33. Slide 33: Adjusted net sales and organic growth reconciliation

    Adjusted Net Sales Adjusted Base Net Adjusted Net Sales for the Three Sales for the Three for the Three Months Ended Base Year Adjustments - Base Year Adjustments - Months Ended Months Ended (in millions) June 30, 2020 Divestitures and Other Foreign Currency June 30, 2020 Acquisitions Organic Growth

  34. Slide 34: Service revenue and organic growth, three months ended March 31, 2022

    The Company's earnings presentation presents service revenue and organic growth for the three months ended March 31, 2022. The components of the change in service revenue, including organic growth, are shown below (unaudited): Proforma Service Adjusted Base Service Service Revenue Revenue for the Re

  35. Slide 35: Proforma service revenue 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) September 30, 2020 Divestitures and Other Foreign Currency September 30, 2020

  36. Slide 36: Last twelve months adjusted EBIT and EBITDA reconciliation

    The following is the last twelve months ended March 31, 2022 reconciliation of income from continuing operations to adjusted EBIT and adjusted EBITDA, which are non-GAAP performance measures (unaudited): Last Twelve Months Ended (in millions) March 31, 2022 Income from continuing operations $ 1,448

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