Johnson Controls International plc · NYSE:JCI
Johnson Controls International — Tyco International — Q3 2014 Earnings Presentation
31 slides from Johnson Controls International's earnings presentation, Jul 25, 2014
Slide 1: Third Quarter Review
Third Quarter Review 25 / July / 2014
Slide 2: Forward-Looking Statements / Safe Harbor
Forward-Looking Statements / Safe Harbor This presentation contains a number of forward-looking statements. In many cases forward-looking statements are identified by words, and variations of words, such as "anticipate", "estimate", "believe", “commit”, "continue", "could", "intend", "may", "plan",
Slide 3: Executing According to Plan
Executing According to Plan Another strong quarter of double-digit earnings per share growth • Continued revenue growth driven by strong Products demand • Second consecutive quarter of installation growth combined with continued growth in service • Strong segment operating margin expansion from incr
Slide 4: Third Quarter Highlights
Third Quarter Highlights Revenue of $2.7 billion increases 5% year over year • Organic revenue* growth of 4% - Products +12%, Service +1% and Installation +2% Acquisition growth of 2% was partially offset by the impact of divestitures Segment operating margin before special items* improved 80 basis
Slide 5: Third Quarter Highlights Continued
Third Quarter Highlights Continued Orders growth of 3% year over year, excluding impact of foreign currency • Service +3%, Installation +4%, and Products +3% Backlog of $5.0 billion increased 3% year over year, and was flat on a quarter sequential basis, excluding impact of foreign currency • Quarte
Slide 6: Q3 2014 Results – Financial Overview
Q3 2014 Results – Financial Overview (EPS amounts are fully diluted and attributable to Tyco common shareholders) ($ in millions, except per-share amounts) ($ in millions) Q3FY14 Q3FY13 Change Revenue $2,662 $2,537 5% Segment Operating Income before special items * $386 $348 11% Segment Operating Ma
Slide 7: Third Quarter – NA Installation & Services
Third Quarter – NA Installation & Services ($ in millions) Organic revenue* up 1% year Q3FY14 Q3FY13 Change over year Revenue $968 $966 - • Service grew 1% • Installation grew 1% Operating Income* $134 $117 14.5% 13.8% 12.1% 170bps Operating Margin* A 1% benefit from acquisitions was more than offse
Slide 8: Third Quarter – ROW Installation & Services
Third Quarter – ROW Installation & Services ($ in millions) Organic revenue* increased 2% Q3FY14 Q3FY13 Change • Service grew 1% Revenue $1,001 $971 3% • Installation grew 4% Operating Income* $112 $112 - A 3% benefit from acquisitions Operating Margin* 11.2% 11.5% (30bps) was partially offset by im
Slide 9: Third Quarter – Global Products
Third Quarter – Global Products ($ in millions) Q3FY14 Q3FY13 Change Acquisitions contributed three percentage points of growth Revenue $693 $600 15.5% Operating Income* $140 $119 18% Operating margin* improved Operating Margin* 20.2% 19.8% 40bps 40 bps year over year • Driven by increased revenues
Slide 10: Other Items
Other Items Corporate expense before special items* was $58 million in the quarter Tax rate excluding special items was 16.9% for the quarter Weighted average diluted share count of 466 million shares for the quarter • Outlook: Expected weighted average diluted share count of ~450 million shares for
Slide 11: Impact of Recast Financial Information on 2014 Quarterly EPS From Continuing Operations
Impact of Recast Financial Information on 2014 Quarterly EPS From Continuing Operations* (EPS amounts are fully diluted and attributable to Tyco common shareholders) During the third quarter, EPS from Cont. Previously Reported EPS management decided to sell Ops from Cont. Ops Before special items* c
Slide 12: Impact of Recast Financial Information on 2013 Quarterly and Full Year EPS
Impact of Recast Financial Information on 2013 Quarterly and Full Year EPS From Continuing Operations* (EPS amounts are fully diluted and attributable to Tyco common shareholders) Previously Reported EPS from Cont. Ops Before special items* EPS from Cont. Ops Before special items* ($ per share) Q1 2
Slide 13: Appendix
Appendix
Slide 14: Consolidated Statements of Operations
TYCO INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) Quarters Ended Nine Months Ended June 27, June 28, June 27, June 28, 2014 2013 2014 2013 Revenue from product sales $ 1,621 $ 1,484 $ 4,553 $ 4,319 Service revenue 1,041 1,053 3,083 3,144 N
Slide 15: Results of Segments
TYCO INTERNATIONAL LTD. RESULTS OF SEGMENTS (in millions) (Unaudited) Quarters Ended Nine Months Ended June 27, June 28, June 27, June 28, 2014 2013 2014 2013 Net Revenue NA Installation & Services $ 968 $ 966 $ 2,864 $ 2,895 ROW Installation & Services 1,001 971 2,909 2,856 Global Products 693 600
Slide 16: Consolidated Balance Sheets
TYCO INTERNATIONAL LTD. CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) June 27, September 27, 2014 2013 Assets Current Assets: Cash and cash equivalents $ 1,912 $ 563 Accounts receivable, net 1,739 1,704 Inventories 650 645 Prepaid expenses and other current assets 1,141 839 Deferred income t
Slide 17: Consolidated Statements of Cash Flows
TYCO INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) For the Quarters Ended For the Nine Months Ended June 27, June 28, June 27, June 28, 2014 2013 2014 2013 Cash Flows From Operating Activities: Net income attributable to Tyco common shareholders $ 1,450 135 1,927
Slide 18: Free Cash Flow Reconciliation
Reconciliation to "Free Cash Flow": Net cash provided by operating activities $ 152 $ 208 $ 520 $ 360 Capital expenditures, net (74 ) (65 ) (203 ) (201 ) Acquisition of dealer generated customer accounts and bulk account purchases (4 ) (4 ) (20 ) (14 ) Purchase accounting and holdback liabilities —
Slide 19: Organic Growth Reconciliation - Revenue
TYCO INTERNATIONAL LTD. ORGANIC GROWTH RECONCILIATION - REVENUE (in millions) Quarter Ended June 27, 2014 Base Year Adjustments Adjusted Net Revenue for the Fiscal Net Revenue for the Quarter Ended 2013 Base Quarter Ended (1) June 28, 2013 Divestitures / Other Revenue Foreign Currency Acquisitions O
Slide 20: Earnings Per Share Summary
Earnings Per Share Summary (Unaudited) Quarter Ended Quarter Ended Year Ended Dec. 27, March 28, June 27, Dec. 28, March 29, June 28, Sept. 27, 2013 2014 2014 2012 2013 2013 2013 Sept. 27, 2013 Diluted EPS from Continuing Operations Attributable to Tyco Shareholders (GAAP) $ 0.52 $ 0.40 $ 0.93 $ 0.3
Slide 21: Quarter Ended December 28, 2013 Reconciliation
Tyco International Ltd. For the Quarter Ended December 28, 2013 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $957 $971 $565 $2,493
Slide 22: Quarter Ended March 28, 2014 Reconciliation
Tyco International Ltd. For the Quarter Ended March 28, 2014 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $939 $937 $605 $2,481 $—
Slide 23: Quarter Ended June 27, 2014 Reconciliation
Tyco International Ltd. For the Quarter Ended June 27, 2014 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $968 $1,001 $693 $2,662 $—
Slide 24: Quarter Ended December 28, 2012 Reconciliation
Tyco International Ltd. For the Quarter Ended December 28, 2012 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $976 $953 $534 $2,463
Slide 25: Quarter Ended March 29, 2013 Reconciliation
Tyco International Ltd. For the Quarter Ended March 29, 2013 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $953 $932 $578 $2,463 $—
Slide 26: Quarter Ended June 28, 2013 Reconciliation
Tyco International Ltd. For the Quarter Ended June 28, 2013 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $966 $971 $600 $2,537 $— $
Slide 27: Quarter Ended September 27, 2013 Reconciliation
Tyco International Ltd. For the Quarter Ended September 27, 2013 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $996 $987 $627 $2,610
Slide 28: Year Ended September 27, 2013 Reconciliation
Tyco International Ltd. For the Year Ended September 27, 2013 (in millions, except per share data) (Unaudited) expense / (benefit) Segments NA ROW Installation Installation Global Segment Corporate Total & Services & Services Products Revenue and Other Revenue Revenue (GAAP) $3,891 $3,843 $2,339 $10
Slide 29: Non-GAAP Measures
Non-GAAP Measures Organic revenue, free cash flow (outflow) (FCF), and income from continuing operations, earnings per share (EPS) from continuing operations, operating income and segment operating income, in each case “before special items,” are non-GAAP measures and should not be considered replac
Slide 30: Non-GAAP Measures Continued
Non-GAAP Measures Continued The limitation associated with using these cash flow metrics is that they adjust for cash items that are ultimately within management's and the Board of Directors' discretion to direct and therefore may imply that there is less or more cash that is available for the compa
Slide 31: Slide 31