12 slides from Johnson Controls International's earnings presentation, Oct 24, 2007
Slide 1: Agenda
Agenda Overview Steve Roell - Chief Executive Officer Q4 Business Results Keith Wandell - President and Chief Operating Officer Financial Review Bruce McDonald - Executive Vice President and Chief Financial Officer Q&A (conclude at noon Eastern time)
Slide 2: 2007 Sustained, profitable growth
2007 Sustained, profitable growth Record financial performance Sales up 7% to $34.6 billion Income from continuing operations up 25% to $1.3 billion Outperformed our markets: took share through innovation, quality, cost Increased earnings diversification Delivered above-average shareholder returns 1
Slide 3: 2007 highlights
2007 highlights Automotive Experience Increasing backlog* $3.9 billion for 2008-2010, up 11% vs. last year JVs with Chery for multiple programs in China Sustained improvements in Europe Building Efficiency Global market share gain in HVAC equipment 14% increase in building efficiency backlog: $4.2 B
Slide 4: Significant growth opportunities in each of our businesses
Significant growth opportunities in each of our businesses: improving comfort, safety and sustainability Energy efficiency/environment Hybrid vehicles Automotive electronics Emerging markets Investing in innovation; product and process technologies Customer focus; strong relationships Discipline of
Slide 5: Building Efficiency
Fourth-quarter 2007 Building Efficiency Market environment Global service market continues to grow North America construction* Non-residential spending up 19% Residential construction down 19% Construction remains strong in key emerging markets Increased customer demand for energy efficiency / green
Slide 6: Power Solutions
Fourth-quarter 2007 Power Solutions Market environment Aftermarket demand flat to slightly lower Ever-higher peaks for lead prices Q4 average LME: $3,140/ton 164% increase over Q4 2006 OEs increasingly committed to hybrid technology 20+ hybrid vehicle announcements at 2007 Frankfurt auto show Improv
Slide 7: Automotive Experience
Fourth-quarter 2007 Automotive Experience Market environment Industry vehicle production North America up 4% Cars down 2% Light truck up 8% Europe up 3%* Japan down 9%* China up 25%* Commodities stabilizing Steel Foam chemicals Resin 2007 Sales $4.2 B $4.0 B +3% +3% North America: up 2% Sales slight
Slide 8: Financial highlights
Fourth-quarter 2007 Financial highlights FX - Euro at $1.37 vs $1.27 Sales - Double-digit sales growth from building efficiency (+15%) and power solutions (+27%); automotive experience sales down slightly excluding FX SG&A - Continued growth initiatives at building efficiency; automotive engineering
Slide 9: Financial highlights
Fourth-quarter 2007 Financial highlights Financing charges - Lower reflecting the benefit of de-leveraging Minority interests - Deduction lower: costs related to new Toyota Tundra program; lower earnings at certain international operations Earnings per share - 26% increase Earnings per share - 26% i
Slide 10: Fiscal 2007 Balance sheet and cash flow highlights
$658 million cash on-hand at year-end No commercial paper outstanding at September 30th Near-term debt maturities Q4:05 Q1:06 Q2:06 Q3:06 Q4:06 Q1:07 Q2:07 Q3:07 Q4:07 0.264 0.456 0.442 0.401 0.377 Column 2 0.38 0.363 0.348 0.297 Capital spending of $823 million Reinvestment ratio of 1.1 to 1 Improv
Slide 11: 2008 guidance
2008 guidance 10% increase in sales 18% increase in earnings Lower net financing charges Comparable effective tax rate $1.1 - $1.3 billion free cash flow (cash from operations less capital expenditures) No change to October 9th guidance Q1 outlook: Diluted earnings per share of $0.35 - $0.37 per sha
Slide 12: 2008 Outlook
2008 Outlook Profitable growth continues - - 62nd consecutive year of sales increases - - 18th consecutive year of earnings increases Continued track record for profitable growth Power - Recurring revenue, profitable growth Automotive - sustained recovery Strong backlog; revenue synergies continue C