18 slides from Johnson Controls International's earnings presentation, Oct 26, 2004
Slide 1: 4th Quarter 2004 Conference Call
4th Quarter 2004 Conference Call October 26, 2004 Safe Harbor Statement: Johnson Controls has made forward-looking statements in this document pertaining to its financial results for fiscal 2004 and 2005 that are based on preliminary data and are subject to risks and uncertainties. Forward-looking s
Slide 2: Agenda
Overview John Barth - Chairman and CEO Q4 Results Denise Zutz - VP Strategy, Investor Relations and Communication Financial Review Steve Roell - Executive VP and CFO Q&A Agenda
Slide 3: Record 2004 Results
Record 2004 Results Pleased to have achieved another record year Sales up 17% to $26.6 billion Net income up 20% to $818 million 2004 was 58th straight year of sales growth and 14th consecutive year of increased earnings Financial performance is a scorecard Expectations of customers, employees, supp
Slide 4: 2004 Results On Plan Versus Expectations a Year Ago
2004 Results On Plan Versus Expectations a Year Ago Some headwinds stronger than anticipated Raw material costs Automotive price reductions Weaker building markets Accelerated rate of change to reduce costs - both in North America and Europe; automotive and controls Process improvement and eliminati
Slide 5: 2005 Outlook - October 8, 2004
2005 Outlook - October 8, 2004 Johnson Controls will continue to perform like a growth company Sales up 8 - 10% Operating income up 10 - 12% Net income up more than operating income Improving ROIC Sustain outstanding track record 16% compounded annual 10 year growth rate in sales 18% compounded annu
Slide 6: Increasing Shareholder Value
Increasing Shareholder Value Growth in our markets by bringing value to our customers Improve and differentiate vehicle interiors Extract more value from building operations Battery market - drive profitable aftermarket sales and improved cost/quality for original equipment and replacement markets I
Slide 7: Fourth-Quarter Overview
Fourth-Quarter Overview Record sales and earnings Sales growth of 13% to $6.8 billion -- excluding foreign exchange, up 9% Operating income up 15% - record results by both automotive and controls Diluted earnings per share growth of 22% -- $1.41 versus $1.16
Slide 8: Fourth Quarter 2004 Automotive Group Sales
Fourth Quarter 2004 Automotive Group Sales 2004 2003 Change Change ex FX $5,126 $4,453 +15% +11% (in millions) Europe Interiors sales up 25% Sales up 15% excluding FX Industry production up slightly North America Interiors sales up 6% Industry production down 0.8% Battery sales up 30% FX and lead pa
Slide 9: Fourth Quarter 2004 Automotive Group Operating Income
Fourth Quarter 2004 Automotive Group Operating Income 2004 2003 Change $317.7 $267.9 +19% North America Lower interiors margin Mix of "new" vs. "old" business Higher commodity costs Lower engineering recoveries Cost reduction/quality improvement Lower battery margin Higher lead costs Inventory write
Slide 10: Fourth Quarter 2004 Controls Group Sales
Fourth Quarter 2004 Controls Group Sales 2004 2003 Change Change ex FX $1,631 $1,547 +5% +3% (in millions) North America Sales +1% Technical services up 5-10% Facility management revenues up 10-15% - new business Systems installation down 5-10% Weaker construction and performance contract bookings E
Slide 11: Fourth Quarter 2004 Controls Group Operating Income
Fourth Quarter 2004 Controls Group Operating Income 2004 2003 Change $96.0 $92.2 +4% North America Slightly lower margin Slightly lower gross margins more than offset lower SG&A % Negative mix - strong facility management growth Europe Margin improvement Higher volumes Improved performance Remains b
Slide 12: Controls Group Backlog
Controls Group Backlog* 2004 2003 Change $1.84 $1.75 +5% Q4 Orders NA systems orders were down Lower government bookings more than offsets higher education and health care Lack of Federal authorization for Energy Saving Performance Contracts -- $75 to $100M orders on hold Overall construction market
Slide 13: Fourth-Quarter 2004 Financial Highlights
Fourth-Quarter 2004 Financial Highlights (in millions)
Slide 14: Fourth-Quarter 2004 Financial Highlights
Fourth-Quarter 2004 Financial Highlights (in millions) Miscellaneous - net: asset disposals and absence of stock- based compensation expenses Tax rate: lower base rate of 26.8% in fourth quarter plus favorable IRS audits Minority interests: automotive JVs in NA
Slide 15: YTD 2004 Cash Flow
YTD 2004 Cash Flow (in millions) vs. 35.6% at September 30, 2003
Slide 16: Fiscal 2004 Summary
Fiscal 2004 Summary Achieved Financial Expectations Sales: +17% or $4 billion Double-digit increases Operating income up 12% Net income up 20% Strong financial position Focal Points Automotive European turnaround on track Realized targeted European battery integration synergies Offset higher than an
Slide 17: 2005 Outlook - First Quarter
2005 Outlook - First Quarter Sales growth 100 - 150 basis points lower than rest of year - NA build down 3% - Lowest flow-through of automotive backlog - Slower controls growth Operating income slightly below prior year - Lower automotive and controls sales growth rates - Timing of automotive price
Slide 18: 2005 Full-Year Outlook
Sales up 8 to 10% Operating income up 10 to 12% Net income up more than operating income Improving ROIC Strong cash flow Reinvest in growing our businesses Increasing dividends 2005 Full-Year Outlook