14 slides from Johnson Controls International's earnings presentation, Jul 17, 2008
Slide 1: Quarterly update FY 2008 third quarter
Quarterly update FY 2008 third quarter July 17, 2008 Exhibit 99.2
Slide 2: Agenda
Agenda Introduction Denise Zutz - Vice President Strategy, Investor Relations and Communication Overview Steve Roell - Chairman and Chief Executive Officer Third quarter 2008 business results Denise Zutz Financial review Bruce McDonald - Executive Vice President and Chief Financial Officer Q&A (conc
Slide 3: Continuing profitable growth
Continuing profitable growth Achieved 3Q 2008 record sales and earnings Sales up 11% to a record $9.9 billion Higher revenues in all three businesses North America automotive and residential HVAC sales down Europe stable, strong growth in emerging markets Segment income up 13% to $645 million Consol
Slide 4: 2008 Third quarter environment
2008 Third quarter Environment Strong demand for energy efficiency, sustainability Non-residential building market growth Emerging markets strong (JCI: $5 billion in sales*) Asia: China, India Eastern Europe, Middle East Western Europe relatively stable North American economy "Institutional" buildin
Slide 5: 2008 full year and fourth quarter outlook
2008 full year Sales growth of 11% to approximately $38.3 billion 62nd consecutive record year Earnings growth of 10 - 11% to approx. $2.32 - $2.34 per share (vs. October 2007 guidance of $2.45 - $2.50) 18th consecutive record year Double-digit earnings growth for the sixth consecutive year 2008 Fou
Slide 6: Continuing our profitable growth
Continuing our profitable growth Looking longer term Positioned to win in mega-trends: energy efficiency, sustainability, hybrid vehicles, emerging markets Business performance strong Large and growing backlogs Solid annuity-like businesses Strong cash flow and balance sheet Investing in growth: org
Slide 7: Building Efficiency
Third quarter 2008 Building Efficiency 2008 2007 Net sales $3.7 B $3.2 B +13% Double-digit increases in North America, Europe, Asia for systems and services Global workplace solutions up 19% North America residential down 17% Segment income $301 M $274 M +10% (+21% excluding residential) Higher marg
Slide 8: Power Solutions
Third quarter 2008 Power Solutions 2008 2007 Net sales $1.4 B $1.0 B +36% Higher unit prices due to lead pass-through Unit shipments up slightly North America aftermarket increase more than offsets OE weakness OE volume higher in Europe Double-digit growth in China Segment income $145 M $119 M +22%
Slide 9: Automotive Experience
Third quarter 2008 Automotive Experience 2008 2007 Net sales $4.8 B $4.6 B +3% North America: down 15% Industry production down 15% Higher volume: Dodge Journey, Voyager/Caravan; Honda Accord; Toyota Corolla / Vibe Lower: GM Lambda (due to strike), Trailblazer; Ford F-Series, Chrysler Grand Cherokee
Slide 10: Financial highlights
Third quarter 2008 Financial highlights FX - Euro to U.S. Dollar average exchange rate at $1.56 in Q3 2008 vs. $1.35 in 2007 Gross profit - Dilutive impact of lead pass-throughs SG&A - Declined as a percentage of sales Equity Income - Improvements in Power Solutions and Asian automotive joint ventur
Slide 11: Financial highlights
Third quarter 2008 Financial highlights Financing charges-net - Benefits of de-leveraging and lower interest rates partially offset by debt swap costs Income tax provision - No change in 21% tax rate Minority interests - Higher profitability in Automotive Experience and Power Solutions joint venture
Slide 12: Q3 2008 Balance sheet / cash flow highlights
Q3 2008 Balance sheet / cash flow highlights Debt to capitalization ratio of 29% Third quarter working capital performance below expectations Modest outflow Significant improvement vs. 2007 Capital spending in line with full-year guidance Expect debt/capitalization to decline to approximately 27% by
Slide 13: Commodity outlook
Commodity outlook Unprecedented increases Aggressive implementation by supply base Broad based - steel, copper, aluminum, chemical, acid, key components Global issue Lead Extremely volatile Hedging programs working effectively Impact by business: Automotive Experience 2008 Q4: Discussions underway 2
Slide 14: Outlook
Outlook Continuing to invest in growth Innovation, technology, people Executing our growth strategies, including emerging markets Driving cost improvements Priorities Sustainable organic sales and earnings growth Sales growth of twice the rate of our underlying industries Further global diversificat