Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q4 2022 Earnings Presentation

36 slides from Johnson Controls International's earnings presentation, Nov 3, 2022

  1. Slide 1: Fiscal Q4 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 Q4 2022 Earnings Conference Call November 3, 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: 2022 Year In Review: Robust Demand and Expanded Digital Capabilities

    2022 Year In Review Robust Demand and Expanded Digital Capabilities  Significant YoY Backlog growth with record order velocity and robust demand ― Record Field Backlog of $11.1B, increased 13% organically YoY ― Total Field Orders up 10% organically; +16% 2-year stack  Disciplined pricing approach

  4. Slide 4: Leading in Connectivity with OpenBlue

    DIGITALIZING THE PORTFOLIO Leading in Connectivity with OpenBlue Solving Customer Needs 1 Dynamic Customer Vision 2 Uniquely Positioned with Expanded 3 Delivering Results* building modes Workshops Energy optimization Suite of Digital Services Connected experiences FY22 – Significantly Expanded Capab

  5. Slide 5: Continuing to Mature the Service Growth Flywheel with Digital Accelerators

    ACCELERATING DIGITAL SERVICE TRANSFORMATION | $160B Global Service Market Opportunity1 Continuing to Mature the Service Growth Flywheel with Digital Accelerators 1 Service Growth Strategy Connected Services Outcomes as a 2 Delivering Results* (e.g., chillers) Service The JCI Digital Advantage • Upti

  6. Slide 6: Sustainability Initiatives Supporting Secular Trends

    VECTORS OF GROWTH: DECARBONIZATION RESULTS | $240B Global Market Opportunity through 20351 Sustainability Initiatives Supporting Secular Trends 1 Q4 Actions Driving Clean Energy Usage 2 Johnson Controls Well Positioned 3 Delivering Results* and Green Economy Growing Best-in-Class Partnership Ecosyst

  7. Slide 7: Unlocking Health, Wellness and Business Value through Healthier Buildings

    VECTORS OF GROWTH: HEALTHY BUILDINGS | $10-15B Healthy Buildings Opportunity1 Unlocking Health, Wellness and Business Value through Healthier Buildings 1 Business case for Indoor Air Quality 2 Johnson Controls is partnering with 3 Delivering Results* (IAQ) investment is stronger than ever our custom

  8. Slide 8: Honored to be Recognized as an ESG Leader

    NOTABLE AWARDS Honored to be Recognized as an ESG Leader I Q4 Recognitions Named to Fortune’s 2022 Change the World List  Johnson Controls was recognized for OpenBlue solutions and OpenBlue Net Zero Buildings as a Service offering Named as a Forbes World’s Best Employers 2022  Johnson Controls was

  9. Slide 9: Continued Growth…Navigating a Challenging Environment

    FISCAL Q4 FINANCIAL SUMMARY* Continued Growth…Navigating a Challenging Environment Sales Adjusted EPS $6.7B  +10% $0.88 $0.99  +13% $6.4B ORGANIC SALES GROWTH + Price +9% / Volume 1% + Increased profitability + Field Solutions +10%; Service +8% + Lower share count + Global Products +11% - FX Headw

  10. Slide 10: Delivering on Our Commitments: Q4 EPS Bridge

    FISCAL Q4 EPS BRIDGE* (CONTINUING OPERATIONS) Delivering on Our Commitments OPERATIONS $0.07 FX (0.05) NFC (0.02) + Price Cost NCI (0.02) + Volume Corp (0.01) + Mix Supply Chain Shares 0.04 Disruptions Executing in a Challenging Environment *Non-GAAP EPS from continuing operations, excluding special

  11. Slide 11: 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 +9% YoY Orders (Organic YoY %) - Service orders +7%; +11% 2-year stack 20% - Install orders +10%; +23% 2-year stack  2-year Stack +18% (vs. +29% in F

  12. Slide 12: Capitalizing on Strong Demand

    FISCAL Q4 SEGMENT RESULTS* Capitalizing on Strong Demand Sales EBITA Margin Comments ($M) Organic % YoY Change YoY  Service +8% / Install +10%  Strong demand for Applied HVAC & Controls equipment North America $2,562 14.7%  Sequential margin improvement of 400bps +9% (50bps)  Continued supply ch

  13. Slide 13: Broad Based Growth, Strong Price Realization

    FISCAL Q4 SEGMENT END MARKET PERFORMANCE* Broad Based Growth, Strong Price Realization % of FY22 Consolidated Organic Sales % Change Sales North America EMEALA Asia Pac Global Products JCI Applied1 33% +LDD +MSD +high-teens +HSD2 +mid-teens Light Commercial3 9% +mid-teens +mid-teens Commercial HVAC

  14. Slide 14: Disciplined Capital Allocation

    BALANCE SHEET & FREE CASH FLOW* Disciplined Capital Allocation Capital Structure ($ millions) Q4 FY21 Q3 FY22 Q4 FY22 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and current portion of long-term debt $234 $2,298 $1,534  92% fixed rate debt Long-term debt 7,506 7,194 7,426  2.9% weighted av

  15. Slide 15: Q1 and High End of FY23 Guidance Reflects Continued Momentum

    FISCAL 2023 Q1 & FULL YEAR GUIDANCE* Q1 and High End of FY23 Guidance Reflects Continued Momentum FY 2023 Commentary FQ1 FY23  Q1 guidance supported by continued positive momentum Organic Revenue +LDD +HSD to LDD  Backlog and end markets remain strong Segment EBITA  Value proposition continues to

  16. Slide 16: Appendix

    Appendix

  17. Slide 17: Additional FY 2023 Guidance Items

    Additional FY 2023 Guidance Items FY23 Corporate Expense $300 - $310M Amortization Expense $415 - $425M NFC $285 – $310M Tax Rate ~13.5% NCI $215 – $245M Shares ~690M 17 Johnson Controls International, plc. — November 3, 2022

  18. Slide 18: Consolidated Financial Results (Continuing Operations)

    FISCAL Q4 2022 Consolidated Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q4 FY21 Q4 FY22 Q4 FY21* Q4 FY22* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $6,392 $6,725 $6,395 $6,725 5% Gross profit 2,191 2,295 2,137 2,269 6% % of sales 34.3% 34.1% 33.4% 3

  19. Slide 19: Special Items (Continuing Operations)

    FISCAL Q4 2022 Special Items (Continuing Operations) $ In millions, except EPS Pre-tax Income Tax (Expense) NCI (Expense) After-tax/NCI Q4 FY22 (Expense) Benefit Income Income (Expense) EPS Impact Mark-to-market adjustments $192 $(33) $- $159 $0.23 Restructuring & impairment costs (167) 21 - (146) (

  20. Slide 20: 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

  21. Slide 21: 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

  22. Slide 22: OpenBlue Enables Outcomes Across All Vectors of Growth

    OpenBlue Enables Outcomes Across All Vectors of Growth Goal: Deliver Scalable Digital Growth from an integrated platform OpenBlue OpenBlue OpenBlue Connected Services Enterprise Solutions Outcomes as a Service (XaaS) Industry-Based Need-Based NetZero Buildings Infrastructure Energy & Sustainability

  23. Slide 23: IR Contacts

    Michael Gates Senior Director, Investor Relations michael.j.gates@jci.com IR Contacts www.johnsoncontrols.com

  24. Slide 24: Condensed Consolidated Statements of Income, Three Months Ended September 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended September 30, 2022 2021 Net sales $ 6,725 $ 6,392 Cost of sales 4,430 4,201 Gross profit 2,295 2,191 Selling, general and administrative expenses (1,533)

  25. Slide 25: Condensed Consolidated Statements of Income, Twelve Months Ended September 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Twelve Months Ended September 30, 2022 2021 Net sales $ 25,299 $ 23,668 Cost of sales 16,956 15,609 Gross profit 8,343 8,059 Selling, general and administrative expenses (5,

  26. Slide 26: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) September 30, September 30, 2022 2021 ASSETS Cash and cash equivalents $ 2,031 $ 1,336 Accounts receivable - net 5,528 5,613 Inventories 2,510 2,057 Assets held for sale 387 - Other cu

  27. Slide 27: Condensed Consolidated Statements of Cash Flows, Three Months Ended September 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended September 30, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 761 $ 269 Income from continuing operations attributable to noncontr

  28. Slide 28: Condensed Consolidated Statements of Cash Flows, Twelve Months Ended September 30

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Twelve Months Ended September 30, 2022 2021 Operating Activities Net income from continuing operations attributable to JCI $ 1,532 $ 1,513 Income from continuing operations attributable to non

  29. Slide 29: 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

  30. Slide 30: Twelve Months Segment EBITA Reconciliation

    The following is the twelve months ended September 30, 2022 and 2021 reconciliation of net sales, total segment EBITA and segment EBITA margin as reported to adjusted net sales, adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solut

  31. Slide 31: Diluted Earnings Per Share Reconciliation

    2. Diluted Earnings Per Share Reconciliation The Company's press release contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include net mark-to-market adjustments, restructuring and impairment costs, Silent-Aire other no

  32. Slide 32: Change in Net Sales, Twelve Months Ended September 30, 2022

    The components of the change in net sales for the twelve months ended September 30, 2022 versus the twelve months ended September 30, 2021, including organic growth, are shown below (unaudited): Adjusted Base Net Adjusted Net Sales Sales for the for the Twelve Twelve Months Net Sales for the Months

  33. Slide 33: Change in Net Sales, Twelve Months Ended September 30, 2021

    Adjusted Net Sales Adjusted Base Net Adjusted Net Sales for the Twelve Sales for the Twelve for the Twelve Months Ended Base Year Adjustments - Base Year Adjustments - Months Ended Months Ended (in millions) September 30, 2020 Divestitures and Other Foreign Currency September 30, 2020 Acquisitions O

  34. Slide 34: Proforma Service Revenue and Organic Growth

    The Company's earnings presentation presents proforma service revenue and organic growth for the three months ended December 31, 2020, the three months ended March 31, 2021, the three months ended June 30, 2021, the three months ended September 30, 2021, and the twelve months ended September 30, 202

  35. Slide 35: Free Cash Flow Conversion

    4. Free Cash Flow Conversion The Company's press release contains financial information regarding free cash flow and free cash flow conversion, which are non-GAAP performance measures. Free cash flow is defined as cash provided by operating activities less capital expenditures. Free cash flow conver

  36. Slide 36: Trade Working Capital as a Percentage of Net Sales

    6. Trade Working Capital as a Percentage of Net Sales The Company provides financial information regarding trade working capital as a percentage of net sales, which is a non-GAAP performance measure. Trade working capital is defined as current assets less current liabilities, excluding cash, short-t

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