Johnson Controls International Plc · NYSE:JCI

Johnson Controls International — Q2 2021 Earnings Presentation

34 slides from Johnson Controls International's earnings presentation, Apr 30, 2021

  1. Slide 1: Fiscal Q2 2021 Earnings Conference Call

    Fiscal Q2 2021 Earnings Conference Call April 30, 2021

  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: Q2 Summary

    Q2 Summary  Solid Q2 results across the board  End markets continue to recover; gaining share  Strategic momentum continues internally - Services - Digital - Sustainability  Announcing COGS plan; $250M cumulative net benefit 3 Johnson Controls, plc. — April 30, 2021

  4. Slide 4: Strategic Announcements & External Recognition

    Strategic Announcements & External Recognition OpenBlue “Buildings as a Service”  Aligns more than a century of experience in building efficiency with our vision for digital transformation  Comprehensive portfolio of advanced solutions serving a wide array of vertical markets; helps customers opti

  5. Slide 5: Uniquely Positioned To Support The Economy's Decarbonization

    Uniquely Positioned To Support The Economy’s Decarbonization And Capture A Once-In-A-Generation Opportunity Buildings are responsible for 40% of GHG Global-scale investment in JCI is positioned to capture a emissions globally decarbonization is at an inflection point significant opportunity Global e

  6. Slide 6: Enabling Net-Zero Buildings, Prioritizing A Healthy Planet

    Enabling Net-Zero Buildings, Prioritizing A Healthy Planet Value Proposition: Net-zero carbon emissions made easy – accessing investment funds & incentives while transferring the delivery of decarbonization to us. Powering a healthy planet for our customers.  One-source, turnkey  Flexible & custom

  7. Slide 7: A Best In Class Heat Pump Technology Portfolio

    A Best In Class Heat Pump Technology Portfolio Enables Growth Across All Building Segments And Delivers on Sustainability Goals Building segment JCI Heat Pump product portfolio Complex YMC2 SHP YK CYK Titan OM YHAP HeatPAC recip DualPAC recip NS Multi-Stage Centrifugal Single Stage Absorption VSD Ma

  8. Slide 8: OpenBlue Driving Sustainability As A Service

    OpenBlue Driving Sustainability As A Service Results  Outcome based services centered on integrated data Positioned Solutions  Increased attach rates and recurring revenue service  OpenBlue as a Service agreements - OpenBlue Digital Twin  Energy and cost savings Customer Challenges - Advanced Da

  9. Slide 9: Industry Leader Powering Sustainability For Our Customers

    Q2 Performance Infrastructure Projects Industry Leader Powering Sustainability For Our Customers Atascadero Jackson-Madison Hackensack City of Lethbridge State Hospital County General Hospital Public Schools Lansing, Michigan School Division  Another successful project  JCI designed and built a 

  10. Slide 10: Q2 FY21 Financial Summary

    Q2 FY21 Financial Summary* SALES EPS $5.6B  1% Organic  +24% $5.4B $0.52 + Strong growth in Global Products $0.42 + Increased profitability + Volume improving in the field + Lower share count + Service revenue has recovered Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 Segment EBITA MARGIN FCF 12.7%  +130bps 

  11. Slide 11: Order Momentum Continues & Backlog Visibility Improves

    Order Momentum Continues & Backlog Visibility Improves Trailing 3-mo Field Orders (YoY % Chg) 15%  Trailing 3-month Field Orders +4% YoY 10% - Service orders down 3% 5% 0% - Install orders inflected positive +9% YoY -5% Total Field  Global Products B:B = 1.0X; Resi HVAC orders -10% Service +88% Yo

  12. Slide 12: Q2 FY21 EPS Bridge (Continuing Operations)

    Q2 FY21 EPS Bridge* (Continuing Operations) $0.10 $0.02 $0.02 $0.01 $0.52 $0.42 ($0.05) Volume + Corporate + Mix FX + Amort Price/cost + M&A Actions + Q2 FY20 OPERATIONS NFC NCI SHARE OTHER Q2 FY21 ACTUAL COUNT ACTUAL  Strong and accelerating operational performance  Disciplined price / cost execu

  13. Slide 13: Q2 Segment Results

    Q2 Segment Results* EBITA Sales Comments Organic % YoY Margin ($M) Change YoY  Service Flat / Install (7%)  Sequential improvement in HVAC & Controls and F&S; very strong growth in North America $2,092 12.7% performance infrastructure driven by sustainability needs (4%) +110bps  Strong gross marg

  14. Slide 14: Q2 Segment End Market Performance

    Q2 Segment End Market Performance* % of FY20 Consolidated Organic Sales % Change Sales North America EMEALA APAC Global Products JCI Applied1 31% (MSD) +LSD +>20% +HSD3 +MSD Light Commercial2 9% (MSD) (MSD) Commercial HVAC 40% (LSD) +LSD NA Residential 4% +35% +35% ROW Residential 8% +mid-teens +mid

  15. Slide 15: Corporate Expense & Other Items

    Corporate Expense* & Other Items Corporate Expense Full Year Guidance Items $82M + Mitigating cost actions  Corporate expense $285 to $295M $70M + Continuous structural cost reductions  Amortization expense ~$410M  NFC - $210 to $220M  NCI - $210 to $220M Q2 FY20 Q2 FY21 *Non-GAAP excludes speci

  16. Slide 16: Balance Sheet & Free Cash Flow

    Balance Sheet & Free Cash Flow* Capital Structure ($ millions) Q4 FY20 Q1 FY21 Q2 FY21 DEBT & LIQUIDITY Net Debt / EBITDA* Short-term debt and $293 $464 $444  94% fixed rate debt current portion of long-term debt  2.8% weighted avg interest rate Long-term debt 7,526 7,469 7,323  $1.9B cash positi

  17. Slide 17: Detailed View Of COGS Cost Actions: ~$250M In Net Savings

    Detailed View Of COGS Cost Actions: ~$250M In Net Savings Cumulative Net Savings From COGS Cost Actions1 $340  Bottoms up analysis of COGS across Gross COGS Savings the entire enterprise OPEX Investments $250 Net Savings  Detailed review to optimize addressable spend $125 $80 $(90) $(45)  Actions

  18. Slide 18: Net Cost Of Goods Reduction Program – Areas Of Focus

    Net Cost Of Goods Reduction Program – Areas Of Focus  Managing supplier relationships Direct Material Spend Material  Design to Value & VAVE 44% Spend  Ongoing productivity savings Other 3%  Standardizing Field practices (e.g., sales planning & $14.8B Field Labor scoping, design & engineering) F

  19. Slide 19: Reduced Cost Structure & Improved Productivity Creating Margin Runway

    Reduced Cost Structure & Improved Productivity Creating Significant Margin Runway Cumulative Net Cost Reductions1 $550M 30bps SG&A COGS Base margin improvement $290M $60M FY21 FY22 FY23 SG&A Significant Cumulative One Time Restructuring & Initiatives = Margin Implementation Costs $300M Expansion SG&

  20. Slide 20: Fiscal 2021 Q3 & Raised Full Year Guidance

    Fiscal 2021 Q3 & Raised Full Year Guidance* FY 2021 Commentary Guidance1 Q3FY21 FY21  Underlying market is recovering; well- positioned to capture growth Organic Revenue +mid-teens +MSD  Continued share gains Segment EBITA  Tax rate 13.5% Margin Up slightly +70 to +90bps  Free cash flow conversi

  21. Slide 21: 2021 Investor Day Save The Date

    2021 Investor Day Save The Date Wednesday, September 8, 2021 Further details to follow 21 Johnson Controls, plc. — April 30, 2021

  22. Slide 22: Appendix

    Appendix • IR CONTACTS • Antonella Franzen • Chief Investor Relations & Communications Officer • antonella.franzen@jci.com • Ryan Edelman • Executive Director, Investor Relations • ryan.edelman@jci.com

  23. Slide 23: FY21 Second Quarter Financial Results (Continuing Operations)

    FY21 Second Quarter Financial Results (Continuing Operations) ($ in millions, except earnings per share) Q2 FY20 Q2 FY21 Q2 FY20* Q2 FY21* % Change GAAP GAAP NON-GAAP NON-GAAP NON-GAAP Sales $5,444 $5,594 $5,444 $5,594 3% Gross profit 1,801 1,943 1,801 1,894 5% % of sales 33.1% 34.7% 33.1% 33.9% SG&

  24. Slide 24: Special Items (Continuing Operations)

    Special Items (Continuing Operations) $ In millions, except EPS After-tax/NCI Pre-tax Income Tax (Expense) NCI (Expense) Q2 FY21 (Expense) Benefit Income Income EPS Impact (Expense) Mark-to-market adjustments $209 $(53) $- $156 $0.22 Restructuring & impairment costs (96) 15 - (81) (0.11) Discrete in

  25. Slide 25: Condensed Consolidated Statements of Income, Three Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Three Months Ended March 31, 2021 2020 Net sales $ 5,594 $ 5,444 Cost of sales 3,651 3,643 Gross profit 1,943 1,801 Selling, general and administrative expenses (1,253) (1,4

  26. Slide 26: Condensed Consolidated Statements of Income, Six Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data; unaudited) Six Months Ended March 31, 2021 2020 Net sales $ 10,935 $ 11,020 Cost of sales 7,264 7,416 Gross profit 3,671 3,604 Selling, general and administrative expenses (2,547) (2,8

  27. Slide 27: Condensed Consolidated Statements of Financial Position

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in millions; unaudited) March 31, September 30, 2021 2020 ASSETS Cash and cash equivalents $ 1,883 $ 1,951 Accounts receivable - net 5,167 5,294 Inventories 1,994 1,773 Other current assets 1,160 1,035 Curren

  28. Slide 28: Condensed Consolidated Statements of Cash Flows, Three Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended March 31, 2021 2020 Operating Activities Net income attributable to JCI from continuing operations $ 343 $ 213 Income from continuing operations attributable to noncontrolli

  29. Slide 29: Condensed Consolidated Statements of Cash Flows, Six Months

    JOHNSON CONTROLS INTERNATIONAL PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Six Months Ended March 31, 2021 2020 Operating Activities Net income attributable to JCI from continuing operations $ 670 $ 372 Income from continuing operations attributable to noncontrolling

  30. Slide 30: 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

  31. Slide 31: Six Months Segment EBITA Reconciliation

    The following is the six months ended March 31, 2021 and 2020 reconciliation of segment EBITA and segment EBITA margin as reported to adjusted segment EBITA and adjusted segment EBITA margin (unaudited): Building Solutions Building Solutions Building Solutions Consolidated (in millions) North Americ

  32. Slide 32: Diluted Earnings Per Share Share Reconciliation

    The following table reconciles the denominators used to calculate basic and diluted earnings per share for JCI plc (in millions; unaudited): Three Months Ended Six Months Ended March 31, March 31, 2021 2020 2021 2020 Weighted average shares outstanding for JCI plc Basic weighted average shares outst

  33. Slide 33: Free Cash Flow Reconciliation

    4. Free Cash Flow Reconciliation The Company's press release contains financial information regarding free cash flow which is a non-GAAP performance measure. Free cash flow is defined as cash provided by operating activities less capital expenditures. Management believes this non-GAAP measure is use

  34. Slide 34: 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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