Johnson Controls International Plc · NYSE:JCI
Johnson Controls International — Investor Day (October 2011)
104 slides from Johnson Controls International's investor day presentation, Oct 12, 2011
Slide 1: Strategic review and 2012 outlook
Strategic review and 2012 outlook October 12, 2011
Slide 2: Johnson Controls
Johnson Controls Global market leadership positions in Building Efficiency, Three world-class growth Automotive Experience, Power Solutions businesses Expanding offerings, geographic footprint, vertical integration Track record for sustainable, Year-over-year revenue growth in 64 of the la
Slide 3: Factors driving sustainable, profitable growth
Johnson Controls Factors driving sustainable, profitable growth Global diversification Global opportunities Aligned with global mega-trends – Energy/fuel efficiency – Sustainability – Emerging markets Innovation Ability to invest
Slide 4: Reflections on 2011: Highlights of a record year
Reflections on 2011 Highlights of a record year Record sales and earnings Market share gains – All three businesses improved faster than the broader global markets Strengthened emerging market position Investments – Capital investments – organic • $1.4 billion in capital expenditures – Metal
Slide 5: Reflections on 2011: Highlights of a record year
Reflections on 2011 Highlights of a record year Building Efficiency Double-digit top-line growth in slow growth market Record backlogs Strong emerging market growth Automotive Experience Secured $2.3 billion in new business Progress on improving European containment costs Power Solutions
Slide 6: FY 2011 forecast results
FY 2011 forecast results Record sales and earnings Consolidated net sales A balanced earnings stream 2010 2011 Power Building $35B $40.7B +14% Solutions Efficiency Earnings per share* Automotive Experience 2010 2011 $1.99 $2.43 +22% 2011 Segment Income *Excluding non-recurring and acquisition-relate
Slide 7: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue Net Income* $ billions $ millions $1.7 $40.7 $38.1 $1,402 $1,356 $34.6 $34.3 $1,252 $32.2 $28.5 $27.5 $1,028 $24.6 $857 $21.6 $19.3 $729 $17.9 $622 $16.7 $15.7 $572 $525 $535 $438 $311 •Excludes one-time and restructuring
Slide 8: Entering FY 2012: Mixed macro environment
Entering FY 2012 Mixed macro environment Recent uncertainty regarding pace of global recovery Johnson Controls is – Associated with low consumer confidence expected to deliver double-digit earnings Modest growth estimates for developed markets growth in 2012 balanced by strong growth in BRIC cou
Slide 9: Sustainable, profitable growth: Investing for organic growth
Sustainable, profitable growth Investing for organic growth and margin expansion Generating new platforms for growth $1.7 Billion (est.) while improving profitability Increasing battery manufacturing capacity and advanced battery capabilities Capacity and footprint expansion in 71% of 2012 emerg
Slide 10: What to listen for: Building Efficiency
Building Efficiency What to listen for in today’s presentation Focus around … to drive above-market four growth platforms … growth and extend our global leadership position Systems & Emerging Market share gains Services Markets Margin expansion Differentiation and competitive advantage through
Slide 11: What to listen for: Automotive Experience
Automotive Experience What to listen for in today’s presentation Building on our core strengths … Global reach Vertical integration Cost leadership Emerging market footprint Component excellence Technology …while continuing to de-risk the business Further margin expansion associated with
Slide 12: What to listen for: Power Solutions
Power Solutions What to listen for in today’s presentation Aggressive investments targeted around three growth platforms… … leveraging our competitive advantages Seizing an expanding set of market opportunities
Slide 13: 2012 Outlook
2012 Outlook Consolidated net sales Approx. $44B +9% Earnings per share $2.85 - $3.00 Approx. +20% …based on key assumptions you will hear in detail today
Slide 14: Our long-term growth objectives are unchanged
Sustainable, profitable growth Our long-term growth objectives are unchanged Organic growth greater than twice Disciplined, sustained investment the rate of our underlying industry / Continuing to make substantial market growth investments to drive organic growth Continued margin expansion W
Slide 15: Today's agenda
Today’s agenda Business unit presentations Dave Myers President, Building Efficiency Beda Bolzenius President, Automotive Experience — Break — Alex Molinaroli President, Power Solutions Financial outlook Bruce McDonald Executive Vice President and Chief Financial Officer Questions and Answ
Slide 16: Closing comments
Closing comments Johnson Y) ( Controls
Slide 17: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue Net Income* $ billions $ millions $44.2 $2.0 $40.7 $38.1 $1.7 $34.6 $34.3 $32.2 $1,402 $28.5 $1,356 $27.5 $1,252 $24.6 $21.6 $1,028 $19.3 $857 $17.9 $16.7 $15.7 $729 $622 $572 $525 $535 $438 $311 •Excludes one-time and re
Slide 18: Sustainable, profitable growth
Johnson Controls, Inc. Sustainable, profitable growth Committed to providing best-in- class total returns to shareholders Market Sustainable organic sales and recovery earnings growth Growth strategies ROIC improvement Value-creating Margin expansion investments Growth investments Sustained,
Slide 19: Building Efficiency
Building Efficiency Dave Myers Vice President & President, Building Efficiency
Slide 20: Johnson Controls Building Efficiency Profile
Johnson Controls Building Efficiency Profile 2011E Revenues Johnson Controls makes buildings in 125 $15B countries more comfortable, productive, and safe. LA & Our offerings are necessary to provide a ME Non- Asia comfortable indoor environment at the 14% Residential North 90% lowest operating cos
Slide 21: Who is Johnson Controls Building Efficiency?
Who is Johnson Controls Building Efficiency? Every Day… 60,000 employees are dedicated to energy efficiency and sustainability in more than 150 countries 20,000 GWS employees help manage 1.5 billion sq. ft. of real estate 15,000 employees meet with customers to help them achieve their goals
Slide 22: Global platform – branches and manufacturing locations
Building Efficiency Global platform – branches and manufacturing locations N.A. Branches: 258 Branches: 226 Europe 2011 Mfrg: 13 Mfrg: 5 $7.4B $4.2B $15B Asia $2.2B Branches: 161 Middle East Mfng: 5 $0.6B Branches: 21 Mfrg: 3 Latin America $0.7B Branches: 28 Mfrg: 5 We have over 650 branch offices t
Slide 23: Global platform – distributor locations
Building Efficiency Global platform – distributor locations N.A. Branches: 258 Branches: 226 Europe 2011 Mfrg: 13 Mfrg: 5 $7.4B Distributors: 744 Distributors: 1,310 $4.2B $15B Asia $2.2B Branches: 161 Middle East Mfng: 5 Distributors: 1,001 $0.6B Branches: 21 Mfrg: 3 Latin Distributors: 79 America
Slide 24: Global platform – customer sites
Building Efficiency Global platform – customer sites N.A. Branches: 258 Branches: 226 Europe 2011 Mfrg: 13 Mfrg: 5 $7.4B Distributors: 744 Distributors: 1,310 $4.2B $15B APAC GWS EMEA GWS Customer Customer Sites 6,409 Sites: 1,748 Asia $2.2B Branches: 161 Americas Middle East Mfng: 5 GWS Distributor
Slide 25: Emerging markets – opportunity from commercial building stock growth
Market overview Emerging markets – opportunity from commercial building stock growth There is ~400 billion sq. ft. of commercial 2011-2021 HVAC/Controls Growth Value from building space globally. Incremental Building Stock Over the next 10 years, over 110 billion Europe 9% additional square feet
Slide 26: Energy legislation
Market overview Energy legislation United States Europe China American Jobs Act 20-20-20 goal – 20% renewable China’s Special Plan for Energy portfolio, 20% better efficiency & Conservation – Repair or modernize 35,000 20% less GHG by 2020 schools Increased focus on bldg efficiency Energy
Slide 27: Market overview: North America
Market overview North America US Non-Residential Construction Energy Solutions Forecast 800 $10 Last Year 700 $9 North America Current $8 Asia Pacific 600 $7 500 $6 $USD (B) $USD (B) 400 $5 300 $4 $3 200 $2 100 $1 0 $0 2008 2009 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2015 2016 Market Mark
Slide 28: Market overview: Asia
Market overview Asia Non-Residential Structure Expenditures Market $1,000 Construction in Japan and $900 Last Year Southeast Asia driven by Japan and New Zealand reconstruction $800 Current from earthquakes $700 India growth steady in short-term Last Year with acceleration in 3-5 years $USD (B)
Slide 29: Market overview: Rest of the world
Market overview Rest of the world Non-Residential Structure Expenditures Europe Latin America & Middle East $1,000 $160 $900 Latin America Last Year $140 W. Europe $800 Current $120 $700 $USD (B) $USD (B) $600 $100 $500 $80 Middle East $400 Last Year $60 $300 E. Europe Current $40 $200 $100 $20 $0 $
Slide 30: Integrated Building Solutions and Connectivity
Market overview Integrated Building Solutions and Connectivity Building integration and connectivity: Contracting chain is changing – More design/build projects Service moving from event driven to ongoing and energy-focused Remote services evolving Evolution of our customer base: CIOs and CF
Slide 31: Value to our customers
Value to our customers What Building Efficiency does
Slide 32: What they are asking for
Value to our customers What they are asking for We interviewed hundreds of customers around the globe. They told us they are asking for: Partnership Innovation Human achievement We will win more often and more profitably by delivering on those critical needs. Our major strategies flow from the
Slide 33: Partnership
Value to our customers Partnership We continue to invest in the quantity and quality of customer relationships Sales force Service force 4,000 sales people globally 15,000+ systems & service technicians to locally serve our customers 3,600 distribution partners 20,000 GWS employees serving c
Slide 34: Innovation: Integrations
Value to our customers Innovation Our customers primary focus is to be We are investing in the key technologies efficient at what they do to help them solve their problems They have told us that their most critical Energy Most Efficient HVAC needs are: Management Equipment – Energy – Operation
Slide 35: Innovation: technologies that help customers save money
Value to our customers Innovation Our customers want to implement technologies that will help them save money EnergyConnect – new acquisition Ready-made grid demand response technology Real-time energy information and access to energy markets Central Plant Optimization™ Helps reduce energy con
Slide 36: Human achievement
Value to our customers Human achievement We are able to help our customers achieve more by knowing how they use their buildings to achieve their goals On October 4th we launched a new system platform that will redefine how buildings are used to help customers’ organizations perform better
Slide 37: The Panoptix platform: Opportunity
The Panoptix™ platform Technology trends New IT Smart Grids technologies Energy and Smart Buildings • machine to machine Trends Sustainability • low cost IP sensors • user experience Smart Devices • cloud computing Tighter IP-based IT and Building building and Solutions Automation enterprise • energ
Slide 38: The Panoptix platform
The Panoptix™ platform Launched Oct. 4th: Data management platform, applications, services, community Customer New and Partner and facing Acquired future 3rd party applications capabilities capabilities capabilities Hosted in the cloud Mission critical control algorithms to run the building and Open
Slide 39: Building Automation System vs Panoptix
The Panoptix™ platform Building Automation System vs Panoptix™ Generic Data Adapter Metasys Adapter 3rd Party BAS Adapter Building C
Slide 40: How are buildings managed?
The Panoptix™ platform How are buildings managed? Today Single building Multiple computer stations for different systems Complex, non-intuitive screens Temperature Security Energy Management Portfolio of buildings One view to see all systems Anytime, Anywhere, Interface Panoptix provides the platfor
Slide 41: How is energy managed?
The Panoptix™ platform How is energy managed? Today Meter trend shows higher Utility bills - 30-90 days System query to find Service technician must Another 30-90 days to see the monthly usage- someone must after the fact the issue fix the issue results, follow up required login to see the problem R
Slide 42: A new approach that makes it easier than ever
The Panoptix™ platform A new approach that makes it easier than ever Building Efficiency Apps Panoptix™ Connected (Open platform, extensible system) Community Live Guide™ Support Building & Energy Services
Slide 43: Panoptix applications
Panoptix™ applications Optimized energy usage, healthier environments , sustainability solutions Carbon and Energy Measurement and Reporter Verification Monitor Measure savings of Insight to energy efficiency reduce energy projects, identify key usage and usage drivers and carbon footprint unanticip
Slide 44: Growth path: How does JCI win?
Growth path How does JCI win? Market Growth of relationships Competitive advantages Improving share despite slow 33,000 points of customer New platform to deliver the recovery in North America & contact every day future of building Europe management Long-term relationships with Leading mar
Slide 45: Revenue growth path
Revenue growth path Outlook Energy • Continued growth in energy retrofit and renewables Solutions projects Global • Significant new contract wins Workplace convert to revenue 15% Growth Solutions expansion 9% - 11% • Continued, but slower Growth for Emerging growth in Asia, Middle East FY12E Markets
Slide 46: Expand margin and leverage scale: major investments
Expand margin and leverage scale Major investments to drive margin expansion Products and engineering Business systems Panoptix and smart equipment platforms Technical service delivery Next generation HVAC equipment Space and facilities management platform System selection tools Global E
Slide 47: Expand margin and leverage scale: key initiatives
Expand margin and leverage scale Key initiatives Short-term 2012-2013 Long-term 2013 and beyond Pricing and margin expansion Evolution of business models – Service pricing – Selling software as service – Energy solutions value – Technology-enabled service Standardization of tools Extended init
Slide 48: Summary – Strategic objectives
Summary – Strategic objectives Strategies for profitable growth Strategic summary We are positioned for 10-15% annual growth through 2016 We are investing in the people and technology that differentiate us and drive growth We are focused on several initiatives to drive margin expansion
Slide 49: Automotive Experience
Automotive Experience Dr. Beda Bolzenius Vice President & President, Automotive Experience
Slide 50: Automotive Experience: Profitable growth
Automotive Experience Profitable growth Profitable growth through product & process excellence, by transforming into a technology company and by leveraging our global capabilities Key levers for profitable growth Systematically elevate our operational performance Drive vertical integration and l
Slide 51: Automotive Experience: Competitive advantage
Automotive Experience Competitive advantage Leading global provider of systems 2011 Sales (est.) and components for seats, overhead $20.0 B* systems, doors, cockpits and electronics Asia Global presence 12% Total interior capability 51% Europe Components North 37% – Strong market position thro
Slide 52: Number 1 in automotive interiors domain
Automotive Experience No. 7 in worldwide OEM supplier ranking – No 1. in automotive interiors domain Top 10 Global OEM Suppliers Leadership position in Complete Seating & Ranked on 2010 global OEM sales Seating Components Ranking Robert Bosch 1 Complete Seating Metals & Mechanisms Denso 2 Continenta
Slide 53: Incremental sales backlog 2012-2014
Automotive Experience Incremental sales backlog 2012-2014 $4.2B of incremental sales backlog Incremental Sales Backlog* (in $B) Further strengthened diversified customer portfolio $4.2 Increased vertical integration content $4.0 Profits align with quoting discipline Interiors backlog gains d
Slide 54: Top new wins for the 2012 – 2014 period
Automotive Experience Top new wins for the 2012 – 2014 period Mini Mercedes Benz PSA Volkswagen Fiat Paceman C-Class DS4/ DS5 Multiple Programs Seating Interior Seating Front/ Rear Structure Interior & Seating W. Europe Worldwide China Europe E. Europe BMW Ford Chevrolet Dodge Buick Multiple Program
Slide 55: Market Development
Automotive Experience Market Development Global Light Vehicle Production (in CY) Regional Light Vehicle Production (in CY) JCI Estimates, September 2011 JCI Estimates, September 2011 Despite economic concerns no signs of North America Europe production slow-down. +5% +4% +7% +1% 20 16.3 30 CAGR 23.4
Slide 56: Market drivers and our response
Automotive Experience Market drivers and our response End-consumer Product portfolio as response to Growing demand for smaller vehicles market drivers Rising environmental awareness Increased quality and safety expectations Connectivity Fibrowood Leather and other fine materials OEM Strategy
Slide 57: Levers for growth & margin improvements
Automotive Experience Levers for growth & margin improvements We’re well positioned to respond to the Development of automotive market drivers component market 2010-2016 (in B USD) CAGR Levers for growth & margin improvement 2010-2016 ~1,050 1 Operational excellence ~860 ~300 5.4% 2 Vertical integ
Slide 58: Operational excellence drives margin improvements
Automotive Experience 1 Operational excellence drives margin improvements Reinforce our processes and tools to foster our leading position, … ...with special focus on Europe Foster world-class quality organization – Overall 300 resources added globally, including European return on sales 2008 - 20
Slide 59: Vertical integration
Automotive Experience 2 Vertical integration Build a world-class component capability Synergy Seat Next Generation to differentiate through technology Response to OEM sourcing patterns Component excellence as enabler for complete seating growth Identify new profit pools Technology in compone
Slide 60: Technology and advanced development
Automotive Experience 3 Technology and advanced development While competing in a more technically Acquisitions add new innovations to driven business environment, Technology metals and mechanisms portfolio and Advanced Development helps to... From 2000 to 3000 - KEIPER Taumel 3000® Create a unique
Slide 61: Technology and advanced development: science-based approach
Automotive Experience 3 Technology and advanced development Science-based approach delivers new Multi-Material Rear Seat Structure products and processes Weight reduction potential: 34% Maintaining all safety Technology domains requirements Metals forming and joining New adhesive technology fo
Slide 62: Enhanced technology portfolio through acquisitions
Automotive Experience 3 Enhanced technology portfolio through acquisitions Metal seat components, structures and mechanisms, special seats Keiper / RECARO* Seat structures, tracks and height adjuster C. Rob. Hammerstein Textiles and integrated trim Michel Thierry Slush skins Benoac Fertigteile Leath
Slide 63: Technology – margin driver in component business
Automotive Experience 3 Technology – margin driver in component business Technology: margin driver in component business ($1B backlog) Synergies from… Building world-class component capability through vertical integration Enhancing our technology portfolio through acquisitions Supporting our e
Slide 64: Emerging Markets – Focus on BRICs
Automotive Experience 4 Emerging Markets – Focus on BRICs Sales in BRICs are steadily increasing JCI sales share of BRICs Solid position >30% market share in seating Brazil Grow interiors & electronics 10,3% 19,8% 27,2% BRIC Non- Strong leadership in St. Petersburg BRIC Carefully exploring
Slide 65: Growth in China
Automotive Experience 4 Growth in China We have put our largest focus on China to JCI China sales forecast 2011 – 2016 position ourselves to participate in attractive (in B USD, incl. unconsolidated sales) growth opportunities 2011 China revenues: $4.0 B (mostly uncons.) CAGR 13.4% 7.4 Market le
Slide 66: Growth in China: manufacturing footprint
Automotive Experience 4 Growth in China AE China Manufacturing Footprint Status August 2011 Existing site* New plant More than 50 plants and 28 JVs 45 major launches in 2012 Changchun >20,000 employees (2010: 18,000) Shenyang Beijing Dalian Balanced presence with global Tianjin Yantai custom
Slide 67: Automotive Experience Summary
Automotive Experience Summary We will accelerate our growth and improve our margins Profitability Short-term: Ensure operational excellence Long-Term: Strive for technology leadership Growth Short-term: $4.2B Backlog Long-Term: – Drive vertical integration – Expand position in emerging markets Incre
Slide 68: Power Solutions
Power Solutions Alex Molinaroli Vice President & President, Power Solutions
Slide 69: Power Solutions Profile
Power Solutions Profile The world‘s largest provider of battery 2011 sales power solutions for the vehicle original ~$6 B equipment and aftermarket Europe Americas World-class customer base in the 26% automotive aftermarket Original equipment (OE) batteries Asia 5% 69% for the top automakers wor
Slide 70: Mission & competitive advantages
Power Solutions Mission & competitive advantages Mission Be the global leader providing battery power solutions for the vehicle original equipment and aftermarket and a leading global provider of advanced energy storage systems
Slide 71: About Our Customers
About Our Customers OEMs & aftermarket Long-term relationships with strategic customers - Original Equipment manufacturers (OEs) - Branded distribution channels - Key private label partners Strong mix - 20% OE - 80% Aftermarket Differentiated relationships and services - Warranty support, cate
Slide 72: Market Dynamics: key trend lines 1990 through 2011
Market Dynamics A few key trend lines from 1990 through 2011… $4.50 $3,500 LME Lead Gas Prices $3,000 (Dollars/Tonne) (Dollars/Gallon) $3.50 $2,500 $2,000 $2.50 $1,500 $1,000 $1.50 $500 $0.50 $0 25 2.0 US Lead Air Emissions (µg/m 3) BRIC OE Sales 20 (Million Units) 15 1.0 10 5 0 0 …accelerating chan
Slide 73: Vehicle Energy Storage Market Evolution
Vehicle Energy Storage Market Evolution Power Solutions perspective 1990 2015 2020 2025 Target MPG for New Vehicles 20-31 35-45 45-55 60-? Internal Combustion Engine High Efficiency ICE Predominant Vehicle w/Start-Stop HEV Configuration PHEV EV Enabling Advanced Li-Ion Energy Lead Acid Storage Lead-
Slide 74: Competitive Landscape
Competitive Landscape Leadership requirement for advanced battery Critical Success Factors High 2 Regional Product & Energy SLI Battery Process Storage R&D Automotive Expertise Providers Technology OE Sales & Vehicle Program Systems Management Expertise 4 Technology Global Investment Players Footpri
Slide 75: Our growth roadmap
Power Solutions Our growth roadmap Aggressive investments across three diversified growth platforms… … leveraging our competitive advantages Delivering shareholder value over the long term
Slide 76: Core Business: a growth business for decades
Core Business A growth business …for decades Batteries for Starting, Lighting and Ignition (SLI) Design Engineering Manufacturing Distribution Collection Recycling Unprecedented scale
Slide 77: Vertical Integration
Vertical Integration Opportunity Increasing Demand Increasing internal capacity from from Emerging Markets 15% to 50% of requirements for North America Industry Infrastructure – Garcia, Mexico facility Technology Innovation Lead Price Start of Production in 2011 Aging & Volume – Florence, SC in 20
Slide 78: Emerging Markets growth strategy focus
Emerging Markets Growth strategy focus EMEA Expand network to support Eastern Asia Europe market leadership South Become the America market leader in China Leverage current leadership position to grow as market develops
Slide 79: China: Recent developments in Shanghai
China Recent developments in Shanghai September - Suspended production in Shanghai plant after achieving annual quota on lead usage We are working with our customers and employees to maintain product availability – Temporarily importing batteries from other regions – Accelerating Changxing facil
Slide 80: Building Our China Network
Building Our China Network $1 Billion invested by 2016 Changxing Facility -- Production Launching Now China Johnson Controls Plant #5 Market Share Target China Future Capacity Plant #4 Chongqing Plant Changxing Plant Fuling County, Chongqing Municipality Western China Region 133,000 square meter
Slide 81: Battery Technology Growth strategy
Battery Technology Growth strategy COMBUSTION ENGINE START-STOP HEV, PHEV, EV Early Market Global Leader in First Mover Long-Term Market Leader Rapidly in Nascent Global Market Market Expanding Leader Segment Maintain & grow leadership position Maintain & grow leadership position Leverage curr
Slide 82: Shifting Battery Requirements
Shifting Battery Requirements OE forecasted programs Europe North America 21% 40% 54% 61% 69% 75% 98% 24% 49% 57% 59% 93% 79% 76% 60% 51% 46% 43% 41% 39% 31% 25% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Standard SLI Advanced Lead-Acid Our pipeline with OE Customers indicates stron
Slide 83: Seizing the Opportunity: AGM investment
Seizing the Opportunity Johnson Controls investment in AGM COMBUSTION ENGINE START-STOP HEV, PHEV, EV AGM Global Capacity Plan Represents annual production level given timing of expansions Leverages unique IP and best practice manufacturing approaches Includes 2.4M in China Million Units …80
Slide 84: Advancing Technology for the Future
Advancing Technology for the Future Unlocking the full potential of Start-Stop COMBUSTION ENGINE START-STOP HEV, PHEV, EV Maximize Start-Stop system potential with AGM technology – Operating temperature range, improve charge acceptance, process improvement and new manufacturing equipment – Number,
Slide 85: Acquisition of Johnson Controls-Saft joint venture
Seizing the Opportunity Acquisition of Johnson Controls-Saft joint venture COMBUSTION ENGINE START-STOP HEV, PHEV, EV $145 million purchase price JCI gains perpetual license to use key Saft Li-Ion technologies JCI retains government grants Provides flexibility to broaden R&D, partnerships, a
Slide 86: A snapshot of Li-Ion commercial wins
Seizing the Opportunity A snapshot of Li-Ion commercial wins COMBUSTION ENGINE START-STOP HEV, PHEV, EV Azure E450 Balance PHEV Azure F550 Super Duty PHEV – 4 Year Program – 5 Year Program – Target SOP – March, 2012 – Target SOP - March, 2013 – 2,000 systems per year – 1,400 systems per year Odyne –
Slide 87: Power Solutions: A growth business
Power Forward Power Solutions Accelerating market dynamics – expanding opportunity – Emerging market expansion, tightening environmental standards, technology evolution Power Solutions positioned for leadership – today and tomorrow – Unique competitive advantages: quality, cost, scale & footprin
Slide 88: Financial outlook
Financial outlook R. Bruce McDonald Executive Vice President and Chief Financial Officer
Slide 89: Fiscal 2012 key assumptions
Fiscal 2012 key assumptions Automotive build * 2012* North America 13.7m +9.6% Europe 20.1m +1.5% China 16.5m +8.0% Construction spending Non-residential – U.S. +1.5% Non-residential – Europe +1.8% Non-residential – Asia, Middle East & Non-residential Latin America +6.5% to +7.5% * October 1, 2011 –
Slide 90: Fiscal 2012 key assumptions
Fiscal 2012 key assumptions Euro Commodities $1.35 in 2012 (vs. $1.40 in 2011) Minimal exposure – Copper hedges Tax rate – Indexing in Automotive Experience 19% in 2012 Lead - $2,500/MT – Improved profitability overseas – 2011 average lead : $2,503MT Low 20% range in 2013 and 2014 Retireme
Slide 91: Fiscal 2012 outlook
Fiscal 2012 outlook Consolidated net sales Building Efficiency: slight global market improvement and share growth Modestly higher vehicle production; full-year impact of FY11 acquisitions Approx. $44.2B Conversion of record backlogs to revenue (up 9%) Growth in emerging markets across all th
Slide 92: Automotive Experience 2012 financial outlook
Automotive Experience 2012 financial outlook Sales up approximately 6% Margin: 5.3% - 5.5% Modestly higher volumes in North America and Europe Operating leverage (+) Growth in emerging markets – Higher volume – Largely via unconsolidated joint – Acquisitions ventures Operational improvements
Slide 93: Automotive Experience Mid-term outlook (through 2016)
Automotive Experience Mid-term outlook (through 2016) Sales growth: 2-3% over industry Key margin drivers Backlog growth Continued growth in Asia R&D / Launch Margin target: Vertical integration 7-8% Increased to 7 – 8% (vs. 6 - 7%) Production volume Annual expansion of 50 – 70 bps Operating
Slide 94: Power Solutions 2012 Financial outlook
Power Solutions 2012 Financial outlook Sales up 11% - 13%* Margin: 13.5% - 13.9%* Higher volumes across all regions Operating leverage (+) Market share growth – Higher volume Full-year impact of the Changxing, Product mix shift (+) China plant – Volume beginning to shift toward Short-ter
Slide 95: Power Solutions Mid-term outlook (through 2016)
Power Solutions Mid-term outlook (through 2016) Sales growth: 10-12% Key margin drivers R&D Market share gains expense Growth in China and other emerging markets Operating 16-17% AGM technology improvement Product mix Annual margin expansion: 100 bps (excluding lead) Operating leverage Impro
Slide 96: Building Efficiency 2012 Financial outlook
Building Efficiency 2012 Financial outlook Sales up 9% - 11% Margin: 5.6% - 5.8% (7.3% - 7.5% excluding GWS) Launch of record backlog, especially Operating leverage (+) in the emerging markets and Energy – Benefits of global volume growth Solutions – Recovery in technical service business Stro
Slide 97: Building Efficiency Mid-term outlook
Building Efficiency Mid-term outlook Sales growth: 10-15% Key margin drivers Growth in Energy Solutions R&D Expansion in emerging markets expense / infrastructure Market share gains Business model Late-cycle market recovery 8.5%* Annual margin expansion: Service / Solutions approx. 50 bps pr
Slide 98: Organic investments: capital investment trend
Organic investments Capital investment trend $1.7 B AE PS BE $1.4-1.6 B $1.3 B $800 M $650 M 09A 10A 11O 12P 13 - 16P
Slide 99: Organic investments
Organic investments Lithium-ion Hybrid Geographic AGM (Start-Stop) $300 million - 5 years Expansion $375 million - 4 years $550 million - 5 years Vertical Integration Automotive Launches I.T. Capital Investments $250 million - 3 years $400 million – 3 years $550 million - 4 years
Slide 100: Capital allocation
Capital allocation Cash flow deployment Capital expenditures to increase organic growth Tuck-under acquisitions Discretionary pension funding Dividend payments Dividends Consecutive dividends paid since 1887 Intend to increase payout ratio to 30% over time – November Board of Directors m
Slide 101: Strategic review and 2012 outlook
Strategic review and 2012 outlook October 12, 2011
Slide 102: Continuing our long track record of profitable growth
Johnson Controls Continuing our long track record of profitable growth Revenue Net Income* $ billions $ millions $44.2 $2.0 $40.7 $38.1 $1.7 $34.6 $34.3 $32.2 $1,402 $28.5 $1,356 $27.5 $1,252 $24.6 $21.6 $1,028 $19.3 $857 $17.9 $16.7 $15.7 $729 $622 $572 $525 $535 $438 $311 •Excludes one-time and re
Slide 103: Sustainable, profitable growth
Johnson Controls, Inc. Sustainable, profitable growth Committed to providing best-in- class total returns to shareholders Market Sustainable organic sales and recovery earnings growth Growth strategies ROIC improvement Value-creating Margin expansion investments Growth investments Sustained,
Slide 104: Strategic review and 2012 outlook
Strategic review and 2012 outlook October 12, 2011