Quarterly Update FY17 First Quarter February 1, 2017 Johnson - PowerPoint PPT Presentation

Quarterly Update FY17 First Quarter February 1, 2017

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 risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In this communication, statements regarding Johnson Controls’ future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures and debt levels are forward-looking statements. Words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “forecast,” “project” or “plan” and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls’ control, that could cause Johnson Controls’ actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: any delay or inability of Johnson Controls to realize the expected benefits and synergies of recent portfolio transactions such as the merger with Tyco and the spin-off of Adient, changes in tax laws, regulations, rates, policies or interpretations, the loss of key senior management, the tax treatment of recent portfolio transactions, significant transaction costs and/or unknown liabilities associated with such transactions, the outcome of actual or potential litigation relating to such transactions, the risk that disruptions from recent transactions will harm Johnson Controls’ business, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, and cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Johnson Controls’ business is included in the section entitled “Risk Factors” in Johnson Controls’ Annual Report on Form 10-K for the 2016 fiscal year filed with the SEC on November 23, 2016, and in the quarterly reports on Form 10-Q filed with the SEC after such date, and available at www.sec.gov and www.johnsoncontrols.com under the “Investors” tab. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this communication are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this communication. 2 Johnson Controls, plc. – February 1, 2017

Non GAAP Financial Information This presentation contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include mark-to-market for pension plans, transaction/integration/separation costs, restructuring and impairment costs, nonrecurring purchase accounting impacts related to the Tyco merger and discrete tax items. Financial information regarding adjusted sales, adjusted segment EBITA and adjusted segment EBITA margin are also presented, which are non-GAAP performance measures. Adjusted segment EBITA excludes special items such as transaction/integration/separation costs and nonrecurring purchase accounting impacts because these costs are not considered to be directly related to the operating performance of its business units. Management believes that, when considered together with unadjusted amounts, these non-GAAP measures are useful to investors in understanding period-over-period operating results and business trends of the Company. Management may also use these metrics as guides in forecasting, budgeting and long-term planning processes and for compensation purposes. These metrics should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Reconciliations of non-GAAP performance measures can be found in the attached footnotes. 3 Johnson Controls, plc. – February 1, 2017

Agenda Introduction 1 Antonella Franzen, Vice President, Investor Relations FY17 priorities & first quarter highlights 2 Alex Molinaroli, Chairman and Chief Executive Officer Integration update & business results 3 George Oliver, President and Chief Operating Officer Financial review & guidance 4 Brian Stief, Executive Vice President and Chief Financial Officer Q&A 5 4 Johnson Controls, plc. – February 1, 2017

FY17 Priorities  Bring together culture of both companies - Vision / mission / values  Deliver on operating and financial plans - Growth / execution / shareholder value  Advance integrated strategic plan - Combined portfolio / customer insights  Continuous evaluation of portfolio - Non-core / underperforming  Disciplined capital allocation - Organic investments / competitive dividend / strategic M&A / share repurchases 5 Johnson Controls, plc. – February 1, 2017

FY17 First Quarter Highlights  Better than expected profitability across all businesses  Solid start to the year as a combined company  Continued focus on productivity and “self-help” initiatives  Integration well underway and cost synergies being realized  Order growth in Institutional vertical; quoting pipeline remains strong  Adient spin-off completed 6 Johnson Controls, plc. – February 1, 2017

Strong Growth and Operational Performance Asia Pacific  Strong performance across all businesses A S Y M B O L O F O U R C O M M I T M E N T A N D F U T U R E I N A S I A  Accelerating organic growth G R A N D O P E N I N G S U M M E R 2 0 1 7 - Demographics / infrastructure / operating scale  Power Solution’s China investments delivering strong growth  Increasing profitability in Hitachi JV 7 Johnson Controls, plc. – February 1, 2017

FY17 First Quarter Earnings from Continuing Operations* NET SALES DILUTED EPS $0.53 $7.1 B $7.1 B FLAT $0.48 Reported +10% +1% Organic FY17 Q1 FY16 Q1 FY17 Q1 FY16 Q1 COMBINED COMBINED EBIT $757 M +10% EBIT margin $690 M Reported +90 bps +13% Excluding FX and Lead FY17 Q1 FY16 Q1 COMBINED *Non-GAAP excludes special items. 2016 results combine legacy Johnson Controls and legacy Tyco adjusted results. See footnotes for reconciliation. 8 Johnson Controls, plc. – February 1, 2017

Integration Update  Strong governance structure in place to track costs and related synergies  Energy level high across regional sales teams with some early wins  Cost synergies / productivity savings expected to ramp-up throughout course of year Grow, Integrate, FY17 Expected Synergies/Productivity Q1 Q2 Q3 Q4 Change, Operate FY17 FY17 FY17 FY17 FY17 ~$0.05 ~$0.05 ~$0.07 ~$0.08 $0.25 9 Johnson Controls, plc. – February 1, 2017

Building Technologies & Solutions* Strong margin expansion  Organic sales NET SALES - Field consistent with prior year $5.3 B $5.2 B • Applied HVAC up mid-single digits (2%) • Fire & Security up low-single digits • Performance contracting and Industrial refrigeration down ~20% Reported (1%) - Products down 3% • UPG up low-teens • Fire & Security down mid-single digits Organic  Orders secured +2% vs prior year (ex. FX and M&A) FY17 Q1 FY16 Q1 - Field +3% / Products down 3% COMBINED  Backlog $8.1B, +6% vs prior year (ex. FX and M&A) SEGMENT EBITA Segment EBITA margin +60 bps  $578 M $559 M  Exceeded expectations +3%  Benefit of strong productivity savings and cost Reported synergies +6%  Improving Hitachi JV margins  Product and channel investments Excluding FX FY17 Q1 FY16 Q1 COMBINED *Non-GAAP excludes special items. 2016 results combine legacy Johnson Controls and legacy Tyco adjusted results. See footnotes for reconciliation. 10 Johnson Controls, plc. – February 1, 2017

Power Solutions* Higher volumes and increased profitability  Higher volumes in all regions NET SALES $1.9B  Global shipments of start-stop +27% $1.7 B +9% - China +124% - Americas +87% Reported - EMEA down 2% +7%  Growth in aftermarket shipments (+7%); OE Organic (flat) FY17 Q1 FY16 Q1 SEGMENT EBITA Segment EBITA margin down 20 bps ;  $390 M ( +90 bps excluding lead) +8% $360 M  Higher volumes Reported  Favorable product mix +12% Excluding FY17 Q1 FY16 Q1 FX and Lead *Non-GAAP excludes special items. See footnotes for reconciliation. 11 Johnson Controls, plc. – February 1, 2017