johnson controls 11/12/2008 Baird 2008 Industrial Conference

614 views
467 views

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
614
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
23
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

johnson controls 11/12/2008 Baird 2008 Industrial Conference

  1. 1. R.W. Baird Conference November 12, 2008
  2. 2. Steve Roell Chairman and Chief Executive Officer Johnson Controls, Inc. (“the Company”) has made forward-looking statements in this presentation pertaining to its fi t it financial results for fiscal 2009 and beyond that are based on preliminary data and are subject to risks il lt f fi l db d th t b d li i dt d bj t t i k and uncertainties. All statements other than statements of historical fact are statements that are or could be deemed forward-looking statements and include terms such as “outlook,” “expectations,” “estimates,” or “forecasts.” For those statements, the Company cautions that numerous important factors, such as automotive vehicle production levels, mix and schedules, financial distress of key customers, energy prices, the strength of the U.S. or other economies, currency exchange rates, cancellation of or changes to f S f commercial contracts, liquidity, the ability to execute on restructuring actions according to anticipated timelines and costs as well as other factors discussed in Item 1A of Part II of the Company’s most recent Form 10-Q filing (filed August 8, 2008) could affect the Company’s actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. 2
  3. 3. Johnson Controls Johnson Controls Three world-class growth businesses Power solutions Interior experience Building efficiency Providing the highest Delivering world-class Creating quality indoor quality, lowest cost technologies that environments that are automotive batteries to differentiate vehicle energy efficient, help customers grow their interiors and increase comfortable and safe market shares and to consumer demand power the vehicles of tomorrow 3
  4. 4. Johnson Controls Inc. 2008 financial results Sales Earnings $38.1 B $ $1.4 B $ Power oe 15% Power Buildings 26% Buildings 37% 46% Automotive Automotive 48% 28% 4
  5. 5. Profitable growth Well-positioned to take advantage of global mega-trends – Energy efficiency – Sustainability – Emerging markets Proven ability to create new value for customers Market insight and customer relationships to adapt and lead industry change Financial strength to invest in growth and take advantage of new opportunities 5
  6. 6. Our growth objectives Sales Growth* > 10% Earnings Growth* 10 – 15% ROIC 15 - 16% * Compounded annual growth rate 6
  7. 7. 2009: Unprecedented uncertainties Global economy Depth and duration of U.S. economic slowdown Softening European economies Emerging markets slowing but still strong – Johnson Controls: $6.5 billion in sales* Impact of global liquidity tightness on businesses and consumers d Our markets Strong global demand for energy efficiency, efficiency sustainability Continued recessionary conditions in North American auto and residential markets Rapid European auto production downturn Financial health of automotive OEs and suppliers *Annual sales, including unconsolidated 7
  8. 8. Johnson Controls strengths Key targets for Record backlogs BBP savings Geographic diversity Footprint ti i ti F t i t optimization: Low cyclicality of some of our businesses manufacturing, engineering, shared services Strong customer relationships Logistics/transportation g p Access to capital / credit ratings Safety Actions to improve cost structure Standardized global product and process architectures – Sharing best practices Supply chain management and – Identifying roadmaps for improvement global sourcing – Leveraging worldwide capabilities Working capital 2009 Nearly $3 billion identified cost savings BBP gap Expectation: close 1/3 of gap E t ti l f 8
  9. 9. Automotive Experience Delivering world-class innovative technologies that differentiate vehicle interiors through improved comfort safety comfort, and sustainability Leading global provider: systems and components for seats, overheads, doors, cockpits and electronics – Supplying over 30 million cars per year from 250 locations in 30 countries (1/3 in low-cost countries) – Over 60% of revenues generated outside of North g America *Excludes $1.5B unconsolidated revenue in China 9
  10. 10. Automotive Experience Our competitive advantages...... …leading to 2009 strengths Robust and disciplined innovation and new Record backlog product processes dt Winning new business, Systems knowledge in major interior zones increasing market share (seating, overhead, cockpit, door) and total Expanding leading market position in interior integration China and Eastern Europe Diversified customer and product portfolio Extending technology leadership Culture focused on continuous cost-reduction and quality Global capability Strategic relationships with the largest global automakers and the flexibility to respond to multiple customer strategies Financial strength – Strong partner in a weak supply base 10
  11. 11. Automotive Experience Visibility of future performance Record profitable backlog Three-year backlog visibility Updated annually in October Represents incremental new business – Net of discontinued programs – Includes unconsolidated 2009 – 2011 backlog – 85% outside North America – Reflects increasing market share in Europe, Asia – Primarily cars, CUVs FAW-VW-Audi Q5 Opel Zafira 11
  12. 12. Power Solutions Dependable starting for today cars and powering tomorrow’s electric vehicles hi l Largest global provider of automotive batteries Leader in lead acid batteries – Largest and growing share of aftermarkets in North America, Europe and South America – Original equipment (OE) batteries for the top automakers worldwide First-to-market provider of lithium-ion batteries for hybrid applications 12
  13. 13. Power Solutions Lead acid batteries Market Global market share Lead-acid automotive battery market Flat demand for lead acid batteries 2008: 352M units in i mature markets t kt – Extended product life and lower OE production – Aftermarket business not as economically sensitive as OE Asia market demand growing New vehicle applications creating higher demand for advanced batteries – Lead acid (AGM) and alternative chemistries Our competitive advantages Strong, Strong growing market leadership position Cost and quality leader Global footprint; geographic expansion Financial strength 13
  14. 14. Hybrid vehicle battery technology Market leadership: program examples Lithium-ion Ford, Southern CA Edison and EPRI to Joint venture with Saft producing first-to- develop and d d l d demonstrate vehicle and tt hi l d market production of lithium-ion systems kt d ti f lithi i t utility applications – Production plant in Nersac, France SAIC for PHEV fuel cell demonstration – 2009 delivery to Daimler, followed by BMW fleet Systems integration: cell chemistry, Daimler for Sprinter PHEV electronics, systems capability and demonstration fleet manufacturing g Battery system for Chery Automotive’s B tt t f Ch At ti ’ Unmatched automotive knowledge (China) first hybrid program Manufacturing expertise to drive lower $8.2m USABC award for PHEV system system costs and assure quality development Resources to invest in global engineering $500k grant from the State of and manufacturing Wisconsin for R&D and hybrid commercialization activity 14
  15. 15. Building Efficiency The global leader in creating and 2008 Sales: managing building solutions to improve $14.1 Billion energy efficiency comfort and safety efficiency, Highly diversified: 1 million customers in 125 countries Non- Residential A huge installed base leading to repeat business 94% Residential Moderate cyclicality due to large service/renovation volume Asia 19% North Europe America 53% 29% 15
  16. 16. Building Efficiency A growth industry Demand for energy efficiency and sustainability continues t expand globally ti to d l b ll Increased integration of building, business, security and IT systems continues Our competitive advantages Industry-leading HVAC service business – 13,000 service providers, twice the size of #2 competitor Well positioned in growing emerging markets Unique product and service offerings Expertise and capability across the entire p p y building lifecycle Vertical market expertise Renewable energy participation 16
  17. 17. Non-residential buildings High level of visibility and recurring revenues Building Efficiency Visibility of future performance commercial building sales $4.7 B backlog (+12%) at September 30, 2008 Service Backlog 75% Technical services, solutions, Updated quarterly retrofits, global workplace solutions Recurring revenues driven by Not included: Workplace Solutions or demand for increased energy efficiency, greenhouse g y, g gas Unitary (residential) Products businesses reductions, occupant comfort Converts to revenue in 6-9 months Historically low backlog cancellation rate – C t t typically awarded after Contracts t i ll d d ft New N financing is in place & work has begun Construction 25% – Tighter credit could have impact Pipeline North America International Tracks bidding activity High concentration in 5 Yr. Growth rates: quot;institutionalquot; buildings Precursor to backlog. 6-9 months of China 13% M.E 13% additional visibility y Europe 4% E 17
  18. 18. Fiscal 2009 key assumptions* Automotive Build 2008 2009e North America 13.9m 12.3m Europe (Western Europe down 10%) E (W t E d 22.5m 22 5 21.2m 21 2 China +19% +0 to 5% Construction S C t ti Spending di Residential – U.S. -13% 0% Non-residential – U.S. -2% -5% – Institutional Sector +4% +3% Non-residential – International +7% +5% Euro $1.40 in 2009 vs. $1.50 average in FY08 *as announced October 13, 2008 18
  19. 19. Fiscal 2009 outlook* Earnings per share Consolidated net sales Approx $37B (down 3%) Approx $1.95 - $2.10 Up 2-3% U 2 3% excluding FX and l d l di d lead Building Efficiency and Power Maintaining top-line sales despite Solutions improvements offset by contraction in mature markets weakness in Automotive – Growth in Building Efficiency – Growth in emerging markets Capturing market share in Automotive and Power Solutions Lead and currency negative impact: $1.7 billion *as announced October 13, 2008 19
  20. 20. Johnson Controls We face unprecedented uncertainties, but we will manage through the current cycle and emerge with expanded market leadership To do so, Johnson Controls will – Take advantage of Global Growth Mega-Trends, especially energy efficiency and sustainability – Stay close to our customers to more quickly react to changing markets and needs – Leverage talent, technology and processes across the company – Execute our growth strategies g g – Use our financial strength to invest in future growth – Not sacrifice the long-term to chase short-term performance – Continue to improve our cost structure Our focus remains: deliver long term shareholder value 20

×