EPG Conference 2017Johnson ControlsAlex MolinaroliChairman & Chief Executive Officer
2
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 JohnsonControls’ 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.
3
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, organic sales, adjusted segment EBITA, adjusted segment EBITA margin and adjusted free cash flow 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 consideredtogether 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.
4
AT A GLANCE
World leader in buildings and energy solutions and technology with $30B in sales
Industry leading brands and innovative technologies
Global footprint and operating system allows for significant scale advantage
Strong investment-grade credit metrics with increasing financial flexibility
Uniquely positioned to provide most comprehensive portfolio of Building and Energy solutions
5
TWO STRONG CORE BUSINESSES POSITIONED FOR GROWTH
5*EBITA before special items is a non-GAAP measure. See appendix for reconciliation. Building Technologies & Solutions amounts are pro forma.
35%
Install31%
34%
Leading provider of building technology, products & solutions
SALES
$23B $2.9BEBITA*
BUILDING TECHNOLOGIES & SOLUTIONS
FY16 REVENUE
74%
OE26%
Global leader and largest manufacturer of automotive batteries, powering nearly every type of vehicle
POWER SOLUTIONS
SALES
$7B $1.3BEBITA*
FY16 REVENUE
Aftermarket
Products Service
6
SIGNIFICANT VALUE CREATION
$1.2B+
EXPECTED TO CONTRIBUTE ˜$1.10 OF EPS BY FY20
WHAT WE SAID AT EPG 2016…
+Revenue
Synergies$500M(EBIT
Contribution ~$85M to $100M)
+$100M
INVESTOR DAY 2016 UPDATE…
Add’l Cost / Productivity
Opportunities
7
REALIZATION PROGRESSION
+Revenue
Synergies$500M
(EBIT Contribution ~$85M to $100M)
~$0.07
+Tax
Synergies$150M~$0.16
CostSynergies /Productivity
$1.0B~$0.88
$1.2B+~$1.10 EPS
2018$250M
2017$300M
2019$250M
2020$200M
CADENCE OF SAVINGS:
8
WHERE WE ARE TODAY
Synergies / Productivity
TARGET:$300MFY17
YTD: $120M
Corporate organizational structure complete
Field organization structure substantially complete
Significant transformation in Field organization
CUSTOMERS AND MARKETS
CAPABILITIES
PEOPLE
40%
9
A DEEPER DIVE INTO BUILDINGS
10
REALIGNING THE ORGANIZATION IN NORTH AMERICA
10
Newly Designed North America Structure
27 P&L managers
317 sales managers
95% sales reps aligned to manager who specializes in their type of selling
100% cross-sell capabilities are enabled through a combined organization across domains
+24%
Created Region Based Structure
1.Harmonize operating models
2.Drive sales focus
3.Streamline organizational structure
4.Leverage infrastructure and lower cost to serve
11
THE COMBINATION OF OUR BUSINESSES = OPPORTUNITY
High Complex Mid Complex Light Commercial / Residential
Campuses/ districts
Complexsingle siteprojects
Large buildings
Medium buildings
Light Commercial
Residential
SOURCE: JCI data; Tyco SG data: Tyco IS data; Team analysis
HVACequipment
Building controls
Fire panels and alarms
Fire sprinklers
Security
NA buildingsdirect revenue,
% of total
12
$500M RUN-RATE SALES SYNERGIES IN FY20
NEAR-TERM
YEAR 1Immediate, tangible benefits
of cross-selling and strategic account management
Have the products and commercial capabilities in
place today
MID-TERM
YEAR 2-4Field integration - integrated
capabilities expand opportunities for integrated solutions and
value-added services
Tailored solutions built to serve specific vertical
markets
LONG-TERM
YEAR 4+ Advanced technology
solutions – new technology platforms for smart and
connected offerings
Well-positioned with technologies and expertise to lead
+Revenue
Synergies$500M
(EBIT Contribution ~$85M to $100M)
~$0.07
+Tax
Synergies$150M~$0.16
CostSynergies /Productivity
$1.0B~$0.88
$1.2B+~$1.10 EPS
13
~$3.61 to $4.01
~($0.15 to $0.20)
~($0.05) ~$1.10
~$0.45 to $0.80
$2.31
SIGNIFICANT VALUE CREATION THROUGH FY20
EPS BRIDGE TO FY20
13
Excludes Capital Deployment of
~$3B+ after Dividends
* EPS before special items is a non-GAAP measure. EPS amounts are based on weighted average diluted shares of 940M. See appendix for reconciliation. ** Sales growth CAGR of 3% to 4% at 17% to 20% incremental margin.
F Y 1 6 *P R O F O R M A
S Y N E R G I E S & P R O D U C T I V I T Y
O R G AN I CG R O W T H * *
I N V E S T M E N T S U N D E R L Y I N GT AX R AT E
F Y 2 0 F *
14
Appendix
1515
NO
N-
GA
AP
R
EC
ON
CI
LI
AT
IO
N
AA
AB
BC
DE
($ in
mill
ions
, exc
ept E
PS
)Q
uart
er E
nded
Year
End
edYe
ar E
nded
Year
End
edYe
ar E
nded
Dec
embe
r 31,
M
arch
31,
June
30,
Sept
embe
r 30,
Se
ptem
ber 3
0,
Sept
embe
r 30,
Se
ptem
ber 3
0,
Sept
embe
r 30,
20
1520
1620
1620
1620
1620
1620
1620
16
Sal
es$
8,92
9 $
9,03
1 $
9,51
6 $
10,1
98
$ 37
,674
$
37,6
94
$(8
,125
)$
29,5
69
Inco
me
from
Con
tinui
ng O
pera
tions
befo
re In
com
e Ta
xes
619
399
665
(97)
1,58
6 3,
493
(675
)2,
818
Inco
me
Tax
Exp
ense
(129
)(8
68)
(206
)(1
,035
)(2
,238
)(5
91)
112
(479
)
Non
cont
rollin
g In
tere
st(4
0)(6
1)(7
6)(3
9)(2
16)
(253
)87
(1
66)
Net
Inco
me
450
(530
)38
3 (1
,171
)(8
68)
2,64
9 (4
76)
2,17
3
Dilu
ted
EPS
$ (1
.30)
$ 3
.94
$ 2
.31
AH
isto
rical
Joh
nson
Con
trols
, Inc
. as
repo
rted
BJo
hnso
n C
ontro
ls In
tern
atio
nal p
lc a
s re
porte
dC
Adj
uste
d to
exc
lude
spe
cial
item
s be
caus
e th
ese
cost
s ar
e no
t con
side
red
to b
e di
rect
ly re
late
d to
the
unde
rlyin
g op
erat
ing
perfo
rman
ce o
f the
C
ompa
ny.
Man
agem
ent b
elie
ves
thes
e no
n-G
AA
P m
easu
res
are
usef
ul to
inve
stor
s in
bet
ter u
nder
stan
ding
the
ongo
ing
oper
atio
ns a
ndbu
sine
ss
trend
s of
the
Com
pany
. S
peci
al it
ems
incl
ude:
‐In
crea
se to
sal
es o
f $20
mill
ion
rela
ted
to n
onre
curr
ing
fair
valu
e ad
just
men
t of T
yco’
s de
ferre
d re
venu
e in
pur
chas
e ac
coun
ting
‐N
on-c
ash
mar
k-to
-mar
ket f
or p
ensi
on /
post
retir
emen
t pla
ns a
nd s
ettle
men
t los
ses
of $
514
mill
ion
($35
7 m
illio
n af
ter-
tax
and
non-
cont
rollin
g in
tere
st)
‐Tr
ansa
ctio
n, in
tegr
atio
n an
d se
para
tion
cost
s of
$69
2 m
illio
n ($
621
mill
ion
afte
r-ta
x an
d no
n-co
ntro
lling
inte
rest
)‐
Res
truct
urin
g an
d no
n-ca
sh im
pairm
ent c
harg
es o
f $62
7 m
illio
n ($
517
mill
ion
afte
r-ta
x an
d no
n-co
ntro
lling
inte
rest
)‐
Non
-rec
urrin
g po
rtion
of p
urch
ase
acco
untin
g ex
pens
es o
f $74
mill
ion
($54
mill
ion
afte
r-ta
x)
‐D
iscr
ete
inco
me
tax
expe
nse
of $
1,96
8 m
illio
nD
Incl
udes
Tyc
o N
on-G
AA
P re
sults
and
recu
rrin
g pu
rcha
se a
ccou
ntin
g ad
just
men
ts fo
r the
per
iod
Oct
ober
1, 2
015
thro
ugh
Sep
tem
ber 2
,201
6 le
ss
Adi
entr
esul
ts fo
r the
twel
ve m
onth
s en
ded
Sep
tem
ber 3
0, 2
016
on a
dis
cont
inue
d op
erat
ions
bas
is.
EP
ro F
orm
a fin
anci
al in
form
atio
n as
if A
dien
twas
refle
cted
as
a di
scon
tinue
d op
erat
ion
and
the
mer
ger w
ith T
yco
was
com
plet
ed o
n O
ctob
er 1
, 201
5.R
efle
cts
17%
tax
rate
and
940
mill
ion
shar
e co
unt.
PR
O
FO
RM
A
EP
S
–F
Y1
6
A re
conc
iliatio
n of
the
diffe
renc
es b
etw
een
earn
ings
per
sha
re re
porte
d an
d ad
just
ed e
arni
ngs
per s
hare
pro
vide
d on
a fo
rwar
d-lo
okin
g ba
sis
is n
ot a
vaila
ble,
due
to
the
high
var
iabi
lity
of th
e m
ark-
to-m
arke
t adj
ustm
ents
rela
ted
to p
ensi
on a
nd p
ost r
etire
men
t pla
ns a
nd u
npre
dict
abilit
y of
any
oth
er p
oten
tial a
djus
ting
item
s.
1616
($ in
mill
ions
, exc
ept E
PS
)Q
uart
er E
nded
Year
End
edD
ecem
ber
31,
Mar
ch 3
1,Ju
ne 3
0,Se
ptem
ber
30,
Sept
embe
r 30
, 20
1520
1620
1620
1620
16
Sale
s
Bui
ldin
gs$
5,3
26
$
5,
475
$
6
,078
$
6,0
37
$
22
,916
Pow
er
1,74
0 1,
583
1,51
9 1,
811
6,65
3
7,06
6 7,
058
7,59
7 7,
848
29,5
69
Inco
me
from
Con
tinui
ng O
pera
tions
befo
re In
com
e Ta
xes
Bui
ldin
gs55
9 63
5 84
5 86
3 2,
902
Pow
er36
0 28
2 28
1 41
3 1,
336
Seg
men
t EB
IT91
9 91
7 1,
126
1,27
6 4,
238
Am
ortiz
atio
n of
Inta
ngib
les
(106
)(1
07)
(109
)(1
08)
(430
)
Cor
pora
te(1
23)
(130
)(1
45)
(143
)(5
41)
EB
IT
690
680
872
1,02
5 3,
267
Net
Fin
anci
ng C
harg
es
(111
)(1
14)
(110
)(1
14)
(449
)
Inco
me
Bef
ore
Tax
579
566
762
911
2,81
8
Inco
me
Tax
Exp
ense
(9
8)(9
6)(1
30)
(155
)(4
79)
Non
cont
rolli
ng In
tere
st(2
9)(4
4)(5
6)(3
7)(1
66)
Net
Inco
me
$
452
$
42
6 $
5
76
$
71
9 $
2,1
73
Dilu
ted
Sha
res
940
940
940
940
940
Dilu
ted
EP
S*
$
0.48
$
0.4
5 $
0
.61
$
0.7
6 $
2
.31
Tyco
's fi
rst t
hree
fisc
al q
uarte
rs o
f 201
6 en
ded
on th
e la
st F
riday
of D
ecem
ber,
Mar
ch, a
nd J
une,
whi
le J
CI's
fisc
al q
uarte
rsen
ded
on th
e la
st d
ay o
f eac
h su
ch m
onth
. B
ecau
se th
e hi
stor
ical
sta
tem
ents
of i
ncom
e of
eac
h co
mpa
ny re
pres
ent f
ull a
nd e
quiv
alen
t qu
arte
rly p
erio
ds, n
o ad
just
men
ts w
ere
mad
e to
alig
n th
e fis
cal q
uarte
rs.
NO
N-
GA
AP
R
EC
ON
CI
LI
AT
IO
N
PR
O
FO
RM
A
EP
S
–F
Y1
6
(C
ON
TI
NU
ED
)