Johnson Controls International : Reports Fiscal Q4 & Full Year Results; Demonstrating Continued Strong Execution in a Challenging Environment

FOR IMMEDIATE RELEASE

JOHNSON CONTROLS REPORTS FISCAL Q4 & FULL YEAR RESULTS, DEMONSTRATING

CONTINUED STRONG EXECUTION IN A CHALLENGING ENVIRONMENT

• GAAP EPS of $0.60; Q4 adjusted EPS of $0.76, down 3% versus prior year
• GAAP EPS of $0.84; Full year adjusted EPS of $2.24, up 14% versus prior year
• Sequential quarterly improvement in sales, orders and profitability
• Continued focus on cost mitigation actions in response to global pandemic
• Q4 and full year cash provided by operating activities of $1.0 billion and $2.5 billion, respectively; Q4 and full year adjusted free cash flow of $1.0 billion and $1.9 billion (115% conversion), respectively
• Completed approximately $750 million of planned share repurchases in Q4; $2.2 billion for full year
• Provides fiscal 2021 first quarter adjusted earnings per share guidance range of $0.39 to $0.41

CORK, Ireland, November 3, 2020 -- Johnson Controls International plc (NYSE: JCI) today reported fiscal fourth quarter 2020 GAAP earnings per share ("EPS") from continuing operations, including special items, of $0.60. Excluding these items, adjusted EPS from continuing operations was $0.76, down 3% versus the prior year period (see attached footnotes for non-GAAP reconciliation).

Sales of nearly $6.0 billion decreased 5% compared to the prior year and declined 6% organically, reflecting the continued impact of the COVID-19 pandemic.

GAAP net income from continuing operations was $441 million, earnings before interest and taxes ("EBIT") was $583 million and EBIT margin was 9.8%. Adjusted net income from continuing operations was $563 million, adjusted EBIT was $770 million and adjusted EBIT margin was 12.9%, in line with prior year results despite the revenue decline.

"Looking back on what was an extraordinary year, I am incredibly proud of how our teams responded in a time of a global pandemic and the progress that we made as an organization. We remained focused on executing on our priorities to support our customers with the most innovative products and solutions, including our OpenBlue digital platform, contributing to a more sustainable world while maintaining the health and safety of our employees and their families, our customers and partners," said George Oliver, chairman and CEO. "In the fourth quarter, we performed very well across all of our end markets delivering revenue and EBIT above our prior guidance, with best in class decrementals. This is a result of continued strong execution on our cost-out initiatives, while maintaining strong reinvestment into our growth platforms."

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Oliver continued, "from a strategic perspective, we executed on the initiatives we set out to accomplish at the beginning of the year, all of which enhance the long-term competitiveness of our business. I remain confident that Johnson Controls is well positioned to capitalize on the strong secular trends in buildings and infrastructure, providing innovative solutions enhancing air purification and health & safety, while delivering on our customers sustainability goals with industry leading energy management."

Income and EPS amounts attributable to Johnson Controls ordinary shareholders ($ millions, except per-share amounts)

The financial highlights presented in the tables below are in accordance with GAAP, unless otherwise indicated. All comparisons are to the fourth fiscal quarter and full fiscal year of 2019.

Organic sales growth, organic EBITA growth, segment EBITA, adjusted segment EBITA, adjusted corporate expense, EBIT, adjusted EBIT, adjusted net income from continuing operations, adjusted EPS from continuing operations and adjusted free cash flow are non-GAAP financial measures. For a reconciliation of these non-GAAP measures and detail of the special items, refer to the attached footnotes. A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at http://investors.johnsoncontrols.com.

		Fiscal Q4					Fiscal Year
	GAAP	Adjusted		GAAP	Adjusted
	2019	2020	2019	2020		2019	2020	2019	2020
Sales	$6,274	$5,954	$6,274	$5,954	$23,968	$22,317	$23,968	$22,317
Segment EBITA	962	869	990	926		3,041	2,948	3,243	3,020
EBIT	75	583	812	770		1,406	1,134	2,490	2,365
Net income from	612	441	615	563		1,100	631	1,710	1,688
continuing operations
Diluted EPS from	$0.77	$0.60	$0.78	$0.76		$1.26	$0.84	$1.96	$2.24
continuing operations

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SEGMENT RESULTS

Building Solutions North America

		Fiscal Q4				Fiscal Year
	GAAP	Adjusted		GAAP	Adjusted
	2019	2020	2019	2020	2019	2020	2019	2020
Sales	$2,401	$2,243	$2,401	$2,243	$9,031	$8,605	$9,031	$8,605
Segment EBITA	346	341	357	345	1,153	1,157	1,179	1,168
Segment EBITA Margin %	14.4%	15.2%	14.9%	15.4%	12.8%	13.4%	13.1%	13.6%

Sales in the quarter of $2.2 billion, decreased 7% versus the prior year. Organic sales were down 6% versus the prior year, driven by a decline in project installations and, to a much lesser extent, service. Growth in Performance Solutions was more than offset by a decline in Fire & Security and HVAC & Controls.

Orders in the quarter, excluding M&A and adjusted for foreign currency, decreased 9% year-over-year driven by lower demand due to the COVID-19 pandemic. Backlog at the end of the quarter of $5.9 billion was consistent with the prior year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $345 million, down 3% versus the prior year. Adjusted segment EBITA margin of 15.4% expanded 50 basis points versus the prior year driven by significant cost mitigation actions and restructuring benefits, which more than offset the volume decline and negative mix.

Building Solutions EMEA/LA (Europe, Middle East, Africa/Latin America)

		Fiscal Q4				Fiscal Year
	GAAP	Adjusted		GAAP	Adjusted
	2019	2020	2019	2020	2019	2020	2019	2020
Sales	$948	$906	$948	$906	$3,655	$3,440	$3,655	$3,440
Segment EBITA	110	101	111	103	368	338	372	340
Segment EBITA Margin %	11.6%	11.1%	11.7%	11.4%	10.1%	9.8%	10.2%	9.9%

Sales in the quarter of $906 million decreased 4% versus the prior year. Organic sales declined 7% versus the prior year driven by a decline in project installations and, to a much lesser extent, service. Volume declined across all regions and platforms.

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Orders in the quarter, excluding M&A and adjusted for foreign currency, decreased 7% year-over-year driven by lower demand due to the COVID-19 pandemic. Backlog at the end of the quarter of $1.6 billion increased 1% year-over-year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $103 million, down 7% versus the prior year. Adjusted segment EBITA margin of 11.4% declined 30 basis points over the prior year, including a 20 basis point headwind related to foreign currency. Adjusting for foreign currency, the underlying margin declined 10 basis points as the impact of the volume decline more than offset positive mix and mitigating cost actions.

Building Solutions Asia Pacific

		Fiscal Q4				Fiscal Year
	GAAP	Adjusted		GAAP	Adjusted
	2019	2020	2019	2020	2019	2020	2019	2020
Sales	$726	$661	$726	$661	$2,658	$2,403	$2,658	$2,403
Segment EBITA	101	90	103	97	341	319	343	326
Segment EBITA Margin %	13.9%	13.6%	14.2%	14.7%	12.8%	13.3%	12.9%	13.6%

Sales in the quarter of $661 million decreased 9% versus the prior year. Organic sales declined 10% versus the prior year primarily driven by a decline in project installations and, to a much lesser extent, service. Although China continues to rebound, declines continue in certain other parts of the region.

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 2% year-over-year driven by significantly improved demand in China. Backlog at the end of the quarter of $1.7 billion increased 10% year-over-year, excluding M&A and adjusted for foreign currency.

Adjusted segment EBITA was $97 million, down 6% versus the prior year. Adjusted segment EBITA margin of 14.7% expanded 50 basis points over the prior, including a 20 basis point benefit from foreign currency. Adjusting for foreign currency, the underlying margin improved 30 basis points as favorable mix and the benefit of mitigating cost actions more than offset the volume decline.

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