Key TakeawaysJohnson Controls shares led the S&P 500's gainers Wednesday morning after the company's first-quarter results beat expectations.The company's revenue and profits rose year-over-year, and its outlook for second-quarter and full-year earnings also topped estimates.The industrial manufacturer also announced Joakim Weidemanis as its new CEO, who will take over the top job in March. Shares of Johnson Controls International (JCI) surged to lead S&P 500 gainers on Wednesday morning after the company's ...

Financial Data and Key Metrics Changes - Organic revenue grew by 10% with adjusted EPS of $0.64, up nearly 40% year-over-year, exceeding guidance by $0.04 [28][29] - Adjusted segment margin expanded by 200 basis points to 15% [28] - Free cash flow improved by nearly $800 million year-over-year, reaching approximately $600 million [29] Business Line Data and Key Metrics Changes - Global Products saw organic sales growth of 15%, with Applied HVAC growing over 30% [30] - Building Solutions orders grew by 16%, with North America orders increasing by 18% [32] - Service backlog grew by 8% and system backlog by 12% year-over-year, with total Building Solutions backlog at a record $13.2 billion [37] Market Data and Key Metrics Changes - Orders in Asia Pacific grew by 32%, led by 40% growth in systems [34] - North America sales increased by 10% organically, with EMEALA growing by 6% [35] - The healthcare vertical is experiencing increased demand for advanced HVAC systems and fire protection solutions [21] Company Strategy and Development Direction - The company is focused on building a leading pure-play building solutions provider, emphasizing operational excellence and innovation [8][12] - The transition to new CEO Joakim Weidemanis is expected to continue the momentum and capitalize on growth opportunities [10][11] - The strategy includes leveraging AI and technology to enhance service offerings and customer intimacy [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum and delivering long-term shareholder value, raising guidance for the year [14][40] - Concerns about potential tariff impacts were noted, with a cautious approach to future growth expectations [58][72] - The company anticipates mid-single-digit organic sales growth for the full year, with a strong backlog providing visibility into future revenue [39][41] Other Important Information - The company ended the first quarter with $1.2 billion in available cash and net debt decreased to 2.3 times [29] - The transition to a new CEO was described as a result of a rigorous succession planning process [7][10] Q&A Session Summary Question: What mandates are being delivered to the new CEO? - The new CEO is expected to leverage his operational background and focus on growth potential while continuing the established strategy [46][48] Question: How does free cash conversion include cash restructuring payments? - Free cash conversion includes $250 million of restructuring cash, which is a headwind against achieving 100% conversion [49][50] Question: Any concerns about guidance despite strong orders? - Management noted that the second half of the year presents tougher comparisons, particularly in Q4, but does not anticipate slowing growth [56][57] Question: Is there an expectation for accelerated growth in the data center business? - Both orders and revenue in the data center segment are expected to accelerate compared to 2024 [60] Question: Are orders now longer duration than before? - There is a shift towards longer cycle businesses, with a focus on building stronger customer relationships [65][68] Question: What is the outlook for margins moving forward? - Margins are expected to improve, particularly in EMEA/LA and global products, with a focus on operational efficiency [93][94] Question: How is the company addressing potential tariff impacts? - The company has evolved its manufacturing strategy to mitigate tariff impacts and is working on supply chain resilience [77][79] Question: What are the capital deployment priorities? - The company plans to return 100% of free cash flow to shareholders and reduce leverage with proceeds from divestitures [138][139]

FISCAL Q1 2025 Earnings Conference Call February 5, 2025 FORWARD-LOOKING AND CAUTIONARY STATEMENTS/NON-GAAP FINANCIAL INFORMATION 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 me ...

Financial Performance - Q1 2025 GAAP earnings per share (EPS) was $0.55, with adjusted EPS at $0.64[2] - Sales for the quarter reached $5.4 billion, a 4% increase year-over-year, with organic sales growth of 10%[3] - Net sales for the three months ended December 31, 2024, increased to $5,426 million, up from $5,209 million in the same period of 2023, representing a growth of 4.2%[27] - Gross profit rose to $1,926 million, compared to $1,778 million in the prior year, reflecting an increase of 8.3%[27] - Income from continuing operations attributable to Johnson Controls was $363 million, up from $340 million, marking a growth of 6.8%[27] - The company reported a net income of $451 million, compared to $404 million in the same quarter of the previous year, an increase of 11.6%[27] - Basic earnings per share attributable to Johnson Controls increased to $0.63, compared to $0.55 in the previous year, a rise of 14.5%[27] - Adjusted net income attributable to Johnson Controls for Q4 2024 was $426 million, compared to $315 million in Q4 2023[48] Sales and Orders - Orders increased 16% organically year-over-year, and the Building Solutions backlog rose to $13.2 billion, an 11% organic increase[6] - Building Solutions North America segment sales were $2.744 billion, up 10% year-over-year, with a segment EBITA margin of 12.1%, expanding 60 basis points[7] - Building Solutions EMEA/LA segment sales were $1.073 billion, a 3% increase year-over-year, with a segment EBITA margin of 10.1%, expanding 240 basis points[9] - Building Solutions Asia Pacific segment sales were $527 million, a 4% increase year-over-year, with orders up 32% year-over-year and a backlog of $1.5 billion, increasing 22%[11] - Global Products segment sales declined 8% to $1.082 billion, but organic sales grew 15%, driven by over 30% growth in Applied HVAC[13] - Products and systems revenue increased by 12% to $3,604 million in 2023, driven by organic growth of 12% in North America[43] - Service revenue for 2023 was $1,605 million, reflecting an 8% growth, with organic growth of 9% in North America[43] Cash Flow and Guidance - Cash provided by operating activities was $249 million, with free cash flow at $133 million and adjusted free cash flow at $603 million[18] - The company raised its fiscal 2025 full-year guidance, projecting adjusted EPS of approximately $3.50 to $3.60[23] - The company initiated fiscal Q2 guidance with expectations of mid-single-digit organic sales growth and an adjusted segment EBITA margin improvement of more than 80 basis points year-over-year[23] - Free cash flow for Q4 2024 was $133 million, a significant improvement from a negative $193 million in Q4 2023[44] - Adjusted free cash flow for Q4 2024 reached $603 million, compared to a negative $105 million in Q4 2023[45] Debt and Assets - Total assets decreased to $42,098 million from $42,695 million, a decline of 1.4%[29] - Total liabilities also decreased to $24,968 million from $25,334 million, a reduction of 1.4%[29] - Total debt as of December 31, 2024, is $9,993 million, a 5.3% increase from $9,493 million on September 30, 2024[50] - Net debt decreased to $8,756 million from $8,887 million in the previous quarter, reflecting a 1.5% reduction[50] - Long-term debt increased to $8,589 million as of December 31, 2024, from $8,004 million on September 30, 2024[50] - Current portion of long-term debt decreased to $522 million from $536 million in the previous quarter[50] Operational Changes - The company signed a definitive agreement in July 2024 to sell its Residential and Light Commercial HVAC business, which will be classified as a discontinued operation[34] Tax and Income Metrics - The effective tax rate for the three months ending December 31, 2024, was approximately 12.0%, compared to 11.5% for the same period in 2023[52] - Income from continuing operations for the twelve months ended December 31, 2024, was $1,432 million, slightly up from $1,411 million in the previous quarter[51] - Adjusted EBITDA for the twelve months ended December 31, 2024, reached $3,733 million, up 3.0% from $3,623 million in the previous quarter[51] - Adjusted EBIT for the twelve months ended December 31, 2024, was $2,917 million, a 4.5% increase from $2,792 million in the previous quarter[51]

Weidemanis, Danaher Veteran, to Succeed George R. OliverCORK, Ireland, Feb. 5, 2025 /PRNewswire/ -- Johnson Controls (NYSE: JCI), a global leader for smart, healthy and sustainable buildings, today announced that its Board of Directors has appointed Joakim Weidemanis as Chief Executive Officer effective March 12, 2025, following the Company's Annual General Meeting of Shareholders. He succeeds George R. Oliver following a thorough succession planning process.  Joakim Weidemanis View PDF Joakim Weidema ...

Core Viewpoint - Johnson Controls International plc (JCI) is set to release its first-quarter fiscal 2025 financial results on February 5, 2025, with expectations of mixed performance across its segments [1][5]. Revenue Estimates - The consensus estimate for JCI's revenues is $5.33 billion, reflecting a decrease of 12.6% compared to the same quarter last year [2]. - Total revenues are expected to be $5.3 billion, indicating a slight increase of 2.1% year over year [5]. Earnings Estimates - The consensus estimate for adjusted earnings is 59 cents per share, which represents a 15.7% increase from the previous year [2]. - Adjusted earnings are anticipated to be 50 cents per share, showing a 9.2% increase from the year-ago quarter [5]. Segment Performance - The Building Solutions North America segment is projected to generate revenues of $2.7 billion, an increase of 8% from the previous year, driven by strong demand for HVAC platforms [3]. - The Building Solutions Europe, the Middle East, Africa/Latin America segment is expected to achieve revenues of $1.1 billion, indicating a 5% increase, supported by strength in control, security, and industrial refrigeration businesses [4]. - The Building Solutions Asia Pacific segment is anticipated to see a revenue decline of 14.3% year over year to $434.8 million, primarily due to weakness in system sales in China [6]. Cost and Margin Concerns - Escalating selling, general and administrative (SG&A) expenses, particularly due to higher insurance recovery costs, are expected to negatively impact JCI's margins [7]. - The company's significant international operations may face foreign currency headwinds, further affecting margins and profitability [7]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for JCI, as it has a Zacks Rank of 4 (Sell) despite having a positive Earnings ESP of +0.60% [8][9].

Core Insights - Johnson Controls International plc (JCI) is experiencing strong growth in its Building Solutions North America segment, with a 16% year-over-year revenue increase in Q4 fiscal 2024 [1] - The company has provided optimistic guidance for fiscal 2025, projecting mid-single digit organic revenue growth [2] - JCI is actively pursuing acquisitions to enhance its customer base and product offerings, with a notable acquisition of FM:Systems contributing an additional $137 million in revenue for fiscal 2024 [3] - The company has returned significant value to shareholders, paying $1 billion in dividends and repurchasing $1.2 billion in shares in fiscal 2024 [4] - Despite positive trends, JCI faces challenges in its Building Solutions Asia Pacific segment, which saw a 5% revenue decline in Q4 fiscal 2024 [6] - Rising selling, general and administrative (SG&A) expenses, which increased by 5.1% to $5.7 billion, are a concern for the company's profitability [7] - JCI's liquidity position is under scrutiny, with cash and cash equivalents of $606 million falling short of its short-term and current long-term debt obligations totaling $1.5 billion [8] Financial Performance - The Building Solutions North America segment's revenue growth of 16% year-over-year in Q4 fiscal 2024 highlights strong demand in heating, ventilation, and air conditioning [1] - The Building Solutions EMEA/LA segment also performed well, with a 7% year-over-year revenue increase in the same quarter [1] - The company’s total revenue increase from acquisitions in fiscal 2024 amounted to $137 million [3] - Shareholder returns included a 2% increase in dividends year-over-year, totaling $1 billion, and a significant 99% increase in share repurchases to $1.2 billion [4] Challenges - The Building Solutions Asia Pacific segment's revenue decline of 5% in Q4 fiscal 2024 indicates potential market weaknesses, particularly in China [6] - The increase in SG&A expenses by 5.1% to $5.7 billion raises concerns about cost management and profitability [7] - The liquidity issue is highlighted by cash reserves of $606 million, which are insufficient to cover short-term and current long-term debt of $1.5 billion [8]

Company Announcement - Johnson Controls International plc will host its First Quarter Fiscal 2025 Earnings Conference Call on Wednesday, Feb 5, 2025, at 8:30 a m ET [1] - The conference call can be accessed via webcast or telephone, with a replay available until Feb 12, 2025 [1][3] - A slide presentation will be available for download on the morning of the call [3] Company Overview - Johnson Controls is a global leader in smart, healthy, and sustainable buildings, transforming environments for living, working, learning, and playing [1] - The company has a 140-year history of innovation and delivers future-oriented solutions for industries such as healthcare, schools, data centers, airports, stadiums, and manufacturing [2] - Johnson Controls offers the world`s largest portfolio of building technology, software, and service solutions under its OpenBlue digital offering [2] Investor Information - Investors can access the live webcast at http://investors johnsoncontrols com/news-and-events/events-and-presentations [3] - Telephone access for the live call is available at 833-816-1266 (US) or +1-412-317-5636 (international) [3] - A telephone replay will be available from 10:30 a m ET on Feb 5, 2025, until 11:59 p m ET on Feb 12, 2025, at 877-344-7529 (US) or +1-412-317-0088 (international) with passcode 3107846 [3]

Core Insights - The Europe heating equipment market is projected to grow from $31.27 billion in 2023 to $53.65 billion by 2033, with a CAGR of 5.55% during the forecast period [1][6]. Market Overview - The market growth is driven by a growing emphasis on sustainability and energy efficiency, influenced by regulations like the EU Green Deal aimed at reducing carbon emissions [1][2]. - There is an increasing demand for advanced heating solutions that are both cost-effective and environmentally friendly, leading to a shift towards alternative technologies such as heat pumps and solar heating [1][2]. Government and Regulatory Influence - Government incentives and subsidies across Europe are promoting the adoption of high-efficiency heating equipment, facilitating the transition to low-carbon alternatives [2]. - Legislative support and technological advancements are transforming the market, driving demand for cleaner and more efficient heating systems [2]. Competitive Landscape - Key players in the Europe heating equipment market include Johnson Controls, Vaillant Group International GmbH, and Robert Bosch GmbH [5][6]. - The competitive landscape includes partnerships, agreements, and collaborations that may reveal untapped revenue opportunities [4]. Market Dynamics - The market is influenced by several drivers, including the rapid expansion of global construction projects, environmental concerns related to greenhouse gas emissions, and the incorporation of renewable energy sources [6]. - Challenges include high initial capital expenditure and fluctuations in energy costs [6]. - Opportunities exist in investing in sustainable and energy-efficient heating equipment products and increasing global partnerships and collaborations [6].

Core Insights - Johnson Controls International plc (JCI) is experiencing strong momentum in its Building Solutions segments across North America and EMEA/LA, driven by solid demand for HVAC platforms and controls businesses [1][2] - The company is investing in digital offerings, particularly the OpenBlue platform, which is expected to enhance customer satisfaction and drive growth through optimized HVAC system performance [3] - Recent acquisitions, such as FM:Systems, have expanded JCI's digital capabilities and are projected to positively impact revenues and earnings in fiscal 2025 [4] - Shareholder returns are robust, with a $1 billion dividend and $1.2 billion in share repurchases in fiscal 2024, indicating a commitment to rewarding investors [5] Building Solutions Segments - The Building Solutions North America segment is benefiting from strong demand in HVAC platforms for data centers and controls businesses [1] - The Building Solutions EMEA/LA segment is supported by strength in control, security, and industrial refrigeration businesses [2] - However, the Building Solutions Asia Pacific segment is facing challenges, particularly in China, where system sales have weakened [7] Digital Integration and ESG Commitments - Investments in the OpenBlue platform are integral to meeting customer needs and optimizing HVAC system performance [3] - The Net Zero Buildings as a Service offering within OpenBlue enhances long-term growth prospects, aligning with the company's ESG commitments to achieve net zero carbon emissions before 2040 [3] Financial Performance and Shareholder Returns - In fiscal 2024, JCI's acquisitions contributed an additional $137 million in revenue, with expectations for further earnings and revenue synergies in fiscal 2025 [4] - The company paid a dividend of $1 billion (up 2% year over year) and repurchased shares worth $1.2 billion (up 99.4%) in fiscal 2024, reflecting strong shareholder return strategies [5] Cost Challenges - JCI is facing rising SG&A expenses, which increased by 5.1% year-over-year to $5.7 billion, impacting profitability [8] - The SG&A expenses as a percentage of total revenues rose by 60 basis points to 24.7%, indicating higher corporate costs related to IT investments and cybersecurity [8]