Johnson Controls: Reports Q4 and FY24 Results; Initiates FY25 Guidance

·       Q4 sales increased 7% and organic sales increased 10%*
·       Full-year sales increased by 2% and organic sales increased by 4%*
·       Q4 GAAP EPS of $0.95; Q4 Adjusted EPS* of $1.28
·       Full-year GAAP EPS of $2.52; full-year Adjusted EPS of $3.71
·       Q4 Orders +8% organically year-over-year
·       Building Solutions backlog of $13.1 billion increased 7% organically year-over-year
Johnson Controls International plc (NYSE: JCI), a global leader in smart, healthy and sustainable buildings, today reported fiscal fourth quarter 2024 GAAP earnings per share ("EPS") of $0.95. Excluding special items, adjusted EPS was $1.28.
Q4 sales increased 7% to $7.4 billion and organic sales increased 10%. Full-year sales increased by 2% to $27.4 billion and organic sales increased by 4%.
For the quarter, GAAP net income was $633 million and adjusted net income was $858 million.
"We are very pleased with our strong end to the fiscal year and our fourth quarter results, which delivered double-digit organic sales growth and robust margin expansion," said George Oliver, Chairman and CEO. "Johnson Controls is entering fiscal 2025 with momentum.  The backlog is at record levels and we are well-positioned to deliver continued profitable top-line growth.  Importantly, the actions taken during the year to simplify our portfolio are allowing us to focus our resources on expanding Johnson Controls as a leading pure-play building solutions provider.  We are driving greater outcomes for our customers globally across the building lifecycle while unlocking shareholder value."
FISCAL Q4 SEGMENT RESULTS
The financial highlights presented in the tables below include both continuing and discontinued operations and are in accordance with GAAP unless otherwise indicated. All comparisons are to the fiscal fourth quarter of 2023.
A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls' website at http://investors.johnsoncontrols.com.
Building Solutions North America
Fiscal Q4
(in millions) 2024 2023 Change
Sales $     3,223 $     2,778 16 %
Segment EBITA
GAAP 484 427 13 %
Adjusted (non-GAAP) 484 427 13 %
Segment EBITA Margin %
GAAP 15.0 % 15.4 %         (40 bp)
Adjusted (non-GAAP) 15.0 % 15.4 %         (40 bp)
Sales in the quarter of $3.2 billion increased 16% over the prior year. Organic sales also increased 16% led by growth greater than 20% in Applied HVAC & Controls.
Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 7% year-over-year. The backlog at the end of the quarter of $9.1 billion increased by 10% compared to the prior year, excluding M&A and adjusted for foreign currency.
Segment EBITA margin of 15.0% declined 40 basis points versus the prior year primarily due to an unfavourable mix, as Systems grew faster than Services.
Building Solutions EMEA/LA (Europe, Middle East, Africa/Latin America)
Fiscal Q4
(in millions) 2024 2023 Change
Sales $     1,113 $     1,045 7 %
Segment EBITA
GAAP 111 82 35 %
Adjusted (non-GAAP) 128 82 56 %
Segment EBITA Margin %
GAAP 10.0 % 7.8 %         220 bp
Adjusted (non-GAAP) 11.5 % 7.8 %         370 bp
Sales in the quarter of $1.1 billion increased 7% over the prior year. Organic sales grew 10% versus the prior year led by double-digit growth in Controls, Security, and Industrial Refrigeration.
Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 14% year-over-year. Backlog at the end of the quarter of $2.5 billion increased 10% year-over-year, excluding M&A and adjusted for foreign currency.
Segment EBITA margin of 10.0% expanded 220 basis points versus the prior year driven by improved productivity and by the positive mix from the growth in Service.  Adjusted segment EBITA in Q4 2024 excludes a non-recurring loss associated with the equity method accounting for a joint venture.
Building Solutions Asia Pacific
Fiscal Q4
(in millions) 2024 2023 Change
Sales $        664 $        697 (5 %)
Segment EBITA
GAAP 94 94 — %
Adjusted (non-GAAP) 94 94 — %
Segment EBITA Margin %
GAAP 14.2 % 13.5 %           70 bp
Adjusted (non-GAAP) 14.2 % 13.5 %           70 bp
Sales in the quarter of $664 million declined 5% versus the prior year. Organic sales also declined 5% versus the prior year as mid-single-digit Service growth was more than offset by continued weakness in the Systems business in China.
Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 6% year-over-year. Backlog at the end of the quarter of $1.5 billion decreased 10% year-over-year, excluding M&A and adjusted for foreign currency.
Segment EBITA margin of 14.2% improved by 70 basis points versus the prior year as a positive mix from our Service business offset a decline in our Systems business.
Global Products
Fiscal Q4*
(in millions) 2024 2023 Change
Sales $     2,394 $     2,386 — %
Segment EBITA
GAAP 670 502 33 %
Adjusted (non-GAAP) 670 502 33 %
Segment EBITA Margin %
GAAP 28.0 % 21.0 %         700 bp
Adjusted (non-GAAP) 28.0 % 21.0 %         700 bp
*Includes results for both continuing operations and discontinued operations related to the sale of the Residential and Light Commercial HVAC business.  See footnote one for additional details.
Sales in the quarter of $2.4 billion were flat versus the prior year. Organic sales grew 8% versus the prior year as growth in Commercial and Residential HVAC were offset by declines in both Fire & Security and Industrial Refrigeration.
Segment EBITA margin of 28.0% expanded 700 basis points versus the prior year driven primarily by operational efficiencies leading to productivity improvements.
Corporate
Fiscal Q4
(in millions) 2024 2023 Change
Corporate Expense
GAAP $           158 $            70 126 %
Adjusted (non-GAAP) 114 49 133 %
Adjusted Corporate expense excludes certain transaction/separation costs.
OTHER Q4 ITEMS
  • Total cash provided by operating activities of $1,526 million included cash from continuing operations of $1,352 million and cash from discontinued operations of $174 million. Free cash flow was $1,318 million and adjusted free cash flow was $1,087 million.
  • The Company paid dividends of $247 million.
  • The Company repurchased 5.4 million shares of common stock for approximately $370 million.
  • The Company recorded pre-tax restructuring and impairment costs for continuing and discontinued operations of $145 million, comprised primarily of severance and other charges related to ongoing restructuring actions and certain asset impairments.
  • The Company signed a definitive agreement to sell its Residential and Light Commercial HVAC business (the "R&LC Business"), which includes the North America Ducted businesses and the global Residential joint venture with Hitachi Global Life Solutions, Inc. ("Hitachi"), of which Johnson Controls owns 60% and Hitachi owns 40%, to Bosch Group for approximately $8.1 billion in cash with the Company's portion of the aggregate consideration being approximately $6.7 billion. The transaction is expected to close in the fourth quarter of fiscal 2025, subject to required regulatory approvals and other customary closing conditions.
  • The Company announced a multi-year restructuring plan to address stranded costs and further right-size its global operations following its previously announced portfolio simplification actions. The Company expects to incur approximately $400 million in restructuring costs over the next three years, resulting in expected annual cost savings of approximately $500 million.
GUIDANCE
The following forward-looking statements regarding organic sales growth, adjusted segment EBITA margin, adjusted segment EBITA margin improvement and adjusted EPS are non-GAAP financial measures and are presented on a continuing operations basis excluding the R&LC Business, which was classified as discontinued operations during the fiscal fourth quarter of 2024. These non-GAAP financial measures are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts excluded is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period and the high variability of certain amounts, such as mark-to-market adjustments. Organic revenue growth excludes the effect of acquisitions, divestitures and foreign currency. The Company is unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to its most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. The unavailable information could have a significant impact on the Company's fiscal 2025 first quarter and full-year GAAP financial results from continuing operations.
The Company initiated fiscal 2025 first quarter continuing operations guidance:
  • Organic sales growth of mid-single digits
  • Adjusted segment EBITA margin of ~14.5%
  • Adjusted EPS before special items of ~$0.57 to $0.60
The Company initiated fiscal 2025 full-year continuing operations guidance:
  • Organic sales growth of mid-single digits
  • Adjusted segment EBITA margin improvement of more than 50 basis points, year-over-year
  • Adjusted EPS before special items of ~$3.40 to $3.50
For the full document click the link below:
Johnson Controls International plc
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