Q3 2024 Johnson Controls International PLC Earnings Call Transcript
Key Points
- Johnson Controls International PLC (JCI) exceeded almost all of its fiscal third-quarter 2024 targets, with organic sales growth of 3% and a robust 150 basis points of segment margin expansion to 17.9%.
- Free cash flow generation during the quarter was more than $500 million higher than the comparable period one year ago.
- Orders grew 5% during the quarter, and the backlog grew 10%, indicating strong demand for JCI's solutions.
- The company announced two significant divestitures, simplifying its portfolio and focusing on higher growth areas, including the sale of its Residential and Light Commercial HVAC business and Air Distribution Technologies business.
- JCI tightened its full-year adjusted EPS guidance to a range of $3.66 to $3.69, reflecting confidence in its financial performance and ongoing transformation efforts.
- The company experienced continued weakness in its China system business, which impacted overall performance.
- Fire & Security segment declined low single digits, with a decline in fire suppression offsetting growth in fire detection and security video surveillance.
- Asia-Pacific sales declined 19% due to ongoing weaknesses in China, affecting the overall segment EBITDA margin.
- The divestitures of the Residential and Light Commercial HVAC business and Air Distribution Technologies business, representing roughly 20% of current sales, may lead to short-term revenue and EPS dilution.
- The CEO succession plan announcement may create uncertainty among investors and stakeholders until a new leader is appointed and the transition is complete.
Good morning and welcome to the Johnson Controls third-quarter 2024 earnings conference call. (Operator instructions) Please note today's event is being recorded. I would now like to turn the conference over to Jim Lucas, Vice President, Investor Relations. Please go ahead.
Good morning, and thank you for joining our conference call to discuss Johnson Controls fiscal third-quarter 2024 results. The press release and related tables that were issued earlier this morning as well as the conference call slide presentation can be found on the Investor Relations portion of our website at Johnson Controls.com.
Joining me on the call today are Johnson Controls' Chairman and Chief Executive Officer, George Oliver; and Chief Financial Officer, Marc Vandiepenbeeck.
Before we begin, let me remind you that during our presentation today, we will make forward looking statements. Actual results may differ materially from those indicated by forward-looking statements due to a
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