Summary
Johnson Controls International plc (JCI) reported its annual results for the fiscal year ending September 29, 2022. The company, a global leader in smart, healthy, and sustainable building solutions, experienced a 7% increase in net sales, reaching $25.3 billion. This growth was driven by higher organic sales and strategic acquisitions, although it was partially offset by unfavorable foreign currency translation. The company faced challenges including increased input material costs, supply chain disruptions, and labor shortages, which impacted gross margins. Despite these headwinds, JCI demonstrated resilience through pricing actions and productivity improvements, aiming to mitigate inflationary pressures. The company's strategic focus remains on capitalizing on key growth vectors like sustainability and healthy buildings, supported by its OpenBlue software platform, which aims to deliver outcome-based solutions and recurring revenue streams. Financially, JCI managed its working capital effectively and maintained compliance with its debt covenants. The company continues to invest in digital capabilities and strategic growth areas, while also navigating macroeconomic uncertainties. Investors will be keen to monitor the company's ability to manage ongoing supply chain issues and translate its backlog into profitable revenue in the coming fiscal year.
Financial Highlights
54 data points| Revenue | $20.64B |
| Cost of Revenue | $13.55B |
| Gross Profit | $7.09B |
| R&D Expenses | $236.00M |
| SG&A Expenses | $5.08B |
| Operating Income | $1.28B |
| Interest Expense | $225.00M |
| Net Income | $1.53B |
| EPS (Basic) | $2.20 |
| EPS (Diluted) | $2.19 |
| Shares Outstanding (Basic) | 696.10M |
| Shares Outstanding (Diluted) | 699.60M |
Key Highlights
- 1Net sales increased by 7% to $25.3 billion for fiscal year 2022, driven by organic growth and acquisitions.
- 2Gross profit increased by 4%, but gross profit margin decreased by 110 basis points to 33.0% due to supply chain inefficiencies and price/cost pressures.
- 3Selling, general, and administrative (SG&A) expenses increased by 13%, with SG&A as a percentage of sales rising to 23.5%, partly due to environmental remediation charges and business acquisitions.
- 4The company reported a goodwill impairment of $75 million for its Silent-Aire reporting unit and significant impairment charges of $235 million related to its Global Retail business held for sale.
- 5Net income attributable to Johnson Controls decreased by 6% to $1.53 billion, with diluted EPS at $2.19, down from $2.27 in the prior year.
- 6The company maintained a strong backlog of $11.7 billion at September 30, 2022.
- 7Johnson Controls continues to invest in its OpenBlue software platform to drive digital services and sustainable building solutions.