01—Abstract
Summary
Summary of the 10-K filed November 19, 2024. Cited figures are marked; the original filing is the authoritative source.
Johnson Controls International plc (JCI) reported a net sales increase of 3% to $22.95 billiona for the fiscal year ended September 30, 2024, driven by organic growth.
The company continues its strategic focus on being a pure-play provider of building technologies and solutions, evidenced by the completion of the Air Distribution Technologies divestiture and the definitive agreement to sell its Residential and Light Commercial (R&LC) HVAC business. The R&LC HVAC divestiture, expected to close in Q4 fiscal 2025, is poised to generate significant proceeds, with a portion allocated to debt reduction and the remainder returned to shareholders. The company's Building Solutions North America segment showed robust growth, up 10%b year-over-year, while the Asia Pacific segment experienced a notable decline of 19% primarily due to weakness in China.
JCI also reported progress in addressing environmental liabilities, notably the AFFF settlement, and ongoing cybersecurity initiatives to strengthen its IT infrastructure and digital product security. The company reiterated its commitment to shareholder returns through dividends and share repurchases, demonstrating a continued focus on enhancing shareholder value.
02—Key points
Key Highlights
- Net sales increased by 3% to $22.95 billion in fiscal year 2024, primarily driven by organic growth across its Building Solutions segments, particularly North America.
- The company is actively streamlining its portfolio, having completed the sale of Air Distribution Technologies and entered into an agreement to sell its Residential and Light Commercial (R&LC) HVAC business for approximately $8.1 billion.
- Building Solutions North America showed strong performance with a 10% increase in net sales, while Building Solutions Asia Pacific saw a 19% decrease, largely attributed to market conditions in China.
- Restructuring and impairment costs totaled $510 million in fiscal 2024, reflecting ongoing efforts to optimize operations and reduce costs, with a new multi-year plan aimed at significant annual savings.
- The company made substantial progress on environmental liabilities, agreeing to a $750 million settlement for PFAS claims related to AFFF products, with ongoing insurance recovery efforts.
- Cybersecurity remains a focus, with the company continuing to invest in IT infrastructure and data security following a past incident, and maintaining robust governance oversight from the Board.
- The company returned $2.2 billion to shareholders in fiscal 2024 through $1.2 billion in share repurchases and $1.0 billion in dividends.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Johnson Controls International plc kept $0.07.
- Revenue$22.95B100.0%
- Cost of revenue−$14.88B64.8%
- Gross profit$8.08B35.2%
- Operating costs−$6.67B29.1%
- Operating income$1.41B6.1%
- Interest, other & tax$298.0M1.3%
- Net income$1.71B7.4%
Where FY2024 revenue went
$22.95B- Cost of revenue: $14.88B, 65% of revenue
- SG&A: $5.66B, 25% of revenue
- Operating income: $1.41B, 6.1% of revenue
- R&D: $267.0M, 1.2% of revenue
- Other operating costs: $742.0M, 3.2% of revenue
Kept 6.1% as operating incomeOperating income $1.41B · 6.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 19, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $22.95B$22.33B | +2.8% |
| Cost of Revenue | $14.88B$14.53B | +2.4% |
| Gross Profit | $8.08B$7.80B | +3.5% |
| R&D Expenses | $267.00M$251.00M | +6.4% |
| SG&A Expenses | $5.66B$5.39B | +5.1% |
| Operating Income | $1.41B$1.56B | −9.9% |
| Net Income | $1.71B$1.85B | −7.8% |
| EPS (Basic) | $2.53$2.70 | −6.3% |
| EPS (Diluted) | $2.52$2.69 | −6.3% |
| Shares Outstanding (Basic) | 673.80M684.30M | −1.5% |
| Shares Outstanding (Diluted) | 676.00M687.40M | −1.7% |
05—Questions
Frequently Asked Questions
What is Johnson Controls' primary strategic direction following these annual results?
Johnson Controls is continuing its strategic transformation to become a pure-play provider of technologies and solutions for commercial buildings. This is being driven by portfolio optimization, including the sale of non-core assets like the R&LC HVAC business, and a focus on key growth areas such as data centers, sustainable and healthy buildings, and digital services powered by its OpenBlue platform.
How is the company managing its financial health and shareholder returns?
Johnson Controls is managing its financial health through a combination of operational improvements, cost management, and strategic divestitures. The company demonstrated its commitment to shareholder returns by repurchasing $1.2 billion of its shares and paying $1.0 billion in dividends during fiscal year 2024. The significant proceeds expected from the R&LC HVAC divestiture are planned to be used for debt reduction to maintain an investment-grade rating and for further shareholder returns.
What are the key risks and challenges facing Johnson Controls?
Key risks highlighted include potential disruptions from ongoing portfolio simplification, cybersecurity threats, managing global supply chain issues and material costs, attracting and retaining skilled personnel, and navigating complex environmental regulations and litigation, such as those related to PFAS. Economic conditions in certain regions, particularly China, also present a challenge.
Can you elaborate on the impact of the R&LC HVAC divestiture?
The sale of the R&LC HVAC business to Bosch for approximately $8.1 billion is a significant step in Johnson Controls' portfolio simplification strategy. The transaction is expected to close in the fourth quarter of fiscal year 2025. The proceeds are earmarked for debt reduction and share repurchases, which should strengthen the balance sheet and enhance shareholder value. The historical financial results of this business are now reported as discontinued operations.
06—Continue