江森自控公司 (JCI.US) 2025年第四季度业绩电话会
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会议摘要
Johnson Controls, a global technology and multi-industrial company, reported Q4 2025 results exceeding free cash flow targets, with a $15 billion record backlog, 6% sales growth, and 17% adjusted EPS increase. The company introduced a proprietary business system for operational efficiency and customer focus, while strengthening its leadership in advanced thermal management and decarbonization. Johnson Controls' long-term growth algorithm targets mid-single-digit organic revenue growth, over 20% adjusted EPS growth, and 100% free cash flow conversion, supported by investments in organic growth, shareholder returns, and selective acquisitions. The company remains confident in delivering strong financial performance and growth, driven by its robust backlog and operational improvements.
会议速览
Johnson Controls Q4 2025 Earnings Call Highlights and Forward-Looking GuidanceA conference call discusses Johnson Controls' fiscal Q4 2025 earnings, featuring forward-looking statements subject to risks, with reconciliations of non-GAAP measures provided in SEC filings and the company's website for further reference.
Strong Year-End Performance & Strategic Growth Focus for Johnson ControlsThe company highlights robust fiscal year results, including sales growth, margin expansion, and a record backlog, underscoring its strategic initiatives and commitment to innovation and customer-centric operations.
Revolutionizing Johnson Controls: Implementing a Proprietary Business System for Enhanced Growth and Customer FocusJohnson Controls introduces a proprietary business system with three pillars: simplifying with 80/20 principles, accelerating with lean methodologies, and scaling through digital and AI. Over 700 colleagues are engaged, 50+ Kaizens conducted, and 200 leaders trained. New regional and manufacturing leaders are appointed to drive growth, customer focus, and operational excellence, aiming for consistent execution and customer satisfaction.
Leveraging Proprietary Business System for Enhanced Sales and Manufacturing EfficiencyThe dialogue highlights the successful implementation of a proprietary business system, enhancing sales capacity and manufacturing efficiency. Key achievements include a 60% increase in customer engagement time for HVAC sellers and a 95% on-time delivery rate for chiller manufacturing. These improvements are attributed to the elimination of non-value-added processes, AI integration in sales, and lean tools application, demonstrating a commitment to continuous improvement and sustainable change. The focus on technology, innovation, and sustainability positions the company as a leader in advanced thermal management, particularly in the growing data center market, with a comprehensive portfolio addressing the full thermal management spectrum.
Johnson Controls Leads in Sustainable Thermal Management and Decarbonization SolutionsJohnson Controls highlights its strategic role in delivering energy-efficient data center solutions and decarbonization projects, leveraging advanced cooling technologies and heat recovery systems. The company underscores its commitment to sustainability, reinforcing its leadership in thermal management and mission-critical environments. By providing green heat solutions, such as the landmark waste incineration project in Zurich, Johnson Controls demonstrates its ability to meet global demand for sustainable heating and cooling. The company's service model, characterized by customer intimacy, technical depth, and global reach, supports its position as a key player in the European energy transition, poised for significant growth amid regulatory tailwinds and increasing customer demand.
Strong Fiscal Script Closure Highlights Solid Financials and Operational ExcellenceA strong fiscal year closure with solid financials, organic revenue growth, and expanded margins underscores the company's focus on operational discipline and customer satisfaction, positioning it well for sustainable long-term shareholder value.
Strong Earnings, Record Backlog, and Updated Growth Algorithm Highlight Company's Financial Health and Strategic PrioritiesThe dialogue outlines impressive financial results, including increased adjusted EPS, strong free cash flow, and a record backlog. It discusses regional performance, cost management, and margin improvements. The company updates its long-term growth algorithm, emphasizing decarbonization, operational efficiency, and innovation. Capital allocation priorities include organic growth investments, shareholder returns, and strategic acquisitions, supported by a robust balance sheet and cash flow generation.
Strong Q1 & Full Year Guidance Highlighting Organic Growth and ProfitabilityThe company anticipates robust fiscal performance with mid-single-digit organic sales growth, over 20% adjusted EPS growth, and 50% operating leverage, driven by operational efficiencies, strong demand, and a record backlog. It emphasizes continued focus on earnings quality, working capital discipline, and capital deployment for sustainable growth and shareholder value.
Strategies for Achieving 2026 Operating Leverage and Margin ImprovementDiscusses achieving 50% operating leverage by 2026, focusing on margin improvement through cost reduction, productivity gains, and disciplined M&A, prioritizing shareholder value.
Exploring Incremental Margin Growth and Process Improvements for Future ProfitabilityDiscussed strategies to achieve a 50% plus income margin, emphasizing operational leverage, delayering, and process improvements. Anticipates ongoing benefits beyond FY 26, aiming to build a more profitable company through targeted growth and productivity enhancements.
Sustainability of Amortization Decline and Its Relation to Restructuring ChargesDiscussion revolves around the sustainability of amortization decline, its relation to one-time portfolio actions and divestiture contemplations, and its distinction from restructuring charges, emphasizing the sustainability of the decline outside of these factors.
Company's Optimism on Overcoming Tough Order Comparisons in Q1Despite a challenging comparison from the previous year, the company expects to see growth in orders for the upcoming quarter, attributing this optimism to an improving pipeline and strategic focus on faster-growing market segments. The speaker emphasizes the importance of targeting growth areas within the market, alongside ongoing productivity and business system improvements, to build a more profitable company.
Exploring Free Cash Flow Growth Through Improved Inventory and Receivable ManagementThe dialogue highlights strategies for enhancing free cash flow conversion by focusing on continuous improvements in inventory management and receivables, aiming to reduce reliance on inventory and optimize cash conversion, presenting opportunities for value creation in the coming years.
Strategies for Enhancing Margins and Service Efficiency in EMEA and APACDiscussions focused on strategies to improve margins in EMEA and APAC regions through pricing discipline, operational efficiency, and technology deployment. The conversation also explored opportunities in data center cooling solutions and the dual benefits of aftermarket technology investments for gaining market share and enhancing margins.
Backlog Growth & Vertical Market Insights in Applied IndustryDiscussed the robust growth in backlog, highlighting data centers, biologics, and advanced manufacturing as key verticals. Addressed quarterly growth cadence, noting first-half comparisons as a factor, with optimism for annual mid-single-digit organic growth.
Revamping Accountability and Structure in Corporate LeadershipDiscussion on implementing enterprise KPIs for enhanced accountability, tweaking compensation models, and restructuring the management matrix to build a championship team for improved organizational outcomes.
Strategic Investments in Data Center Cooling Solutions and Portfolio OptimizationDiscussed investments in CDU and excelsius, highlighting complementary technologies for immediate and future data center cooling needs. Also, touched on portfolio adjustments aimed at enhancing shareholder value through divestitures and operational improvements.
Analysis of Applied HVAC Growth and Margin Expansion StrategiesDiscussion revolves around Applied HVAC growth in Americas, clarifying market share, and explaining margin expansion through operating leverage and restructuring benefits.
Analysis of Organic Growth, Backlog, and Restructuring Impact on Fiscal Year 26The dialogue discusses the company's mid-single-digit organic growth guidance for fiscal year 26, attributing it to a record backlog of $15 billion, strong predictability from recurring service contracts, and proven execution capabilities including pricing. It also covers regional growth insights and the impact of a $500 million multi-year restructuring program, highlighting achieved savings and future operational leverage opportunities.
Strategies for Maintaining Market Share in the Data Center IndustryThe dialogue discusses the company's strategies to maintain and increase its market share in the data center sector through significant capacity investments, improving on-time delivery, reducing lead times, and focusing on innovation and field service capabilities to stay ahead of competitors.
要点回答
Q：What improvements have been made in delivery times and what is the strategy for future growth?
A：The company has improved on-time delivery to over 95% by leveraging lean approaches and has reduced lead times significantly. They are confident they can maintain this standard, which will further strengthen their competitive advantage. The strategy for future growth involves fundamentally changing how they work by going narrow and deep, counter measuring root causes, engaging impacted teams, and ensuring sustainable change.
Q：How is Johnson Controls enhancing its leadership in advanced thermal management?
A：Johnson Controls is enhancing its leadership in advanced thermal management through AI-driven demand for high-density data centers and pushing the limits of cooling technology. They offer an integrated digital monitoring and controls package, and have successfully launched the coulet distribution unit as a major milestone in their differentiated data cooling center strategy. Their liquid cooling solutions are critical enablers for reducing heat generation in AI chips and are gaining interest from hyperscale customers prioritizing energy efficiency and sustainability.
Q：What is the impact of Johnson Controls' cooling technologies on energy consumption in data centers?
A：Johnson Controls' cooling technologies are reducing non-IT energy consumption by more than 50% in most North American hubs, helping data centers save substantial energy. This makes them a strategic partner to data center professionals at a time when the industry is poised for significant growth in Europe.
Q：How does the waste incineration project in Zurich relate to Johnson Controls' decarbonization efforts?
A：Johnson Controls' partnership with the city of Zurich involves providing green heat through a waste incineration project using ammonia, a zero GWP refrigerant. This landmark project will install the largest heat pump technology to recover energy from flue gases, supplying heat to approximately 15,000 homes. It showcases how Johnson Controls is enabling cities to transition to sustainable heating solutions while maintaining reliability, and highlights the opportunity to harness excess heat, reduce operating costs, and accelerate decarbonization.
Q：What differentiates Johnson Controls' service model in the global market?
A：The strength of Johnson Controls' service model lies in its combination of customer intimacy, technical depth, and global reach. With direct service operations across the globe, they provide consistent high-quality support to customers throughout the lifecycle in mission-critical verticals such as data centers, advanced manufacturing, and healthcare. This consistent service across global footprints is a unique differentiator, especially in hyperscale data centers, and positions them to meet high touch, high availability service demands.
Q：How did the financial performance and operational discipline contribute to the company's success?
A：The company's ongoing focus on operational discipline, customer satisfaction, and continuous improvement drove solid financial performance. This consistent execution throughout the year positioned the company well for the new fiscal year. They achieved operational efficiency, resulting in tangible benefits from productivity programs and maintained strong earnings performance with rigorous working capital management. The financial success is evidenced by improved adjusted EPS, balance sheet strength, and increased adjusted free cash flow.
Q：What is the company's approach to capital allocation?
A：The company is investing in organic growth, focusing on returning capital to shareholders through dividends and share repurchases, and pursuing selective acquisitions to strengthen its portfolio.
Q：What is the company's outlook for the fiscal first quarter and full year?
A：The company anticipates organic sales growth of approximately Ed, operating leverage of approximately Ly, and an adjusted EPS of approximately 83 cents for the full year.
Q：What is the expected operating leverage for the new fiscal year?
A：The company expects operating leverage to be approximately 50%, which is above the long-term algorithm as efforts to remove stranded costs are recognized faster in the new fiscal year.
Q：What is the focus of the company entering fiscal Ly?
A：As it enters fiscal Ly, the company's focus remains on advancing sustainable growth, expanding margins, and creating lasting value for all shareholders.
Q：Can you provide details on how EMEA and APAC will contribute to margin improvement?
A：EMEA and APAC are expected to be the main drivers of margin improvement this year, while the level of improvement in the Americas is expected to be muted. However, overall, the company feels comfortable that operating leverage will be in the Lys or above.
Q：What are the priorities for the cost opportunity and potential M&A activities?
A：The priorities for the cost opportunity include reducing G&A costs and corporate costs. As for M&A, the company is engaged in multiple situations, applying a disciplined approach, and focusing on creating shareholder value. The process is a multi-quarter effort together with the board and is guided by creating shareholder value as the number one principle.
Q：What is the rationale behind the updated operating leverage guidance?
A：The rationale behind the updated operating leverage guidance is the progress being made with the business system, which is focused on driving productivity in field operations, factory footprint, and service, as well as optimizing the investment in SG&A with the help of the business system. This is why there is a plus sign behind the guidance.
Q：What are the drivers of the decline in amortization, and is it related to the $400 million restructuring charge taken in the quarter?
A：The decline in amortization is related to various portfolio actions taken over the year, including one-time charges from divestitures considered for a while. However, the majority of the decline stems from those one-time actions seen in the quarter.
Q：Is the decrease in amortization sustainable, and does it relate to stranded cost takeout?
A：The decrease in amortization is not related to stranded cost takeout and is entirely outside of that trend.
Q：What is the outlook for orders in the first quarter, given the tough comp from the first quarter of last year?
A：While the company generally does not guide around orders, the health of the pipeline is improving and is expected to see growth in orders both for the current and upcoming quarters.
Q：Can the company grow orders off the comp in the first quarter, and is this growth supported by the pipeline?
A：Yes, the company can grow orders off the comp in the first quarter, and this growth is supported by an improving order pipeline.
Q：What is the strategy for focusing on growing segments of the market?
A：The strategy includes focusing on parts of the market that are growing at a faster rate, in addition to productivity work and business system improvements.
Q：What opportunities are there for improving free cash flow conversion and what is the role of inventory management in this?
A：The opportunities for improving free cash flow conversion include continued outperformance in working capital management, particularly in receivable management, and enhancements in inventory management. The business system will provide clarity and visibility into areas for continuous improvement and reducing inventory reliance to enhance cash flow conversion.
Q：What actions are being taken to improve EMEA and APAC margins, especially in light of easier comps in Europe?
A：The improvements in EMEA and APAC margins are supported by a combination of factors already executed upon, such as enhanced pricing discipline, better focus on deployment efforts, and ongoing implementation of the business system network in EMEA and Asia. There is not a reliance on a single factor, but rather a combination of business practices and strategies.
Q：How is the transition from air cooling to liquid cooling affecting content and opportunities within the data center?
A：The transition to newer chips that require more power and heat necessitates increased cooling, which drives the need for more of the company's products and services. The company sees continued demand for both air-side solutions and chillers, with liquid to air and liquid to liquid chillers showing strong momentum.
Q：What is the impact of the company's investments in technology on the aftermarket and its service costs?
A：The company's investments in technology are reducing the cost to serve the aftermarket, which in turn provides efficiency savings to customers. This drives both share gain by becoming more competitive in mission-critical applications and margin improvement by lowering service costs through technology deployment.
Q：How significant is the investment in technology for the company's growth and margin improvement?
A：The investment in technology is significant for the company's growth and margin improvement. It enables the company to deploy more sophisticated technology-based approaches in lifecycle services, which is an exciting area that will lead to future discussions on growth and margin outcomes.
Q：What is the projected growth for the applied business in the upcoming fiscal year?
A：The company projects a mid single-digit growth in the applied business for the upcoming fiscal year.
Q：How is the company performing in its key verticals and segments?
A：The company is performing well in its targeted verticals and has a strong backlog and recurring service business which contributes to a good degree of predictability for the year.
Q：What factors contribute to the growth projection?
A：The growth projection is not reliant on any new initiatives not already proven, including the impact of price and volume growth across different regions and businesses.
Q：What is the forecasted growth range by region and domain for the upcoming fiscal year?
A：Growth is forecasted to be within the mid single digits across all regions with EMEA potentially slightly above and APAC and America at the enterprise level. Traditional applied in the AC business is expected to grow slightly faster, while fire and security will be on the lower end of the growth scale.
Q：What progress has been made with respect to the 500 million over a multi-year period in restructuring?
A：The company has spent about $200 million in fiscal year quest, slightly ahead of expectations, but the run-rate benefit of $200 million is reflected in the guidance for the upcoming fiscal year and the results exceeded expectations. Further restructuring may be needed to maintain the operating leverage profile laid out, but the focus is on reducing the footprint without sacrificing that profile.
Q：What is the company's strategy to increase its market share in the data center market?
A：The company's strategy to increase market share includes capacity investments, improving on-time delivery and reducing lead times, and staying at the forefront of innovation in the data center market with an end-to-end thermal solution and a highly agile and fast manufacturing position. It also aims to maintain a strong field service presence to avoid downtime and continue winning in the market.
