Johnson Controls International (JCI) 6 Nov 242024 Q4 Earnings call transcript

Good morning, and welcome to the Johnson Controls Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note that 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 fourth quarter 2024 results. Relations related as were presentation the found the and morning earlier can release website on well our as conference Investor press tables issued that this be at The johnsoncontrols.com. of portion call slide

Johnson the Officer, Chief and Financial are Oliver; Vandiepenbeeck. Chairman Officer, and Joining me Marc today Controls' on Chief call Executive George

statements results SEC we uncertainties inherent limitations due the refer indicated will make we forward-looking begin, presentation our today, those of variety let such Before a a risks to to of from statements. to me discussion may Actual risks during by Please and materially remind these addition of forward-looking filings you that uncertainties. detailed differ forward-looking in and for our statements.

non-GAAP to on be non-GAAP certain to the measures Johnson Controls of will this to website. schedule GAAP comparable in both also the can Relations directly contained press of measures. measures found in are the appendix the of presentation, our Investor attached reference these section Reconciliations and most release We which

I over to call will turn George. now the

Thank of and their in today's for a Jim, delivering to taking quarterly call everyone. thank to call you would for morning, good the by joining us start and acknowledge results. moment our today. I employees Thanks, all on like strong contributions

profitable, of more We solutions faster-growing, for our progress portfolio Today, company. transformation provider are in a also a pure-play comprehensive significant and commercial made to simplify become our we buildings. simpler

the $XX.X by demand Order to growth record growth, ended XXXX cash conversion. adjusted margin X% backlog, XX% momentum, at contributed Let's billion. in expansion free year Slide begin delivering double-digit ended with robust and year organic data revenue We the with our X. led fiscal flow which center was of and

continue with serve. to Our sustainability differentiated customers commercial key the we to and our resonate verticals across enhance buildings in efficiency solutions

delivered. position more in data doubling the our extended centers we year full cooling sales than orders for For the example, for we leading with

are hundreds we seeing dollars multiyear in placing the cooling fact, solutions. In orders of millions provide now of customers key to

of is close light sale the we residential Bosch pending and to quarter. fiscal transaction expect fourth business commercial to in the and Our progressing, the

are give which on XXXX the we fiscal details continuing later to will call. shareholder our going Marc we long-term guidance are operations of more $X.XX, We forward in $X.XX positioned Today, introducing value. to deliver well believe from

we Our and are consistent, benefiting more performance. business predictable transformation almost is from complete,

composition dedicated customers' Slide clean going presents the is forma look the needs Controls, our X forward. Johnson at a pro to energy of solving new for efficiency company solutions, building a in Johnson Today, Controls and our representing leader electrification.

Our innovative meet provide evolving solutions to commitment and that we us the sustainability driving ensuring market. the cutting-edge of approach demands are forward,

translates proposition Johnson directly shareholder value Controls' unique to customer creation. value

also life while Our customers delivering over enables the our healthy serve This us sustainable the them. multi-domain the presence we building deliver means customers and cycle solutions. savings for over and of can all our cost efficiencies world meet safe, and to needs

we We branch value with believe our customers. line growth expertise this margin to we and network well are the turn, domain are lead deliver greater top integrated extensive In in confident sustained to expansion. to will positioned significant an

our verticals. in part serving end-to-end with connected expand one we all our and deployed digital that we services leverage As towards our to us model our of unique capability globally have path model. expertise a of operating simplification, key across is now buildings This leveraging positioning

realize enables sustained model of of over our life engineered benefits campus deliver centers, verticals. key productivity solutions, hospitals expansion their to maximize to ensuring us the of cycle the on our from solutions customers, this behalf care improving we housing fast-growing data the Whether all This outpatient of in for helping buildings. across are higher education We health labs solving and it our or is them facilities, needs value across of outcomes creation.

Johnson Controls the buildings maximizing experience. create customers while is more sustainable help better ever also to occupant safer, before than positioned

XXXX, strong to Our building with record globally fiscal confidence solutions. that to Controls lead Johnson finish our in our coupled backlog, will continue reinforces

it to With turn Marc. that, over I'll

Thanks, turn to good Slide Please and everyone. X. George, morning,

highlights Our execution performance in across the fourth continued portfolio. quarter strong the

in end-to-end single provides grew margin organic drive visibility Products. the the needed and results. to led predictable basis Our to expanded both model XX.X%, and This points in quarter XXX in our Global as substantial segment robust consistent was evident by a operating revenue and performance improvement EMEA/LA XX%

another while our end year-over-year higher-margin range exceeded delivered high XX% of $X.XX $X.XX. of backlog. up the our EPS strong guidance We converting productivity and was by quarter Adjusted increased of

the contributed efficiency related safeguard additional operational strategic corporate we ensures support to Our IT equipped infrastructure. our offset resources and of than The growth to investments. primarily well of more the growth allocation and are to majority expenditure

these Below results. share the lower Overall, EPS a line, were while has higher, with count. pleased net growth, are achieved finance EP from benefited and we charges we significant

$XXX balance the lower long-term of in available and approximately quarter to to the our fourth decreased is X the million X.Xx. debt which ended sheet, of Xx, we with On net target end cash,

free Our exceeded in commitments. our capital year-over-year improved was trend previous our conversion XX% cash substantially This flow working of is reflecting fundamental and adjusted improvement a management. of strong

nearly improved Adjusted free of cash million flow $X.X year-over-year. $XXX billion

dividends billion share via For the $X.X and full year, to repurchases. we shareholders returned

Products and to X. segment Beginning points X remained growth. through of results positive, we our Slide more X Organic a volume as in price had year. Let's X% the grew now Global on sales X, strong our Slides delivered business discuss on detail finish

Refrigeration. broad-based in expanded margin growth Low both and region, double-digit Adjusted and XX%. the was Fire double-digit by in led points America. segment to HVAC, XXX basis declines EBITDA North in growth residential, [indiscernible] commercial across Industrial offset Security & Strength

past year improving made margin the in substantial over efficiencies, operational experienced have half. the tremendous to second We fiscal progress leading our in improvement

margin delivered Slide to performance solid growth and this Solutions X to underpinned momentum, Building expansion. Solutions Building our sustainable performance. revenue X by Turning double-digit quarter, discuss a and

remains record levels strength our which backlog, our increased business the at underscore and we historical Additionally, model. of

many resonate vertical to serve across continues higher center, strong attractive we customers government, and offering of in care solution our growth health ed. with the data with outcome-driven Our

order mid-teens & tough double-digit led low growth, led by grew in grew while America in a System in the Security. a North increased by teen Service with in strength quarter System orders against quarter, Fire growth Orders comp. the tough comparison. Orders X% Service X% in X% X% grew against

while strong orders Refrigeration. and up XX% portfolio, saw controls XX% were growth EMEA/LA, In the HVAC with Service, growth in Industrial over X%. we order in Across grew double-digit System

Asia is In Service. X% from as the rebounded of grew growth led few X%, in quarters orders by momentum past order decline. Overall, building Pacific,

to of the past the healthy opportunities momentum continue several build on as of quarters. pipeline Our within Solutions Building remain we

solutions services. Solutions a with segment solid Building the enabling capitalize high backlog, and Our us record entered a quarter which on foundation, demand for provided to

increased sales and growth double-digit both XX%, Organic Systems Service. by across led

Our for cycle growth us our as continue sustained Service sets solution deliver differentiated apart we customers. [indiscernible] to

continued in North organically XX% across Controls, controls. with Industrial EMEA/LA, were Security America and and Sales up In grew in Refrigeration. double-digit sales strength organic HVAC with growth XX%

executing while and our the to backlog. X%, improvement stronger enhanced higher-margin backlog we Pacific, improvement. productivity, service was within This mix business. the segment declined strengthen resilient margin Solutions sales Asia saw in profile while due continues our driven The Service Building to sequential operational In efficiencies our favorable improved by a

productivity EMEA/LA $XX.X in In than Building expanded Systems backlog points mix business. growth positive as offset In APAC, in by X% Service margin our points XX%, billion. North Service. as and basis adjusted mix basis grew level, Systems on the positive declined to America, grew segment System XX% to Solutions XX related Service. XX faster at margin EBITDA record remained a to year-over-year. segment region, adjusted a expanded basis grew adjusted points and margin X% XXX backlog mix Service to By decline to growing from backlog improved business XX.X% XX.X%, driven

first XX of operation our discuss and Let's XXXX and fiscal the guidance and Slide XX. quarter on discontinued impact

and momentum, We new into are entering great offers visibility backlog year. the fiscal our record XXXX with

Service positioned remains and Our provide mix margins. favorable to business well

commercial both discontinued the a first As fiscal quarter to operations we share. will operation to year continuing per our look residential $X.XX we light and fiscal moving full business EPS for guidance presenting the After is be operation, and basis. adjusted on the continuing our XXXX XXXX,

mid-single expansion points approximately $X.XX EPS to margin to we the $X.XX, growth of first range of XX% representing XX% segment the For adjusted quarter, adjusted in anticipate over basis [indiscernible] XXX digits, and growth. XX.X% of sales organic to

easy against first the fundamentals strong the an entering quarter year. comparison, is the overall While are

to digits, points. expand algorithm. For over full long-term mid-single expected basis the year, [indiscernible] we organic growth which sales of our XX is with are margins Adjusted segment expect consistent growth

Our adjusted growth. X% to share $X.XX represents EPS range to $X.XX X% per of

cash free consistent on flow XX% the a with continuing basis. operations greater, of XXXX or performance expect of We fiscal conversion

cash flow dividends target to through continue repurchases. XXX% returning We and to our free share shareholders of

deployment included fiscal divestiture to commercial we light the in from sales fiscal expect our proceeds quarter. not during residential capital Consequently, have outlook. fourth We and close the any XXXX

to plan cost $XXX actions. anticipate resulting restructuring of next Additionally, to portfolio a and stranded expected X our we incurring multiyear simplification committing address operations, rightsize savings $XXX over global the years, announced roughly further in million. our We previously following expenses million in are annual costs approximately

divestiture, Similar to of plan of the of light transaction. the of this many closure will on the restructuring timing of the depend close aspects timing deploying residential the the and capital commercial from

are factor to will value and our long-term stakeholders. sustained success create We drive confident this

to more as we While on you 'XX. updating significant fiscal faster-growing, momentum our as portfolio continue XXXX forward transformation, was a profitable, we company. positioned year our simplified year look fiscal of entering are strong We better progress a

for open please questions. operator, lines that, the With

question Instructions] from with [Operator Wolfe Research. comes And today's Nigel Coe first

Sorry, mute I button the have there.

how see is that above there's Marc, that. digits, segments? think, bit I question APAC the -- the assuming you for across do a mid-single you, So the a probably I'm

across you color So XX on the any [indiscernible] see segments? the And missing how just bps segments? across again curious

and the verify, Global it want Products. and 'XX, 'XX EBITA ex happening And are within like And I margins just were clean to XX.X% the the XX.X% looks obviously, York. in [indiscernible] restatements

the want So sure make I numbers. to those are right just

Nigel, a to there. cover lot

have the strong full record lot rate. know, growth And larger growth, vertical. of confidence that digits. impact Granted, And the the are the with billion. can level quarter entering So of -- very we growth quarter-over-quarter results. given first I tailwinds as of with we you to we backlog on a seeing target projects in had very But about are we're a timing strong a think mid-single we of core very year some of continue think and some the $XX.X the we backlog I new happy

by going that that order enterprise to be showed to think overall that break And guide we in will growth of is year. rate EMEA/LA, think we're the mid-single we below overall growth be rest you to above for fourth for or compare. on going really down, that an Global easier APAC the is business if is as guide in the the digit how North starting Now segment, the Products And throughout see just quarter, America, sequential business. slightly at slightly our

when basis, how QX quarter that and and base 'XX. standpoint of guidance dealt as and year within you being margin remain a in volume go total cost think it continued is a behind from the fiscal us, base true way, that Products long was the chain we and lot supply to disruption margin, for I a margin, both cost enter what the Now going you Global hear comes I in the of QX. a last we business saw the that And going bit we and on operation to covered gave with that's to with little when we

significant both see chain. and that And we absorption, operational benefited. see year-on-year. will base and to that the Products benefit from that comps driving that, supply and leverage been Global easier And can continue are We've improved an has continue manufacturing you provide across efficiency fundamental to the business structural

Now that seasonality it. to some business has

we of part But the second softer fiscal year. year first set 'XX. is part the be for will little margin, very of a well feel, the So than the bit year that

I've And just 'XX, Global want Products make [indiscernible] the to the margins got 'XX. sure fiscal for in

the identifying replace if be CEO any maybe you progress comment person wondering, been you What I'm good. just there But on George, So would the right has could retire? succession. when you to made help

is ongoing process. don't the there in have any understand interest succession significant updates this new to time, We At share. we CEO

considering in an to actively XXXX. first and You of can candidates, both is update calendar do And we internal impressive be Board expect list rest assured that half the have the of external. an

question next JPMorgan. with comes Steve today's Tusa And from

first if particularly up X sure wanted just the just so mean better trending reason not Sorry, the quarter. quite your or orders quarter understand inorganic and is specifically? the for quarter why looking that, the comp the with quarter, being first only is the to year hard, mid-singles strong organic what this first not up but gave you guide I I'm was with

Yes.

in and of in strong being benefiting So larger strong performance if decarbonization fourth the had big performance business, projects Service large some the that particularly Service orders whether our center double quarter also of those the very particular And think or for you are the we we those quarter project, it's vehicles about the had with we season there verticals. from, digits very busiest that timing data growth.

long While probably that's quarter-to-quarter term, that. volatility over sustainable are the there to some

And last feel [indiscernible] comfortable so year, easier mid-single-digit here. growth really an for a places granted versus on coming is we QX, where compare

that's mid-single-digit North as think that come slightly EMEA/LA growth But going performance mid-single Global we digit. than America APAC in comfortable with the And will bit right that strong lower. higher will probably Products be where I some where see little well as quarter. to feel next a or both and line

can get portfolio, that what expect center just of the for now And refresh revenue is Okay. we in then 'XX? data you percentage

rest what least the for give our solid with growth continues than take grow the revenue a little and [indiscernible] at the portfolio faster of to prior, Consistent about very our foreseeable with center said future. exposure's sequentially of or double-digit we've data bit,

with Our Scott question Melius next Davis comes from Research.

there? there of -- -- with an would attachment building? kind typically do a data get does rate a come you attachment different install, order you and it of service OpenBlue in it is I center rate kind that when have attachment similar you the Or is and a big

service digital solution cautious Yes. The The how digital slightly That about Good type overall the particular is deploy Scott. attach better they very of and portfolio an rate services from really is than depends standpoint. on sensitive very it. our vertical to question, customer.

full There than bit have a are to have other edge more some customers cutting expecting little that connections.

portfolio. rate service is others the of on attach the rest manage their strong like would that for that to very Some the own. than business very, But better and

you, it's not attach ago of years that a probably X or And X changed those view I'll have the key vertical that to X probably customers a tell self-serve they the that. or where service last years, where over lot, some high taken wanted X lot was very of

service they've guaranteed what a complexity we with and the our capabilities, to think and provide really for customers. full I outcomes are ourselves suite of the also able quality of learned differentiate with those

short is of you these of look what I And as operations. significantly sites. And data center term, these technicians up these trend Scott, sites, would dozens have because tell have the at the that are you, we hundreds supporting our on units we deployed

And we them, only proactive very we've we we're not we one more how that we maintaining overall in the when have made but serve making is number the efficient be can in connectivity, operation. sure case are

actually is So the trend of that. up significantly because

vertical through is because everything had in segment? better complex? That's Is that little it's the to helpful, comparable and because now it it orders power kind come another of big guys. applied building the a And more such, you've bit just of that that Or would more quarter easy. honestly, in you isn't compare how pricing seeing traditional

to and the control embedded cooling the try the well value of their we've and with the and some it applied and slightly to they're there's solve pricing. data trying to to commoditized, our as and is when way but that of strong engineering of customer the The parts partnership engineered are the most we've comes for way vertical security building. with problems approached kind those to of applied chain Well, us higher really drive they [indiscernible] solutions solve is the a value as fire deliver require customers really allows good heating, customer that center

of probably is see. if slightly vertical particular you market the So more businesses probably the of vis-a-vis margin across you board, compare the rest those the what than

Now months as evolve next it's few over to going years. a the to continue and market

And bit continue more we're We've a than business. peers better applied more developed profile little the to equipment to that price. margin drive traditional our differentiated solution allows command us to a expecting that from

our the to curve ahead in side, add that the been product. we've with product would I of reinvestment And on also

And extremely so that next believe well proposition. value of differentiating as a that and we've I for product with position gaining generation positioned data centers, our been the we're

believe to with to we to able So the continue been we've that going improve we've going date achieve profile done margin that to what is forward.

today's And Julian Mitchell comes next question from with Barclays.

program, cost-out of just Maybe of Maybe how to flow think, that in savings current first and the reflected margin of the on is cash sort that And the understand off wanted announcement understand the million XXXX much or for operating costs for restructuring year? phasing XXX on similarly, is made. us in the much how help of the, the of so that I guide? you guide $XXX free

question, great No, Julian.

divestiture to better So a been as the quicker a in structure change light we've any residential resource facilitate refine to we commercial, deploy really model more to and and business and market. to like the simpler, with business portfolio clear significant opportunities operating how our of pursuing our

aspects that through And we many that. have been of as we driving different go restructuring

As you know, have business transaction a until close. to the still run we

some that timing of attached So the the to of transaction. the is be it's predict timing very to the of because closing to hard of cost going

restructuring, the of to restructuring come restructuring But ahead expect the benefits. as any costs we

X:X perfectly million will the the timed $XXX million. not come $XXX So of structure. ahead It's a

substantial right year the about 'XX, one 'XX. is our traditional we in $XXX As year fiscal of we that of between for investments look is tax tax half large there's cash fiscal flow headwinds cash But of large and in guide probably million CapEx some conversion rate. of year, alongside including that effective kind had for that, rate the for restructuring, delta portion a at we've into free the year guide the a guide of included amount for our which structural

next question Morgan And Snyder from comes today's with Stanley. Chris

wanted Building 'XX. I about outlook North the kind ask Solutions to margins and America into of

Systems in it So lot sounds year, of of 'XX. like into that's through the guess, fiscal really supposed first half the kind QX that segment normalize But the clearly, a of I on mix. pressure on to

that So about what can in mean for of headwind kind as talk Building away? the margins what's goes can you just mix that? guide And for that Solutions

question. it's larger the North for wouldn't the those pressure, Service is those is margin Chris. but saw the what you material on the of those question, to Systems is America on in I Great -- come extremely thanks say growing rapidly that quarter No, drive. it projects. And business lower back at margin -- than slightly larger end larger a able projects Yes,

though if new even was in able team the project energy was Service to in solid drive data North center compensate, those you the it mix team and not to and decarbonization So growth, like, quarter. for a the the that completed large of America projects effect very enough

remain. And so get quarter-on-quarter the if going you look you're to on those will forward, projects valuation

that the the particular tail the will the But because will live especially year of this start supporting System Service move it rate. net project headwind service as and Service revenuing the projects come we creates rate up, attachment the as on all effect start improved towards margin we and an

question today's comes Sachs. And Goldman next with Ritchie Joe from

kind for focusing Marc, a second. of Products just maybe Global on

that before. way, little you we a guys said goes candidly, like haven't I are think but seen volume long margins a these

quarter? of maybe so question as this of margins one-off had the there just dovetailing well, anything that kind was And Nigel kind that in earlier

what to And understand jumping-off XXXX. for really trying then is the right just point

Products forma for the XXXX locked that we margins pro Global think so like So we in year? as have next what that about was

Joe. fair question, Very

one be months did that Global up we really of margin. really the the that in XX significant the to mix onetimer there's operation that work did efficiencies. deal that to no, team So to and helped It's effect set business drive really able back Products really and no over past particular any or structural

well the the say about be will margin margin If half above that XX% of that margin I think second you XX% of drive first that continued forma rate, would pro from will would of half want year a to the one on and the side year business margin, rate. the I say And operation rate. take

now, business perform We'll And I better. able and efficiently not that more think at been operating much well. more if focused much as has continuously that to be that level,

from Sprague, comes is Citigroup. Bystricky And your our with Mr. next open. And question Vlad line

the kind nonoperating of on Maybe of speak. question items a just to here, multipart some so

roughly up I dollars, the Corporate, the of on $XXX both it's there. same would just cases. million-ish that First, kind show stranded interesting in friction it's thought nominally

So maybe some color on that.

some your of And taking XX? we're and believing the had stepping also, instead And actually down up be here. the think tax down global changes rate rate to what's would tax Marc, you drifting I

as door that the you I give And count back little comes over buying a of on the could as So balance the you're just share just cash -- maybe kind pay year. stock imply to in that. color go correct? Is seems the finally, the you of

I'll with last part. that Yes, start

right. absolutely You're

guide contemplate So first, deployment any business. not of proceeds I'll the to does sale $X.XX guide, associated our our our residential start with $X.XX, the with all of at

a flow. just our pay-as-you-go it's free shareholders, of So regular to XXX% return cash

Corporate expenses. couple on the question, Now of It's flat your year-on-year.

costs have want of We've would higher. of a in a those that also that but of as lower cybersecurity of, on infrastructure of it we to investment divestiture to work the left some the we well of substantial cost, stranded those are We of expected little we lot action business. while and and residential light couple made for we timing we a we need with need hardening and You got take a IT that to to commercial them, as to time done continue take actions provide pace and have support to care still to business. business the with be

rate, we on Now points question continued operation year-on-year. the seeing of -- CO the are rate pressure your tax basis the on XXX tax continued on on

stepping look to POCO at XX% rate, and up you XX%. in it's we 'XX, year if about were at So fiscal

happening, allows that better And that we planning little were little us around and the prepare had not for were manage going headwind. to see indicated felt transaction XXXX. bit started the particular bit we a that I a to more rate for that commercial that. pressure right. seeing And I residential we You're as probably than

fiscal rate at transparency, of of all you see XXXX pressure tax on look beyond, quite we in closing on that to of points globally that because be tax that transaction XX% mean have the and commercial XXX happened. Now basis rate planning and year XXX as We residential that 'XX as to global probably the behind a bit will the see and for reform us.

And question of from with Andrew the next comes Bank Obin America.

a Can on key get more What on stands negatively? North sales centers. by I applied or out data in verticals? question. color America elsewhere? Just we But just you know is seeing the focus are positively what

X supportive. really There's are X, verticals that

still data has showing Of lot [indiscernible] seeing one. to of help been course, where on some the activity center a new health a great manufacturing the is hospitals it's there's whether The and one associated manufacturing with care, of energy. of strong critical pickup, business. we're But battery a our

postpandemic some is to a And to of be that people spaces of the applied that commercial throughout office portfolio the is It able for opportunity rebalancing estate with then but creates the repurpose finally, across market. the domain, overall, just not new as market softer, real as drive lot reallocation of opportunities associated the space.

Deane And question the Dray Capital with RBC comes Markets. next from

cash free the flow about guide. Question's

what noticed of working capital. out, twice does the taking that you conversion. then threshold? it support conversion? Marc, XX% in Just for put and out lower of 'XX, what just structurally, just I you XXX% resi has to that structurally is to light talk impact And and goal get through change to how commercial longer-term kind But fiscal play us of the

Yes.

comment not clear, cash be free flow I what to flow was in the XXX% is free conversion. XXX% Just to cash prepared shareholders, -- return

XX%. that headwind structural that to with. I'm better deal have than Now continuously got some we will longer you we to willing term, we tell be But

working trade capital, of the lot From capital. it's trade a not working

and So is in continue trade our going cash flow conversion. a improvement capital tailwind be to free support an to working

is commercial that structural headwinds we our company that at become and accretive, to or the business cash you However, weighted -- joint cash you conversion Hitachi a as the residential flow or as there's had if about from separate that that flow some of look discontinued in little of like, with operation. whole light structural conversion if X XX% owning free venture to more bit X free benefits now

cash cash But actually That with and flow the get discontinued XXX% on overall, a where generation operation of a earnings of outside means the free the always aligned we operation, was flow to of headwind. business. get the timing free of not landed versus basis couple XX, that there's would dividend the continued of the structural to

that tax and the the to continue effective The X% CapEx substantial first see And increase at delta continue then level. XX% with and we effective data one we to stay maybe is as rate our investment as talked continue about beyond the continue right? cash to well make Julian tax to we earlier it market. finally, opportunities to capacity to in to goal the is rate, Between restructuring the our tax doubling and our as center with rate

at pressure as headwind. X don't cash rate. coming this actually But I will effective tax the I as see see that it, look a on be rate. we see tax much down pressure we XX, on that our

capital overall. improvement taxes with you restructuring, So trade headwind the see in working CapEx associated and with

next with the question follow-up And a JPMorgan. from is Tusa Steve

Sorry about that.

at So just sales kind Global just Products about on RemainCo wanted $X point? you Products. that revenues just backing to want sure make is year reported was have that for right I about Is billion as of -- math starting we continuing out in I what mean a from my guys right Global margin. this to this op

I The RemainCo of Global would $X Products is probably going than to bit be say. a less billion, little

Okay.

continuing that a gave is in like I am you -- a Is you're X, the like profits, ops missing not divide Products slides, if something there? about. then the talking number that So that's XXs high by that that margin, X I for whatever XX% think Global I that's

No.

didn't much, probably I the XX%. XX% first the be will be second of other the much but XX%. will higher say side I side the half than So one said on on XX%, half and of

Okay.

pro forma there's a basis on if nothing So so volume that of we the unusual XX kind you that, and base the right leverage XX this is on about -- but year, should assume that? can in XX,

the on We can I that's think absolutely that. yes. right And ballpark, leverage volume

And Okay. then on center. lastly, sorry, data just

You XX% there. XX% exposure? data broke up center little you say Did bit a or

XX%.

next our from Deutsche Bank. with DeBlase question comes And Nicole

fiscal question do starts put guess, from on, year? kind guys record come that expectation together I growth you for gives to it just or down through and So it the the these think you backlog the levels order When backlog. consistent a outlook of 'XX, remains

the little are depend bit data center how strong be going and going in trend pipeline as continuing margin the that Well, have continuing the solidify. to assuming to the improve in we to we of will see vertical. But seen within backlog the on as the the book to line year we jobs growth opportunities it's market, well a and the mix of

going the be the is in growth in think I trend backlog. strong to So

That's of mid-single-digit to why a to are as we of be revenue that revenue lot comfortable growth out with drive backlog. very we're that going able

question with Joe from Wells Fargo. the O'Dea comes next And

within a that? just the maybe Slide indirect. go-forward market X the on XX% so How or end mix about like talk exposure on about and think within revenue that fit Just basis? the you portfolio looks Could you

objectives think then, on year, and around announcement of the the with offsetting as how toward timing thinking that? of the of any about kind the dilution restructuring you Marc, achieving today perspective you're sort and And exit just proceeds about end just

Yes.

So we view integrated model. operating on model an operating our as the mixture,

even. a market we So we every product, every to we by the brand market entitlement standpoint. vertical, make our market, from by that full segment get share sure And for sometimes

service ability high and are direct in, for of buildings so in And choose work. vast to where value, drive being attach the see those going an value majority rates are both we're of the some our products cycle our life the sell markets create branches do able And going to to always we we the to channel.

market. where parts us because the are simply different value more the It's or addresses that's either sell of profile where more harder itself, customer end a complexity commoditized there wants the the cycle type low value of application the it's not comes of market to that part the or Now market. or of market, in mid- building the meet maybe the to to vertical life of of the of it just

distribution use market or leverage we try stay the to end for where partners, of and indirect lower a mid the sales to from the treat away that more of mostly larger market. we're and there, channel highly able part and And complex

restructuring the our what Now The when and similar plan ability had be to we've capital is historically offset going very of dilution. to we've question capital and deployment second on your large divestiture. done part to

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questions. couple of a Just

assume free expect payments to just the conversion year I purposes? include for housekeeping flow divestitures. First, within Would doesn't the the the tax guide on those you cash fall

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strokes I go-to-market that entails? more And sustainably, then qualitatively, of configuration your within program the more you of can us But the business may or the cost-out how you broad perhaps be what program? changing the give think just

you comments, correct. are X first Your

the assumption you're there. So making right

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you present we'll and we changes updated So in see operate keep we needed as how ourselves.

the would This to concludes turn George Oliver like for now I session. question-and-answer to Mr. our conference back over closing any remarks.

of Yes, I all for you us thank to today. joining want

direction. Johnson am fiscal and confident in we the right XXXX future, is look Controls conclude the heading I As to

important created year fiscal entering has team and this XXXX. delivered Our an momentum achievements

demonstrated record proposition building value quarters by resonating, and Service and sales multiple a is growth customer of our backlog. consecutive Our

leadership positioned We provided our the on in our by operating ahead capitalize model. are Solutions end-to-end Building and to well opportunities

for you operator, to And and that, Controls. concludes call. that confidence with So in continued I support want our your Johnson thank

Thank and you for you. presentation. has conference now attending thank The concluded, today's

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