George Oliver
Chairman and Chief Executive Officer at Johnson Controls International
Thanks, Jim, and good morning, everyone. Thank you for joining us on the call today. I'd like to start by taking a moment to thank all Johnson Controls employees for their hard work and tremendous contributions in helping us achieve an excellent start to the year with our strong quarterly results. Before we get into the details on results, I want to briefly address the CEO transition we announced today. As you've likely seen, the Board and I have selected Joachim to succeed me as CEO of Johnson Controls in March. I will remain on the Board through August 1 to support a seamless transition and will remain an advisor to the company until I officially retire at the end of December. It has been the honor of my career to lead Johnson Controls for eight years working alongside an incredible team and to have been a part of the JCI merger before that. We have accomplished a tremendous amount during that time and I could not be more pleased with the company we have built. Together, we have successfully simplified our portfolio and positioned our company as a leading pure-play building solutions provider. We are driving results-based on our unique value proposition with an ability to serve our customers over the life-cycle of the building. The company's future lies in-building on the momentum we have underway. Our company has an incredibly strong bench, including our talented CFO, Mark. This transition came together after a rigorous and thoughtful succession planning process and I am confident that as you get to know, you will agree that the company is in very capable hands and he is the right leader for Johnson Controls. Comes from Danaher, where he worked for 13 years. He is a highly accomplished executive with extensive experience scaling global companies with a foundation of customer orientation, innovation and efficiency. His track-record of leading service-oriented businesses and leveraging technology to deliver best-in-class financial performance is uniquely suited for where Johnson Controls is in its value-creation journey. I will remain fully engaged until Yokum steps into the CEO role, and then I will work with him and the rest of the management team as we seamlessly transition leadership and set John's controls up for continued success. With that, I will turn to a more in-depth discussion of our first-quarter performance. Let's begin with Slide 4. Johnson Controls is starting 2025 with great momentum and a clear focus as validated by our first-quarter results. Importantly, each of our businesses contributed to robust revenue growth and significant margin expansion and remain positioned for ongoing shareholder value-creation. These results reinforce the considerable progress we have made through our transformation efforts and demonstrate the success of our strategic initiatives, which have driven increased demand for our core systems and service offerings. We are confident that our performance provides a solid foundation as we move through the year. Auto momentum remained solid with 16% growth in the quarter, driven by double-digit growth in both systems and service. The sustained demand for our tailored engineered solutions offerings has not only fueled growth, but also positions us well for continued success. Our focus on driving operational excellence and fostering innovation is enabling our performance and building on our capability to deliver consistent, predictable results. Taking into account our strong performance to date, we are raising our guidance for the year. Mark will provide more details later in the call. We are confident in our ability to maintain our momentum and deliver long-term shareholder value-creation. Please turn to the next slide. Controls is experiencing consistent progress across key verticals, demonstrating the breadth of our expertise and stability of our business model. Our global presence across multiple domains with a simplified operating model enables us to assist and grow our customer relationships over the course of the entire building life-cycle while also delivering safe, healthy and sustainable solutions. By focusing on the entire life-cycle, we create great customer intimacy while achieving a high-level of customer retention, a key metric and differentiator. Our services business, supported by long contractual engagements, empowers us to optimize performance at every phase across all building systems, driving increased value for our customers. This is largely achieved through our global branch network and its more than 20,000 qualified technicians, but also through the continuous advancements in the innovation and strategic use of AI. We leverage remote monitoring by employing AI to drive utilization and efficiency. For instance, proactive repair recommendations are contributing to a larger share of our overall services growth. Additionally, customer surveys indicate that Johnson Controls technicians are regarded as trusted advisors, which is due in large part to our local market strategy. Our product agnostic central operations infrastructure supports our technicians with monitoring, call intake, dispatch and technical support to ensure a seamless and efficient process. This provides best-in-class turnaround time and improved system uptime. We continue to build momentum as a leading solutions provider to data centers, which is one of our fastest-growing verticals and remains an attractive opportunity. I am pleased to report that Johnson Controls was recently named the number-one implementer among data center thermal management providers and was recognized as a top innovator. We are one of only two players to be named an overall leader in the field and are proud to be a key partner in supporting the infrastructure of the digital economy. We are capitalizing on the significant transformation underway to support safer and more efficient manufacturing, reshoring initiatives in Industry 4.0. This is illustrated by how we are driving mission-critical solutions in the healthcare vertical. Hospitals and healthcare facilities face growing challenges, including agent infrastructure and the need to meet ambitious sustainability targets. Our comprehensive portfolio, including advanced HVAC systems, fire protection and our OpenBlue platform helps healthcare providers enhance air quality, improve infection control and reduce energy costs while meeting regulatory requirements. OpenBlue is another area where we have expanded upon our generative AI capabilities. Our software can now easily explain building equipment faults and trends using generative AI and help users with easy-to-understand investigation and resolution steps. Additionally, we can now analyze energy and carbon emissions across our real-estate portfolio and evaluate compliance against any local regulations related to excess carbon emissions, helping customers better plan and prioritize capital improvement projects and facility improvement measures. Pharmaceutical manufacturing is also a dynamic area where demand for advanced production environments, including clean rooms has surged to support the production of innovative therapies and medications. These facilities require precise temperature, humidity and air quality management. Our leading solutions ensure that they can operate efficiently, safely and sustainably. Across the broader manufacturing sector, our ability to integrate smart, energy-efficient and resilient technologies helps manufacturers optimize their operations and achieve their long-term goals. Our performance in these verticals and our use of AI demonstrate our ability to address the unique needs of mission-critical environments across a range of industries. By leveraging our advanced technology, digital innovation and focus on sustainability, we continue to deliver measurable value for our customers and position ourselves as a leader in driving long-term growth. In summary, our strong start to fiscal 2025 reflects the success of our strategy to simplify our portfolio and position Johnson Controls as a leading pure-play building solutions provider. The significant progress in our transformation is enabling us to achieve more consistent and predictable performance as we continue to deliver value for our stakeholders. With that, I'll turn it over to Mark.
