Marc Vandiepenbeeck
Executive Vice President & Chief Financial Officer and President of Building Solutions EMEALA at Johnson Controls International
Thanks, George, and good morning, everyone.
Please turn to Slide 6. Our performance in the fourth quarter highlights continued strong execution across our portfolio. Our single end-to-end operating model provides the visibility needed to drive consistent and predictable results. This was evident in our performance in the quarter as organic revenue grew 10% and segment margin expanded a robust 260 basis points to 18.6%, led by substantial improvement in both EMEALA and Global Products. We delivered another strong quarter of increased productivity, while converting our higher margin backlog.
Adjusted EPS of $1.28 was up 22% year-over-year and exceeded the high-end of our guidance range by $0.02. Our operational efficiency contributed to the majority of the growth and more than offset additional corporate expenditure, primarily related to IT investments. The strategic allocation of resource ensured we are well-equipped to support our growth and safeguard our infrastructure. Below the line, net finance charges were higher, while EPS benefited from a lower share count. Overall, we achieved significant EPS growth and we are pleased with these results.
On the balance sheet, we ended the fourth quarter with approximately $600 million in available cash and net debt decreased to 2 times, which is the lower end of our long-term target of 2 times to 2.5 times. Our adjusted free cash flow conversion of 96% was a strong improvement year-over-year and substantially exceeded our previous commitments. This trend is reflecting of our improved fundamental in working capital management. Adjusted free cash flow of $2.4 billion improved nearly $800 million year-over-year. For the full year, we returned $2.2 billion to shareholders via dividends and share repurchases.
Let's now discuss our segment result in more details on Slide 7 through 9. Beginning on Slide 7, our Global Product business had a strong finish to the year. Organic sales grew 8% as price remained positive and we delivered 5 points of volume growth. Low double-digit growth in HVAC, both commercial and residential, offset declines in fire and security and industrial refrigeration. Strength was broad-based across the region, led by double-digit growth in North America. Adjusted segment EBITDA margin expanded an impressive 700 basis points to 28%. We have made tremendous progress over the past year in improving our operational efficiencies, leading to substantial margin improvement experienced in the fiscal second half.
Turning to Slide 8 and 9 to discuss our Building Solutions performance. Building Solutions delivered a solid performance this quarter, underpinned by sustained order momentum, double-digit revenue growth and margin expansion. Additionally, we increased our record backlog, which remains at historical levels and underscore the strengths of our business model. Our outcome-driven solution offering continued to resonate with our customer across many of the attractive vertical we serve, with strong growth in data center, government healthcare and higher ed.
Orders grew 8% in the quarter, led by mid-teen service growth, while system order grew 5%, again, a tough double-digit comparison. Orders in North America increased 7% in the quarter, with low-teen growth in service led by strength in Fire and Security. System orders grew 3% against a tough comp. In EMEALA, orders were up 14% with over 20% growth in service, while system order grew 9%. Across the portfolio, we saw strong double-digit growth in HVAC controls and industrial refrigeration. In Asia Pacific, momentum is building as orders rebounded from the past few quarters of decline. Overall, orders grew 6%, led by 9% growth in service.
Our pipeline of opportunities within Building Solutions remain healthy as we continue to build on the momentum of the past several quarters.
Our Building Solutions segment entered the quarter with a record backlog, which provided a solid foundation, enabling us to capitalize on high demand for solutions and services. Organic sales increased 11%, led by double-digit growth across both systems and service. Our sustained service growth sets us apart as we continue to deliver differentiated lifecycle solutions for our customers.
Sales in North America were up 16% organically with continued strength across HVAC and controls. In EMEALA, organic sales grew 10% with double-digit growth in controls, security and industrial refrigeration. In Asia Pacific, while sales declined 5%, we saw sequential improvement. This improvement was driven by a stronger backlog and our resilient service business.
The margin profile within our Building Solutions segment continues to strengthen due to the enhanced productivity, favorable service mix and the improved operational efficiencies while executing our higher margin backlog. By region, EMEALA adjusted segment EBITDA margin expanded 370 basis points to 11.5%, driven by improved productivity and the positive mix from growth in service. In APAC, adjusted margin expanded 70 basis points to 14.2% as positive mix from our service business offset a decline in systems business. In North America, adjusted segment margin declined 40 basis points to 15% related to mix, as systems grew faster than service.
Building Solutions backlog remained at record level, growing 7% to $13.1 billion. Service backlog grew 12% and system backlog grew 6% year-over-year.
Let's discuss our first quarter and fiscal 2025 guidance and the impact of discontinued operation on Slide 10 and 11. We are entering fiscal 2025 with momentum and our record backlog offers great visibility into the new year. Our service business remains well-positioned and provides a favorable mix to margins. As we look to our guidance for fiscal 2025, we will be presenting both the first quarter and the full year on a continuing operations basis.
After moving the Residential & Light Commercial business to discontinued operation, our fiscal 2024 continuing operational adjusted EPS is $3.21 per share. For the first quarter, we anticipate organic sales growth of mid-single-digits, adjusted segment EBITA margin expansion of over 100 basis points to approximately 14.5%, and adjusted EPS in the range of $0.57 to $0.60, representing 24% to 30% growth. While the first quarter is against an easy comparison, the overall fundamentals are strong entering the year.
For the full year, we expect organic sales growth of mid-single-digits, which is consistent with our long-term growth algorithm. Adjusted segment EBITA margin are expected to expand over 50 basis points. Our adjusted EPS range of $3.40 to $3.50 per share represents 6% to 9% growth. We expect free cash flow conversion of 85% or greater, consistent with the performance of fiscal 2024 on a continuing operations basis. We continue to target returning 100% of our free cash flow to shareholders through dividends and share repurchases. We expect the Residential & Light Commercial divestiture to close during the fiscal fourth quarter. Consequently, we have not included any capital deployment from sale proceed in our fiscal 2025 outlook.
Additionally, we are committing to a multi-year restructuring plan to address stranded cost and further right-size our global operations, following our previously announced portfolio simplification actions. We anticipate incurring roughly $400 million in expenses over the next three years, resulting in expected annual cost savings of approximately $500 million.
Similar to the timing of deploying capital from the closure of the Residential & Light Commercial divestiture, many aspects of this restructuring plan will depend on the timing of the close of the transaction. We are confident this factor will drive sustained success and create long-term value to our stakeholders.
While fiscal 2024 was a year of significant portfolio transformation, we are better positioned as a faster-growing, more profitable, simplified company. We look forward to updating you on our progress as we continue our strong momentum entering fiscal year '25.
With that, operator, please open the lines for questions.
