Johnson Controls International plc (Johnson Controls) is a global leader in smart, healthy and sustainable buildings, serving a wide range of customers in more than 150 countries.
The company’s products, services, systems and solutions advance the safety, comfort and intelligence of spaces to serve people, places and the planet. The company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.
In 2024, the com...
Johnson Controls International plc (Johnson Controls) is a global leader in smart, healthy and sustainable buildings, serving a wide range of customers in more than 150 countries.
The company’s products, services, systems and solutions advance the safety, comfort and intelligence of spaces to serve people, places and the planet. The company is committed to helping its customers win and creating greater value for all of its stakeholders through its strategic focus on buildings.
In 2024, the company announced that it was evaluating its non-core product lines in connection with its objective to be a pure-play provider of technologies and solutions for commercial buildings. During the fourth quarter of fiscal 2024, the company completed the sale of its Air Distribution Technologies business included within its Global Products segment. During the fourth quarter of fiscal 2024, the company entered into a definitive agreement to sell its Residential and Light Commercial (‘R&LC’) HVAC business to Robert Bosch GmbH (‘Bosch’). The R&LC HVAC business includes the company’s North America ducted business and Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd., the company’s global residential joint venture with Hitachi Global Life Solutions, Inc. (‘Hitachi’), of which the company owns 60% and Hitachi owns 40%. The sale of the R&LC HVAC business is expected to be completed in the fourth quarter of fiscal 2025.
The company is a global leader in engineering, manufacturing, commissioning and retrofitting building products and systems, including residential and commercial HVAC equipment, industrial refrigeration systems, controls, security systems, fire-detection systems and fire-suppression solutions. The company further serves customers by providing technical services, including maintenance, management, repair, retrofit and replacement of equipment (in the HVAC, industrial refrigeration, security and fire-protection space), and energy-management consulting. The company’s OpenBlue digital software platform enables enterprises to better manage their physical spaces by combining the company’s building products and services with cutting-edge technology and digital capabilities to enable data-driven ‘smart building’ services and solutions. The company partners with customers by leveraging its broad product portfolio and digital capabilities powered by OpenBlue, together with its direct channel service and solutions capabilities, to deliver outcome-based solutions across the lifecycle of a building that address customers’ needs to improve energy efficiency, enhance security, create healthy environments and reduce greenhouse gas emissions.
Business Segments
The company conducts its business through four business segments:
Building Solutions North America which operates in the United States and Canada;
Building Solutions EMEA/LA which operates in Europe, the Middle East, Africa and Latin America;
Building Solutions Asia Pacific which operates in the Asia Pacific; and
Global Products which operates worldwide.
The Building Solutions segments:
Design, sell, install and service HVAC, controls, building management, refrigeration, integrated electronic security and integrated fire-detection and suppression systems; and
Provide energy-efficiency solutions and technical services, including data-driven ‘smart building’ solutions, as well as inspection, scheduled maintenance, and repair and replacement of mechanical and controls systems.
The Global Products segment designs, manufactures and sells:
HVAC equipment, controls software and software services;
Refrigeration equipment and controls;
Fire protection and suppression; and
Security products, including intrusion security, anti-theft devices, access control, and video surveillance and management systems.
The company’s segments provide products and services primarily to commercial, institutional, industrial, data center, and governmental customers.
Products, Systems, Services and Solutions
The company sells and installs its commercial HVAC equipment and systems, control systems, security systems, fire-detection and fire suppression systems, equipment and services primarily through its extensive direct channel, consisting of a global network of sales and service offices. Significant sales are also generated through global third-party channels, such as distributors of air-conditioning, controls, security and fire-detection and suppression products. The company’s large base of current customers leads to significant repeat business for the maintenance, retrofit and replacement markets. The company is also able to leverage its installed base to generate sales for its service business. Trusted building brands, such as YORK, Metasys, Ansul, Frick, FM:Systems, PENN, Sabroe, Silent-Aire, Simplex and Grinnell, together with the breadth and depth of the products, systems and solutions offered by the company, give it what it believes to be the most diverse portfolio in the building technology industry.
The company has developed software platforms, including on-premises platforms and cloud-based software services, and integrated its products and services with digital capabilities to provide data-driven solutions to create smarter, safer and more sustainable buildings. The company’s OpenBlue platform enables enterprises to better manage their physical spaces delivering sustainability, new occupant experiences, safety and security by combining the company’s building expertise with cutting-edge technology, including artificial intelligence and machine learning-powered service solutions, such as remote diagnostics, predictive maintenance, workplace management, compliance monitoring and advanced risk assessments. The company leverages its product portfolio and service network, together with digital and data-driven technologies to offer integrated and customizable solutions focused on delivering outcomes to customers, including OpenBlue Buildings-as-a-Service, OpenBlue Net Zero Buildings-as-a-Service and OpenBlue Healthy Buildings. These services are generally designed to generate recurring revenue for the company as it supports its customers in achieving their desired outcomes.
In the year ended September 30, 2024 (fiscal 2024), products and systems accounted for 70% of sales from continuing operations and services accounted for 30% of sales from continuing operations.
Business Strategy
The company’s business strategy is to sustain and expand its position as a leader in commercial building technology and solutions by offering a full spectrum of products and solutions for commercial customers across the globe. In 2024, the company acted to optimize its core commercial buildings portfolio with the sale of its Air Distribution Technologies business and the entry into a definitive agreement to sell its R&LC HVAC business. Following these portfolio optimization actions, the company’s core strategy remains focused on creating growth platforms, driving operational improvements and creating a high-performance, customer-centric culture.
The company has strong positions in attractive and growing end-markets across HVAC, controls, fire, security and services, enhanced by its comprehensive product portfolio and substantial installed base. The company is well positioned to capitalize on the emerging and prevalent trends in the commercial buildings industry, including data centers, sustainable buildings, healthy buildings/indoor environmental quality and smart buildings.
The company’s strategic priorities are to capitalize on key growth vectors; bringing value across the building lifecycle; accelerate in high growth digital services, regions and verticals; and sustain a high-performance, customer-centric culture.
Seasonal Factors
Certain of the company’s sales are seasonal as the demand for residential air conditioning equipment and services generally increases in the summer months. This seasonality is mitigated by the other products and services provided by the company that have no material seasonal effect.
Research and Development Costs
Expenditures for research activities relating to product development and improvement are charged against income as incurred and primarily included within selling, general and administrative expenses in the consolidated statements of income. Such expenditures for the year ended September 30, 2024, were $267 million.
History
The company was founded in 1885. It was incorporated in the state of Wisconsin in 1885. The company was formerly known as Johnson Electric Service Company and changed its name to Johnson Controls, Inc. in 1974. Further, the company changed its name to Johnson Controls International plc in 2016.