Dive Brief:
- Johnson Controls’ North American orders grew 18% year over year in the first quarter of its 2025 fiscal year, with a 23% increase in systems orders and 10% increase in service orders in that time, according to its earnings presentation Wednesday.
- The company’s building solutions backlog increased 11% year over year in the quarter to reach $13.2 billion, including $10.8 billion in installations and $2.4 billion in services.
- “The sustained demand for our tailored engineered solutions has not only fueled growth but also positions us well for continued success,” CEO George Oliver said on the earnings call. The company announced Joakim Weidemanis will succeed Oliver as CEO on March 12.
Dive Insight:
The company’s North American business grew its backlog 12% year over year in the quarter, to $9.3 billion, with the systems backlog growing 13% and the service backlog growing 6% in that time. Orders in North America increased 18% in the quarter. The company continues to see “strong demand for data centers, healthcare, broader industrial and manufacturing,” Chief Financial Officer Marc Vandiepenbeeck said on the earnings call.
Vandiepenbeeck attributed the uptick in orders during the quarter to “customers proactively adapt[ing] to the changing global landscape, including anticipated tariffs.” In part, this led to “some acceleration of those orders [as people were] trying to get ahead of the change in leadership in the country,” he said.
Johnson Controls’ strong start to its 2025 fiscal year demonstrates the success of its transformation efforts — which included selling its residential and light commercial business to Bosch Group — and the success of its strategic initiatives, which have driven increased demand for core systems and service offerings, Oliver said.
Its simplified operating model enables the company to assist and grow customer relationships over the course of the entire building life cycle, Oliver said.
Oliver attributed the success of Johnson Controls’ services business to long contractual engagements, a global branch network with more than 20,000 qualified technicians and “continuous advancements in innovation and strategic use of AI.”
Globally, Johnson Controls increased organic sales 10% year over year in Q1, with double-digit growth in systems and service helping to grow orders 16% in that time, according to its earnings presentation.
Applied HVAC, which was 46% of fiscal year 2024 sales globally, saw organic growth in the high teens in North America in Q1 2025. Fire and security, which were 44% of 2024 global sales, rose by low-single-digits in the region in that period, per the presentation.
Weidemanis takes over as CEO following a 13-year career at Danaher Corp., where he held several executive leadership roles, most recently executive vice president of diagnostics and China.
