[Applause] So, let me start my talk on a positive note. I totally messed up my career. At least that's what my friends say. That's what all the head hunters said.And the even worse thing about it is I did it on purpose. So, that was me some month ago. I was flying private jet together with my 87year-old self-made billionaire boss I learned tons of things from.We invested more than 500 million euro into the German startup and ecosystem. We invested most of the flagship startups from Munich and from Berlin. I ...

Johnson Controls International (JCI) 2025 Conference Summary Company Overview - **Company**: Johnson Controls International (JCI) - **Event**: 2025 Conference - **Date**: May 14, 2025 Key Points Industry and Company Restructuring - **Resegmentation**: JCI is restructuring its operating model by combining its building solutions and global products divisions to eliminate inefficiencies and better serve customer needs [3][4][5] - **Market Focus**: The new model aims to be more market-focused, addressing specific customer requirements across different verticals such as healthcare and higher education [5] Financial Performance and Cash Conversion - **Cash Conversion**: JCI is approaching a cash conversion rate of 100%, driven by improvements in cash management, supply chain simplification, and procurement processes [6][7] - **Inventory Management**: Future improvements in cash conversion will depend on better inventory management and lean manufacturing practices [8][9] Strategic Review and M&A Outlook - **Portfolio Review**: The CEO is conducting a comprehensive review of the company's portfolio to optimize operations and identify underperforming assets [15][16][18] - **M&A Strategy**: JCI has a healthy pipeline of M&A targets, focusing on acquiring complementary technologies rather than transformative deals [20][21] Data Center Market Insights - **Data Center Growth**: JCI's data center business is experiencing high double-digit growth, with a significant portion of revenue coming from this segment [23][25] - **Customer Base**: The company has strong relationships with hyperscalers and colocation providers, with North America being the most successful region [26][27] - **Market Challenges**: Regulatory complexities in Europe and power availability issues are impacting growth in that region [28] Vertical Market Performance - **Healthcare**: The healthcare sector is shifting towards smaller facilities, with JCI focusing on servicing multiple smaller hospitals rather than large mega-hospitals [60][61] - **Commercial Real Estate**: The Class A office market is performing well, while Class B and C offices are struggling with high vacancy rates [57][58] - **Fire and Security**: The fire and security market in Europe is strong, while North America is experiencing low single-digit growth due to reliance on new construction [64][65] Operational Improvements - **Lean Management**: JCI is implementing lean management practices to improve operational efficiency and reduce waste, aiming for significant margin improvements [48][67] Future Outlook - **Market Indicators**: JCI is monitoring quoting activity in biopharma and warehousing as indicators of future demand, though conversion to orders remains a challenge [49][54] - **Geopolitical Factors**: The company is cautious about the impact of geopolitical dynamics on market conditions and demand [52] Additional Insights - **Customer-Centric Approach**: JCI emphasizes a customer needs-based segmentation strategy to enhance service and product delivery [66] - **Technological Differentiation**: The company is focused on developing differentiated solutions in the data center market, particularly in thermal management [32][33] This summary encapsulates the key insights and strategic directions discussed during the Johnson Controls International conference, highlighting the company's focus on operational efficiency, market responsiveness, and growth opportunities in various sectors.

Financial Data and Key Metrics Changes - Organic sales grew 7%, segment margins expanded 180 basis points to 16.7%, and adjusted EPS increased 19% [4][16] - Adjusted EPS of $0.82 exceeded the high end of guidance [16] - Net debt decreased to 2.4 times, within the long-term target range of 2 to 2.5 times [16] - Adjusted free cash flow for the quarter was strong, resulting in an increase of approximately $1,100,000,000 year to date [16][23] Business Line Data and Key Metrics Changes - Building Solutions region saw orders grow 5%, with North America orders up 4%, EMEA orders up 10%, and Asia Pacific orders flat [17][18] - Organic sales in Building Solutions increased 7%, with high single-digit growth in both systems and service [19] - Global Products reported organic sales growth of 8%, with Applied HVAC growing more than 20% [21] Market Data and Key Metrics Changes - Orders in North America increased 4%, EMEA orders were up 10%, and Asia Pacific orders were flat [18] - Service orders in Asia Pacific grew nearly 20% [18] - Building Solutions backlog grew 12% to $14,000,000,000 [20] Company Strategy and Development Direction - The company is focusing on a new organizational model to enhance customer centricity and operational performance [10][11] - The strategy includes prioritizing customer needs and simplifying product offerings to improve operational efficiency [12][13] - The company aims to redefine building performance and drive the next era of smart, safe, sustainable, and autonomous buildings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth due to strong performance in recent quarters and a record backlog [4][24] - The company is raising full-year guidance for margins, adjusted EPS, and free cash flow conversion [22][23] - Management acknowledged the impact of tariffs but emphasized strategies to mitigate risks [24] Other Important Information - The company is undergoing a pending sale of its residential and light commercial HVAC business [10] - The organizational model aims to improve customer intimacy and market reach while delivering profitable growth [11] Q&A Session Summary Question: How does the company plan to implement lean in such a large organization? - Management acknowledged that there are remnants of lean in some areas and expressed excitement about the opportunities for improvement [34][35] Question: What is the margin entitlement of the business? - Management believes there are significant opportunities for margin expansion and does not see a ceiling on margin growth compared to peers [44][45] Question: What is the outlook for free cash flow? - Management raised guidance to approximately 100% for the year and sees good signs for maintaining strong free cash flow conversion [50][51] Question: How does the company manage pricing in contracts amid inflation? - Management has implemented strong contractual terms to manage pricing and recover costs due to inflation [61][62] Question: What are the growth drivers in the Applied segment? - Management noted broad-based good growth across most verticals and does not see any slowdown in leading indicators [112]