What Are Johnson Controls’ Key Sources of Revenue?
Johnson Controls (NYSE: JCI) generates its revenues from two segments, namely Building Technologies & Solutions and Power Solutions. The former is a global market leader in engineering, developing, manufacturing, and installing building products and systems around the world, including HVAC equipment and controls, energy-management systems, security systems, and fire detection systems, while the latter is a major global supplier of lead-acid automotive batteries for virtually every type of passenger car, light truck, and utility vehicle. JCI also supplies advanced battery technologies to power start-stop, hybrid, and electric vehicles through its Power Solutions segment.
We have a $45 price estimate for Johnson Controls, which is higher than the current market price. The charts below have been made using our new, interactive platform. Our interactive model charts out Johnson Controls’ key sources of revenues and you can modify the blue dots in this model to analyze the impact of a change in segment revenues on JCI’s total sales.
Building Technologies & Solutions
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JCI sells its products through an extensive global network of sales and service offices, with operations in approximately 60 countries. Significant sales are also generated through global third-party channels, such as distributors of air-conditioning, security, fire-detection and commercial HVAC systems. The Company’s large base of current customers leads to significant repeat business for the retrofit and replacement markets. In fiscal 2017 (year ended September 2017), approximately 27% of its sales originated from its service offerings, and this segment accounted for 76% of the company’s sales.
JCI completed a merger with Tyco International, a global fire and security provider, in FY 2017, which provided a boost to the company’s revenues from this segment. Moreover, a joint venture with Hitachi on October 1, 2015, has helped to expand its building related product offerings.
Power Solutions
This segment services both automotive OEMs (Original Equipment Manufacturers) and the battery aftermarket by providing advanced battery technology. JCI is the largest producer of lead-acid automotive batteries in the world, producing and distributing approximately 154 million lead-acid batteries annually. Investments in new product and process technology have expanded product offerings to AGM (Absorbent Glass Mat) and EFB (Enhanced Flooded Battery) technologies that power start-stop vehicles, as well as lithium-ion battery technology for certain hybrid and electric vehicles. Roughly 76% of unit sales worldwide in fiscal 2017 were to the automotive replacement market, with the remaining sales to the OEM market. This segment contributed to 24% of JCI’s revenues in FY 2017.
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Have more questions on Johnson Controls? See the links below:
- Why Did 3M Acquire Johnson Controls’ Scott Safety?
- Will The Merger With Tyco Result In Improved Margins For Johnson Controls?
- Johnson Controls: A Focus On China
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