Johnson Controls International plc

Good morning and welcome to the Johnson Controls Second Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jim Lucas, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining our conference call to discuss Johnson Control's Fiscal Second Quarter 2025 results. Joining me on the call today are Johnson Control's Chief Executive Officer, Joachim Wiedemannis, and Mark Van Diepenbeck, our Chief Financial Officer. Before we begin, let me remind you that during our presentation today, we will make forward-looking statements that reflect our current views about our future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Please refer to our SEC filings for a list of these important risk factors that could cause actual results to differ from our predictions. We will also reference certain non-GAAP measures throughout today's presentation. Reconciliations of these non-GAAP measures are contained in the schedules attached to our press release and in the appendix to this presentation, both of which can be found on the Ambassador Relations section of Johnson Control's website. I will now turn the call over to Joachim.

Thanks, Jim, and good morning, everyone. Thank you for joining us on today's call. I'm just about two months into the job, and I'm appreciative of the very warm welcome I received from the Johnson Control's team. I'd like to start by thanking our 100,000 colleagues around the world for their dedication to our customers and the work they do every day. As you can see from our strong second quarter results, we continue to execute better across the portfolio. Organic sales grew 7%, segment margins expanded 180 basis points to 16.7%, and adjusted EPS increased 19%. During the quarter, orders were up 5% led by continuous strength in our leading applied and resilient service businesses. Overall, we grew our record backlog by 12% to $14 billion. At a fundamental level, these results show broad-based and sustained demand for our differentiated solutions. And now as a more focused company and with strength and execution, we're driving value for all of our customers and shareholders. Our strong performance in recent quarters combined with the continuous momentum in our recurring businesses and record backlog, give us the confidence to today raise our guidance slightly for the full year. Mark is going to provide more details on this later in the call. Now I will share how I've been spending my initial weeks as CEO of Johnson Controls and some of my early observations. I will also touch on the benefits of our new organizational model and reporting segments. Before I start, my main takeaway is that I see great potential in this iconic 140-year-young technology-based and service-enabled company. I have a good sense, even in these early days, of the opportunity to further enhance value for shareholders. First, what am I seeing? Prior to my role at Johnson Controls, I spent 13 years at Danner, profitably scaling global businesses by building stronger capabilities in operational execution and accelerating organic growth, as well as making strategic acquisitions. I learned from that experience that the best way to get to know a business fast and in depth is to spend a considerable amount of time at Gemba. This means joining our team on the front lines where the action is and where the value is created. Over the last eight weeks, I have visited eight countries, many customers, hundreds of our field colleagues, all of our main R&D centers, and walked the floor in 15 factories. I am becoming ingrained in the business, getting up to speed on the needs of our customers, markets, competitors, technologies, services, and assessing our capabilities in operational and growth execution, talent, and strategy. So where are we now? It's clear to me that Johnson Controls has considerable strengths. First, our market-leading franchises such as our York HVAC business and our Metasys Building Automation Controls platform. Second, our talent in the field is a true differentiator We have over 40,000 dedicated and customer-oriented employees. Finally, our technological capabilities and our product domains are impressive. Our capabilities are evidenced by our many industry firsts and nearly 8,000 patents with more coming. Johnson Controls has come a long way over the last several years, but as I said, there's still great potential to unlock in this iconic technology-based and service-enabled company. An important step in achieving this is our new structure. Let me discuss our new organizational model. Johnson Controls has been undergoing a lot of change the past few years, including the pending sale of our residential and light commercial HVAC business. We have now evolved our operating model, which is an important first step to make us a more customer-centric organization. As you can see on slide five, we have reorganized into three geographical customer-oriented reporting segments, which are supported by leading global functional capabilities. Our goal is to achieve market-leading performance and build a faster-growing and more profitable company by strengthening how we serve our customers, improving our operational performance, and accelerating innovation. Our three geographical segments serve as our consolidated commercial engine, regardless of channel strategy, responsible for improving customer intimacy and market reach while delivering profitable systems and lifecycle solutions growth. The geographical segments are supported by two global centers of functional excellence. The products and solutions group is tasked with accelerating our rate and speed of innovation and improving our operational performance in supply chain and manufacturing. Our commercial and field operations team is tasked with building capabilities in all commercial areas by deploying best practices and tools, which enables our regions to grow faster by finding and winning more customers while improving how we serve them over the life cycle. This organizational model clarifies and delineates roles and responsibilities in a much better way. And it is the right next step for Johnson Controls. We're looking forward to realizing its benefits. With that, as I said, I have a few initial impressions to share. First, throughout my travels, I can see that there are opportunities for us to focus a lot more on our customers and our competition in all functions and layers in our organization. I'm encouraging everyone at Johnson Controls from customer facing to senior leadership to prioritize winning with our customers and to act with speed and urgency. This emphasis coupled with our new operating model will allow us to build a more agile, faster executing, and thereby faster growing and more predictable execution engine. Second, our operational and innovation execution is slowed by complexities in our current product offerings, number of SKUs, footprint and operating methods. This can be unlocked with tried and proven lean and business system approaches. As some of you know, lean is about orienting and aligning an entire organization around our customers, involving all employees in waste elimination and continuous improvement to build capabilities, better processes and speed. In short, a winning execution engine. Third, I'm taking an objective, fresh look at our strategy and how to best further optimize our portfolio. I will share more at a later point in time about what I think is good for Johnson Controls as I deepen my understanding of our businesses and markets and customer needs. I still have a lot of listening and learning to do. I want to continue to do it where the real value is created, at Gamba. We are building on a solid foundation, and I believe with more relentless focus on customers across our organization, as well as on lean enabled execution fundamentals, we will be able to drive accelerated value creation. We have a unique offering and an enviable service capability that is driven by our culture of innovation. Johnson Controls will continue to redefine building performance, driving the next era of smart, safe, sustainable, and autonomous buildings and powering our customers' missions. And with that, I'll turn it over to Mark to cover the quarter. Mark?