- In its efforts to further optimize the overall cost structure, enhance operational efficiency and deliver meaningful margin expansion, Johnson Controls (NYSE:JCI) detailed its multi-year SG&A actions.
- These actions will deliver annualized savings of $300M by FY23 and are incremental to ongoing improvements in underlying fundamentals.
- The one-time pretax costs associated with these actions are estimated at $240M, chunk of which to be recorded in FY21.
- The cash impact associated with these costs is seen at $200M and will be absorbed as part of reported free cash flow conversion.
- Led by the aforementioned actions, the company raised its FY21 adjusted EPS outlook to $2.50 to $2.60 (vs. prior range of $2.45 to $2.55); adj. segment EBITDA margin is seen expanding 60 to 90 basis points (vs. 40 to 60 basis points earlier).
- Full year organic revenue growth of up low-to-mid single digits, and FCF conversion of 100% remain unchanged; FQ2 guidance is also unchanged (Read here).
- Cost actions and impact to FY21 guidance provided at recent conference by the company.