Analysis of Geographic Areas
Johnson Controls International plc operates in 4 regions: United States; Europe; Asia Pacific; and Other Non-U.S..
Area Asset Turnover
Johnson Controls International plc, asset turnover by geographic area
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| United States | 8.78 | 8.18 | 7.07 | 6.64 | 6.56 | 4.55 |
| Europe | 9.50 | 10.16 | 9.33 | 12.67 | 14.16 | 7.73 |
| Asia Pacific | 8.90 | 8.83 | 7.91 | 7.92 | 6.80 | 4.17 |
| Other Non-U.S. | 5.81 | 6.13 | 5.33 | 5.33 | 6.07 | 5.55 |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
The geographic asset turnover analysis reveals divergent efficiency trends across operational regions between 2018 and 2023. While the United States and Asia Pacific regions demonstrated sustained improvements in asset utilization, the European market experienced significant volatility, and other non-U.S. markets remained relatively stagnant.
- United States
- A consistent and strong upward trend is observed, with the asset turnover ratio increasing every consecutive year from 4.55 in 2018 to 8.78 in 2023. This steady progression indicates a systematic improvement in the ability to generate revenue from the asset base within the domestic market.
- Europe
- This region exhibited the highest peak turnover in 2019 at 14.16 but subsequently experienced a decline. Following this peak, the ratio decreased to 9.33 by 2021 before stabilizing at 9.50 by 2023. Despite the reduction from the 2019 high, Europe generally maintained a higher turnover ratio than most other regions throughout the period.
- Asia Pacific
- A significant growth trajectory is evident, mirroring the trend observed in the United States. The ratio rose from 4.17 in 2018 to 8.90 in 2023. The most rapid acceleration occurred between 2018 and 2020, suggesting a period of rapid expansion or optimization of asset deployment in the region.
- Other Non-U.S.
- Asset turnover in this segment remained relatively flat, characterized by minor fluctuations between a low of 5.33 and a high of 6.13. No definitive long-term growth or contraction trend is present, indicating a stable but stagnant level of asset efficiency relative to the other geographic areas.
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Area Asset Turnover: United States
Johnson Controls International plc; United States; area asset turnover calculation
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 13,989) | 12,864) | 11,577) | 11,371) | 11,973) | 14,625) |
| Long-lived assets | 1,594) | 1,573) | 1,638) | 1,713) | 1,824) | 3,216) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 8.78 | 8.18 | 7.07 | 6.64 | 6.56 | 4.55 |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 13,989 ÷ 1,594 = 8.78
The analysis of asset utilization within the United States market reveals a significant improvement in operational efficiency over the six-year period ending September 30, 2023.
- Net Sales Trends
- Revenue experienced a notable contraction between 2018 and 2020, falling from 14,625 million to 11,371 million. However, a sustained recovery began in 2021, with sales increasing annually to reach 13,989 million by 2023, nearly returning to the levels observed at the start of the period.
- Long-lived Asset Management
- A substantial reduction in the asset base occurred between 2018 and 2019, where long-lived assets decreased from 3,216 million to 1,824 million. This downward trend continued gradually through 2022, before stabilizing at 1,594 million in 2023, representing a total reduction of approximately 50% compared to 2018.
- Area Asset Turnover Performance
- The area asset turnover ratio exhibited consistent growth throughout the analyzed period, rising from 4.55 in 2018 to 8.78 in 2023. The most pronounced increase occurred between 2018 and 2019, driven primarily by the sharp reduction in long-lived assets. The subsequent steady rise from 2020 to 2023 reflects the synergy of recovering sales volumes paired with a leaner, more efficient asset structure.
Overall, the data indicates a strategic shift toward a more asset-light operating model in the United States, resulting in a significantly higher capacity to generate revenue per unit of long-lived asset.
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Area Asset Turnover: Europe
Johnson Controls International plc; Europe; area asset turnover calculation
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 4,882) | 4,186) | 4,069) | 3,523) | 3,697) | 6,105) |
| Long-lived assets | 514) | 412) | 436) | 278) | 261) | 790) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 9.50 | 10.16 | 9.33 | 12.67 | 14.16 | 7.73 |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 4,882 ÷ 514 = 9.50
The financial performance in Europe is characterized by a significant structural shift occurring between 2018 and 2019, followed by a period of steady recovery and asset reinvestment through 2023.
- Net Sales Trends
- A substantial decrease in net sales occurred between September 30, 2018, and September 30, 2019, with revenues falling from 6,105 million US$ to 3,697 million US$. Following a slight further dip in 2020, a consistent upward trajectory is observed, with sales growing annually to reach 4,882 million US$ by September 30, 2023.
- Long-lived Assets Evolution
- Long-lived assets experienced a sharp contraction of approximately 67% between 2018 and 2019, decreasing from 790 million US$ to 261 million US$. From 2020 onward, there is a trend of gradual asset expansion, with the value increasing to 514 million US$ by 2023, suggesting a period of strategic reinvestment following the initial reduction.
- Area Asset Turnover Analysis
- The asset turnover ratio peaked in 2019 at 14.16, a direct result of the drastic reduction in the asset base outweighing the decline in sales. Since this peak, the ratio has normalized, fluctuating between 9.33 and 10.16. As of September 30, 2023, the ratio stands at 9.50, indicating a stabilized level of efficiency in utilizing long-lived assets to generate revenue compared to the volatility observed in the 2018-2019 period.
Overall, the data indicates a strategic resizing of the European operations in 2019, which initially inflated efficiency ratios. The subsequent years demonstrate a balanced growth phase where increasing sales are supported by a measured increase in the asset base.
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Area Asset Turnover: Asia Pacific
Johnson Controls International plc; Asia Pacific; area asset turnover calculation
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 5,610) | 5,791) | 5,748) | 5,285) | 5,888) | 4,069) |
| Long-lived assets | 630) | 656) | 727) | 667) | 866) | 975) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 8.90 | 8.83 | 7.91 | 7.92 | 6.80 | 4.17 |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 5,610 ÷ 630 = 8.90
The financial performance of the Asia Pacific region between 2018 and 2023 is characterized by a substantial increase in asset utilization efficiency. While net sales have remained relatively stable following an initial period of growth, the long-lived asset base has contracted significantly, resulting in a steady and consistent climb in the area asset turnover ratio.
- Net Sales Performance
- A significant increase in net sales occurred between 2018 and 2019, rising from 4,069 million to 5,888 million. Following this growth, sales figures exhibited moderate volatility, fluctuating between a low of 5,285 million in 2020 and a peak of 5,791 million in 2022, before settling at 5,610 million by September 30, 2023.
- Long-lived Asset Trajectory
- A continuous downward trend is observed in the value of long-lived assets. From a starting point of 975 million in 2018, the asset base declined to 630 million by 2023. This suggests a strategic reduction in capital intensity or a systematic divestment of regional assets over the six-year period.
- Area Asset Turnover Analysis
- The area asset turnover ratio demonstrated a strong upward trend, increasing from 4.17 in 2018 to 8.90 in 2023. The most rapid improvement occurred between 2018 and 2020, where the ratio nearly doubled. This expansion in the ratio is the result of maintaining higher revenue levels while simultaneously reducing the denominator of long-lived assets, indicating a significant improvement in operational efficiency and capital productivity within the region.
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Area Asset Turnover: Other Non-U.S.
Johnson Controls International plc; Other Non-U.S.; area asset turnover calculation
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 2,312) | 2,458) | 2,274) | 2,138) | 2,410) | 6,601) |
| Long-lived assets | 398) | 401) | 427) | 401) | 397) | 1,190) |
| Area Activity Ratio | ||||||
| Area asset turnover1 | 5.81 | 6.13 | 5.33 | 5.33 | 6.07 | 5.55 |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 2,312 ÷ 398 = 5.81
The operational profile of the Other Non-U.S. geographic area underwent a substantial transformation between 2018 and 2019, characterized by a sharp contraction in both revenue and the asset base. Following this transition, the segment entered a period of relative stability with marginal fluctuations in performance metrics through 2023.
- Net Sales Trend
- A significant reduction in net sales occurred between September 2018 and September 2019, falling from US$ 6,601 million to US$ 2,410 million. In the subsequent four years, sales remained stable, fluctuating within a narrow range between a low of US$ 2,138 million in 2020 and a high of US$ 2,458 million in 2022, ending the period at US$ 2,312 million in 2023.
- Long-lived Asset Base
- Long-lived assets mirrored the trajectory of net sales, decreasing from US$ 1,190 million in 2018 to US$ 397 million in 2019. This asset base remained nearly constant from 2019 through 2023, with values hovering around the US$ 400 million mark, indicating a lack of significant new capital investment in the region during this timeframe.
- Area Asset Turnover Efficiency
- Despite the overall reduction in scale, asset turnover efficiency remained high and relatively consistent. The ratio increased from 5.55 in 2018 to 6.07 in 2019, followed by a period of stability at 5.33 in 2020 and 2021. A peak efficiency of 6.13 was reached in 2022 before moderating to 5.81 in 2023. These figures demonstrate a consistent ability to generate high volumes of sales relative to the invested long-lived assets.
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Net sales
Johnson Controls International plc, net sales by geographic area
US$ in millions
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| United States | 13,989) | 12,864) | 11,577) | 11,371) | 11,973) | 14,625) |
| Europe | 4,882) | 4,186) | 4,069) | 3,523) | 3,697) | 6,105) |
| Asia Pacific | 5,610) | 5,791) | 5,748) | 5,285) | 5,888) | 4,069) |
| Other Non-U.S. | 2,312) | 2,458) | 2,274) | 2,138) | 2,410) | 6,601) |
| Total | 26,793) | 25,299) | 23,668) | 22,317) | 23,968) | 31,400) |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
Total net sales experienced a period of significant volatility between 2018 and 2023. A sharp contraction occurred from September 30, 2018, to September 30, 2020, with total revenue decreasing from 31,400 million to 22,317 million. Following this trough, a consistent recovery trend is observed, with total sales increasing annually to reach 26,793 million by September 30, 2023.
- United States Market Performance
- The United States remains the primary revenue driver. After a decline from 14,625 million in 2018 to a low of 11,371 million in 2020, the region has demonstrated a steady rebound. Net sales grew to 13,989 million by 2023, nearly returning to 2018 levels and accounting for the largest portion of the total recovery in aggregate sales.
- European Market Trends
- Europe saw a substantial reduction in net sales between 2018 and 2019, dropping from 6,105 million to 3,697 million. Since reaching a minimum of 3,523 million in 2020, the region has maintained a positive growth trajectory, ending the period at 4,882 million in 2023.
- Asia Pacific Regional Analysis
- Unlike other regions, Asia Pacific experienced a significant increase in net sales between 2018 and 2019, rising from 4,069 million to 5,888 million. Following this surge, revenue has remained relatively stable, fluctuating slightly between 5,285 million and 5,791 million over the subsequent four years, closing at 5,610 million in 2023.
- Other Non-U.S. Territories
- A structural contraction is evident in the Other Non-U.S. segment. Net sales plummeted from 6,601 million in 2018 to 2,410 million in 2019. Revenue in this category has since plateaued, showing minimal variance and concluding the period at 2,312 million in 2023.
The geographic distribution of revenue shifted markedly over the six-year period. The heavy reliance on the United States persisted, but the relative importance of the Asia Pacific region increased significantly following the 2019 spike. While the United States and Europe show clear signs of recovery, the Other Non-U.S. segment has failed to regain its 2018 volume, suggesting a permanent shift in the company's geographic revenue base.
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Long-lived assets
Johnson Controls International plc, long-lived assets by geographic area
US$ in millions
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | |
|---|---|---|---|---|---|---|
| United States | 1,594) | 1,573) | 1,638) | 1,713) | 1,824) | 3,216) |
| Europe | 514) | 412) | 436) | 278) | 261) | 790) |
| Asia Pacific | 630) | 656) | 727) | 667) | 866) | 975) |
| Other Non-U.S. | 398) | 401) | 427) | 401) | 397) | 1,190) |
| Total | 3,136) | 3,042) | 3,228) | 3,059) | 3,348) | 6,171) |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
Total long-lived assets underwent a substantial contraction between September 30, 2018, and September 30, 2019, decreasing from 6,171 million to 3,348 million. Following this sharp decline, the total asset base reached a period of relative stabilization, fluctuating within a narrow range between 3,042 million and 3,228 million through September 30, 2023.
- United States Asset Trends
- The United States remains the largest geographic concentration of long-lived assets. A significant reduction occurred between 2018 and 2019, where assets fell from 3,216 million to 1,824 million. This was followed by a gradual decline reaching a period low of 1,573 million in 2022, before a marginal increase to 1,594 million in 2023.
- European Asset Trends
- Assets in Europe experienced a sharp initial decrease from 790 million in 2018 to 261 million in 2019. However, this region demonstrated a consistent recovery trend in the subsequent years, with assets growing to 514 million by September 30, 2023, representing a significant rebound from the 2019 trough.
- Asia Pacific Asset Trends
- The Asia Pacific region exhibited a steady downward trajectory over the observed period. Assets decreased from 975 million in 2018 to 630 million in 2023. Unlike other regions that stabilized or recovered, the Asia Pacific region shows a persistent erosion of long-lived asset value over the six-year span.
- Other Non-U.S. Asset Trends
- Assets categorized as other non-U.S. dropped precipitously from 1,190 million in 2018 to 397 million in 2019. Since that initial decline, the asset levels in this segment have remained remarkably static, concluding the period at 398 million in 2023.
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