MILWAUKEE – Johnson Controls said this week it expects to post higher sales and earnings in fiscal 2013, despite a challenging economic environment.
The company presented its fiscal 2013 forecast to financial analysts yesterday in New York. From a market perspective, Johnson Controls said that compared with 2012 markets, it expects slightly higher 2013 automotive production in North America and China with lower production in Europe. Global non-residential construction spending is forecast to be relatively flat in 2013 as strength in emerging markets, especially Asia, offsets anticipated softness in North America and Europe. The company said it believes it is positioned to grow faster than its underlying markets with improved profitability over the long-term.
"While we recognize the challenges of the near-term global economy, we believe our unique strengths will enable Johnson Controls to outperform our underlying markets," said Stephen Roell, chairman and CEO of Johnson Controls. "We have added management capacity and depth with talent from outside JCI to further leverage of our competitive advantages. The company continues to benefit from growth opportunities stemming from our investments in technology and global expansion. We remain committed to investing for future growth and profit improvement and are confident that our 2013 strategies and improvement initiatives position us to improve shareholder value over the long-term."
The company said its automotive seating 2013 sales are forecast to gain approximately 2 percent, reflecting higher production volumes in North America, partially offset by the lower production environment in Europe. Segment margins are expected to be approximately 4.2 to 4.4 percent in 2013 as the negative impact of lower European production offsets improvements in operational efficiency and the benefits from recent cost reduction initiatives.
Automotive electronics and interiors 2013 sales are projected to increase approximately 2 percent, reflecting higher volumes in Asia, partially offset by lower electronics sales in Europe. Operating leverage and operational improvements, offset by investment in electronics product development are forecast to result in margins of approximately 1.9 to 2.1 percent in 2013.
The combined automotive backlog for 2013 to 2015 is $3.7 billion, approximately level with the 2012 to 2014 period due to a lower assumed auto production rate in Europe.
Power Solutions 2013 sales are estimated to increase approximately 10 to 12 percent due to higher battery volumes across all regions and channels, led by higher production in China, market share growth and increasing market demand for AGM batteries, which are used in start-stop vehicles. Segment margins are expected to be approximately 14.6 to 14.8 percent in 2013 led by operating leverage, an improved product mix and continued operational improvements, offset by lead recoveries, the company said.
Johnson Controls added that it expects to make capital investments of $1.4 billion in 2013 vs. $1.8 billion in 2012. Approximately 80 percent of the company’s capital expenditures in 2013 are associated with growth and margin expansion opportunities. The higher capital expenditures focus on increased manufacturing capacity for AGM batteries and on expansion in emerging markets. The increased investments also will support a higher level of automotive experience new business launches in 2013.
