New Johnson Controls CEO Looks to Continue Growth
August 13, 2007
Stephen Roell said he plans to follow the footsteps of John Barth as CEO of Johnson Controls. That could translate into more acquisitions in the HVAC arena. “We have a balance sheet which allows this growth,” hinted Roell.
Roell introduced himself in a July 26 teleconference as a manager who embraces the “growth culture” that Barth fostered. During Barth’s five-year leadership, the Building Efficiency division of Johnson Controls doubled in size via the acquisition of York International on Dec. 9, 2005. It made the company one of the largest providers of integrated products, systems, and services in the building markets. With York in its fold, Johnson Controls also gained entry to the residential HVAC market for the first time in the company’s history.
“York provided us with a great footprint to gain ground in the HVAC and building controls market,” said Roell. “We expect that to continue with strong, double digit growth. Our expectations are high.”
Roell officially takes over the CEO helm on Oct. 1. He will also step in as chairman of Johnson Controls’ board of directors on Jan. 1, 2008. “We’ll look to see where we can invest,” said Roell, not ruling out more HVAC-related acquisitions. “We want to strengthen our growth in innovation.”
He said the company has a wide array of sustainability-oriented solutions that save energy, reduce greenhouse gas emissions, and protect the environment.
“We will seek to strengthen our leadership in the emerging markets through support of our global and regional customers,” he said.
PRAISE FOR FORMER CEORoell said he will oversee further acquisitions and adhere to the company’s annual goal of 10 percent sales growth, and promised to carry on an expansion into emerging markets such as China and India. “We will continue to be a diversified, multi-industrial company,” said the man who will be the eighth CEO in the company’s 123-year history.
In addition to its Building Efficiency division, which is expected to earn $13 billion in sales this year, Johnson Controls has its Automotive Experience division, which is an automotive interiors business, and a Power Solutions division, which makes batteries for conventional and hybrid vehicles. Estimated sales in the Automotive Experience division is $17 billion; $4 billion for the Power Solutions division.
At the teleconference, Roell praised Barth for his accomplishments as CEO. The company is on track for its 17th straight year of record earnings. At the same time, it announced a 3-for-1 stock split the day prior to reporting Roell’s promotion to the trade media.
“John has been a truly exceptional leader, and our customers, employees, and shareholders have all benefited significantly during his tenure,” Roell said of Barth.
“In 2002, when he became CEO, Johnson Controls had sales of just over $20 billion. Through his focus on unparalleled customer service, operational excellence, workforce and supplier diversity, and especially the development of strong leaders across the company, we will end 2007 with sales of approximately $34.5 billion and an unbroken track record of 17 consecutive years of earnings increases.
“Additionally, Johnson Controls market capitalization has in-creased from $7 billion to over $22 billion since 2002. John has also established a tremendously strong foundation upon which our company will continue to grow and deliver outstanding results to all of our stakeholders.”
Roell knows he has some tough shoes to fill. What mattered most under Barth was expanding sales, earnings, and dividends. “He’s also highly competitive and lots of our growth culture comes from John,” said Roell.
Publication date: 08/13/2007