George Oliver said Johnson Controls International plc will expand its sales force and adjust incentive structures to focus on sales of higher margin offerings moving forward.
Oliver, the new chairman and chief executive officer of the company, told analysts during the company’s fourth quarter earnings call that JCI’s sales force would increase by a net of 400 in fiscal 2018. It increased by a net of 50 in fiscal 2017.
Oliver did not indicate where the additional salespersons would be located.
Johnson Controls, which is based in Ireland for tax purposes but run from headquarters in Glendale, reported financial results for the year that Oliver said were at the low end of expectations.
The company reported revenue of $8.14 billion in the fourth quarter, an increase of 4 percent over the combined sales of Johnson Controls Inc. and Tyco International during the same period last year. The two companies closed their merger at the start of fiscal 2017. For the full year, revenues were up 2 percent to $30.14 billion.
Net income improved from $719 million to $813 million in the fourth quarter, a 13 percent increase. Adjusted earnings were up from 76 to 87 cents per diluted share. The full year saw also saw a 13 percent increase in net income to $2.46 billion with earnings improving from $2.31 to $2.60 per share.
“During the first year as a combined company, we have made significant progress bringing two market leading companies together as one,” Oliver said. “We have integrated across geographies and businesses and are off to a strong start in streamlining our cost structure.”
Oliver was previously chief operating officer at Johnson Controls and took over for Alex Molinaroli on Sept. 1.
The change in leadership was referenced occasionally during Thursday’s earnings call, but it wasn’t among the main topics of the call.
Oliver said the planned increase to the company’s sales team was in response to feedback from customers. While he said there would be some challenges bringing on new hires at the start of the year, the additional capacity would ultimately lead to improved sales.
Johnson Controls has been ahead of schedule in realizing cost savings from the merger with Tyco, but expected growth in sales from combining the two companies has been slower to come.
Oliver said he was humbled and honored to be leading the organization and would make it his personal mission “to lead with clarity, simplicity and confidence.”
“We are well positioned to lead the evolution of building solutions and battery technologies,” Oliver said.
