Latest news with #wasteElimination
Fox News
2 days ago
- Politics
- Fox News
EPA administrator vows ‘zero tolerance policy' for budget waste, pledges to track every dollar
Environmental Protection Agency administrator Lee Zeldin joins 'Special Report' to outline his efforts to eliminate waste and abuse within the agency.
Yahoo
08-05-2025
- Automotive
- Yahoo
Johnson Controls International PLC (JCI) Q2 2025 Earnings Call Highlights: Strong Growth and ...
Q : How do you plan to implement lean practices in such a large organization, and is the organization ready for it? A : Joakim Weidemanis, CEO, explained that lean is about aligning the organization towards the customer and involving everyone in waste elimination. While some remnants of lean exist from past automotive connections, the foundation is not strong. The organization is open-minded, and they have already started working on one value stream. The approach involves prioritizing and tackling one value stream at a time. There is a need for further strategic evaluation of the portfolio to optimize growth and shareholder value, indicating potential areas of underperformance. The company's operational and innovation execution is hindered by complexities in its footprint and operating methods. Tariffs and geopolitical uncertainties pose potential risks, with an estimated exposure of 2% of sales or 3% of cost of goods sold. The company faces complexities in its current product offerings, including a high number of SKUs, which may slow operational and innovation execution. The company is implementing a new organizational model to enhance customer focus and operational performance, which is expected to drive future growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript . Story Continues Q: What is the potential for margin expansion in the field, and how does it compare to peers? A: Joakim Weidemanis, CEO, believes there is significant opportunity for margin improvement in the field through value stream mapping and digital tools. He does not see a bigger limit on margin expansion compared to peers and is optimistic about improving margins in both product and field operations. Q: What is the outlook for free cash flow conversion, and can it sustain at 100%? A: Marc Vandiepenbeeck, CFO, stated that they confidently raised guidance to about 100% free cash flow conversion for the year, supported by strong working capital fundamentals. While it's early to commit to 100% conversion indefinitely, they expect to remain solidly in the 90s and potentially better as operational efficiencies improve. Q: How do you view capital allocation, especially in terms of acquisitions versus shareholder returns? A: Joakim Weidemanis, CEO, is currently reviewing the strategy to determine the best approach for capital allocation. He sees opportunities to differentiate with technology and will provide more insights on capital allocation strategy once the strategic review is complete. Q: How is the data center business performing, and what are the expectations for new product rollouts? A: Joakim Weidemanis, CEO, noted that the data center business is strong, with continued healthy demand. They have been working closely with large customers on designing data center architectures, leveraging their differentiated York Chiller platform. The demand remains robust, and they are investing in manufacturing and field capabilities to support growth. Q: What is the impact of tariffs on margins, and how are you managing pricing in contracts? A: Marc Vandiepenbeeck, CFO, explained that while they are recovering costs from tariffs, they are not applying margin on these recoveries, which dampens short-term margin expansion. They have implemented strong contractual terms to manage pricing and change orders effectively. Q: What are your initial impressions of the fire and security portfolio, and how do you plan to rejuvenate growth? A: Joakim Weidemanis, CEO, acknowledged the strength of the fire and security franchises but is still assessing growth acceleration potential. He is taking a fresh look at the strategy and will provide more insights once he has a clearer understanding of the portfolio's potential. Q: How do you ensure installation drives aftermarket growth, and what is the strategy for service attachment? A: Joakim Weidemanis, CEO, is conducting a detailed analysis of installation projects to understand their financial performance and service attachment. The strategy will likely involve a tailored approach based on customer types and products, aiming to simplify complexities and enhance service attachment. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
