Milwaukee, Wisconsin -- Johnson Controls announced on 24 July 2015 it plans to spin-off of its Automotive Experience business in the next 12 months to create an independent, publicly traded company.
Johnson Controls gives timetable for seating spin-off
Bruce McDonald, currently Johnson Controls vice chairman and executive vice president, will become chairman and CEO of the new company. Beda Bolzenius will serve as president and chief operating officer.
As part of the spin-off preparation, Johnson Controls is looking hard at costs in the run-up to separation, the firm said. It promised more details as the separation process develops.
"This is a great opportunity for our Automotive Experience business to further its position as the global leader in automotive seating and interiors," said Alex Molinaroli, chairman and CEO of Johnson Controls.
Johnson Controls also used it’s third quarter performance announcement to say it had completed the transaction to form an automotive interiors joint venture: Yanfeng Automotive Interiors. This, Johnson Controls said, is the largest automotive interiors company in the world with annual revenues of approximately $8.5 bn (EUR 7.7bn).
Johnson Controls will stop treating income from the Automotive Interiors business as trading income and treat profit from that business as equity income from the fourth quarter of fiscal 2015.
Johnson Controls said it saw revenue in its Automotive Experience segment, which includes seating in the fiscal third quarter of 2015 of $5.4 bn, drop 6% compared to the same quarter in 2014.
The company said that slightly higher global automotive production was more than offset by the impact of foreign currency fluctuations. Excluding foreign currency, revenues were up 3%. Automotive industry production in the quarter grew 2 % in North America and China and was level versus the same period last year in Europe.
Revenues in China, which are primarily related to seating and generated through non-consolidated joint ventures, increased 10% to $1.9 bn, reflecting gains in market share, Johnson Controls said.
Profitability of continuing operations in the segment grew to $342 or 19% after currency effects compared to $288 m in the third quarter of 2014, said Johnson Controls.
The increase reflects profitability improvements in the company's seating and interiors businesses. Johnson Controls said that the improvement was due to higher volumes and the benefits of restructuring initiatives.