Otis Worldwide : Third Quarter 2024 Earnings Conference Call

Published: 2024-10-30 14:12:08 ET OTIS

Q3 2024 Earnings Call

October 30, 2024

Q3 2024 highlights

Continued Service strength in the third quarter...

...creating value for all stakeholders

1 See appendix for additional information regarding these non-GAAP financial measures. 2 At constant currency.

YTD 2024

6.4%

Service organic1 sales growth

60 bps

adjusted operating profit

margin expansion1

8.2%

adjusted EPS growth1

10.1%

modernization orders growth2

Q3 2024 orders & portfolio

New Equipment

Q3 2024 Orders

Y/Y

New Equipment orders1

(2.9%)

New Equipment backlog2

(3%)

101 Collins Street

St. Luke's University Health,

Melbourne, Australia

Anderson Campus

Bethlehem Township, Pennsylvania

Service

Y/Y

Portfolio units

4.2%

Modernization orders1

2.9%

Modernization backlog2

12%

Tianjin Metro

Tianjin, China

1 At constant currency.

2 At constant currency. See appendix for additional information regarding these non-GAAP financial measures.

Vällingby Shopping Centre

Stockholm, Sweden

Q3 2024 results

($ millions, except per share amounts)

Sales

Operating profit

GAAP

571

363

Diluted earnings per share

GAAP

$0.91

$1.34

3,5233,548

Adjusted1

595599

Adjusted1

$0.95$0.96

Q3 2023

Q3 2024

Organic1

1.2%

(0.8%)

Net acquisitions/other

0.3%

Total net sales

0.7%

16.9%16.9%

Adjusted margin1

Q3 2023

Q3 2024

Adjusted operating profit up $8M at constant currency1, excluding $4M of FX headwinds

Adjusted operating profit margin1 of 16.9% was flat, driven by favorable segment mix offset by New Equipment segment performance and headwinds in corporate costs

Q3 2023

Q3 2024

Adjusted EPS1 drivers

Operational

$0.02

($0.01)

1 See appendix for additional information regarding these non-GAAP financial measures.

Q3 2024 segment net sales results

($ millions)

Otis

New

Equipment

New

Service Equipment

Service

New Equipment

Service

Y/Y

(8.8%)

2,239

7.2%

1,435

2,088

1,309

Organic1

(8.2%)

7.7%

Q3 2023

Q3 2024

Q3 2023

Q3 2024

Organic1 sales down 8.2%

Organic1 sales up 7.7%

1 See appendix for additional information regarding these non-GAAP financial measures. LSD: low single digits; MSD: mid single digits; HSD: high single digits.

Q3 2024 segment operating profit results

($ millions)

New Equipment

Service

Otis

Y/Y

518

555

New

Operating

104

(19.2%)

7.1%

profit

24.8%

Equipment

Operating

7.2%

6.4%

(80) bps

0 bps

profit margin

Service

Q3 2023

Q3 2024

Q3 2023

Q3 2024

Operating profit down $20M at constant currency1

Operating profit up $40M at constant currency1

1 See appendix for additional information regarding these non-GAAP financial measures.

Industry & 2024 outlook1

Industry new equipment unit growth1

Otis

~flat

Down

LSD

~10%

HSD

• Net sales of ~$14.2B; organic up ~1.5%

Americas EMEAAsia Global

Industry installed base unit growth1

MSD

LSD

Americas

EMEA

Asia

Global

1 Based on Otis internal estimates. LSD: low single digits; MSD: mid single digits; HSD: high single digits. 2 See appendix for additional information regarding these non-GAAP financial measures.

2024 organic1 sales outlook

Prior outlook

Current outlook

(July 24, 2024)

New Equipment

down mid single

down mid-high single

Americas

up mid single

EMEA

up low single

Asia

down low teens

down high teens

Service

up 6% to 7%

up ~6.5%

Maintenance & repair

up 5.5% to 6.5%

up ~6%

Modernization

up 8% to 9%

up ~9%

Otis

up 1% to 3%

up ~1.5%

1 See appendix for additional information regarding these non-GAAP financial measures.

Outlook drivers

2024 financial outlook

Prior outlook (July 24, 2024)

Current outlook

Constant currency

adj. operating profit1

Segment and total adjusted operating profit1 margin

Adjusted free cash flow1,2

up $160M to $190M

Otis up ~80 bps New Equipment ~flat Service up ~75 bps

$1.5B to $1.6B

up ~$140M

Otis up ~70 bps

New Equipment down ~50 bps

Service up ~75 bps

$1.4B to $1.5B

Share repurchases

~$1B

1 See appendix for additional information regarding these non-GAAP financial measures.

2 Expected annual tax related toll charge payments are anticipated to conclude in 2026: 2024 $50M, 2025E $50M, 2026E $60M.

~$1B

Disclaimer

Otis Worldwide Corporation published this content on October 30, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 30, 2024 at 18:11:18.397.