Otis Worldwide Corporation · NYSE:OTIS
Otis Worldwide — Q4 2024 Earnings Presentation
34 slides from Otis Worldwide's earnings presentation, Jan 29, 2025
Slide 1: Q4 2024 Earnings Call
Q4 2024 Earnings Call January 29, 2025 © 2025 OTIS WORLDWIDE CORPORATION.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted. This communication contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under th
Slide 3: Q4 and FY 2024 highlights
Q4 and FY 2024 highlights FY 2024 Sustained Service strength in Q4 and 2024 supports our long term strategy... 1 6.8% • Q4 Organic sales up 1.9%… Service up 7.8%…modernization up 17.5% 1 Service organic sales growth • Q4 Adjusted EPS up 6.9%… up 8.2% in 2024 50 bps 1 • Q4 Adjusted free cash flow of
Slide 4: Q4 2024 orders & portfolio
Q4 2024 orders & portfolio Q4 2024 Orders Orders1 Y/Y New Equipment & modernization orders 0.5% New Equipment & modernization backlog (1%) New Equipment orders (4.4%) Mexican Social Security Institute The Trilight Towers Mexico Hyderabad, India New Equipment backlog (4%) Modernization orders 18.0% M
Slide 5: Q4 2024 results
Q4 2024 results ($ millions, except per share amounts) Sales Operating profit Diluted earnings per share GAAP 522 531 GAAP $0.79 $0.84 3,620 3,675 1 1 Adjusted Adjusted 583 566 $0.93 $0.87 15.9% Adjusted 15.6% 1 margin Q4 2023 Q4 2024 Q4 2023 Q4 2024 Q4 2023 Q4 2024 Adjusted operating profit up $22M
Slide 6: Q4 2024 segment net sales results
Q4 2024 segment net sales results ($ millions) New Equipment Service Otis Y/Y Y/Y 2,318 (7.4%) 7.6% 2,154 1,466 1,357 1 1 New Organic Organic Equipment (6.8%) 7.8% New Service Equipment Service Q4 2023 Q4 2024 Q4 2023 Q4 2024 1 1 Organic sales down 6.8% Organic sales up 7.8% • Americas up 4.0% • Mai
Slide 7: Q4 2024 segment operating profit results
Q4 2024 segment operating profit results ($ millions) New Equipment Service Otis Y/Y Y/Y 569 518 New Operating Equipment (28.1%) 9.8% profit 89 24.5% 64 6.1% 24.0% Operating (140) bps +50 bps profit margin 4.7% Service Q4 2023 Q4 2024 Q4 2023 Q4 2024 Operating profit down $24M at constant Operating
Slide 8: FY 2024 adjusted EPS growth drivers
FY 2024 adjusted EPS1 growth drivers $118M at constant 1 currency ($31M) $3.83 $0.13 ($0.06) $0.22 Q4: EUR @ 1.07 + Shares +8.2% CNY @ 7.17 + Tax $3.54 + FY: + - NCI Volume EUR @ 1.08 + Productivity CNY @ 7.19 Interest + Pricing + -- Commodities Mix & churn - Wage / material inflation Corporate / ot
Slide 9: Industry & 2025 outlook
Industry & 2025 outlook1 Industry new equipment unit growth 1 Otis Up Up Down Down • Net sales of $14.1B to $14.4B; LSD LSD M-HSD MSD 2 organic up 2% to 4% 2 • Adjusted operating profit of $2.4B to $2.5B, up $120M to $150M at 2 constant currency ; up $55M to $105M at actual currency Americas EMEA As
Slide 10: Transforming China for Service flywheel strategy
Transforming China for Service flywheel strategy1 Driving modernization and Service growth Targeting benefits • Engaging our agents & distributors network • Low teens Service portfolio growth to accelerate modernization growth • Service margin expansion • Growing portfolio through conversions and re
Slide 11: Multiple initiatives to drive customer centricity and profitability
Multiple initiatives to drive customer centricity and 1 UpLift profitability Targeted savings • Achieved $70M of cost savings Cumulative in-year benefits ($ millions) 250 in FY24; exiting 2024 with a run- China transformation savings rate of $120M Incremental UpLift savings 200 • Increased run-rate
Slide 12: 2025 organic sales outlook
2025 organic1 sales outlook 2024 actuals 2025 outlook Outlook drivers New Equipment down 6.4% down 1% to 4% • Strong maintenance portfolio growth and Americas up mid-single down low single disciplined pricing EMEA up low single up low to mid-single • Continued strong Asia down high teens down low to
Slide 13: Service driven strategy
Service driven strategy 2.4-2.5 Service 2.3 2.4 2.3 + ~4% portfolio growth 2.2 2.1 2.2 + Modernization 2.0 + Pricing 1.8 1.9 1.8 1.8 + Productivity including UpLift and - 1.7 China transformation 1.6 Annual wage inflation 17.1% 16.5% New Equipment 15.6% 16.0% + Productivity including UpLift and 15.3
Slide 14: 2025 adjusted EPS growth outlook drivers
2025 adjusted EPS1 growth outlook drivers + $120M to $150M at constant currency 1 ($65M) to ($45M) ($0.12) to ($0.08) ~$0.05 $0.24 to $0.30 FY25: + - Shares EUR @ 1.05 + Volume CNY @ 7.25 Interest + Productivity $3.83 + Pricing $4.00 to $4.10 + UpLift / Commodities -- Mix & churn - Annual wage infla
Slide 15: 2025 financial outlook
2025 financial outlook 2024 actuals 2025 outlook Constant currency up $118M up $120M to $150M adj. operating profit1 Total adjusted operating profit1 up 50 bps up ~60 bps margin Adjusted free cash $1.6B ~$1.6B flow1,2 Share repurchases $1.0B ~$800 million 1 See appendix for additional information re
Slide 16: © 2025 OTIS WORLDWIDE CORPORATION.
© 2025 OTIS WORLDWIDE CORPORATION. 16
Slide 17: Appendix
Appendix © 2025 OTIS WORLDWIDE CORPORATION. 17
Slide 18: Backlog and orders
Appendix Backlog and orders 1 ($ billions, at constant currency ) Remaining performance obligation New Equipment orders Y/Y Region Q4 2024 Y/Y FY 2024 Y/Y 17.7 18.1 17.9 1% Total Otis (4.4%) (7.6%) Modernization 13% Americas 14.5% (4.0%) EMEA (6.9%) 3.7% Asia (14.7%) (14.7%) Maintenance 4% & repair
Slide 19: Q4 2024 adjusted operating profit drivers
Appendix Q4 2024 adjusted operating profit1 drivers Actual currency ($25M) $51M ($9M) $17M 1 $22M at constant currency ($8M) ($5M) $583M $54M $566M ($24M) + Pricing + Volume + Productivity + Pricing + + -- - Commodities Productivity Volume Annual wage inflation Mix Q4 2023 adjusted New Equipment Ser
Slide 20: FY 2024 results
Appendix FY 2024 results ($ millions, except per share amounts) Sales Operating profit Diluted earnings per share GAAP 2,186 2,008 GAAP $3.39 $4.07 1 2,356 1 Adjusted 2,269 Adjusted $3.83 $3.54 14,261 16.5% 14,209 16.0% Adjusted 1 margin FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024 1 Adjusted EPS
Slide 21: FY 2024 segment net sales results
Appendix FY 2024 segment net sales results ($ millions) New Equipment Service Otis Y/Y Y/Y 8,894 8,397 (7.7%) 5.9% 5,812 5,367 1 1 Organic Organic (6.4%) 6.8% New Equipment Service FY 2023 FY 2024 FY 2023 FY 2024 1 1 Organic sales down 6.4% Organic sales up 6.8% • Americas up 5.7% • Maintenance & re
Slide 22: FY 2024 segment operating profit results
Appendix FY 2024 segment operating profit results ($ millions) New Equipment Service Otis Y/Y 2,185 Y/Y 381 2,014 329 Operating (13.6%) 24.6% 8.5% New profit Equipment 24.0% Operating 6.6% (50) bps +60 bps profit margin 6.1% Service FY 2023 FY 2024 FY 2023 FY 2024 1 Operating profit down $44M at con
Slide 23: Accelerating portfolio growth
Appendix Accelerating portfolio growth 4.2% Growth driver portfolio growth ~net-neutral ~66% global conversion rate ~2.4M ~7.6% global ~2.3M ~51.4% China cancellation rate conversion rate in 2024 ~92.4% global retention rate 2023 portfolio units Retention Recapture NE Conversion 2024 portfolio units
Slide 24: Strong geographic diversification
Appendix Strong geographic diversification FY24 metrics New Equipment sales Service sales $5.4B $8.9B Asia Pacific Asia Pacific Americas Americas China China EMEA EMEA Adj. operating profit1 Maintenance units $2.4B ~2.4M 1 ~110K ~80K New Adj. margin connected connected Equip. 6.1% Americas Asia Paci
Slide 25: Use and Definitions of Non-GAAP Financial Measures
Appendix Use and Definitions of Non-GAAP Financial Measures Otis Worldwide Corporation (“Otis”) reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with
Slide 26: Additional information
Appendix Additional information Actuals FY25 1Q24 2Q24 3Q24 4Q24 FY24 outlook UpLift restructuring $1M $6M $4M $20M $31M Other restructuring $19M $5M $5M $11M $40M ~$250M China transformation restructuring $-M $-M $-M $-M $-M UpLift transformation costs $12M $15M $18M $20M $65M Non-service pension c
Slide 27: 2024 GAAP to adjusted financials reconciliation
Appendix 2024 GAAP to adjusted financials reconciliation ($ millions) Income 1Q24 2Q24 3Q24 4Q24 FY 2024 Net income attributable to Otis 353 415 540 337 1,645 Noncontrolling interest in subsidiaries’ earnings 21 35 17 16 89 Income tax expense (benefit) 126 94 (45) 130 305 Net interest expense (benef
Slide 28: 2023 GAAP to adjusted financials reconciliation
Appendix 2023 GAAP to adjusted financials reconciliation ($ millions) Income 1Q23 2Q23 3Q23 4Q23 FY 2023 Net income attributable to Otis 331 376 376 323 1,406 Noncontrolling interest in subsidiaries’ earnings 21 31 19 21 92 Income tax expense (benefit) 128 135 137 133 533 Net interest expense 33 37
Slide 29: Organic sales reconciliation
Appendix Organic sales reconciliation Maintenance & Q4 2024 Y/Y Total Otis New Equipment Service Modernization repair Organic 1.9% (6.8%) 7.8% 5.6% 17.5% FX (0.8%) (0.7%) (0.7%) (0.7%) (1.0%) Net acquisitions / divestitures 0.4% 0.1% 0.5% 0.6% 0.3% Total net sales growth 1.5% (7.4%) 7.6% 5.5% 16.8%
Slide 30: Segment and total adjusted operating profit at constant currency reconciliations
Appendix Segment and total adjusted operating profit at constant currency reconciliations ($ millions) Q4 2023 Q4 2024 Y/Y FY 2023 FY 2024 Y/Y New Equipment Operating profit 89 64 (25) 381 329 (52) Impact of foreign exchange 0 1 1 0 8 8 Operating profit at constant currency 89 65 (24) 381 337 (44) S
Slide 31: SG&A reconciliation
Appendix SG&A reconciliation ($ millions) Q4 2023 Q4 2024 FY 2023 FY 2024 Net sales 3,620 3,675 14,209 14,261 SG&A expense 498 495 1,884 1,861 UpLift restructuring (25) (14) (25) (23) Other restructuring (11) (3) (36) (20) Separation-related / other 1 (1) 0 1 Adjusted SG&A expense 463 477 1,823 1,81
Slide 32: Diluted EPS and Tax reconciliations
Appendix Diluted EPS and Tax reconciliations Q4 2023 Q4 2024 FY 2023 FY 2024 GAAP diluted earnings per share $0.79 $0.84 $3.39 $4.07 Impact of non-recurring items on diluted earnings per share $0.08 $0.09 $0.15 ($0.24) Adjusted diluted earnings per share $0.87 $0.93 $3.54 $3.83 Q4 2023 Q4 2024 FY 20
Slide 33: Adjusted free cash flow reconciliation
Appendix Adjusted free cash flow reconciliation ($ millions) Q4 2023 Q4 2024 FY 2023 FY 2024 Operating cash flow 597 690 1,627 1,563 Capital expenditures (42) (39) (138) (126) Free cash flow 555 651 1,489 1,437 UpLift restructuring payments 12 12 12 32 UpLift transformation payments 6 20 8 54 Separa
Slide 34: Other reconciliations
Appendix Other reconciliations Remaining performance obligation (RPO) ($ billions) Q4 2023 Q3 2024 Q4 2024 RPO at actual currency (GAAP measure) 18.0 18.6 17.6 FX (0.3) (0.5) 0.3 RPO at constant currency 17.7 18.1 17.9 Backlog New Maintenance Q4 2024 Y/Y Growth Modernization Equipment & repair Actua