Slide 1: Q1 2021 Earnings Call
Q1 2021 Earnings Call April 26, 2021 © 2021 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: Highlights
Highlights Q1 orders Excellent start to the year…broad-based performance • New Equipment share gain, up ~2 pts1 • Organic2 sales growth in both segments • New Equipment growth in all regions • Service returned to growth • Strong material and service productivity…margin expansion in both segments Inc
Slide 4: Q1 2021 update
Q1 2021 update • New Equipment orders up 18.4% at constant currency1…up 1.4% on a rolling 12- month basis Q1 2021 • New Equipment backlog up 8% and 2% at constant currency1 Results • Organic1 sales up 10.3%...New Equipment up 25.1%, Service up 1.3% • Adjusted operating profit margin1 expanded 40 bps
Slide 5: Q1 2021 results
Q1 2021 results ($ millions, except per share amounts) Sales Operating profit Diluted earnings per share 3,408 GAAP 329 509 GAAP $0.38 $0.71 $0.72 Adjusted1 533 $0.60 2,966 450 Adjusted1 Adjusted 15.6% margin1 15.2% Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Organic1 10.3% Q1 adjusted operating
Slide 6: New Equipment
New Equipment ($ millions) Q1 Results Net sales • Orders up ~18.4% at constant currency1 Y/Y …growth in all regions with the Americas 1,458 29.8% and Asia up double digits 1,123 Organic1 25.1% • New Equipment share up ~2 pts2 • New Equipment backlog up 2% at constant Q1 2020 Q1 2021 currency1…broad-
Slide 7: Service
Service ($ millions) Net sales Q1 Results Y/Y • Maintenance units up 2% versus prior 1,950 5.8% 1,843 year…growth in all regions with China up Organic1 low teens 1.3% • Modernization orders up 0.7% at constant currency1...growth in the Americas and Asia Q1 2020 Q1 2021 Operating profit • Organic1 sa
Slide 8: 2021 financial outlook
2021 financial outlook Improving 2021 outlook across key metrics Prior outlook Current outlook Otis up 2 to 4% Otis up 4 to 6% Organic1 sales New Equipment up 2 to 5% New Equipment up 7.5 to 8.5% Service up 2 to 4% Service up 2 to 4% Adjusted operating Constant currency1 up $75 to $125M Constant cur
Slide 9: 2021 organic sales outlook
2021 organic1 sales outlook Prior outlook (February 1, 2021) Updated outlook Outlook drivers New Equipment up 2 to 5% up 7.5 to 8.5% • Q1 New Equipment Americas up low to mid single up high single backlog up 8%, 2% at constant currency1... accelerating conversion EMEA up low single up low to mid sin
Slide 10: 2021 adjusted operating profit drivers
2021 adjusted operating profit1 drivers Actual currency + $75 – 95M + $110 – 140M $(10) – (20M) + $175 – 215M up $120 to $160M at constant currency1 ~$55M $(10) – (20M) $70 – 100M $2,095 - 2,135M $60 – 80M Volume Volume Transactional FX EUR @ 1.19 Material & field Productivity Standalone costs CNY @
Slide 11: Otis fundamentals
Otis fundamentals1 Iconic global brand in a large, growing industry Gaining share in NE2 & accelerating Service Sustainable growth over the medium-term portfolio growth Driving profitability Expanding margins through growth & productivity Investing through the cycle Sustainable level of R&D and Cape
Slide 12: © 2021 OTIS WORLDWIDE CORPORATION.
© 2021 OTIS WORLDWIDE CORPORATION. 12
Slide 13: Appendix
Appendix © 2021 OTIS WORLDWIDE CORPORATION. 13
Slide 14: Backlog and orders
Appendix Backlog and orders ($billions, at constant currency1) Remaining performance obligation New Equipment orders Y/Y 16.7 16.6 17.0 + 2% Modernization + 2% Q1 2021 12-month Region Y/Y rolling Maintenance Total Otis 18.4% 1.4% + 1% & Repair Americas 14.2% (6.9%) EMEA 3.1% (2.5%) New Equipment + 2
Slide 15: Q1 2021 adjusted operating profit drivers
Appendix Q1 2021 adjusted operating profit1 drivers Actual currency + $44M + $35M + $4M + $83M +$57M at constant currency1 $26M $3M $15M $39M $533M Volume Volume Material productivity Productivity $450M Mix/price Pricing Standalone costs Q1 2020 adjusted New Service Corporate / FX Q1 2021 adjusted 1
Slide 16: Additional information
Appendix Additional information Prior FY21 outlook Updated FY21 1Q21 actuals (February 1, 2021) outlook Restructuring expense $15M $60 – 70M $60 – 70M Non-service pension expense $2M $10 – 15M $10 – 15M Net interest expense $32M ~$135M ~$125M Adjusted effective tax rate 28.7% ~29.5% ~29.5% Noncontro
Slide 17: Use and Definitions of Non-GAAP Financial Measures
Appendix Use and Definitions of Non-GAAP Financial Measures Otis Worldwide Corporation (“Otis”) reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with
Slide 18: 2021 GAAP to adjusted financials reconciliation
Appendix 2021 GAAP to adjusted financials reconciliation ($millions) Otis New Equipment Service Corporate/other Sales 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 Net sales 2,966 3,408 1,123 1,458 1,843 1,950 0 0 Income Net income attributable to Otis 165 308 Noncontrolling interest in subsidiaries’ 37 4
Slide 19: Organic sales reconciliation
Appendix Organic sales reconciliation New Maintenance Q1 2021 Total Otis Service Modernization Equipment & Repair Organic 10.3% 25.1% 1.3% 1.5% 0.3% FX 4.4% 4.6% 4.2% 4.4% 3.9% Net acquisitions / divestitures 0.2% 0.1% 0.3% 0.3% 0.0% Total net sales growth 14.9% 29.8% 5.8% 6.2% 4.2% © 2021 OTIS WORL
Slide 20: Adjusted operating profit at constant currency reconciliation
Appendix Adjusted operating profit at constant currency reconciliation ($millions) Q1 2020 Q1 2021 Y/Y New Equipment Adjusted operating profit 65 109 44 Impact of foreign exchange (5) (5) Adjusted operating profit at constant currency 65 104 39 Service Adjusted operating profit 405 440 35 Impact of
Slide 21: SG&A reconciliation
Appendix SG&A reconciliation ($millions) Q1 2020 Q1 2021 SG&A expense 465 482 Restructuring (6) (11) One-time separation costs (32) (9) UTC allocated corporate expenses (a) (16) 0 Other (1) 0 Adjusted SG&A 410 462 Adjusted SG&A % of sales 13.8% 13.6% (a) Reflects costs for certain functions and serv
Slide 22: Diluted earnings per share reconciliation
Appendix Diluted earnings per share reconciliation Q1 2020 Q1 2021 GAAP diluted earnings per share $0.38 $0.71 Impact of non-recurring items on diluted earnings per share $0.22 $0.01 Adjusted diluted earnings per share $0.60 $0.72 © 2021 OTIS WORLDWIDE CORPORATION. 22
Slide 23: Free cash flow reconciliation
Appendix Free cash flow reconciliation ($millions) Q1 2020 Q1 2021 Operating cash flow1 159 585 Capital expenditures (39) (44) Free cash flow 120 541 GAAP net income 165 308 FCF conversion 73% 176% 1 Operating cash flow excludes dividends paid to noncontrolling interests. © 2021 OTIS WORLDWIDE CORPO
Slide 24: Other reconciliations
Appendix Other reconciliations Remaining performance obligation (RPO) Q1 Q4 Q1 ($billions) 2020 2020 2021 RPO at actual currency 16.3 17.2 17.3 FX1 0.4 (0.6) (0.3) RPO at constant currency 16.7 16.6 17.0 New Equipment backlog Q1 Growth % 2021 Constant currency 2% FX 6% Actual currency 8% 1 2020 tota