Otis Worldwide Corporation · NYSE:OTIS
Otis Worldwide — Q1 2025 Earnings Presentation
27 slides from Otis Worldwide's earnings presentation, Apr 23, 2025
Slide 1: Q1 2025 Earnings Call
Q1 2025 Earnings Call April 23, 2025 © 2025 OTIS WORLDWIDE CORPORATION.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward- looking statements may also be included in othe
Slide 3: Q1 2025 highlights
Q1 2025 highlights Q1 2025 Solid performance to start the year... • Service organic1 sales up 4%… modernization up 10% 4% • Modernization orders up 12%; backlog up 14% at constant currency1 Portfolio growth • Margin expansion in both segments... Service expanded 40 bps, New Equipment expanded 20 bps
Slide 4: Q1 2025 orders & portfolio
Q1 2025 orders & portfolio Q1 2025 Orders Orders1 Y/Y New Equipment & modernization orders 2% New Equipment & modernization backlog 0% New Equipment orders (1)% Christ the Redeemer A - Train AB New Equipment backlog (3)% Rio de Janeiro, Brazil Stockholm, Sweden Modernization orders 12% Modernization
Slide 5: Q1 2025 results
Q1 2025 results ($ millions, except per share amounts) Sales Operating profit Diluted earnings per share GAAP 544 411 GAAP $0.86 $0.61 Adjusted1 Adjusted1 Adjusted margin1 Adjusted EPS1 drivers Adjusted operating profit up $15M at Organic1 0% constant currency1, excluding $16M of FX Operational $0.0
Slide 6: Q1 2025 Service segment results
Q1 2025 Service segment results Service ($ millions) Segment Operating Profit Sales Operating Profit Y/Y Y/Y 1% 3% Operating Organic1 profit margin New Equipment 4% +40 bps Organic1 sales up 4% Operating profit up $29M at constant currency1 • Maintenance & repair up 3% + Volume • Modernization up 10
Slide 7: Q1 2025 New Equipment segment results
Q1 2025 New Equipment segment results ($ millions) Segment Operating Profit Sales Operating Profit Y/Y Y/Y (9%) (7%) Operating Organic1 profit margin (7%) +20 bps Service Organic1 sales down 7% Operating profit down $4M at constant currency1 • • Americas down 7% EMEA up 6% + Productivity • Asia down
Slide 8: Industry & 2025 outlook
Industry & 2025 outlook1 Industry new equipment unit growth1 Otis Down Up Down Down LSD M-HSD MSD • Net sales of $14.6B to $14.8B; organic2 up LSD 2% to 4% • Adjusted operating profit2 of $2.4B to $2.5B, up $105M to $135M at constant currency2 excluding ($75M) to ($45M) of tariff impact Industry ins
Slide 9: 2025 organic sales outlook
2025 organic1 sales outlook Prior outlook (Jan 29, 2025) Current outlook Outlook drivers New Equipment down 1% to 4% down 1% to 4% • Strong maintenance portfolio growth and Americas down low single down mid-single disciplined pricing EMEA up low to mid-single up mid-single • Robust modernization and
Slide 10: Multiple initiatives to drive customer centricity and profitability
Multiple initiatives to drive customer centricity and profitability1 UpLift Targeted savings • Harnessing our scale Cumulative in-year benefits ($ millions) • Optimizing our supply chain China transformation savings • Delivering process improvement Uplift savings and standardization • Targeting ~$20
Slide 11: 2025 financial outlook
2025 financial outlook Prior outlook (Jan 29, 2025) Current outlook Constant currency adj. op up $120M to $150M up $105M to $135M profit1 ex-2025 tariffs Actual currency adj. op up $55M to $105M up $55M to $105M profit1 with 2025 tariffs Total adjusted operating up ~50bps (ex-2025 tariffs) up ~60 bp
Slide 12: 2025 adjusted EPS growth outlook drivers
2025 adjusted EPS1 growth outlook drivers + $105M to $135M at constant currency1 ~$0.05 ~$0.05 ($0.14) to ($0.10) BOY: + Shares $0.21 to $0.27 EUR @ 1.14 CNY @ 7.30 - Interest Tariffs: ($75M) to ($45M) + Volume + Productivity + Pricing UpLift & $4.00 to $4.10 $3.83 + China Transformation Commodities
Slide 13: © 2025 OTIS WORLDWIDE CORPORATION.
© 2025 OTIS WORLDWIDE CORPORATION. 13
Slide 14: Appendix
Appendix © 2025 OTIS WORLDWIDE CORPORATION. 14
Slide 15: Tariff impact and exposure
Appendix Tariff impact and exposure Mitigating actions Mitigation actions underway: Incremental Customer & supply chain negotiations Annual purchases Annual impact US. supply chain localization U.S. imports from Section 232 ~$50M ~ $90M Contract language protection China Reciprocal ~$50M Evaluating
Slide 16: Backlog and orders
Appendix Backlog and orders ($ billions, at constant currency1) Remaining performance obligation1 New Equipment orders Y/Y Region Q1 2025 Y/Y 18.0 17.8 18.5 2% Total Otis (1%) Modernization 14% Americas 16% EMEA (4%) Maintenance 5% Asia (10%) & repair Modernization orders New (3%) Equipment Q1 2025
Slide 17: Q1 2025 adjusted operating profit drivers
Appendix Q1 2025 adjusted operating profit1 drivers Actual currency ($5M) +$14M ($10M) ($1M) +$15M at constant currency1 + Productivity + Volume + Commodities + Pricing Pricing + Productivity -- Volume Mix -- Labor & material costs Mix Adjusted operating profit margin1 expanded 40 basis points to 16
Slide 18: 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 19: Additional information
Appendix Additional information Actuals FY25 outlook Prior 1Q25 Current (Jan 29, 2025) UpLift restructuring expense $20M Other restructuring expense $23M ~$250M ~$250M UpLift transformation costs $23M Non-service pension cost (benefit) $0M ~$5M ~$5M Adjusted net interest expense (a) $46M ~$220M ~$22
Slide 20: 2025 GAAP to adjusted financials reconciliation
Appendix 2025 GAAP to adjusted financials reconciliation ($ millions) Income 1Q25 Net income attributable to Otis 243 Noncontrolling interest in subsidiaries’ earnings 13 Income tax expense (benefit) 110 Net interest expense 45 Non-service pension benefit (expense) 0 GAAP operating profit 411 UpLift
Slide 21: 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 22: Organic sales reconciliation
Appendix Organic sales reconciliation Maintenance & Q1 2025 Y/Y Total Otis New Equipment Service Modernization repair Organic 0% (7%) 4% 3% 10% FX (3%) (3%) (3%) (3%) (3%) Net acquisitions / divestitures 0% 1% 0% 0% 0% Total net sales growth (3%) (9%) 1% 0% 7% © 2025 OTIS WORLDWIDE CORPORATION. 22
Slide 23: Segment and total adjusted operating profit at constant currency reconciliations
Appendix Segment and total adjusted operating profit at constant currency reconciliations ($ millions) Q1 2024 Q1 2025 Y/Y New Equipment Operating profit 71 66 (5) Impact of foreign exchange 0 1 1 Operating profit at constant currency 71 67 (4) Service Operating profit 523 537 14 Impact of foreign e
Slide 24: SG&A reconciliation
Appendix SG&A reconciliation ($ millions) Q1 2024 Q1 2025 Net sales 3,437 3,350 SG&A expense 462 464 UpLift restructuring (1) (11) Other restructuring (14) (8) Separation-related / other 0 0 Adjusted SG&A expense 447 445 Adjusted SG&A % of sales 13.0% 13.3% © 2025 OTIS WORLDWIDE CORPORATION. 24
Slide 25: Diluted EPS and Tax reconciliations
Appendix Diluted EPS and Tax reconciliations Q1 2024 Q1 2025 GAAP diluted earnings per share $0.86 $0.61 Impact of non-recurring items on diluted earnings per share $0.02 $0.31 Adjusted earnings per share $0.88 $0.92 Q1 2024 Q1 2025 Effective tax rate 25.2% 30.1% Impact of adjustments on effective t
Slide 26: Adjusted free cash flow reconciliation
Appendix Adjusted free cash flow reconciliation ($ millions) Q1 2024 Q1 2025 Operating cash flow 171 190 Capital expenditures (31) (34) Free cash flow 140 156 UpLift restructuring payments 7 11 UpLift transformation payments 8 19 Adjusted free cash flow 155 186 © 2025 OTIS WORLDWIDE CORPORATION. 26
Slide 27: Other reconciliations
Appendix Other reconciliations Remaining performance obligation (RPO) ($ billions) Q1 2024 Q4 2024 Q1 2025 RPO at actual currency (GAAP measure) 18.3 17.6 18.6 FX (0.3) 0.2 (0.1) RPO at constant currency 18.0 17.8 18.5 Backlog New Maintenance Q1 2025 Y/Y Growth Modernization Equipment & repair Actua