Carrier Global Corporation · NYSE:CARR
Carrier Global — J.P. Morgan Industrials Conference 2022
17 slides from Carrier Global's conference presentation, Mar 17, 2022
Slide 1: J.P. Morgan Industrials Conference
J.P. MORGAN INDUSTRIALS CONFERENCE Dave Gitlin, Chairman & CEO March 17, 2022
Slide 2: Cautionary Statement
2 CARRIER CAUTIONARY STATEMENT 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. These forward-looking statements are intended to provide management's current expectati
Slide 3: Why Carrier
3 CARRIER WHY CARRIER 1 Secular trends driving increased total addressable market 2 Carrier leading through technology / digital transformation, life-cycle solutions and ESG leadership 3 Rigorous cost reduction to fund investments and improve margins 4 Compelling financial algorithm 5 Strong balance
Slide 4: Differentiation
4 CARRIER DIFFERENTIATION STRATEGIC INITIATIVES TO CARRIER POSITIONED TO CAPTURE OUTGROW BASE MARKET SHARE OF EXPANDED TAM Integrated HVAC and Unmatched installed F&S healthy and safe base 330K 33M 1.8M 90M+1 Commercial Residential Refrigeration Fire and solutions HVAC HVAC equipment security Global
Slide 5: Aftermarket Focus Fuels Growth…
5 CARRIER AFTERMARKET FOCUS FUELS GROWTH… Attractive business • Gross margins 10+ points higher than $7.0B+ Carrier average HSD- LDD Large growth potential vs. TAM • Massive current installed base $4.5B • ~$2.5B growth in ~5 years Proven playbook already delivering results High single to low double
Slide 6: ESG: Good for the Planet and Good for Customers
6 CARRIER ESG: GOOD FOR THE PLANET AND GOOD FOR CUSTOMERS Product Planet Customer Annual GHG Savings Annual Operational Savings Vector eCool1 65% 75% All electric TRU PowerCO2OL1 77% 30% Commercial refrigeration AquaEdge® 19DV2 62% 40% Water-cooled chiller Infinity® 26 Air Conditioner with 38% 28% G
Slide 7: Operational Excellence
7 CARRIER OPERATIONAL EXCELLENCE SUPPLY CHAIN FACTORY FOOTPRINT G&A OPTIMIZATION Carrier Global Centers Carrier Business Excellence of Excellence Services +10% >200 >2x 2x bps 75% 6M 85% 75% 35% 3M 2021 2026 2021 2026 2021 2026 2021 2026 Critical component Automation hours Low cost hours G&A as % of
Slide 8: Disciplined Capital Deployment Within Solid Investment Grade Credit Rating
8 CARRIER DISCIPLINED CAPITAL DEPLOYMENT WITHIN SOLID INVESTMENT GRADE CREDIT RATING M&A PRIORITIES 1 ORGANIC GROWTH • Enhance sustainability leadership 2 INORGANIC GROWTH • Bolster building and cold chain ecosystems • Accelerate digital and aftermarket growth 3 GROWING DIVIDEND • Enhance technology
Slide 9: Carrier's Medium Term Value Creation Framework
9 CARRIER CARRIER’S MEDIUM TERM VALUE CREATION FRAMEWORK1 Organic sales growth ~6-8% Cost reduction 2-3% annual productivity Adj. operating margin expansion >50 bps/yr Adj. EPS Double-digit growth Free cash flow ~100% of net income 1. Excludes the impact of M&A (including, but not limited to, Toshib
Slide 10: Appendix
10 CARRIER APPENDIX …and plenty of opportunity ahead
Slide 11: Use and Definitions of Non-GAAP Financial Measures
11 CARRIER USE AND DEFINITIONS OF NON-GAAP FINANCIAL MEASURES Carrier Global Corporation (“Carrier”) 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
Slide 12: Carrier 2021 vs 2020 Sales Reconciliation
12 CARRIER CARRIER 2021 VS 2020 SALES RECONCILIATION (Unaudited) Factors Contributing to Total % Change in Net S ales 2021 vs 2020 General Corporate Expenses and Fire & Eliminations HVAC Refrigeration S ecurity and Other Total Organic 17% 21% 7% 0% 15% FX Translation 1% 3% 4% 0% 2% Acquisitions / Di
Slide 13: Segment Adjusted Operating Profit Reconciliation
13 CARRIER SEGMENT ADJUSTED OPERATING PROFIT RECONCILIATION (Unaudited) (Unaudited) For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 General General Corporate Corporate Expenses and Expenses and Fire & Eliminations Fire & Eliminations (In millions) HVAC Refrigeration Securit
Slide 14: EPS Reconciliation
14 CARRIER EPS RECONCILIATION (Unaudited) For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 20,613 $ - $ 20,613 $ 17,456 $ - $ 17,456 Operating profit 2,645 159 a 2
Slide 15: Net Debt to Adjusted EBITDA Reconciliation
15 CARRIER NET DEBT TO ADJUSTED EBITDA RECONCILIATION (Unaudited) For the Year For the Twelve Ended December Months Ended (1) (In millions) 31, 2021 March 31, 2020 Long-term debt $ 9,513 $ 11,029 Current portion of long-term debt 183 218 Less: Cash and cash equivalents 2,987 768 Net debt $ 6,709 $ 1
Slide 16: Fire & Security Segment Reconciliation
16 CARRIER FIRE & SECURITY SEGMENT RECONCILIATION (Unaudited) For the Year Ended December 31, 2021 Fire & Fire & Security Security (1) (In millions) (Reported) Chubb (Adjusted) Net Sales $ 5,515 $ (2,159) $ 3,356 Segment operating profit $ 662 $ 133 $ 529 Adjustments to segment operating profit: Res
Slide 17: Free Cash Flow Reconciliation
17 CARRIER FREE CASH FLOW RECONCILIATION (Unaudited) For the Year Ended December (In millions) 31, 2021 Net cash flows provided by operating activities $ 2,237 Less: Capital expenditures 344 Free cash flow $ 1,893
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