Carrier Global Corporation · NYSE:CARR
Carrier Global — Bank of America Global Industrials Conference 2024
25 slides from Carrier Global's conference presentation, Mar 21, 2024
Slide 1: Carrier Global Corporation
Carrier Global Corporation Patrick Goris, SVP & CFO Bank of America Global Industrials Conference March 21, 2024
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: Carrier Overview
3 CARRIER CARRIER OVERVIEW 2023 KEY DATA POINTS WHAT WE DO Fire & Service & $22.1B ~53,000 Security parts Asia Pacific SALES EMPLOYEES HVAC 14.5% 160+ SALES Americas SALES SALES ADJ. OP. MARGIN* % COUNTRIES MIX BY REGION $2.1B ~$250B Refrigeration EMEA FREE CASH FLOW* TAM1 New equipment DIGITAL AND
Slide 4: The Carrier Investment Thesis
4 CARRIER THE CARRIER INVESTMENT THESIS Iconic Outsized Growing Productivity Portfolio and brands with digitally- market with and capital leading enabled secular simplification deployment market aftermarket tailwinds focus optionality positions opportunity Continued growth in electrification, indoor
Slide 5: Carrier Transformation
5 CARRIER CARRIER TRANSFORMATION Add Exit Carrier Post-Transactions A higher growth and focused Viessmann Climate Fire & Security and intelligent climate and Solutions Commercial Refrigeration energy solutions company Premier company in the Simpler, differentiated Increased focus on heat pump and en
Slide 6: Carrier Post-Transformation
6 CARRIER CARRIER POST-TRANSFORMATION Americas Europe Asia Pacific Commercial HVAC Residential and Light Commercial HVAC Transport Refrigeration Leading market positions across major regions
Slide 7: Value Creation Framework
7 CARRIER VALUE CREATION FRAMEWORK Above- Strong market Margin Tax Capital revenue + expansion + efficiency + free cash + deployment flow growth Re-invest in profitable growth Acquisitions / 6-8% organic >50 ~22% ongoing ~100% net share-count revenue growth bps/year adjusted1 ETR2 of net income redu
Slide 8: Secular Trends Drive Sustained Growth
8 CARRIER SECULAR TRENDS DRIVE SUSTAINED GROWTH Secular Trends Carrier Capitalizing Recognition Ranked No. 8 of Climate Change 100 Most Sustainable Companies Higher demand for products Barron’s, 2023 Named an Energy Efficiency Price / mix-up from higher ESG Industry Top-Rated Company efficiency unit
Slide 9: Aftermarket Focus Fuels Growth
9 CARRIER AFTERMARKET FOCUS FUELS GROWTH… Attractive business • Existing customer base, asset-light HSD- ~$7B+ Large growth potential vs. TAM LDD • Massive current installed base ~$5.5B ~$5B Proven playbook delivering results ~$4.5B • Recurring revenue with strong cashflow streams High single to low
Slide 10: Productivity and Simplification
10 CARRIER PRODUCTIVITY AND SIMPLIFICATION ERP Systems Legal Entities Brands 70+ Spin 2023 2025 Spin 2023 2025 Spin 2023 2025 Supply Chain Product Development Factory G&A • Material substitution • Common platforming • Footprint optimization • Organizational streamlining • Low-cost sourcing • SKU red
Slide 11: Business Exits Update
11 CARRIER BUSINESS EXITS UPDATE Gross Transaction Type Proceeds Definitive Agreements for 3 out of 4 Transactions Security Sale ~$5.0B ~$7.2B Gross and ~$5.5B Net Proceeds Commercial Refrigeration Sale ~$0.8B Industrial Fire Sale ~$1.4B On-track for exits throughout 2024 Residential and Commercial
Slide 12: Capital Deployment Priorities
12 CARRIER CAPITAL DEPLOYMENT PRIORITIES De-lever to ~2x Priorities Net Leverage Organic growth ~3.5x Strong free Inorganic growth cashflow generation Net proceeds from the exits ~2x Growing dividend Share repurchase January 1 2024 2 3 December 4 2024 Currently expect to resume share repurchases by
Slide 13: 2024 EPS Bridge
1 13 CARRIER 2024 EPS BRIDGE ~$0.35 $2.85 $2.73 ($0.07) ($0.05) (~$0.10) Net Viessmann $2.55 Earnings ~$0.60 $2.23 Interest (~$0.45) Share dilution (~$0.20) Net Impact (~$0.07) Net Exits (Half Year)3 Earnings divested ~($0.20) Interest savings $0.15 Net Impact (~$0.05) 2023 Adj EPS* 2024 Growth Net
Slide 14: Earnings Growth
14 CARRIER EARNINGS GROWTH Business Exits + + FCF-funded + + Nine months of Redeployment of net proceeds share repurchases $2.55 interest savings Core 2025 on $1.1B Growth INDUSTRIAL COMMERCIAL & FIRE RESI FIRE 2024 Core Adj EPS* 2025 Guidance Midpoint Positioned for solid core earnings growth in 20
Slide 15: Summary: Lead and Deliver
15 CARRIER SUMMARY: LEAD AND DELIVER Transformational portfolio moves create premier climate and energy solutions Global Climate provider; positioning Carrier as the Leader in all major geographies in HVACR and Leader energy solutions _________________________________________________________________
Slide 16: Appendix
16 CARRIER APPENDIX …and plenty of opportunity ahead
Slide 17: Use and Definitions of Non-GAAP Financial Measures
17 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 18: Carrier 2023 vs 2022 Sales Reconciliation
18 CARRIER CARRIER 2023 VS 2022 SALES RECONCILIATION Three Months Ended December 31, 2023 Compared with Three Months Ended December 31, 2022 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC (1)% 1% (1)% —% (1)% R
Slide 19: 2023 Adjusted Operating Profit Reconciliation
19 CARRIER 2023 ADJUSTED OPERATING PROFIT RECONCILIATION (Unaudited) Year Ended December 31, 2023 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 15,139 $ 3,818 $ 3,633 $ (492) $ — $ 22,098 Segment operating profit $ 2,275 $ 428
Slide 20: 2022 Adjusted Operating Profit Reconciliation
20 CARRIER 2022 ADJUSTED OPERATING PROFIT RECONCILIATION (Unaudited) Year Ended December 31, 2022 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 13,408 $ 3,883 $ 3,570 $ (440) $ — $ 20,421 Segment operating profit $ 2,610 $ 483
Slide 21: 2023 EPS Reconciliation
21 CARRIER 2023 EPS RECONCILIATION (Unaudited) Three Months Ended December 31, 2023 Year Ended December 31, 2023 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,102 $ — $ 5,102 $ 22,098 $ — $ 22,098 Operating profit $ 607 (50) a $ 557
Slide 22: 2022 EPS Reconciliation
22 CARRIER 2022 EPS RECONCILIATION (Unaudited) Three Months Ended December 31, 2022 Year Ended December 31, 2022 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,105 $ — $ 5,105 $ 20,421 $ — $ 20,421 Operating profit $ 433 83 a $ 516 $
Slide 23: Net Debt Reconciliation
23 CARRIER NET DEBT RECONCILIATION (Unaudited) As of December 31, (In millions) 2023 2022 Long-term debt $ 14,242 $ 8,702 Current portion of long-term debt 51 140 Less: Cash and cash equivalents 10,015 3,520 Net debt $ 4,278 $ 5,322
Slide 24: Free Cash Flow Reconciliation
24 CARRIER FREE CASH FLOW RECONCILIATION (Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY (In millions) 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 Net cash flows provided by operating activities $ (202) $ 32 $ 790 $ 1,123 $ 1,743 $ 120 $ 384 $ 1,041 $ 1,062 $ 2,607 Less: Capital expenditures 56 66 9
Slide 25: Amortization of Acquired Intangibles
25 CARRIER AMORTIZATION OF ACQUIRED INTANGIBLES (Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY (In millions) 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 HVAC $ 4 $ 4 $ 16 $ 22 $ 46 $ 37 $ 36 $ 35 $ 35 $ 143 Fire & Security 1 1 1 1 4 2 2 2 — 6 Total Carrier 5 5 17 23 50 39 38 37 35 149 Associated ta
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