Carrier Global Corporation · NYSE:CARR
Carrier Global — Q3 2024 Earnings Presentation
39 slides from Carrier Global's earnings presentation, Oct 24, 2024
Slide 1: October 24, 2024
October 24, 2024
Slide 2: Cautionary Statement
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 expectations or pla
Slide 3: Earnings From Continuing Operations
Earnings From Continuing Operations • Effective Q3 2024 the Fire & Security segment is presented as discontinued operations • All material discussed today will refer to Continuing Operations except preliminary free cash flow unless stated otherwise Continuing Operations Discontinued Operations • HVA
Slide 4: Q3 2024 Summary
Q3 2024 Summary Highlights Sales $5,984M Organic1 +4% Y/Y ~20% orders growth Y/Y Adjusted Operating $1,044M Continued strength in Global Commercial and North America Profit1 +19% Y/Y Residential HVAC offsetting market challenges in RLC HVAC Europe and China Adjusted Operating 17.4% Double-digit afte
Slide 5: Global Leader in Intelligent Climate and Energy Solutions
Global Leader in Intelligent Climate and Energy Solutions Vision Objective Q3 Highlights Share leader GLOBAL LEADER Share gains across major segments and geographies Differentiated technology Connected ~5k new chillers in the field, on track for ~50k by end of year Everything connected INTELLIGENT I
Slide 6: New Carrier – Post Transformation
New Carrier – Post Transformation At spin New Carrier Sales1 Sales2 F&S 27% HVAC ~85% HVAC HVAC 53% REF REF / Cold Chain 20% ~15% • Broad vision • Focused vision • Significant complexity • Removed significant complexity • Mid single-digit organic sales growth profile • 6–8% organic sales growth prof
Slide 7: Key focus areas
Key focus areas Since spin New Carrier 1. Establish performance culture and best team 1. Laser focus on customers, share and margin expansion across segments 2. Portfolio transformation 2. Sustained double-digit aftermarket CAGR 3. Simplify and focus business enabled by digital differentiation 4. Ne
Slide 8: Carrier and Viessmann Climate Solutions: 1+1>4
Carrier and Viessmann Climate Solutions: 1+1>4 Digital & Technology Synergies On track to achieve ~$200M in revenue synergies by year 3 On track to achieve ~$200M in cost synergies by year 3 Carrier + Viessmann Climate Solutions Leveraging channels and brand portfolio Introducing iconic brands to se
Slide 9: Q3 2024 Results
Q3 2024 Results Q3 2024 Q3 2023 Y/Y Sales $5,984M $4,935M 21% Organic sales1 4% Acquisitions / Divestitures, net 17% FX 0% Adjusted operating profit1 $1,044M $877M 19% Adjusted operating margin1 17.4% 17.8% (40 bps) Adjusted effective tax rate1 23.4% 22.0% Adjusted EPS1 $0.77 $0.75 3% Preliminary fr
Slide 10: Q3 2024 HVAC Results
Q3 2024 HVAC Results Q3 2024 Y/Y Highlights Sales $5,058M 26% Continued strength in global Commercial HVAC and Organic sales* 6% aftermarket – both up double-digits Acquisitions / divestitures, net 20% North America Resi sales up double-digits FX 0% Commercial HVAC Americas up almost 20% Adjusted op
Slide 11: Q3 2024 Refrigeration Results
Q3 2024 Refrigeration Results Q3 2024 Y/Y Highlights Sales $938M 1% Container sales up over 30% Organic sales* 1% Global Truck & Trailer sales down MSD driven by FX 0% declines in North America Asia Truck & Trailer up 20% Adjusted operating profit* $117M 6% Aftermarket sales up 10% Adjusted operatin
Slide 12: Q3 Organic Order Trends
Q3 Organic Order1 Trends HVAC Segment Y/Y Refrigeration Segment Y/Y Americas1 ~30% Global Truck and Trailer ~85% Residential ~30% Container 15% – 20% Light Commercial ~60% Total Refrigeration3 45 – 50% Commercial1 ~25% EMEA2 (5%) – 0% Residential & Light Commercial2 ~(20%) Commercial ~5% Asia Pacifi
Slide 13: 2024 Full Year Guidance
2024 Full Year Guidance** ~$22.5B Organic* up ~3% Sales FX (0%) Acquisitions up +18% Divestitures (2%) Adjusted Operating Margin* ~15.5% Up ~150 bps Adjusted EPS* ~$2.50 Up ~14% Y/Y Free Cash Flow* ~($0.2B) Includes the expected results of continuing operations and discontinued operations. Guide inc
Slide 14: 2025 Adjusted EPS Framework
2025 Adjusted EPS* Framework ~$4.7B in share ~$2.50 Net Interest repurchase by end Elimination of $0.05 - $0.10 of 2025 Organic EPS stranded costs Growth ~$0.05 2024 2025 Oct Guide 2024E Adj. EPS* (Continuing Operations) *See appendix for additional information regarding non-GAAP measures 2024 Q3 Ea
Slide 15: AFFF Settlements
AFFF Settlements Upon U.S. court approvals, settlements will resolve: • Estate claims: Permanently resolve all present and future claims (including but not limited to personal injury, water, airport, fire training facilitiess, etc.) that Carrier is responsible for any liabilities of KFI including al
Slide 16: Summary
Summary Strong orders momentum continues, positioning Carrier well for 2025 Continuing to gain share in key segments and geographies Driving sustainability differentiation and continuous double-digit aftermarket growth Four of five exits closed with remaining exit on-track to close around year-end ~
Slide 17: 2024 Q3 Earnings | October 24, 2024
2024 Q3 Earnings | October 24, 2024 17
Slide 18: Carrier's Road Map to Net-Zero
Carrier’s Road Map to Net-Zero Strategies for a Sustainable Path Forward Carrier’s Ambitious Climate and Net Zero Targets Validated by the Science-Based Target Initiative 2024 Q3 Earnings | October 24, 2024 18
Slide 19: 2024 Recognitions & Awards Year to Date
2024 Recognitions & Awards Year to Date 100 Most Sustainable Companies Gold Medal Award Fortune 500 World’s Best Companies 2024 World’s Most Admired Companies World’s Most Sustainable Companies America’s Most Innovative Companies Most Trustworthy Companies in America America’s Climate Leaders Americ
Slide 20: Use and Definitions of Non-GAAP Financial Measures
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 with certa
Slide 21: Discontinued Operations
Discontinued Operations In 2023, the Company announced plans to exit its Fire & Security and Commercial Refrigeration businesses over the course of 2024. The announced plan to exit the Fire & Security segment represents a single disposal plan to separately divest multiple businesses over different r
Slide 22: Q3 2024 Adjusted EPS Bridge
Q3 2024 Adjusted EPS* Bridge $0.06 $0.07 $0.77 $0.75 ($0.05) ($0.01) ($0.05) Q3 2023 Adj EPS* Operational Viessmann Net Interest Tax Rate Share Count Q3 2024 Adj EPS* (Continuing Ops) ** Adj. Operating Profit (Continuing Ops) ** *See appendix for additional information regarding non-GAAP measures **
Slide 23: FY 2024 Adjusted EPS Guide to Guide Bridge
FY 2024 Adjusted EPS* Guide to Guide Bridge $2.85 ~($0.35) ~$2.50 July Guide Impact of Oct Guide 2024E Adj. EPS* Discontinued Operations 2024E Adj. EPS* (Continuing Operations)** *See appendix for additional information regarding non-GAAP measures ** Continuing Operations includes Carrier businesses
Slide 24: FY 2024 Adjusted EPS: Core to Continuing Ops Bridge
FY 2024 Adjusted EPS*: Core*** to Continuing Ops Bridge $2.60 ~($0.10) ~$2.50 July Guide Impact of Oct Guide 2024E Adj. EPS* Discontinued Operations 2024E Adj. EPS* (Core)*** (Continuing Operations)** *See appendix for additional information regarding non-GAAP measures ** Continuing Operations inclu
Slide 25: FY 2024 Adjusted EPS Guidance Bridge
FY 2024 Adjusted EPS* Guidance Bridge ~$0.35 $0.15 ~$0.40 ~$2.50 ~($0.30) - $2.20 (~$0.15) 2023 Adj EPS Operational Viessmann Net Interest Tax Rate Share Count 2024 Adj EPS Oct (Continuing Ops) ** Adj. Operating Profit Guidance Midpoint (Continuing Ops) ** *See appendix for additional information re
Slide 26: Additional Items
Additional Items Current Guidance** (Includes Viessmann Climate Solutions) Shares outstanding (diluted) 910M - 915M Corporate expenses / eliminations and other ~$250M Adjusted interest expense, net* $450M - $470M Adjusted effective tax rate* ~23% Capital expenditures ~$500M Depreciation & amortizati
Slide 27: Continuing Operations – Historical Figures [Part 1]
Continuing Operations – Historical Figures [Part 1] Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 (In millions, except per share amounts) 2022 2023 2023 2023 2023 2023 2024 2024 2024 Net sales $ 17,288 $ 4,517 $ 5,183 $ 4,935 $ 4,316 $ 18,951 $ 5,420 $ 5,934 $ 5,984 Operating profit $ 3,991 $ 460 $ 651 $
Slide 28: Continuing Operations – Historical Figures [Part 2]
Continuing Operations – Historical Figures [Part 2] Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 (In millions, except per share amounts) 2022 2023 2023 2023 2023 2023 2024 2024 2024 Earnings from continuing operations $ 3,164 $ 307 $ 393 $ 270 $ 417 $ 1,387 $ 177 $ 415 $ 565 Total operating profit adjus
Slide 29: Carrier Q3 2024 vs 2023 Sales Reconciliation
Carrier Q3 2024 vs 2023 Sales Reconciliation Three Months Ended September 30, 2024 Compared with Three Months Ended September 30, 2023 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC 6 % — % 20 % — % 26 % Refrig
Slide 30: Q3 2024 Adjusted Operating Profit Reconciliation
Q3 2024 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended September 30, 2024 General Eliminations Corporate (In millions) HVAC Refrigeration and Other Expenses Carrier Net sales $ 5,058 $ 938 $ (12) $ — $ 5,984 Segment operating profit $ 741 $ 109 $ (25) $ (62) $ 763 Reported o
Slide 31: Q3 2023 Adjusted Operating Profit Reconciliation
Q3 2023 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended September 30, 2023 General Eliminations Corporate (In millions) HVAC Refrigeration and Other Expenses Carrier Net sales $ 4,008 $ 924 $ 3 $ — $ 4,935 Segment operating profit $ 763 $ 107 $ (252) $ (108) $ 510 Reported op
Slide 32: YTD 2024 Adjusted Operating Profit Reconciliation
YTD 2024 Adjusted Operating Profit Reconciliation (Unaudited) Nine Months Ended September 30, 2024 General Eliminations Corporate (In millions) HVAC Refrigeration and Other Expenses Carrier Net sales $ 14,569 $ 2,795 $ (26) $ — $ 17,338 Segment operating profit $ 1,857 $ 319 $ (84) $ (220) $ 1,872 R
Slide 33: YTD 2023 Adjusted Operating Profit Reconciliation
YTD 2023 Adjusted Operating Profit Reconciliation (Unaudited) Nine Months Ended September 30, 2023 General Eliminations Corporate (In millions) HVAC Refrigeration and Other Expenses Carrier Net sales $ 11,846 $ 2,794 $ (5) $ — $ 14,635 Segment operating profit $ 1,940 $ 327 $ (399) $ (247) $ 1,621 R
Slide 34: Q3 and YTD 2024 EPS Reconciliation
Q3 and YTD 2024 EPS Reconciliation (Unaudited) Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,984 $ — $ 5,984 $ 17,338 $ — $ 17,338 Operating profit $ 763 281
Slide 35: Q3 and YTD 2023 EPS Reconciliation
Q3 and YTD 2023 EPS Reconciliation (Unaudited) Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 4,935 $ — $ 4,935 $ 14,635 $ — $ 14,635 Operating profit $ 510 367
Slide 36: Preliminary Free Cash Flow Reconciliation
Preliminary Free Cash Flow Reconciliation (Unaudited) Nine Months Ended September 30, (In millions) 2024 2023 Preliminary net cash flows provided by (used in) operating activities $ 431 $ 1,545 Less: Capital expenditures (1) 312 236 Free cash flow $ 119 $ 1,309 (1) Includes $10 million and $19 milli
Slide 37: Net Debt Reconciliation
Net Debt Reconciliation (Unaudited) (In millions) September 30, 2024 December 31, 2023 Long-term debt $ 10,337 $ 14,242 Current portion of long-term debt 2,095 51 Less: Cash and cash equivalents 2,225 9,852 Net debt $ 10,207 $ 4,441 2024 Q3 Earnings | October 24, 2024 37
Slide 38: Q3 2024 Discontinued Operations EPS Reconciliation
Q3 2024 Discontinued Operations EPS Reconciliation (Unaudited) Three Months Ended September 30, (In millions, except per share amounts) 2024 Discontinued operations, net of tax $ (117) Summary of adjustments, net of tax: Divestiture-related costs $ 33 Gain on sale of Industrial business (310) AFFF l
Slide 39: Q3 2024 Total Adjusted EPS Reconciliation
Q3 2024 Total Adjusted EPS Reconciliation (Unaudited) Three Months Ended September 30, (In millions) 2024 Continuing operations $ 0.77 Discontinued operations 0.06 Total $ 0.83 2024 Q3 Earnings | October 24, 2024 39