Carrier Global Corporation · NYSE:CARR
Carrier Global — Q1 2024 Earnings Presentation
33 slides from Carrier Global's earnings presentation, Apr 25, 2024
Slide 1: Q1 2024 Earnings Conference Call
b Carrier Q1 2024 Earnings Conference Call April 25, 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: Starting the Year on a Strong Note: Q1 2024 Summary
Starting the Year on a Strong Note: Q1 2024 Summary Sales $6,182M Highlights Organic* +2% Y/Y Successfully kicked-off combination with Viessmann Climate Solutions Adjusted Operating $927M Profit* +44% Y/Y Business exits tracking well; announced definitive agreement for Industrial Fire Adjusted Opera
Slide 4: Global Leader in Intelligent Climate and Energy Solutions
Global Leader in Intelligent Climate and Energy Solutions Light Commercial / Commercial Residential Cold Chain Small rooftop units most New Viessmann product HE19 Trailer Unit reduces efficient in North America introductions expanded its fuel consumption by 10% with a ~15-30% smaller addressable mar
Slide 5: Aftermarket Focus Fuels Continued Growth & Margin Expansion
Aftermarket Focus Fuels Continued Growth & Margin Expansion Innovative and Differentiated Digital Solutions… …Driving Consistent Aftermarket Growth1 ✓ Connected ~5K additional chillers in Q1, highest quarter since Spin DD+ Growth ✓ ~48% attachment rate up from ~44% in Q4 2023 +12% +10% ✓ ~75K chille
Slide 6: Viessmann Climate Solutions: Outperforming Market
Viessmann Climate Solutions: Outperforming Market Q1 Highlights 2024 Outlook Integration off to an excellent start Leveraging Carrier, Toshiba, Giwee, and Viessmann technologies to create best-in-class global, scalable platforms Outgrowing market through share gains, new product introductions, and p
Slide 7: Data Centers Present Unique and Compelling Opportunity
Data Centers Present Unique and Compelling Opportunity Opportunity Differentiated Technology Global HVAC Market for Data Centers1 Air-cooled chillers: ~20 – 25% smaller footprint than competition, lower installation costs, 30% annual energy savings with free cooling Water-cooled chillers: 15% smalle
Slide 8: Significant Progress on Portfolio Transformation
Significant Progress on Portfolio Transformation 2023 2024 April December December January March By 2024 YE Portfolio Strategy Access Solutions Commercial Viessmann Climate Industrial Fire Residential and Refrigeration Solutions Commercial Fire Announcement Announced Sale Announced Sale Acquisition
Slide 9: Q1 2024 Results
Q1 2024 Results Q1 2024 Q1 2023 Y/Y Sales $6,182M $5,273M 17% Organic sales* 2% Acquisitions / Divestitures, net 15% FX - Adjusted operating profit* $927M $642M 44% Adjusted operating margin* 15.0% 12.2% 280 bps Adjusted effective tax rate* 23.2% 23.5% Adjusted EPS* $0.62 $0.52 +19% Free cash flow*
Slide 10: Q1 2024 HVAC Results
Q1 2024 HVAC Results Q1 2024 Y/Y Highlights ~20% sales growth in Americas Light Commercial & Sales $4,541M 25% Commercial Organic sales* 2% Acquisitions / divestitures, net 24% North America Residential sales down LSD FX (1%) Global Commercial equipment and aftermarket sales both up LDD Adjusted ope
Slide 11: Q1 2024 Refrigeration Results
Q1 2024 Refrigeration Results Q1 2024 Y/Y Highlights Global Truck & Trailer sales down low-teens driven Sales $884M (2%) by market decline and tough comparison in North Organic sales* (2%) America FX - Container sales up ~50% Adjusted operating profit* $99M (11%) Margin decline due to absence of Q1
Slide 12: Q1 2024 Fire & Security Results
Q1 2024 Fire & Security Results Q1 2024 Y/Y Highlights Residential and Commercial Fire up MSD Sales $887M 2% Organic sales* 7% Sales growth and strong productivity drove significant Deconsolidation of KFI (5%) margin expansion FX - Announced definitive agreement to sell Industrial Fire Adjusted oper
Slide 13: Q1 Organic Order Trends
Q1 Organic Order Trends HVAC Segment Y/Y Refrigeration Segment Y/Y Americas* (0%) – (5%) Global Truck and Trailer ~(45%) Residential 0% - 5% Container 15% - 20% Light Commercial ~(35%) Commercial Refrigeration ~(5%) Commercial* ~+5% Total Refrigeration (25%) – (30%) EMEA ~(5%) Residential & Light Co
Slide 14: 2024 Guidance
2024 Guidance April 25 February 6 Guidance** Guidance ~$26B ~$26.5B Organic* up ~MSD Organic* up ~MSD Sales FX 0% FX 0% Acquisitions up 18% Acquisitions up 20% Divestitures (6%) Divestitures (5%) Adjusted Operating ~15.5% 15.0% - 15.5% Margin* Up ~100bps Up > 50bps Adjusted EPS* $2.80 - $2.90 $2.80
Slide 15: FY 2024 Adjusted EPS Guide to Guide Bridge
FY 2024 Adjusted EPS* Guide to Guide Bridge $2.85 ~$0.08 $2.85 - ($0.03) ($0.05) EPS Guide to Guide $2.55 $2.60 Exits (~$0.05) Core ~$0.05 Net Impact ~$0.00 Net Industrial Fire Earnings Divested ($0.07) Interest Savings $0.02 Net Impact ($0.05) 2024 Adj. EPS Feb. Operational Net Viessmann Net Exits
Slide 16: 2025 Adjusted EPS Framework
2025 Adjusted EPS* Framework Business Exits $2.60 + + $2.85 + + Six months of interest savings Redeployment of net proceeds FCF-funded share repurchases Core 2025 on $1.1B $2.60 Growth INDUSTRIAL COMMERCIAL & FIRE RESI FIRE 2024 Adj. EPS 2025 Guidance Midpoint** Approximate earnings contributions fr
Slide 17: Summary
Summary Off to a very strong integration with Viessmann Climate Solutions Adjusted operating margin up 280bps, adjusted EPS up ~20% year over year Driving sustainability differentiation with key new product introductions Business exits on track; expecting to resume share repurchases in 2024 Increase
Slide 18: Global Leader in Intelligent Climate and Energy Solutions
Global Leader in Intelligent Climate and Energy Solutions
Slide 19: Appendix
APPENDIX
Slide 20: 2024 Q1 Awards Earned
2024 Q1 Awards Earned 100 100Most Sustainable Most Sustainable Companies Companies World’s Most Admired Companies America’s Most Innovative Companies Most Trustworthy Companies in America Global -The World’s 500 Most Valuable Brands 2024 U.S. - The 500 Most Valuable American Brands 2024 Gold Medal A
Slide 21: Carrier's Road Map to Net-Zero
Carrier’s Road Map to Net-Zero Carrier’s road map to Net-Zero A Vision for a Sustainable Future 2024 Q1 Earnings Release Webcast | April 25, 2024 21
Slide 22: 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 23: Q1 2024 Adjusted EPS Bridge
Q1 2024 Adjusted EPS* Bridge $0.20 $0.62 ($0.06) ($0.04) $0.00 Net Viessmann $0.52 $0.14 FX in JV Income ($0.02) Earnings ~$0.10 2023 gain on sale ($0.02) Interest (~$0.12) $0.09 Share dilution (~$0.03) Net Impact (~$0.06) $0.48 $0.43 Q1 2023 Operational Net Viessmann Other Tax Rate Q1 2024 Adj. EPS
Slide 24: FY 2024 Adjusted EPS Guidance Bridge
FY 2024 Adjusted EPS* Guidance Bridge ~$0.40 $2.85 $2.73 ($0.10) ($0.10) (~$0.10) $2.60 Net Viessmann $2.23 Earnings ~$0.57 Interest (~$0.45) Share dilution (~$0.20) Net Impact (~$0.10) Net Exits (Half Year) Earnings divested ~($0.25) Interest savings $0.15 Net Impact (~$0.10) 2023 Adj EPS 2024 Grow
Slide 25: Additional Items
Additional Items 4/25/24** 2/6/2024 Current Guidance Prior Guidance (Includes Viessmann Climate Solutions) (Includes Viessmann Climate Solutions) Shares outstanding (diluted) ~915M ~915M Corporate expenses / eliminations ~$275M ~$275M Adjusted interest expense, net* $500M - $525M $525M - $550M Adjus
Slide 26: Carrier Q1 2024 vs 2023 Sales Reconciliation
Carrier Q1 2024 vs 2023 Sales Reconciliation Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC 2 % (1) % 24 % — % 25 % Refrigeratio
Slide 27: 2024 Adjusted Operating Profit Reconciliation
2024 Adjusted Operating Profit Reconciliation Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Operating Profit (Unaudited) Three Months Ended March 31, 2024 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier
Slide 28: 2023 Adjusted Operating Profit Reconciliation
2023 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended March 31, 2023 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 3,622 $ 898 $ 869 $ (116) $ — $ 5,273 Segment operating profit $ 435 $ 108 $ 93 $ (38) $
Slide 29: Q1 2024 EPS Reconciliation
Q1 2024 EPS Reconciliation (Unaudited) Three Months Ended March 31, 2024 (In millions, except per share amounts) Reported Adjustment Adjusted s Net sales $ 6,182 $ — $ 6,182 Operating profit $ 500 427 a $ 927 Operating margin 8.1 % 15.0 % Income from operations before income taxes $ 335 427 a $ 762
Slide 30: Q1 2023 EPS Reconciliation
Q1 2023 EPS Reconciliation (Unaudited) Three Months Ended March 31, 2023 (In millions, except per share amounts) Reported Adjustments Adjusted Net sales $ 5,273 $ — $ 5,273 Operating profit $ 555 87 a $ 642 Operating margin 10.5 % 12.2 % Income from operations before income taxes $ 509 87 a $ 596 In
Slide 31: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (Unaudited) Q1 Q2 Q3 Q4 FY Q1 (In millions) 2023 2023 2023 2023 2023 2024 Net cash flows provided by (used in) operating activities $ 120 $ 384 $ 1,041 $ 1,062 $ 2,607 $ 40 Less: Capital expenditures 70 74 92 233 469 104 Free cash flow $ 50 $ 310 $ 949 $ 829 $ 2,138 $ (
Slide 32: Net Debt Reconciliation
Net Debt Reconciliation (Unaudited) (In millions) March 31, 2024 December 31, 2023 Long-term debt $ 15,647 $ 14,242 Current portion of long-term debt 1,248 51 Less: Cash and cash equivalents 1,313 10,015 Net debt $ 15,582 $ 4,278 2024 Q1 Earnings Release Webcast | April 25, 2024 32
Slide 33: Amortization of Acquired Intangibles
Amortization of Acquired Intangibles (Unaudited) Q1 Q2 Q3 Q4 FY Q1 (In millions) 2023 2023 2023 2023 2023 2024 HVAC $ 37 $ 36 $ 35 $ 35 $ 143 $ 172 Fire & Security 2 2 2 — 6 — Total Carrier 39 38 37 35 149 172 Associated tax effect (12) (11) (11) (11) (45) (46) Net impact to adjusted results $ 27 $