Carrier Global Corporation · NYSE:CARR
Carrier Global — Q1 2023 Earnings Presentation
22 slides from Carrier Global's earnings presentation, Apr 25, 2023
Slide 1: Q1 2023 Earnings Conference Call
Q1 2023 EARNINGS CONFERENCE CALL April 25, 2023
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: Q1 2023 Summary
Q1 2023 Summary $5,273M Highlights Sales Organic* +4% Y/Y High-teens aftermarket growth Adjusted Operating Profit* $642M Strength in commercial HVAC, light commercial HVAC, controls and global truck/trailer Adjusted EPS* $0.52 Container and commercial refrigeration sales decline Orders grew in the q
Slide 4: Sustainability and Healthy Building Leadership
Sustainability and Healthy Building Leadership Highlights and Key Wins: • NA residential heat pump sales up over 20% in Q1 ✓ Ranked No. 8 on Barron’s 100 Most Sustainable Companies Sustainability • European commercial heat pump 2023 List Leadership sales up 20% in Q1 • New Syberia eCool units advanc
Slide 5: Q1 2023 Results
Q1 2023 Results Q1 2023 Q1 2022 Y/Y Sales $5,273M $4,654M 13% Organic sales* 4% Acquisitions / divestitures, net 11% FX (2%) Adjusted operating profit* $642M $655M (2%) Adjusted operating margin* 12.2% 14.1% (190 bps) Adjusted effective tax rate* 23.5% 16.1% Adjusted EPS* $0.52 $0.55 Free cash flow*
Slide 6: Q1 2023 HVAC Results
Q1 2023 HVAC Results Q1 2023 Y/Y Highlights HVAC orders up double-digits organically Y/Y Sales $3,622M 22% Organic sales* 6% NA Residential HVAC sales down HSD Acquisitions / divestitures, net 18% FX (2%) Light commercial sales grew over 30% Y/Y Adjusted operating profit* $490M 3% Commercial HVAC sa
Slide 7: Q1 2023 Refrigeration Results
Q1 2023 Refrigeration Results Q1 2023 Y/Y Highlights Sales $898M (8%) Organic sales* (5%) Global Truck/Trailer sales up nearly 30%, orders up FX (3%) more than 20% Y/Y Adjusted operating profit* $111M (1%) Container and Commercial Refrigeration sales and Adjusted operating margin* 12.4% 90 bps order
Slide 8: Q1 2023 Fire & Security Results
Q1 2023 Fire & Security Results Q1 2023 Y/Y Highlights Sales $869M 6% Commercial Fire sales up double-digits Organic sales* 9% FX (3%) ~20% sales growth in Access solutions Adjusted operating profit* $108M (8%) Double-digit sales growth in Asia and EMEA Adjusted operating margin* 12.4% (190 bps) Mid
Slide 9: Organic Order Trends
Organic Order Trends Orders by Key Business Line Q1 2023 Orders by Geography Q1 2023 (Y/Y) (Y/Y) HVAC* ~5% Residential & Light Commercial 5% - 10% Americas* 5% - 10% Commercial HVAC* 5% - 10% Refrigeration (5%) – 0% EMEA ~(10%) Transport Refrigeration ~5% Commercial Refrigeration ~(20)% China (5%) –
Slide 10: 2023 Guidance
2023 Guidance 2/7/2023 Guidance 4/25/2023 Guidance** ~$22B ~$22B Sales Organic* up LSD - MSD Organic* up LSD - MSD FX (~1%) FX ~0% Acquisitions +~6% Acquisitions +~6% Adjusted Operating ~14% ~14% Includes ~50 bps negative impact Includes ~50 bps negative impact Margin* from TCC from TCC Adjusted EPS
Slide 11: Summary
Summary • Solid start to the year and targeting another strong year in 2023 • Q1 aftermarket up high-teens; continued momentum on key growth initiatives • Orders increased Y/Y in Q1 and improved as the quarter progressed • Maintaining adjusted EPS guidance range Global leader in intelligent climate
Slide 12: Appendix
APPENDIX
Slide 13: 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 14: Additional Items
Additional Items 2/7/2023 guidance 4/25/2023 guidance** Shares outstanding (diluted) ~840M 850M – 855M Corporate expenses / eliminations ~$200M ~$200M Adjusted interest expense, net* ~$225M ~$185M - $190M Adjusted effective tax rate* ~23% ~23% Non-service pension income / (expense) ~$0M ~$0M Capital
Slide 15: Carrier Q1 2023 vs 2022 Sales Reconciliation
Carrier Q1 2023 vs 2022 Sales Reconciliation Y/Y % Three Months Ended March 31, 2023 Compared with Three Months Ended March 31, 2022 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC 6 % (2) % 18 % — % 22 % Refrig
Slide 16: 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 17: 2022 Adjusted Operating Profit Reconciliation
2022 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended March 31, 2022 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 2,970 $ 976 $ 818 $ (110) $ — $ 4,654 Segment operating profit $ 470 $ 107 $ 1,218 $ (24)
Slide 18: 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 19: Q1 2022 EPS Reconciliation
Q1 2022 EPS Reconciliation (Unaudited) Three Months Ended March 31, 2022 (In millions, except per share amounts) Reported Adjustments Adjusted Net sales $ 4,654 $ — $ 4,654 Operating profit $ 1,737 (1,082) a $ 655 Operating margin 37.3 % 14.1 % Income from operations before income taxes $ 1,688 (1,1
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (Unaudited) Q1 Q2 Q3 Q4 FY Q1 (In millions) 2022 2022 2022 2022 2022 2023 Net cash flows provided by (used in) operating activities $ (202) $ 32 $ 790 $ 1,123 $ 1,743 $ 120 Less: Capital expenditures 56 66 91 140 353 70 Free cash flow $ (258) $ (34) $ 699 $ 983 $ 1,390
Slide 21: Net Debt Reconciliation
Net Debt Reconciliation (Unaudited) (In millions) March 31, 2023 December 31, 2022 Long-term debt $ 8,708 $ 8,702 Current portion of long-term debt 142 140 Less: Cash and cash equivalents 3,347 3,520 Net debt $ 5,503 $ 5,322 20 See “Use and Definitions of Non-GAAP Financial Measures” for additional
Slide 22: Amortization of Acquired Intangibles
Amortization of Acquired Intangibles (Unaudited) Q1 Q2 Q3 Q4 FY (In millions) 2022 2022 2022 2022 2022 HVAC $ 4 $ 4 $ 16 $ 22 $ 46 Fire & Security 1 1 1 1 4 Total Carrier 5 5 17 23 50 Associated tax effect (1) (1) (7) (4) (13) Net impact to adjusted results $ 4 $ 4 $ 10 $ 19 $ 37 21 See “Use and Def