Carrier Global Corporation · NYSE:CARR
Carrier Global — Q2 2024 Earnings Presentation
34 slides from Carrier Global's earnings presentation, Jul 25, 2024
Slide 1: Q2 2024 Earnings Conference Call
Q2 2024 Earnings Conference Call July 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: Q2 2024 Summary
Q2 2024 Summary Sales $6,689M Highlights Organic1 +2% Y/Y Total company organic orders up ~30%; HVAC up over 40% Adjusted Operating $1,213M Stronger than expected sales in Global Commercial HVAC and Profit1 +26% Y/Y North America Light Commercial with weaker than expected sales in RLC EMEA and China
Slide 4: Global Leader in Intelligent Climate and Energy Solutions
Global Leader in Intelligent Climate and Energy Solutions Q2 Highlights Market Leadership Strong data center orders driving share gains in Commercial HVAC Viessmann Climate Solutions outperforming challenged markets Recurring revenue Differentiated customer intimacy lobal Leader G Aftermarket sales
Slide 5: Aftermarket Focus Fuels Growth
Aftermarket Focus Fuels Growth Aftermarket revenue growth rate Q2 Highlights • Launched InteliSense connected portal aimed at mid-tier offerings Parts capturein In • DD growth from Automated Logic Controls te • Continued DD growth at Viessmann Climate Solutions ~+10% +Double-Digit l lig ent • Contin
Slide 6: Delivering on our Portfolio Transformation
Delivering on our Portfolio Transformation Successfully integrating with Viessmann Climate Solutions Highly differentiated channel, iconic brand, leading technology driving share gains Integration progressing well; cost and revenue synergies ahead of plan Team taking aggressive actions to address ne
Slide 7: Viessmann Climate Solutions Update
Viessmann Climate Solutions Update Business and Market Performance Synergies Business Execution Revenue Synergies Gained share in heat pumps in every primary country Booked over $15M in growth synergies orders year-to-date; targeting hundreds of millions over 4 years Expanding addressable market wit
Slide 8: Balanced, Focused Portfolio
Balanced, Focused Portfolio Leading Market Positions Unique Portfolio Post-Transformation Business Carrier Position1 HVAC Americas Residential #1 Leading positions across product lines and Light Commercial #1 geographies allow for resiliency through cycles Commercial2 #3 HVAC EMEA Commercial #1 Uniq
Slide 9: Q2 2024 Results
Q2 2024 Results Q2 2024 Q2 2023 Y/Y Sales $6,689M $5,992M 12% Organic sales* 2% Acquisitions / Divestitures, net 11% FX (1%) Adjusted operating profit* $1,213M $964M 26% Adjusted operating margin* 18.1% 16.1% 200 bps Adjusted effective tax rate* 22.0% 23.3% Adjusted EPS* $0.87 $0.79 10% Free cash fl
Slide 10: Q2 2024 HVAC Results
Q2 2024 HVAC Results Q2 2024 Y/Y Highlights Sales $4,970M 18% Continued strength in global Commercial HVAC and Organic sales* 2% aftermarket – both up double-digits Acquisitions / divestitures, net 17% North America Resi returned to volume growth FX (1%) Double-digit sales growth in Americas Light A
Slide 11: Q2 2024 Refrigeration Results
Q2 2024 Refrigeration Results Q2 2024 Y/Y Highlights Sales $973M 0% Container sales up ~35% Organic sales* 1% Global Truck & Trailer sales down mid single-digits FX (1%) driven by declines in North America; Europe up MSD Asia Truck & Trailer up over 25% Adjusted operating profit* $118M (1%) Aftermar
Slide 12: Q2 2024 Fire & Security Results
Q2 2024 Fire & Security Results Q2 2024 Y/Y Highlights Sales $871M (7%) Residential and Commercial Fire sales up MSD Organic sales* 3% Sales growth and strong net price productivity drove Divestitures (10%) significant margin expansion Adjusted operating profit* $155M 13% Closed on sale of Access So
Slide 13: Q2 Organic Order Trends
Q2 Organic Order1 Trends HVAC Segment Y/Y Refrigeration Segment Y/Y Americas2 ~70% Global Truck and Trailer (20%) – (25%) Residential >100% Container 40% – 45% Light Commercial ~5% Commercial Refrigeration (5%) – 0% Commercial2 40 – 45% Total Refrigeration (5%) – (10%) EMEA3 10% – 15% Residential &
Slide 14: 2024 Guidance
2024 Guidance July 25 April 25 Guidance** Guidance ~$25.5B ~$26B Organic* up ~MSD Organic* up ~MSD Sales FX (1%) FX 0% Acquisitions up +16% Acquisitions up 18% Divestitures (5%) Divestitures (6%) Adjusted Operating ~15.5% ~15.5% Margin* Up ~100bps Up ~100bps Adjusted EPS* $2.80 – 2.90 $2.80 - $2.90
Slide 15: FY 2024 Adjusted EPS Guidance Bridge
FY 2024 Adjusted EPS* Guidance Bridge $0.10 ~$0.55 ~$0.01 $2.85 $2.73 ~($0.25) ~($0.10) (~$0.10) $2.60 Net Viessmann $2.23 Earnings ~$0.40 Interest (~$0.45) Share dilution (~$0.20) Net Impact (~$0.25) Net Exits (Half Year) Earnings divested (~$0.25) Interest savings ~ $0.15 Net Impact (~$0.10) 2023
Slide 16: Summary
Summary Strong orders in Q2, positioning Carrier for a strong H2 Q2 adjusted operating margin up 200 bps and double digit adjusted EPS growth Driving sustainability differentiation and sustained aftermarket growth Strength in portfolio enables topline growth Business exits on track; ~$5B in net debt
Slide 17: Appendix
APPENDIX 2024 Q2 Earnings | July 25, 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 Q2 Earnings | July 25, 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 Most Admired Companies World’s Most Sustainable Companies America’s Most Innovative Companies Most Trustworthy Companies in America America’s Climate Leaders America’s Greatest Workplaces Best
Slide 20: Upcoming Event - New York Climate Week
Upcoming Event - New York Climate Week REIMAGINING THE BUILT Gold Medal Award ENVIRONMENT FOR A NET ZERO FUTURE Strategies for creating sustainable, energy-efficient and cost-effective buildings September 24, 2:15 – 6:00 PM EDT 22 Vanderbilt, New York City Just 100 Rankings 2024 Q2 Earnings | July 2
Slide 21: 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 22: Q2 2024 Adjusted EPS Bridge
Q2 2024 Adjusted EPS* Bridge $0.21 $0.01 $0.87 $0.79 ($0.13) ($0.01) $0.12 $0.12 $0.75 $0.67 Q2 2023 Operational Net Viessmann Net Exits Tax Rate Q2 2024 Adj. EPS Adj. EPS Approximate earnings contributions from Core** Approximate earnings contributions from Fire & Security and Commercial Refrigerat
Slide 23: FY 2024 Adjusted EPS Guide to Guide Bridge
FY 2024 Adjusted EPS* Guide to Guide Bridge ~$0.15 $2.85 $2.85 ~($0.15) ~$0.01 $2.60 $2.60 2024 Adj. EPS Apr Guidance Operational Net Viessmann Share Count 2024 Adj EPS Jul Guidance Midpoint Midpoint Approximate earnings contributions from Core** Approximate earnings contributions from Fire & Securi
Slide 24: Additional Items
Additional Items 7/25/24** 4/25/24 Current Guidance Current Guidance (Includes Viessmann Climate Solutions) (Includes Viessmann Climate Solutions) Shares outstanding (diluted) 910M - 915M ~915M Corporate expenses / eliminations ~$250M ~$275M Adjusted interest expense, net* $500M - $525M $500M - $525
Slide 25: Carrier Q2 2024 vs 2023 Sales Reconciliation
Carrier Q2 2024 vs 2023 Sales Reconciliation Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023 (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisitions / Organic Translation Divestitures, net Other Total HVAC 2 % (1) % 17 % — % 18 % Refrigeration
Slide 26: Q2 2024 Adjusted Operating Profit Reconciliation
Q2 2024 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended June 30, 2024 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 4,970 $ 973 $ 871 $ (125) $ — $ 6,689 Segment operating profit $ 687 $ 113 $ 3,001 $ (2
Slide 27: Q2 2023 Adjusted Operating Profit Reconciliation
Q2 2023 Adjusted Operating Profit Reconciliation (Unaudited) Three Months Ended June 30, 2023 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 4,216 $ 972 $ 932 $ (128) $ — $ 5,992 Segment operating profit $ 742 $ 112 $ (157) $ (1
Slide 28: YTD 2024 Adjusted Operating Profit Reconciliation
YTD 2024 Adjusted Operating Profit Reconciliation (Unaudited) Six Months Ended June 30, 2024 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 9,511 $ 1,857 $ 1,758 $ (255) $ — $ 12,871 Segment operating profit $ 1,116 $ 210 $ 3,15
Slide 29: YTD 2023 Adjusted Operating Profit Reconciliation
YTD 2023 Adjusted Operating Profit Reconciliation (Unaudited) Six Months Ended June 30, 2023 General Fire & Eliminations Corporate (In millions) HVAC Refrigeration Security and Other Expenses Carrier Net sales $ 7,838 $ 1,870 $ 1,801 $ (244) $ — $ 11,265 Segment operating profit $ 1,177 $ 220 $ (64)
Slide 30: Q2 and YTD 2024 EPS Reconciliation
Q2 and YTD 2024 EPS Reconciliation (Unaudited) Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 (In millions, except per share amounts) Reported Adjustmen Adjusted Reported Adjustmen Adjusted ts ts Net sales $ 6,689 $ — $ 6,689 $ 12,871 $ — $ 12,871 Operating profit $ 3,691 (2,478) a
Slide 31: Q2 and YTD 2023 EPS Reconciliation
Q2 and YTD 2023 EPS Reconciliation (Unaudited) Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 5,992 $ — $ 5,992 $ 11,265 $ — $ 11,265 Operating profit $ 489 475 a $ 964 $
Slide 32: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 (In millions) 2023 2023 2023 2023 2023 2024 2024 Net cash flows provided by (used in) operating activities $ 120 $ 384 $ 1,041 $ 1,062 $ 2,607 $ 40 $ 660 Less: Capital expenditures 70 74 92 233 469 104 111 Free cash flow $ 50 $ 310 $ 949
Slide 33: Net Debt Reconciliation
Net Debt Reconciliation (Unaudited) (In millions) June 30, 2024 December 31, 2023 Long-term debt $ 11,270 $ 14,242 Current portion of long-term debt 2,052 51 Less: Cash and cash equivalents 2,919 10,015 Net debt $ 10,403 $ 4,278 2024 Q2 Earnings | July 25, 2024 33
Slide 34: Amortization of Acquired Intangibles
Amortization of Acquired Intangibles (Unaudited) Q1 Q2 Q3 Q4 FY Q1 Q2 (In millions) 2023 2023 2023 2023 2023 2024 2024 HVAC $ 37 $ 36 $ 35 $ 35 $ 143 $ 172 $ 170 Fire & Security 2 2 2 — 6 — — Total Carrier 39 38 37 35 149 172 170 Associated tax effect (12) (11) (11) (11) (45) (46) (42) Net impact to