Carrier Global Corporation · NYSE:CARR
Carrier Global — Bank of America Global Industrials Conference 2022
22 slides from Carrier Global's conference presentation, Mar 15, 2022
Slide 1: Bank of America Global Industrials Conference
Driving sustainability. Inspiring confidence. Bank of America Global Industrials Conference Patrick Goris, Chief Financial Officer March 15, 2022
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 ‘21 KEY DATA POINTS1 WHAT WE DO Fire & $20.6B ~58,000 Security Aftermarket Asia Pacific SALES EMPLOYEES HVAC 13.6% 160+ SALES Americas SALES2 SALES ADJ. OP. MARGIN* % COUNTRIES MIX2 EMEA BY REGION2 $1.9B Refrigeration FREE CASH FLOW* Original equipment DIGITAL AND TECHNOLO
Slide 4: Who We Are
4 CARRIER WHO WE ARE HVAC Fire & Security1 Refrigeration $11.4B 15.6% ~$3.4B ~15.6% $4.1B 12.1% NET SALES ADJ. OP. MARGIN* % NET SALES ADJ. OP. MARGIN* % NET SALES ADJ. OP. MARGIN* % WHAT WE DO WHAT WE DO WHAT WE DO • Heating, ventilation, and cooling • Building and home safety / security • Transpor
Slide 5: Secular Trends Drive Sustained Growth for Building and Cold Chain Solutions
5 CARRIER SECULAR TRENDS DRIVE SUSTAINED GROWTH FOR BUILDING AND COLD CHAIN SOLUTIONS HEALTH AND WELLNESS SUSTAINABILITY DIGITALIZATION GROWING MIDDLE CLASS Wellness economy ($T)¹ Annual infrastructure investments for Global spend on digital Middle-class population global net zero by 2050 transforma
Slide 6: Differentiation
6 CARRIER DIFFERENTIATION STRATEGIC INITIATIVES TO CARRIER POSITIONED TO CAPTURE OUTGROW BASE MARKET SHARE OF EXPANDED TAM Integrated HVAC and Unmatched installed F&S healthy and safe base 330K 33M 1.8M 90M+1 Commercial Residential Refrigeration Fire and solutions HVAC HVAC equipment security Global
Slide 7: Aftermarket Focus Fuels Growth
7 CARRIER AFTERMARKET FOCUS FUELS GROWTH… Attractive business • Gross margins 10+ points higher than $7.0B+ Carrier average HSD- LDD Large growth potential vs. TAM • Massive current installed base $4.5B • ~$2.5B growth in ~5 years Proven playbook already delivering results High single to low double
Slide 8: Value Creation Framework
8 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% ~100% net share-count revenue growth bps/year ongoing ETR of net income reduction1 Doub
Slide 9: Disciplined Capital Deployment
9 CARRIER DISCIPLINED CAPITAL DEPLOYMENT… KEY MESSAGES • P&L investments funded by productivity Organic growth • Capex ~1.75% of sales • Primary metric: FCF yield > WACC + risk premium Inorganic growth by years 3-5 • Sustainable through the cycle Growing dividend • 30% payout ratio by 2023 vs. ~27%
Slide 10: Acquisitions
10 CARRIER ACQUISITIONS FINANCIAL PRIORITIES ASSESSMENT METRICS Enhance sustainability leadership FCF Yield Bolster building and cold chain ecosystems EPS accretive by year 2 Accelerate digital and aftermarket growth Margin accretive Enhance technology differentiation and disruption Expand adjacenci
Slide 11: ESG Is in Our DNA – 2030 Goals
11 CARRIER ESG IS IN OUR DNA – 2030 GOALS OUR PLANET OUR PEOPLE OUR COMMUNITIES Invest over $2B to develop Achieve water neutrality in Exceed benchmark employee Positively impact communities by healthy, safe, sustainable and our operations, prioritizing engagement. enabling access to safe and intell
Slide 12: Good for the Planet and Good for Customers
12 CARRIER GOOD FOR THE PLANET AND GOOD FOR CUSTOMERS Product Planet Customer Annual GHG Savings Annual Operational Savings Vector eCool1 65% 75% All electric TRU PowerCO2OL1 77% 30% Commercial refrigeration AquaEdge® 19DV2 62% 40% Water-cooled chiller Infinity® 26 Air Conditioner with 38% 28% Green
Slide 13: Recognition & Industry Leadership
13 CARRIER RECOGNITION & INDUSTRY LEADERSHIP Named to Named an Change the World List ESG Industry Top-Rated Company Fortune, 2021 Sustainalytics, 2021 Among the Received a rating of Best Places to Work for LGBTQ Equality AA in the MSCI ESG Ratings assessment Human Rights Campaign Foundation Corporat
Slide 14: Why Carrier
14 CARRIER WHY CARRIER 1 Secular trends driving increased total addressable market 2 Carrier leading through technology / digital transformation, life-cycle solutions and ESG leadership 3 Rigorous cost reduction to fund investments and improve margins 4 Compelling financial algorithm 5 Strong balanc
Slide 15: Appendix
15 CARRIER APPENDIX …and plenty of opportunity ahead
Slide 16: Use and Definitions of Non-GAAP Financial Measures
16 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 17: Carrier 2021 vs 2020 Sales Reconciliation
17 CARRIER CARRIER 2021 VS 2020 SALES RECONCILIATION (Unaudited) Factors Contributing to Total % Change in Net S ales 2021 vs 2020 General Corporate Expenses and Fire & Eliminations HVAC Refrigeration S ecurity and Other Total Organic 17% 21% 7% 0% 15% FX Translation 1% 3% 4% 0% 2% Acquisitions / Di
Slide 18: Segment Adjusted Operating Profit Reconciliation
18 CARRIER SEGMENT ADJUSTED OPERATING PROFIT RECONCILIATION (Unaudited) (Unaudited) For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 General General Corporate Corporate Expenses and Expenses and Fire & Eliminations Fire & Eliminations (In millions) HVAC Refrigeration Securit
Slide 19: EPS Reconciliation
19 CARRIER EPS RECONCILIATION (Unaudited) For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 (In millions, except per share amounts) Reported Adjustments Adjusted Reported Adjustments Adjusted Net sales $ 20,613 $ - $ 20,613 $ 17,456 $ - $ 17,456 Operating profit 2,645 159 a 2
Slide 20: Net Debt to Adjusted EBITDA Reconciliation
20 CARRIER NET DEBT TO ADJUSTED EBITDA RECONCILIATION (Unaudited) For the Year For the Twelve Ended December Months Ended (1) (In millions) 31, 2021 March 31, 2020 Long-term debt $ 9,513 $ 11,029 Current portion of long-term debt 183 218 Less: Cash and cash equivalents 2,987 768 Net debt $ 6,709 $ 1
Slide 21: Fire & Security Segment Reconciliation
21 CARRIER FIRE & SECURITY SEGMENT RECONCILIATION (Unaudited) For the Year Ended December 31, 2021 Fire & Fire & Security Security (1) (In millions) (Reported) Chubb (Adjusted) Net Sales $ 5,515 $ (2,159) $ 3,356 Segment operating profit $ 662 $ 133 $ 529 Adjustments to segment operating profit: Res
Slide 22: Free Cash Flow Reconciliation
22 CARRIER FREE CASH FLOW RECONCILIATION (Unaudited) For the Year Ended December (In millions) 31, 2021 Net cash flows provided by operating activities $ 2,237 Less: Capital expenditures 344 Free cash flow $ 1,893
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