Carrier Global Corporation · NYSE:CARR
Carrier Global — Q1 2020 Earnings Presentation
23 slides from Carrier Global's earnings presentation, May 8, 2020
Slide 1: Q1 2020 Earnings Conference Call
Q1 2020 EARNINGS CONFERENCE CALL May 8, 2020
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. From time to time, oral or written forward- looking statements may also be included in other info
Slide 3: Leading through crisis
Leading through crisis Priorities Initiatives / Accomplishments People Protecting and supporting our 53,000 employees globally. Responding to the changing needs of our customers. Maintaining operations Customers and business continuity and managing supply chain issues for our essential business. Str
Slide 4: Focusing on strategic priorities
Focusing on strategic priorities Maintaining focus on strategic Essential: now and in new The New Carrier Social imperatives normal VISION Our aspiration; why we come to work every day. Creating solutions that matter for people and our planet. VALUES Our absolutes; always do the right thing. Respect
Slide 5: 1Q 2020 Financial summary
1Q 2020 Financial summary (Millions except EPS) 1Q 2019 1Q 2020 Y/Y % Comments February 10th outlook had expected 1Q sales down Sales $4,323 $3,888 (10)% mid-single digits driven by gas furnace and truck / 1 Organic (9)% trailer compares and Interlogix wind-down GAAP operating profit $500 $315 (37)%
Slide 6: 1Q 2020 Segment results
1Q 2020 Segment results (Millions except %) HVAC Refrigeration Fire & Security 1Q Y/Y % 1Q Y/Y % 1Q Y/Y % Sales $1,959 (10)% $808 (16)% $1,206 (7)% Organic1 (9)% (14)% (5)% GAAP Operating Profit $167 (43)% $99 (22)% $120 (9)% Adjusted Operating Profit1 $242 (19)% $99 (24)% $126 (13)% + + + Carrier 6
Slide 7: Reducing cost while preserving investment
Reducing cost while preserving investment (Millions) February Expected Expected Investor Day cost actions COVID-19 impact Updated Carrier 600 ~$175 ~$50 ~$225 Investment ~($150) ~$75 ~($75) Non-recurring cost ~$300 ~$300 containment actions Productivity / absorption ~($200) ~($200) Total ~$25 ~$425
Slide 8: Well positioned on cash / liquidity
Well positioned on cash / liquidity 1Q Free Cash Flow1 Cash balance $1.3B opening cash balance at spin Up 100% Intense focus on working capital in Q1 and beyond ($1M) Prudent capital expenditure reduction ~$1.3B Assess timing and amount of dividends ($224M) $952M $768M $2B revolver remains available
Slide 9: Order trends
Order trends (Y/Y %) China United States Watch items/ EMEA ~ 8% of sales ~ 50% of sales United States1 (5%) Flat (25%) Q1 April ~ 30% of sales (40%) EMEA (10%) (30%) Q1 April Q1 April 8 1Excludes NORESCO
Slide 10: 2020 scenario ranges
2020 scenario ranges (@ constant currency) Watch items Sales $15B - $17B Adjusted Operating Profit1 $1.7B - $2.0B Free Cash Flow1 >$1B 9 1 See appendix for additional information regarding non-GAAP measures
Slide 11: Strategic profile
Strategic profile Strategic focus to drive top and Medium-term outlook bottom line growth Strengthen and grow core Sales Up mid-single digits Increase product extensions and geographic coverage 1 Adjusted EPS Up high-single digits Grow services and digital 90 – 100% cash conversion 1 Free cash flow
Slide 12: TM
TM 11
Slide 13: Appendix
APPENDIX
Slide 14: 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 15: Carrier Q1 2020 vs Q1 2019 Sales Reconciliation
Carrier Q1 2020 vs Q1 2019 Sales Reconciliation (Unaudited) Factors Contributing to Total % change in Net Sales FX Acquisition / Organic Translation Divestitures, net Other Total HVAC (9)% (1)% —% —% (10)% Refrigeration (14)% (2)% —% —% (16)% Fire & Security (5)% (2)% —% —% (7)% Combined (9)% (1)% —
Slide 16: 1Q 2020 Segment adjusted operating profit reconciliation
1Q 2020 Segment adjusted operating profit reconciliation $USD, Millions (Unaudited) For the Quarters Ended March 31, (dollars in millions - Income (Expense)) 2020 2019 HVAC Net sales $ 1,959 $ 2,168 Operating profit $ 167 $ 293 Restructuring (2) (17) Impairment charge on minority owned joint venture
Slide 17: Constant currency reconciliation
Constant currency reconciliation $USD, Millions For the Quarters Ended March 31, 2020 2019 % YoY HVAC Adjusted Operating Profit $ 242 $ 297 (19)% Impact of Foreign Exchange (1) Adjusted Operating Profit at constant currency $ 243 $ 297 (18)% Refrigeration Adjusted Operating Profit $ 99 $ 130 (24)% I
Slide 18: 1Q 2020 EPS reconciliation
1Q 2020 EPS reconciliation (Unaudited) $USD, Millions For the Quarters Ended March 31, (dollars in millions - Income (Expense)) 2020 2019 Net income attributable to common shareowners $ 96 $ 400 Total restructuring costs (5) (33) Total non-recurring and non-operational items included in operating pr
Slide 19: Free cash flow reconciliation
Free cash flow reconciliation $USD, Millions (Unaudited) For the Quarters Ended March 31, (dollars in millions) 2020 2019 Net income attributable to common shareowners $ 96 $ 400 Net cash flows provided by (used in) operating activities $ 47 $ (183) Less: Capital expenditures 48 41 Free cash flow $
Slide 20: 2019 Segment adjusted operating profit reconciliation
2019 Segment adjusted operating profit reconciliation (Unaudited) $USD, Millions For the Year For the Quarters Ended Ended March 31, September 30, December 31, December 31, (dollars in millions - Income (Expense)) 2019 June 30, 2019 2019 2019 2019 HVAC Net sales $ 2,168 $ 2,735 $ 2,602 $ 2,207 $ 9,7
Slide 21: 2019 EPS reconciliation
2019 EPS reconciliation (Unaudited) For the Year $USD, Millions For the Quarters Ended Ended March 31, June 30, September 30, December 31, December 31, (dollars in millions - Income (Expense)) 2019 2019 2019 2019 2019 Net income attributable to common shareowners $ 400 $ 784 $ 492 $ 440 $ 2,116 Tota
Slide 22: Operating profit - reported
Operating profit - reported Reconciliation to results reported by RTX $USD, Millions 2019 2020 Q1 Q2 Q3 Q4 Full Year Q1 Net Sales $ 4,323 $ 4,962 $ 4,822 $ 4,501 $ 18,608 $ 3,888 Operating Profit - as reported by RTX $ 529 $ 836 $ 685 $ 647 $ 2,697 $ 363 Reconciling items: RTX corporate cost allocat
Slide 23: Operating profit - adjusted
Operating profit - adjusted Reconciliation to results reported by RTX $USD, Millions 2019 2020 Q1 Q2 Q3 Q4 Full Year Q1 Net Sales $ 4,323 $ 4,962 $ 4,822 $ 4,501 $ 18,608 $ 3,888 Adjusted Operating Profit - as reported by RTX $ 562 $ 866 $ 861 $ 689 $ 2,978 $ 456 Reconciling items: RTX corporate cos