OTIS - Earnings call 4 2023 | Otis Worldwide Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Otis' Fourth Quarter 2023 Earnings Conference Call. This call is being carried live on the Internet and recorded for replay. Presentation materials are available for download from Otis' website at www.otis.com. I'll now turn it over to Michael Rednor, Vice President of Investor Relations.

Michael, you may begin.

Michael Rednor

Krista. you, Thank Fourth Otis' Earnings Call. Conference Welcome Quarter to XXXX

otherwise today Marks, Maheshwari, be appendix to Chair, On except Vice the significant and results can Judy items. me with where note excluding Please the Anurag of call from CEO continuing will restructuring measures are President; the A and webcast. reconciliation CFO. found the these operations, in noted, company President and speak Executive nonrecurring and of

statements, quarterly listeners which uncertainties. details remind the Form could that results differ that risks including contains forward-looking cause XX-Q, factors subject also and to are We materially. Otis' our presentation to Form reports provide filings, SEC important actual XX-K on and on

Now I'd to Judy. the like turn call over to

Judith Marks

including thank which everyone everyone, these around We XXXX We results our hard last operational We globe. and us. with cap achieved on We quarter focused fifth well. as of our and performance. excellence. work year, in you, listening business safe a while modernization imperative strong we our delivery joining strategic with hope remaining strong delivered fourth strategic our the added enter confidence off to for driving model, Thank you, pillars, year is colleagues value, full Mike, the service-driven

So commitment I for to you of want work, Otis to Absolutes. thank your our demonstration hard each of our customers and

teens EPS the growth new milestone including achieved grew year, about organic portfolio at X. now growth year delivered sales a all X.X%. for the organic We maintenance in our Slide for strong full of by grew industry-leading record growth units, by sales for Otis the Starting We X.X%, X.X% of high Service, and quarter. with million We stands on year total our growth fourth adjusted company. in low mid-teens a X.X driven regions, which

year, Modernization in teens fourth orders for up growth low XX.X% quarter. were including the the

Our XX%. modernization backlog is up

XXXX, In XXXX. Equipment we Equipment share our the in business. New uncertain in for increased despite sales XX we have environment, basis points continued as strong approximately and backlogs increased of New expect our backlog X.X%, to on X% XXXX, have orders QX Heading we our sales and our Equipment Equipment into New growth visibility achieved modernization New macro good gain. grow,

We adjusted generated approximately $X.X $X.XX cash billion dividends approximately share to allowing repurchases. to of return shareholders free flow cash in and us billion through

Additionally, initiatives related generate in to customer-centric began earlier to global scale gaining our and supplier and synergies, to spend. our our unlock we executing focused program, optimizing uplift across our processes indirect standardizing XXXX, on organization efficiencies

million characterized margin profit sales track guidance. transformation Our are on solid in To summarize, XX% expansion of indicated. medium-term growth, streamlining nearly and and achieve outperforming by savings XXXX our to EPS mid-XXXX growth adjusted efforts organic was we $XXX run as rate previously operating

on positioned enter repair greater well maintenance are with supporting We focus and we XXXX unit maintenance our as as X% than growing and executing sales New Equipment we in our backlogs growth business. growth modernization

our business goals meaningful alignment with XX absolutes of strategy. also and ethics the We safety, in our of ESG XXXX, toward made progress our quality emphasizing

science-based reduction in for announced we to have gas setting targets, Importantly, to early November, initiative evaluation. science-based the near-term commitment our targets which formally submitted been greenhouse

performance Slide orders on our X. to Turning

Asia with the were in year orders the for quarter-over-quarter growth growth mid-teens single-digit EMEA and Equipment up regions. declines X.X% as by and China Americas. in down in quarter, Pacific Orders New to X.X%, offset in in returned were low acceleration the all growth

X%. of XXXX Despite backlog, able we gain units increase our Overall, on points up challenges, in were Equipment grow were to and nearly able of X% and achieve these Equipment XXXX. roughly X-point share New New XXX,XXX units the New approximately to between were basis globally, to about top macro we down which XX XXXX, was Equipment

better to and innovate drive growth to serve our continue across our customers business. We

we expanding launching platforms, GenXXX America deployment the example, Core GenX to roll of out in and continue North elevator For the connected digitally China. our to

the as ability In to over sales our investments Otis our R&D for year percent X% addition, in our also the we in second support one launched efficiently. relatively includes a which the position remained for GenX MOD platform. Americas X.X% our at globally, We growth number a plus, a invest upgrades ONE of IoT a connectivity and about year of row. innovate to business accelerating modernization and package our strategic reflecting to strengthened stable to portfolio

line Asia in China, of We've recaptures in and within Americas power the our growth growth second offset low continues the in consecutive EMEA. a double-digit portfolio at driver, improve, rate about China in Pacific and single-digit growth strategy. improvement our cancellations and portfolio with mid-single-digit the demonstrated approximately geographic diversification with our growth as conversion business year, X% Globally, versus for leading to XX% currently our XXXX. conversions standing to

appendix the IoT units growth Additional our growth have XXX,XXX use of long-term our be portfolio solution. and which can we growth component XXXX Otis of essential an At as details strategy top on line our portfolio connected is XXX,XXX algorithm. found our XXXX, accelerating in year-end in ONE

well Our maintenance year labor with like-for-like Service performed mitigate to throughout pricing headwinds the cost points, helping within the business. sales of force X

up our modernization strength offerings double-digit continues package in delivering Korea, in of Modernization Our by drive in fifth -- performing. strategic particularly driven mod our is growth were pillar XX.X%, value Asia to the as of orders results.

EMEA bookings. and strong quarter project in Americas drove major the Additionally, fourth modernization

backlog year, XX% giving for versus us the Our XXXX. sight prior growth in line good strong up of modernization is

to trust have continue innovation, We us. deliver many exciting projects the customers based our on in win ability to our and

increasing build, streams. escalators, loyalty build customers' we with we and recurring Service value and revenue As elevators modernize our and

nation's development. is on with providers close transport building decades of cooperation and For China, metro Equipment help New urban the to expand in Otis city

than the rugged a for Otis million In interiors for a a West We more famous in awarded on units. incorporating XXX on custom engineering. carries X Chongqing project Street. of installation XX daily of its while our elevator and destination Line San with Compass network and Metro, units will design which provide Mission across was long elevators Otis XXX these Chongqing modernization Otis the Francisco, XXX system. and China, escalators cab that ONE passengers includes at comprehensive dispatch Metro all XX of has history terrain The ingenious is

The Hong been has maintenance awarded selected use Tin a energy-efficient Otis office gearless modernization quarter. all project Hong upon are the conscious Service partners addition, contract will meet requirements. drives This the the have we and units machines Estate. the our Kong Yiu modernization to project's recaptures to Kong, Housing to XX relationship project be In new been Commonwealth elevators, to for honored at will a the with of our In which with XX-story by extending customer in the commercial Otis contributing completion. includes for long-standing Authority, environmentally maintained building,

equipment Khalifa. EMAAR In the in tallest properties their original Dubai, and Otis will take being upgrade the escalators X controllers XX us for the the Burj We technology with and providing provider drives modernize building. pride its world's of this at elevators iconic has the maintenance trusted of manufacturer and opening. latest since building and

for extends contract In addition, Service the agreement another years. XX our

a top years, last, to taken the And of delivering iconic multiyear XXX elevators Two have where modernization in nearly we're visitors EMEA the of towers the Duolift. also Eiffel Tower, for Otis

on Turning to X. the fourth quarter results Slide

in increased X.X%, finish the for of and $XX the face exchange profit, Organic EPS China. roughly operating foreign sales million growth challenges, growth quarter in high up New strong both approximately billion excluding the $XXX while free million the billion. XXth Equipment tailwind was notably with in X.X%. cash We $X to sales were quarter. reported flow quarter, fourth of at in $X.X flat the Adjusted quarter year ended $X.X Adjusted segments. a or macro with consecutive were us the the grew single-digit XX% with Service, year For allowing of in $X.XX fourth profit million adjusted grew up

over it to walk through Anurag more detail. turn I'll our that, results in XXXX With to

Anurag Maheshwari

offsetting flat, Thank in Starting roughly quarter segment and sales declines driven single Equipment you, up on $X.X were Americas Slide roughly respectively. in digits billion Asia Pacific, sales New single-digit were mid-single-digit performance organic Judy. high with Otis China. X. by low and sales growth flat with EMEA fourth

strong growth with lines strong regions. Service, organic and For all we of X.X% of business sales delivered quarter another across performance at

repair and the mod including X.X% consecutive X%, were Asia. up in were third and up sales growth sales quarter Maintenance of double-digit

sales New and of China. $X.X were grew organic solid growth billion, For Equipment with year, regions all the sales X.X% full outside in

mid-single New and digits Pacific single Equipment high up single up globally, pricing EMEA with digits single the was up digits. digits, Americas up Asia low low

material Although challenging, discipline in the neutral we the from price focus environment remains remain productivity. in continued price on region cost and our pricing China

in performance business of organic growth, Service of and single-digit the sales outstanding X.X% year CAGR lines teens. marking billion, were low growth in including $X.X with high a X-year another showing all repair

X the excluding for the came of impact in in up about pricing, mix as roughly churn points Maintenance year. expected,

segment expense. Slide was and Turning by million Equipment, product operating to partially commodity SG&A as pricing headwind profit $X year offset X. operating performance the mix our tailwinds fourth ForEx we for margin best points. excluding higher quarter, Starting productivity, Adjusted the profit, expansion of million $XX up XXX alongside were unfavorable delivered strong with and in regional on basis up New

material by pricing costs. to of partially profit, million $XX and annual $XX Turning up maintenance as Service. million higher favorable adjusted increases was were operating and tailwind wage ForEx quarter offset higher Fourth excluding volumes, productivity

For consecutive margin we points margin XX% year, by quarters, XX And basis XX at year for consecutive we a expansion. past the second expanded the Service consistent the delivered have rate. exiting

than as currency, offset constant million expanded we regions put full pricing, midpoint the initial performance more XX to overall constant than weaker operating achieve at the constant overcame our Despite able during For better New and macro currency profit full Equipment guidance year. of was in year, was experienced operating the unfavorable growth margin at weakness up million $XX basis us year as we other of and growth were productivity $XXX profit and at points. anticipated backdrop profit This the currency in mix. China, at all growth the for

strong million currency, EPS by and million then, by of in grew of Service tax more exchange driven of operating productivity. have Zardoya points. Adjusted XXX operational we at bridge. solid $X.XX, profit X than basis supported optimization which Slide out basis the EPS Service full a of 'XX the increased additional and foreign increased an $XXX Since rate year by pricing $X.XX, repurchases year adjusted $XXX performance. the points offset volume, margins XX transaction, $X.XX headwinds. drove lays from share Accretion $X.XX by constant

out versus and income net the favorable flow of the quarter, we notable with than in closed more capital. by prior working XXXX up free higher million driven $XXX Additionally, adjusted XX% cash year

to continued In working New Equipment manage team payments increased in addition to from quarter, the growth the in down capital well. orders the

result, As and to we that $X.X EPS margin points guidance flow. we a approximately we of would achieve guided of low to XX we profit expansion our adjusted growth. mid-single-digit back to billion cash the look approximately free If basis of operating generating 'XX, achieved annual to X% XX were growth, sales beginning initially

and performance, a a and we macro pricing billion environment base EPS more New order Due beyond. to grew will and repair our all adjusted our approximately solid strong to backlog, operational throughout able productivity, on which despite to support were outperform to continued of Equipment both growing end With 'XX and all maintenance and approximately year by orders 'XX, expanded uncertain on activity shareholders. $X.XX these New while the robust Equipment us the returning metrics we XX%, penetration sales further an in modernization

I'll to Judy it discuss outlook. XXXX to now back turn our

Judith Marks

was market year by up down market drivers, teens which estimate North down in In in high double-digit the outlook. digits, China, north low the market XX%. the X Americas masked Slide by as America. downturn of the was with was with low the Asia, down America digits. growth the Asia mid-single to on in Western solid single a low single that but market just we down and the in Europe in Pacific, XXXX, performance a primary were was was Latin In digits offset EMEA, partially decline Central Starting market In single-digit leading

In markets to down XXXX, low to digits is the down Americas expected markets EMEA global low the China. down low in market with to digits be and and New in single units mid-single driven mid-single in Asia by Equipment digits

million In to that remain fluid, expected the market industry base around of fundamentals growth well grow are a Equipment to at model. supported mid-single dynamics New global XX.X the at the installed of by and While approximately the units. XXXX long-term digits similar Service-driven XXXX, reach rate is

single-digit growth. the China. for the low $XX.X billion or to at growing the and we Otis, $X.XX be expect expect business. expected the X% growth X% we in same growth be In to we for $XXX EMEA, actual we driver billion, expect to And foreign mid-single-digit by Asia, for the X% industry this Adjusted $X.X With driven operating sales Americas industry, as expect and organically Service of $XXX currency. our at to we're backdrop, expecting Overall, or exchange million between $XXX million, up billion, excluding to currency million $XX.X to headwinds. and $XXX actual billion is profit to million X% net

range the expect midpoint X% prior We year. in nearly to of XX% $X.XX the or versus the up adjusted $X.XX, $X.XX to EPS at

$XXX repurchase as to With look Finally, our a of free $X.X bolt-on our we disciplined million in payout M&A. of commitment and shares approximately in XXXX our approximately expect to capital to $XX adjusted to pursue cash $XXX strategy, grow typical million we billion. dividend allocation expect million we flow

it to in detail. that, let segment Anurag to more the With me hand back XXXX outline outlook

Anurag Maheshwari

on XX Starting Slide outlook. New for the Equipment

a good of have well to and gain due with have sales. backlog incremental relatively combination New This, actions sight to extends the over the over line position year XXXX. few we initiatives We pricing of past coverage, share years our taken for Equipment sales which us out in for

China. anticipate low Equipment with sales single declines EMEA flattish up digits a New with Pacific mid-single and up Asia result, Americas mid-single-digit we to digits As be organic and in

targets. installation roughly faster with and again and backlog mix with offset volume uplift higher from the tailwinds up by SG&A project Equipment to New profit productivity, from material regional pricing, XX points conversion commodities We to and and flat remain our basis steady will productivity the Driving goal be to expect expense. benefits unfavorable outperform margin a and alongside strong priority

to Service sales. outlook. for Slide the XX Turning Starting with

net be of Service X.X%, in anticipate the to expected organic significant year sales by our driven at we of what digital solid moderate and our saw after portfolio sales up than another mix organic approximately pricing contribute to are Mid-single-digit channels, for maintenance growth point expect traditional Maintenance to a repair We both in also repair X%. X more and adjusting growth and and X% pace and will through to churn. although 'XX. additions X.X%

a in to about year For the sales X% extends we modernization, the solid execute up out similar Equipment, backlog, ended we of with mid-teens. as organic a and on anticipate growth New over year

in Our optimization has accelerate products expansion. and margin drive strategy of more of and driving to above modernization standardizing benefit chain growth the X% supply sales factory to also This achieved will enable added the 'XX. helping us

Service to profit. Turning

expect similar than and expansion, volume, offset and are roughly wage productivity We margin annual price, of more 'XX. uplift SG&A points basis higher strong continued expected to to inflation XX

processes. Slide scale, half standardize to our Now Project second enterprise and chain Uplift turning We spend XX. executing and leverage initiatives indirect in we 'XX began optimize the and supply as our improve of

leveraging track million in anticipated come half $XXX XXXX, million optimization with $XXX are savings by of roughly Out rate nearly year-end the supply and mid-'XX. from be in and scale achieve to by We savings savings million the and of will enterprise total million rest run of $XX indirect savings to $XXX from realized, standardization. and rate improvements process on our XX% run targeted chain from

Service opportunities the New and and with analyze the split in remaining estimate to savings execute Equipment on continue segment of will be and We between the corporate. XX% the

'XX the on XX. to bridge Slide Moving EPS

optimization and Below line, of of $X.XX $X.X adjusted increased in to and by at sales of guidance with organic to by expect our tax of adjusted the with is midpoint, margin $X.XX the expansion. operating share X%, interest XX approximately EPS driven million growth to expense X% $XXX benefit we ForEx continued headwinds offset basis of growth to approximately profit points $X.XX billion rate the cash approximately Our flow. $X.XX free of in supported for $X.XX reflecting repurchases

first EPS cents Looking half, for loaded $X.XX expect the EPS we the the to growth half, EPS of be first cadence level in we second year, and growth the be first at expect the to while fairly the the a on quarter color little between faced the of quarter. first with couple A orders. compare X%. starting where we We bit quarter versus a than second than metrics, of last grew year the lighter more quarter first more difficult the

New So we roughly expect should modernization while orders remain Equipment orders XX%, be strong. to portfolio down and growth

margins company be total should profit over and Service. sales for As roughly will basis sales expand XX operating led XX%-plus growth profit, points and both to by X%,

year be by year in interest consistent continuing share with led to from the driving macro costs prior by driven All lead Overall, due a EPS should roughly remain and on line tax by of of count. outlook will higher shareholder focused to another headwinds reflects $X.XX further Below operational to the this lower mitigate line, growth business. primarily in, timing offset We Service $X.XX performance performance. and our to value. challenges rate

request will for With open the please to that, Krista questions. I line

Operator

first Instructions] Coe Nigel Research. question the line Your [Operator from of comes Wolfe from

Nigel Coe

think outlook weakness So New mentioned X% know solid some for I a in you we've I Anurag, price had XXXX, China. Equipment. for

Service geographies again, would if of wondering excuse So it, any I out but across missed significant And maybe called me just there's SKUs pricing the that sort there. this you you expect if year? the what

Anurag Maheshwari

Thanks for the Okay. question.

was spoke Let I clarify, my on prepared pricing. me maintenance that comments in the X%

see So and see what adjusted churn. is we'll we'll for mix

about that. X% just like-to-like on see for a we'll and So basis

seen New and AP. good in Equipment 'XX EMEA price side, America, we've the clearly, On in increases

it deflationary a over that Equipment. of have in cost as in pressure expect does 'XX 'XX, But price be price will neutral. saw economy, continue so China it's New to in Some we but we

Nigel Coe

pricing China? outside of Okay. deflation But evidence of no

Judith Marks

at all. Nigel, No, none

Nigel Coe

those 'XX. And land on. starting an trajectory in if savings. I through initiative upward that Great. say the then do Equipment just focused what curious New we're I on mean, of see Obviously, Okay. Where that's year? to any we're you know seeing UpLift margins? you're Services? coming more mainly this on And the just I'm modernization or they would kind

if we're through to of going Just wondering see coming some that 'XX? in

Judith Marks

let to work savings and with margins. and it pretty where of how Yes, we We with you we're with be to UpLift touch focused. the me seen mod again, model in let importantly, customer really across days early much board, the on going trajectory pretty pleased the more Nigel, process we've the the more changing but 'XX. talk Anurag, the work I'll organizational saw

Anurag Maheshwari

Yes.

Day said On mod in that bit is on New between rest well. in of the comments, we right we And few trend. months UpLift at started little be as that par the but the weeks, months outlined Equipment think and the give going in what on margins, good. savings, as the that see it and that the a color Equipment year should a the then expect Investor this and for few and we Service up, a in XX% be cadence, pretty I We'll prepared couple a ago trajectory I with to New for more corporate,

$XX So $XX we're with million the that. year to year going across cadence and in exit of million similar

Operator

of Cowen. from from next Your Khanna comes the question TD Gautam line

Gautam Khanna

the net should how UpLift was could think I wondering you next? quantify that year savings and and we this about if from

Anurag Maheshwari

Yes.

at Nigel 'XX, Equipment million we from or P&L currency net tailwinds, positive. are right? New price is million cost. if Gautam, in side, bit but flowing commodity is than going constant $XXX We're profit you grow of approximately a XXXX, bit me the The to seeing the So question. $XXX operating Service through that is -- to $XX by our which still what side. little at About The obviously UpLift, million. the savings, the for the a look that's thanks, asked little lighter is earlier, price from So

from that, our about the million, you coming and of we're price right? So then of and $XX to that volume, add $XXX UpLift if getting cost mix. -- is million rest contributing net all together, the is of So

$XX to is the UpLift the P&L. flow of net through million So XXX%

Gautam Khanna

on just sound on you erosion to se, some comment earlier is your due Equipment all like to China New but then in could reason And the rather the cost price you're New market, competitors, it. going Equipment -- about just it across if it and talking there pricing? what's for lower on expand per competition is doesn't Got other

Judith Marks

Sure.

we're competitive very of We'll of and too. what's price continued it market. there. north So remains in But this down, terms are what savings. really, gives be costs And cost costs commodity start the The focused this called We've it weak. XX% really the environment, deflationary productivity it's coming helping. a us going And we're market on very year. we And down, in come that's a neutral ability. saw to seeing

every market that's down of we Now Equipment, orders Sally the China, New margin. a our great in to orders. XX% are in and team we're volume listen, quality did the terms balancing that's what day backlog in and taking job. on contributing in quarter, we're of X% we're a And the We this were down the in

share gain years. did we've gained several we share consistently now for so And and

managing Gautam, I you focused we've business Service executed for sales coverage on when up it business. in really our we're year-over-year. significantly New you, tell our done the business, is this whole, When their a was year, but contributed China and importantly, will growing pivoting but with year look look China what Equipment and profit our carefully, on you our just with So well as key more strategy as because we've our at all that accounts we've

a sales now Service have sales, mid-teens Our years of is from China we ago. which our -- CAGRs. XX% few And Service grown for mid-teen up accounts

we've on. trend service last we XX% and that's growth been both and this And value units had in quarter, in in the

it's story. in in mod Service growing it's but Equipment, New a So balance about

Operator

next the Barclays. of Instructions] from line Your comes question [Operator Mitchell from Julian

Julian Mitchell

the perhaps clarify wanted just I New on outlook. Equipment to

through New guess, up had the Because for backlog orders Equipment, I last sort year, X, as you down with every backlog region and Slide the move the year? the down. market the I think, globally even year. in we you How the trending thinking got of the You've about in are

a 'XX Equipment. sort a had guess, New over I you Xx So of book-to-bill, in in

understand how progression are So just in and implied there about trying sort XXXX, of the backlog to we book-to-bill? the thinking

Judith Marks

Yes.

the EMEA quarter. So EMEA how, We pleased up fourth strong really in the was with more was X%, Americas up obviously, going drove Julian, couldn't Americas with itself, XX%. really New especially orders we're in backlog is X%. be and Equipment

in So giving everyone to line the strength of majority of down that with of is that that our going regions XX But that in we gives us backlog exception us Equipment -- going that's gain is digits confidence. mid-single we to of backlog into China can that strong share the with points New the we're gives as go backlog 'XX. confidence basis between the it's that that sustain and us sight

Anurag, I'll year through you take the them kind transpires. how of let

Anurag Maheshwari

Thanks, Yes. Judy. Yes.

was our in you more Julian, than as said, X So XX%. book-to-bill

to that are New orders Equipment expect We higher in than because quite revenue. be 'XX our similar

So our the outlook as finish end be line in the to increase we a even go through at even should with don't we share, the year, market if backlog higher. slightly course year and do of to perform expect we flattish we

quarter the Clearly, in quarter. are for the in Equipment third first second and easier but terms get orders, us us New tough then they comps in of the for

in little we the of if a generation this we So market way quarter-by-quarter, flattish year backlog. bit it remain should you higher slightly that will but with stays or are given a see confident the outlook,

Julian Mitchell

customers how and and North sort in verticals are Are America in seeing terms right of customers that on maybe in sort of of the versus behaving just that taking That's for helpful. projects being on New sort projects just sort seeing how multifamily? And you're North on color Equipment? of office EMEA, sign you existing it's weakness or particular and then and now particularly delayed Any maybe market one America off. Judy Are projects you going please? seeing it's plan of for new longer that ahead Europe, are on to

Judith Marks

Julian. Sure,

Let last be I it to our out relationships and we team book up the lowest be North still up. in to share, me to we since the and there pricing. America America. said, we GFC. orders and market But really enable units that in yet, increased back start we the these is New context, long-term with finished gain the -- backlog And for Equipment North the goes customer And as segment year, delivered

there. North performing to our to infrastructure we've well had If to all of to So going rank, there. team grow the segments of outpaced America. When North segments major success But growth. years is themselves, none and order the look due weakest I in of best, none America. strong Multifamily had several the we is are good them, very at segments strong them is in really We're continue -- with are of projects. the the

to market, that We've the in And a X market backlog gives pipeline for so introduced in Otis North a the Core we invested that seeing active and bids. America. the low-rise know us the encouragement Core GenX to is and to a seen of And benefit seeing successful and can the orders we're to going it's the still this we're stories. American be that great is is market. -- mid-single-digit X be backlog between year XX% we going North we're where why to We GenX our and product

there, that sight and is for better sustained by of Central lead is plus year's far. us good North Europe next -- again, Europe, it is in led by a infrastructure months little we're in than And gives XX line So South a seeing to revenue. activity. weak. Spain, tends XX, America Europe strong, Northern Europe In remains residential

the the it's looks terms segments or German of of is locations economy we -- ground, in Europe. we again, whether like in see other -- 'XX to on the any the 'XX, But what us looks like

Operator

Exane. Paribas of Borrega BNP from next Your Miguel the question from comes line

Miguel Nabeiro Ensinas Serra Borrega

the sense the as weak. The you of first market said, so, pressure one, But just in one QX. peers environment share quarter in reported you strong or on China, pricing the increased market do Obviously, -- competitive China. the gains market remains last your over

So on views just seen far? wanted to get your to we've what anything incremental so

Judith Marks

actually we believe market in I'd to but Miguel, a we in performance on the down step and 'XX, color north me single gained can you take any coming given China low look Listen, some or quarter compares, down with year, share XX for here. X back and about give like for and when try additional Sure. again, digits of in, but let you us based even vary overall, the

the half did and versus manage perform those our share but half on profitability. the second maintaining appropriately always of manage growth. versus first share in And while we volume year dials the First, we momentum we better

products. and GenXXX multiple We've in of to offset with because year price decline and our offering, again, reach the over -- and and geographic value China, declined and in coverage this We've OH order the And us look and in the we that channel. we've escalator our of given the for better continued technology, brought vertical It's distributors. that's invest in market, productivity. added because our all impacted brought strategy past the give about you our China our to year. the mid-single our Our deflation XXXX, innovate market terms when digits, but to agents the And and able upgraded China. market advantage the of products us spoken will us our yield been the to in we've year at an we've sales we've

over our in XX% market increased to bookings pre-spin, multiyear down period the that XX% by we've while since over nearly same China Overall, XX%. is

So our is there team day focused. out is our every working, strategy

our backlog, down of profitability sacrificing backlog, quality backlog, our the it's the digits, mid-single we're We not volume. for are of while -- our

Miguel Nabeiro Ensinas Serra Borrega

if bit then modernization. a little second can talk about you And question, great. That's my

your margin of And peers mentioned other see growth up from you exactly? how I maintenance. backlog in for What of ahead Equipment, mentioned with par the lies? even difference And then New is think next those XXXX think that modernization, here, XX%. the than one Where the should driving the are And about you we do stated You think that would you and of in you it that years? XXXX? margins growing few is modernization higher margins segments on

Judith Marks

Yes.

based all mod up market just is by region a the by on -- the me market regions. sixth XX-plus a let a growth And the refurbishment to now on over margins because was margins But orders that is pleased the So in the We're little vary where year-over-year terms going little cycles up mod. I'll in the XX%. that's of of our consecutive just comment see backlog you're in up. to aging quarter additional majority driven the modernization cycle of with the about out required due on ago. This from years talk and nicely margins. construction bit Really equipment natural

and little base fourth my significantly regulations expect of bit really orders Asia combination, Korea. But and a installed is China in in again, of quarter, really with a aging in And demand younger creation. out I the obsolete China as team a goes mod a was again when terms proud EMEA, is we contribution a But Again, in because look the margins. team on are prepared geographies, shortly. have margins safety you it's said different will our and in project Pacific as to albeit The growing And in of double that strong because part and we great orders, comments, continue. digit. Americas Equipment our base small of and a Anurag when mod surpass had really mod major we shared, there. margins, a market New there different is product standout our I'm

mechanics a out them this set up know encouraged We've future. are imperative, current, We've to customers by kits what industrialize mods. we They're we do are out really Our strategic sales they how ensuring modernization. there, our to we just because teams need I'm mod not to but around the fifth our it. going there. have organized their as elevators, prepare for keep are

factory, to more a expansion. the margin look that's what's drive of out New like coming and going Equipment will it So

Anurag Maheshwari

Yes.

couple strategy, go-to-market optimize inching talk chain, products, that be that, Just mod margin mean we New the the But Miguel, the And to it about as to better seeing no there's we're clearly we'll on us, add than I see more we as on should but clearly, And outpaced I speak should Equipment. the said, up. of be trajectory about Equipment reason much why pick can't I for the up. in it margins the our others, margins. higher And standardize New weeks. next supply do

Operator

to our queue remarks. over this closing further at turn the Judy Marks We questions back have call no will time. I for in now

Judith Marks

strategic Please focused drive XXXX remain York service-driven on Thank safe for to on Exchange Thank February We New us strength stakeholders. you, we Stock our our Investor well. and our Krista. XX. by Otis all our strong the another share XXXX of you excited into proved the to joining at and head you. as to look at forward XXXX all for imperatives successes with be stay you. Day of We value model to year business supported customer-centric

Operator

now This Thank and may for you disconnect. you participation, call. concludes today's conference your

Otis Worldwide (OTIS) 31 Jan 242023 Q4 Earnings call transcript