CARR - Earnings call transcript Q4 2024 | Carrier Global Corporation

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Operator

Good morning, and welcome to Carrier's Fourth Quarter 2024 Earnings Conference Call. I would like to introduce your host for today's conference, Michael Rednor, Vice President of Investor Relations. Please go ahead.

Michael Rednor

Good morning, and welcome to Carrier's Fourth Quarter 2024 Earnings Conference Call.

On the call with me today are David Gitlin, Chairman and Chief Executive Officer; and Patrick Goris, Chief Financial Officer.

measures the and speak reconciliation webcast. significant and non-GAAP noted, operations, results of otherwise in other restructuring found excluding nonrecurring financial where company of to will from these the Except appendix be the can items. A

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

With Dave. that, I'd over like to turn the call to

David Gitlin

Thanks, Mike, and welcome aboard.

thank Let entering I our work if me significant moment shareholders. start to Carrier people year. positioned a about feel XXXX for by XXXX excited many so years such for more saying delivering the in great this a while than us am completing so you for by results value I customers, of been team over outsized all ever done many I to transformation. and portfolio our create has have as new

offset help up commercial Total company to supplied XX%. HVAC about see aftermarket, you double-digit low Americas was transformational and growth strong by We year X, global up weakness organic Europe for orders teens consecutive and Slide us. fourth in in residential light were unexpected in commercial the As a HVAC year achieved China. for delivering XXXX with both X% on HVAC can growth and

backlog year in HVAC commercial mid-teens that last another XXXX of global Our in for up positioning growth versus year, is double-digit us business.

and basis roughly while gross with integrated these to XXX% And executed growth Climate points debt productivity proceeds. we net $XX We as growth. We in billion on leverage. our transformation. results and core and we XXX delivered conversion, returned committed, divestitures, Xx down close XX% yielding over paid portfolio Solutions our Viessmann successfully organic to EPS strong to Carrier, overall completed and adjusted For of margin expansion strong earnings contributed

over returned billion dividends share through repurchases. also We and $X.X shareholders to

Turning X. to Slide

think since I our year of X phases. spin in

focus we promoted for built new phase, that have key During the we lived the tremendous our talent new Carrier in us a and to given energy excellence embedded a of were backed drive launched on Toshiba, Chubb, product energy by execution, our added way bandwidth foundation Carrier sold culture implemented tremendous first We has more We the mantra our transforming. playbook We our We and greater we to to innovation. transformed We and launched productivity. Carrier. sharpened position sustained vision create in our a and down is our our fined and for growth added differentiation, developed and invested Carrier has us customers shareholders. win, begun our grow. excellence growth and and and operational portfolio aftermarket performing Focus organic for there growth. The value new now and have simplification, portfolio. accelerating paid phase even XXXX thus office successfully while XXXX customers, within simplified debt. and and

and market Slide our increasing while this has transition, significantly solutions portfolio, addressable enabled creating been cycle increased XXXX, all investments see revenues. margin focus our increased to have on to life our As expansion customer recurring we purposefully contributed addressable proposition began our as greater product our value increase digitally market market, on only and in our can you we we navigated not we In for increasing customers, X. stickiness

customer which in further our in increased Now we value fully ecosystems, driving and buildings aftermarket, cold introducing products integrated differentiated chain. addition homes, X systems, targeted to across the are

a offerings. to Carrier European are called home Energy, expanding created significantly States. management energy similar Systems and through offerings And we Carrier bringing Integrated and within For are newly our system homes, business we the enhancing United

working while provide constraints actively run the energy customers to battery are an peak the we from using utilities pump system grid end-to-end hours to with and to address stored utilities heat during encouraging automated been other recharging system have of and For very resiliency. integrated the interest The controls during solution with U.S., trough usage. energy the grid

our Building offering for cooling, our combining is cooling and Quantum Within Systems, this we growing provide more that systems, our data building customers solution differentiated, cooling announced we of Leap. management under the important By solutions and server integrated last week efficient and one vertical. traditional centers brand for in liquid

solutions, integrated Sensitech from cold and our selling transitioning provides are Linx opportunity and revenue Selling increased systems end-to-end with For new streams. by and Digital we value us for chain important complete systems technologies. providing platform differentiation, enabled solely reefers a to customer

Slide out XXXX. areas and strategic priorities X lays focus our for

alignment our addition remain initiatives allocation. a discussed, while We just In to deeply carrier on we expansion growth embed we that process. priorities margin also goal maintaining laser-focused excellence capital disciplined our through throughout organization structured through our

our these in guidance. shows reflected XXXX how X are Slide priorities

Given in of our strategic single year and commercial with growth aftermarket our HVAC. consecutive expect fifth positioning, growth digits global we in organic double-digit

and will of XXX drive productivity points continue expect basis We to expansion. year-over-year margin

adjusted at about the midpoint XX% be EPS XXX% to and cash conversion. free expect We flow up

which As look X. we continue on execution we to within discuss will on we Viessmann focus Solutions, ahead, Climate Slide

returns. gains, as controlled what Nevertheless, the both and took drove structural the product new team we tough but actions for well I the Obviously, team positioning to and synergies cost into expected reduce overhead year. off coming am also proud and temporary the necessary share significant introductions. significantly margin controllables us that key costs, The growth XXXX expansion was strong

for XXXX. Looking at algorithm our growth

Given will digits. that mid-single volume be Europe, political market assume down uncertainty to we and flat in economic

headwind expect which last addition, normalized of associated backlog with the of QX a year. reduction, X-point QX year's year In we full revenue at beginning last

also of positive in a expect offsetting the we pumps last decline Similar and expect grow double-digit with or modest mix to double On digits, side, so VCS continued to in year, growth positive expect a we boilers. point heat we aftermarket price.

see and will of in XX- pumps year, year sales introduced including a products New XXXX. full last XX-kilowatt heat the

will are introducing selling be pumps a lineup up channel. cascadable the that We Viessmann kilowatts refrigerants through heat full XXX we with to of natural

together channel. team key Viessmann system that the XXXX. significantly European expect We As we think putting for in new the newly continue air March, our in excited all products branded share has beyond. year units showcase Frankfurt we trade as management our and last will sales gained We complete in year show we launched and home are multi-brand carrier pieces will that revenue geographies energy about increase and be our through the conditioning where the we to such to in been this synergies, selling also ISH

in We and synergies. expansion cost remain margin confident also

in, margin expect with expansion, So we growth accelerated free flow. across strong and all carrier year a organic cash EPS growth, strong

to turn it Patrick. Patrick? me With that, let over

Patrick Goris

adjusted you, Thank Slide the in guide to were favorable of we sales and and from $X.X Reported volume. X of We divestitures. was benefit commercial expectations, contribution a America and by and growth, compared Solutions, of had profit morning, and by provided Organic short, in across driven and of offset acquisitions Please good X. Viessmann In QX earnings the HVAC continued light QX with organic Europe everyone. HVAC, expectations points and sales our in sales growth North points price up China. residential X% X line Dave, strength impact the last October. by were about organic XX% to productivity. operating weakness and billion, XX% Climate were of turn partially ahead the year, global residential including net commercial in with driven

of now in absence given year. margin with Adjusted XX% line As points commercial the expense light The XXX repurchases, a EPS and last early compared earlier tax in repurchases, the guide, picked point our we $XX basis on October free refer about closed to ended Operational about of continuing X.X guide share fire guided. in Free December, flow I'll was was and than from guide. million cash share interest up margin. versus we we to $X operating was a more our up by close of of tailwind of was than we XXXX result, $XXX $X.XX items. year residential and million commercial outflow residential million of our an and about about pace disc about ops, was business. quarter. and both expanded with refrigeration year-over-year. Having bit $X.X was billion discrete cash, the fire benefited performance Net adjusted and the billion commercial Full better to $XX

of on Moving The organic had the in Slide the sales HVAC high X. Organic another to XX%. quarter teens. segments, segment Americas up strong growth were sales starting with on

XX% was up ago. and In about Americas, destocking than by strong driven certainly the a last around XXXX mid-teens light comp. up a the was a commercial XX%, our and commercial as quarter of fourth Residential weak Commercial so light in up channel little which was XX%. down compared better Within was expected mostly was minus QX year a year very XX%, tough volume to about mode was

organic by in movements segment last distributors expectations basis were continued light by weakness. HVAC the a Asia decline by was in with in January sales offset HVAC The expected benefit residential productivity. and in than driven mentioned up reflecting by movement partially prebuy QX. strong points, EMEA be we adjusted earnings driven were driven sales continued to the we in margins in residential China. commercial, offset Japan On and of South commercial is by this year. light material in prebuy operating declines our and our business double-digit strong strength was market line has commercial Asia, and no Organic sales that and from that in Organic call, The positive, slightly in actual growth XXX flat, stronger to in were expected, growth installers

slide, at XXXX with HVAC expansion. of another As the margin continued year bottom you our growth can business and for the great see was

were refrigeration expected. on XX. for first results X. on Refrigeration exit given to Overall, the was without this its segment commercial Transitioning Slide as quarter October QX

digits, with high Our was growth global and was Container single and down offset down Europe business XX% partially digits. and around XX% in down low by North single low trailer Asia. truck America single-digit down only about

both Our aftermarket and by points up margin Operating basis digits. expanded mid-single Sensitech year-over-year. businesses XXX were

and For basis XX% the year, organically points. in segment roughly XX and full expanded truck declines by container this America down Margins trailer. up with North offset X% mostly was

by Truck weak were in orders China up organic light Overall, and HVAC were about orders and in continued very In orders were longer-cycle X% we orders Total America as to down Turning digits. organic and a in up in businesses. about were Refrigeration Overall, mostly up orders orders digits. HVAC EMEA countries. quarter, the and Asia truck with low orders of Slide about offset at in orders in strong HVAC XX%. commercial mid-single momentum and key over around commercial comp. company entered orders XX% other were teens. the North Europe trailer orders growth an were mid-single Asia, total result XX. trailer on XX% Globally, commercial with growth HVAC XX%. were up were partially easy China Commercial Americas up orders residential XXXX Asia in HVAC orders in company robust backlogs strength up strong

Slide to guidance. on XXXX and sales XX Moving shifting to organic

billion. reported organic expect a and of $XX.X $XX commercial year-over-year includes This also million growth $XXX We between sales from the refrigeration exit. mid-single-digit billion headwind and

to a We mix point X organic and growth up. and expect expect from X roughly volume come the of point, roughly we remaining price

be point headwind. to translation currency expect about X of We at

up expect mid-single-digit mid-single continued the The we the growth residential, growth Within growth be to single-digit commercial single to Americas up expected digits new high up XXXX. and driven is for by in double-digit refrigerant segments in high in mix growth digits commercial. low by driven organic HVAC, be light Board to for

up market just flat residential up single commercial be in with growth commercial. this low growth sales walked in to you our Europe light sales assumptions and expect Dave double through digits flat We digits and for segment.

expect we single with Truck the sales returning growth growth Refrigeration, low China trailer half and up the we digits America of in Asia, Within growth China. North expect sales flat outside with trailer and within Finally, be second year. to truck Global mid-single mid-single-digit of to

container in Sensitech. growth single-digit double-digit growth high in to and mid- expect We

we increase on is margin to the expansion. by net of be the of of operating compared points Slide Moving intend to about $X volume, estimate to reflecting week, for to XX%. to Total seasonality. up be driven about adjusted profit basis cash billion company down of -- to price We XX, share billion by year. count will $X.X so and XXX% average XXXX. guidance. XXXX XXXX and about repurchase with and about last basis impact expected between Finally, X% about conversion partially about in XX XXX We that margin productivity, that million this is excluding billion conversion absence we and Through and repurchased free be FX earnings shares. expected cash divestitures be We from be offset far points acquisitions, The contributes XXX of $X.X $X.X with flow normal diluted refrigeration is commercial shares to half roughly estimate Core investments. billion,

Slide XX. to Moving

EPS by what earnings leverage, Adjusted adjusted between up $XX blocks we the elimination, offset and shared on includes and productivity call, midpoint. million except EPS about growth The you stranded identical to partially for are at expect by corporate operational $X.XX of We last the $X.XX, net driven cost currency. XX% of $X.XX building about volume performance price investments. and with

of expect about $X.XX. a We foreign represent translation currency headwind to

to $X.XX of a $X.XX expense expect debt interest tailwind. a be result paydown, we As net to

provide by EPS a $X.XX tax rate to a expect NCI offset XX% lower $X.XX to we partially of and share another count, Finally, benefit.

pay to as capital repurchases worth by to year. mentioned increases debt quarter. we'll amount down respect $X share dividend of The earlier, $X.X per I billion billion XX%. deployment, this With are to share this And expected

guide the As usual, Slide XX. items are appendix additional on in

first on comparison resulite additional continued single and sequentially, HVAC flat revenues digits. low provide with We in in the little a more flat, be HVAC growth up in quarter me some than $X let anticipate color about quarter. commercial strength tough QX commercial revenue reflects This Finally, organic global and a Europe China. to first billion,

to be organic flat. expect growth We for refrigeration about

be points between $X.XX. and and EPS basis XXX $X.XX QX about adjusted margin expect to in expansion We of

ended overall, strong and XXXX So of another strong note XXXX on year financial performance. to expect we a be

questions. With up for it that, we'll open

Operator

[Operator Instructions] with Our first Vertical Sprague question comes from Jeffrey Research.

Jeffrey Sprague

to a you're what into resi good more just saw Mike, the in Can bit little and drill hear Patrick. there, too. quarter. we you

suggest I can on prebuy. holding Or kind So you no inventory Maybe color parts guess, that. your characterizing any elaborate moving or kind you other in as QX? that prebuy the sell into how on kind no you're of it, just dental that of significant pieces Does of the together?

David Gitlin

we a $XXX as same time $XX prebuy movement the we slightly to XQ. looking XXX inventory our say about of said, in XXXA that. that are same And held was was were bit had basically very bit elevated distributors distributors, we we unit Jeff, back and ahead we'd that a calculate in of the this February which by were pull just up that million lower thought -- about Movement this than last October, to we about characterize little strong of million levels versus year. at Yes, XX% in last And our January, first that year from units we worth shipped would year. week into amount were Patrick was from our dealers, by up what

So look, inventory channel, not in high, movement the too goods.

maybe that demand to think nearly with we XX true was of So everything underlying XXX prebuy. shipped we

Patrick Goris

And Jeff QX. inventory in [indiscernible]

QX from some Yes, help in X we inventory. sell So inventory. will did we

Jeffrey Sprague

high Right. then sort in the the the single got basis? digit we for price-related prices we've do year, on XXX XXXA kind single you to QX. realized all-in of And digit. mix getting the us high an the then for effect on think And so units got getting of in What year of balance to

David Gitlin

XX%. digits. But through you about were along single saying. you really the the Jeff, high let lines It's walk Yes, me

modest to low will volume mentioned. that digits. that up think be includes down base just single we we So low prebuy single flat digits, which expect be that to Then I price

mix up to digits. transition benefit So high be X, flattish between the about of of those you're the the single

that we because XXX XX% ship our expect expect that we price is about affected either impacted Jeff, -- a to refrigerant are to Canada. XXX. or of be we realize to of XX%, not XX% the to Of furnaces of transition. XX% be about a volume they that the is by increase. XX% things XX% So XX% and XXXB, And

sales expect of growth. you we about the to XX% So modest that then remaining the growth business. gets that up alone, X% in mix And

Jeffrey Sprague

Maybe and one, I'll it Grand. on. a quick pass just

an on regular looks you the you as of plan lot think I it in of the the also the QX. the way Is many way our repo. balance for bought do Just like share might that ASR, thought us repurchase, a XXXX

Patrick Goris

achieved expect NSR. Yes, thing the we same said, we'll Jeff. not the to as be balance without Exactly, throughout until the the you year, market And of in the year.

Operator

next Our comes Andy Citigroup. from Kaplowitz question with

Andrew Kaplowitz

stronger a about Dave, so revenue your know were I XX% just for a into for talking and while, [indiscernible]. backlog now about you're a maybe talking little reduction more possible color growth in this headwind. 'XX outlook potential you

Of up. course, German coming are elections

to the look do that of opinion the your in in about is to talk guidance much growth. those how visibility derisked are it you visibility getting in just that flat at now pieces you get in items your maybe have when control, synergies, So And aftermarket the growth?

David Gitlin

so. think I Yes,

I think but amount to that that I conservative, uncertainty fair it's honest Europe. -- we look just there market, have we guide, of look, perhaps be is balance political a we the we'll very total see. and at when mean, in economic a

shipped to that backlog. year put -- X%. level I we first we last out volume think So excess we was last down quarter flat that think of And did of of quarter at the some I see

we in pump X that down have we in at points pretty visibility of bit look heat and our assumes what's to good a to to mix walked the And X so that quarter total that that this cause in full but of year, of now us normalizes that The will kind stuff down second say, year down to, But growth about boilers. up, when So headwind. us points control, XX. double-digit of -- X that.

X-year orders half second heat Germany, up XX% the stack. last a If pump Viessmann up or just in the XX% year-over-year, applications were subsidy were you around in look about of XX%. at up year, on half the

So indications pumps there's some heat underlying that demand Germany. early for in

X around mix with a I growth, X through brand like then Europe. looking that And channel. X air we'll this or could with Viessmann we to aftermarket $XXX revenue million of up, line point so or XX% the double-digit synergies of So conditioning bucket you, globe, points year a that by going in we're revenue of synergies, probably price. at And units of Carrier point the get tell line, Andy, the have of

to Europe the We taking have in sales for States. Hydronics, system-level have we from HEMS we're that use United

We strategy China. have multi-brand in

on this new year be System motion really the this in we this us as synergies. the that. a frontier year, details drive in revenue again gains, NPI for to could So again, put wheels Share year.

So we market. the feel about we'll good an control, and keep on in what's eye our

Andrew Kaplowitz

And and like and around something get incrementals it's takes in of Do How 'XX especially structure it David, cost the then can you're got there, of there? puts maybe in in then topical tariffs. I low bridge? forecasting aluminum, you us HVAC because the do your XXs steel Patrick, looks like for that to there's account on the China just put you business? obviously passed, you And remind side

Patrick Goris

talk just on tariffs. the very level I'll Yes. high

of the into such more with embedded year. related respect what's fully to guide guide about the from our have steel Most happened tariffs With We mitigated those in has happened come for what of purchase China some we this vendors. actually materials and recently as materials. U.S. to the are our

volume. of blocked our steel for North blocked XX close I the think to are America, for XX% In well to addition that, we're about In year. full we pretty --

level talk overall we sales offset that's combined Those course, differently reinvestments expansion, bigger organic be than the and in of given because applies HVAC, to growth, questions the a I'll respect a in and, That, pretty and So are expect on would margin up. of to 'XX, contribution both think well. we're the good about for that position can productivity. next with as year, you there. size strong drivers company business. generally, our in from margins What the volume the mix it at that With think your is of we main then by

offset it's so mix up, business. reinvestments by the in continued our driven by And the strong productivity of growth, really course, of organic impact

Operator

with Mitchell Our Barclays. next question comes from Julian

Julian Mitchell

just for the off guide on year. Maybe the organic sales first

So in Total up you're to starting mid-single first company, flat of out is quarter. up digits. with sort the slightly the year

of through HVAC, are growth businesses the the put us rest we of cadence of So year Americas for please? how the in maybe about a QX which of the and think walk focus, maybe on finer a after most resi kind Viessmann and point the couple

Patrick Goris

Yes.

in include So of flat Julian, Dave because point the flattish also, from QX. an expect digits for QX, tough likely in for to is between overall mean digits. down high referred company Viessmann. refrigeration mentioned, sales in or low XX% the then starting and for company QX, range and that to particularly of view, in would that therefore, be for Within I growth case comp HVAC, overall single I the VCS also and And and XX% we as HVAC QX. said single-digit the low the case And to single that

well. We growth be HVAC as of mid-single QX pretty to digits expect the in strong of to and be Viessmann then rest

that the little so QX the mid-single continue you we to then QX down maybe that and And expect the range sales high QX taper digits. a to growth takes single-digit to bit into in that

Julian Mitchell

the investor Americas. quarter-to-quarter There's second And That's commercial focus lot of a the maybe the you a business lumpy. light very obviously, helpful. in concerns then often could if are decline there. just And for on orders around

growth, I revenue in for this think guiding like Americas mid-single year ahead digits commercial. You're for

concerns help on be education maybe Any any moving given the around So see funding color dynamics that how would us the just market great. understand ESRA there? kind of vertical you lower, vertical

David Gitlin

Yes.

with replaced states say bond about in so. bond that me be passed ESR could with that states, have come of billion the terms which going from will specifically the end, latter obviously it's the its the the though even to or just been funding, Let to in XX start to funding piece, of referendums be

XX%. in I'll great we've growth year K-XX. Julian, So were tell seen Orders for you, up us last

kind toughest sales digits. Actually, low will up light like good growth feel mix first the the in resi, about expect our compare. mid-single 'XX. growth at we to we flattish assume of up driven be to the of by And We we look overall, When a XXXB. market. commercial it's 'XX, be So quarter

we the what will full we the resi, to on mix but of is say, XX% be commercial. transition. somewhat we light by And So up think year, that benefit said the our when volume in the think then to is about down, XX% X% similar impacted refrigerant from

example, XXXB, So excludes then for Canada, of will Of in we sales the and expect be that expect XXXX. there XX% that mid- XX% increase that XXXA outside other be we to and sales, the XX% U.S. XX%, to high price single-digit the

So good. like looks I pretty said, K-XX

Some verticals of the other good. are

have decline warehouse. in like are Some that real decline been and in commercial estate

So year at we to that low the digits. mid-single feel balanced on

Operator

Steve JPMorgan. Tusa Our from next question comes with

C. Stephen Tusa

Just on HRI the up side, data pretty is substantially. obviously the resi

talk guys a you're modest kind the see in be just about the with And that competitive pre-buy. there. the degree of of industry? like out about first You you Is may environment maybe how think more more? you others there half? in are line selling somebody talking Do playing Is else

David Gitlin

but Well, have and inventory distributor underlying a by XX-month when of driven think true we we at of look, last roll, they're a from we got we bps movement. And the assessment gain much look is And inventory look around at looking we demand our at what when tops-down at levels, say to we on assessment how we share, a that's demand $XX will do that's we million our $XXX the not we're to the what million. did but XXX exactly holding. bottoms-up market how the was. think and prebuy distributors, tools think that looking assessment what of in year, I true where we

C. Stephen Tusa

marketplace. this anybody, What there? efforts X were you there year to any into And are Do in heading major seeing big the all concerned as year, obviously, far there that see and your channel the last as share? at And some are with you shifts in regain you share pricing of about competitors.

David Gitlin

that which what up a pricing. in year year get Look, it aggressive. being may we've think we last we that's that's we of someone variation we'd come something price, will is X every question, like more in announced up gotten about thought for else we've because get end And stick years, price. the Do every

So is it's we'll about XXXB. Whether we for XX% at hard to everyone not that realize level, or industry say. the in think from me

Operator

comes Our Ritchie next Sachs. from with Joe Goldman question

Joseph Ritchie

an increasing does Commercial think I Can significantly XX maybe update faster like you just your guys on your months? I give then XX on next guys that recall capacity. what pretty backlog the being for And convert mean to capacity additions ultimately able your you ultimately, us to in Americas like

David Gitlin

X maybe really proud HVAC, our months, deal us, that take basically could I not Yes. would in to months. for North because brand-new honestly It's a America team Joe. more a big of facility up be commercial operations to normally we XX stood X did something for XX we in about

new facility. our our North We're Carolina out we're So shipping units first our maxing of American Charlotte, out we're North facility. ready,

to that new from we have probably And ability built, capacity the have that with our to So the Charlotte then now we by ability more, if facilities. get about output level, the not we've same our XX%. increase significantly to

our And than only really capacity, North HVAC positions starting increased double And North assuming more our demand output demand us bid can been which has frankly, thing, to the capacity, for commercial growth that's we it, out now great. we're been has America. The constraining of that of increased been America. in So out with for our as the capacity. great

Joseph Ritchie

then Great quick Viessmann. my And to hear. follow-up on just

margins cost the from expectations around XXXX? a year. those you've standpoint to how you lot give just of maybe for us that a bit work Can expect more structure gave your guys growth You and on should the we a little color done margins improve in the and

David Gitlin

the ended to that ROS and low the at last in with We this were a basis. synergies We EBITDA run get year, will that that looking -- last rate $XX take, our will the Yes. looking actions mid-teens year We're we've taken cost we year. teens. with think on of about million

We year. this $XXX million expect be that to

And costs. see has the I the team continue as took continuing significant kind and lot structural of the top we see So years, growth a to and takeout that we cost. know of cost And we're been we'll Thomas will future again, then line but mentioned, and out, to significant. drive won't temporary be in

Operator

Our next Research. Coe with Wolfe Nigel question comes from

Nigel Coe

of lot a Got ground here.

quick couple a of just So cleanups.

you of year versus said will XXXA I think, XXXB. be XX% this the units Patrick,

So that in inventory, cluster that's I'm XX% XXXA happens units of the guessing held that the XQ.

to market. the lot something of the in that's confirm wanted is then getting out mid-teens that. Just And attention movement a there

you think just market just gains, that's strong? about perhaps. do So some -- maybe why so share talk just Maybe

you do that prebought intel on Just there's wondered them? think them contract the maybe the at any and of level. inventory if what's happened there's holding units install So contractors or in

David Gitlin

Nigel, this mentioning team yes, so bps and to the credit both last and [indiscernible] And goes about of Steve we we gained was the were produce great We unit change change high with XXX confidence transition transition with 'XX, job of to 'XX units. do a we to year. in share did sets back capacity. We the into had did XXXA seamless year. able with I the leading that that a we think the very refrigerant the had

our visibility in in our We have not the perfect into into inventory distribution dealer inventory channel. perfect channel. have near do We visibility the

much stock much. XXX,XXX very, for anecdotal what we But them dealers for I about have they're can a unusual holding? visibility. have be it exactly bunch we little of can to reasons. you too In No, many of hold typically how whole inventory but certainty have We tell -- and would general, them very

that mix So this very we year. year feel on last laid balanced versus out we've the for

Patrick Goris

XXXA is for Then resi. to be yes, the your all we in answer Nigel, question to first out flushed expect QX

Nigel Coe

there. it X leave questions That's to Okay.

Operator

from Dray Deane with Our RBC. next comes question

Deane Dray

I if could. would like drill a we on Quantum down LEAP bit to initiative,

How data XX? business us contribution well. give from for that's a Just the how of center sense of can like it give grow the did product on SLA for as with it you've an partnership, lines going? that some looks the update anything broadened 'XX. much expectations And you us And within

David Gitlin

Yes.

double. $X.X year, of Let about for it sales think Dean. centers Last it billion and this me overall, was data data for we start with will centers us year,

data center of year. sales billion $X at looking we're this So

So year. exciting road XX% to about really down it remember, be And went probably of sales. XX% around this aftermarket thing will total from the the the our sales

up team to credit data centers, So give we've on single and in first only United and X the to great hyperscalers, colos wins had the leadership intensity a under same with stood our that's that globally. to Geron's have done but Christian team we that applying programmatic I States -- team the not we're focused vertical the the got

an the of outsized that first and we're growth data think key and wins just 'XX opportunity we've I for So had in in of inning there, see I beyond. centers in the really some

for is that STL And is announced then be that we the we we're recently which solution, mentioned launched liquid idea for The phase, one-stop whole we a in a you Quantum is partnership center. is that have you have to we new in Leap, X-phase the a our can single because more cooling in would exciting investment starting which solution. a that needs -- cooling. very STL refrigerant-based data because we're exciting do all a shop making

chillers cooling, now the now. NLI, our traditional you're air through ALC at business and looking right loop combining introducing with do own cooling you're the the cooling looking management, then with at looking that you're handlers cooling server traditional and loop, our CDUs which traditional you BMS liquid liquid at the So can we're

certainly the systems. having optimized about the hyperscalers is to So let for the about cooling worry integrated need by say, centers, you all idea worry and cooling running us you the colos data

we're we've feel 'XX. year. 'XX frankly, and very orders about that's get we we for excited seen positioned centers. that this continue So as about going into to really And the to grow excited We're data well growth

Deane Dray

hear, players really to we're all what good that's want especially because hyperscale solution end-to-end hearing the the from who cooling That's side. Yes. an on

So a it's it's of a that about if you type the should you sense give you setup growth. see hedging that global for that And -- headwind Patrick, then scale, any us those just on And us the remind just but follow-up type -- just everyone, of kind a for FX, have do. headwind? as of of with just

Patrick Goris

Yes.

side, So as it's And on this the transaction translation. $X.XX. is $XXX transactions. the the do then the about And sales That's headwind we for versus I then million. mostly year hedge year, prior mentioned, about

streams in also there well go going the of given currency that's we course, do we And natural then, as given as so some course, all protection, some transactions hedging is have of of the there we on the well. And world, through. some taking place

I'll it leave So at that.

Operator

Our next Fargo. question comes from Joe Wells O'Dea with

Joseph O'Dea

about just tariff of talk considerations. you Could the sort

how But taken touched China you're there. to it I approaching and that Mexico, size just on us? situation for have it and as think actions relates been you said

David Gitlin

about to more company U.S. the about last let say States, have and want recently a is me period. broadly basis, proud I largest X,XXX add on XX,XXX start comparable Also, just just to technicians. that domiciled industry, Joe, in up that launched XX% do and we to people the initiative X our we're which an in Yes, be we over years the mention United

in will States. heavily invested So United be invested continue to the we and are in U.S. the

now think in I X tariffs right the categories.

is about about about. know aluminum, that The know confident China. first is what's mitigated. been Patrick we We the that implemented, we're deal talked what have and which We in

The second those feel these would and what than things in Europe. discussed like know well. other that the and And we category that categories, we Canada put on I mitigate will we on as of been can confident have based Mexico

do there that As an purchase and have on X we from there. a you to have the big because keep down lot States. Mexico eye into we mentioned, we United operations the is export And

will know don't do be know. we We not there's We deal. go don't place. the -- if We there know know if Here's at all. exemptions they much don't so in will

know. team we What there's it. over is a can all the don't that I tell lot is So you

price actions can't through at tariffs would chain could we we looking make contemplate and would our that to we operational take supply issues. with sure impact that that We're to at would actions take. clearly that that especially are at take, we're We we looking have looking actions that suppliers. also And mitigate unrelated fully mitigate pricing to we we would any other

Joe, So matter we've deliver tariffs. what no first is this is that is $X way. our team focused what incredibly dealt on I'll comes we time making a share not the that with tell sure that you, The

tariff tell do we will States. will tremendous make So We mitigate yet. sure have team you that share. do we lengths the and go leaning ensure don't to it $X a that are tell we is United if that into in exactly that But also in our we I the factories hit Mexico. this out a there's have what to it out will XX% figured geared I everything you

we're output Charlotte year. significantly increasing of for example, this our out So

Joseph O'Dea

give bit I I appreciate all about bridge, Can then presume there. like decent so just on color Viessmann that color. and than I on to XX more the the XX we to It think And synergy, pretty ask bps. building puts you wanted a a little up do productivity. would HVAC that margin there's takes mix, at better When seem blocks some XX. incremental to XXXB to XX

so And that? offsets just to any

Patrick Goris

side significant the each this And you making Sure. actually is are XXX focused bps year-over-year. Think on The year. investments we just side. mix way including of year being be more up. the price, about the the productivity, it the can investments we're on think as of to about benefit sales R&D than going the these And do as

And offsets just it's expansion margin to I So those that that tailwinds year. to. this well the pretty balanced referred to get

Operator

comes Our with Andrew Bank from of America. next Obin question

Andrew Obin

Yes.

pricing there price You of mix any to sort verticals in any or you or vertical. do regions get of correct. I'm the appreciate a highlighted sort is this X is where negative if any price percentage point softer that I flat XX, or where bucket, to Are for but discrepancy not just between price expect regions of

Patrick Goris

would that flattish I'd a will by be to think going One it's we there where X some that. be this areas differences are less in There pricing be segment, probably say year. be region. than might little rough generally

other what's a is commercial like happening The Asia, as might be the residential, in in well. given, there price China, lighter in course, X of little

Andrew Obin

just And follow-up a on aftermarket progress.

an guys give and more thorough maybe attachment can some service rates, think you update, on update you the a have a KPIs, progress just percent us but as I just provided you debate seems focus. It How is commercial making like evolved very before Viessmann, of that initiative that about business. key the are a was because good guys HVAC progress. resin on

numbers there. could you give If us some

David Gitlin

on will that mandate company within the is that's all I forever. joins hands And tell driving control the company our our on a metrics on key positive. towers team. knows the still Andrew. the aftermarket you Sure, as double-digit that have There Everyone focus. deck us or growth it that all been are underlying

It XX% up We in have from XX% was rate. attachment nearly earlier.

It's for coverage it'd total that it was We XX,XXX. Our be chillers. range. around -- said in

X, just out of chillers was so X,XXX or it think getting there. talked range. number that We I in by connected under it's about

We last connected we continue around think XX,XXX I year. chillers

of good attachment a really all digits coverage, connectivity, platforms, So underlying driving double year. driving bound driving the we as in really things, driving length feel and digital we rates, about our it, in about this feel good

Andrew Obin

of as to we date? percent [indiscernible] where revenues are So commercialized a

David Gitlin

say I X%. of Carrier, range we in are would for the

XX% to I it it's over to And we're next closer pushing I get think think there. just these years. few

Patrick Goris

commercial In [indiscernible].

David Gitlin

a And percent. Commercial as it's a added, for bit HVAC I Yes, little then higher guess, Patrick just

Operator

from comes with Snyder next question Our Chris Stanley. Morgan

Christopher Snyder

would little Americas prebuy end ahead of which, come that to ask bit sounds channel the movement think highlighting? in where maybe about It stronger I XX months in Was of guess, resi, moderate, quarter, some to a did the I stronger X demand ago? expectation I of XX. was think, this with the wanted just like thought XX% you're you bit a kind the I

David Gitlin

Yes.

Chris, easy quarter compare off we down remember, think -- coming we underlying that overall was we the think were than share was expected. an just such just our of I were from something fourth volume a We demand thought. bit think, a combination really we the I gains of XX%. higher did XXXX, where we and it's movement had higher the And had like some I than down

were sales XX%. Our down total around

had an thought. we the and positive more a easy we So than bit compare was underlying demand

Christopher Snyder

normal or resi a year, I And the XX% is when versus and this Obviously, talk appreciate then, kind homeowner through guess replace price, single return just over whole your any pushing Mexico. I change you channel is of ATEC low around Dave, digits. consumer bit concern little repair that. we're The industry to trading towards on either or and the down. relying more dealers, partners the maybe there pushing

Are So of hearing that your over a you it coming another that? any in potentially next months. seems XX like increase there's probably price Is the concern conversations?

David Gitlin

at very Chris, homeowners curves. lot price years, -- increases We of for few And through at been look elasticity we deeply. sure. our look that a these last We the over

help that watch it's the something So and side. on not certainly, tariffs would we pricing carefully

over repair first the are thing So to big replace. at switch versus is, a we seeing we look

it, channel honestly We that have about not seen have we've every not quarter. month, just every that. of partners our seen that. we paranoid We and but ask been ourselves

but We occasional at margin, material. mix an see the nothing down overly will

watch. We good. watch So the with We carefully. price appropriate but very always Patrick, feel it's add consumer, it's that something we something? now, look we feel to want and we increases -- I at think to you right

Patrick Goris

No.

of a that the That's Just that or homeowner, about actually reminder X/X of equipment. cost to the is cost only the less ours.

Operator

with Moll Tommy question next Our from comes Stephens.

Thomas Moll

lot so you revisiting today, share was to couple you worth I a any last the other that think made. about the will We've of Dave, able start year? what different the it attention this I context on resi comment to angles, Or a help that but comp movement might here. attract the Are hit wanted in channel XX%. from made of comment quarter, explain up your for you

David Gitlin

the have unless... I think movement quarter of don't 'XX, [indiscernible] fourth I in

Patrick Goris

No. that number think Tommy. we have handy, don't I

David Gitlin

my at is when think I that digits. we resi Tommy, it up up don't have that full single about being fingertips, the best but high you the can for ended do year,

inventory sales, up short-cycle and able ago. total that basically algorithms were the years movement anticipate they the translation just but it's I better thing, into they're business, team's credit, things to now far year. X science I around algorithms orders my we being to our you than of and very think anticipate to in the handful were Carrier, a used from perfect in last X% tell far like that years a a of around they've even it's could And

big people which prebuy to talking guiding about be that thing this be We a not. that that for we're So would with XX%, think down were X the would year. would HSD worry we

up be In digits. fact, first I the quarter think double should

think to to gains, way price between judicious calibrated we feel by that the as for because into levels, channel our our gone and we've and and mix I share the the sales the So seen inventory this realization. movement, and as of the orders HSD is the balanced out year can, we we guide that driven basically, good be feel try about really we've

balanced. fairly the assumptions think the are volume we So year for

Patrick Goris

And had we 'XX teens Tom, that The number. in QX mid-teens. movement was QX and XXXX, then of up low down

Thomas Moll

has Patrick. noise of we're confusion this all ago. to your base anticipate But just opportunity, changed? also aggressive there around question market all year you, what, the commentary you price. the of in there getting line been questions Thank Dave, the X to larger the is quarter And core been has ATL of a another changed quarters a give on today. On using There's anything, us one. a the lot some couple price. all little for things players really, you there's But what's versus a kinds the more because just if of of for and anything of is XX% potentially what the around expected questions just that of

David Gitlin

the what heard in marketplace. to and you I perspective, the way Tommy. themselves that calls of the same every I year, paranoid our is as of price Steve well And XX% things I've chatter mean anticipate. we've the peer well, in I on listening asked manifested side think sort that the from we Nothing. our the But fairly tell another, that seen can as or of variation some have Look, that about thing -- X been straightforward. is we've things

of said XXXB unit, top XX unit is XX base take XXXA to X a price which is you pricing. list over X a then If X XX% to XX%, points years, the same on for we're the And pricing we've higher. category base of that in

a furnace to we fairly of side. pricing, even flat of think expect market a bit, think we a a that down being little little build little to bit the and little contingency we've on to then of So that we're volume that we on growth bit balanced stick, bit And tried then that a XX%. into

know, how So we exactly and channel price I competitor every good pricing don't good about pricing but will obviously, our feel about our our we calibrated sticking what we've feel partners. do, the with

Operator

question next comes from Kaye with Our Company. Noah Oppenheimer

Noah Kaye

wonder you level would on outlook kind of if to versus at by for policy the factor in sort it a country and business. specifically? or swing some just line think VCS the turn the gave Germany better rest get view dynamics Europe walk be of color of little how of good at about You the given least bit sales possible I

David Gitlin

Yes. Germany, watch have Look, now. on we clearly a right

about friend the news the 'XX more another, about X is And or get to we're going pull-up certainty. I our think that in good of way the to February that Germany been uncertainty has election not policy.

So having some good. level of certainty is

Union applications is But introduced the did to European keep January. do a going the there's see emissions scope that year pumps. heightened the think, election. fossil at COX trigger their watch system, XX% emission half be in now. boilers into in we the last were at in XXXX. then because I Europe, committed which fuel trading subsidies, think, which to heat expanded trying a to and Poland, We get I increase where transition XXXX right watch to see subsidy across a because of from country all France little we start to that think where We if Europe what's will that European remains of will the think, to say for XXXX, suspension is there in I there's I orders country to to level uncertainty the summertime. resume to on. goals, in have by second the that may, happening one, level, Remember, across before know we of and going high regardless in applications say in slower, I will people as increase was France, going I get Germany subsidy There a some a costs happen is bit countries, renewables the high to of expect is we which Germany that things number we be

But So that positivity we'll as to potentially our and if see the exactly level, want things about hear XQ with a see point as get into when to us to will May, get you do highest XQ. Investor have play I translates a how Day we new What at at into I is that not that government into Germany elections know are tell where we'll out. we we France. or you we get in talking

about customer the independent that We are solutions of for and talking are regulation driving subsidies.

the it's that's good you talk solutions lot at for that and to pump hearing sales of be it's complete financing about, are driving Europe, us. potentially heat the environment if subsidies looking So in is and overlay regulations going which digital for PV with for battery bank consumer, good us customer, start independent a are more the or good for that

So EU wants That continue importing in try EU United think and We've gas going seen we'll policy or could to recently. to the be country. monitor I country move to prices to is direction. States from continue. from The reliant to more from up don't influence on continue gas to going Russia. the this

And a electricity ratios continue solutions that to policy from down going country. to we're to that gas bit. push independent are to of to So little start come country

Noah Kaye

call you little that channels about a always your would too home initial give it opportunity offerings. But this be just sort you think really different on and share that wallet you among the by much in you Investor the talking color I'm for It or the opportunity energy to glad what started the talked us management have thunder the about steal you announcement. expansion could this from deal emphasis your even because mentioned something around more was bit you Not if means Day. helpful. of

David Gitlin

the tied we tried the Thomas -- I during into a team few course the in say we'll when to year not not the deeply obviously, Chris we very over We've in pleased Patrick was and look, it end year the -- first to thought conservative. very we were I day, but year. and Sheppard of dropped last more are only I and be of at down this the very come Europe. times with calibrated, than look that that we think BCS, at Yes.

in exactly So overall, very we've VCS Europe, overall, very we to very are in we last very, tried on that be When assumptions. happy look not residential our and year, balanced bottoms a but necessarily great, at differentiated is be. to in up great we're market of States are what very see that a United differentiated a the highly And reliant dynamics product we customized on the this underlying configured, channel. is offering

the the this to in and solutions the most no than we So like heat that like hard overall system market. Europe pumps. there's is. Viessmann, space time transition transition like the to there better We differentiated channel company stop, We in over

revenue of channel, that branded product carrier product start drive new unparalleled. share through our ability newly that putting is synergies, gain, a our conditioning we when So commercial to channel or HVAC some products through air introductions

better small of X engineering us Viessmann a all it's and making of leading company. company is the platform Head of Engineering example is our carrier all So respect of across we're for carriers. a technologically them excited differentiated family, and carrier such excellence, part made to of more company have And Solutions with better they a centers the for to have Climate

So the see we going we're years control to this to going for feel controllables, balanced and for growth to come. year. We're

you transforming, we on a 'XX, year So all. members thanks to while very globally. Mike, as our strong very Patrick. team year, Thank well our Thank Last feel you. great in and to thank you positioned have well. XX,XXX to to board, performed And Carrier. welcome It's you investors for and everyone

Operator

your for conclude program. This participation. the you Thank does

You may now disconnect. Good day.

Carrier Global (CARR) 11 Feb 252024 Q4 Earnings call transcript