Otis Worldwide (OTIS) - 2024 Q4 - Annual Results

Financial Performance - Full year 2024 net sales reached $14.3 billion, with a 1.4% organic growth[3] - Fourth quarter net sales of$ 3.7 billion increased by 1.5% year-over-year, driven by a 7.6% increase in Service sales[4] - GAAP EPS for 2024 increased by 20.1% to $4.07, while adjusted EPS rose by 8.2% to$ 3.83[8] - Net sales for Q4 2024 were $3,675 million, a slight increase from$ 3,620 million in Q4 2023, while total net sales for the year reached $14,261 million compared to$ 14,209 million in 2023[29] - Operating profit for Q4 2024 was $531 million, up from$ 522 million in Q4 2023, with total operating profit for the year at $2,008 million, down from$ 2,186 million in 2023[29] - Net income attributable to Otis Worldwide Corporation for Q4 2024 was $337 million, compared to$ 323 million in Q4 2023, with annual net income increasing to $1,645 million from$ 1,406 million[29] - Diluted earnings per share (EPS) for Q4 2024 was $0.84, up from$ 0.79 in Q4 2023, while annual diluted EPS increased to $4.07 from$ 3.39[29] - Adjusted net income attributable to common shareholders for the year ended December 31, 2024, was $1,548 million, up from$ 1,469 million in 2023[34] Cash Flow and Liquidity - Adjusted free cash flow for 2024 was $1.6 billion, with GAAP cash flow from operations at$ 1.6 billion[4] - The company maintained a free cash flow that is considered a useful measure of liquidity, although specific figures were not disclosed in the provided content[22] - Free cash flow for the year ended December 31, 2024, was $1,437 million, a decrease of 3.5% from$ 1,489 million in 2023[45] - Cash and cash equivalents at the end of December 2024 were $2,300 million, an increase of 80.1% from$ 1,274 million at the end of December 2023[44] - The adjusted free cash flow for the quarter ended December 31, 2024, was $682 million, compared to$ 573 million in the same quarter of 2023, indicating an increase of 19.1%[45] - The company reported a net cash flow from operating activities of $690 million for the quarter ended December 31, 2024, compared to$ 597 million for the same quarter in 2023, marking a 15.6% increase[44] Expenses and Profitability - Research and development expenses for Q4 2024 were $37 million, consistent with Q4 2023, and total R&D expenses for the year were$ 152 million, up from $144 million in 2023[29] - Selling, general and administrative (SG&A) expenses for Q4 2024 were$ 495 million, slightly down from $498 million in Q4 2023, with total SG&A for the year at$ 1,861 million compared to $1,884 million in 2023[29] - Service segment operating profit margin expanded by 50 basis points to 24.5% in Q4 2024[15] - Adjusted operating profit for Q4 2024 was$ 583 million, up from $566 million in Q4 2023, reflecting a year-over-year increase of 3.0%[34] - The operating profit margin for Q4 2024 was 15.9%, compared to 15.6% in Q4 2023, indicating improved profitability[34] - Service segment operating profit increased by$ 51 million year-over-year to $569 million in Q4 2024, reflecting strong performance in maintenance and repair services[40] Future Outlook - For 2025, Otis expects organic sales growth of 2% to 4% and adjusted EPS between$ 4.00 and $4.10[19] - The company anticipates adjusted operating profit of$ 2.4 to $2.5 billion for 2025, reflecting an increase of$ 120 to $150 million at constant currency[20] - Otis expects to continue focusing on organic sales growth, which excludes the impact of foreign currency translation and acquisitions, as a key performance measure[22] Assets and Liabilities - Total assets increased to$ 11,316 million in December 2024, up from $10,117 million in December 2023, representing a growth of 11.9%[43] - Total liabilities rose to$ 16,044 million in December 2024, up from $14,837 million in December 2023, indicating an increase of 8.1%[43] - Long-term debt stood at$ 6,973 million as of December 31, 2024, compared to $6,866 million a year earlier, reflecting an increase of 1.6%[43] - Total current assets increased to$ 7,670 million in December 2024, up from $6,400 million in December 2023, a growth of 19.9%[43] Market Performance - New Equipment net sales for Q4 2024 decreased by 7.4% to$ 1.4 billion, primarily due to a greater than 20% decline in China[10] - New equipment backlog decreased by 7% year-over-year at actual currency as of December 31, 2024[37] - Modernization backlog increased by 10% year-over-year at actual currency as of December 31, 2024, indicating strong demand in this segment[38] - The effective tax rate for Q4 2024 was 26.9%, a decrease from 27.9% in Q4 2023, reflecting improved tax efficiency[34] - The company paid dividends of $156 million on common stock in the quarter ended December 31, 2024, compared to$ 139 million in the same quarter of 2023, representing a 12.2% increase[44] - The company reported a non-service pension cost benefit of $0 million for Q4 2024, compared to a cost of$ 4 million in Q4 2023[29]