Carrier Global Corporation (CARR) Presents at Bank of America Global Industrials Conference (Transcript)

Carrier Global Corporation Conference Call Summary Company Overview - Company: Carrier Global Corporation (NYSE:CARR) - Industry: HVAC, Fire & Security, Refrigeration - Key Participants: Patrick Goris (CFO), Samuel Pearlstein (VP Investor Relations) [1][2] Core Company Insights - Carrier has been an independent public company for less than three years and is positioned as an attractive investment opportunity due to its iconic brands and leading market positions [3][4] - The company operates in three segments: HVAC, Fire & Security, and Refrigeration, all focused on improving energy efficiency and driving aftermarket growth [5][6] - Carrier is committed to ESG excellence, helping customers achieve carbon emission reduction goals [5][17] Financial Performance and Growth Strategy - The company aims for double-digit EPS growth through the cycle, with a focus on above-market organic revenue growth and margin expansion [7][8] - Current aftermarket business is estimated at $5 billion, with potential annual revenue from the installed base being 4-5 times larger, indicating significant growth opportunities [10][11] - Carrier targets a 2-3$300 million in cost savings last year and plans to do the same this year [12] Market Trends and Opportunities - The company is benefiting from secular tailwinds such as the move towards electrification and increased government incentives for sustainable technologies, particularly in the U.S. and Western Europe [9][17] - The Inflation Reduction Act in the U.S. and various incentives in Europe are expected to drive demand for heat pumps and energy-efficient units [9][51][53] Residential HVAC Insights - Residential HVAC sales are expected to be flat for the year, with a decline in volumes offset by price increases and a shift towards higher-priced, more efficient units [20][21] - The company anticipates destocking in the second half of the year due to higher inventory levels at the end of 2022 [22][23] Acquisitions and Portfolio Management - Carrier has simplified its portfolio since its spin-off in 2020, selling non-core assets and making strategic acquisitions, including the buyout of Toshiba Carrier [13][36] - The acquisition of Toshiba provides direct access to VRF technology and compressor technology, enhancing Carrier's competitive position in the heat pump market [36][38] Heat Pump Market Position - Carrier has a leading position in the U.S. residential heat pump market, with direct sales estimated at $2 billion, and plans to expand in Europe [44][53] - The profitability of heat pumps is higher than traditional HVAC systems, with heat pumps typically replacing legacy boilers at a significantly higher price point [57] Commercial HVAC and Applied Business - The commercial HVAC segment is expected to grow mid- to high single digits, with strong demand and a healthy backlog [62] - The company is not currently facing capacity issues but is monitoring supply chain dynamics [64] Refrigeration Business Outlook - The North America truck/trailer segment is projected to grow over 10% this year, driven by strong order intake and a shift towards electrification [69] Conclusion - Carrier is well-positioned to capitalize on market trends towards sustainability and energy efficiency, with a strong focus on aftermarket growth, cost reduction, and strategic acquisitions to enhance its competitive edge [18][19]