Carrier (CARR)2023-09-12 22:52Company and Industry Overview * Company: Carrier Global Corporation (NYSE:CARR) * Industry: HVAC, Climate Solutions, Energy Efficiency Key Points Performance and Financials * Q2 2023: 6% organic growth, residential sales down mid-single digits, aftermarket up mid-teens YTD, full-year projected price cost positive up 300 million plus 300 million of productivity. * Viessmann Climate Solutions: Base business tracking to €4 billion in sales this year and €700 million EBITDA, double-digit growth profile. * Business Exits: Formal process of engaging with prospective buyers for security and commercial refrigeration begun, industrial fire in market next month, commercial and residential fire businesses targeting listing dates in late spring or early summer 2024. Market Trends and Opportunities * Residential: Sales expected to be down a few percent, volume down in high single-digit range, light commercial up around 20%. * Light Commercial: Strong across the board, 60% growth in Q2, 35% growth in Q1, driven by new beltless design, ESSER Funding for K-12, and lower end retail. * Commercial Applied: Up double digits, driven by growth in aftermarket controls, strong backlog, and focus on key verticals like K-12, healthcare, and data centers. * Data Centers: Strong growth, well-positioned in Europe and the United States, leveraging heat pumps and chillers, and Nlyte acquisition for heat dissipation and optimization. * Heat Pumps: Bullish on residential and commercial applications, driven by IRA incentives and energy efficiency benefits. * Sustainability: Focus on all things digitally enabled lifecycle revenues and sustainability, with strong traction in aftermarket and ESG initiatives. Competitive Positioning * Brand: Attractive brand recognition globally, with premier brand recognition for Carrier and other brands like Toshiba. * Channel Access: Deliberate channel approach that works globally. * Product Portfolio: Strong focus on energy efficiency, with new digital platforms and innovative products like mag-bearing chillers. * Service: Aftermarket tracking well, with high single-digit to low double-digit growth, strong coverage, and growing attachment rates. Strategic Initiatives * Portfolio: Exiting Fire and Security businesses, focusing on HVAC, Climate Solutions, and Energy Efficiency. * Viessmann Acquisition: Gaining a strong position in the European residential heating market and expanding into commercial and industrial markets. * Capital Markets: Exploring IPO for commercial and residential fire businesses to clean exit, maximize value, and improve leverage ratio. Regulatory Environment * Germany: Encouraging legislation for sustainability, with increased funding and subsidies for heat pumps and district heating. * Europe: Strong trajectory for heat pumps and greenification, with alignment with the European Green Deal-Fit for 55 and repower EU targets.