Otis Worldwide Corporation (NYSE:OTIS) Q3 2023 Earnings Conference Call October 25, 2023 8:30 AM ET

Company Participants

Michael Rednor - Senior Director, Investor Relations

Judy Marks - Chair, Chief Executive Officer and President

Anurag Maheshwari - Executive Vice President and Chief Financial Officer

Conference Call Participants

Jeffrey Sprague - Vertical Research Partners

Nigel Coe - Wolfe Research

Julian Mitchell - Barclays

Joe O’Dea - Wells Fargo

Steve Tusa - JPMorgan

Nick Housden - RBC

Gautam Khanna - TD Cowen

Operator

Good morning, and welcome to Otis Third 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, Senior Director of Investor Relations. Please go ahead.

Michael Rednor

Thank you, Michelle. Welcome to Otis' third quarter 2023 earnings conference call.

On the call with me today are Judy Marks, Chair, CEO and President; and Anurag Maheshwari, Executive Vice President and CFO.

Please note, except where otherwise noted, the company will speak to results from continuing operations excluding restructuring and significant non-recurring items. A reconciliation of these measures can be found in the appendix of the webcast.

We also remind listeners that the presentation contains forward-looking statements, which are subject to risks and uncertainties. Otis' SEC filings, including our Form 10-K and quarterly reports on Form 10-Q, provide additional details on important factors that could cause actual results to differ materially.

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

Judy Marks

Thank you, Mike and thank you everyone for joining us. We hope that everyone listening is safe and well.

Starting with Q3 highlights on slide three, Otis achieved strong results in the third quarter marking nine months of solid execution in 2023. We grew organic sales 5.2% with growth in both segments, expanded operating profit margin 60 basis points, and achieved 19% adjusted EPS growth. This marks the 11th consecutive quarter of service organic sales growth, and the 15th quarter where our service operating profit margin has expanded, demonstrating the consistency in our execution and the strength of our strategy.

With our fourth consecutive quarter of maintenance portfolio growth above 4% and backlog growth in both new equipment and modernization, we have set ourselves up nicely for the future. Last quarter, we announced the launch of our Gen 3 core elevator in North America. And in the third quarter, we sold our first units. This new product addresses the needs of our customers and the two to six storey building segment, the largest by volume in North America.