Otis Worldwide Corporation (OTIS) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 26, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Good morning, and welcome to Otis First 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.

Michael Rednor

Thank you, [Didi]. Welcome to Otis' First 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 nonrecurring 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 details on important factors that could cause actual results to differ materially.

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

Judy Marks

Thank you, Mike, and thank you, everyone, for joining us. We hope everyone listening is safe and well. Starting with first quarter highlights on Slide 3. Otis delivered a solid first quarter to start 2023, driving strong financial performance and executing on our capital allocation strategy despite continued market uncertainty. We achieved organic sales growth, driven by our service business, and expanded adjusted service operating profit margins by 40 basis points, leading to mid-single-digit adjusted EPS growth. Our Service segment performance, in addition to our maintenance portfolio growth of more than 4%, reinforces the strength of our business model.

We continue to execute our balanced capital allocation strategy with $175 million of share repurchases in the first quarter. Yesterday, we announced a 17.2% increase to our quarterly dividend. Since spin, we have increased our dividend 70%, emphasizing the importance we place on disciplined capital management and delivering value to our shareholders.

In the Americas, building on our strong track record of major project execution and service across Canada, Otis was selected by the Montreal Metro System to replace escalators at 17 stations, while providing units for 5 new blue line stations. In total, 97 Otis escalators will keep metro passengers on the move daily. In China, FA Metro placed a new order of 250 Otis ONE connected escalators and elevators across 3 new lines. Real-time data insights, remote monitoring and predictive maintenance will all help bring the FA Metro into the future and add to our growing infrastructure installed base.