Carrier Global (CARR) Morgan Stanley’s 13th Annual Laguna Conference summary

Strategic overview and market positioning

• Portfolio is focused on secular growth trends, with leadership in key verticals and geographies.

• EPS has grown at a 17% CAGR since 2022, with over 25% growth in the first half of this year.

• Commercial HVAC business is on track for its fifth consecutive year of double-digit revenue growth, especially strong in North America.

• Data center sales are expected to reach $1 billion this year, doubling last year's figure, with a strong backlog for future growth.

• Aftermarket business is also achieving its fifth year of double-digit growth.

North America residential HVAC challenges

• Q3 North America residential volumes are expected to be down over 40%, with sales down about 30%.

• Inventory destocking by distributors is expected to reduce field inventory levels by 15% year-over-year by end of Q3.

• Sales shortfall in Q3 is projected at over $500 million, split between inventory reductions and lower consumer demand.

• Aggressive cost actions and workforce reductions are underway to offset the EPS headwind of $0.20-$0.25 in Q3.

• Inventory levels are expected to normalize to pre-COVID levels by year-end, positioning for a balanced start to next year.

Commercial HVAC and data center growth

• Commercial HVAC now represents $6.5 billion, about 30% of the portfolio, with significant wins in data centers globally.

• Investments in R&D, digital, and technician capacity have improved competitive positioning, especially outside the U.S.

• Capacity for water-cooled and air-cooled chillers in North America will quadruple over four years.

• Double-digit growth is being achieved in verticals outside data centers, with strong performance in healthcare and electronic fab.

• Light commercial in the Americas is stabilizing, with share gains and improved outlook for Q4.