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OFFON

OTIS WORLDWIDE CORPORATION

(OTIS)
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Otis Worldwide : Regional overview - China & Americas

11/17/2021 | 06:18am EST

Regional overview - China & Americas

November 17, 2021

© 2021 OTIS WORLDWIDE CORPORATION.

Forward-Looking Statements

Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted.

This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management's current

expectations or plans for Otis' future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such

as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," "goals" and other words of similar meaning in connection with a discussion of future operating or financial performance or the proposed tender offer by Otis to acquire all of the issued and outstanding shares of Zardoya Otis, S.A (the "Tender Offer") or the separation and distribution. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, dividends, share repurchases, tax rates, research and development spend, credit ratings, net indebtedness and other measures of financial performance or potential future plans, strategies or transactions of Otis following its separation from United Technologies Corporation or in connection with the Tender Offer, including the estimated costs associated with the Tender Offer and the separation and distribution and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, Otis claims the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which Otis and its businesses operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions, pandemic health issues (including COVID-19 and its effects, among other things, on global supply, demand, and distribution disruptions as the outbreak continues and results in an increasingly prolonged period of travel, commercial and/or other similar restrictions and limitations), natural disasters and the financial condition of Otis' customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; (3) future levels of indebtedness, including as a result of the Tender Offer, and capital spending and research and development spending; (4) future availability of credit, including in connection with the financing of the Tender Offer, and factors that may affect such availability, including credit market conditions in the U.S. and other countries in which Otis and its businesses operate and Otis' capital structure; (5) the timing and scope of future repurchases of Otis' common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (6) fluctuations in prices of and delays and disruption in delivery of materials and services from suppliers; (7) cost reduction efforts and restructuring costs and savings and other consequences thereof; (8) new business and investment opportunities; (9) the anticipated benefits of moving away from diversification and balance of operations across product lines, regions and industries; (10) the outcome of legal proceedings, investigations and other contingencies; (11) pension plan assumptions and future contributions; (12) the impact of the negotiation of collective bargaining agreements and labor disputes; (13) the effect of changes in political conditions in the U.S., including the new U.S. Administration, and other countries in which Otis and its businesses operate, including China's response to the new U.S. administration and the United Kingdom's recent withdrawal from the European Union, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; (14) the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which Otis and its businesses operate, including changes as a result of the new U.S. Administration; (15) the ability of Otis to retain and hire key personnel; (16) the scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; (17) the timing of closing, if any, of the Tender Offer and the expected benefits of the Tender Offer and separation and distribution and timing thereof; (18) the determination by the Internal Revenue Service and other tax authorities that the distribution or certain related transactions should be treated as taxable transactions; (19) risks associated with indebtedness incurred as a result of financing transactions undertaken in connection with the separation; (20) the risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the separation will exceed Otis' estimates; and (21) the impact of the separation on Otis' businesses and Otis' resources, systems, procedures and controls, diversion of management's attention and the impact on relationships with customers, suppliers, employees and other business counterparties. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary from those stated in forward-looking statements, see Otis' registration statements on Form 10 and Form S-3 and the reports of Otis on Forms 10-K,10-Q and 8-K filed with or furnished to the SEC from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Otis assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

© 2021 OTIS WORLDWIDE CORPORATION.

2

Otis overview

STRONG GEOGRAPHICAL DIVERSITY

2020 Net sales - $12.8B

New

Service

Equipment

42%

58%

2020 Adj. operating profit1 - $1.9B

New

EquipmentNE

17%margin

6.5%

Service

83%Service

margin

22.5%

2020 results

1 See appendix for additional information regarding these non-GAAP financial measures.

© 2021 OTIS WORLDWIDE CORPORATION.

Net sales split

New Equipment

ChinaAmericas

Asia

Pacific EMEA

Service

China

Asia

Pacific Americas

EMEA

3

China overview

China: ~20% of overall Otis net sales

Otis is a leading, established player in China

Otis China net sales

Service

Service margin

~20%

< Otis average

New Equipment

NE margin

> Otis average

~80%

China margin

< Otis average

high teens

NE share1

~ 2.3K

A&D channel partners

MSD

Service share1

~ 265K

Service portfolio units

Q3 2021 year-to-date results

1 Based on Otis internal estimates. MSD = mid single digit.

2 Otis operates in China primarily through 2 joint ventures with effective ownership ~70%.

~ 70%

Ownership of 2 JVs2

© 2021 OTIS WORLDWIDE CORPORATION.

4

China New Equipment

Otis China orders outgrowing the market1

(% growth, units)

~2x

market

low teens

~HSD

Otis

~MSD

Market

~LSD

China

~flat

2019

2020

2021 YTD

1 Based on Otis internal estimates.

© 2021 OTIS WORLDWIDE CORPORATION.

Otis levers

  • Sales coverage up ~10 pts vs 2019
    • Expanded agent & distributor channel…up ~2x since spin
    • Added 100+ colleagues to sales
  • Rationalized brands and factory footprint
  • Standardized product platform and introduced new products …launched
    Gen3
  • Gained ~1.6 pts of NE share1 from 2015
    • 2020

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Otis Worldwide Corporation published this content on 17 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 November 2021 11:16:06 UTC.


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