On this page of StockholderLetter.com we present the latest annual shareholder letter from Otis Worldwide Corp — ticker symbol OTIS. Reading current and past OTIS letters to shareholders can bring important insights into the investment thesis.

 •  4/4/2025 Letter Continued (Full PDF)
 •  4/6/2023 OTIS Stockholder Letter
 •  4/5/2024 OTIS Stockholder Letter
 •  More "Industrial Machinery & Equipment" Category Stockholder Letters
 •  OTIS Benford's Law Stock Score = 93

OTIS Shareholder/Stockholder Letter Transcript:

Otis Worldwide Corporation
Annual Report 2024


OTIS WORLDWIDE CORPORATION ANNUAL REPORT 2024
Dear Shareholders,
2024 marked a year of steady and important progress at Otis. Amid a dynamic global macro
environment, we again demonstrated the strength of our Service-driven business, the resilience of our
long-term strategy, and our focus on operational excellence to deliver value for our stakeholders.
EXECUTING ON OUR SERVICE COMMITMENTS
VIA PORTFOLIO GROWTH
It is an honor to lead this iconic company. I thank our
72,000 Otis colleagues around the world who have
remained steadfast in meeting our commitments to
our customers. They enable us to move 2.4 billion
people globally every day, and they do so while living
the Otis Absolutes of Safety, Ethics and Quality.
The Service segment remained on a steady growth
trajectory as the global installed base2 of
approximately 22.5 million units grew at a midsingle-digit pace, with Asia increasing mid-single
digits and low-single-digit growth in both the
Americas and EMEA.
DELIVERING SOLID FINANCIAL
PERFORMANCE
Otis delivered 4.2% portfolio growth in 2024,
marking three consecutive years of greater than
4% growth and sustaining our industry-leading
maintenance portfolio, which grew to approximately
2.4 million units. Service now represents
approximately 60% of sales and greater than 90% of
operating pro   t. The Service segment continues to
perform well, with maintenance and repair organic
sales1 growth of 5.7%, modernization organic sales1
growth of 11.7%, and 60 basis points of segment
operating pro   t margin expansion for the year.
Our 2024    nancial results re   ect our industry-leading
position. Net sales of $14.3 billion were driven by
our reliable Service segment, which delivered
organic sales1 growth of 6.8%, leading to an increase
in overall organic sales1 of 1.4%. Adjusted operating
pro   t1 of $2.4 billion increased approximately
4%, and adjusted operating pro   t margins1
expanded 50 basis points to 16.5%. Operational
performance, combined with tax rate improvement
and a lower share count, resulted in adjusted
earnings per share1 growth of 8.2% to $3.83.
Our modernization business is strong, as
demonstrated by our growth in orders of 12.1% and
backlog1 of 13% at constant currency in 2024. For
the year, modernization margins surpassed New
Equipment margins, putting us    rmly on the path to
10% margins over the medium term. We enter 2025
with con   dence in our modernization strategy and
offering, and we look to deliver sustained growth of
on- and off-portfolio modernizations. This is
expected to drive both customer retention and
recaptures. We also remain focused on the
signi   cant opportunities in this area as the number of
units ready for modernization is projected to increase
from 8 million to more than 10 million by
2030 globally.
With adjusted free cash    ow1 of $1.6 billion, we
remained disciplined in our shareholder friendly
capital allocation strategy. In April, the Board of
Directors raised our dividend by 14.7% to a quarterly
rate of $0.39 per share. For the year, Otis paid out
more than $600 million in dividends and completed
$1.0 billion in share repurchases. Since becoming an
independent company in 2020, we have returned
over $5.6 billion to our shareholders.
Acquisitions are important to the continued growth
of our Service portfolio. We deployed $87 million
for approximately 30 targeted bolt-on acquisitions.
This was toward the high end of our typical yearly
expectation of $50 million to $100 million and was
driven by available accretive opportunities. One such
acquisition was of Jardine Schindler Lifts Limited
in Taiwan.
1
2
1
See page 4-7 for additional information regarding non-GAAP    nancial measures.
Based on Otis internal estimates.

OTIS WORLDWIDE CORPORATION ANNUAL REPORT 2024
ADAPTING TO NEW EQUIPMENT MARKET
CONDITIONS
CHAMPIONING CHANGE
We recognize that sustaining our position as the
industry leader requires embracing change. Both our
UpLift and China transformation programs enable us
to operate more ef   ciently and deliver exceptional
experiences for our customers and colleagues. They
also support reinvestment and shape our long-term
growth and success. We have made steady progress
in enhancing our global operating model and
optimizing indirect spend, delivering $120 million in
run-rate savings so far. We are on track to achieve
$230 million in run-rate savings by the end of 2025.
Global units in the New Equipment market dropped
to approximately 770,0002, marking the third
consecutive year of a roughly 10% decline2. While
units in China declined approximately 15%, units in
the rest of the world combined were about    at
versus the prior year as low-single-digit growth in
Asia Paci   c and mid-single-digit growth in the
Americas were offset by a low-single-digit
decline in EMEA2.
Despite the macro environment, we maintained our
global New Equipment share of approximately 20%2.
Over the medium term, we anticipate stabilization of
New Equipment organic sales as we will balance
price and volume. We will leverage our digital tools
to drive productivity and lower cost wherever
possible to keep pace with the changing
environment and meet our customers    needs.
LOOKING AHEAD
2025 holds great promise and opportunity. We will
continue to execute our strategy with excellence and
grow with con   dence in our customer-centric,
Service-driven business model. You, our
shareholders, can count on the unwavering
commitment of our leadership team and colleagues
to deliver value for all stakeholders and move Otis
successfully into the future.
DRIVING PRODUCTIVITY THROUGH
STRATEGIC INVESTMENTS IN DIGITALIZATION
Our strong    nancial performance allows us to invest
in productivity and innovation initiatives that enable
us to enhance the passenger and customer
experience. In 2024, we directed 1.4% of net sales
toward research and development, as well as
investments in digital and strategic initiatives. Our
investments led to Otis winning three internationally
prestigious Red Dot awards for industrial product
design. They were for our Smart Cab that leverages
the newest in-cabin technology displays and humancentric design, for elevator buttons that prioritize
accessibility for the visually impaired, and for an ID
card that promotes colleague safety.
With gratitude,
Judy Marks
Chair, Chief Executive Of   cer and President
Cautionary Statement
This Otis Annual Report contains forward-looking statements that are inherently subject
to uncertainties and risks. Please see the section titled    Cautionary Note Concerning
Factors That May Affect Future Results    included in our 2024 Form 10-K accompanied
herewith and other    lings with the Securities and Exchange Commission, for a list of
factors that could cause our results to differ from those anticipated in any such forwardlooking statements.
As of year-end, we have approximately 1.0 million
connected units globally, and we remain focused on
reaching 60% connectivity over the medium term.
Otis ONE, our IoT solution that connects elevators to
the cloud, currently serves 34 countries and
territories. It is driving productivity improvements in
the    eld and is increasing our retention and
conversion rates around the world.
2
Based on Otis internal estimates.
2

OTIS WORLDWIDE CORPORATION ANNUAL REPORT 2024
Board of Directors
Thomas A. Bartlett
Kathy Hopinkah Hannan
Margaret M. V. Preston
Former President and
Chief Executive Of   cer,
American Tower Corporation
Former Global Lead Partner,
National Managing Partner and
Vice Chairman, KPMG, LLP
Managing Director,
Cohen Klingenstein, LLC
Jeffrey H. Black
Shailesh G. Jejurikar
Former Senior Partner and
Vice Chairman, Deloitte LLP
Chief Operating Of   cer,
The Procter & Gamble Company
Former Chief Procurement Of   cer,
E. I. du Pont de Nemours and Company
Jill C. Brannon
Christopher J. Kearney
Executive Vice President,
Chief Sales Of   cer, FedEx Corporation
Former Chairman and
Chief Executive Of   cer,
SPX Corporation
Nelda J. Connors
Founder and Chief Executive Of   cer,
Pine Grove Holdings, LLC
Shelley Stewart, Jr.
John H. Walker
Former Chairman and
Chief Executive Of   cer,
Global Brass and Copper Holdings, Inc.
Judith F. Marks
Chair, Chief Executive Of   cer and President,
Otis Worldwide Corporation
Executive Leadership*
Judith F. Marks
Nora LaFreniere
Enrique Mi  arro Viseras
Chair, Chief Executive Of   cer
and President
Executive Vice President
& General Counsel
President, Otis EMEA
St  phane de Montlivault
Sally Loh
President, Otis Asia Paci   c
President, Otis Greater China
Senior Vice President
& Chief Communications Of   cer
Tracy Embree
Abbe Luersman
Perry Zheng
President, Otis Americas
Executive Vice President
& Chief People Of   cer
Executive Vice President
& Chief Product, Delivery
and Customer Of   cer
Neil Green
Executive Vice President
& Chief Digital Of   cer
Cristina M  ndez
Executive Vice President
& Chief Financial Of   cer

As of January 1, 2025
3
Randi Tanguay



 4/4/2025 Letter Continued (Full PDF)