Carrier Global (CARR) Barclays 43rd Annual Industrial Select Conference summary

Growth outlook and business performance

• Targeting 6%-8% organic growth, with confidence in achieving the low end as market headwinds ease and backlog improves, especially in commercial aftermarket and data centers.

• Short-term growth is impacted by headwinds in the Americas RLC and China container business, but recovery is expected as market conditions stabilize.

• Sequential revenue and EBIT step-up expected in Q2, driven by higher-margin businesses and productivity gains.

• Price increases and cost actions are expected to offset commodity headwinds, with positive price-cost dynamics, especially in the U.S.

• Channel inventory was aggressively reduced, with field inventory down 32% year-over-year, positioning for future demand recovery.

Market dynamics and demand trends

• U.S. residential market saw a shift toward repair over replacement due to low home sales and refrigerant changes, but this is not expected to be a long-term trend.

• The natural replacement cycle in the U.S. is about 9 million units per year, with recent years above average, now trending below but expected to revert to the mean.

• Light commercial business is guided down for the year but saw strong order growth in Q4 and is introducing new products to support recovery.

• European heat pump market is stabilizing after a period of overcapacity, with technical expertise and installer relationships seen as key differentiators.

• Commercial business in Europe is expected to perform well over time, with margin improvement tied to aftermarket growth and cost actions.

Data center and technology innovation

• Orders in data center cooling grew 5x in Q4, with strong momentum expected to continue, driven by new product introductions and systems integration.

• Liquid cooling is projected to grow at twice the rate of traditional cooling, with new CDU products and technology partnerships supporting portfolio expansion.

• Aftermarket opportunities for liquid cooling products are expected to be comparable to chillers, supporting long-term service revenue.

• Integration with major technology partners and investments in advanced cooling technologies position the business for leadership in the data center segment.