Otis Worldwide Corporation

CEO and President, and Christina Mendez, Executive Vice President and CFO. Please note, except where otherwise noted, the company will speak to results from continuing operations, excluding restructuring and significant non-recurring 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's 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. Now I'd like to turn the call over to Judy.

Thank you, Rob. Good morning, afternoon, and evening, everyone. Thank you for joining us. We hope everyone listening is safe and well. Before discussing our results, I'd like to take a moment to recognize an important milestone. Earlier this month, Otis celebrated our fifth anniversary since returning as an independent public company. The last five years have been challenging and rewarding, and I'm proud of our colleagues and our many accomplishments. Five years ago, when we were completing our spinoff, the world was in the midst of a global pandemic. While the pandemic posed many challenges, it also provided an opportunity to demonstrate the impact of our strategy, the resilience of our business, and the commitment of our colleagues to serving our customers and continuous improvement. We have made tremendous progress since those early days, and our shareholders have been rewarded. Since 2019, we've expanded adjusted operating profit margins by 220 basis points and grown adjusted EPS over 70%. We've more than doubled our dividend, and together with share repurchases, we have returned $6 billion of capital to our shareholders. I'm proud of our achievements over the last five years and thankful for our 72,000 colleagues who demonstrate our absolutes each and every day. We've laid a strong foundation, and I couldn't be more excited about the future opportunities ahead of us. Turning to Q1 highlights on slide three, Otis started the year with a solid first quarter, driven by the resilience and strength of our service-driven business model. First quarter organic sales were flat, as strength in service was offset by a decline in new equipment. Service organic sales grew 4%, with growth across all business lines. Modernization orders increased 12%, and we ended the quarter with a backlog up 14% at constant currency. Our maintenance portfolio continued to grow 4%, while we also drove 40 basis points of adjusted operating margin expansion compared to the prior year. Solid growth in service coupled with margin expansion enabled us to grow adjusted EPS 5% in the quarter. We generated $186 million in adjusted free cash flow and completed approximately $250 million in share repurchases. And yesterday, we announced an 8% increase in our dividend which brings our cumulative dividend increase in spin to approximately 110%. During the quarter, we were honored to be recognized by Fortune as one of the world's most admired companies and to be named to Wall Street Journal's Best Managed Companies list. These prestigious recognitions reflect our colleagues' commitment to serving our customers and living our absolutes every day. Turning to our orders performance on slide four. New equipment and modernization combined orders grew 2% driven by strength and modernization. The combined backlog was relatively flat, a sequential improvement from the fourth quarter. Our total backlog, including maintenance and repair, remains at historically high levels and positions us well for future quarters. New equipment orders declined 1% in the quarter. America's continued its strong orders performance from the second half of 2024, growing mid-teens in the first quarter. This was driven by mid-teens growth in North America and greater than 20% growth in Latin America. Demand in Asia Pacific also remains robust, with orders growth greater than 20%, primarily driven by India and Southeast Asia. This strength was offset by continued weakness in China, where orders declined greater than 20%. This was in line with our expectations, and we continue to expect the new equipment market to stabilize later this year. New equipment orders in EMEA were down mid-single digits, partially due to a tough compare, with declines in Europe offsetting strength in the Middle East. Our new equipment backlog at constant currency was down 3% versus the prior year, although excluding China, it was up mid-single digits. Modernization orders grew 12%, and our quarter-end backlog increased 14% at constant currency. Order growth was widespread, with China a notable standout, growing orders greater than 20%. We are just at the beginning of a projected multi-year growth cycle globally in modernizations, driven by aging of the 22 million global unit install base. With 8 million units already in the prime modernization age, and that number forecasted to grow mid to high single digits for several years, we see a significant opportunity ahead in all four regions. Our service portfolio grew 4% with growth across all of our regions. China grew low teens, Asia Pacific grew mid single digits, and EMEA and Americas grew low single digits. Before moving to financial results, I'd like to highlight several exciting projects from the first quarter. In the Americas, one of our standout projects is the modernization of the three elevators that are expected to provide safer and more reliable transportation to over 600,000 annual visitors to the iconic Christ the Redeemer in Rio de Janeiro, Brazil. Our commitment to safety and excellence will enhance the visitor experience while preserving the monument's legacy. In Stockholm, Sweden, Otis is embarking on an exciting project to modernize 29 escalators for A-Train, the operator of the Arlanda Express Rail Link. The vital connection links Stockholm City Center to Arlanda Airport. The project will revitalize escalators initially installed by Otis in the late 1990s, bringing them to modern standards. Modernization was both an efficient and sustainable choice for this customer, as Otis can enhance performance while minimizing disruption for passengers in this essential link for the Swedish capital. We continue to excel in the new equipment business by demonstrating our strong performance and reliability. Otis has once again been selected by China's Hangzhou Metro to supply 145 escalators and 26 IoT-connected elevators for the new Line 3. This addition brings the total number of Otis units in the city's metro network to over 1,700 across nine subway lines. And in India, Otis has proudly secured a landmark contract to supply over 470 elevators and escalators to the Prestige Group, spanning five major cities. The project includes 28 double deck elevators and high speed elevators designed for what will be India's tallest commercial tower. Turning to our first quarter results on slide five. Otis delivered net sales of $3.3 billion with organic sales flat year over year. Adjusted operating profit, excluding a $16 million foreign exchange headwind, increased 3% with growth in service, offset by a decline in new equipment. Adjusted operating profit margin expanded 40 basis points to 16.7%. Adjusted EPS grew 5% or 4 cents in the quarter with solid operational performance and the benefit of a lower share count. With that, I'll turn it over to Christina to walk through our results in more detail.

Thank you, Judy. Starting with service on slide six. Service organic sales grew 4% with growth in all lines of business. Maintenance and repair organic sales grew 3% given by portfolio growth. positive price of 2% in maintenance, partially offset by mix and churn. Repair growth was muted in the first quarter, a blow single digits, due to timing of backlog execution. We expect acceleration in the balance of the year. Modernization organic sales grew 10% as we executed on our backlog. Growth was broad-based across all regions, including high-teens growth in China, and approximately 10% growth in Americas. Service operating profit of $537 million increased $29 million at constant currency, with higher volume, favorable pricing and productivity, including the benefits from uplift, more than upsetting higher labor and material costs, and mix and churn. Operating profit margins expanded 40 basis points to 24.6% in the quarter. Turning to new equipment on slide seven. New equipment organic cells declined 7% in the quarter, as the strength in EMEA and APAC were more than offset by declines in China and America. EMEA cells grew mid-single digits, primarily due to strength in the Middle East, which grew greater than 20%, while Europe was up low single digits. APAC grew approximately 10%, with a strength across most of the region. Americas declined high single digits as we worked through last year's backlog. And lastly, we are continuing to work through China's lower backlog, with organic sales down greater than 20% in the quarter due to market conditions and strict credit controlling segments. However, as Judy mentioned, we continue to expect the market to stabilize later this year, with sales stabilization to follow in 2026. New equipment operating profit of $66 million declined $5 million at actual currency and $4 million at constant currency, driven by the headwinds of lower volume and regional mix that were partially upset by productivity, including the benefits from uplift and our China transformation, and lower commodity costs. Pricing was relatively flat. Operating profit margins increased 20 basis points to 5.7%. I will now turn it back to Judy to discuss our 2025 outlook.