Otis Worldwide Corporation Reports Slight Increase in Net Sales for Fiscal Year 2024

Otis Worldwide Corporation reported a slight increase in net sales for the fiscal year ended December 31, 2024, reaching $14.261 billion, up 0.4% from $14.209 billion in 2023. The growth was primarily driven by a 6.8% increase in service sales, which totaled $8.894 billion, while new equipment sales decreased by 7.7% to $5.367 billion. The company's operating profit also saw an increase, rising to $2.008 billion from $2.186 billion in the previous year, reflecting a gross margin percentage of 29.9%, up from 29.5% in 2023.

In terms of strategic developments, Otis continued to implement its UpLift program, aimed at transforming its operating model through process standardization and supply chain improvements. The company incurred $96 million in total UpLift costs in 2024, which included $31 million in restructuring costs and $65 million in transformation costs. The program is expected to generate approximately $200 million in annual run-rate savings by the second half of 2025. Additionally, Otis completed the acquisition of the remaining shares of its subsidiary in Japan for approximately $70 million, further consolidating its global operations.

Operationally, Otis maintained a robust service portfolio, with approximately 2.4 million units under maintenance globally. The company employed around 72,000 individuals, with a significant portion (45%) based in Asia. The company’s international operations accounted for approximately 70% of its net sales, highlighting its global reach. Otis also reported a favorable ruling in a German tax litigation case, resulting in an estimated tax benefit of $185 million and related interest income of $200 million, which will positively impact its financial position in the coming quarters.

Looking ahead, Otis expressed cautious optimism regarding its financial outlook, despite ongoing macroeconomic challenges such as inflation and geopolitical tensions. The company anticipates that these factors may affect customer demand and operational costs in 2025. However, with a strong cash position of approximately $2.3 billion and access to credit facilities, Otis is well-positioned to navigate these challenges and continue its strategic initiatives. The company’s effective tax rate for 2024 was reported at 15.0%, significantly lower than the previous year, primarily due to the resolution of the German tax litigation and adjustments related to deferred tax liabilities.