Otis Worldwide Corp (OTIS)

History and Background

Otis Worldwide Corp. was founded in 1853 by Elisha Otis, the inventor of the safety elevator. Initially focused on industrial applications, Otis expanded into commercial and residential markets, becoming a global leader in elevator and escalator manufacturing, installation, and service. In 2020, it separated from United Technologies to become an independent publicly traded company.

Core Business Areas

• New Equipment: Designs, manufactures, sells, and installs elevators, escalators, and moving walkways for a variety of buildings and infrastructure projects.
• Service: Provides maintenance, repair, and modernization services for its own equipment and that of other manufacturers. This includes contracts and call-out services.

Leadership and Structure

Judy Marks serves as the Chairwoman, President, and Chief Executive Officer. The company operates with a global structure, dividing its operations into geographical regions. It has a functional organizational structure with departments responsible for engineering, manufacturing, sales, service, and finance.

Key Offerings

• Gen2 Elevator: A machine-roomless elevator system with coated steel belts instead of ropes, reducing energy consumption and space requirements. Otis estimates a 25% market share in elevators globally. Competitors include Schindler, KONE, and Thyssenkrupp Elevator.
• SkyRise Elevator: High-speed, high-rise elevator systems designed for skyscrapers and complex buildings. Competitors include Schindler, KONE, and Thyssenkrupp Elevator.
• CompassPlus Destination Management: A destination dispatch system that optimizes elevator traffic flow in buildings, reducing wait times. Competitors include Schindler PORT, KONE Destination.

Industry Overview

The elevator and escalator industry is driven by urbanization, infrastructure development, and aging populations. The industry is characterized by high barriers to entry due to technical expertise, service networks, and regulatory requirements.

Positioning

Otis is the world's largest manufacturer and servicer of vertical transportation systems, holding a significant market share and a strong global presence. Its competitive advantages include its brand reputation, extensive service network, and technological innovation.

Total Addressable Market (TAM)

The global elevator and escalator market is expected to reach $140 billion by 2028. Otis, with its substantial market share and global presence, is well-positioned to capture a significant portion of this TAM.

Key Competitors

• SCHN.SW
• KNEBV.HE
• TKAG.DE

Competitive Landscape

Otis benefits from its large installed base and service network, providing a competitive edge in the aftermarket. Schindler and KONE are strong competitors, particularly in Europe and Asia. Thyssenkrupp Elevator has been acquired by a consortium of investors, which could lead to changes in its competitive strategy.

Memor Elevator

• Year: 2023
• Acquisition Price (USD millions): 17
• Strategic Rationale: Expand geographic footprint and service capabilities in Turkey.

Historical Growth: Otis has experienced steady growth in revenue and earnings over the past decade, driven by its strong market position, global presence, and focus on innovation.

Future Projections: Analysts project continued growth for Otis in the coming years, driven by urbanization, infrastructure development, and the increasing demand for service and modernization. Revenue is expected to grow at a rate of 4-6% annually, with earnings per share growing at a faster rate.

Recent Initiatives: Otis has recently focused on expanding its digital offerings, improving its service efficiency, and investing in new technologies such as AI and IoT to enhance its products and services.

Otis is a strong company with a leading position in the elevator and escalator market. Its extensive service network and large installed base provide a competitive advantage. While exposed to cyclical markets, Otis's focus on innovation and expansion into emerging markets positions it for future growth. Competitors and supply chain issues need to be looked out for.

Data Sources:

• Otis Worldwide Corp. Annual Reports
• Company Filings
• Industry Reports
• Analyst Estimates

Disclaimers:

This analysis is based on publicly available information and analyst estimates. Investment decisions should be based on your own due diligence and financial assessment. The information provided is not financial advice and should not be interpreted as a recommendation to buy or sell any securities.