Trane Technologies Plc · NYSE:TT
Trane Technologies — Ingersoll Rand — Q4 2014 Earnings Presentation
21 slides from Trane Technologies's earnings presentation, Jan 30, 2015
Slide 1: Fourth-Quarter 2014 Results
Fourth-Quarter 2014 Results January 30, 2015
Slide 2: Safe Harbor
Safe Harbor This presentation includes “forward-looking statements,” which are statements that are not historical facts, including statements that relate to the mix of and demand for our products, performance of the markets in which we operate, our share repurchase program including the amount of sh
Slide 3: Full-Year 2014
Full-Year 2014 • Revenue growth in 2014 +4%, +5% exFX Revenue and Operating Margin - Mid-single digit growth in N. America, low-teen growth in EMEA, declines in +4% $12,891M L. America and Asia $12,351M • Full-year adjusted EPS from continuing 5% operations of $3.33, up 25%. Ex FX • Adjusted operati
Slide 4: Adjusted Operating and EBITDA Margins
Adjusted Operating and EBITDA Margins 13.6% 12.3% Adjusted Operating Margins 11.6% 12.0% 2011 2012 2013 2014 Climate 8.8% 9.3% 10.5% 12.2% 9.2% 9.6% 11.0% Industrial 14.9% 15.8% 15.8% 14.8% 8.7% Segment 10.2% 10.9% 11.7% 12.8% Total 8.7% 9.2% 9.6% 11.0% 2011 2012 2013 2014 Operating Income EBITDA St
Slide 5: Full-year Operating Margin
Full-year Operating Margin Operating Leverage Reported Adjusted* Segment Operating Leverage Adjusted* Year-Over-Year Revenue Change $541M $541M Climate 46% Year-Over-Year Op. Income Change $300M $229M Industrial Neg. Leverage 55% 42% Operations 37% 1.1 0.1 10.9% 0.6 0.2 8.9% Investment/Other (0.5) L
Slide 6: Fourth-Quarter 2014
Fourth-Quarter 2014 Revenue and Operating Margin • Adjusted EPS from continuing ops: $0.82 up by 34% +5% $3,241 M • Revenue of $3,241M, up 5%, +7% exFX $3,099M − Strong growth in residential HVAC, 7% N. America and EMEA commercial Ex FX HVAC and N. America transport. • 5% increase in Q4 bookings, +7
Slide 7: Q4 2014 Guidance to Actual Bridge
Q4 2014 Guidance to Actual Bridge Q4 EPS Continuing Operations Forecast – 3Q call $0.68 to $0.72 Additional interest expense ($0.02) and early (0.05) retirement cost of debt ($0.03) Revised EPS Forecast – Oct. 24 $0.63 to $0.67 Volume+price+mix 0.06 Productivity 0.05 No Venezuela currency in Q4 0.03
Slide 8: Quarterly Year-Over-Year Order Change
Quarterly Year-Over-Year Order Change Orders, % Change Excluding Currency Reported ExFX 8% 8% Q1 ′13 (1%) Flat Q2 2% 2% 7% Q3 7% 8% Q4 5% 5% Q1 ′14 5% 5% 5% 5% 5% Q2 5% 5% Q3 7% 8% Q4 5% 7% Q4 2014 2% % Change vs. Q4 2013 Reported ExFX Flat Climate 6% 8% Industrial 3% 6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Tota
Slide 9: Q4 2014 Revenue Change
Q4 2014 Revenue Change Segment Revenue Change 5% Reported Climate Ex FX 7% 3% Industrial 6% Geographic Revenue Change Reported Ex FX Americas 5% U.S. +7% 6% Europe, Middle 13% East, Africa 22% -6% Asia -3% Q4 revenue up 7% ExFX 9
Slide 10: Q4 Operating Margin
Q4 Operating Margin Operating Leverage Reported Adjusted* Segment Operating Leverage Adjusted* Year-Over-Year Revenue Change $142M $142M Climate 54% Year-Over-Year Op. Income Change $128M $86M Industrial 11% Leverage 91% 61% Operations 47% 1.0 10.7% 2.1 0.7 (0.1) 7.0% Investment/Other (0.4) Lower re
Slide 11: Climate Segment – Q4 2014
Climate Segment – Q4 2014 • Commercial HVAC bookings up mid-single digits; up low- Revenue and Operating Margin single digits in Americas; up mid-teens in Asia; up mid- single digits in Europe. $2,446M • Commercial HVAC revenues up mid-single digits. 5% $2,328M – Commercial equipment up low-single d
Slide 12: Industrial Segment – Q4 2014
Industrial Segment – Q4 2014 Revenue and Operating Margin • Industrial orders and revenues up 6% ExFX +3% $795M • Air and industrial products bookings up mid- $771M single digits and revenues up low-single digits. 6% Ex FX – Revenues up mid-single digits in Americas, low-single digit declines in Eur
Slide 13: Working Capital
Working Capital Annual Working Capital % of Revenues 3% to 4% 3.1% 2.5% 2.1% 2012 2013 2014 2015 Target Strategically managing working capital 13
Slide 14: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow $ Millions YE 13 YE 14 Cash 1,937 1,705 Debt 3,521 4,224 Net Debt 1,584 2,519 $ Millions Free Cash Flow 1,151* ~950 to 1,000 810 862 Post Security Spin 2013 2014 2015 Target *Reported – includes Allegion security businesses and excludes restructuring and one-time spin cos
Slide 15: Full-Year 2015 Forecast
Full-Year 2015 Forecast Y-O-Y Adjusted Revenue Markets Operating Change Margin Climate • Commercial HVAC equipment ‒ Reported 2% to 3% replacement and aftermarket growing ‒ Organic--ExFX 4% to 5% low to mid-single digits • Transport: mid-single digit growth in 12.5% to North America and low-single d
Slide 16: Forecast 2015
Forecast 2015 Full Year Q1 YOY reported revenue change 4% to 5% 4% to 5% • Organic 4% to 5% 5% to 6% • Currency -3% -3% • Acquisitions +3% +2% EPS continuing-reported* $3.60 to $3.75 $0.26 to $0.30 Cameron acquisition inventory $(0.06) $(0.03) step-up costs-add back EPS continuing-adjusted $3.66 to
Slide 17: Appendix
aim) Ingersoll Rand. Appendix
Slide 18: Year-Over-Year Revenue Change
Year-Over-Year Revenue Change 2013 2014 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 Climate (1%) 5% 4% 8% 4% 4% 4% 6% 5% Industrial (1%) (3%) 3% 1% Flat Flat 4% 3% 3% Total Ingersoll Rand (1%) 3% 4% 6% 3% 3% 4% 5% 5% Excluding FX 2013 2014 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 Climate (1%) 5% 4% 8% 4% 5% 4% 6% 7% Industrial (1
Slide 19: Full-Year 2015 Guidance Bridge
Full-Year 2015 Guidance Bridge 2014 EPS Continuing Operations $3.27 Restructuring + refinancing premium 0.06 Operations improvement $0.65 to $0.80 Lower share count (270M vs. ~274M) 0.06 Currency (0.17) Investments (0.23) Cameron acquisition net impact* 0.03 Tax rate/Other (0.07) EPS Continuing Repo
Slide 20: Q1 2015 Guidance Bridge
Q1 2015 Guidance Bridge 2014 EPS Continuing Operations $0.27 Restructuring costs 0.02 Operations improvement $0.10 to $0.14 Investments (0.05) Currency (0.05) Cameron acquisition net impact* (0.03) EPS Continuing Reported 0.26 to 0.30 2015 Cameron inventory step-up costs (add back) (0.03) Adjusted E
Slide 21: “Ly Ingersoll Rand.
“Ly Ingersoll Rand.