Slide 1: First-Quarter 2021 Results
First-Quarter 2021 Results May 5, 2021
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 our future performance, statements relating to the continued impact of the COVID-19 global pandemic, capital deployment including the amount and
Slide 3: Focused Strategy Delivers Differentiated Shareholder Returns
CLEAR PRIORITIES Focused Strategy Delivers Differentiated Shareholder Returns 1 2 3 4 Win Grow Margins Maximize Continue Through and Cash Via Value As With Sustainable Execution Focused Dynamic Capital Innovation Excellence Climate Co. Allocation Strong Foundation Strong operating system and Uplifti
Slide 4: Exceptional Q1 2021 Performance and Steadily Improving End Markets; Raising FY Guidance
Q1 2021 E xceptional Q1 2021 Performance and Steadily Improving End Markets; Raising FY Revenue and EPS Guidance Above Prior Range • Exceptional financial performance highlights strength of focused strategy, business operating system & high-performance culture − Broad-based outgrowth / share gains a
Slide 5: Robust Bookings w/ Growth in All Businesses; Strong Revenue Outgrowth
Q1 2021 ORGANIC BOOKINGS AND REVENUES Robust Bookings w/ Growth in All Businesses; Strong Revenue Outgrowth in Improving End Markets Q1 Organic* Y-O-Y Change Bookings Revenue Americas Enterprise + 31% + 11% • CHVAC bookings up LSD and revs flat on tough comps (2-year stack bookings of high-teens, HS
Slide 6: Consistent Execution Drives Strong Performance in Improving Markets
ENTERPRISE Consistent Execution Drives Strong Performance in Improving Markets Net Revenue Adj. EBITDA %* Adj. Operating Margin* Adj. Continuing EPS* +11% +460 +500 +135% Organic bps bps 14.5% 12.2% $1.01 $3,018 +14% $2,641 9.9% 7.2% $0.43 Q1 '20 Q1 '21 Q1 '20 Q1 '21 Q1 '20 Q1 '21 Q1 '20 Q1 '21 • St
Slide 7: Q1 Segment Results: Americas, EMEA, Asia Pacific
Q 1 2 0 2 1 S E G M E N T R E S U LT S Strong Execution, Product and Service Innovation, Productivity and Price / Cost Deliver Significant Growth and Margin Expansion Revenue Adj. EBITDA% Adj OI% Highlights $M Org. Growth vs PY vs PY • Market outgrowth including strong Res HVAC and Transport America
Slide 8: Market Improvements Expected w/ Global Vaccinations in 2021
M A R K E T U P D AT E Market Improvements Expected w/ Global Vaccinations in 2021 Commercial HVAC • IAQ demand strong for systems-focused solutions; IAQ remains long-term tailwind • End markets mixed; data center and warehouse remain strong; education outlook improving on IAQ stimulus, however full
Slide 9: Leveraging Value Creation Framework to Outgrow Improving Markets
2 0 2 1 G U I D A N C E U P D AT E Leveraging Value Creation Framework to Outgrow Improving Markets with Strong Operating Leverage Prior FY Guidance Updated FY Guidance Organic + 5% to + 7% + ~9% Revenues (Up 6.5% to 8.5% w/ M&A) (Up ~10.5% w/ M&A) Adj. EPS $5.30 to $5.50* ~$6.00* w/ M&A ($5.25 to $
Slide 10: On Track to Deliver ~$300M Total Transformation Savings by 2023
T R A N S F O R M AT I O N S AV I N G S On Track to Deliver ~$300M Total Transformation Savings by 2023; 3X Original $100M RMT Stranded Cost Reduction Target • On track to deliver ~$90M incremental savings in Transformation Savings 2021 after delivering stranded / fixed cost take-out of ~$100M in 20
Slide 11: Strong FCF Drives Continued Balanced Capital Deployment Strategy
Strong FCF Drives Continued Balanced Capital Deployment Strategy 1 2 3 Invest for Maintain Healthy, Return Capital to Growth Efficient Balance Sheet Shareholders • Strengthen the core business • Expect to deliver FCF ≥ 100% • Expect to consistently deploy and extend product & market of adjusted net
Slide 12: Increased Target to ~$2.5B for Balanced Capital Allocation in FY 2021
Increased Target to ~$2.5B for Balanced Capital Allocation in FY 2021, up $500M vs prior guidance; Strong Deployment in Q1 Balanced Capital Deployment Capital Allocation Q1 2021 FY 2021 ~$2.5B+ Dividends* $140M ~$564M Acquisitions and investments $70M ~$1.5B** Share repurchases $104M Debt retirement
Slide 13: Topics of Interest
a 4 Topics of Interest TECHNOLOGIES
Slide 14: Strong 2021 Organic Leverage on Growth in Improving Markets
TOPICS OF INTEREST Strong 2021 Organic Leverage on Growth in Improving Markets; Positive Impact from EPS-Accretive M&A in First Year of Integration Updated FY Revenue Adj. EPS Commentary 2021 • ~30% organic leverage through balance of 2021; transformation Organic + ~9% ~$5.95 savings plus higher Tra
Slide 15: Continued Strong North America / EMEA Transport Markets Primed for Growth
TOPICS OF INTEREST Continued Strong North America / EMEA Transport Markets Primed for Growth in 2021; FY Outlook Reiterated N.A. and EMEA Market Results / Forecast N.A. and EMEA 2021 Strong Market Outlook 2020 Transport N.A. 2021 Transport N.A. • Trailer/Truck/APU: ~2/3rds of Total Transport Revenue
Slide 16: Positioned to Outperform. Consistently.
IN SUMMARY Positioned to Outperform. Consistently. Secular The markets we serve will continue to outgrow GDP fueled Tailwinds by long-term sustainability megatrends Sustainability We are positioned to outgrow the market and expand Focused Innovation margins with market-leading sustainable innovation
Slide 17: Appendix
Appendix Appendix
Slide 18: Trane Technologies Core Sustainability Strategy: Challenge Possible
2 0 3 0 S U S TA I N A B I L I T Y C O M M I T M E N T S Trane Technologies Core Sustainability Strategy: Challenge Possible Global Megatrends Our Commitments The Gigaton Challenge Leading by Example Opportunity for All Achieving carbon neutral Reducing one gigaton of carbon Creating gender parity i
Slide 19: Highly Regarded ESG Performance
S U S TA I N A B I L I T Y L E A D E R Highly Regarded ESG Performance 10 Years Listed on North America Index #26 On Corporate Knights Top 100 Global Most Sustainable Corporations 61% Higher score than industrial machinery average Gold Medal Winner 35th annual award for International Achievement in
Slide 20: Purpose Alignment Drives Uplifting Culture
S U S TA I N A B I L I T Y L E A D E R Purpose Alignment Drives Uplifting Culture 1st in our industry to sign on to Paradigm for Parity – A Call to Action for Gender Equality Founding Member OneTen coalition to hire 1 million Black Americans 2nd Consecutive Year Forbes Best Employers for Diversity J
Slide 21: Q1 Organic Bookings Up 31% Year-Over-Year; Organic Revenues Up 11%
Q1 Organic Bookings Up 31% Year-Over-Year; Organic Revenues Up 11% Organic* 2019 2020 2021 Bookings Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Americas -2% -4% +2% -7% -3% +11% -5% +8% +2% +4% +36% EMEA -9% +0% -2% -1% -3% -2% -20% +6% +9% -3% +18% Asia Pacific +0% -6% +3% -5% -2% -17% -2% -5% +2% -6% +14% To
Slide 22: Restructuring and Transformation Costs GAAP to Non-GAAP Adjustments
Restructuring and Transformation Costs GAAP to Non-GAAP Adjustments Restructuring and Transformation Costs • Restructuring costs of ~$10M included in Table 2 of the Q1 2021 earnings release includes ~$9M of restructuring costs related to transformation activities as well as ~$1M of restructuring cos
Slide 23: Q1 Non-GAAP Measures Definitions
Q1 Non-GAAP Measures Definitions Organic bookings is defined as reported orders in the current period adjusted for the impact of currency and acquisitions. Organic revenue is defined as GAAP net revenues adjusted for the impact of currency and acquisitions Adjusted operating income in 2021 and 2020
Slide 24: Q1 Non-GAAP Measures Definitions
Q1 Non-GAAP Measures Definitions Free cash flow in 2021 and 2020 is defined as net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for restructuring costs and transformation costs. Working capital measures a firm’s operating liquidity positio