Trane Technologies Plc · NYSE:TT
Trane Technologies — 2018 Electrical Products Group Conference
21 slides from Trane Technologies's conference presentation, May 22, 2018
Slide 1: 2018 EPG Conference
2018 EPG Conference May 22, 2018
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 sha
Slide 3: Mike Lamach (CEO) and Sue Carter (CFO)
Mike Lamach (CEO) and Sue Carter (CFO)
Slide 4: Why Ingersoll Rand?
Why Ingersoll Rand? Strategy ● Strategy tied to attractive end markets supported by global mega trends Brands ● Franchise brands and businesses with leadership market positions Innovation ● Sustained business investments delivering innovation and growth, operating excellence and improving margins Pe
Slide 5: Consistent Strategy Execution Delivers Profitable Growth and Powerful Cash Flow
Consistent Strategy Execution Delivers Profitable Growth and Powerful Cash Flow 1. 2. 3. 4. Sustained Operational Dynamic Capital Winning Growth Excellence Allocation Culture Differentiated products Margin improvement Reinvestment, dividends, Commitment to and services deliver and powerful cash flow
Slide 6: Global Mega Trends Play to Our Strengths
Global Mega Trends Play to Our Strengths Global Mega Trends Our Strengths • Climate change • Reduce energy demand and greenhouse gas emissions • Urbanization • Improve efficiency in: • Natural resource scarcity – Buildings • Digital connectedness and – Industrial processes technologies – Transportat
Slide 7: Leading Brands and Market Positions
Leading Brands and Market Positions Commercial HVAC Residential HVAC Transport Refrigeration ● World leader in HVAC ● Leader in heating and air ● World leader in refrigerated conditioning solutions transportation Industrial and Process Fluid Handling Golf and Utility Vehicles ● Leader in compression
Slide 8: Significant Ongoing Business Investments Support Growth and Profitability
Significant Ongoing Business Investments Support Growth and Profitability Business Investments Key Examples ● ~70 major new products throughout the world in 2017 ~20% ● New low-global warming potential refrigerants ● Digital / controls / wireless technology ● Channel expansion ● Parts and services c
Slide 9: Business Operating System Delivers Results
Business Operating System Delivers Results 1 Drive innovation and productivity 2 Proven & unique system to accelerate profitable growth 3 Committed to sustainability and energy efficiency 4 Focus on employee engagement 9
Slide 10: Widely Recognized for Global Citizenship, Sustainability, Diversity and Inclusion and Employee Engagement
Widely Recognized for Global Citizenship, Sustainability, Diversity and Inclusion and Employee Engagement Citizenship Sustainability Diversity and Inclusion 2017 Dow Jones Sustainability World and North America Corporate Responsibility magazine for 7th consecutive year Employee Engagement 100 Best C
Slide 11: Driving Sustained Growth and Operating Margin Improvement
Driving Sustained Growth and Operating Margin Improvement In Billions Revenue Adjusted EPS $15 $6.00 4% 11% $14 CAGR $5.00 CAGR $4.00 $13 $3.00 $12 $2.00 $11 $1.00 $10 $0.00 2014 2015 2016 2017 2018F 2014 2015 2016 2017 2018F FCF% of Adj Net Income Adjusted Operating Margin 140% 18% +1.7 15% Ppts 12
Slide 12: Strong CROIC Growth Highlights Quality of Earnings
Strong CROIC Growth Highlights Quality of Earnings Cash Flow Return on Invested Capital ● 22.4% CROIC in 2017 Cash Flow Return on Invested Capital ● Steady CROIC improvement reflects 25% +6.4 Ppts both topline growth and margin 20% expansion—driven by our business 15% operating system 10% 5% 0% CROI
Slide 13: Robust Financial Model Drives Powerful Cash Flow
Robust Financial Model Drives Powerful Cash Flow 1. Attractive, diversified 2. Leading brands, market positions end markets – outgrowing market rates $4.5 billion free cash flow over the last 4 years 5. Investing for growth 3. Focused on margin and profitability expansion (growth / op. excellence) 4
Slide 14: Maximizing Shareholder Value (2014 – 2017)
Dynamic and Balanced Capital Deployment Focused on Maximizing Shareholder Value (2014 – 2017) $6.6 Billion Capital Share Mergers & Dividends Expenditures Buyback Acquisitions • ~$900M Capex • ~$1.4B dividends paid • $2.9B • ~$1.4B on 22 • ~22% CAGR dividend • 44 million shares acquisitions through p
Slide 15: Why Ingersoll Rand?
Why Ingersoll Rand? Strategy ● Strategy tied to attractive end markets supported by global mega trends Brands ● Franchise brands and businesses with leadership market positions Innovation ● Sustained business investments delivering innovation and growth, operating excellence and improving margins Pe
Slide 16: Appendix
am) Ingersoll Rand Inspiring Progress™ Appendix
Slide 17: M&A Framework – Clear Criteria
M&A Framework – Clear Criteria Business Criteria Financial Criteria Strong position – no major gaps to fill IRR > WACC Strengthening our core or extend leadership in product, channel or technology ROIC: Accretive < 3 years Must be clear strategic fit for Ingersoll Rand EPS accretive < 3 years and cl
Slide 18: Our Climate Businesses
Our Climate Businesses COMMERCIAL HVAC Air conditioning systems, services and solutions. Innovative solutions geared toward making high performance buildings reliable and safe, as well as healthy, comfortable and efficient RESIDENTIAL HVAC Heating, cooling, thermostat controls and home automation fo
Slide 19: Our Industrial Businesses
Our Industrial Businesses COMPRESSION TECHNOLOGIES AND SERVICES SMALL ELECTRIC VEHICLES Rotary, centrifugal and reciprocating air compressors, Golf, commercial and utility and treatment products with Comprehensive multi- vehicles for transportation year service agreements, audits, parts, and accesso
Slide 20: Non-GAAP Measures Definitions
Non-GAAP Measures Definitions Organic bookings is defined as reported orders closed/completed 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. • Currency impacts on net re
Slide 21: Non-GAAP Measures Definitions
Non-GAAP Measures Definitions Working capital measures a firm’s operating liquidity position and its overall effectiveness in managing the enterprises’ current accounts. • Working capital is calculated by adding net accounts and notes receivables and inventories and subtracting total current liabili
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