Slide 1: Third-Quarter 2022 Results
Third-Quarter 2022 Results November 2, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements” which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS and operating income; our business operations; demand for ou
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: Strong Q3 Results: Raising FY Revenue & EPS Guidance
Q 3 2 0 2 2 U P D AT E Strong Q3 Results: Raising FY Revenue & EPS Guidance • Strong execution across portfolio delivers strong Q3 performance • Organic Bookings* up ~8%, Organic Revenue* up ~19%, adj. EPS* up 26% • Robust and broad-based demand for Trane Technologies’ innovative products and servic
Slide 5: Strong Quarterly Bookings and Backlog; Strong Revenue Growth in Challenging Supply Chain Environment
Q3 2022 ORGANIC BOOKINGS AND REVENUES Strong Quarterly Bookings and Backlog; Strong Revenue Growth in Challenging Supply Chain Environment Q3 Organic* Y-O-Y Change Bookings Revenue Enterprise + 8% + 19% Americas • CHVAC bookings up 20%, 2-yr stack up ~50%; Revs up low-teens w/ low-teens Americas + 1
Slide 6: Strong Revenue Growth, Margin Expansion and EPS Growth
Q 3 2 0 2 2 E N T E R P R I S E R E S U LT S Strong Revenue Growth, Margin Expansion and EPS Growth Net Revenue Adj. EBITDA %* Adj. Operating Margin* Adj. Continuing EPS* +19% +50 +60 +26% Organic bps bps $4,372 16.7% $2.27 18.5% 16.1% 18.0% $3,720 $1.80 Q3 '21 Q3 '22 Q3 '21 Q3 '22 Q3 '21 Q3 '22 Q3
Slide 7: Strong Organic Revenue Growth and Margin Expansion in Dynamic Macro Environment
Q 3 2 0 2 2 S E G ME N T R E S U LT S Strong Organic Revenue Growth and Margin Expansion in Dynamic Macro Environment Adj. Revenue Adj. OI*% EBITDA*% Highlights $M Org.* Growth vs PY vs PY Americas • Strong incrementals from volume growth $3,481 20.0% 18.1% • Strong volume growth and positive price
Slide 8: Strong Bookings & Backlog, Leading Innovation, Strong Financial Position Support Q4 2022 Outlook
M A R K E T U P D AT E Strong Bookings & Backlog, Leading Innovation, Strong Financial Position Support Q4 2022 Outlook and Strong Foundation for 2023 Commercial HVAC • Strong demand for innovative solutions driving strong backlog; End markets remain healthy, e.g., Sep ABI 51.7 and > 50 since Feb 20
Slide 9: Raising FY 2022 Revenue & EPS Guidance Reflecting Strong Execution
2 0 2 2 G U I D A N C E U P D AT E Raising FY 2022 Revenue & EPS Guidance Reflecting Strong Execution Prior FY Guidance* Updated FY Guidance* Organic + ~12% + ~13% to ~14% (Up ~11% incl. FX) (Up ~11% to ~12% incl. FX) Revenues Adj. EPS ~$7.05 to ~$7.15 ~$7.15 to ~$7.20 Operating Organic Mid-Teens Or
Slide 10: On Track For ~$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 For ~$300M Total Transformation Savings by 2023; Business Operating System to Drive Strong Productivity / Cost Savings Over Long Term • On track to deliver ~$50M incremental savings in 2022 Transformation Savings ($240M total savings) • ~$300M transfo
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: Strong, Balanced Capital Allocation YTD through October; Targeting Deployment of ~$2.5B for FY 2022
202 2 BAL A N C ED CA PI TAL D E PL O YME N T Strong, Balanced Capital Allocation YTD through October; Targeting Deployment of ~$2.5B for FY 2022 Balanced Capital Deployment FY 2022 Outlook • Q3 Share repurchases of $250M (YTD YTD Oct 2022 FY 2022 $900M); ~$3.5B remaining authorization Dividends $46
Slide 13: Topics of Interest
a 4 Topics of Interest TECHNOLCG ES
Slide 14: N.A. Transport Market Outlook Remains Strong; EMEA Market Outlook Flat To Prior
TOPICS OF INTEREST N.A. Transport Market Outlook Remains Strong; EMEA Market Outlook Flat To Prior N.A. 2022 Strong Market Outlook N.A. and EMEA Market Results / Forecast EMEA Market Reflects Exclusion of Russia 2021 Transport N.A. • Trailer/Truck/APU: ~2/3rds of Total Transport Revenue 2022 Transpo
Slide 15: 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 innovatio
Slide 16: Appendix
Appendix 16
Slide 17: Raising FY 2022 Revenue and EPS Guidance
2 0 2 2 G U I D A N C E U P D AT E Raising FY 2022 Revenue and EPS Guidance *Includes certain Non-GAAP financial measures. See the company’s Q3 2022 earnings release for additional details and reconciliations. 17
Slide 18: Trane Technologies Core Sustainability Strategy: Challenge Possible
2030 SUSTAINABILITY CO MMITMENTS 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 in leadership, operations
Slide 19: Presented by His Majesty King Charles III, in his former role as HRH the Prince of Wales
Presented by His Majesty King Charles III, in his former role as HRH the Prince of Wales 19
Slide 20: Widely Recognized for Environmental, Social and Governance Performance
S U S TA I N A B I L I T Y L E A D E R Widely Recognized for Environmental, Social and Governance Performance Business and Sustainability People and Citizenship Top Decile Globally 10 years (5th percentile in the Most Admired Companies list Building Products Placed 2nd in the Industrial Machinery in
Slide 21: Q3 Organic Bookings Up 8% Y-O-Y; Organic Revenues Up 19%
Q3 Organic Bookings Up 8% Y-O-Y; Organic Revenues Up 19% Organic* 2020 2021 2022 Bookings Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Americas +11% -5% +8% +2% +4% +36% +29% +20% +31% +29% +6% +10% +11% EMEA -2% -20% +6% +9% -3% +18% +53% +25% +13% +27% flat -12% -10% Asia Pacific -17% -2% -5% +2% -6% +1
Slide 22: Q3 Non-GAAP Measures Definitions
Q3 Non-GAAP Measures Definitions Adjusted operating income in 2022 is defined as GAAP operating income adjusted for restructuring costs, transformation costs, M&A transaction costs, non-cash adjustments for contingent consideration, a settlement charge for a compensation related payment to a retired
Slide 23: Q3 Non-GAAP Measures Definitions
Q3 Non-GAAP Measures Definitions Adjusted effective tax rate for 2022 is defined as the ratio of income tax expense adjusted for the net tax effect of adjustments for restructuring costs, transformation costs, non-cash adjustments for contingent consideration, settlement charge for a retired executi