Trane Technologies Plc · NYSE:TT
Trane Technologies — Ingersoll-Rand — Q4 2015 Earnings Presentation
23 slides from Trane Technologies's earnings presentation, Feb 9, 2016
Slide 1: Fourth-Quarter 2015 Results
Fourth-Quarter 2015 Results February 9, 2016
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 2015
Full-Year 2015 • Revenue up 3%, +7% exFX, +5% organic: Revenue and Operating Margin mid-single digit organic growth in N. America and up low-single digits overseas • Full-year adjusted EPS from continuing +3% $13,301M $12,891M operations of $3.73, up 12% • Adjusted operating margin up 40 bps vs 2014
Slide 4: Adjusted Operating and EBITDA Margins
Adjusted Operating and EBITDA Margins 14.1% 13.6% 12.0% 12.3% 11.6% 8.7% 9.2% 9.6% 11.0% 11.4% 2011 2012 2013 2014 2015 Operating Margins EBITDA Adjusted Operating Margins 2011 2012 2013 2014 2015 Segment 10.2% 10.9% 11.7% 12.8% 13.0% Total 8.7% 9.2% 9.6% 11.0% 11.4% Steady improvements in margins 4
Slide 5: Full-Year 2015 Operating Margin
Full-Year 2015 Operating Margin Operating Leverage Reported Adjusted* Year-Over-Year Revenue Change $409M $409M Year-Over-Year Op. Income Change $ 53M $100M Leverage 13% 24% Organic**Leverage 35% 0.9 (0.9) 10.9% (0.2) 0.3 11.0% Acquisitions (0.4) Volume/Mix 0.3 - Operations/amort. (0.2) FX (0.5) - I
Slide 6: Fourth-Quarter 2015
Fourth-Quarter 2015 Revenue and Operating Margin • Adjusted EPS from continuing ops of $0.94, up 15% +3% $3,326M • Revenue up 3%, +6% exFX, +3% organic $3,241M − 5%+ organic growth in both residential 6% and commercial HVAC Ex FX • 1% increase in Q4 bookings, +2% organic 10.7% Operating 10.8% • Adju
Slide 7: Quarterly Year-Over-Year Order Change
Quarterly Year-Over-Year Order Change Orders, % Change Excluding Currency • +1% in Q4 bookings, +4% exFX, +2% organic 7% 7% • Climate bookings up 2%, organic +5% – Commercial HVAC bookings (organic) 6% up low-single digits; up high-single digits in North America; down in all 5% Organic overseas mark
Slide 8: Q4 2015 Revenue Change
Q4 2015 Revenue Change Segment Revenue Change Reported 2% Organic* Climate 5% 5% Industrial -2% *Organic revenue excludes acquisitions and currency Geographic Revenue Change Reported U.S. Organic +4% 3% Organic* Americas 3% Europe, Middle -2% East, Africa 2% 5% Asia 9% *Organic revenues excludes acq
Slide 9: Q4 2015 Operating Margin
Q4 2015 Operating Margin Operating Leverage Reported Adjusted* Year-Over-Year Revenue Change $85M $85M Year-Over-Year Op. Income Change $13M $29M Leverage 15% 34% Organic**Leverage 55% 0.8 (1.0) 10.7% No net change 0.3 10.8% Volume/Mix 0.4 Acquisitions (0.3) FX (0.4) Investment/other (0.2) Restructu
Slide 10: Climate Segment – Q4 2015
Climate Segment – Q4 2015 • Commercial HVAC revenues up mid-single digits Revenue and Operating Margin (exFX) – Revenues up mid-single digits in N. America; up +2% $2,492M low teens in Asia and up low-single digits in EMEA $2,446M and S. America – Commercial equipment up low-single digits; growth +5
Slide 11: Industrial Segment – Q4 2015
Industrial Segment – Q4 2015 • Industrial segment organic revenues down 2% Revenue and Operating Margin • Air and industrial products organic revenues down low-single digits; equipment down mid-single 5% $834M digits; parts and service revenues up low-single $795M digits +10% – Organic revenues down
Slide 12: Working Capital
Working Capital Annual Working Capital % of Revenues 4.2% ~ 4% 3.1% 2.5% 2.1% 2012 2013 2014 2015 2016 Target Strategically managing working capital 12
Slide 13: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow $ Millions YE 13 YE 14 YE 15 Cash 1,937 1,705 737 Debt 3,521 4,224 4,239 Net Debt 1,584 2,519 3,502 $ Millions Free Cash Flow 1,151* 985** 950 to 1,000** 810 862 Post Security Spin 2013 2014 2015 2016 Target *Reported – includes Allegion security business and excludes res
Slide 14: Returned $6.1B to Shareholders 2011-15
Returned $6.1B to Shareholders 2011-15 Share Repurchase, $M Annual Dividend Per Share Allegion Proceeds 1,375 $1.28 $1.16 1,157 1,200 $1.00 $0.84 840 $0.64 250 2011 2012 2013 2014 2015 2012 2013 2014 2015 2016F #Shares Purchased, Millions 36.3 18.4 20.8 23.0 4.4 • $1.28 per share dividend for 2016 •
Slide 15: Forecast 2016
Forecast 2016 End Markets Organic Americas EMEA Asia Revenue Commercial Up low- HVAC single digits Residential Up mid- HVAC single digits Transport ~Flat Air & Industrial Down low- Products single digits Up low- Golf/Utility single digits 15
Slide 16: Full-Year 2016 Forecast
Full-Year 2016 Forecast Y-O-Y Adjusted Operating Revenue Margin Change Climate 13.25% to 13.75% ‒ Reported 1% to 3% ‒ ExFX 3% to 5% Industrial 13.0% to 13.75% ‒ Reported -4% to -2% ‒ ExFX -1% to 1% Total 11.5% to 12.0% – Reported Flat to 2% – ExFX 2% to 4% 16
Slide 17: Forecast 2016
Forecast 2016 Full Year Q1 YOY reported revenue change Flat to 2% Flat to 2% • Organic 2% to 4% 3% to 5% • Currency -2% -3% EPS continuing – reported* $3.75 to $3.95 $0.28 to $0.33 Restructuring – add back $(0.05) $(0.05) EPS continuing-adjusted $3.80 to $4.00 $0.33 to $0.38 EPS – discontinued $(0.0
Slide 18: Appendix
aim) Ingersoll Rand. Appendix
Slide 19: Year-Over-Year Revenue Change
Year-Over-Year Revenue Change Reported 2013 2014 2015 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Climate 4% 4% 4% 6% 5% 5% 6% 2% 4% 2% 3% Industrial Flat Flat 4% 3% 3% 3% 7% (1%) (2%) 5% 2% Total 3% 3% 4% 5% 5% 4% 6% 2% 3% 3% 3% Organic 2013 2013 2014 2015 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Climate 4% 5% 4% 6%
Slide 20: Full-Year 2016 Guidance Bridge
Full-Year 2016 Guidance Bridge 2015 EPS Continuing Operations $2.57 Restructuring + other one-time items* 1.16 Operations – includes ($0.05) of restructuring $0.37 to $0.57 Lower share count (260M vs. 268M) 0.11 Currency (0.19) Investments (0.13) Tax rate/other** (0.14) EPS Continuing Reported $3.75
Slide 21: Q1 2016 Guidance Bridge
Q1 2016 Guidance Bridge 2015 EPS Continuing Operations $0.22 Restructuring and other one-time items* 0.16 Operations – includes ($0.05) of restructuring (0.01) to $0.04 Lower share count 0.01 Currency (0.03) Investments (0.04) Tax rate/other** (0.03) EPS Continuing Reported 0.28 to 0.33 2016 forecas
Slide 22: 2015 Revenue Profile
2015 Revenue Profile Geography 2015 Revenue: $13.3B Segment 68% New Equipment 32% Aftermarket End Markets Golf/Utility Vehicles 5% Transport Refrigeration Non-Res 16% Building, N. America 31% Industrial Process 18% Non-Res Building, Overseas 16% Residential, N. America 22 14%
Slide 23: “Ly Ingersoll Rand.
“Ly Ingersoll Rand.