Slide 1: Second-Quarter 2022 Results
Second-Quarter 2022 Results August 3, 2022
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: Strong Q2 Results. Raising FY Revenue & EPS Guidance
Q 2 2 0 2 2 U P D AT E Strong Q2 Results. Raising FY Revenue & EPS Guidance • Strong execution across portfolio delivers record Q2 performance • Organic Bookings* up ~7%, Organic Revenue* up ~11%, adj. EPS* up 13% • Robust and broad-based demand for Trane Technologies’ innovative products and servic
Slide 5: Highest Bookings Quarter of All Time
Q2 2022 ORGANIC BOOKINGS AND REVENUES Highest Bookings Quarter of All Time - Drives Unprecedented Backlog; Strong Revenue Growth in Dynamic Supply Chain Environment Q2 Organic* Y-O-Y Change Bookings Revenue Americas Enterprise + 7% + 11% • CHVAC bookings up mid-teens, 2-yr stack up ~45%; Revs up HSD
Slide 6: Strong Revenue / EPS Growth Despite Challenging Macro Environment
ENTERPRISE Strong Revenue / EPS Growth Despite Challenging Macro Environment Net Revenue Adj. EBITDA %* Adj. Operating Margin* Adj. Continuing EPS* +11% -40 -20 +13% Organic bps bps $4,190 19.1% 17.1% 16.9% $2.16 18.7% $3,830 $1.92 Q2 '21 Q2 '22 Q2 '21 Q2 '22 Q2 '21 Q2 '22 Q2 '21 Q2 '22 • Strong org
Slide 7: Segment Results: Americas, EMEA, Asia Pacific
Q 2 2 0 2 2 S E G ME N T R E S U LT S Strong Organic Revenue Growth in Dynamic Macro Environment. Higher Costs to Serve Customers Impacting Margins Near Term Adj. Revenue Adj. OI*% EBITDA*% Highlights Org.* Growth vs PY $M vs PY • Sustainability-focused innovation, strong end markets, decarbonizatio
Slide 8: Record Bookings & Backlog, Leading Innovation
M A R K E T U P D AT E Record Bookings & Backlog, Leading Innovation, Strong Financial Position Support 2H 2022 Outlook and Strong Foundation for 2023 Commercial HVAC • Record demand for innovative solutions driving increasing, unprecedented backlog; End markets remain healthy, e.g., June ABI 53.2 a
Slide 9: Raising FY 2022 Revenue & EPS Guidance
2 0 2 2 G U I D A N C E U P D AT E Raising FY 2022 Revenue & EPS Guidance Reflecting Greater Visibility and Improved Outlook Prior FY Guidance* Updated FY Guidance* Organic + ~10% + ~12% (Up ~9% incl. FX) (Up ~11% incl. FX) Revenues Adj. EPS ~$6.95 to $7.15 ~$7.05 to $7.15 Operating Organic Mid-Teen
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; Fueling Innovation / Investments Across Portfolio • On track to deliver ~$50M incremental savings in Transformation Savings 2022 ($240M total savings) • ~$300M transformation savings adds fuel to
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
2 0 2 2 B A L A N C E D C A P I TAL D E P L O YME N T Strong, Balanced Capital Allocation YTD; On Track to Deploy ~$2.5B FY 2022 Balanced Capital Deployment FY 2022 Outlook • Balanced capital deployment of ~$2.5B YTD 2022 FY 2022 • Q2 Share repurchases of $300 million (YTD Dividends $311M ~$0.6B $65
Slide 13: Topics of Interest
a 4 Topics of Interest TECHNOLCGIES
Slide 14: N.A. Transport Market Outlook Remains Strong
TOPICS OF INTEREST N.A. Transport Market Outlook Remains Strong; EMEA Market Outlook Flat To Prior (ex-Russia) N.A. 2022 Strong Market Outlook N.A. and EMEA Market Results / Forecast EMEA Market Reflects Exclusion of Russia • Trailer/Truck/APU: ~2/3rds of Total Transport Revenue 2021 Transport N.A.
Slide 15: Transport Growth Outlook
TOPICS OF INTEREST Transport Growth Outlook: ACT Projecting Continued Growth in 2023 North America Trailer Market Outlook N.A. Healthy 2023 Market Outlook • Underlying transport refrigeration demand remains strong 50 • 2022 N.A. OEM build capacity constrained for trailer/truck/APU 40 • Underlying de
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 innovatio
Slide 17: Appendix
Appendix
Slide 18: Guidance Increased ~$0.05 at Mid-Point Including FX Impact; Plus M&A
2 0 2 2 G U I D A N C E U P D AT E Guidance Increased ~$0.05 at Mid-Point Including > FX Impact; Plus M&A Updated FY Revenue Adj. EPS* Commentary 2022 • Expect strong 2H w/ improving supply chain, strong price execution Organic + ~12% ~$7.15 to ~$7.25 • Mid-teens FY organic leverage consistent with
Slide 19: Trane Technologies Core Sustainability Strategy
2030 SUSTAI NABI LIT Y CO MMIT MENT 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 in leadership, opera
Slide 20: Driving Performance Through Sustainability
SU S TA I N AB I L I T Y L E A D E R Driving Performance Through Sustainability 20 20
Slide 21: Widely Recognized for Environmental, Social and Governance Performance
SU S TA I N AB 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 10 years Top Decile Globally Most Admired Companies list (5th percentile in Placed 2nd in the Industrial Machinery industry) industry 11 Cons
Slide 22: Q2 Organic Bookings Up 7% Y-O-Y; Organic Revenues Up 11%
Q2 Organic Bookings Up 7% Y-O-Y; Organic Revenues Up 11% Organic* 2020 2021 2022 Bookings Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Americas +11% -5% +8% +2% +4% +36% +29% +20% +31% +29% +6% +10% EMEA -2% -20% +6% +9% -3% +18% +53% +25% +13% +27% flat -12% Asia Pacific -17% -2% -5% +2% -6% +14% +12% +11%
Slide 23: Q2 Non-GAAP Measures Definitions
Q2 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 2022 is define
Slide 24: Q2 Non-GAAP Measures Definitions
Q2 Non-GAAP Measures Definitions Free cash flow in 2022 is defined as net cash provided by (used in) continuing operating activities, less capital expenditures, plus cash payments for restructuring costs, transformation costs and the continuing operations component of the qualified settlement fund (