Trane Technologies Plc · NYSE:TT
Trane Technologies — Ingersoll Rand — Q1 2018 Earnings Presentation
22 slides from Trane Technologies's earnings presentation, Apr 25, 2018
Slide 1: First-Quarter 2018 Results
First-Quarter 2018 Results April 25, 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: Executing a Consistent Strategy that Delivers Profitable Growth
Executing a Consistent Strategy that Delivers Profitable Growth 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 share repurchas
Slide 4: Q1 2018 – Off to Strong Start
Q1 2018 – Off to Strong Start Many things are going well • End markets very healthy - strong organic order and revenue growth across segments / geographies / regions • Industrial segment continues to strengthen — growth / margin expansion ahead of expectations • China HVAC direct sales strategy perf
Slide 5: Q1 2018 Strong Organic Bookings and Revenue Growth Across All Businesses
Q1 2018 Strong Organic Bookings and Revenue Growth Across All Businesses Organic* Y-O-Y Change Climate Bookings Revenues Commercial HVAC + + - N. America + + - L. America + + - EMEA + + - Asia + + Residential HVAC + + Transport + + Total + 11% + 8% Industrial Compression Tech + + Industrial Products
Slide 6: Strong Performance Across Healthy End Markets
Strong Performance Across Healthy End Markets • Sustained growth in Global CHVAC markets - Strong equip bookings and revenues w/ outsized growth in parts / service • N.A. CHVAC mkt growth solid – equip/services/ contracting/controls. Institutional growth led by Education, Health Care Commercial • EM
Slide 7: Q1 2018 - Key Takeaways
Q1 2018 - Key Takeaways • Strong operating results – Adjusted continuing EPS of $0.70, up 23% year over year driven by gains in both Climate and Industrial – Markets broadly receptive to price increases, however persistent inflation remains significant headwind – Consistent with company expectations
Slide 8: Q1 2018 Strong Revenue Growth, Margin Expansion and Capital Deployment Delivering 23% EPS Growth
Q1 2018 Strong Revenue Growth, Margin Expansion and Capital Deployment Delivering 23% EPS Growth Net Revenue Adj. Operating Margin* Adjusted EPS* +13% +23% $0.70 +20 bps $3,385 $3,001 8.3% 8.5% $0.57 +8% Organic Q1 '17 Q1 '18 Q1 '17 Q1 '18 Q1 '17 Q1 '18 Highlights • Strong organic revenue growth in
Slide 9: Strong Growth in Both Segments Offsetting Inflation Headwinds
ENTERPRISE Strong Growth in Both Segments Offsetting Inflation Headwinds +20 bps 1.2 (0.4) (0.2) 8.3% (0.4) 8.5% Q1 2017 Volume / Mix / FX Price/Material Inflation Productivity/Other Investment/Other Q1 2018 Adjusted Operating Inflation Adjusted Operating Margin Margin Highlights • Price / cost impr
Slide 10: Strong Operating Income Growth in Both Segments Driving Adjusted Continuing EPS Higher by 23%
ENTERPRISE Strong Operating Income Growth in Both Segments Driving Adjusted Continuing EPS Higher by 23% +$0.13 $0.08 ($0.03) $0.02 $0.70 $0.57 $0.06 Q1 2017 Climate Industrial Other Share Count Q1 2018 Adjusted Adjusted Continuing EPS* Continuing EPS* Highlights • EPS growth driven by operational g
Slide 11: Q1 Broad-Based Revenue Growth; Persistent Inflation Headwinds
CLIMATE SEGMENT Q1 Broad-Based Revenue Growth; Persistent Inflation Headwinds Net Revenue Adj. Operating Margin* Adj. OI + D&A %** 13.2% -60 bps 12.6% +12% -50 bps $2,610 10.6% 10.1% $2,324 +8% Organic Q1 '17 Q1 '18 Q1 '17 Q1 '18 Q1 '17 Q1 '18 Highlights • Broad-based revenue growth across all busin
Slide 12: Q1 Solid Margin Expansion and Revenue Growth
INDUSTRIAL SEGMENT Q1 Solid Margin Expansion and Revenue Growth Net Revenue Adj. Operating Margin* Adj. OI + D&A %** +180 bps +190 bps 15.0% +15% $775 13.2% $676 12.3% +9% Organic 10.4% Q1 '17 Q1 '18 Q1 '17 Q1 '18 Q1 '17 Q1 '18 Highlights • Strong revenue growth in all products; North America and As
Slide 13: Strong Balance Sheet
Strong Balance Sheet $Mil YE 16 Q1 17 Q2 17 Q3 17 YE 17 Q1 18 Cash 1,715 1,322 1,310 1,259 1,549 1,175 Debt 4,070 4,072 4,066 4,063 4,064 4,351 Net Debt 2,355 2,750 2,756 2,804 2,515 3,176 Free Cash Flow* $1,378 1,278 $ Millions 1,020 829 2014 2015 2016 2017 Highlights • On target to achieve free ca
Slide 14: Balanced Execution of Dynamic Capital Allocation Strategy in 2018
Balanced Execution of Dynamic Capital Allocation Strategy in 2018 • Strengthen the core business and extend product & market leadership 1 Invest for Growth • Invest in new technology and innovation • Strategic acquisitions pipeline primarily focused on technology, product and channel bolt-ons 2 • St
Slide 15: Topics of Interest
am Ingersoll Rand Inspiring Progress™ Topics of Interest
Slide 16: Topics of Interest: Tariffs
Topics of Interest • Tariffs − We execute an in-region, for-region sourcing and manufacturing strategy − >95% of supplies are sourced in the U.S. for U.S. customers − Details around tariffs uncertain and negotiations are on-going; continue to monitor − Historically, the industry generally recovers p
Slide 17: Summary: Expect Strong Revenue, EPS and Free Cash Flow in 2018
Summary: Expect Strong Revenue, EPS and Free Cash Flow in 2018 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, op
Slide 18: Appendix
am Ingersoll Rand Inspiring Progress™ Appendix
Slide 19: Q1 Organic Bookings Up 9%; Revenue Up 8% Year-Over-Year
Q1 Organic Bookings Up 9%; Revenue Up 8% Year-Over-Year Organic* 2016 2017 2018 Bookings Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Climate 6% 6% 4% 10% 6% 6% 3% 5% 7% 5% 11% Industrial (5%) (5%) (1%) (1%) (3%) 9% 5% 5% 12% 8% 5% Total 4% 3% 3% 7% 4% 7% 4% 5% 8% 6% 9% Organic* 2016 2013 2017 2018 Revenue Q1 Q
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
Slide 22: Li Ingersoll Rand.
Li Ingersoll Rand.