Trane Technologies Reports Strong Third Quarter Results and Raises 2024 Revenue and EPS Guidance
Trane Technologies (NYSE:TT) reported strong Q3 2024 results with revenues of $5.4 billion, up 11% year-over-year. The company achieved a GAAP operating margin increase of 110 bps and adjusted operating margin growth of 90 bps. Earnings per share (EPS) reached $3.43 GAAP and $3.37 adjusted, up 21%. Strong bookings of $5.2 billion were reported, up 5%, with backlog increasing to $7.2 billion from $6.9 billion at year-end 2023. Based on these results, the company raised its full-year 2024 guidance, expecting revenue growth of approximately 11% and adjusted EPS of $11.10.
Trane Technologies (NYSE:TT) ha riportato risultati solidi nel terzo trimestre del 2024, con ricavi pari a 5,4 miliardi di dollari, in aumento dell'11% rispetto all'anno precedente. L'azienda ha registrato un aumento del margine operativo GAAP di 110 punti base e una crescita del margine operativo rettificato di 90 punti base. Gli utili per azione (EPS) hanno raggiunto i 3,43 dollari GAAP e 3,37 dollari rettificati, in aumento del 21%. Sono state segnalate forti prenotazioni pari a 5,2 miliardi di dollari, in aumento del 5%, con un portafoglio ordini in crescita a 7,2 miliardi di dollari rispetto ai 6,9 miliardi di dollari alla fine dell'anno 2023. Sulla base di questi risultati, l'azienda ha rivisto al rialzo le previsioni per l'intero anno 2024, aspettandosi una crescita dei ricavi di circa l'11% e un EPS rettificato di 11,10 dollari.
Trane Technologies (NYSE:TT) reportó resultados sólidos en el tercer trimestre de 2024, con ingresos de 5.4 mil millones de dólares, un aumento del 11% en comparación con el año anterior. La empresa logró un aumento del margen operativo GAAP de 110 puntos básicos y un crecimiento del margen operativo ajustado de 90 puntos básicos. Las ganancias por acción (EPS) alcanzaron 3.43 dólares GAAP y 3.37 dólares ajustados, un aumento del 21%. Se reportaron fuertes reservas de 5.2 mil millones de dólares, un aumento del 5%, con una carga de pedidos que aumentó a 7.2 mil millones de dólares desde 6.9 mil millones de dólares a finales de 2023. Con base en estos resultados, la empresa elevó su pronóstico para todo el año 2024, esperando un crecimiento de ingresos de aproximadamente el 11% y un EPS ajustado de 11.10 dólares.
트레인 테크놀로지스(뉴욕증권거래소: TT)는 2024년 3분기에서 54억 달러의 매출을 기록하며, 전년 대비 11% 증가한 강력한 실적을 발표했습니다. 회사는 GAAP 운영 마진이 110bps 증가하고 조정 운영 마진이 90bps 성장한 것을 달성했습니다. 주당 순익(EPS)은 GAAP 기준으로 3.43달러, 조정 기준으로 3.37달러에 달해 21% 증가했습니다. 52억 달러의 강력한 수주 실적이 보고되었으며, 이는 5% 증가한 수치입니다. 수주 잔고는 2023년 말 69억 달러에서 72억 달러로 증가했습니다. 이러한 결과를 바탕으로 회사는 2024년 전체 연도 가이던스를 상향 조정하며, 약 11%의 매출 성장과 11.10달러의 조정 EPS를 기대하고 있습니다.
Trane Technologies (NYSE:TT) a annoncé des résultats solides pour le troisième trimestre 2024 avec des revenus de 5,4 milliards de dollars, en hausse de 11% par rapport à l'année précédente. La société a enregistré une augmentation de la marge opérationnelle GAAP de 110 points de base et une croissance de la marge opérationnelle ajustée de 90 points de base. Le résultat par action (EPS) a atteint 3,43 dollars GAAP et 3,37 dollars ajustés, en hausse de 21%. De fortes commandes de 5,2 milliards de dollars ont été signalées, en hausse de 5%, avec un carnet de commandes passant de 6,9 milliards de dollars à 7,2 milliards de dollars à la fin de l'année 2023. Sur la base de ces résultats, l'entreprise a relevé ses prévisions pour l'ensemble de l'année 2024, s'attendant à une croissance des revenus d'environ 11% et un EPS ajusté de 11,10 dollars.
Trane Technologies (NYSE: TT) meldete starke Ergebnisse im dritten Quartal 2024 mit einem Umsatz von 5,4 Milliarden Dollar, was einem Anstieg von 11% im Vergleich zum Vorjahr entspricht. Das Unternehmen verzeichnete einen Anstieg der GAAP-Betriebsgewinnmarge um 110 Basispunkte und ein Wachstum der bereinigten Betriebsgewinnmarge um 90 Basispunkte. Der Gewinn pro Aktie (EPS) erreichte 3,43 Dollar GAAP und 3,37 Dollar bereinigt, was einem Anstieg von 21% entspricht. Es wurden starke Bestellungen in Höhe von 5,2 Milliarden Dollar gemeldet, ein Plus von 5%, während der Auftragsbestand von 6,9 Milliarden Dollar Ende 2023 auf 7,2 Milliarden Dollar anstieg. Basierend auf diesen Ergebnissen hob das Unternehmen seine Prognose für das gesamte Jahr 2024 an und erwartet ein Umsatzwachstum von etwa 11% sowie einen bereinigten EPS von 11,10 Dollar.
- Revenue growth of 11% to $5.4 billion in Q3 2024
- Adjusted EPS growth of 21% to $3.37
- Operating margin improvement of 110 bps
- Backlog increase to $7.2 billion
- Raised full-year 2024 guidance
- Asia Pacific segment revenues declined 21%
- Asia Pacific bookings dropped 30%
- Asia Pacific operating margin decreased 290 bps
Insights
Trane Technologies delivered exceptional Q3 2024 results with
The raised full-year guidance, projecting
The HVAC industry's robust demand trends are clearly reflected in Trane's results, particularly in commercial HVAC systems. The
The company's working capital management has improved significantly, with working capital to revenue ratio decreasing
Highlights (third-quarter 2024 versus third-quarter 2023, unless otherwise noted):
-
Reported revenues of
$5.4 billion - GAAP operating margin up 110 bps; adjusted operating margin* up 90 bps
- Adjusted EBITDA margin* of 20.7 percent, up 120 bps
-
GAAP continuing EPS of
$3.43 $3.37 -
Continued strong bookings of
$5.2 billion
*This news release contains non-GAAP financial measures. Definitions of the non-GAAP financial measures can be found in the footnotes of this news release. See attached tables for additional details and reconciliations.
SWORDS,
Third-Quarter 2024 Results
Financial Comparisons - Third-Quarter Continuing Operations
$, millions except EPS |
Q3 2024 |
Q3 2023 |
Y-O-Y Change |
Organic Y-O-Y
|
Bookings |
|
|
|
|
Net Revenues |
|
|
|
|
GAAP Operating Income |
|
|
|
|
GAAP Operating Margin |
|
|
110 bps |
|
Adjusted Operating Income* |
|
|
|
|
Adjusted Operating Margin* |
|
|
90 bps |
|
Adjusted EBITDA* |
|
|
|
|
Adjusted EBITDA Margin* |
|
|
120 bps |
|
GAAP Continuing EPS |
|
|
|
|
Adjusted Continuing EPS |
|
|
|
|
Pre-Tax Non-GAAP Adjustments, net** |
|
|
|
|
**For details see table 2 and 3 of the news release. |
||||
“The third quarter continues our track record of delivering leading revenue and earnings per share growth,” said Dave Regnery, chair and CEO, Trane Technologies. “Customers continue to choose our sustainable solutions. With bookings near an all-time high and a strong project pipeline, particularly in commercial HVAC, we are raising our full-year revenue and adjusted EPS guidance for 2024 and expect 2025 to be another strong year.
“Our purpose-driven strategy, proven business operating system and uplifting culture, combined with the resilience of our diversified global portfolio, position us to deliver leading growth and differentiated shareholder returns over the long term.”
Highlights from the Third Quarter of 2024 (all comparisons against third-quarter 2023 unless otherwise noted)
- Delivered strong revenue, operating income, EBITDA and EPS growth.
-
Strong bookings of
$5.2 billion -
Backlog of
$7.2 billion $6.9 billion - Enterprise reported revenues and organic revenues were both up 11 percent.
- GAAP operating margin was up 110 basis points, adjusted operating margin was up 90 basis points and adjusted EBITDA margin was up 120 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
Third-Quarter Business Review (all comparisons against third-quarter 2023 unless otherwise noted)
Americas Segment: innovates for customers in the
$, millions |
Q3 2024 |
Q3 2023 |
Y-O-Y Change |
Organic Y-O-Y
|
Bookings |
|
|
|
|
Net Revenues |
|
|
|
|
GAAP Operating Income |
|
|
|
|
GAAP Operating Margin |
|
|
140 bps |
|
Adjusted Operating Income |
|
|
|
|
Adjusted Operating Margin |
|
|
130 bps |
|
Adjusted EBITDA |
|
|
|
|
Adjusted EBITDA Margin |
|
|
140 bps |
-
Strong bookings of
$4.3 billion - Reported and organic revenues were both up 15 percent.
- GAAP operating margin was up 140 basis points, adjusted operating margin was up 130 basis points and adjusted EBITDA margin was up 140 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
$, millions |
Q3 2024 |
Q3 2023 |
Y-O-Y Change |
Organic Y-O-Y
|
Bookings |
|
|
|
|
Net Revenues |
|
|
|
|
GAAP Operating Income |
|
|
|
|
GAAP Operating Margin |
|
|
280 bps |
|
Adjusted Operating Income |
|
|
|
|
Adjusted Operating Margin |
|
|
140 bps |
|
Adjusted EBITDA |
|
|
|
|
Adjusted EBITDA Margin |
|
|
50 bps |
- Strong bookings, up 9 percent.
- Reported and organic revenues were both up 8 percent.
- GAAP operating margin was up 280 basis points; adjusted operating margin was up 140 basis points and adjusted EBITDA margin was up 50 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
Asia Pacific Segment: innovates for customers throughout the
$, millions |
Q3 2024 |
Q3 2023 |
Y-O-Y Change |
Organic Y-O-Y
|
Bookings |
|
|
(30)% |
(31)% |
Net Revenues |
|
|
(21)% |
(21)% |
GAAP Operating Income |
|
|
(31)% |
|
GAAP Operating Margin |
|
|
(290) bps |
|
Adjusted Operating Income |
|
|
(31)% |
|
Adjusted Operating Margin |
|
|
(290) bps |
|
Adjusted EBITDA |
|
|
(29)% |
|
Adjusted EBITDA Margin |
|
|
(230) bps |
- Bookings were down 30 percent. Organic bookings were down 31 percent.
- Reported and organic revenues were both down 21 percent led by lower volumes.
- GAAP operating margin was down 290 basis points, adjusted operating margin was down 290 basis points and adjusted EBITDA margin was down 230 basis points.
Balance Sheet and Cash Flow
$, millions |
Q3 2024 |
Q3 2023 |
Y-O-Y Change |
Cash From Continuing Operating Activities Y-T-D |
|
|
|
Free Cash Flow Y-T-D* |
|
|
|
Working Capital/Revenue* |
|
|
(260) bps |
Cash Balance September 30** |
|
|
|
Debt Balance September 30 |
|
|
|
**Includes short-term investments of |
|||
-
Through September 30, 2024, cash flow from continuing operating activities was
$2.3 billion $2 billion -
Year-to-date through October, the Company deployed or committed approximately
$2.0 billion $800 million $230 million $1 billion - The Company expects to pay a competitive and growing dividend and to deploy 100 percent of excess cash to shareholders over time.
Raising Full-Year 2024 Revenue and EPS Guidance
- The Company expects full-year reported and organic revenue growth of approximately 11 percent.
-
The Company expects GAAP and adjusted continuing EPS for full-year 2024 of approximately
$11.10 - Additional information regarding the Company's 2024 guidance is included in the Company's third-quarter earnings presentation found at www.tranetechnologies.com in the Investor Relations section.
This news release includes “forward-looking" statements within the meaning of securities laws, which are statements that are not historical facts, including statements that relate to our future financial performance and targets, including revenue, EPS, and earnings; our business operations; demand for our products and services, including bookings and backlog; capital deployment, including the amount and timing of our dividends, our share repurchase program, anticipated capital commitments for M&A activity, and our capital allocation strategy; our available liquidity; our anticipated revenue growth, and the performance of the markets in which we operate.
These forward-looking statements are based on our current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Such factors include, but are not limited to, global economic conditions, including recessions and economic downturns, inflation, volatility in interest rates and foreign exchange; changing energy prices; national and international conflict; impacts of global health crises, epidemics, pandemics, or other contagious outbreaks on our business operations, financial results and financial position and on the world economy; financial institution disruptions; climate change and our sustainability strategies and goals; commodity shortages; supply chain constraints and price increases; government regulation; restructurings activity and cost savings associated with such activity; secular trends toward decarbonization, energy efficiency and internal air quality, the outcome of any litigation, including the risks and uncertainties associated with the Chapter 11 proceedings for our deconsolidated subsidiaries Aldrich Pump LLC and Murray Boiler LLC; cybersecurity risks; and tax audits and tax law changes and interpretations. Additional factors that could cause such differences can be found in our Form 10-K for the year ended December 31, 2023, as well as our subsequent reports on Form 10-Q and other SEC filings. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events and how they may affect the Company. We assume no obligation to update these forward-looking statements.
This news release also includes non-GAAP financial information, which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The definitions of our non-GAAP financial information and reconciliation to GAAP are attached to this news release.
All amounts reported within the earnings release above related to net earnings (loss), earnings (loss) from continuing operations, earnings (loss) from discontinued operations, adjusted EBITDA and per share amounts are attributed to Trane Technologies' ordinary shareholders.
Trane Technologies (NYSE:TT) is a global climate innovator. Through our strategic brands Trane® and Thermo King®, and our portfolio of environmentally responsible products and services, we bring efficient and sustainable climate solutions to buildings, homes and transportation. For more information, visit tranetechnologies.com.
# # #
10/30/2024
(See Accompanying Tables)
- Table 1: Condensed Consolidated Income Statement
- Tables 2 - 5: Reconciliation of GAAP to Non-GAAP
- Table 6: Condensed Consolidated Balance Sheets
- Table 7: Condensed Consolidated Statement of Cash Flows
- Table 8: Balance Sheet Metrics and Free Cash Flow
*Q3 Non-GAAP measures definitions
Adjusted operating income in 2024 is defined as GAAP operating income adjusted for restructuring costs, a non-cash adjustment for contingent consideration, merger and acquisition related costs, and legacy legal liability. Adjusted operating income in 2023 is defined as GAAP operating income adjusted for restructuring costs, transformation costs, a non-cash adjustment for contingent consideration and merger and acquisition related costs. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 2, 3 and 4 of the news release.
Adjusted operating margin is defined as the ratio of adjusted operating income divided by net revenues.
Adjusted earnings from continuing operations attributable to Trane Technologies plc (Adjusted net earnings) in 2024 is defined as GAAP earnings from continuing operations attributable to Trane Technologies plc adjusted for net of tax impacts of restructuring costs, a non-cash adjustment for contingent consideration, merger and acquisition related costs, legacy legal liability, and a
Adjusted continuing EPS in 2024 is defined as GAAP continuing EPS adjusted for net of tax impacts of restructuring costs, a non-cash adjustment for contingent consideration, merger and acquisition related costs, legacy legal liability, and a
Adjusted EBITDA in 2024 is defined as adjusted operating income adjusted to exclude depreciation and amortization expense and include other income / (expense), net. Adjusted EBITDA in 2023 is defined as adjusted operating income adjusted to exclude depreciation and amortization expense, include other income / (expense), net and exclude the impairment of an equity investment. Other income / (expense), net mainly comprises interest income, foreign currency exchange gains and losses and certain components pension and postretirement benefit costs. Please refer to the reconciliation of GAAP to non-GAAP measures on tables 4 and 5 of the news release.
Adjusted EBITDA margin is defined as the ratio of adjusted EBITDA divided by net revenues.
Adjusted effective tax rate for 2024 is defined as the ratio of income tax expense adjusted for a
Free cash flow in 2024 is defined as net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring costs, legacy legal liability, and merger and acquisition related costs. Free cash flow in 2023 is defined as net cash provided by (used in) continuing operating activities adjusted for capital expenditures, cash payments for restructuring costs, transformation costs, and merger and acquisition related costs. Please refer to the free cash flow reconciliation on table 8 of the news release.
Operating leverage is defined as the ratio of the change in adjusted operating income for the current period (e.g. Q3 2024) less the prior period (e.g. Q3 2023), divided by the change in net revenues for the current period less the prior period.
Organic revenue is defined as GAAP net revenues adjusted to eliminate currency fluctuations and the impact of acquisitions.
Organic bookings is defined as reported orders in the current period adjusted to eliminate currency fluctuations and the impact of acquisitions.
Working capital measures a firm’s operating liquidity position and its overall effectiveness in managing the enterprise's current accounts.
- Working capital is calculated by adding net accounts and notes receivables and inventories and subtracting total current liabilities that exclude short-term debt, dividend payable and income tax payables.
- Working capital as a percent of revenue is calculated by dividing the working capital balance (e.g. as of September 30) by the annualized revenue for the period (e.g. reported revenues for the three months ended September 30 multiplied by 4 to annualize for a full year).
The Company reports its financial results in accordance with generally accepted accounting principles in
The non-GAAP financial measures should be considered supplemental to, not a substitute for or superior to, financial measures calculated in accordance with GAAP. They have limitations in that they do not reflect all of the costs associated with the operations of our businesses as determined in accordance with GAAP. In addition, these measures may not be comparable to non-GAAP financial measures reported by other companies.
We believe the non-GAAP financial information provides important supplemental information to both management and investors regarding financial and business trends used in assessing our financial condition and results of operations.
Non-GAAP financial measures assist investors with analyzing our business results as well as with predicting future performance. In addition, these non-GAAP financial measures are also reviewed by management in order to evaluate the financial performance of each segment. Presentation of these non-GAAP financial measures helps investors and management to assess the operating performance of the Company.
As a result, one should not consider these measures in isolation or as a substitute for our results reported under GAAP. We compensate for these limitations by analyzing results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to non-GAAP results.
Table 1 |
|||||||||||||||
TRANE TECHNOLOGIES PLC Condensed Consolidated Income Statement (In millions, except per share amounts) UNAUDITED |
|||||||||||||||
|
For the quarter |
|
For the nine months |
||||||||||||
ended September 30, |
|
ended September 30, |
|||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net revenues |
$ |
5,441.2 |
|
|
$ |
4,882.9 |
|
|
$ |
14,964.2 |
|
|
$ |
13,253.5 |
|
Cost of goods sold |
|
(3,466.8 |
) |
|
|
(3,224.8 |
) |
|
|
(9,594.5 |
) |
|
|
(8,867.6 |
) |
Selling and administrative expenses |
|
(949.8 |
) |
|
|
(793.9 |
) |
|
|
(2,677.2 |
) |
|
|
(2,179.5 |
) |
Operating income |
|
1,024.6 |
|
|
|
864.2 |
|
|
|
2,692.5 |
|
|
|
2,206.4 |
|
Interest expense |
|
(63.0 |
) |
|
|
(57.9 |
) |
|
|
(178.5 |
) |
|
|
(177.1 |
) |
Other income/(expense), net |
|
6.3 |
|
|
|
(10.0 |
) |
|
|
(22.8 |
) |
|
|
(76.8 |
) |
Earnings before income taxes |
|
967.9 |
|
|
|
796.3 |
|
|
|
2,491.2 |
|
|
|
1,952.5 |
|
Provision for income taxes |
|
(181.1 |
) |
|
|
(157.5 |
) |
|
|
(492.3 |
) |
|
|
(400.2 |
) |
Earnings from continuing operations |
|
786.8 |
|
|
|
638.8 |
|
|
|
1,998.9 |
|
|
|
1,552.3 |
|
Discontinued operations, net of tax |
|
(8.9 |
) |
|
|
(6.5 |
) |
|
|
(21.3 |
) |
|
|
(18.2 |
) |
Net earnings |
|
777.9 |
|
|
|
632.3 |
|
|
|
1,977.6 |
|
|
|
1,534.1 |
|
Less: Net earnings from continuing operations attributable to noncontrolling interests |
|
(5.9 |
) |
|
|
(6.0 |
) |
|
|
(14.0 |
) |
|
|
(14.5 |
) |
Net earnings attributable to Trane Technologies plc |
$ |
772.0 |
|
|
$ |
626.3 |
|
|
$ |
1,963.6 |
|
|
$ |
1,519.6 |
|
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to Trane Technologies plc ordinary shareholders: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
780.9 |
|
|
$ |
632.8 |
|
|
$ |
1,984.9 |
|
|
$ |
1,537.8 |
|
Discontinued operations |
|
(8.9 |
) |
|
|
(6.5 |
) |
|
|
(21.3 |
) |
|
|
(18.2 |
) |
Net earnings |
$ |
772.0 |
|
|
$ |
626.3 |
|
|
$ |
1,963.6 |
|
|
$ |
1,519.6 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share attributable to Trane Technologies plc ordinary shareholders: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
3.43 |
|
|
$ |
2.74 |
|
|
$ |
8.68 |
|
|
$ |
6.66 |
|
Discontinued operations |
|
(0.04 |
) |
|
|
(0.02 |
) |
|
|
(0.09 |
) |
|
|
(0.08 |
) |
Net earnings |
$ |
3.39 |
|
|
$ |
2.72 |
|
|
$ |
8.59 |
|
|
$ |
6.58 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Diluted |
|
228.0 |
|
|
|
230.6 |
|
|
|
228.8 |
|
|
|
230.9 |
|
Table 2 |
||||||||||||||||||||||||
TRANE TECHNOLOGIES PLC Reconciliation of GAAP to non-GAAP (In millions, except per share amounts) UNAUDITED |
||||||||||||||||||||||||
|
|
For the quarter ended September 30, 2024 |
|
For the nine months ended September 30, 2024 |
||||||||||||||||||||
|
|
As |
|
|
|
As |
|
As |
|
|
|
As |
||||||||||||
|
|
Reported |
|
Adjustments |
|
Adjusted |
|
Reported |
|
Adjustments |
|
Adjusted |
||||||||||||
|
Net revenues |
$ |
5,441.2 |
|
|
$ |
— |
|
|
$ |
5,441.2 |
|
|
$ |
14,964.2 |
|
|
$ |
— |
|
|
$ |
14,964.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Operating income |
|
1,024.6 |
|
|
|
1.2 |
|
(a,b,c) |
|
1,025.8 |
|
|
|
2,692.5 |
|
|
|
(0.1 |
) |
(a,b,c,d) |
|
2,692.4 |
|
|
Operating margin |
|
18.8 |
% |
|
|
|
|
18.9 |
% |
|
|
18.0 |
% |
|
|
|
|
18.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Earnings from continuing operations before income taxes |
|
967.9 |
|
|
|
1.2 |
|
(a,b,c) |
|
969.1 |
|
|
|
2,491.2 |
|
|
|
(0.1 |
) |
(a,b,c,d) |
|
2,491.1 |
|
|
Provision for income taxes |
|
(181.1 |
) |
|
|
(13.5 |
) |
(e,f) |
|
(194.6 |
) |
|
|
(492.3 |
) |
|
|
(15.2 |
) |
(e,f) |
|
(507.5 |
) |
|
Tax rate |
|
18.7 |
% |
|
|
|
|
20.1 |
% |
|
|
19.8 |
% |
|
|
|
|
20.4 |
% |
||||
|
Earnings from continuing operations attributable to Trane Technologies plc |
$ |
780.9 |
|
|
$ |
(12.3 |
) |
(g) |
$ |
768.6 |
|
|
$ |
1,984.9 |
|
|
$ |
(15.3 |
) |
(g) |
$ |
1,969.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Diluted earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Continuing operations |
$ |
3.43 |
|
|
$ |
(0.06 |
) |
|
$ |
3.37 |
|
|
$ |
8.68 |
|
|
$ |
(0.07 |
) |
|
$ |
8.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Diluted |
|
228.0 |
|
|
|
— |
|
|
|
228.0 |
|
|
|
228.8 |
|
|
|
— |
|
|
|
228.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Detail of Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(a) |
Restructuring costs / (income) (COGS & SG&A) |
|
|
$ |
(1.9 |
) |
|
|
|
|
|
$ |
3.6 |
|
|
|
||||||||
(b) |
Legacy legal liability (SG&A) |
|
|
|
1.8 |
|
|
|
|
|
|
|
3.5 |
|
|
|
||||||||
(c) |
M&A transaction costs (SG&A) |
|
|
|
1.3 |
|
|
|
|
|
|
|
1.7 |
|
|
|
||||||||
(d) |
Non-cash adjustment for contingent consideration (SG&A) |
|
|
|
— |
|
|
|
|
|
|
|
(8.9 |
) |
|
|
||||||||
(e) |
|
|
|
|
(12.9 |
) |
|
|
|
|
|
|
(12.9 |
) |
|
|
||||||||
(f) |
Tax impact of adjustments (a,b,c) |
|
|
|
(0.6 |
) |
|
|
|
|
|
|
(2.3 |
) |
|
|
||||||||
(g) |
Impact of adjustments on earnings from continuing operations attributable to Trane Technologies plc |
|
|
$ |
(12.3 |
) |
|
|
|
|
|
$ |
(15.3 |
) |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Pre-tax impact of adjustments on cost of goods sold |
|
|
$ |
(1.7 |
) |
|
|
|
|
|
$ |
(1.1 |
) |
|
|
||||||||
|
Pre-tax impact of adjustments on selling & administrative expenses |
|
|
|
2.9 |
|
|
|
|
|
|
|
1.0 |
|
|
|
||||||||
|
Pre-tax impact of adjustments on operating income |
|
|
$ |
1.2 |
|
|
|
|
|
|
$ |
(0.1 |
) |
|
|
||||||||
Table 3 |
||||||||||||||||||||||||
TRANE TECHNOLOGIES PLC Reconciliation of GAAP to non-GAAP (In millions, except per share amounts) UNAUDITED |
||||||||||||||||||||||||
|
|
For the quarter ended September 30, 2023 |
|
For the nine months ended September 30, 2023 |
||||||||||||||||||||
|
|
As |
|
|
|
As |
|
As |
|
|
|
As |
||||||||||||
|
|
Reported |
|
Adjustments |
|
Adjusted |
|
Reported |
|
Adjustments |
|
Adjusted |
||||||||||||
|
Net revenues |
$ |
4,882.9 |
|
|
$ |
— |
|
|
$ |
4,882.9 |
|
|
$ |
13,253.5 |
|
|
$ |
— |
|
|
$ |
13,253.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Operating income |
|
864.2 |
|
|
|
15.0 |
|
(b,c,d,e) |
|
879.2 |
|
|
|
2,206.4 |
|
|
|
(6.3 |
) |
(a,b,c,d,e) |
|
2,200.1 |
|
|
Operating margin |
|
17.7 |
% |
|
|
|
|
18.0 |
% |
|
|
16.6 |
% |
|
|
|
|
16.6 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Earnings from continuing operations before income taxes |
|
796.3 |
|
|
|
15.0 |
|
(b,c,d,e) |
|
811.3 |
|
|
|
1,952.5 |
|
|
|
45.9 |
|
(a,b,c,d,e,f) |
|
1,998.4 |
|
|
Benefit (Provision) for income taxes |
|
(157.5 |
) |
|
|
(3.5 |
) |
(g) |
|
(161.0 |
) |
|
|
(400.2 |
) |
|
|
2.8 |
|
(g) |
|
(397.4 |
) |
|
Tax rate |
|
19.8 |
% |
|
|
|
|
19.8 |
% |
|
|
20.5 |
% |
|
|
|
|
19.9 |
% |
||||
|
Earnings from continuing operations attributable to Trane Technologies plc |
$ |
632.8 |
|
|
$ |
11.5 |
|
(h) |
$ |
644.3 |
|
|
$ |
1,537.8 |
|
|
$ |
48.7 |
|
(h) |
$ |
1,586.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Diluted earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Continuing operations |
$ |
2.74 |
|
|
$ |
0.05 |
|
|
$ |
2.79 |
|
|
$ |
6.66 |
|
|
$ |
0.21 |
|
|
$ |
6.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Diluted |
|
230.6 |
|
|
|
— |
|
|
|
230.6 |
|
|
|
230.9 |
|
|
|
— |
|
|
|
230.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Detail of Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(a) |
Non-cash adjustment for contingent consideration (SG&A) |
|
|
$ |
— |
|
|
|
|
|
|
$ |
(49.3 |
) |
|
|
||||||||
(b) |
Acquisition inventory step-up and backlog amortization (COGS & SG&A) |
|
|
|
8.4 |
|
|
|
|
|
|
|
18.5 |
|
|
|
||||||||
(c) |
Restructuring costs (COGS & SG&A) |
|
|
|
2.3 |
|
|
|
|
|
|
|
10.1 |
|
|
|
||||||||
(d) |
Transformation costs (SG&A) |
|
|
|
1.1 |
|
|
|
|
|
|
|
3.5 |
|
|
|
||||||||
(e) |
M&A transaction costs (SG&A) |
|
|
|
3.2 |
|
|
|
|
|
|
|
10.9 |
|
|
|
||||||||
(f) |
Impairment of equity investment (OIOE) |
|
|
|
— |
|
|
|
|
|
|
|
52.2 |
|
|
|
||||||||
(g) |
Tax impact of adjustments (a,b,c,d,e) |
|
|
|
(3.5 |
) |
|
|
|
|
|
|
2.8 |
|
|
|
||||||||
(h) |
Impact of adjustments on earnings from continuing operations attributable to Trane Technologies plc |
|
|
$ |
11.5 |
|
|
|
|
|
|
$ |
48.7 |
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Pre-tax impact of adjustments on cost of goods sold |
|
|
$ |
2.5 |
|
|
|
|
|
|
$ |
14.7 |
|
|
|
||||||||
|
Pre-tax impact of adjustments on selling & administrative expenses |
|
|
|
12.5 |
|
|
|
|
|
|
|
(21.0 |
) |
|
|
||||||||
|
Pre-tax impact of adjustments on operating income |
|
|
|
15.0 |
|
|
|
|
|
|
|
(6.3 |
) |
|
|
||||||||
|
Pre-tax impact of adjustments on other income / (expense), net |
|
|
|
— |
|
|
|
|
|
|
|
52.2 |
|
|
|
||||||||
|
Pre-tax impact of adjustments on earnings from continuing operations |
|
|
$ |
15.0 |
|
|
|
|
|
|
$ |
45.9 |
|
|
|
||||||||
Table 4 |
||||||||||||||
TRANE TECHNOLOGIES PLC Reconciliation of GAAP to non-GAAP (In millions) UNAUDITED |
||||||||||||||
|
|
For the quarter ended
|
|
For the quarter ended
|
||||||||||
|
|
As Reported |
|
Margin |
|
As Reported |
|
Margin |
||||||
|
Net revenues |
$ |
4,474.9 |
|
|
|
|
$ |
3,888.0 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
922.3 |
|
|
20.6 |
% |
|
$ |
748.3 |
|
|
19.2 |
% |
|
Restructuring/Other (a) |
|
(1.6 |
) |
|
0.0 |
% |
|
|
2.3 |
|
|
0.1 |
% |
|
Adjusted operating income * |
|
920.7 |
|
|
20.6 |
% |
|
|
750.6 |
|
|
19.3 |
% |
|
Depreciation and amortization (b) |
|
75.1 |
|
|
1.7 |
% |
|
|
65.2 |
|
|
1.7 |
% |
|
Other income/(expense), net |
|
(1.9 |
) |
|
(0.1 |
)% |
|
|
(6.8 |
) |
|
(0.2 |
)% |
|
Adjusted EBITDA * |
$ |
993.9 |
|
|
22.2 |
% |
|
$ |
809.0 |
|
|
20.8 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Net revenues |
$ |
667.8 |
|
|
|
|
$ |
618.6 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
137.4 |
|
|
20.6 |
% |
|
$ |
110.1 |
|
|
17.8 |
% |
|
Restructuring/Other (c) |
|
(0.3 |
) |
|
(0.1 |
)% |
|
|
8.3 |
|
|
1.3 |
% |
|
Adjusted operating income * |
|
137.1 |
|
|
20.5 |
% |
|
|
118.4 |
|
|
19.1 |
% |
|
Depreciation and amortization (d) |
|
10.8 |
|
|
1.6 |
% |
|
|
11.2 |
|
|
1.9 |
% |
|
Other income/(expense), net |
|
(3.6 |
) |
|
(0.5 |
)% |
|
|
0.8 |
|
|
0.1 |
% |
|
Adjusted EBITDA * |
$ |
144.3 |
|
|
21.6 |
% |
|
$ |
130.4 |
|
|
21.1 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Net revenues |
$ |
298.5 |
|
|
|
|
$ |
376.3 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
56.9 |
|
|
19.1 |
% |
|
$ |
82.6 |
|
|
22.0 |
% |
|
Restructuring/Other |
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income * |
|
56.9 |
|
|
19.1 |
% |
|
|
82.6 |
|
|
22.0 |
% |
|
Depreciation and amortization |
|
4.4 |
|
|
1.4 |
% |
|
|
4.4 |
|
|
1.2 |
% |
|
Other income/(expense), net |
|
1.4 |
|
|
0.5 |
% |
|
|
0.7 |
|
|
0.1 |
% |
|
Adjusted EBITDA * |
$ |
62.7 |
|
|
21.0 |
% |
|
$ |
87.7 |
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
||||||
Corporate |
Unallocated corporate expense |
$ |
(92.0 |
) |
|
|
|
$ |
(76.8 |
) |
|
|
||
|
Restructuring/Other (e) |
|
3.1 |
|
|
|
|
|
4.4 |
|
|
|
||
|
Adjusted corporate expense * |
|
(88.9 |
) |
|
|
|
|
(72.4 |
) |
|
|
||
|
Depreciation and amortization |
|
4.7 |
|
|
|
|
|
4.4 |
|
|
|
||
|
Other income/(expense), net |
|
10.4 |
|
|
|
|
|
(4.7 |
) |
|
|
||
|
Adjusted EBITDA * |
$ |
(73.8 |
) |
|
|
|
$ |
(72.7 |
) |
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Total Company |
Net revenues |
$ |
5,441.2 |
|
|
|
|
$ |
4,882.9 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Operating income |
$ |
1,024.6 |
|
|
18.8 |
% |
|
$ |
864.2 |
|
|
17.7 |
% |
|
Restructuring/Other (a,c,e) |
|
1.2 |
|
|
0.1 |
% |
|
|
15.0 |
|
|
0.3 |
% |
|
Adjusted operating income * |
|
1,025.8 |
|
|
18.9 |
% |
|
|
879.2 |
|
|
18.0 |
% |
|
Depreciation and amortization (b,d) |
|
95.0 |
|
|
1.7 |
% |
|
|
85.2 |
|
|
1.7 |
% |
|
Other income/(expense), net |
|
6.3 |
|
|
0.1 |
% |
|
|
(10.0 |
) |
|
(0.2 |
)% |
|
Adjusted EBITDA * |
$ |
1,127.1 |
|
|
20.7 |
% |
|
$ |
954.4 |
|
|
19.5 |
% |
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
||||||||||||||
(a) Restructuring/Other within |
||||||||||||||
(b) Depreciation and amortization within |
||||||||||||||
(c) Restructuring/Other within EMEA in 2023 includes acquisition inventory step-up and backlog amortization of |
||||||||||||||
(d) Depreciation and amortization within EMEA in 2023 excludes acquisition backlog amortization of |
||||||||||||||
(e) Other within Corporate in 2024 includes |
||||||||||||||
Table 5 |
|||||||
TRANE TECHNOLOGIES PLC Reconciliation of GAAP to non-GAAP (In millions) UNAUDITED |
|||||||
|
For the quarter |
||||||
|
ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Total Company |
|
|
|
||||
Adjusted EBITDA * |
$ |
1,127.1 |
|
|
$ |
954.4 |
|
Less: items to reconcile adjusted EBITDA to net earnings attributable to Trane Technologies plc |
|
|
|
||||
Depreciation and amortization (1) |
|
(95.0 |
) |
|
|
(85.2 |
) |
Interest expense |
|
(63.0 |
) |
|
|
(57.9 |
) |
Provision for income taxes |
|
(181.1 |
) |
|
|
(157.5 |
) |
Restructuring costs / (income) |
|
1.9 |
|
|
|
(2.3 |
) |
Transformation costs |
|
— |
|
|
|
(1.1 |
) |
M&A transaction costs |
|
(1.3 |
) |
|
|
(3.2 |
) |
Legacy legal liability |
|
(1.8 |
) |
|
|
— |
|
Acquisition inventory step-up and backlog amortization |
|
— |
|
|
|
(8.4 |
) |
Impairment of equity investment |
|
— |
|
|
|
— |
|
Discontinued operations, net of tax |
|
(8.9 |
) |
|
|
(6.5 |
) |
Net earnings from continuing operations attributable to noncontrolling interests |
|
(5.9 |
) |
|
|
(6.0 |
) |
Net earnings attributable to Trane Technologies plc |
$ |
772.0 |
|
|
$ |
626.3 |
|
(1) Depreciation and amortization in 2023 excludes acquisition backlog amortization of |
|||||||
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
|||||||
Table 6 |
|||||
TRANE TECHNOLOGIES PLC Condensed Consolidated Balance Sheets (In millions) UNAUDITED |
|||||
|
September 30, |
|
December 31, |
||
|
2024 |
|
2023 |
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
1,470.0 |
|
$ |
1,095.3 |
Short-term investments |
|
457.6 |
|
|
— |
Accounts and notes receivable, net |
|
3,393.4 |
|
|
2,956.8 |
Inventories |
|
2,033.4 |
|
|
2,152.1 |
Other current assets |
|
745.3 |
|
|
665.7 |
Total current assets |
|
8,099.7 |
|
|
6,869.9 |
Property, plant and equipment, net |
|
1,906.6 |
|
|
1,772.2 |
Goodwill |
|
6,214.3 |
|
|
6,095.3 |
Intangible assets, net |
|
3,364.6 |
|
|
3,439.8 |
Other noncurrent assets |
|
1,318.5 |
|
|
1,214.7 |
Total assets |
$ |
20,903.7 |
|
$ |
19,391.9 |
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
||
Accounts payable |
$ |
2,194.8 |
|
$ |
2,025.2 |
Accrued expenses and other current liabilities |
|
3,481.9 |
|
|
3,226.4 |
Short-term borrowings and current maturities of long-term debt |
|
952.2 |
|
|
801.9 |
Total current liabilities |
|
6,628.9 |
|
|
6,053.5 |
Long-term debt |
|
4,317.1 |
|
|
3,977.9 |
Other noncurrent liabilities |
|
2,343.4 |
|
|
2,343.5 |
Shareholders' Equity |
|
7,614.3 |
|
|
7,017.0 |
Total liabilities and equity |
$ |
20,903.7 |
|
$ |
19,391.9 |
Table 7 |
|||||||
TRANE TECHNOLOGIES PLC Condensed Consolidated Statement of Cash Flows (In millions) UNAUDITED |
|||||||
|
For the nine months |
||||||
|
ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating Activities |
|
|
|
||||
Earnings from continuing operations |
$ |
1,998.9 |
|
|
$ |
1,552.3 |
|
Depreciation and amortization |
|
282.7 |
|
|
|
260.2 |
|
Changes in assets and liabilities and other non-cash items |
|
(9.4 |
) |
|
|
(329.9 |
) |
Net cash provided by (used in) continuing operating activities |
|
2,272.2 |
|
|
|
1,482.6 |
|
Net cash provided by (used in) discontinued operating activities |
|
(26.5 |
) |
|
|
(27.8 |
) |
Net cash provided by (used in) operating activities |
|
2,245.7 |
|
|
|
1,454.8 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures, net |
|
(245.0 |
) |
|
|
(217.2 |
) |
Acquisition of businesses, net of cash acquired |
|
(179.6 |
) |
|
|
(510.2 |
) |
Purchases of short-term investments, net |
|
(450.0 |
) |
|
|
— |
|
Other investing activities, net |
|
(12.0 |
) |
|
|
(8.7 |
) |
Net cash provided by (used in) investing activities |
|
(886.6 |
) |
|
|
(736.1 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Net proceeds from (payments of) debt |
|
491.0 |
|
|
|
(11.6 |
) |
Dividends paid to ordinary shareholders |
|
(568.8 |
) |
|
|
(513.0 |
) |
Repurchase of ordinary shares |
|
(926.1 |
) |
|
|
(459.8 |
) |
Other financing activities, net |
|
13.7 |
|
|
|
32.3 |
|
Net cash provided by (used in) financing activities |
|
(990.2 |
) |
|
|
(952.1 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
5.8 |
|
|
|
(27.1 |
) |
Net increase (decrease) in cash and cash equivalents |
|
374.7 |
|
|
|
(260.5 |
) |
Cash and cash equivalents - beginning of period |
|
1,095.3 |
|
|
|
1,220.5 |
|
Cash and cash equivalents - end of period |
$ |
1,470.0 |
|
|
$ |
960.0 |
|
Table 8 |
||||||||||
TRANE TECHNOLOGIES PLC Balance Sheet Metrics and Free Cash Flow ($ in millions) UNAUDITED |
||||||||||
|
September 30, |
|
September 30, |
|
December 31, |
|||||
|
2024 |
|
2023 |
|
2023 |
|||||
Net Receivables |
$ |
3,393.4 |
|
|
$ |
3,142.5 |
|
|
$ |
2,956.8 |
Days Sales Outstanding |
|
56.9 |
|
|
|
58.7 |
|
|
|
61.0 |
|
|
|
|
|
|
|||||
Net Inventory |
$ |
2,033.4 |
|
|
$ |
2,191.8 |
|
|
$ |
2,152.1 |
Inventory Turns |
|
6.8 |
|
|
|
5.9 |
|
|
|
5.5 |
|
|
|
|
|
|
|||||
Accounts Payable |
$ |
2,194.8 |
|
|
$ |
2,093.3 |
|
|
$ |
2,025.2 |
Days Payable Outstanding |
|
57.8 |
|
|
|
59.2 |
|
|
|
62.6 |
|
|
|
|
|
|
|||||
------------------------------------------------------------------------------------------------------------------------------------------------------- |
||||||||||
|
|
|
|
|
|
|||||
|
Nine months ended |
|
Nine months ended |
|
|
|||||
|
September 30, 2024 |
|
September 30, 2023 |
|
|
|||||
Net cash flow provided by continuing operating activities |
$ |
2,272.2 |
|
|
$ |
1,482.6 |
|
|
|
|
Capital expenditures, net |
|
(245.0 |
) |
|
|
(217.2 |
) |
|
|
|
Cash payments for restructuring |
|
7.2 |
|
|
|
8.8 |
|
|
|
|
Legacy legal liability |
|
2.2 |
|
|
|
— |
|
|
|
|
M&A transaction costs |
|
0.9 |
|
|
|
10.7 |
|
|
|
|
Transformation costs paid |
|
— |
|
|
|
3.5 |
|
|
|
|
Free cash flow * |
$ |
2,037.5 |
|
|
$ |
1,288.4 |
|
|
|
|
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030812535/en/
Media:
Travis Bullard
919-802-2593
Media@tranetechnologies.com
Investors:
Zac Nagle
704-990-3913
InvestorRelations@tranetechnologies.com
Source: Trane Technologies
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