Trane Technologies (TT) Goldman Sachs Industrials & Materials Conference summary

Business transformation, innovation, and strategic priorities

• Significant transformation driven by innovation, digital solutions, and a direct sales force model, with increased investment in new product development and services since 2008.

• Focused on winning through innovation, margin growth, and dynamic capital allocation, underpinned by a strong performance culture and powerful cash flow.

• Business model emphasizes customer-focused innovation, operational excellence, and a lean, agile structure to maximize value.

• Biannual board reviews on technology and innovation, with deep dives into projects and investments, including digital and data center initiatives.

• Sustainability is central, with a goal to reduce customer carbon footprint by 35% and deliver one gigaton of CO₂e reduction by 2030.

Market growth, backlog, and financial performance

• Ended Q3 with over $7 billion in backlog, 90% in commercial HVAC, with more than $4 billion scheduled for 2025 and beyond.

• Q3 2024 saw organic revenue up 11%, adjusted EBITDA margin up 120 bps, and adjusted EPS up 21%.

• Bookings reached $5.2B, the second highest in history, providing strong visibility into 2025.

• Americas and EMEA delivered strong growth and margin expansion, while Asia Pacific faced softness, particularly in China.

• FY 2024 guidance raised: organic revenue growth expected at ~11%, adjusted EPS at ~$11.10 (+23%), and free cash flow at or above adjusted net earnings.

Data center, megaproject, and custom solutions

• Data center customers seek solutions to reduce power utilization, with custom chillers and air-cooled offerings developed for specific needs.

• Over 370 megaprojects in the pipeline, including EV battery and semiconductor plants, with custom solutions and growing demand for heat recovery and decarbonization.

• Differentiation comes from consultative problem-solving, rapid product development, and a technical direct sales force.