Trane Technologies Reports Strong First Quarter Results and Raises 2024 Revenue and EPS Guidance
Highlights (first-quarter 2024 versus first-quarter 2023, unless otherwise noted):
-
Reported revenues of
$4.2 billion , up 15 percent; organic revenues* up 14 percent - GAAP operating margin up 250 bps; adjusted operating margin* up 230 bps
- Adjusted EBITDA margin* of 16.8 percent, up 200 bps
-
GAAP continuing EPS of
$1.92 ; adjusted continuing EPS* of$1.94 , up 38 percent - Organic bookings* up 17 percent, led by Americas Commercial HVAC, up 30 percent
-
$7.7 billion backlog, up 10 percent versus year-end 2023, and over 2.5 times historical norms
*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,
First-Quarter 2024 Results
Financial Comparisons - First-Quarter Continuing Operations
$, millions except EPS |
Q1 2024 |
Q1 2023 |
Y-O-Y Change |
Organic Y-O-Y Change |
Bookings |
|
|
18% |
17% |
Net Revenues |
|
|
15% |
14% |
GAAP Operating Income |
|
|
39% |
|
GAAP Operating Margin |
15.0% |
12.5% |
250 bps |
|
Adjusted Operating Income* |
|
|
36% |
|
Adjusted Operating Margin* |
15.2% |
12.9% |
230 bps |
|
Adjusted EBITDA* |
|
|
30% |
|
Adjusted EBITDA Margin* |
16.8% |
14.8% |
200 bps |
|
GAAP Continuing EPS |
|
|
42% |
|
Adjusted Continuing EPS |
|
|
38% |
|
Pre-Tax Non-GAAP Adjustments, net** |
|
|
|
|
**For details see table 2 and 3 of the news release. |
“Our strong first quarter performance demonstrates the power of our purpose-driven sustainability strategy, uplifting culture and highly engaged team,” said
“In the first quarter, we achieved double-digit revenue growth, an increase of 38% in adjusted earnings per share, and exceptional bookings that drove backlog to
Highlights from the First Quarter of 2024 (all comparisons against first-quarter 2023 unless otherwise noted)
- Delivered strong first-quarter revenue, operating income, EBITDA and EPS growth.
-
Strong bookings of
$5.1 billion ; organic bookings were up 17 percent. Book-to-bill was 120 percent. -
Backlog of
$7.7 billion . Added approximately$800 million of Commercial HVAC backlog for 2025 and beyond. - Enterprise reported revenues were up 15 percent, including 2 percentage points related to acquisitions and approximately 1 percentage point of negative foreign exchange impact. Organic revenues were up 14 percent.
- GAAP operating margin was up 250 basis points, adjusted operating margin was up 230 basis points and adjusted EBITDA margin was up 200 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
First-Quarter Business Review (all comparisons against first-quarter 2023 unless otherwise noted)
Americas Segment: innovates for customers in the
$, millions |
Q1 2024 |
Q1 2023 |
Y-O-Y Change |
Organic Y-O-Y Change |
Bookings |
|
|
21% |
20% |
Net Revenues |
|
|
17% |
15% |
GAAP Operating Income |
|
|
39% |
|
GAAP Operating Margin |
16.3% |
13.7% |
260 bps |
|
Adjusted Operating Income |
|
|
36% |
|
Adjusted Operating Margin |
16.4% |
14.0% |
240 bps |
|
Adjusted EBITDA |
|
|
33% |
|
Adjusted EBITDA Margin |
18.1% |
15.9% |
220 bps |
-
Strong bookings of
$4.0 billion . Book-to-bill was 120 percent. - Organic bookings were up 20 percent, led by Commercial HVAC, which was up 30 percent year-over-year and up more than 60 percent on a 3-year stack.
- Reported revenues were up 17 percent, including 2 percentage points related to acquisitions. Organic revenues were up 15 percent.
- GAAP operating margin was up 260 basis points, adjusted operating margin was up 240 basis points and adjusted EBITDA margin was up 220 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
$, millions |
Q1 2024 |
Q1 2023 |
Y-O-Y Change |
Organic Y-O-Y Change |
Bookings |
|
|
12% |
7% |
Net Revenues |
|
|
8% |
4% |
GAAP Operating Income |
|
|
10% |
|
GAAP Operating Margin |
17.1% |
16.8% |
30 bps |
|
Adjusted Operating Income |
|
|
10% |
|
Adjusted Operating Margin |
17.3% |
17.0% |
30 bps |
|
Adjusted EBITDA |
|
|
5% |
|
Adjusted EBITDA Margin |
18.0% |
18.5% |
(50) bps |
- Bookings were up 12 percent; organic bookings were up 7 percent. Book-to-bill was 119 percent.
- Reported revenues were up 8 percent, including approximately 4 percentage points related to acquisitions. Organic revenues were up 4 percent.
- GAAP operating margin was up 30 basis points; adjusted operating margin was up 30 basis points impacted by lower contribution from year one M&A. Adjusted EBITDA margin was down 50 basis points due to the negative impact of foreign exchange losses.
- 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 |
Q1 2024 |
Q1 2023 |
Y-O-Y Change |
Organic Y-O-Y Change |
Bookings |
|
|
2% |
6% |
Net Revenues |
|
|
11% |
16% |
GAAP Operating Income |
|
|
35% |
|
GAAP Operating Margin |
20.3% |
16.8% |
350 bps |
|
Adjusted Operating Income |
|
|
31% |
|
Adjusted Operating Margin |
20.3% |
17.2% |
310 bps |
|
Adjusted EBITDA |
|
|
24% |
|
Adjusted EBITDA Margin |
21.6% |
19.4% |
220 bps |
- Bookings were up 2 percent; organic bookings were up 6 percent. Book-to-bill was 121 percent.
- Reported revenues were up 11 percent, including approximately 5 percentage points of negative foreign exchange impact. Organic revenues were up 16 percent.
- GAAP operating margin was up 350 basis points, adjusted operating margin was up 310 basis points and adjusted EBITDA margin was up 220 basis points.
- Strong volume growth, positive price realization and productivity more than offset inflation. The Company also continued high levels of business reinvestment.
Balance Sheet and Cash Flow
$, millions |
Q1 2024 |
Q1 2023 |
Y-O-Y Change |
Cash From Continuing Operating Activities Y-T-D |
|
|
|
Free Cash Flow Y-T-D* |
|
( |
|
Working Capital/Revenue* |
5.4% |
6.6% |
(120) bps |
Cash Balance |
|
|
|
Debt Balance |
|
|
|
-
First quarter of 2024, cash flow from continuing operating activities was
$254 million and free cash flow was$175 million . -
Year-to-date through April, the Company deployed approximately
$621 million , including$190 million for dividends and$431 million for share repurchases. -
The Company expects to continue to pay a competitive and growing dividend and to deploy 100 percent of excess cash to shareholders over time. In the first quarter of 2024, the Company increased its quarterly dividend by 12 percent to
$3.36 per share annualized. Since launchingTrane Technologies in March of 2020, the Company has raised the quarterly dividend by 58 percent.
Raising Full-Year 2024 Revenue and EPS Guidance
- The Company expects full-year reported and organic revenue growth of 8 to 9 percent; reported revenue growth includes approximately 1 percentage point of M&A offset by approximately 1 percentage point of negative foreign exchange.
-
The Company expects GAAP continuing EPS for full-year 2024 of approximately
$10.30 to$10.40 . This includes EPS of$0.10 for non-GAAP adjustments. The Company expects adjusted continuing EPS for full-year 2024 of$10.40 to$10.50 . - Additional information regarding the Company's 2024 guidance is included in the Company's 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
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
# # #
(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
*Q1 Non-GAAP measures definitions
Adjusted operating income in 2024 is defined as GAAP operating income adjusted for restructuring 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
Adjusted continuing EPS in 2024 is defined as GAAP continuing EPS adjusted for net of tax impacts of restructuring costs and legacy legal liability. Adjusted continuing EPS in 2023 is defined as GAAP continuing EPS adjusted for net of tax impacts of 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 and 3 of the news release.
Adjusted EBITDA in 2024 and 2023 is defined as adjusted operating income adjusted for depreciation and amortization expense and other income / (expense), net. 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 the net tax effect of adjustments for restructuring costs and legacy legal liability divided by adjusted net earnings. Adjusted effective tax rate for 2023 is defined as the ratio of income tax expense adjusted for the net tax effect of adjustments for restructuring costs, transformation costs, a non-cash adjustment for contingent consideration and merger and acquisition related costs divided by adjusted net earnings. This measure allows for a direct comparison of the effective tax rate between periods.
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. Q1 2024) less the prior period (e.g. Q1 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 for the impact of acquisitions.
Organic bookings is defined as reported orders in the current period adjusted to eliminate currency fluctuations and for 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
March 31 ) by the annualized revenue for the period (e.g. reported revenues for the three months endedMarch 31 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 |
|||||||
Condensed Consolidated Income Statement (In millions, except per share amounts) UNAUDITED |
|||||||
|
For the quarter |
||||||
ended |
|||||||
2024 |
|
2023 |
|||||
Net revenues |
$ |
4,215.5 |
|
|
$ |
3,665.8 |
|
Cost of goods sold |
|
(2,755.6 |
) |
|
|
(2,522.3 |
) |
Selling and administrative expenses |
|
(826.1 |
) |
|
|
(686.7 |
) |
Operating income |
|
633.8 |
|
|
|
456.8 |
|
Interest expense |
|
(58.1 |
) |
|
|
(57.6 |
) |
Other income/(expense), net |
|
(25.0 |
) |
|
|
(9.4 |
) |
Earnings before income taxes |
|
550.7 |
|
|
|
389.8 |
|
Provision for income taxes |
|
(105.5 |
) |
|
|
(73.2 |
) |
Earnings from continuing operations |
|
445.2 |
|
|
|
316.6 |
|
Discontinued operations, net of tax |
|
(5.4 |
) |
|
|
(5.5 |
) |
Net earnings |
|
439.8 |
|
|
|
311.1 |
|
Less: Net earnings from continuing operations attributable to noncontrolling interests |
|
(3.5 |
) |
|
|
(4.0 |
) |
Net earnings attributable to |
$ |
436.3 |
|
|
$ |
307.1 |
|
|
|
|
|
||||
Amounts attributable to |
|
|
|
||||
Continuing operations |
$ |
441.7 |
|
|
$ |
312.6 |
|
Discontinued operations |
|
(5.4 |
) |
|
|
(5.5 |
) |
Net earnings |
$ |
436.3 |
|
|
$ |
307.1 |
|
|
|
|
|
||||
Diluted earnings (loss) per share attributable to |
|
|
|
||||
Continuing operations |
$ |
1.92 |
|
|
$ |
1.35 |
|
Discontinued operations |
|
(0.02 |
) |
|
|
(0.02 |
) |
Net earnings |
$ |
1.90 |
|
|
$ |
1.33 |
|
|
|
|
|
||||
Weighted-average number of common shares outstanding: |
|
|
|
||||
Diluted |
|
229.5 |
|
|
|
231.5 |
|
Table 2 |
||||||||||||
Reconciliation of GAAP to non-GAAP (In millions, except per share amounts) UNAUDITED |
||||||||||||
|
|
For the quarter ended |
||||||||||
|
|
As |
|
|
|
As |
||||||
|
|
Reported |
|
Adjustments |
|
Adjusted |
||||||
|
Net revenues |
$ |
4,215.5 |
|
|
$ |
— |
|
|
$ |
4,215.5 |
|
|
|
|
|
|
|
|
||||||
|
Operating income |
|
633.8 |
|
|
|
5.8 |
|
(a,b) |
|
639.6 |
|
|
Operating margin |
|
15.0 |
% |
|
|
|
|
15.2 |
% |
||
|
|
|
|
|
|
|
||||||
|
Earnings from continuing operations before income taxes |
|
550.7 |
|
|
|
5.8 |
|
(a,b) |
|
556.5 |
|
|
Provision for income taxes |
|
(105.5 |
) |
|
|
(1.4 |
) |
(c) |
|
(106.9 |
) |
|
Tax rate |
|
19.2 |
% |
|
|
|
|
19.2 |
% |
||
|
Earnings from continuing operations attributable to |
$ |
441.7 |
|
|
$ |
4.4 |
|
(d) |
$ |
446.1 |
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share |
|
|
|
|
|
||||||
|
Continuing operations |
$ |
1.92 |
|
|
$ |
0.02 |
|
|
$ |
1.94 |
|
|
|
|
|
|
|
|
||||||
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
||||||
|
Diluted |
|
229.5 |
|
|
|
— |
|
|
|
229.5 |
|
|
|
|
|
|
|
|
||||||
|
Detail of Adjustments: |
|
|
|
|
|
||||||
(a) |
Restructuring costs (SG&A) |
|
|
$ |
4.7 |
|
|
|
||||
(b) |
Legacy legal liability (SG&A) |
|
|
|
1.1 |
|
|
|
||||
(c) |
Tax impact of adjustments (a,b) |
|
|
|
(1.4 |
) |
|
|
||||
(d) |
Impact of adjustments on earnings from continuing operations attributable to |
|
|
$ |
4.4 |
|
|
|
||||
|
|
|
|
|
|
|
||||||
|
Pre-tax impact of adjustments on cost of goods sold |
|
|
$ |
— |
|
|
|
||||
|
Pre-tax impact of adjustments on selling & administrative expenses |
|
|
|
5.8 |
|
|
|
||||
|
Pre-tax impact of adjustments on operating income |
|
|
$ |
5.8 |
|
|
|
Table 3 |
||||||||||||
Reconciliation of GAAP to non-GAAP (In millions, except per share amounts) UNAUDITED |
||||||||||||
|
|
For the quarter ended |
||||||||||
|
|
As |
|
|
|
As |
||||||
|
|
Reported |
|
Adjustments |
|
Adjusted |
||||||
|
Net revenues |
$ |
3,665.8 |
|
|
$ |
— |
|
|
$ |
3,665.8 |
|
|
|
|
|
|
|
|
||||||
|
Operating income |
|
456.8 |
|
|
|
15.6 |
|
(a,b,c,d,e) |
|
472.4 |
|
|
Operating margin |
|
12.5 |
% |
|
|
|
|
12.9 |
% |
||
|
|
|
|
|
|
|
||||||
|
Earnings from continuing operations before income taxes |
|
389.8 |
|
|
|
15.6 |
|
(a,b,c,d,e) |
|
405.4 |
|
|
Provision for income taxes |
|
(73.2 |
) |
|
|
(2.9 |
) |
(f) |
|
(76.1 |
) |
|
Tax rate |
|
18.8 |
% |
|
|
|
|
18.8 |
% |
||
|
Earnings from continuing operations attributable to |
$ |
312.6 |
|
|
$ |
12.7 |
|
(g) |
$ |
325.3 |
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share |
|
|
|
|
|
||||||
|
Continuing operations |
$ |
1.35 |
|
|
$ |
0.06 |
|
|
$ |
1.41 |
|
|
|
|
|
|
|
|
||||||
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
||||||
|
Diluted |
|
231.5 |
|
|
|
— |
|
|
|
231.5 |
|
|
|
|
|
|
|
|
||||||
|
Detail of Adjustments: |
|
|
|
|
|
||||||
(a) |
Restructuring costs (COGS & SG&A) |
|
|
$ |
6.3 |
|
|
|
||||
(b) |
Transformation costs (SG&A) |
|
|
|
1.1 |
|
|
|
||||
(c) |
M&A transaction costs (SG&A) |
|
|
|
2.9 |
|
|
|
||||
(d) |
Acquisition inventory step-up and backlog amortization (COGS & SG&A) |
|
|
|
2.6 |
|
|
|
||||
(e) |
Non-cash adjustment for contingent consideration (SG&A) |
|
|
|
2.7 |
|
|
|
||||
(f) |
Tax impact of adjustments (a,b,c,d,e) |
|
|
|
(2.9 |
) |
|
|
||||
(g) |
Impact of adjustments on earnings from continuing operations attributable to |
|
|
$ |
12.7 |
|
|
|
||||
|
|
|
|
|
|
|
||||||
|
Pre-tax impact of adjustments on cost of goods sold |
|
|
$ |
8.2 |
|
|
|
||||
|
Pre-tax impact of adjustments on selling & administrative expenses |
|
|
|
7.4 |
|
|
|
||||
|
Pre-tax impact of adjustments on operating income |
|
|
$ |
15.6 |
|
|
|
Table 4 |
||||||||||||||
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 |
$ |
3,334.8 |
|
|
|
|
$ |
2,861.0 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
542.5 |
|
|
16.3 |
% |
|
$ |
391.6 |
|
|
13.7 |
% |
|
Restructuring/Other (a) |
|
2.8 |
|
|
0.1 |
% |
|
|
8.4 |
|
|
0.3 |
% |
|
Adjusted operating income * |
|
545.3 |
|
|
16.4 |
% |
|
|
400.0 |
|
|
14.0 |
% |
|
Depreciation and amortization |
|
72.1 |
|
|
2.1 |
% |
|
|
61.2 |
|
|
2.1 |
% |
|
Other income/(expense), net |
|
(12.6 |
) |
|
(0.4 |
)% |
|
|
(5.4 |
) |
|
(0.2 |
)% |
|
Adjusted EBITDA * |
$ |
604.8 |
|
|
18.1 |
% |
|
$ |
455.8 |
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Net revenues |
$ |
553.4 |
|
|
|
|
$ |
510.5 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
94.5 |
|
|
17.1 |
% |
|
$ |
85.7 |
|
|
16.8 |
% |
|
Restructuring/Other (b) |
|
1.1 |
|
|
0.2 |
% |
|
|
0.9 |
|
|
0.2 |
% |
|
Adjusted operating income * |
|
95.6 |
|
|
17.3 |
% |
|
|
86.6 |
|
|
17.0 |
% |
|
Depreciation and amortization |
|
10.9 |
|
|
2.0 |
% |
|
|
8.7 |
|
|
1.7 |
% |
|
Other income/(expense), net |
|
(7.1 |
) |
|
(1.3 |
)% |
|
|
(0.9 |
) |
|
(0.2 |
)% |
|
Adjusted EBITDA * |
$ |
99.4 |
|
|
18.0 |
% |
|
$ |
94.4 |
|
|
18.5 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Net revenues |
$ |
327.3 |
|
|
|
|
$ |
294.3 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Segment operating income |
$ |
66.4 |
|
|
20.3 |
% |
|
$ |
49.3 |
|
|
16.8 |
% |
|
Restructuring/Other (c) |
|
— |
|
|
— |
% |
|
|
1.3 |
|
|
0.4 |
% |
|
Adjusted operating income * |
|
66.4 |
|
|
20.3 |
% |
|
|
50.6 |
|
|
17.2 |
% |
|
Depreciation and amortization (d) |
|
4.4 |
|
|
1.3 |
% |
|
|
4.8 |
|
|
1.6 |
% |
|
Other income/(expense), net |
|
— |
|
|
— |
% |
|
|
1.8 |
|
|
0.6 |
% |
|
Adjusted EBITDA * |
$ |
70.8 |
|
|
21.6 |
% |
|
$ |
57.2 |
|
|
19.4 |
% |
|
|
|
|
|
|
|
|
|
||||||
Corporate |
Unallocated corporate expense |
$ |
(69.6 |
) |
|
|
|
$ |
(69.8 |
) |
|
|
||
|
Restructuring/Other (e) |
|
1.9 |
|
|
|
|
|
5.0 |
|
|
|
||
|
Adjusted corporate expense * |
|
(67.7 |
) |
|
|
|
|
(64.8 |
) |
|
|
||
|
Depreciation and amortization |
|
4.1 |
|
|
|
|
|
4.7 |
|
|
|
||
|
Other income/(expense), net |
|
(5.3 |
) |
|
|
|
|
(4.9 |
) |
|
|
||
|
Adjusted EBITDA * |
$ |
(68.9 |
) |
|
|
|
$ |
(65.0 |
) |
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Net revenues |
$ |
4,215.5 |
|
|
|
|
$ |
3,665.8 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Operating income |
$ |
633.8 |
|
|
15.0 |
% |
|
$ |
456.8 |
|
|
12.5 |
% |
|
Restructuring/Other (a,b,c,e) |
|
5.8 |
|
|
0.2 |
% |
|
|
15.6 |
|
|
0.4 |
% |
|
Adjusted operating income * |
|
639.6 |
|
|
15.2 |
% |
|
|
472.4 |
|
|
12.9 |
% |
|
Depreciation and amortization (d) |
|
91.5 |
|
|
2.2 |
% |
|
|
79.4 |
|
|
2.2 |
% |
|
Other income/(expense), net |
|
(25.0 |
) |
|
(0.6 |
)% |
|
|
(9.4 |
) |
|
(0.3 |
)% |
|
Adjusted EBITDA * |
$ |
706.1 |
|
|
16.8 |
% |
|
$ |
542.4 |
|
|
14.8 |
% |
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
||||||||||||||
(a) Other within |
||||||||||||||
(b) Other within EMEA includes a |
||||||||||||||
(c) Other within Asia Pacific includes |
||||||||||||||
(d) Depreciation and amortization within |
||||||||||||||
(e) Other within Corporate includes |
Table 5 |
|||||||
UNAUDITED |
|||||||
|
For the quarter |
||||||
|
ended |
||||||
|
2024 |
|
2023 |
||||
|
|
|
|
||||
Adjusted EBITDA * |
$ |
706.1 |
|
|
$ |
542.4 |
|
Less: items to reconcile adjusted EBITDA to net earnings attributable to |
|
|
|
||||
Depreciation and amortization(1) |
|
(91.5 |
) |
|
|
(79.4 |
) |
Interest expense |
|
(58.1 |
) |
|
|
(57.6 |
) |
Provision for income taxes |
|
(105.5 |
) |
|
|
(73.2 |
) |
Restructuring costs |
|
(4.7 |
) |
|
|
(6.3 |
) |
Legacy legal liability |
|
(1.1 |
) |
|
|
— |
|
Transformation costs |
|
— |
|
|
|
(1.1 |
) |
M&A transaction costs |
|
— |
|
|
|
(2.9 |
) |
Non-cash adjustment for contingent consideration |
|
— |
|
|
|
(2.7 |
) |
Acquisition inventory step-up and backlog amortization |
|
— |
|
|
|
(2.6 |
) |
Discontinued operations, net of tax |
|
(5.4 |
) |
|
|
(5.5 |
) |
Net earnings from continuing operations attributable to noncontrolling interests |
|
(3.5 |
) |
|
|
(4.0 |
) |
Net earnings attributable to |
$ |
436.3 |
|
|
$ |
307.1 |
|
(1) Depreciation and amortization excludes acquisition backlog amortization of |
|||||||
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
Table 6 |
|||||
Condensed Consolidated Balance Sheets (In millions) UNAUDITED |
|||||
|
|
|
|
||
|
2024 |
|
2023 |
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
849.9 |
|
$ |
1,095.3 |
Accounts and notes receivable, net |
|
2,939.8 |
|
|
2,956.8 |
Inventories |
|
2,382.7 |
|
|
2,152.1 |
Other current assets |
|
714.8 |
|
|
665.7 |
Total current assets |
|
6,887.2 |
|
|
6,869.9 |
Property, plant and equipment, net |
|
1,788.3 |
|
|
1,772.2 |
|
|
6,059.7 |
|
|
6,095.3 |
Intangible assets, net |
|
3,390.9 |
|
|
3,439.8 |
Other noncurrent assets |
|
1,215.1 |
|
|
1,214.7 |
Total assets |
$ |
19,341.2 |
|
$ |
19,391.9 |
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
||
Accounts payable |
$ |
2,008.3 |
|
$ |
2,025.2 |
Accrued expenses and other current liabilities |
|
3,191.5 |
|
|
3,226.4 |
Short-term borrowings and current maturities of long-term debt |
|
902.1 |
|
|
801.9 |
Total current liabilities |
|
6,101.9 |
|
|
6,053.5 |
Long-term debt |
|
3,978.7 |
|
|
3,977.9 |
Other noncurrent liabilities |
|
2,349.8 |
|
|
2,343.5 |
Shareholders' Equity |
|
6,910.8 |
|
|
7,017.0 |
Total liabilities and equity |
$ |
19,341.2 |
|
$ |
19,391.9 |
Table 7 |
|||||||
Condensed Consolidated Statement of Cash Flows (In millions) UNAUDITED |
|||||||
|
For the three months |
||||||
|
ended |
||||||
|
2024 |
|
2023 |
||||
Operating Activities |
|
|
|
||||
Earnings from continuing operations |
$ |
445.2 |
|
|
$ |
316.6 |
|
Depreciation and amortization |
|
91.5 |
|
|
|
79.8 |
|
Changes in assets and liabilities and other non-cash items |
|
(282.3 |
) |
|
|
(379.6 |
) |
Net cash provided by (used in) continuing operating activities |
|
254.4 |
|
|
|
16.8 |
|
Net cash provided by (used in) discontinued operating activities |
|
(7.2 |
) |
|
|
(8.3 |
) |
Net cash provided by (used in) operating activities |
|
247.2 |
|
|
|
8.5 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures, net |
|
(83.8 |
) |
|
|
(77.1 |
) |
Other investing activities, net |
|
2.1 |
|
|
|
(13.9 |
) |
Net cash provided by (used in) investing activities |
|
(81.7 |
) |
|
|
(91.0 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Net proceeds from (payments of) debt |
|
99.9 |
|
|
|
(0.9 |
) |
Dividends paid to ordinary shareholders |
|
(189.5 |
) |
|
|
(170.3 |
) |
Repurchase of ordinary shares |
|
(300.3 |
) |
|
|
(300.0 |
) |
Other financing activities, net |
|
3.2 |
|
|
|
12.0 |
|
Net cash provided by (used in) financing activities |
|
(386.7 |
) |
|
|
(459.2 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
(24.2 |
) |
|
|
14.1 |
|
Net increase (decrease) in cash and cash equivalents |
|
(245.4 |
) |
|
|
(527.6 |
) |
Cash and cash equivalents - beginning of period |
|
1,095.3 |
|
|
|
1,220.5 |
|
Cash and cash equivalents - end of period |
$ |
849.9 |
|
|
$ |
692.9 |
|
Table 8 |
||||||||||
Balance Sheet Metrics and Free Cash Flow ($ in millions) UNAUDITED |
||||||||||
|
|
|
|
|
|
|||||
|
2024 |
|
2023 |
|
2023 |
|||||
Net Receivables |
$ |
2,939.8 |
|
|
$ |
2,606.0 |
|
|
$ |
2,956.8 |
Days Sales Outstanding |
|
63.6 |
|
|
|
64.9 |
|
|
|
61.0 |
|
|
|
|
|
|
|||||
Net Inventory |
$ |
2,382.7 |
|
|
$ |
2,343.7 |
|
|
$ |
2,152.1 |
Inventory Turns |
|
4.6 |
|
|
|
4.3 |
|
|
|
5.5 |
|
|
|
|
|
|
|||||
Accounts Payable |
$ |
2,008.3 |
|
|
$ |
1,962.6 |
|
|
$ |
2,025.2 |
Days Payable Outstanding |
|
66.5 |
|
|
|
71.0 |
|
|
|
62.6 |
|
|
|
|
|
|
|||||
------------------------------------------------------------------------------------------------------------------------------------------------------- |
||||||||||
|
|
|
|
|
|
|||||
|
Three months ended |
|
Three months ended |
|
|
|||||
|
|
|
|
|
|
|||||
Net cash flow provided by continuing operating activities |
$ |
254.4 |
|
|
$ |
16.8 |
|
|
|
|
Capital expenditures |
|
(83.8 |
) |
|
|
(77.1 |
) |
|
|
|
Cash payments for restructuring |
|
3.3 |
|
|
|
4.4 |
|
|
|
|
Legacy legal liability |
|
0.6 |
|
|
|
— |
|
|
|
|
M&A transaction costs |
|
0.5 |
|
|
|
3.5 |
|
|
|
|
Transformation costs paid |
|
— |
|
|
|
0.8 |
|
|
|
|
Free cash flow * |
$ |
175.0 |
|
|
$ |
(51.6 |
) |
|
|
|
*Represents a non-GAAP measure, refer to pages 5-6 in the Earnings Release for definitions. |
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