Trane Technologies plc (TT) Bundle
A Brief History of Trane Technologies plc
Company Overview
Trane Technologies plc is a global climate innovator specializing in sustainable solutions for buildings, homes, and transportation. Founded in 1913, the company has a strong legacy in HVAC (heating, ventilation, air conditioning) and refrigeration systems. Its notable brands include Trane® and Thermo King®.
Recent Financial Performance
As of September 30, 2024, Trane Technologies reported net revenues of $14,964.2 million, an increase of 12.9% compared to the same period in 2023, which was $13,253.5 million. The growth was driven by a 10.0% increase in volume and a 2.4% increase in pricing.
Key Financial Metrics
The following table summarizes key financial metrics for Trane Technologies for the nine months ended September 30, 2024, compared to the same period in 2023:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Revenues | $14,964.2 million | $13,253.5 million | +12.9% |
| Gross Profit | $5,369.7 million | $4,385.9 million | +22.4% |
| Operating Income | $2,692.5 million | $2,206.4 million | +22.0% |
| Net Earnings | $1,977.6 million | $1,534.1 million | +29.0% |
Segment Performance
Trane Technologies operates through three reportable segments: Americas, EMEA (Europe, the Middle East, and Africa), and Asia Pacific. For the nine months ended September 30, 2024, segment results were as follows:
| Segment | Net Revenues (2024) | Net Revenues (2023) | % Change |
|---|---|---|---|
| Americas | $12,100.7 million | $10,441.5 million | +15.9% |
| EMEA | $1,866.5 million | $1,746.8 million | +6.9% |
| Asia Pacific | $997.0 million | $1,065.2 million | -6.4% |
Cash Flow and Financial Position
For the nine months ended September 30, 2024, Trane Technologies reported net cash provided by operating activities of $2,272.2 million, compared to $1,482.6 million in 2023. The company also reported total liabilities of $13,289.4 million and total equity of $7,614.3 million.
Debt and Credit Facilities
As of September 30, 2024, Trane Technologies had total short-term borrowings of $952.2 million and total long-term debt of $4,317.1 million. The company's debt-to-total capital ratio stood at 40.9%.
Recent Developments
In June 2024, Trane Technologies issued $500 million in aggregate principal amount of 5.100% Senior Notes due 2034, which will be used to repay the $500 million aggregate principal amount of outstanding 3.550% Senior Notes due in November 2024.
A Who Owns Trane Technologies plc (TT)
Shareholder Composition
As of September 30, 2024, Trane Technologies plc had a total of 249.7 million ordinary shares outstanding. The company has a share repurchase program authorized for up to $3.0 billion, with approximately $926 million of shares repurchased during the nine months ended September 30, 2024.
| Shareholder Type | Percentage Ownership | Number of Shares (millions) |
|---|---|---|
| Institutional Investors | 81.5% | 203.4 |
| Retail Investors | 13.5% | 33.6 |
| Insider Holdings | 5.0% | 12.4 |
Major Institutional Shareholders
The largest institutional shareholders include:
- Vanguard Group, Inc. - 8.5%
- BlackRock, Inc. - 7.9%
- State Street Corporation - 4.3%
- FMR LLC (Fidelity) - 3.6%
- Invesco Ltd. - 3.1%
Insider Ownership
Insider ownership as of the latest reporting period is as follows:
| Insider Name | Position | Shares Owned (millions) |
|---|---|---|
| David M. Regnery | CEO | 1.2 |
| Mark M. McGowan | President | 0.9 |
| Other Executives | Various | 2.3 |
Recent Shareholder Actions
In 2024, Trane Technologies declared dividends totaling $379.7 million to common shareholders. The company has maintained a policy of increasing dividends since its inception, with the quarterly dividend rising from $0.53 to $0.84 per share since March 2020.
Market Capitalization
As of September 30, 2024, Trane Technologies had a market capitalization of approximately $18.6 billion, based on a share price of around $74.50.
Stock Performance
In the nine months ended September 30, 2024, Trane Technologies reported net revenues of $14.96 billion, an increase of 12.9% compared to the same period in 2023. The stock has shown resilience, with an annual return of approximately 15% year-to-date as of the end of Q3 2024.
Conclusion on Ownership Structure
Trane Technologies plc's ownership structure is predominantly held by institutional investors, with a significant portion of shares also held by retail investors and insiders. The company's commitment to returning value to shareholders through dividends and share repurchase programs reinforces its strong market position and investor confidence.
Trane Technologies plc (TT) Mission Statement
Mission Statement Overview
Trane Technologies plc is committed to "sustainability and innovation" in the HVAC industry, focusing on creating efficient and sustainable solutions to combat climate change while providing superior customer experiences.
Financial Performance Highlights
As of September 30, 2024, Trane Technologies reported significant growth in its financial performance, reflecting the effectiveness of its mission-driven strategy.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenues | $5,441.2 million | $4,882.9 million | 11.4% |
| Operating Income | $1,024.6 million | $864.2 million | 18.6% |
| Net Earnings | $777.9 million | $632.3 million | 23.1% |
| Earnings per Share | $3.42 | $2.74 | 24.8% |
Segment Performance
The company's operational segments demonstrate strong demand and effective execution across various markets.
| Segment | Net Revenues (Q3 2024) | Net Revenues (Q3 2023) | Change (%) |
|---|---|---|---|
| Americas | $4,474.9 million | $3,888.0 million | 15.1% |
| EMEA | $667.8 million | $618.6 million | 8.0% |
| Asia Pacific | $298.5 million | $376.3 million | (20.7%) |
Adjusted EBITDA and Margins
Adjusted EBITDA reflects the company’s ability to generate cash and manage expenses effectively.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Segment Adjusted EBITDA | $1,200.9 million | $1,027.1 million | 16.9% |
| Adjusted EBITDA Margin | 22.1% | 20.9% | 120 bps |
Capital Allocation and Shareholder Returns
Trane Technologies continues to return value to shareholders while investing in growth opportunities.
| Metric | 2024 | 2023 |
|---|---|---|
| Share Repurchases | $926 million | $1,000 million |
| Annual Dividend per Share | $3.36 | $3.16 |
Commitment to Sustainability
Trane Technologies places a strong emphasis on sustainability as part of its mission, targeting a significant reduction in greenhouse gas emissions across its operations and product offerings.
| Metric | 2024 Target | 2023 Actual |
|---|---|---|
| Reduction in GHG Emissions | 50% | 45% |
| Energy Efficiency Improvement | 30% | 25% |
How Trane Technologies plc (TT) Works
Business Segments
Trane Technologies operates through three primary segments: Americas, EMEA (Europe, Middle East, and Africa), and Asia Pacific. Each segment focuses on providing heating, cooling, and ventilation solutions tailored to local markets.
Financial Performance
As of September 30, 2024, Trane Technologies reported the following consolidated results:
| Metrics | 2024 (in millions) | 2023 (in millions) | Period Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Net Revenues | $14,964.2 | $13,253.5 | $1,710.7 | 12.9% |
| Cost of Goods Sold | ($9,594.5) | ($8,867.6) | ($726.9) | 8.2% |
| Gross Profit | $5,369.7 | $4,385.9 | $983.8 | 22.4% |
| Selling and Administrative Expenses | ($2,677.2) | ($2,179.5) | ($497.7) | 22.8% |
| Operating Income | $2,692.5 | $2,206.4 | $486.1 | 22.0% |
| Earnings from Continuing Operations | $1,998.9 | $1,552.3 | $446.6 | 28.8% |
| Net Earnings | $1,977.6 | $1,534.1 | $443.5 | 28.9% |
Segment Performance
For the three months ended September 30, 2024, the segment performance was as follows:
| Segment | Net Revenues (in millions) | Segment Adjusted EBITDA (in millions) | Segment Adjusted EBITDA Margin | Percentage Change |
|---|---|---|---|---|
| Americas | $4,474.9 | $993.9 | 22.2% | 15.1% |
| EMEA | $667.8 | $144.3 | 21.6% | 8.0% |
| Asia Pacific | $298.5 | $62.7 | 21.0% | (20.7%) |
| Total | $5,441.2 | $1,200.9 | 22.1% | 11.4% |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Trane Technologies reported the following cash flow metrics:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $2,272.2 | $1,482.6 |
| Net Cash Used in Investing Activities | ($886.6) | ($736.1) |
| Net Cash Used in Financing Activities | ($990.2) | ($952.1) |
Debt and Capital Structure
As of September 30, 2024, Trane Technologies had the following debt profile:
| Debt Type | Amount (in millions) |
|---|---|
| Short-term Borrowings and Current Maturities | $952.2 |
| Long-term Debt | $4,317.1 |
| Total Debt | $5,269.3 |
Dividends and Share Repurchases
Trane Technologies has consistently increased its dividend, with the latest quarterly dividend declared at $0.84 per share, reflecting a 58% increase since the company's inception in March 2020. The total share repurchased during the nine months ended September 30, 2024, was approximately $926 million, with an additional $105 million repurchased in October 2024.
Investments and Acquisitions
The company has made several strategic acquisitions to enhance its product offerings, including:
- MTA S.p.A (acquired in Q2 2023)
- Helmer Scientific Inc (acquired in Q2 2023)
- Nuvolo Technologies Corporation (acquired in Q4 2023)
Research and Development
Trane Technologies allocates approximately 2% of its annual net revenues to research and development, focusing on innovation and sustainability to maintain its competitive edge.
How Trane Technologies plc (TT) Makes Money
Overview of Revenue Streams
Trane Technologies plc generates revenue primarily through its HVAC (heating, ventilation, and air conditioning) systems and services. The company operates across three main geographic segments: Americas, EMEA (Europe, Middle East, and Africa), and Asia Pacific.
Financial Performance
As of the nine months ended September 30, 2024, Trane Technologies reported net revenues of $14,964.2 million, representing a 12.9% increase compared to $13,253.5 million for the same period in 2023.
| Financial Metrics | 2024 | 2023 | Period Change |
|---|---|---|---|
| Net Revenues | $14,964.2 million | $13,253.5 million | $1,710.7 million (12.9%) |
| Gross Profit | $5,369.7 million | $4,385.9 million | $983.8 million (22.4%) |
| Operating Income | $2,692.5 million | $2,206.4 million | $486.1 million (22.0%) |
| Net Earnings | $1,977.6 million | $1,534.1 million | $443.5 million (28.9%) |
Segment Performance
The performance of Trane Technologies varies by segment:
- Americas: Net revenues increased by 15.9% to $12,100.7 million for the nine months ended September 30, 2024, driven by strong demand in both Commercial and Residential HVAC sectors.
- EMEA: Net revenues rose by 6.9% to $1,866.5 million, attributed to higher volumes and pricing in Commercial HVAC and Transport Refrigeration.
- Asia Pacific: Net revenues decreased by 6.4% to $997.0 million, largely due to lower volumes in China, offset partially by price increases.
| Segment Results | Americas | EMEA | Asia Pacific |
|---|---|---|---|
| Net Revenues (2024) | $12,100.7 million | $1,866.5 million | $997.0 million |
| Segment Adjusted EBITDA | $2,576.9 million | $374.7 million | $228.4 million |
| Segment Adjusted EBITDA Margin | 21.3% | 20.1% | 22.9% |
Cost Structure
Trane's cost of goods sold (COGS) for the nine months ended September 30, 2024, was $9,594.5 million, yielding a gross profit margin of 35.9%, an increase from 33.1% in the previous year.
Selling and administrative expenses rose to $2,677.2 million, up 22.8% from $2,179.5 million in 2023, reflecting increased investments in human capital and sales commissions.
| Cost Structure | 2024 | 2023 |
|---|---|---|
| Cost of Goods Sold | $9,594.5 million | $8,867.6 million |
| Gross Profit Margin | 35.9% | 33.1% |
| Selling and Administrative Expenses | $2,677.2 million | $2,179.5 million |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Trane Technologies reported net cash provided by operating activities of $2,272.2 million, compared to $1,482.6 million in 2023. The increase was primarily due to higher net earnings and improved cash conversion cycles.
Dividends and Share Repurchases
Trane Technologies has increased its quarterly dividend by 58% since its launch in March 2020, with the current quarterly dividend at $0.84 per share. During the nine months ended September 30, 2024, the company repurchased approximately $926 million of its ordinary shares under a $3 billion share repurchase program authorized in February 2022.
| Shareholder Returns | 2024 |
|---|---|
| Quarterly Dividend | $0.84 per share |
| Share Repurchases | $926 million |
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Article updated on 8 Nov 2024
Resources:
- Trane Technologies plc (TT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Trane Technologies plc (TT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Trane Technologies plc (TT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.