Investor Presentation May 2020
Safe Harbor This presentation includes “forward - looking statements” which are statements that are not historical facts, including statements that relate to statements regarding capital deployment including the amount and timing of our dividends, our share repurchase program including the amount of shares to be repurchased and the timing of such repurchases and our capital allocation strategy including projected acquisitions; our projected free cash flow and usage of such cash; our available liquidity; performance of the markets in which we operate; restructuring activity; our projected financial performance and targets including assumptions regarding our effective tax rate. 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, the impact of the global COVID-19 pandemic on our business, our suppliers and our customers, global economic conditions taking into account the global COVID-19 pandemic, disruption and volatility in the financial markets due to the COVID-19 pandemic, the outcome of any litigation, demand for our products and services, 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, 2019, as well as our subsequent reports on Form 10-Q and other SEC filings. We assume no obligation to update these forward-looking statements. This presentation 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 are included as an appendix in our presentation and reconciliations can be found in our earnings releases for the relevant periods located on our website at www.tranetechnologies.com. All data beyond the first quarter of 2020 are estimates. 2
Executing a Consistent Strategy Delivering Profitable Growth Over the Long-Term 1. 2. 3. 4. Sustained Operational Dynamic Capital Uplifting Allocation Growth Excellence Culture Lean methodology Innovation at the nexus Reinvestment, dividends, Commitment to delivering margin of sustainability and share repurchase and integrity, ingenuity, energy efficiency global improvement acquisitions community and and powerful cash flow megatrends engagement Sustainable growth Strong operating system Powerful cash flow and balanced capital allocation above GDP and performance culture 3
Pure-Play Climate Control Business with High Aftermarket Mix Regional Segments Key Metrics Manufacturing locations 34 worldwide Total Americas EMEA $13.1B Employees ~36,000 Sales Asia Pacific Market cap ~$20B 0% 20% 40% 60% 80% 100% Revenue Streams 69% 31% Parts and Equipment Services All figures are FY 2019. 4
Global Business with Strong and Growing Service / Parts Mix Americas EMEA Asia Pacific Transport Transport Transport Refrigeration Refrigeration Refrigeration Total Total Total $10.1B $1.8B $1.3B Residential Sales HVAC Sales Sales Commercial Commercial Commercial HVAC HVAC HVAC 0% 50% 100% 0% 50% 100% 0% 50% 100% Revenue Streams Revenue Streams Revenue Streams 68% 32% 69% 31% 70% 30% Parts and Parts and Equipment Parts and Equipment Equipment Services Services Services All figures are FY 2019. 5
Trane Technologies Core Sustainability Strategy: Challenging Possible GLOBAL MEGATRENDS DEMOGRAPHICS DIGITAL CONNECTEDNESS RESOURCE SCARCITY URBANIZATION CLIMATE CHANGE “One company can OUR COMMITMENTS change an industry and The Gigaton Challenge Leading by Example Opportunity for All one industry can Reducing one gigaton of carbon emissions Achieving carbon neutral operations, zero Creating gender parity in leadership, workforce change the world.” (CO2e) from our customers’ footprint by 2030 waste to landfill and net positive water* diversity, investing in STEM education MATERIAL ISSUES TO FOCUS OUR EFFORTS – MIKE LAMACH, OPERATIONS SUPPLY CHAIN EMPLOYEES COMMUNITIES GOVERNANCE PRODUCTS AND SERVICES Energy emissions Responsible sourcing Diversity and inclusion Access to cooling Board oversight CHAIRMAN AND CEO Energy efficiency Renewable energy Supplier diversity Ethics and Integrity Food and wellness Financial performance Low-emission products Water usage Safety Education Public policy Technology and innovation Development Workforce development Emerging market innovations Engagement Product life cycle TARGETS ALIGN WITH GLOBAL PRIORITIES 6
Widely Recognized for Global Citizenship, Sustainability, Diversity and Inclusion and Employee Engagement Highly Regarded ESG Performance People and Citizenship 1 st in our Industry Gold Medal Winner 9 consecutive years 35th annual award for to sign onto Paradigm for Parity only Industrial listed in NA International Achievement and World Index in Sustainable Development in machinery category 2 nd consecutive year Forbes Best Employers for Diversity 45% higher 8 consecutive years score than Industrial listed on most admired Machinery average companies list Joined 150 of America’s leading CEOs in a pledge to diversity and inclusion in the workplace A- #66 Climate Change Employee on Corporate Knights Among top tier disclosure submitted Top 200 public Engagement of high-performing companies worldwide 10+ consecutive years companies ranked by clean revenue 7
Leading Brands and Market Positions Commercial HVAC • World leader in HVAC Transport Refrigeration • World leader in refrigerated transportation Residential HVAC • Leader in HVAC solutions 8
Business Operating System Delivers Results 1 Key Examples Aligns resources for customer value • New equipment using low-global warming potential refrigerants 2 Accelerates profitable growth • Digital / controls / wireless technology • Expanded sales capabilities and channel 3 reach Embeds sustainability in our operations • Parts and services capabilities / offerings • Operational and functional productivity 4 initiatives Empowers people to solve problems 9
Strong Free Cash Flow Generation and Dynamic and Balanced Capital Deployment ~107%* Free Cash Flow Conversion of Adj. Net Earnings Past 5 Years ~$9.7 Billion* Cash Deployed Past 5 Years Capital Share Dividends Mergers & Acquisitions Expenditures Buyback • ~$1.3B Capex • ~$2.1B dividends paid • $3.2B spend • ~$2.9B on 26 acquisitions • ~16% CAGR dividend • ~1.7% of revenues • ~37 million shares per share repurchased • Capex-lite business • Long history of model growing dividend *Includes the historical combined business of Trane Technologies and legacy Ingersoll Rand from 2015 – 2019. 10
Executing a Consistent Strategy that Delivers Profitable Growth Over the Long-Term • Strategy tied to attractive end markets supported by global megatrends Strategy • Franchise brands with leadership market positions in all regions Brands • Sustained business investments delivering innovation and growth, Innovation operating excellence and improving margins • Experienced management and high performing team culture Performance • Operating model delivers powerful cash flow Cash Flow • Capital allocation priorities deliver strong shareholder returns Capital Allocation 11
First-Quarter 2020 Results May 5, 2020
Executing a Consistent Strategy Delivering Profitable Growth Over the Long-Term 1. 2. 3. 4. Sustained Operational Dynamic Capital Uplifting Allocation Growth Excellence Culture Lean methodology Innovation at the nexus Reinvestment, dividends, Commitment to delivering margin of sustainability and share repurchase and integrity, ingenuity, energy efficiency global improvement acquisitions community and and powerful cash flow megatrends engagement Sustainable growth Strong operating system Powerful cash flow and balanced capital allocation above GDP and performance culture 13
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