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Trane Technologies(TT) - 2024 Q3 - Quarterly Results
TTTrane Technologies(TT)2024-10-30 10:00

Revenue Performance - Reported revenues of 5.4billion,up115.4 billion, up 11% year-over-year, with organic revenues also up 11%[1] - Americas segment bookings increased by 8% to 4.3 billion, with revenues up 15% to 4.5billion[6][7]−EMEAsegmentbookingsgrewby94.5 billion[6][7] - EMEA segment bookings grew by 9% to 637 million, with revenues up 8% to 667.8million[8][10]−AsiaPacificsegmentbookingsdeclinedby30667.8 million[8][10] - Asia Pacific segment bookings declined by 30% to 279 million, with revenues down 21% to 298.5million[12]−NetrevenuesforthequarterendedSeptember30,2024,were298.5 million[12] - Net revenues for the quarter ended September 30, 2024, were 5,441.2 million, compared to 4,882.9millionforthesameperiodin2023[36]−NetrevenuesforthequarterendedSeptember30,2024,were4,882.9 million for the same period in 2023[36] - Net revenues for the quarter ended September 30, 2024, were 5,441.2 million, with no adjustments, resulting in adjusted net revenues of 5,441.2million[37]−NetrevenuesfortheninemonthsendedSeptember30,2024,were5,441.2 million[37] - Net revenues for the nine months ended September 30, 2024, were 14,964.2 million, with no adjustments, resulting in adjusted net revenues of 14,964.2million[37]−Americasnetrevenuesincreasedto14,964.2 million[37] - Americas net revenues increased to 4,474.9 million in Q3 2024, up from 3,888.0millioninQ32023,representinga15.13,888.0 million in Q3 2023, representing a 15.1% growth[39] - Total company net revenues grew to 5,441.2 million in Q3 2024, compared to 4,882.9millioninQ32023,a11.44,882.9 million in Q3 2023, a 11.4% increase[39] Profitability Metrics - GAAP operating margin increased by 110 basis points to 18.8%, while adjusted operating margin rose by 90 basis points to 18.9%[1][3] - Adjusted EBITDA margin improved by 120 basis points to 20.7%[1][3] - GAAP continuing EPS of 3.43, with adjusted continuing EPS of 3.37,up213.37, up 21% year-over-year[1][2] - Operating income for the quarter ended September 30, 2024, was 1,024.6 million, compared to 864.2millionforthesameperiodin2023[36]−OperatingincomeforthequarterendedSeptember30,2024,was864.2 million for the same period in 2023[36] - Operating income for the quarter ended September 30, 2024, was 1,024.6 million, with an operating margin of 18.8%, and adjusted operating income of 1,025.8millionwithamarginof18.91,025.8 million with a margin of 18.9%[37] - Earnings from continuing operations before income taxes for the quarter ended September 30, 2024, were 967.9 million, with adjustments of 1.2million,resultinginadjustedearningsof1.2 million, resulting in adjusted earnings of 969.1 million[37] - Tax rate for the quarter ended September 30, 2024, was 18.7%, and adjusted tax rate was 20.1%[37] - Earnings from continuing operations attributable to Trane Technologies plc for the quarter ended September 30, 2024, were 780.9million,withadjustmentsof780.9 million, with adjustments of (12.3) million, resulting in adjusted earnings of 768.6million[37]−DilutedearningspercommonsharefromcontinuingoperationsforthequarterendedSeptember30,2024,were768.6 million[37] - Diluted earnings per common share from continuing operations for the quarter ended September 30, 2024, were 3.43, with adjustments of (0.06),resultinginadjusteddilutedearningspershareof(0.06), resulting in adjusted diluted earnings per share of 3.37[37] - Operating income for the nine months ended September 30, 2024, was 2,692.5million,withanoperatingmarginof18.02,692.5 million, with an operating margin of 18.0%, and adjusted operating income of 2,692.4 million with a margin of 18.0%[37] - Earnings from continuing operations before income taxes for the nine months ended September 30, 2024, were 2,491.2million,withadjustmentsof2,491.2 million, with adjustments of (0.1) million, resulting in adjusted earnings of 2,491.1million[37]−TaxratefortheninemonthsendedSeptember30,2024,was19.82,491.1 million[37] - Tax rate for the nine months ended September 30, 2024, was 19.8%, and adjusted tax rate was 20.4%[37] - Adjusted EBITDA for the total company rose to 1,127.1 million in Q3 2024, up from 954.4millioninQ32023,an18.1954.4 million in Q3 2023, an 18.1% increase[39] - Net earnings attributable to Trane Technologies plc increased to 772.0 million in Q3 2024, compared to 626.3millioninQ32023,a23.3626.3 million in Q3 2023, a 23.3% growth[41] Cash Flow and Liquidity - Cash flow from continuing operating activities year-to-date was 2.3 billion, with free cash flow of 2billion[14]−CashandcashequivalentsattheendofQ32024stoodat2 billion[14] - Cash and cash equivalents at the end of Q3 2024 stood at 1,470.0 million, up from 1,095.3millionattheendof2023[43]−Netcashprovidedbyoperatingactivitiesincreasedto1,095.3 million at the end of 2023[43] - Net cash provided by operating activities increased to 2,245.7 million in the first nine months of 2024, compared to 1,454.8millioninthesameperiodof2023[44]−Capitalexpendituresforthefirstninemonthsof2024were1,454.8 million in the same period of 2023[44] - Capital expenditures for the first nine months of 2024 were 245.0 million, up from 217.2millioninthesameperiodof2023[44]−Repurchaseofordinarysharestotaled217.2 million in the same period of 2023[44] - Repurchase of ordinary shares totaled 926.1 million in the first nine months of 2024, compared to 459.8millioninthesameperiodof2023[44]−NetcashflowprovidedbycontinuingoperatingactivitiesfortheninemonthsendedSeptember30,2024,was459.8 million in the same period of 2023[44] - Net cash flow provided by continuing operating activities for the nine months ended September 30, 2024, was 2,272.2 million, up from 1,482.6millioninthesameperiodin2023[46]−FreecashflowfortheninemonthsendedSeptember30,2024,was1,482.6 million in the same period in 2023[46] - Free cash flow for the nine months ended September 30, 2024, was 2,037.5 million, compared to 1,288.4millioninthesameperiodin2023[46]−Capitalexpenditures,netfortheninemonthsendedSeptember30,2024,were1,288.4 million in the same period in 2023[46] - Capital expenditures, net for the nine months ended September 30, 2024, were 245.0 million, up from 217.2millioninthesameperiodin2023[46]−Cashpaymentsforrestructuringwere217.2 million in the same period in 2023[46] - Cash payments for restructuring were 7.2 million in the nine months ended September 30, 2024, compared to 8.8millioninthesameperiodin2023[46]BalanceSheetandFinancialPosition−Totalcurrentassetsincreasedto8.8 million in the same period in 2023[46] Balance Sheet and Financial Position - Total current assets increased to 8,099.7 million at the end of Q3 2024, up from 6,869.9millionattheendof2023[43]−Long−termdebtroseto6,869.9 million at the end of 2023[43] - Long-term debt rose to 4,317.1 million at the end of Q3 2024, compared to 3,977.9millionattheendof2023[42]−NetReceivablesincreasedto3,977.9 million at the end of 2023[42] - Net Receivables increased to 3,393.4 million as of September 30, 2024, compared to 3,142.5millioninSeptember2023and3,142.5 million in September 2023 and 2,956.8 million in December 2023[45] - Days Sales Outstanding improved to 56.9 days in September 2024 from 58.7 days in September 2023 and 61.0 days in December 2023[45] - Net Inventory decreased to 2,033.4millioninSeptember2024from2,033.4 million in September 2024 from 2,191.8 million in September 2023 and 2,152.1millioninDecember2023[45]−InventoryTurnsincreasedto6.8inSeptember2024from5.9inSeptember2023and5.5inDecember2023[45]−AccountsPayableincreasedto2,152.1 million in December 2023[45] - Inventory Turns increased to 6.8 in September 2024 from 5.9 in September 2023 and 5.5 in December 2023[45] - Accounts Payable increased to 2,194.8 million in September 2024 from 2,093.3millioninSeptember2023and2,093.3 million in September 2023 and 2,025.2 million in December 2023[45] - Days Payable Outstanding improved to 57.8 days in September 2024 from 59.2 days in September 2023 and 62.6 days in December 2023[45] Guidance and Definitions - The company raised full-year 2024 revenue guidance to approximately 11% growth and adjusted continuing EPS guidance to 11.10[15]−AdjustedcontinuingEPSfor2024isdefinedasGAAPcontinuingEPSadjustedforrestructuringcosts,contingentconsideration,mergerandacquisitionrelatedcosts,legacylegalliability,andaU.S.discretetaxbenefit[24]−AdjustedEBITDAfor2024isdefinedasadjustedoperatingincomeexcludingdepreciationandamortizationexpenseandincludingotherincome/(expense),net[25]−AdjustedEBITDAmarginisdefinedastheratioofadjustedEBITDAdividedbynetrevenues[26]−Adjustedeffectivetaxratefor2024isdefinedastheratioofincometaxexpenseadjustedforaU.S.discretetaxbenefitandthenettaxeffectofadjustmentsforrestructuringcosts,contingentconsideration,mergerandacquisitionrelatedcosts,andlegacylegalliabilitydividedbyadjustednetearnings[27]−Freecashflowfor2024isdefinedasnetcashprovidedbycontinuingoperatingactivitiesadjustedforcapitalexpenditures,cashpaymentsforrestructuringcosts,legacylegalliability,andmergerandacquisitionrelatedcosts[28]−Operatingleverageisdefinedastheratioofthechangeinadjustedoperatingincomeforthecurrentperiodlessthepriorperiod,dividedbythechangeinnetrevenuesforthecurrentperiodlessthepriorperiod[29]−OrganicrevenueisdefinedasGAAPnetrevenuesadjustedtoeliminatecurrencyfluctuationsandtheimpactofacquisitions[29]BookingsandSegmentPerformance−Strongbookingsof11.10[15] - Adjusted continuing EPS for 2024 is defined as GAAP continuing EPS adjusted for restructuring costs, contingent consideration, merger and acquisition related costs, legacy legal liability, and a U.S. discrete tax benefit[24] - Adjusted EBITDA for 2024 is defined as adjusted operating income excluding depreciation and amortization expense and including other income/(expense), net[25] - Adjusted EBITDA margin is defined as the ratio of adjusted EBITDA divided by net revenues[26] - Adjusted effective tax rate for 2024 is defined as the ratio of income tax expense adjusted for a U.S. discrete tax benefit and the net tax effect of adjustments for restructuring costs, contingent consideration, merger and acquisition related costs, and legacy legal liability divided by adjusted net earnings[27] - Free cash flow for 2024 is defined as net cash provided by continuing operating activities adjusted for capital expenditures, cash payments for restructuring costs, legacy legal liability, and merger and acquisition related costs[28] - Operating leverage is defined as the ratio of the change in adjusted operating income for the current period less the prior period, divided by the change in net revenues for the current period less the prior period[29] - Organic revenue is defined as GAAP net revenues adjusted to eliminate currency fluctuations and the impact of acquisitions[29] Bookings and Segment Performance - Strong bookings of 5.2 billion, up 5% year-over-year[1][3] - Americas segment bookings increased by 8% to 4.3billion,withrevenuesup154.3 billion, with revenues up 15% to 4.5 billion[6][7] - EMEA segment bookings grew by 9% to 637million,withrevenuesup8637 million, with revenues up 8% to 667.8 million[8][10] - Asia Pacific segment bookings declined by 30% to 279million,withrevenuesdown21279 million, with revenues down 21% to 298.5 million[12]