Trane Technologies(TT) - 2024 Q4 - Annual Results

Financial Performance - Fourth-quarter 2024 net revenues were $4.9 billion, up 10% year-over-year, with organic revenues also increasing by 10%[3] - Full-year 2024 bookings reached $20.3 billion, an 11% increase compared to 2023, with strong performance in Americas Commercial HVAC, which grew by 14%[3] - GAAP continuing EPS for fourth-quarter 2024 was $2.67, reflecting a 20% increase from $2.23 in the same quarter of 2023[3] - Adjusted EBITDA margin for full-year 2024 was 19.4%, up 140 basis points from the previous year[18] - The company reported a strong free cash flow conversion of 109% for full-year 2024, totaling $2.8 billion[24] - For the full year 2024, net revenues totaled $19,838.2 million, compared to $17,677.6 million in 2023, marking a year-over-year growth of 12.2%[53] - Adjusted EBITDA for the year was $3,846.3 million, compared to $3,184.4 million in 2023, indicating a year-over-year increase of 20.8%[74] - Earnings from continuing operations rose to $2,614.2 million in 2024, compared to $2,068.9 million in 2023, marking an increase of 26.4%[82] Guidance and Future Outlook - Full-year 2025 guidance anticipates reported revenue growth of approximately 6.5% to 7.5% and organic revenue growth of approximately 7% to 8%[24] - The company expects GAAP and adjusted continuing EPS for full-year 2025 to be in the range of $12.70 to $12.90[24] - The backlog at the end of 2024 was $6.75 billion, positioning the company well for growth in 2025[3] - Trane Technologies plc plans to continue its market expansion and product development initiatives to drive future growth[56] Segment Performance - Strong bookings in the Americas segment for fourth-quarter 2024 were $3.7 billion, up 1% year-over-year[8] - The Americas segment reported net revenues of $3,802.5 million, a 12.1% increase from $3,390.3 million in the previous year[60] - Adjusted operating income for the Americas segment rose to $669.3 million, with a margin of 17.6%, compared to $562.6 million and a margin of 16.6% in the prior year[60] - The Asia Pacific segment achieved net revenues of $381.2 million, slightly up from $379.2 million, with adjusted operating income increasing to $96.1 million, a margin of 25.2%[60] Cash Flow and Capital Management - Free cash flow for the year ended December 31, 2024, was $2,789.0 million, up from $2,151.2 million in 2023, reflecting a growth of 29.7%[85] - Net cash provided by operating activities increased to $3,145.6 million in 2024, compared to $2,389.6 million in 2023, an increase of 31.7%[82] - Capital expenditures for 2024 were $370.6 million, up from $300.7 million in 2023, indicating a rise of 23.2%[82] - The company achieved a free cash flow conversion rate of 109% in 2024, up from 103% in 2023, indicating improved cash generation efficiency[85] Earnings and Margins - Operating income for the year 2024 was $3,500.1 million, up 21.0% from $2,894.0 million in 2023[50] - The operating margin for the full year 2024 was 17.6%, consistent with the previous year’s margin of 16.4%[53] - Operating income for the quarter was $807.6 million, with an operating margin of 16.6%, compared to an operating income of $687.7 million and a margin of 15.5% in Q4 2023[53] - Adjusted net earnings attributable to Trane Technologies plc for 2024 were $2,567.9 million, compared to $2,023.9 million in 2023, reflecting a 27.1% increase[50] Shareholder Returns - Dividends paid to ordinary shareholders increased to $757.5 million in 2024 from $683.7 million in 2023, a rise of 10.8%[82] Inventory and Debt Management - The company reported a decrease in inventory from $2,152.1 million in 2023 to $1,971.5 million in 2024, a reduction of 8.4%[79] - The company’s long-term debt increased to $4,318.1 million in 2024 from $3,977.9 million in 2023, an increase of 8.6%[79] Tax and Share Count - The tax rate for Q4 2024 was 18.0%, compared to 16.0% in Q4 2023, indicating an increase in the effective tax burden[53] - The weighted-average number of diluted common shares outstanding was 227.3 million for Q4 2024, slightly down from 229.9 million in Q4 2023[56] Strategic Initiatives - The company highlighted ongoing strategic initiatives in sustainability and climate solutions, aligning with global trends towards decarbonization and energy efficiency[29] - The company emphasized the importance of non-GAAP financial measures in assessing financial performance and trends, which are detailed in the accompanying tables[46]