TT - Earnings call transcript Q4 2021 | Trane Technologies plc

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Operator

Good morning. Welcome to the Trane Technologies Q4 2021 Earnings Conference Call. My name is Chris, and I will be your operator for the call. The call will begin in a few moments with the speakers’ remarks and the Q&A session. At this time, all participants are in a listen-only mode. now of call Investor will Nagle, to I President Vice Relations. Instructions] turn over the Zac [Operator

Zac Nagle

Thanks, operator. Conference Good at us is for morning, webcast tranetechnologies.com, and thank Technologies’ being the Quarter you where Fourth you’ll XXXX accompanying our Earnings on Call. find call Trane This website for presentation. joining

description forward-looking slide made not recording in Please today’s cause some made to and also to our on see historical are the Harbor Federal our differ Statements This are SEC filings this results measures, release. call actual news includes the provisions are our for materially may Securities in that X. are a statements website. the Safe which that also We law. tables archiving anticipated explained Please results. of pursuant presentation facts financial factors considered go and attached to from to of our non-GAAP of call are

call Kuehn, over and Dave? today’s the Chair call are to Regnery, President on that, turn With Vice me CFO. Executive Joining I’ll Dave Chris Dave. and CEO; and

Dave Regnery

call. Thanks, today’s joining everyone, for us on Zac, and

what meet is set people passes. today. around targets getting world. Trane Let’s that's on turn strategy, continue purpose-driven is the to time X. to difficult differentiated deliver is to is I'd over vulnerable us intensify. Secular possible Scientists but shareholder doing. to which change enables as engine to to our the that economies sustainability We threaten more Climate weather few extreme a and it which returns Technologies act slide the the open with megatrends causing like time. more number Paris it And comments events, still need Today, under Agreement, sustainability say, is

air is science-based food We indoor the to targets cools transforming and faster. emission way innovation That push safely our have buildings, and continue world improves the medicine. innovation quality and transports further and heats set that aggressive reduction

emissions reduce can world's innovate and technology progress. for today's dramatically scale tomorrow, and we accelerate As we the

committed us to free strong a powerful relentlessly making helps balanced customers, markets, and approach our strong our long margin difference consistently capital enables end over our to turn, the are our end the unyielding planet. drive creation in We is board outgrow The for for result us value deploy and term. This our the shareholders across team, cash flow allocation for and to through strategy. for which

Moving slide number X. to

inflation, to we and team and close XXXX global availability despite macro of and delivered pushed approximately Our us reached power high-end enabling backlog it XX% level $XX for to constrain than metrics. third revenue, negatively all the very for We strong of year, half the business the They financial guidance. are we for EPS second for performance expected was the the to thinking XXXX With record EBITDA much million. of year, a continue logistics impact and of half. that XX% our services about we're how adjusted our the balance, and On cost In that levels, at EPS and the time innovative persistent cadence EPS first levels. with margins of stronger continued the key macro million the also supply in negatively elevated $XXX across and million XXXX year guidance growth. revenue and demonstrating are growth, reflected us system and strong revenue revenue operating nearly to quarter, more tight X. delivered at into chains the challenges in our organic capacity and restrict challenges Price positioned levels to the bookings also record realization anticipate Please to impact and demand double related to labor which markets reflected last productivity capacity throughout growth was of well to includes XXXX fourth productivity. strong range those extremely turn quarter, $XX we supply XX% are and was and inflation at be out beyond. of remain million this XXXX. to products persistent impacts backlog, macro and our Bookings, neutralize record the widespread environment, continue adjusted record $XX to to With year. than was backlog number another This slide hit of and with by expect constrained impact demand

and strong XX% or targets adjusted revenue Looking at points exceeded performance. our XXX delivered EPS margin of initial growth, delivered guidance we of year operating and We basis organic met growth. of all financial effectively our expansion another adjusted XXXX, for XX%

strong We to also flow slide and capital cash share turn $X.X returned billion free dividends through and repurchases. delivered number shareholders in to X. Please

intensify returns and unwavering to in us performance Our sustainable differentiated innovation customers us continue We're focus financial on world to for sustainable deliver and for innovation our Demand outperform long-term. over shareholders solutions positioning to end leadership leadership relentless our strong investments will the and confident the differentiated This X. serving our number performance deliver consistently continues shareholder accelerate, turn and our enables is our slide future. markets. into in as to the to only returns decarbonizes. Please will innovation

am we report reducing X. of plan by for Customer bookings purpose financial of continues grow. done These high and the all with XXXX, year, increasing quarter strong, with to other the job to XX% XXXX. entering also diversity bookings team. Please metrics, earlier. metrics to our exceeded in well organic exceeded the the our including carbon And in strategy. we chain ESG far and leaders annual slide to our was number ESG part our to XXX innovation climate-focused global path on which milestone our metrics, our up directly supply for across delivered link the addition XXXX, is each workforce. by both challenges to XXXX to We turn our for are growth, Beginning were segment XXXX and incentive In our core emissions up revised that to achieving referenced our performance Overall, macro I commitments. Customer glide and sustainability happy growth each growth record quarter quarter XX% was demand for revenues another demand segments. and backlog constrained Organic driving year. throughout growth, robust the bookings organic in revenue in compensation

mid-XXs. single-digit to up revenue Americas. robust was high-teens. to high-teens organic to our of organic business more year air bookings also over were North Commercial markets strong quarter, more residential and Revenues up our XX%. over remained broad-based markets. end-to-end growth full quality HVAC Sell-through transport growth organic growth Commercial up each the was across indoor in than quarter America orders The XX%, for XX% strong, over in than Strength our XXXX. Americas Americas remained adding in refrigeration transport applied, delivered with strong, revenues unitary of comprehensive mid- the with With HVAC up quarter the channels year the bookings significantly up and fourth Our solutions and growth up HVAC service full bookings Demand residential XX% team business XX%. high HVAC and delivered contributed in also outperformed

XX%. order which the of During quarter extended book XXXX our third the bookings XXXX, to fourth we contributed more growth through quarter, than of

growth mitigate XX%. risks. inflationary our consistent to thoughtfully year Fourth order manage revenue with to in growth, book order continue was organic XXXX quarter We full up

Turning strong for our that products services reduce for customers. and to greenhouse innovative to emissions we continue energy EMEA, see our and demand intensity help gas

organic quarter, outperformed in growth teams delivered up organic full year both in organic EMEA the in transport and XX% revenues EMEA with significantly and XX% our XXXX. bookings markets Our commercial full over up bookings XX%, the business over refrigeration HVAC strong refrigeration. With transport year growth

quarter, refrigeration up both bookings were the transport During EMEA high-teens. revenues and

Our China supported XX% bookings Asia team Pacific X%, and region. the of growth growth growth by revenue strong across in broad-based delivered and of

call to to like Chris. Chris? the I'd over Now turn

Chris Kuehn

Thanks, turn of continued was strong strong execution slide Please X. growth by both incremental price. volume driven the price X% Dave. number over and in quarter Organic revenue to

year modestly the significantly Turning to material exacerbated logistics the labor rapid positive were was impacted which variant. margins. with quarter, challenges, chain, availability continued of was weeks Price Productivity by price/cost. and capping in inflation positive supply the Omicron full in spread over recent

page. revenues make continue margins incremental strong the from The the XX and slide higher adjusted the respectively. we challenges were income. inflation with points, key challenges improved were to Both macro Adjusted number price strong revenue discussed incremental basis delivered business with as and reinvestments. for as impacted highlighted to we've and operating similar business XX EPS and innovation, Net operating the and each drivers. prior by across here, driven margin turn impacting revenue we've Americas segments, business dynamics declines. dynamics primarily on EMEA adjusted EBITDA enterprise the segments margins Please and addition, In XX%, higher productivity We modest and our margin and outlined. reinvestments of realization, cost XX. Margins grew consistent macro impacting the

and full Americas expansion For expanding year, the EMEA respectively. EBITDA points basis segments basis and XXX margin XXX with delivered both margins strong points,

good leverage Pacific expansion margin year. points in Asia margins quarter EBITDA with and full expanding basis Our segment delivered the for the XXX

to Dave? turn the like back over Dave. to call Now, I'd

Dave Regnery

has relentless Chris. customers. Please number Commercial Thanks, markets innovation number to significantly our over slide the for outperformed HVAC Americas through of turn XX. years broader a

remains XXXX underlying indicators K-XX the market complex record yielded XXXX. Demand the with growth in conditions, Our backlog improve our been like pointing XXXX. low, markets and indicators in strong since and stimulus vertical. demand customers' forward benefiting our for problems, federal largely tailwind sales strength forecast the for of is market unwavering has powered remained deep customers End as growth. most Index, products focus both strong. favorable. from residential revenue. continue unprecedented strong which a business February, in GDP and current XX on education in solving to multitude data We record future see by to in Architectural over our to our and economic and Billing entering Unemployment compounded across our center, given with relationships in We're this force education, position warehouse, XXXX, our this remains contributing increased was Demand business, with healthcare. a funds supporting multi-year in direct

February XXXX XXXX, The ramping we weather tough entering compares to from season. while realization. from continued for Texas backlog advance of I'm we in remains of the team customer from demand a our after facility. has team that see lapping see event price growth headwinds in expect tailwinds record capacity capacity and at expansion on And, our cooling track Looking year proud residential XXXX. meet the strong

Turning transport. the we XXXX, in outlook I'll earlier. continued markets our outgrew significantly market transport We talk to of as through horizon project their growth topics to ACT outlined section. of about XXXX. in forecast strong Americas end continues more interest

to EMEA. Turning

remain services and muted for and to While expectations for strong, outgrowth. for Demand have our systems market growth, opportunities we good we market continue sustainability-focused see

transport in over markets, as compared business market to significantly revenue the growth end year refrigeration region. Our outgrew delivering XX% growth full XX%

Asia. to Turning

growth expect data in expansion COVID-related some the China in strength Outside picture electronics, by in partial impacting China, lockdowns center, in pharmaceutical and still of supported XXXX, market health mixed with countries. We is care.

sales direct region, Our for the market equipment is opportunities force outgrowth differentiated services. good provides and model and in in

guidance call to I'd the over Chris our Chris? for XXXX. turn Now, to back like to outline

Chris Kuehn

number financial single-digit between Please Dave. deliver adjusted and with and performance slide expect to Dave high entering strong the growth market strong XX. $X.XX. Based $X.XX backdrop Thanks, our and revenue XXXX, on EPS year, just the we backlog outlined in organic turn to

particularly half supply second dynamics, Our an XX%, stronger leverage a of operating with improving inflation improving macro outlook approximately chain. around contemplates and

year, remains to the we expect labor negative from lap revenue We tight XXXX. slightly half first dynamic, inflation the of especially to first price/cost strong as and through and the half the first we margins, supply logistics environment positive the restrain chains, of half, modest but in more and The macro growth for and expect be year. availability price

cash free remain or of to to flow and income. strong greater adjusted equal than expect We XXX% net

manufacturing X% investments ahead year. are and to capital our which chain in it's XXXX, automation, reinvestment to as outlook expenditures high X% projects approximately range. ROI our year decarbonize how supply XXXX further the our planning well X% at business revenues, Relentless of innovate for never Entering of Our commitments. incremental incremental profitable of investments the operations. include growth and These episodic as sustainability support is our after competition of projects typical resiliency, high we includes of us, is end we objectives in high ROI

in investment inventory flow on cash particular includes free continued with to Our outlook modest support focus also growth. working capital, strategic

excludes Given our inherent guidance transparent forecasting bookings challenges rates potential that fact the quarter, each our accurately in FX and revenue and impacts. we're FX organic about

nature Please in of rates. each to and translate is point a negative exposure EPS headwind. at point FX as would $X.XX FX each of OI of translate translational number slide approximately Our largely XX. into about revenue reference, would turn Net,

the provide traditionally it the to may outlook environment, quarter what today. believe orders volumes mid-single-digit and an we guidance, currently given expect to the unit expect on backlog, low and to we macro macroeconomic While we dynamic grow for we've Based realization. price the based backdrop organic in flattish constructive dynamic we range, with annual see strong first on be to revenues provide outlined,

quarter margins dynamics, first XXXX. be are cost expected versus in challenged considering First incremental price the negative quarter cost very to to strong due of price

QX the high modest first in improves leverage more dampens XXXX XXXX well But from but ramp XXXX. bit part inflation expect modest over peak keep expect relatively Likewise, $XX fourth for in which first the inflation incremental quarter in on carry exited of levels lap and of result taken at upside the We QX more began of This the the You'll carry almost of move get expect inflation. from by in of are full and we're over of $XX XXXX million. also quarter quarter, from lapping quarter strong to able The XXXX, inflation the see and reason aggressively deliver pricing operating strong million were The very first price. of to recall, pricing a this really was first Net, through we the this. which of first peak in carryover QX were and XXXX online price the nearly fourth unprecedented is we come we down was the of it of carryover with realization, price able with to XX% XXXX, in of quarter the price/cost strong X%. price ahead to quarter to simple, we quarter end Inflation XXXX. XXXX, quarter realized. fourth additional to the to XXXX quarters. price third of of impact as we than dynamic to while into more we we'll the that first complex from into actions the with than equation peak and XXXX essentially means is pricing to be cost

to constraints tight challenges exacerbated chain, macro Omicron variant outlined, impact we've productivity. supply As related negatively to by the logistics and expected are labor

All to very is a it's the million in to year-over-year all as $XX down the income impact While in difficult negative be in approximately predict operating productivity impact for first on balance considerable a expect outlook our we quarter. dynamic QX, work environment, adjusted the pieces. in, to we

highlight are as I help with models. to prior As and slide, There We'll stronger our full-year to along. contemplates inflation of macro a couple improving an your wanted easing the QX we outlook half this second environment. update outlook on that a also for year discussed items goes the with

XXXX is retirements. expense $XX be approximately reflecting interest expected million, debt to First,

in transformation item effective quarter. remains estimated on We to XX% million XX%. business Please full-year by The is compensation with rate is the tax adjusted tax savings guidance rate low, to is stock-based Slide run the The impacted XXXX rate XX%, flat deliver I'd from of of higher assumed approximately which track XXXX. numberXX. $XXX to go by remain highlight traditionally The we've QX XXXX. other QX

Slide on highest savings opportunities balanced continue go We Importantly, remain consistently fuel returns allocation strategy, number investments and committed excess deploying for cash ROI Please portfolio we the to projects discussed further shareholders. our cost earlier. across with capital focused the in other as XX. to to innovation invest these high to

continue relentless our core to business reinvestment. through business we strengthen First,

a Second, we're with strong that provides evolve. balance committed optionality to us sheet our markets maintaining continued as

time. to Third, we over consistently XXX% deploy expect cash of excess

Our and balanced outlook deployment to Please further improves Slide our as share long-term shareholder the trades and XX, an turn approach on capital includes stock in and XXXX. M&A value. strategic update for below provide XXXX returns our repurchases intrinsic calculated our I'll that

paid share we down We cash and million with repurchases. to deployed to $XXX million $X.X in debt. and M&A approximately During XXXX, billion $XXX $X.X pay billion in dividends

we Looking repurchases $X.X XXXX. share in million cash, to expect deploy $XXX we to approximately in billion of executed in XXXX, of January inclusive

in announcement as also climate intend business quarterly XXXX. a per control with combined annualized. we share the annual When dividend our Our March since XXXX, raise dividend outlook be of includes increase the $X.XX expected launching XX% that to is dividend to the XX% up pure-play to in

Our flow, strong us and give free optionality allocation and dry cash forward. capital balance excellent moving sheet liquidity powder to continue

Dave? back the Now I'd Dave. to call over to turn like

Dave Regnery

like Please market our minutes businesses robust update markets. in Chris. providing both challenges King I'd through Both outgrew go to We refrigeration thrived. the regions. had of Thanks, in an markets EMEA transport significantly XX. XXXX, couple on and a slide and Thermo pushed number spend macro Americas growth and the

the you King XX%, the APU more EMEA, left the trailer In combined slide, while combined that trailer growth was King grew also On can markets XX%, North truck grew XX%. than for Thermo more America and Americas truck side while Thermo grew and market than XX%. see EMEA of

discussing into total King for in both was Market can each particular one refrigeration more transport for XX%, right than There's and the respectively. side with XXXX. of dynamic other Americas moving continuing projections and XXXX with the pleased We're market that businesses XXXX weighted we're to important strength markets extremely average growth I'd was for highlighted than these XXXX. call America. in the in continued highlight delivered North regions, the and in refrigeration outgrowth in EMEA tremendous while and like for growth the box, more growth market XX%, Americas the transport you of the XX% respectively. On Thermo and slide XX% see EMEA

in on in regions booking both teams delivered as tremendous we Our slide XXXX, growth X. discussed

growth ACT compares extending was both continues last and deck but go record trailer than to against going bookings North Our our through number a we tough the sustainability We're range to through we spend well XXXX a our to Please exceeded as work today, Net, resulting add growth dynamics helpful as time call as being for the go mid-XX,XXX-unit this growth, growth Energy market it's twice quarter. refrigeration from through second pandemic on America numberXX. added the backlogs. efficiency, America slide dynamic our growing in for result North calls to revenue in transparency perspectives. slide backlog lot Please XXXX, more not XXXX bookings We during average go it forward-looking XXXX. decarbonization highlight to slide are only of around quarter transport earnings backward color the every and into megatrends nine-year end markets, we declines to only more a we of for move year reference additional up transparency. far with the significant in and even slide for to revenue the a outlier. expect We'll XX. trailers in our these with the stronger. think

for unprecedented for services and top levels balanced seeing macro quartile We XXXX the are products We're these happy We and us ingredients transformation record by to challenges our progress, system capital navigate and engaging backlog that number customer-first innovation and cash deployment. persistent business accelerates and now, our a supported uniquely stronger. strong Despite world's never beyond to over your continue positioned our uplifting was a of mindset. to leading board continue and macro culture. well be executing demand addresses accompanied deliver our to deliver growth of long-term. Operator? have take challenges, EPS by across returns has and strong free differentiated our a the to fundamental successfully XXXX with to trends and believe business flow to the been we'd questions, with we drive performance the And We're shareholder in operating expect year

Operator

first you. Kaplowitz question Andy Instructions] is from [Operator Our with Thank Citigroup.

line open. Your is

Andy Kaplowitz

Good Hi. morning guys.

Dave Regnery

Good doing? are How morning. you Andy. Hi

Andy Kaplowitz

are How Good. you?

Dave Regnery

Great.

Andy Kaplowitz

offset Because or other thinking Chris, that is big swing color in QX XXXX. into terms material us seemed how to more headwind obviously cost margin Trane's a in inflation Dave ability outside you pressuring in with of QX be factor productivity? to and give of about can it you're

in impact weeks from Omicron you So the for that how thinking headwinds much And impact QX. assume into the additional I QX? about in over What's you're baking labor XXXX? are on few was how on the QX? the last

Chris Kuehn

Yeah, Andy. I'll start,

terms our we into supply right mid-teens, in buys, really going of the think to and see kind of on around QX chain the challenges factory we landed fourth I spot in leverage So guide of operations. quarter, our continue with around And plant guide. driving front that inefficiencies

leverage XX%. think around quarter I was in the

back chain we constraints getting it's half We thought on them, in fourth little through we're little and inflation we quarter. see other realization saw see we both to week-by-week. well chain now, quarter chain right working the the supply each fourth fourth saw those on a day-by-day, in and quarter, managing But is of what The supply looks supply anticipating And land. would we a did of we now of price bit the right for And that the some year So continue well. In But balance as every stronger landed resiliency where track. terms the a half the we second be as over as are in to of bit side. more first real. ultimately right XXXX more ramp. inflation the the day. We're productivity we're negative

Dave Regnery

inventory that the you manager, inventory, supply what pulling a now we're about. add replacing in more about rebalance Andy, plant line-side having and it's our and line-side reschedule, chain other very to, disruptive, So right if thing very, is Yeah. was constraints, on a the manager plant talking constantly could with after, be employees. the to line, We're anyone I I know you'd I it opportunity the rescheduling would plants only were you that, had okay? ever with talk lines,

some quarter is anticipate disruption through we and have it first managers, good of continue said, But disruptive. kind working first we and manager plant a the now. as through is been disruptive we're the great nightmare. half. to thing It's And for this is it. And this time plant the Chris So certainly

Andy Kaplowitz

Helpful, going And be HVAC forward in business to expect GDP-plus think mentioned and you I Dave, you a XXXX. guys. then that your before resi business

in know pricing, I about company capacity strong you Does tough the business I up, XX% line about think or point? with potential talked comps. resi grow viewing are inventory QX, bookings to XXXX? at still are you how How this have thinking in it you the in with up the in the channel

Dave Regnery

question, Yeah. mean, resi resi business. a just our over Great that had we Andy. I did business. We about was -- XX%. fourth up over revenue were the see quarter. business, being strong our up quarter XX% GDP-plus our And and for resi And is bookings a business remind very I'd XX%, in time, our our do everyone of business total XX%, we fourth

weather facility to customers, that So and been serve just up And Texas Tyler, up has the best I'm ability able mindset our the ramp and the do, a performing what the there company. freak resi really I've seen for in the them to ramping of proud business of well. some team in event. the after is customer

fall off a we go, our portion As new replacement construction, the see we'll to cliff. of in business, to market, expect larger -- of our a And business. going the is is as you're the smaller which markets far growth resi see don't part which

a up strong backlog, have year. business we'll all we market-leading our strong said, year. said, be So With as that you against see comps, will brands all tough price resi and

Andy Kaplowitz

for Thanks guys. that

Dave Regnery

Andy. Thanks,

Chris Kuehn

Andy. Thanks,

Operator

question The next from is with Barclays. Mitchell Julian

open. Your line is

Julian Mitchell

morning. good Hi,

Dave Regnery

Hi, Julian, are how you?

Julian Mitchell

EPS year. you. Thank on Good. back good. Maybe the just of the through to Very sort wanted seasonality circle

QX around challenging the not half. low-teens earnings, QX sort to being and versus of clear kept you a the I as You But gave first very different year emphasizing out say share so of guidance full the worked too history.

think the a So should earnings? full the price/cost in little sort sort we half, bit mid-XXs getting Is roughly first it's of ballpark with right we of bad about when year around QX? the share that less of assume

Chris Kuehn

$X, around I'll Julian, Chris. the where to Yeah, year. $X.XX it it's start. quarter, that in put guide we're to XX% full first around would the dialing

That's around So XX% a full average would has midpoint. what our average little be the to XX%. the years. last over That QX at actually five versus better is been year than four the around

seeing So what on we fully a second bit But quarter think will think be it point. hard be year. little to I at we're the to tell it's this full stronger the

supply supply challenges. to as not through do work really concern. there. it, the continue and we chain a we We The absolutely navigate demand it. And is is a how see this chain is demand This

constraints our easing when more second supply, So supply for guidance the some call of is we labor as from we definitely quarter provide what we'll through the we chain the year get first see in But terms well. and half think and the QX. aspects, of logistics some of

Julian Mitchell

the one around maybe the about XXXX. kind this in how And construction this in market US Thank Americas my year. commercial HVAC of strongest in the non-resi Should trends any we on commercial then, regions That's think new year? HVAC the three just revenue in the second And you. of having see color you helpful. growth

Dave Regnery

performed across XXXX, in in up hi XX%. with Julian, well strength our service, Dave. all broad-based Look, year very unitary, them business this Americas is all and were commercial of over Yes. applied in the QX and

So, tremendous seeing demand. the team is

the low six lag positive again, on foreshadowing for months, that above which a in nine-month future. far to ABI are And positive. you end go, strong as to metric, which expect XX, As has last that's XX markets underlying unemployment, means have GDP that's a been good the so have you the what as growth, to

the vertical. growth strong decarbonization to will in education. see starting us. built particularly to strength continue nice warehousing, the be We're Indoor for We tailwinds of centers the and air data vertical, have quality healthcare, office environment in

us business, we So, strong behind tailwinds and some execute. to year and we'll have business that our have continue will a commercial HVAC in nice

of there visibility those Our the get will around as the constraint markets. starting And first some will It not start second half, be the supply electronic supply we're the specifically ease. to into will to half, chain. back to in some specifically components, constraints, be

Julian Mitchell

Great. Thank you.

Dave Regnery

Thanks.

Chris Kuehn

Thanks.

Operator

is Morgan from question next Pokrzywinski Josh with Stanley. Our

is open. Your line

Josh Pokrzywinski

Good morning, Hey. guys.

Dave Regnery

How Josh. doing? Hey, you’re

Chris Kuehn

morning. Good

Josh Pokrzywinski

Well, thanks.

term. of worse. worse the sort got got rolling that anything XQ know kind metals things we watching should like, the year-over-year what a the wondering in near that call in sequentially are the of like Just actually some XQ. way of But it of off. like on closely? be that kind maybe inflation putting gets to of journey you front bit out more aside probably the specifically sounds little math, realizing Like an I inventory dynamic There's

Chris Kuehn

Hey, Josh. fourth expedited is and Chris. levels also a spot well. a seeing over carrying fourth ultimately the little carrying buys think say QX we into as seeing better It's was the up being quarter QX, over I freight we're the than Part where inflation inefficiencies of customers. roughly wound quarter, higher as would Yes, quarter into this started in I the we're price the of in to same first serve around quarter. But and inflation the little

practice the for really aluminum, really strategy in and look may XX months copper smooths impact of out place we have hedging inflation. which commodities will over You and it recall, and a at roll but

XX% XX%, about hedged. have we'd quarter, one of that any into already price Going

there. to of start quarter really be impacts to the would first the fourth similar I the impacts So, roughly way. the the in say very quarter Steel, same

would a changes. price when six-month about we purchasing in we lock our steel from when prices any have to We see lag on

steel year. really would in in So second be realized seeing half January, any we're the the of dynamics in now

we're how to from that's of QX QX. playing kind out So,

Josh Pokrzywinski

air watching track commercial side, broader that What been That's of there Really more normal had and now customers whether out helpful. over while to some then, out guys earnest you kind a replacement just indoor maybe are market initiatives some the in And of or of of guys disaggregate you have taking some own, Got demand today hold. for we've put the stuff kind sustainability-focused marketplace on type products. of in these years? commercial it. spicier in quality couple past of and your in the the the it's from

Dave Regnery

We that. continue year first had all, with good right? to start a in Yes. Quality, Josh. mean tailwind see a IAQ, of Good I from Air very I'll question, Indoor we XXXX. IAQ,

We quality there we two long-term good a sight in well infrastructure our expect helping customers out what energy out which indoor as getting of improvements with lot year Still day build consumption in XXXX. there. for is for to as have line an demand of activity, audits, call the air another

we about decarbonization into also and a far heat -- we're As remind that's to growing environment, a in just as there it's plant again, system. a that Europe there seeing Europe is of doing It's And a heating the in just pump. and lot a with is intention early very built electrification in combining the not we're what We've seeing talked we're the there, in as one of really traction every innings. we're call day. system the it, that boiler the chiller only together great everyone, That not Americas. is very,

the blend It's we harder getting two So, decarbonization activity those Indoor innings. both, for early are closely. And Air as as pretty to the in Quality well on together. track

that We what's then demand of So those XXXX. we forecasting business obviously going is say, right? you would have the robust And Dodge at continue. happening the core to are in to new more pretty traditional, going look construction and with follow what actively is still kind

one And commercial the to been I be XX Index going our of is sign. probably the the good HVAC a for XX that's now probably highest of So said Billing what and of future for over months. is Architectural some -- business, earlier, that's correlation has as

well So, for future well. the that bodes as

Josh Pokrzywinski

guys. Thanks Great.

Operator

Sprague from Research. Jeff with is Vertical question next The

open. Your is line

Jeff Sprague

Good morning everyone. thanks. Hey

Dave Regnery

Jeff, did up Connecticut? in you survive the storm

Jeff Sprague

good did. here. to I up four-wheelers the All work. Putting

Dave Regnery

to so… had use Charlotte, four-wheelers too, here we some in Unfortunately,

Jeff Sprague

on orders place in line costs coming were your of what able And backlog? yourself price the of that on it's kind now and know kind that in the protect extent been roll out scary sure the of up orders of advance I'm suggest you like, and fully implicit you question acknowledging the ordered thing. We their also a though. will here increases? the I have Yes, right, the to have think there. my Dave, place further sort drive obviously down to nature in people Or would get is, of on down people and how really, roads inventory then able through comps to channel little to the the to

Dave Regnery

products, start the times it’s extended Yeah, let for okay? do the good right a of our have now. with So, order lead me sure. first we one, question And rates, many for

-- I So definition. visibility that, we’re by possible. you we they customers early very that do tell working have order much as ordering and also are our customers would closely as give with want us to

they happening certainly supply -- understand there's So what's with chain.

in us secured spot that sure the for to them got asking we future. make they're So

orders I are earlier. say, getting So we would in

few concerned wouldn't in orders we're here. talking okay? out, from see in numbers. It's You robust bookings I years a not overly that X.X our pulling with We're it. like get months

of through business. As by you is far the we repriced the And backlog. go business, at the in really as our concerned example, have end in it resi the backlog, for pricing day, to

we indices. have our have those reprice price In So a some built orders on actually business, elasticity backlog. if into our the increase, we'll certain of price commercial based

it's going at depending price doing to So been for higher time. if we've will ship, when And it it's on that's we'll that vis-à-vis long and -- be be shipped normal, today. a a actually

days to a get as it. of, much increase, double-order or I the So order be of front can let going as to in there's me price

mean, has happens bit. I that we've think behavior I -- A of changed. lot a been little certainly that

Jeff Sprague

do of the But little You course maybe people And there falling here. how gamesmanship resi over don't Dave, the you're said anymore so pre-buy it you can not it cliff. that. don't off more the change? But overall you bit resi kind trajectory said right? think efficiency of just some you as a And color you see around on see is just a expecting the how plays playing? of out, year You it provide you perhaps envision

Dave Regnery

as -- would year that of regulation unfold that We everyone we to the could as -- as to starting it activity. see pre-buy do obviously change for the anything as some I far XXXX, alarming. don't be update there the in see It Yes. we'll change efficiency be and goes forward.

go As quarter in robust very Fourth resi, XXXX was far as for the year. very a us. was strong end markets

very order of right? earlier, metrics there's positive, the it be I'm lot around XX% said that. new up in fourth a out Residential encouraged will So as I over rates I mean, construction, with quarter.

percentage falling So also we're in off The a see of cliff, I strong positive, Sure. be resi. we our okay? about you X point? that digits market, price business, X would year or volume tell low business, XX% going to our Could will point down unit all that's But replacement small that don't probably the of about be single see XX%. in although a it

Jeff Sprague

That’s Thank great. you.

Dave Regnery

Sure.

Operator

question Davis Research. next from is Scott The with Melius

is Your line open..

Scott Davis

Good – Good guys. morning,

Dave Regnery

Hi, How you? are Scott.

Scott Davis

I’m a construction, cheapest always in buying great. patterns? new similar Thank guys just efficiency to you. up Or the that? buy past? and of capture the question. trying curious, the I'm there. Jeff's on benefits kind in still was there value Are builders it homebuilding upgrade? is they stuff like would unit kind some as higher the if buying side kind Are and on they any it able following out the sell environmental to of the Is mean, I change -- of

Dave Regnery

talk we're that their on interesting we're hard greener selling, just see talk actually large only where able interested it's see on about. act of small, and lot Again, a they're what to we customer. for the question. great on very they're very of be but some so act to lack home, some have our to in, XX%. a it's interested that to that. many being of – Yes, a able sell to about And they sell of it'd market, high homebuilders we'll if to better they we the into to homebuilders, Because certainly larger conceptually what I'd the players many you a described, – be of business, terms, being part smaller But and

Scott Davis

getting premium of all? and the line to capture imbalance to the kind of changed the common a integrity at customer them secure a and capture spots is of that the But Can larger the bit backlogs, with demand perhaps occurring then you Dave, the about higher in And upfront has down from on we're folks supply right dynamic and the the question of more historically, just little Okay. kind backlog. the now? that's base right people the get now back payment, integrity of

Dave Regnery

mean, at orders. with independent think can't backlog I why. resi is end let wholesale distributors, cancel quite okay? the technically, business we the Yeah. tell the day, me our of In integrity strong, And our you of they our

closely customer going of same the other together time. see make with we're solution and duplicate double but and a from the with architects backlog. In – $X.X So billion that and the in on the matching see it and to site that a engineered all with we're combine trailer working whether are job dealers, to products for going dealing complex to do orders. and closely highly don't King, ordering we us we're side. working insignificant customers, not And or you everything And we and in customers. HVAC, the we're their We tractor maybe see backlog away. delay, could but don't through it's of And a systems sure at be our see commercial Thermo with small engineers you're working amount OEMs, end demand side respect gets

as we being see So orders canceled don't well. those

the backlog think is we overall, strong. So

do been demanding demanding question our money the from amount our them, problems is with we're seeing. and the work complex certainly that or that's As of customers' out – as customers, that don't what future. in more Asia, doing we're in most the But about incredible practice your of we're the going continue that's solve EMEA. Trane want because not of Technologies do. and far We not in and Americas That a parts We about. not we'll demand – which in to what to always upfront, in has cash we

Scott Davis

Sounds good you. Dave. Thank Good luck.

Dave Regnery

Okay. it. Thanks. Appreciate

Operator

Sachs. from is Goldman Joe next with Ritchie The question

is open. line Your

Joe Ritchie

Thanks. Good morning, everyone.

Dave Regnery

Hey, Joe. are How you?

Joe Ritchie

All Dave. good. Thanks,

in resi start I'm baking for XQ, whatever give pricing off XXXX? headwind The specifically in throughout supposed question maybe in price/cost to million us the $XX for just And this can curious on are you on we'll for rest to you Chris. then – details how So just look the $XX what that's of quarters like year. the on million pricing,

Chris Kuehn

Joe. hey, Yeah,

So I'll question with I second start mean, first. the

just we a of points really it's a about price. had three portfolio And pricing, price our the across increases unprecedented remind across XXXX, an basis level you, majority of on enterprise and at year price half on to the So the of company. full in three level

very So really very, strong.

call place increase announced really majority – products. here in what started have XXXX of and are We of first our to I'll applied the the that and that in price January,

see the and as So and as remain we it's we of go year we follow, year kind evaluate through I today inflation industry saw on we based were we're inflation. as nimble that think the the to last as we going nimble

over competition marketing price. first had the first being on got dynamic, quarter quarter first that quarter the negative quarter We modest price likely of and exactly, price/cost a inflation we last that very price the year. QX. timing Again, of carrying QX. a year, inflation significant we the the the in from terms last a our in ahead in the slightly first right offset strong significant some positive saw over half. into nearly announcements. of very now in the We're we level carrying And of in quarter. price And we're fourth price/cost in the fourth We were negative see On the

XX% that drive So the helped a leverage in the first year near quarter ago.

XXXX see We So really QX. inflation in image lap mirror of against we're inflation is. going XXXX, to, it's the a unfortunately, year, very for modest

is first of like to the lot the inflation the the quarter. a start in year inflation going half The of second second or inflation. XXXX in more we modest to much of terms starting in of half then look XXXX third half the a And comparable comping

strong second and price/cost it very really good in of right returns probably So, half first best we're now, to the view is in year the and strength think then our leverage. I half, the negative

Joe Ritchie

coming guys in that the deflation about as guide? Chris, thinking of in the the just point curves following second about you in into are but on down you baking in XH, your inflation, cost second how talked And And We've half? maybe are part up half. numbers

Chris Kuehn

futures I of deflation they're baking until to copper and of aluminum fair. now we're I guide, year. pretty not I'd say into be lot mean, balance whole the the Joe, Yeah, and look from a the at narrow

What's there. impacts bit So show deflationary to I is of steel. lot don't a a of see starting deflation

today Let's if price from a But start see and it our based really would months. where buying steel for impact habits deflation at months point, on starting that in seeing just out we there, our six us locking six this goes.

half we're So out start not see if that, environment, a plays could tailwind seeing but second which in it we'll turns out of if deflationary be then. that we on, year, start counting we see how to the but then a the that

Joe Ritchie

guys. Thanks great. Okay,

Dave Regnery

Joe. Thanks,

Chris Kuehn

Thanks.

Operator

with is next from The BMO. Tiss Joel question

Your open. line is

Joel Tiss

Hi it guys. How's going?

Dave Regnery

Hey Joel, How are you? Congratulations.

Joel Tiss

Thanks.

Dave Regnery

I hear … the retirement

Joel Tiss

you. Thank

Dave Regnery

great all your …is thanks through we'll And and We Congratulations, coverage for in Trane years. your the of future. miss certainly Technologies/Ingersoll-Rand appreciate. you.

Joel Tiss

Yeah. me Well, going let it not. see at or if I'm good be any to

Dave Regnery

some rods, fishing get you okay? We'll

Joel Tiss

make if longer-term talk all of looking your of, five any And wonder go. little kind that And stuff. bit margins? to about what don't the and new the a you kind out? you sure no factors could and work I two you operating cap there five to so, over on really see can that your Yeah, I bottleneck years guy factors have the that or on do like, kind upside the next Like EBITDA there's years today, of questions, know, just what you being are

Dave Regnery

investing continuously the And know the question. about Yeah. Even in a We half ensuring but of a with be Joe, price have we strong you're hitting is heard tough, has you going little first got inflation. us long-term. it's for struggle image through do though to great constraints. talk And We'll year with chain it. Chris it a really that mirror carryover some have price strong we'll going as to supply right, this to well. we're innovation

know I have about first decarbonization the do some half before Since cool and be our caught and that a ESG I it to products That's is we a So it had investors, fact term. this to other time. about green. a continue been proud set for at was our going minute, they half generations, green our through we're better the we're tough. going a you're And committed like, of we're science-based first What really Trane be base -- what's targets. innovation. making upside see over to that's going what's day working investments we to this place was XXXX, Trane will happening cut of Trane for Trane most our And this I next from where our and Technologies and the we be tremendous And me science-based long second Technologies of was what of we world whole first for to Technologies. to for off-guard, long long going our see a it's that's not thought we the of are purpose. We and do ESG with science term. going proud second our the now know of to me targets. that set to about we've a not that in was possible, we're had and 'I'm is I call a for for making challenging what Technologies. the We're committed little bit asked to, difference because

Joel Tiss

are to maybe but the the little transport turning a And a from us business it's kind of little trucks of -- just impacts last, out a you far then what sense also, little can on EV? give there

Dave Regnery

strategy our there, part of is Yeah. Joel. big Electrification a

top again there. game you're on of again, you're your So -- once

or a So a we and going highways. unit yeah, that's -- the we're have -- couple we down have fact, up in --

it. you're see trailer you electric. that a in XXX% is California, If That unit is may

we innovation there. working a so have we're lot on neat And of really

the the market -- highway tremendous are to -- staying customers King think it. develop data there about to anyway, again, is of from think ahead The it's as, able products. electrification down loving Our up and that's going vehicles, of engineers Thermo the continue extract EV our and with we've for to about once been that unit our

a around neat with lot those the we and came now of We tractions traction, lot products have that home I was ago globe really delivery, of products. guess, out months some it the a with about, XX we're getting in

Joel Tiss

very All Thank right. much. you

Dave Regnery

luck okay. right. you, All Joel. Good to

Joel Tiss

Congratulations.

Operator

with question JPMorgan Chase. from Steve Tusa is next The

open. is Your line

Unidentified Analyst

between Can you Good break HVAC on Hey. -- business. guys. commercial your if piece, morning, first I on then This for growth that possible? equipment? And services had Steve. unitary versus year within Pat expectations pod, the global this organic equipment down for expect is what a my is you for one versus

Chris Kuehn

growth, it's I'll we services full start. expect year a Hey, Chris. equipment and Pat, strong basis. on Look,

a installed expect the As we've orders orders carrying XXXX, talked past, into that applied and the have over we nice service base as And drives business grow just services well. in and in to tailwind. our given XXXX backlog we

it this We'll good plan now. to But typically update in kind we've which the leave of highlight the that year. as got each growth for go I'd of both do So we we at some growth quarter-by-quarter, for categories.

Dave Regnery

over were of XX%. And don't The other business add, but quarter, I service Pat, it up thing XX%, I is in we've And rates performed for our this and XXXX. to year in connected fourth very Dave, the expect in intelligent very, but global well lot services nice grow commercial is our that would basis, this growth very all services order nice not at seen a be business. Really HVAC as HVAC service service our a just commercial for with And in on well, our is would solutions. growth. on

nicely very business And growing us. so is the for that of side

Unidentified Analyst

specifically, versus versus slow think any to half growth volume resi then to you dynamics? I you market And drives have but if did had half the much end growth? dynamics, be say difference start in quarter going missed on second in and this, Okay. may between first particular first I the second half try. do first half And there's

Dave Regnery

it's Yes. within first half in first the half the specifically, to supply right, components end it's that isn't is really chain, don't clear, what's I be constraining the growth markets, around supply electronics. the just And the -- which chain.

end So, it's markets. not

got through of As our comps accelerate, -- rolling some first good a outlined, you half, over. it quarter, sign. the tough wouldn't quarter, so the inflation as I as the end see think Chris in continued we markets got -- which first to fourth is

also supply a at have will the second least over, half chain through we We we but first We choppy we there compares the price some of the see the price. rolling into head light the against some year. tough year. have clouds of through half -- have as at But the

Unidentified Analyst

you. Got

you're supply chain resi saying? of impacts so equally is of and kind what and kind that transport And commercial

Dave Regnery

unfortunately I affects think it most industrial companies.

Unidentified Analyst

Appreciate Thanks it. for sense. the Make Yes. time.

Dave Regnery

Sure. No Pat. problem,

Chris Kuehn

Thanks, Pat.

Operator

is Andrew The Bank next from of question Obin America. with

is Your line open.

Emily Xu

Andrew Hey, Emily morning. Xu is for This Obin. on guys. Good

Dave Regnery

Hi, Emily. How are you?

Chris Kuehn

morning. Hey. Good

Emily Xu

Hey. I’m good.

I So question IAQ. a had on

tailwind to IAQ X% guided any to of do being that previously and And to seen have in given you you IAQ growth per end Omicron X% stick Does had You products, expect surge? momentum revenue year. where for still points additional in that Thanks. the demand XXXX?

Dave Regnery

be It's Yes, Emily. X of tailwind X thought We to said revenue early bit we a would X year little -- in be that will actually last actually. from the north IAQ. it

tailwinds embedded see air our these to that expect every Trane indoor And some quality So to on quality. day-two. we in indoor expect continues the see continue air probably for indoor air launched going to wouldn't quality our solutions for quite nice been and what grow. We're year. and very we our up have it's new several audit we seeing would backlog equipment. you for to air Technologies. year tailwinds But because compound to I remember, tell time. becoming quality into to new not from ended harder we're I it count, quality well call initiatives indoor side solutions. is day-one, But do there, the X% are indoor especially air We've to

right? in peroxide of got as innovation And But photocatalytic think bus a traction of unitary said, part systems. we're there. pipeline. We've Thermo business piece lot it well our our like things a doing of we're a continue is of Really the the So, just of cool great the some some with making dry with to we becoming solutions. still King. as hydrogen in in envelope that controller quality equipment, push as Indoor air unit with transit

Emily Xu

has And visibility sort been back stimulus stimulus to Awesome. HVAC you sense passed of how the of projects what are For Or you can kind Thanks. then, example, stimulus bill of on funding? do on K-XX the have scope trace of was the have passed? since federal already for do much a there you any spent education?

Dave Regnery

as long can is on know -- -- they there we're the over versus the with two, stimulus what do, tell one, dig capital may on into know them should the get restrictions I customers. school that our and I be you we we you know that the infrastructure side you are lot you funding this, going absolutely, we're what the have on helping customers to how day education would where districts side. we flowing. day some all Yes. seeing a through We're But if but funding may them the and exist dynamics could the of don't tiger not, doing there's helping that they term. working I on way specific, the funds actually the going And them so navigate that this, helping a local but -- there. our with deploy those detail works to And that team have of be dedicated to

Emily Xu

Thank Great. you.

Operator

John Credit Suisse. The from with next Walsh question is

Your line open. is

John Walsh

good everyone. morning Hi,

Dave Regnery

Hey John, how are you.

Chris Kuehn

Good morning.

John Walsh

you. order you see tough obviously product they’re Hey, declines, the think. a comps, did of first lines those were about Thank the that maybe highlight clarification. some is just might you When I but the one across talking board,

Just product that you out? those comment enterprise specific if understand, an called to to particular or wanted was lines

Dave Regnery

business, -- XX%, be strong up it, King backlog a that bookings within mean, will very And certainly rate was our right? okay? our mean, so that rate, John, I our over going twice bookings last not If will I it's Yes. during there, have to Thermo we So to case order year continue. going burn you about the that's think year. the

what So to if really bookings looking of the quarter order negative really But backlog or you revenue. surprised, is two don't rates within need see be be you output a King. out to and combine Thermo incoming with

Chris Kuehn

Yes.

as XXXX backlog, strong our historical ending with above be. XXXX what the a level and kind we very through well of view now, is Our starting John, year look will

year So end a some very to the we that two strong Dave's very see order of quarters 'XX. against by But still point, of going being one or comping the some growth. healthy into backlog

Dave Regnery

so And resi in we'll have tough just aware. okay, you're comps too,

the make I Just everyone just clear. to backlog, on want sure, is

be Our end billion backlog $X.X of will it at the was the year.

If you our percentage in look revenue backlog And like year, be it's your a guide, XX%. at XX%. normal that of would midpoint as a like

very, we for very mean, a the very, I have year. backlog So strong

John Walsh

pipeline you look Great. and about thinking M&A? as on And and appreciate you're share repo just maybe Thank of called How year January. of deal one No, balance you. a for toggling the does out quick repo uses that. cash. elevated in Obviously, spend the between the I

Dave Regnery

a we being robust lot imagine, as I major you our Yes. at the mean, is would of HVAC industry. player a opportunities, pipeline and M&A in look

always have we pipeline that we a full So evaluate.

Chris Kuehn

John, $XXX I million Hi, would add, repurchase, billion $X.X here share did on and to January. repurchase in we M&A the

$X.X spent billion approximately remaining year. guidance, repurchase to to the how we of a our whole modeling just quarters yet of is would year. the M&A the the kind be over remaining share the be for share given in much versus deploy billion And we from let's identify ratably say, $X.X perspective, assumed left can't repurchase, just on So

everyone on be that update certainly, $X.X of a would some we preference value But we'll to So as M&A. spend go billion quarter-to-quarter.

John Walsh

questions. Great. Appreciate the Thanks for it. taking

Dave Regnery

John Problem. No, Thanks,

Operator

Gautam is Khanna The question from next with Cowen.

open. is line Your

Gautam Khanna

guys. morning, Hi. Good

Dave Regnery

Gautam. you? How are Hi,

Chris Kuehn

morning. Good

Gautam Khanna

Doing to well. just up. well, Doing follow I wanted

those stimulant as exist for may So terms of I are to savings think if whatever but concerned does been of the can Are certain pricing or power earlier the contract, in commercial of that to It's tool back space, performance commercial you customers in on opposed demand. like allow targets bit all, guarantee sort changing sort is if targets, of just the way? it this, have contracts about paid little how utilizing it? the reductions, Josh for a before? greenhouse maybe energy their didn't hit who talk the as evolving? some business in that just question ESG And can a a about to as model own, any HVAC you if get where on asked seeing you presumably at meaningful pay you they

Dave Regnery

Gautam, could different we built than one a that calls is, question, question. on how actually We're tell That's things was very, a innings that, tell getting their But of great did, we from little it's And would help the a of and asking questions. lot customers that and out there's we them there. practiced and bit you environment. a decarbonize very I early you ourselves obviously, maybe some great would went that's I first.

reduce of our greenhouse part commitments own to gas. So is our

well practices them its our what that take getting implementing we've in so decarbonization-as-a-service very type we you're the we're on show could traction. is that best there many early you So I and tell as traction. done. certainly of it's would customers innings some environment to But but facilities getting

Gautam Khanna

we pricing it has you the greater in historically than And time actually resi, think customers. example? a mean, market, for been more of think I than just competitive in follow-up, it kind where of power commercial as do confers the over the of being case concentration

Dave Regnery

Yes. It's a question. fair

write whenever very I the you chapter efficiency, do I complex high for would services we've coming that have But to had tell to problems our think that to customers, years the in products probably we and tend here. solve we'll be able well. that

Gautam Khanna

color. Appreciate the you. Thank

Dave Regnery

Thanks. Okay.

Operator

question Dray Capital is with from next The RBC Markets. Deane

Your line open. is

Deane Dray

morning, Good everyone. you. Thank

Dave Regnery

you? Hi, How are

Chris Kuehn

Good morning.

Deane Dray

Doing well. million first did comparable you size Thanks. got have that that I from but would XQ? this, pushed out XQ push-out the be missed to might revenue any the from $XXX into quarter

Chris Kuehn

we million the in pushed mean, revenue quarter, we so that thing obviously, which in half with quarter, We will enter range. probably in that I we Yeah. $XXX do of But from same you the recoup some have quarter, we that suppliers the did. out anything. okay, QX – did saw in did that fourth we periods. going fourth into as would had the same One in in that we It's our we the from fourth visibility visibility not didn't realm working have different did be that's QX. it QX about miss there, future to we have – not, that QX

our not So that including guide. obviously, we're in

Deane Dray

quarter, the that the guide is it? including Not for first

Dave Regnery

That's correct. That's correct.

Deane Dray

it. Got

Dave Regnery

for Obviously, be first will in quarter. will within sure, not the and backlog but the it year, the churn

Deane Dray

still? components mostly Is that electronic

Dave Regnery

have. Yeah, areas still electronic we some but significant yeah. as Electronic have components I said still components have is earlier, still supply we got chain the biggest improved, -- concern that there. There has some have of choppiness been

Deane Dray

Great.

last question Just for me.

Can these On returns. you're year, for size own you us what your doing? projects? returns investment the getting for maybe CapEx kind increase of referenced in some de-carbonization you on the an And of higher example you're

Chris Kuehn

bit a expecting Yeah, right X% X% to now it but still categories in would see further plants, CapEx, little on we automation be multiple around X%, range kind driving Maybe sustainability of Deane, kind XXXX, chain manage thing higher improving as within year one front-end The our projects side. in capacity again transitionary the expansion, to closer the here this in of supply resiliency driving categories highlight systems. of through XXXX. think I we to be to

off-line of And lower As and machinery to efficiency. machinery should on machinery on three you're for just the technology impact we a examples take usage. factory of pieces have older environment, lower pieces to that where improvements that a you've us, given today, deploy of there's impact we able got piece one energy a in

begin things we the are types those of So to in. lean

Dave Regnery

don't Midwest, only In dramatically asset's it was energy to took I through program old run great piece are out, – take it's have space. that would our a of working technology. factories facility. literally the old the were These and fully around I I pieces me equipment depreciated. of examples the they out and many you're just Dave. increase of that in newer the equipment the load many showing as new in them machine those prior XX% the our where service. is one This at And able had time. the out they're of our pieces in throughput were factories we they reduce of with world. old cases, equipment been need We with the newer of they four mindset a put of the

to you're need So what time the wait the benefit. – And significant new wait it's sort of Deploy don't say new we we it's all for is what technology. to for and going don't get – you what's talking same we're about what do. today is available

Deane Dray

you. Thank good. sounds Well,

Dave Regnery

you. Thank right. All

Chris Kuehn

Thanks.

Operator

the any over closing question-and-answer remarks. Zac our I'll Nagle session. concludes for That turn to call

Zac Nagle

thank Chris. on I'd to for Thanks, us everyone Great. call. like joining today's

and for around you we'll road you on always, seeing As many great forward days a the the be in And that weeks. may of Thank we have you. XXXX. any coming look have day. in questions to hopefully And

Operator

this disconnect. call. you may Ladies Thank for and concludes gentlemen, today's now And participating. you conference

Trane Technologies (TT) 31 Jan 222021 Q4 Earnings call transcript