Trane Technologies PLC at Barclays Industrial Select Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Julian Mitchell - Barclays - Analyst : <_ALACRA_META_ABSTRACT>Let me start off, I guess it's a question that exercising the minds of a lot of investors right now around backlog. It's a very high number, has been a very high number for a couple of years. How are you thinking about the backlog progression from here? How confident are you that Trane can still generate revenue growth at 2 times plus?

Question: Julian Mitchell - Barclays - Analyst : Thanks very much, Dave. And when you think about incoming orders, there's been some noise (technical difficulty) but when you think about incoming orders on the equipment, with that noise in data center with interest rates that are still high, how confident are you about orders growth and order rates?

Question: Julian Mitchell - Barclays - Analyst : Perfect. And you mentioned on the Commercial HVAC side, verticals, 14 of them you had orders up in almost all of them except one last year. When you're looking at this year ahead, are there any of those 14 that you think things may move around much? I think education people ask about, life sciences is the one that wasn't up last year.

Question: Julian Mitchell - Barclays - Analyst : That's good context. And within data center, specifically, people can go down all sorts of rabbit holes, but I guess one question that often comes up is around liquid cooling technology. What are Trane's aspirations in there? How does it feel liquid cooling compliment or substitute for the traditional space cooling business that you're very strong? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 2:50PM, TT.N - Trane Technologies PLC at Barclays Industrial Select Conference

Question: Julian Mitchell - Barclays - Analyst : And when you think about the services business, how should we think about the penetration or the attachment of your services business, maybe depending on those verticals or different (multiple speakers) --

Question: Julian Mitchell - Barclays - Analyst : And when you're looking at the, say the light commercial, and people have different definitions of that market, but for what you're doing in light commercial, there's no data center there. Maybe it's a little bit more interest rate sensitive. How do you assess the health of that market?

Question: Julian Mitchell - Barclays - Analyst : Great. And when you look at the applied side, it seems like lead times have been long for a while that may help with pricing and so forth because of tight supply. You and your peers have been adding some capacity, but demand growth is still strong. So from the outside, how should we think about how lead times trending? How much of your orders being booked today for delivery in 2026, for example, and applied?

Question: Julian Mitchell - Barclays - Analyst : And the bottleneck, to your point, it's more around the power side?

Question: Julian Mitchell - Barclays - Analyst : And competition wise, some parts of the market, just because of the expected growth, like say liquid cooling, it feels that there's a lot of people who have been pulled into it, adding capacity, making CDUs, and so forth. How do you assess competition, the discipline of it, the level of it across the whole Commercial HVAC business?

Question: Julian Mitchell - Barclays - Analyst : One thing on that point around breadth and the lead time discussion, how do you think about price right now? I think you guided for a point of price or so for this year, and that's an enterprise-wide number so (technical difficulty) how do you think about price across the business?

Question: Julian Mitchell - Barclays - Analyst : Great. And you mentioned, Chris, the guidance for this year and so on. I think that the first quarter guidance surprised people when you issued it was stronger. I think that many expected, partly people worried about the pre-buy hangover in residential. Maybe help us understand the thinking behind that first quarter guide and how comfortable do you feel about the resi market in general?

Question: Julian Mitchell - Barclays - Analyst : Perfect. Thank you. And then on transport, there's been a tough market for a long time. You mentioned that it's down a lot (multiple speakers) what's needed to get that cycle --

Question: Julian Mitchell - Barclays - Analyst : Great. And then on margins, you have the 25% plus organic operating leverage framework. Your own margins in the P&L have been moving up in recent years, which is a good thing. But when you take that plus the service tail that you're building from all the equipment growth recently, and I feel that there should be upwards pressure on that operating leverage medium-term, any thoughts on that?

Question: Julian Mitchell - Barclays - Analyst : Perfect. Well, with that we have to switch the audience response survey questions. So if we could bring up the first one, do you currently own shares in Trane?

Question: Julian Mitchell - Barclays - Analyst : Next question is around general bias right now towards Trane. Very positive. Third question is around through cycle earnings growth of Trane versus the call it multi-industry group average.

Question: Julian Mitchell - Barclays - Analyst : Fourth question is around what should Trane do with excess cash? So organic reinvestment. Penultimate question is around the multiple, I think. What P/E should Trane trade at?

Question: Julian Mitchell - Barclays - Analyst : So generally a premium to the S&P, I don't know what maybe they thought it was sales or something. And then the last question is around yeah, why it didn't look like there was much ownership in the room, what's the biggest single reason for that on fundamentals? So [core] growth has been okay, I think. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 2:50PM, TT.N - Trane Technologies PLC at Barclays Industrial Select Conference