"2022 marked another year of top quartile financial performance for Trane Technologies,” said Dave Regnery, chair and CEO. “With focused execution of our purpose-driven strategy, we delivered record bookings, revenue, operating margins and earnings per share, while successfully navigating inflationary, supply chain and macroeconomic challenges. While the macroenvironment remains dynamic, we continue to see high levels of demand for our sustainable products and services, with the tailwinds underpinning our end markets only growing stronger.
Over the last five years, we have delivered compound annual revenue growth of 7 percent, adjusted EBITDA margin expansion of 250 basis points and free cash flow as a percentage of adjusted net earnings of 105 percent, while deploying $11.5 billion of capital. With our focused strategy, ongoing reinvestment in business innovation and uplifting culture, we are well positioned to continue delivering differentiated shareholder returns over the long term."
Europe, Middle East and Africa (EMEA) Segment: innovates for customers in the Europe, Middle East and Africa region. The EMEA segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
- Reported bookings were down 5 percent; organic bookings were up 2 percent. Commercial HVAC organic bookings were up low-teens.
- Reported revenues were up 16 percent, including approximately 5 percentage points of acquisitions offset by approximately 12 percentage points of negative foreign exchange impact. Organic revenues were up 23 percent.
- EMEA Segment exited the fourth quarter of 2022 with backlog approximately 40 percent more than historical norms.
- GAAP operating margin was up 140 basis points, adjusted operating margin was up 150 basis points and adjusted EBITDA margin was up 80 basis points.
- Strong volume growth, positive price realization and productivity more than offset material and other inflation related to supply chain challenges and higher costs to serve customers. The Company also continued high levels of business reinvestment.
Asia Pacific Segment: innovates for customers throughout the Asia Pacific region. The Asia Pacific segment encompasses heating, cooling and ventilation systems, services and solutions for commercial buildings and transport refrigeration systems and solutions.
- Reported bookings were down 12 percent; organic bookings were down 6 percent, driven by tough prior-year comps.
- Reported revenues were up 11 percent, including approximately 3 percentage points of acquisitions offset by approximately 11 percentage points of negative foreign exchange impact. Organic revenues were up 19 percent.
- Asia Pacific Segment exited the fourth quarter of 2022 with backlog approximately 50 percent more than historical norms.
- GAAP operating margin was up 230 basis points, adjusted operating margin was up 240 basis points, and adjusted EBITDA margin was up 200 basis points.
- Strong volume growth, positive price realization and productivity more than offset material and other inflation related to supply chain challenges and higher costs to serve customers. The Company also continued high levels of business reinvestment.
Full-Year 2022 Results
- Reported bookings were up 4 percent; organic bookings were up 5 percent.
- Reported revenues were up 13 percent, including approximately 1 percentage point of acquisitions offset by approximately 3 percentage points of negative foreign exchange impact. Organic revenues were up 15 percent.
- Exited full-year 2022 with backlog over 2 times historical norms.
- GAAP operating margin was up 80 basis points, adjusted operating margin was up 30 basis points, and adjusted EBITDA margin was up 10 basis points.
- Strong volume growth, positive price realization and productivity more than offset material and other inflation related to supply chain challenges and higher costs to serve customers. The Company also continued high levels of business reinvestment.
Full-Year 2023 Guidance
- The Company expects full-year 2023 reported revenue growth of approximately 7 percent to 9 percent; organic revenue growth of approximately 6 percent to 8 percent versus full-year 2022.
- The Company expects GAAP continuing EPS for full-year 2023 of $8.10 to $8.40. This includes EPS of $0.10 for non-GAAP adjustments. The Company expects adjusted continuing EPS for full-year 2023 of $8.20 to $8.50.
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