Letter to Shareholders

Continue delivering long-term value

Dear Fellow Shareholders: 


Every day at Trane Technologies, we boldly challenge what’s possible for a sustainable world. Climate change, urbanization, indoor environmental quality and other megatrends are intensifying, and so is customer demand for sustainable solutions. We are innovating further and faster, taking action today to transform the world for a better tomorrow.

Sustainability is Our Business Strategy

Sustainability has long been at the core of our strategy. Nearly ten years ago, we led the industry transition to low-global warming potential refrigerants. We established our first set of climate commitments, and exceeded them two years early in 2018. Since then, our ambitions and actions have grown, with significant progress toward our bold 2030 Sustainability Commitments. We are one of only about 50 companies in the world to have two sets of carbon reduction commitments validated by the Science-Based Targets initiative.

We continue to set the pace for what’s possible in our industry and for the world, decarbonizing homes, buildings and the cold chain with clean, energy-efficient solutions. We demonstrated our leading-edge approach for the Mater Dei Hospital in Malta with an electric heating and cooling solution that reduced energy use by over 58%, improved air quality and reduced emissions by 2,700 metric tons in its first year alone.

Living Our Purpose Begins With Our People

Our purpose-driven strategy is powered by our uplifting and inclusive culture. We know that diverse and inclusive teams are more collaborative, creative and better at solving problems. Operation Possible, our employee-led innovation program, is a perfect example of how our people bring their unique ideas forward to identify solutions that will impact the world for generations to come.

In 2021, we continued to further strengthen our culture, creating an agile and flexible environment that keeps our people engaged, productive and safe. We increased diversity in our workforce and enhanced our learning and development offerings to equip leaders, including women and people who are racially and ethnically diverse, with the skills and resources they need to thrive.

Transforming Tomorrow Through Innovation Today

We also continued our relentless investment in innovation. In 2021, we launched 62 new products and services, continuing to broaden our applications and deepen our advanced technology and analytics offerings. From our WellsphereTM  solutions that control and improve indoor environmental quality, to Advancer Hybrid refrigerated transport units that automatically detect and adjust to low-emission and low-noise urban zones by switching to electric mode, Trane Technologies is enhancing customer performance while sustaining natural environments.

Sustained Exceptional Performance is Proof of Purpose

Our strategy not only delivers innovative solutions, it also fuels strong financial performance over the long-term. Since 2018, we have delivered revenue growth at a compounded annual growth rate of 5% and increased adjusted continuing earnings per share* at a compounded annual growth rate of 14%. Over this same time, we expanded adjusted EBITDA margins* by 210 basis points, with exceptional free cash flow* that averaged 110% of adjusted net earnings*. This supports our balanced capital allocation strategy, focused on deploying excess cash to opportunities with the highest returns for shareholders.

In 2021, our team delivered record bookings, revenue, operating margins and earnings per share. Our strong free cash flow enabled higher levels of investment in business innovation, while returning $1.7 billion to our shareholders through dividends and share repurchases. We are entering 2022 with record backlog of $5.4 billion, up 88% from 2020. Through our comprehensive Business Operating System, we continue to aggressively manage global inflationary, supply chain and COVID-related labor challenges.

“As a climate innovator, we have a bold vision and ambitious goals for a better future.”

David S. Regnery, Chair and CEO
Dave Regnery

Positioned to Consistently Outperform  

As a climate innovator, we have a bold vision and ambitious goals for a better future. And through continued innovation, excellence in execution and the power of our people, we’re well positioned to create differentiated, long-term value for our shareholders.

I’m confident that we will continue leading the market with cutting-edge climate solutions while accelerating the world’s progress in solving global sustainability challenges. I am proud to lead Trane Technologies as we continue to transform tomorrow, today.

David S. Regnery

Chair and CEO

*These are non-GAAP financial measures. Reconciliation of non-GAAP financial measures can be found preceding the 2022 Notice and Proxy Statement.