Trane Technologies (TT) Bank of America’s 33th Annual Industrials, Transportation and Airlines Key Leaders Conference summary

Inflation, tariffs, and pricing

• Inflationary pressures and tariffs have increased since January, but these are reflected in the updated guidance for 7% revenue growth and 13%-15% EPS growth for the year.

• Over 95% of U.S. sales are manufactured or assembled domestically, helping manage tariff impacts.

• Price increases were announced in February and effective April 1, with ongoing monitoring for further adjustments.

• The business operating system has enabled staying ahead of inflation for several years.

Commercial HVAC and data center growth

• Applied HVAC bookings have grown over 100% for three consecutive quarters, with broad-based strength across data centers, healthcare, education, government, and industrial sectors.

• Data center vertical is strong, but growth is not limited to this segment; most sales staff focus on other verticals.

• Sales teams are compensated on commission and develop expertise in specific regions or verticals.

• Service opportunities in data centers are significant and expected to grow as installed base expands.

Pricing, margins, and acquisitions

• Enterprise pricing contributed over 1.5 points in Q1, with guidance for about 2 points for the year.

• Applied systems are viewed as long-term customer relationships, with service revenue expected to grow.

• Incremental margin framework remains at 25%+, with potential for upside as new acquisitions scale.

• Stellar acquisition is expected to reach $1 billion in revenue in 2-3 years, with mid-teens EBITDA margins.

• Expansion includes new facilities in Texas and Florida to support backlog and growth.