Analysis of Reportable Segments
Trane Technologies plc operates in 3 segments: North America and Latin America (Americas); Europe, Middle East and Africa (EMEA); and Asia Pacific.
Segment Profit Margin
Trane Technologies plc, profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 18.40% | 18.33% | 17.32% | 17.32% | 16.98% |
| Europe, Middle East and Africa (EMEA) | 16.62% | 18.47% | 16.12% | 15.19% | 16.53% |
| Asia Pacific | 18.86% | 18.51% | 16.85% | 14.58% | 13.39% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- North America and Latin America (Americas) Segment Profit Margin
- The profit margin in the Americas region showed a consistent upward trend over the five-year period. Starting at 16.98% in 2018, it increased slightly to 17.32% in 2019 and remained steady at that level in 2020. The margin then continued to rise, reaching 18.33% in 2021 and slightly improving to 18.4% in 2022. This steady increase suggests continuous operational improvements or favorable market conditions in this region.
- Europe, Middle East and Africa (EMEA) Segment Profit Margin
- The EMEA region demonstrated more variability in profit margins over the five years. The margin started at 16.53% in 2018, declined to 15.19% in 2019, indicating a downturn possibly due to market challenges or increased costs. It partially recovered to 16.12% in 2020 and experienced a significant increase to 18.47% in 2021, reflecting a strong improvement. However, in 2022, the margin decreased to 16.62%, suggesting some instability or headwinds affecting profitability towards the end of the period.
- Asia Pacific Segment Profit Margin
- The Asia Pacific segment showed the most consistent and significant growth in profit margin from 2018 to 2022. Beginning at a lower base of 13.39% in 2018, the margin increased steadily each year: 14.58% in 2019, 16.85% in 2020, 18.51% in 2021, and finally 18.86% in 2022. This upward trajectory indicates improving profitability and potentially expanding market presence or operational efficiency in the Asia Pacific region throughout the period.
Segment Profit Margin: North America and Latin America (Americas)
Trane Technologies plc; North America and Latin America (Americas); segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment adjusted EBITDA | 2,326,300) | 2,008,800) | 1,677,700) | 1,742,100) | 1,565,500) |
| Net revenues | 12,640,800) | 10,957,100) | 9,685,900) | 10,059,500) | 9,219,400) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 18.40% | 18.33% | 17.32% | 17.32% | 16.98% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment adjusted EBITDA ÷ Net revenues
= 100 × 2,326,300 ÷ 12,640,800 = 18.40%
- Segment Adjusted EBITDA
- The segment adjusted EBITDA shows a consistent upward trend throughout the five-year period. Starting at approximately $1.57 billion in 2018, it increased steadily each year, reaching about $2.33 billion in 2022. The most notable growth occurred between 2021 and 2022, with an increase of nearly $318 million, indicating improving profitability and operational efficiency within the segment.
- Net Revenues
- Net revenues also experienced a positive trajectory over the analyzed period. Revenues rose from approximately $9.22 billion in 2018 to $12.64 billion in 2022. Although there was a slight dip in 2020, likely influenced by external factors, revenues quickly rebounded in 2021 and 2022. The most substantial year-over-year revenue growth occurred between 2021 and 2022, reflecting strong market performance and demand within the Americas segment.
- Segment Profit Margin
- The segment profit margin exhibited moderate improvement, beginning at 16.98% in 2018 and increasing to 18.4% by 2022. The margin remained relatively stable between 2019 and 2020, both at 17.32%, then saw a notable increase in 2021 and a slight further rise in 2022. This indicates effective cost management and potential pricing power contributing to enhanced profitability.
- Overall Insights
- The Americas segment demonstrated solid financial performance over the five-year span, with consistent increases in both revenues and adjusted EBITDA. The gradual improvement in profit margins supports a narrative of strengthened operational capabilities. Despite a minor revenue setback in 2020, the segment quickly recovered, suggesting resilience and adaptability to market conditions.
Segment Profit Margin: Europe, Middle East and Africa (EMEA)
Trane Technologies plc; Europe, Middle East and Africa (EMEA); segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment adjusted EBITDA | 338,100) | 359,200) | 265,700) | 267,700) | 302,700) |
| Net revenues | 2,034,500) | 1,944,900) | 1,648,100) | 1,762,600) | 1,831,100) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 16.62% | 18.47% | 16.12% | 15.19% | 16.53% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment adjusted EBITDA ÷ Net revenues
= 100 × 338,100 ÷ 2,034,500 = 16.62%
- Net Revenues
- Net revenues demonstrate fluctuations over the analyzed period. A decline is observed from 2018 through 2020, with figures decreasing from approximately 1.83 billion US dollars in 2018 to around 1.65 billion US dollars in 2020. This downward trend reverses beginning in 2021, as net revenues increase to nearly 1.94 billion US dollars and continue up to approximately 2.03 billion US dollars by 2022. Overall, net revenues show a recovery and growth in the latter two years after a prior decline.
- Segment Adjusted EBITDA
- Segment adjusted EBITDA follows a somewhat similar pattern, albeit with less pronounced changes. It declines from about 303 million US dollars in 2018 to roughly 266 million US dollars in 2019, remaining stable near that level in 2020. A significant increase is observed in 2021 when EBITDA rises sharply to over 359 million US dollars, followed by a slight decrease to approximately 338 million US dollars in 2022. The trend suggests improved operating profitability from 2020 onward, reaching a peak in 2021.
- Segment Profit Margin
- The segment profit margin, expressed as a percentage, reveals variability consistent with the other metrics. It declines from 16.53% in 2018 to 15.19% in 2019, then modestly improves to 16.12% in 2020. A notable increase occurs in 2021, with the margin rising to 18.47%, indicating enhanced profitability efficiency during that year. However, the margin drops again to 16.62% in 2022, aligning closer to earlier period levels. This pattern reflects fluctuating profitability margins, peaking in 2021 but moderating afterward.
- Overall Analysis
- Across the period, the data reveals an initial decline in performance from 2018 to 2020, with reductions in net revenues, adjusted EBITDA, and profit margin. Recovery and improvement occur in 2021, marked by increases in all three metrics and culminating in peak profitability margins. The final year, 2022, sustains revenue growth but records a slight decrease in adjusted EBITDA and profit margin relative to 2021. This suggests that while sales expanded further, operational efficiency and profitability experienced some moderation. The trends imply sensitivity to external factors influencing performance, with 2021 representing a particularly strong year for the segment.
Segment Profit Margin: Asia Pacific
Trane Technologies plc; Asia Pacific; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Segment adjusted EBITDA | 248,300) | 228,500) | 188,800) | 182,800) | 173,200) |
| Net revenues | 1,316,400) | 1,234,400) | 1,120,700) | 1,253,800) | 1,293,300) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 18.86% | 18.51% | 16.85% | 14.58% | 13.39% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Segment adjusted EBITDA ÷ Net revenues
= 100 × 248,300 ÷ 1,316,400 = 18.86%
The analysis of the financial data for the Asia Pacific segment over the five-year period from 2018 to 2022 reveals several key trends and insights.
- Net Revenues
- Net revenues exhibited a slight decline from 2018 through 2020, decreasing from approximately 1,293 million USD in 2018 to a low of about 1,120 million USD in 2020. This downward movement suggests a period of contraction or challenges impacting sales during this timeframe. However, revenues rebounded in the subsequent two years, increasing to around 1,234 million USD in 2021 and further to about 1,316 million USD in 2022. This recovery indicates an improvement in market conditions or operational effectiveness in the latter part of the period.
- Segment Adjusted EBITDA
- Segment adjusted EBITDA consistently increased year over year, rising from 173.2 million USD in 2018 to 248.3 million USD in 2022. The growth was steady, with notable expansion between 2020 and 2021, where EBITDA increased by approximately 21%. This positive trend reflects enhanced earnings quality and possibly improved cost management or operational efficiencies within the segment.
- Segment Profit Margin
- The segment profit margin demonstrated progressive improvement over the entire period, moving upward from 13.39% in 2018 to 18.86% in 2022. The margin grew more sharply after 2019, with a pronounced increase from 16.85% in 2020 to 18.51% in 2021, and a slight further rise in 2022. This pattern suggests that despite fluctuations in revenue, profitability was enhanced, possibly through margin expansion strategies, cost controls, or a more profitable product mix.
- Overall Insights
- The segment showed resilience in profitability despite initial revenue declines. The increase in adjusted EBITDA and profit margins amidst revenue volatility points to effective management of expenses and operational leverage. Recovery in revenues after 2020 coupled with improved margins indicates strengthening financial health and potentially increasing market competitiveness in the Asia Pacific region during this period.
Segment Capital Expenditures to Depreciation
Trane Technologies plc, capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 0.90 | 0.65 | 0.44 | 0.69 | 0.94 |
| Europe, Middle East and Africa (EMEA) | 0.90 | 0.71 | 0.76 | 0.97 | 0.48 |
| Asia Pacific | 0.64 | 1.25 | 0.66 | 0.84 | 0.57 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- North America and Latin America (Americas)
- The capital expenditures to depreciation ratio in the Americas region exhibited a fluctuating trend over the five-year period. The ratio started at 0.94 in 2018, dropped significantly to 0.69 in 2019 and further declined to 0.44 in 2020. In 2021, there was a recovery to 0.65, followed by a marked increase to 0.9 in 2022. This pattern indicates an initial cutback in capital spending relative to depreciation, with a subsequent increase in investment activities in the last two years.
- Europe, Middle East and Africa (EMEA)
- The EMEA region showed a more variable trend in the capital expenditures to depreciation ratio. The year 2018 had a relatively low ratio of 0.48, which then nearly doubled to 0.97 in 2019. Following this peak, the ratio decreased to 0.76 in 2020 and further to 0.71 in 2021, before increasing again to 0.9 in 2022. This suggests cycles of increased investment followed by moderation, with a strong upward movement at the end of the period.
- Asia Pacific
- The Asia Pacific region displayed a moderate increase and variability throughout the period. Starting at 0.57 in 2018, the ratio rose to 0.84 in 2019, then decreased to 0.66 in 2020. A significant jump to 1.25 occurred in 2021, indicating capital expenditures exceeding depreciation levels substantially. However, this was followed by a sharp decline to 0.64 in 2022, which may indicate a reduction in capital investment or an increase in depreciation in that year.
- Overall Insights
- Across all regions, capital expenditures to depreciation ratios show volatility with no consistent single trend. The Americas region exhibited an initial decline followed by recovery, EMEA demonstrated peaks and troughs with a strong upward trend at the end, and Asia Pacific experienced a notable spike in 2021 before falling off in 2022. The ratios generally remain below or around 1.0, implying capital expenditures roughly keep pace with or fall short of depreciation, with Asia Pacific's 2021 figure being an exception. These patterns may reflect regional differences in investment priorities, asset lifecycle stages, or strategic focus during the analyzed period.
Segment Capital Expenditures to Depreciation: North America and Latin America (Americas)
Trane Technologies plc; North America and Latin America (Americas); segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 230,500) | 148,700) | 98,200) | 146,800) | 195,300) |
| Depreciation and amortization | 256,900) | 227,600) | 224,000) | 213,600) | 208,800) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.90 | 0.65 | 0.44 | 0.69 | 0.94 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 230,500 ÷ 256,900 = 0.90
- Capital Expenditures
- Capital expenditures exhibited a fluctuating trend over the five-year period. Initially, there was a decline from $195.3 million in 2018 to $146.8 million in 2019, followed by a further decrease to $98.2 million in 2020. The expenditures then increased to $148.7 million in 2021 and saw a significant rise to $230.5 million by the end of 2022. This indicates a renewed and strengthening investment in capital assets during the latter years.
- Depreciation and Amortization
- Depreciation and amortization expenses showed a consistent upward trajectory throughout the period. Starting at $208.8 million in 2018, these expenses increased annually, reaching $256.9 million in 2022. This steady rise suggests a growing depreciable asset base or increased amortization of intangibles within the segment.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation varied notably over the years. It began at 0.94 in 2018, reflecting nearly equivalent levels of investment and asset depreciation. This ratio decreased sharply to 0.44 by 2020, highlighting a period where capital investments lagged depreciation significantly. Subsequently, the ratio improved to 0.9 in 2022, almost returning to the initial level, which indicates a rebound in capital spending relative to the rate of asset consumption.
- Overall Insights
- The data suggests a strategic shift in the latter years, with increased capital investments potentially aimed at asset renewal or expansion following a conservative approach during 2019-2020. The steadily increasing depreciation aligns with an expanding asset base or updated accounting schedules. The restoration of the capital expenditure to depreciation ratio towards 2018 levels by 2022 signals a focus on maintaining asset sustainability in the segment.
Segment Capital Expenditures to Depreciation: Europe, Middle East and Africa (EMEA)
Trane Technologies plc; Europe, Middle East and Africa (EMEA); segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 25,900) | 23,600) | 24,700) | 30,000) | 14,500) |
| Depreciation and amortization | 28,800) | 33,300) | 32,600) | 31,000) | 30,000) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.90 | 0.71 | 0.76 | 0.97 | 0.48 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 25,900 ÷ 28,800 = 0.90
- Capital expenditures
- Capital expenditures in the Europe, Middle East and Africa segment exhibited fluctuations over the five-year period. Starting at $14.5 million in 2018, the amount more than doubled in 2019 to reach $30 million, indicating a substantial increase in investment. Following this peak, capital expenditures declined to $24.7 million in 2020 and further to $23.6 million in 2021. However, in 2022, capital expenditures rose again to $25.9 million, reflecting a moderate rebound compared to the previous two years.
- Depreciation and amortization
- Depreciation and amortization expenses showed a gradual upward trend from $30 million in 2018 to $33.3 million in 2021, implying an increasing base of depreciable assets or changes in amortization schedules. However, in 2022, there was a notable decrease to $28.8 million, which may be attributable to asset disposals, changes in depreciation methods, or lower additions of depreciable assets in prior periods.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation varied significantly during the analyzed timeframe. It began at 0.48 in 2018, illustrating capital spending was less than half of the depreciation expense. In 2019, this ratio nearly doubled to 0.97, suggesting that capital expenditures were almost equal to depreciation, marking a period of substantial reinvestment. The ratio declined to 0.76 in 2020 and to 0.71 in 2021, indicating relatively lower investment levels compared to asset consumption. In 2022, the ratio increased again to 0.9, signaling renewed investment efforts nearing the level of asset consumption.
Segment Capital Expenditures to Depreciation: Asia Pacific
Trane Technologies plc; Asia Pacific; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 11,200) | 20,600) | 7,700) | 11,300) | 7,500) |
| Depreciation and amortization | 17,600) | 16,500) | 11,600) | 13,400) | 13,200) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 0.64 | 1.25 | 0.66 | 0.84 | 0.57 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 11,200 ÷ 17,600 = 0.64
- Capital expenditures
- Capital expenditures in the Asia Pacific segment exhibited a fluctuating pattern over the five-year period. Starting at $7.5 million in 2018, expenditures increased to $11.3 million in 2019, before declining to $7.7 million in 2020. A significant spike was observed in 2021, with capital expenditures reaching $20.6 million, followed by a sharp decrease to $11.2 million in 2022. Overall, the trend lacks stability, showing spikes in investment activity, particularly in 2021.
- Depreciation and amortization
- Depreciation and amortization expenses displayed a gradual increase over the observed years. Beginning at $13.2 million in 2018, the figure slightly increased to $13.4 million in 2019, then experienced a dip to $11.6 million in 2020. After 2020, there was a consistent upward trend, reaching $16.5 million in 2021 and further rising to $17.6 million in 2022. This pattern suggests an increasing allocation of costs over the latter years, possibly due to higher asset base or changes in accounting estimates.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation showed notable variability. Initially, it was 0.57 in 2018 indicating capital investment was significantly lower than depreciation. This ratio increased to 0.84 in 2019, suggesting more investment relative to asset depreciation. It decreased to 0.66 in 2020, reflecting reduced capital spending compared to depreciation. In 2021, the ratio peaked at 1.25, indicating that capital expenditures exceeded depreciation, likely due to substantial investments in that year. By 2022, the ratio declined sharply to 0.64, indicating capital investment was again below the level of asset depreciation. Overall, this ratio indicates fluctuating investment intensity relative to asset consumption over the years.
Net revenues
Trane Technologies plc, net revenues by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 12,640,800) | 10,957,100) | 9,685,900) | 10,059,500) | 9,219,400) |
| Europe, Middle East and Africa (EMEA) | 2,034,500) | 1,944,900) | 1,648,100) | 1,762,600) | 1,831,100) |
| Asia Pacific | 1,316,400) | 1,234,400) | 1,120,700) | 1,253,800) | 1,293,300) |
| Total | 15,991,700) | 14,136,400) | 12,454,700) | 13,075,900) | 12,343,800) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- North America and Latin America (Americas)
- The net revenues for the Americas segment demonstrate a consistent upward trend over the five-year period. Starting at approximately $9.22 billion in 2018, revenues increased to about $12.64 billion by 2022. There was a slight decline in 2020, but the overall growth was strong, with the segment showing its highest revenue in 2022.
- Europe, Middle East and Africa (EMEA)
- The EMEA segment displayed moderate fluctuations during the period. Revenues decreased between 2018 and 2020, dropping from roughly $1.83 billion to approximately $1.65 billion. However, the segment recovered in 2021 and 2022, reaching around $2.03 billion in the latest year. This suggests some volatility but a positive rebound in recent years.
- Asia Pacific
- The Asia Pacific region showed a mild declining trend from 2018 through 2020, with revenues falling from about $1.29 billion to $1.12 billion. Sales then improved in 2021 and 2022, increasing to approximately $1.32 billion. The recovery in the last two years indicates resilience despite earlier decreases.
- Total Net Revenues
- The total net revenues across all segments increased steadily from around $12.34 billion in 2018 to nearly $16.00 billion in 2022. A minor decline occurred in 2020, reflecting the global impacts likely tied to that period. However, the overall data depicts strong growth momentum in the most recent years, driven primarily by expansion in the Americas, supported by recoveries in EMEA and Asia Pacific.
Segment adjusted EBITDA
Trane Technologies plc, segment adjusted ebitda by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 2,326,300) | 2,008,800) | 1,677,700) | 1,742,100) | 1,565,500) |
| Europe, Middle East and Africa (EMEA) | 338,100) | 359,200) | 265,700) | 267,700) | 302,700) |
| Asia Pacific | 248,300) | 228,500) | 188,800) | 182,800) | 173,200) |
| Total | 2,912,700) | 2,596,500) | 2,132,200) | 2,192,600) | 2,041,400) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- North America and Latin America (Americas)
- The adjusted EBITDA for this segment shows a consistent upward trend over the five-year period. Starting at 1,565,500 thousand US dollars in 2018, it increased to 1,742,100 thousand US dollars in 2019. Although a slight decline occurred in 2020 to 1,677,700 thousand US dollars, the segment rebounded strongly with significant growth in subsequent years, reaching 2,088,800 thousand US dollars in 2021 and further rising to 2,326,300 thousand US dollars in 2022. This overall growth indicates a robust performance with resilience during 2020.
- Europe, Middle East and Africa (EMEA)
- This segment experienced a decline from 302,700 thousand US dollars in 2018 to 267,700 thousand US dollars in 2019, maintaining stability in 2020 at 265,700 thousand US dollars. However, 2021 saw a notable recovery with adjusted EBITDA increasing to 359,200 thousand US dollars, followed by a decrease to 338,100 thousand US dollars in 2022. While the segment recovered after 2020, the fluctuation suggests some volatility in market conditions or operational challenges.
- Asia Pacific
- The adjusted EBITDA in this segment demonstrated steady growth throughout the period. Starting at 173,200 thousand US dollars in 2018, it increased gradually each year to reach 248,300 thousand US dollars by 2022. This consistent upward movement reflects positive developments and expanding profitability within the Asia Pacific region.
- Total
- The total adjusted EBITDA across all segments mirrors the trends observed in the regional data. There was growth from 2,041,400 thousand US dollars in 2018 to 2,192,600 thousand US dollars in 2019, followed by a decline to 2,132,200 thousand US dollars in 2020. A strong rebound occurred in 2021 with a total of 2,596,500 thousand US dollars, which further increased to 2,912,700 thousand US dollars in 2022. This demonstrates an overall positive trajectory in the company's segment profitability despite the downturn observed in 2020.
Depreciation and amortization
Trane Technologies plc, depreciation and amortization by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 256,900) | 227,600) | 224,000) | 213,600) | 208,800) |
| Europe, Middle East and Africa (EMEA) | 28,800) | 33,300) | 32,600) | 31,000) | 30,000) |
| Asia Pacific | 17,600) | 16,500) | 11,600) | 13,400) | 13,200) |
| Total | 303,300) | 277,400) | 268,200) | 258,000) | 252,000) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The depreciation and amortization expenses across the reportable segments exhibit distinct trends over the five-year period ending December 31, 2022.
- North America and Latin America (Americas)
- This segment shows a consistent upward trend in depreciation and amortization expenses. Starting at 208,800 thousand US dollars in 2018, the figure increased incrementally each year, reaching 256,900 thousand US dollars by 2022. The steady growth suggests ongoing investments in assets or possibly acquisitions leading to increased depreciable and amortizable bases.
- Europe, Middle East and Africa (EMEA)
- In contrast to the Americas segment, the EMEA region experienced a relatively stable trend with minor increases from 30,000 thousand US dollars in 2018 to a peak of 33,300 thousand in 2021. However, a noticeable decline occurred in 2022, with expenses falling to 28,800 thousand US dollars. This reduction may indicate asset disposals, impairment, or reduced capital expenditure in that region during the latest year.
- Asia Pacific
- The Asia Pacific segment displays some volatility but an overall upward trajectory in depreciation and amortization costs. Beginning at 13,200 thousand US dollars in 2018, the expenses slightly decreased to 11,600 thousand in 2020, possibly reflecting asset retirements or slower investment. A strong recovery follows, with expenses rising to 16,500 thousand in 2021 and further to 17,600 thousand in 2022, suggesting renewed capital investment or acquisition activity in the region.
- Total Depreciation and Amortization
- Aggregating the data across all segments, total depreciation and amortization increased steadily over the period, from 252,000 thousand US dollars in 2018 to 303,300 thousand in 2022. This represents a cumulative increase of approximately 20%. The growth in the total figures primarily reflects the increasing expenses in the Americas and Asia Pacific segments, partially offset by the decline observed in EMEA during the final year.
Overall, the pattern of depreciation and amortization expenses suggests a strategic focus on asset growth and reinvestment, particularly in the Americas and Asia Pacific regions, while the EMEA region experienced a contraction or revaluation of assets in the latest reporting period.
Capital expenditures
Trane Technologies plc, capital expenditures by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| North America and Latin America (Americas) | 230,500) | 148,700) | 98,200) | 146,800) | 195,300) |
| Europe, Middle East and Africa (EMEA) | 25,900) | 23,600) | 24,700) | 30,000) | 14,500) |
| Asia Pacific | 11,200) | 20,600) | 7,700) | 11,300) | 7,500) |
| Total | 267,600) | 192,900) | 130,600) | 188,100) | 217,300) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Overall Capital Expenditures Trend
- There is a clear fluctuation in total capital expenditures over the five-year period. The total investment decreased from 217,300 thousand US dollars in 2018 to a low of 130,600 thousand US dollars in 2020, followed by a recovery and an increase to 267,600 thousand US dollars in 2022. This indicates a volatile investment pattern with a significant rebound in the most recent year.
- North America and Latin America (Americas)
- The Americas segment shows a general decline in capital expenditures from 195,300 thousand US dollars in 2018 to 98,200 thousand US dollars in 2020. However, from 2020 onwards, there is a notable increase, reaching a peak of 230,500 thousand US dollars by the end of 2022. This reflects a strategic shift or renewed investment focus in this region after a period of reduced expenditure.
- Europe, Middle East and Africa (EMEA)
- The EMEA region exhibits a generally stable but moderate level of capital expenditures compared to Americas. Starting at 14,500 thousand US dollars in 2018, expenditures nearly doubled in 2019 to 30,000 thousand US dollars, then fluctuated slightly downward in the following years, ending at 25,900 thousand US dollars in 2022. This suggests a relatively steady investment allocation with minor variations year over year.
- Asia Pacific
- Capital expenditures in Asia Pacific show some volatility with initial growth from 7,500 thousand US dollars in 2018 to 11,300 thousand US dollars in 2019, followed by a decrease to 7,700 thousand US dollars in 2020. In 2021, there was a significant increase to 20,600 thousand US dollars, but it dropped again to 11,200 thousand US dollars in 2022. This pattern indicates intermittent investment activity, possibly driven by specific projects or market conditions.
- Regional Contribution to Total Expenditures
- The Americas consistently represent the largest share of capital expenditures across all years, accounting for the majority of total investments. The EMEA and Asia Pacific regions contribute significantly less, with EMEA generally maintaining a slightly higher level of expenditure than Asia Pacific except in 2021 when Asia Pacific investment surged. The variation in these regions highlights differentiated investment priorities and possibly varying growth opportunities or operational needs.