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).
An analysis of reportable segment profit margins from 2018 to 2022 reveals a general trend of margin expansion across all geographic regions, although the trajectory and stability of this growth vary by segment.
- North America and Latin America (Americas)
- A steady and incremental increase in profit margins is observed in this segment. Margins rose from 16.98% in 2018 to 18.40% by 2022. The progression was characterized by a period of stability between 2019 and 2020, followed by a notable acceleration in profitability during 2021 and 2022.
- Europe, Middle East and Africa (EMEA)
- This segment exhibits the most volatility in profit margins over the five-year period. After an initial decline from 16.53% in 2018 to 15.19% in 2019, margins recovered and peaked at 18.47% in 2021. However, a contraction occurred in 2022, with margins falling to 16.62%, suggesting a lack of sustained stability compared to other regions.
- Asia Pacific
- The Asia Pacific segment demonstrates the most significant and consistent growth trajectory. Starting as the least profitable region in 2018 with a margin of 13.39%, it achieved uninterrupted annual growth to reach 18.86% by 2022. This represents the highest margin expansion of any segment, resulting in Asia Pacific becoming the most profitable region by the end of the analyzed period.
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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%
Between 2018 and 2022, the Americas segment demonstrated a consistent upward trajectory in both top-line growth and operational profitability. While a brief contraction occurred in 2020, the segment exhibited strong resilience and an accelerated recovery phase in the subsequent two years, culminating in peak performance across all measured metrics by the end of 2022.
- Revenue Performance
- Net revenues increased from US$ 9.22 billion in 2018 to US$ 12.64 billion in 2022. A temporary decline was observed in 2020, where revenues dipped to US$ 9.69 billion from a 2019 high of US$ 10.06 billion. However, this was followed by a robust expansion, with revenues growing by approximately 13% in 2021 and a further 15% in 2022.
- Operational Earnings (Adjusted EBITDA)
- Segment adjusted EBITDA mirrored the revenue trend, rising from US$ 1.57 billion in 2018 to US$ 2.33 billion in 2022. The growth in EBITDA remained closely aligned with revenue fluctuations, though the absolute increase in earnings accelerated significantly between 2020 and 2022, indicating strong operational scaling.
- Profit Margin Analysis
- The segment profit margin showed a steady expansion from 16.98% in 2018 to 18.40% in 2022. A key observation is the margin stability between 2019 and 2020, where the rate remained unchanged at 17.32% despite the decrease in net revenues. This suggests effective cost management and the ability to maintain profitability during a revenue downturn. The subsequent climb to 18.33% in 2021 and 18.40% in 2022 reflects improved operational efficiency and a successful capture of operating leverage as volumes increased.
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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%
The financial performance of the Europe, Middle East and Africa (EMEA) segment between 2018 and 2022 is characterized by a period of revenue contraction followed by a strong recovery, alongside fluctuating profitability margins.
- Revenue Trends
- Net revenues experienced a downward trend from 2018 to 2020, declining from US$ 1,831.1 million to a low of US$ 1,648.1 million. This contraction was reversed starting in 2021, with revenues climbing to US$ 1,944.9 million and reaching a five-year peak of US$ 2,034.5 million by the end of 2022. This indicates a successful recovery and expansion of the top line in the region.
- Adjusted EBITDA Performance
- Segment adjusted EBITDA mirrored the revenue decline initially, dropping from US$ 302.7 million in 2018 to US$ 265.7 million in 2020. A significant surge occurred in 2021, where EBITDA peaked at US$ 359.2 million. However, 2022 saw a decline to US$ 338.1 million, despite the continued increase in net revenues, suggesting a rise in operating expenses or a shift in product mix during that period.
- Segment Profit Margin Analysis
- The segment profit margin exhibited notable volatility. After a dip to 15.19% in 2019, the margin improved steadily to reach a peak of 18.47% in 2021. By the end of 2022, the margin compressed to 16.62%. While this final figure represents a return to levels seen in 2018, the divergence between increasing revenues and decreasing EBITDA in the final year highlights a period of margin erosion.
Overall, the EMEA segment demonstrated resilience by growing its revenue base beyond pre-2019 levels. However, the inability to maintain the peak profitability observed in 2021 suggests that revenue growth in the most recent period was not accompanied by proportional growth in adjusted EBITDA.
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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%
Between 2018 and 2022, the Asia Pacific segment demonstrated a strong upward trajectory in profitability and operational efficiency, characterized by consistent margin expansion despite fluctuations in top-line revenue.
- Net Revenue Performance
- A period of volatility is observed in net revenues, which declined from US$1,293.3 million in 2018 to a low of US$1,120.7 million in 2020. Following this trough, a recovery trend emerged, with revenues increasing to US$1,234.4 million in 2021 and reaching a period peak of US$1,316.4 million by December 31, 2022.
- Segment Adjusted EBITDA Growth
- In contrast to the revenue volatility, adjusted EBITDA showed uninterrupted growth throughout the five-year period. The figure rose from US$173.2 million in 2018 to US$248.3 million in 2022. A significant acceleration in earnings growth occurred between 2020 and 2021, where adjusted EBITDA increased by approximately 21%.
- Profit Margin Expansion
- The segment profit margin exhibited a steady and continuous increase, rising from 13.39% in 2018 to 18.86% in 2022. The most notable aspect of this trend is the margin expansion observed between 2018 and 2020; during this interval, profit margins increased from 13.39% to 16.85% despite a simultaneous decline in net revenues. This suggests a successful implementation of cost-reduction strategies or a strategic shift toward higher-margin offerings within the region.
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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).
The analysis of capital expenditures relative to depreciation across reportable segments indicates fluctuating investment intensities from 2018 to 2022. While all segments ended the period with ratios below or near 1.0, the trajectories varied significantly, reflecting divergent regional asset management strategies and investment cycles.
- North America and Latin America (Americas)
- A V-shaped trend is observed in this segment. The ratio declined steadily from 0.94 in 2018 to a period low of 0.44 in 2020, indicating a phase where capital investment was significantly lower than the depreciation of existing assets. This trend reversed after 2020, with the ratio climbing to 0.65 in 2021 and recovering to 0.90 by 2022.
- Europe, Middle East and Africa (EMEA)
- This region showed an overall increase in the ratio over the five-year period. Starting at 0.48 in 2018, the ratio spiked to 0.97 in 2019 before entering a period of relative stability, fluctuating between 0.71 and 0.76 in 2020 and 2021. The period concluded with an increase to 0.90 in 2022, matching the ratio seen in the Americas segment.
- Asia Pacific
- The Asia Pacific segment exhibited the highest volatility and the only instance where capital expenditures exceeded depreciation. After starting at 0.57 in 2018, the ratio reached a significant peak of 1.25 in 2021, suggesting aggressive capital expansion or large-scale asset replacement. However, this was followed by a sharp correction to 0.64 in 2022.
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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
The investment trajectory for the Americas segment between 2018 and 2022 is characterized by a significant V-shaped fluctuation in capital expenditures set against a backdrop of consistent, incremental growth in depreciation and amortization expenses.
- Capital Expenditure Volatility
- Capital expenditures exhibited a sharp decline in the early part of the period, falling from 195.3 million US dollars in 2018 to a low of 98.2 million US dollars in 2020. This represent a reduction of approximately 50% over two years. However, a strong recovery followed, with expenditures rising to 148.7 million US dollars in 2021 and peaking at 230.5 million US dollars in 2022, surpassing pre-2019 levels.
- Depreciation and Amortization Growth
- In contrast to the volatility of capital spending, depreciation and amortization costs followed a steady upward trend throughout the five-year period. Expenses increased linearly from 208.8 million US dollars in 2018 to 256.9 million US dollars in 2022, reflecting a consistent growth in the depreciable asset base.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation serves as a proxy for the segment's investment intensity relative to asset wear and tear. The ratio began at 0.94 in 2018 and contracted significantly to 0.44 by 2020, indicating a period where investment was substantially lower than the consumption of existing assets. From 2021 onward, the ratio rebounded to 0.65 and eventually 0.90 in 2022. This recovery suggests a return to an investment strategy that nearly offsets annual depreciation, signaling a shift back toward asset renewal and potential expansion after a period of capital conservation.
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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
The capital investment strategy for the EMEA segment from 2018 to 2022 is characterized by a reinvestment rate that remained consistently below the level of annual depreciation. This indicates a period where capital expenditures did not fully offset the accounting depletion of existing assets, suggesting a phase of asset maturity or strategic consolidation within the region.
- Capital Expenditure Trends
- A significant increase in capital spending occurred in 2019, where expenditures rose from 14,500 thousand US$ to 30,000 thousand US$. Following this peak, spending experienced a moderate decline and stabilized between 23,600 thousand US$ and 25,900 thousand US$ from 2020 through 2022.
- Depreciation and Amortization Patterns
- Depreciation and amortization expenses showed a steady upward trajectory from 2018 to 2021, peaking at 33,300 thousand US$. However, a notable decrease was recorded in 2022, with the value dropping to 28,800 thousand US$, which may reflect the full depreciation of certain legacy assets or changes in asset valuations.
- Analysis of the Capital Expenditure to Depreciation Ratio
- The ratio fluctuated between a low of 0.48 in 2018 and a high of 0.97 in 2019. After the 2019 peak, the ratio declined to 0.76 in 2020 and 0.71 in 2021, reflecting a period of reduced relative investment. In 2022, the ratio recovered to 0.90, driven by a simultaneous increase in capital expenditures and a decrease in depreciation expenses, bringing the segment closer to a neutral replacement rate.
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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
The investment profile for the Asia Pacific segment is characterized by significant volatility in capital expenditures relative to a steadily increasing base of depreciation and amortization. For the majority of the analyzed period, capital spending remained below the level of depreciation, suggesting a trend of asset consumption exceeding replacement investment, with a notable exception in 2021.
- Capital Expenditure Trends
- Capital expenditures exhibited substantial fluctuations, starting at 7,500 thousand US dollars in 2018 and peaking at 20,600 thousand US dollars in 2021. The most significant increase occurred between 2020 and 2021, where spending more than doubled. However, this expansion was short-lived, as expenditures decreased by approximately 45.6% in 2022 to 11,200 thousand US dollars.
- Depreciation and Amortization Trajectory
- Depreciation and amortization remained relatively stable between 2018 and 2020, hovering around 11,600 to 13,400 thousand US dollars. Starting in 2021, there was a sustained upward trend, reaching 17,600 thousand US dollars by 2022. This consistent increase indicates a growing base of fixed assets being depreciated over time.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation fluctuated between a low of 0.57 in 2018 and a peak of 1.25 in 2021. A ratio below 1.0 suggests that the segment is not investing enough to fully offset the depreciation of its existing asset base. This condition persisted throughout 2018, 2019, 2020, and 2022. The spike to 1.25 in 2021 represents a period of aggressive growth or strategic asset renewal, where investment exceeded the rate of depreciation. By 2022, the ratio reverted to 0.64, signaling a return to a conservative investment stance relative to asset wear and tear.
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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).
Total net revenues exhibited an overall growth trajectory between 2018 and 2022, increasing from US$ 12.34 billion to US$ 15.99 billion. A synchronized contraction across all reportable segments occurred in 2020, followed by a robust recovery and accelerated growth through the end of 2022.
- Americas Segment Performance
- The Americas region serves as the primary driver of total revenue growth. Net revenues in this segment increased from US$ 9.22 billion in 2018 to US$ 12.64 billion in 2022. While a dip to US$ 9.69 billion was recorded in 2020, the segment demonstrated the strongest rebound, achieving significant year-over-year gains in 2021 and 2022.
- EMEA Segment Performance
- The Europe, Middle East, and Africa region experienced a period of decline from 2018 to 2020, with revenues dropping from US$ 1.83 billion to US$ 1.65 billion. This trend reversed starting in 2021, with the segment reaching a five-year peak of US$ 2.03 billion by December 31, 2022.
- Asia Pacific Segment Performance
- Net revenues in the Asia Pacific region remained the most stable but showed the slowest growth. Revenues declined from US$ 1.29 billion in 2018 to US$ 1.12 billion in 2020. The subsequent recovery was gradual, with 2022 revenues of US$ 1.32 billion representing a marginal increase over 2018 levels.
- Regional Revenue Concentration
- A high degree of geographic concentration is evident, as the Americas segment consistently contributes the vast majority of total net revenues. By 2022, the Americas accounted for approximately 79% of total revenue, while the EMEA and Asia Pacific segments collectively contributed approximately 21%, indicating a significant reliance on the Americas market for overall corporate growth.
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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).
Total adjusted EBITDA demonstrates a sustained growth trend over the five-year period, increasing from US$ 2,041,400 thousand in 2018 to US$ 2,912,700 thousand by 2022. While a slight contraction occurred in 2020, the subsequent recovery in 2021 and 2022 indicates a strong acceleration in profitability across the reportable segments.
- North America and Latin America (Americas)
- This segment serves as the primary driver of total EBITDA. Adjusted EBITDA grew from US$ 1,565,500 thousand in 2018 to US$ 2,326,300 thousand in 2022. Despite a temporary decrease in 2020 to US$ 1,677,700 thousand, the segment experienced significant growth in the final two years of the period.
- Europe, Middle East and Africa (EMEA)
- The EMEA region exhibited the highest level of volatility among the segments. A downward trend was observed between 2018 and 2020, reaching a low of US$ 265,700 thousand. This was followed by a sharp increase to US$ 359,200 thousand in 2021, before moderating to US$ 338,100 thousand in 2022.
- Asia Pacific
- Asia Pacific demonstrated the most consistent growth pattern. Adjusted EBITDA increased monotonically every year, rising from US$ 173,200 thousand in 2018 to US$ 248,300 thousand in 2022, reflecting a steady upward trajectory in regional performance.
The overall distribution of adjusted EBITDA remains heavily weighted toward the Americas, which consistently contributes the vast majority of the total value. The combined growth in Asia Pacific and the recovery in EMEA provided secondary support to the total increase in adjusted EBITDA through 2022.
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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).
Total depreciation and amortization expenses exhibited a consistent upward trajectory from 2018 to 2022, increasing from 252.0 million US$ to 303.3 million US$. This overall growth reflects a steady expansion in the cost of allocating tangible and intangible asset values over time, with the most pronounced increase occurring between 2021 and 2022.
- North America and Latin America (Americas)
- The Americas segment represents the primary driver of depreciation and amortization costs. A continuous increase is observed, rising from 208.8 million US$ in 2018 to 256.9 million US$ in 2022. The most significant escalation occurred in the final year of the period, where expenses rose by approximately 12.8% compared to 2021.
- Europe, Middle East and Africa (EMEA)
- Expenses in the EMEA region remained relatively stable with a slight upward trend until 2021, peaking at 33.3 million US$. However, a reversal occurred in 2022, with costs declining to 28.8 million US$, marking the only segment to end the five-year period with lower expenses than its 2021 level.
- Asia Pacific
- The Asia Pacific region showed more volatility than other segments. After a slight increase in 2019, expenses dipped to 11.6 million US$ in 2020. This was followed by a sharp recovery in 2021 and 2022, reaching 17.6 million US$, representing a 33.3% increase over the 2018 baseline.
- Regional Concentration and Contribution
- The distribution of depreciation and amortization is heavily skewed toward the Americas. In 2018, the Americas accounted for approximately 82.9% of the total expense; by 2022, this concentration increased to approximately 84.7%, indicating that capital asset intensity is increasingly concentrated within this geographic region.
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Capital expenditures
Trane Technologies plc, capital expenditures by reportable segment
US$ 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).
Total capital expenditures across all reportable segments exhibited a V-shaped trajectory between 2018 and 2022. After a period of contraction that reached a five-year low in 2020, expenditures experienced a significant acceleration, culminating in a peak of 267.6 million US dollars in 2022.
- North America and Latin America (Americas)
- The Americas segment serves as the primary driver of capital allocation. Expenditures decreased from 195.3 million US dollars in 2018 to a low of 98.2 million US dollars in 2020. A subsequent rapid recovery followed, with 2022 spending reaching 230.5 million US dollars, representing the highest investment level for any segment across the analyzed period.
- Europe, Middle East and Africa (EMEA)
- Capital spending in the EMEA region remained relatively stable. Following a peak of 30.0 million US dollars in 2019, expenditures experienced a slight decline and then stabilized, ending the period at 25.9 million US dollars in 2022.
- Asia Pacific
- The Asia Pacific region demonstrated the highest relative volatility. Expenditure increased from 7.5 million US dollars in 2018 to a peak of 20.6 million US dollars in 2021, before declining to 11.2 million US dollars in 2022.
- Aggregate Capital Allocation Patterns
- Overall capital expenditure was heavily concentrated in the Americas, which consistently accounted for the vast majority of total spending. The aggregate trend indicates a strategic reduction in investment during 2020, followed by an aggressive expansion phase in 2021 and 2022, resulting in a total expenditure increase of approximately 23% compared to the 2018 baseline.
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