welcome 2021 supplier conference

January 20, 2021

Welcome2021 Supplier Conference

2

Agenda – January 20, 2021

8:00 Welcome & Message from Mike Lamach

8:30 International Business Update

9:00 Commercial HVAC Business Update

9:30 Residential HVAC & Supply Update

10:00 Break

10:15 Trane Technologies Transformation

11:00 Voice of Supplier

11:45 Closing

❑ If you have a question or technical

issue use the Q&A feature.

Mike LamachChairman and Chief Executive Officer

Questions?

❑If you have a question or technical


International Business Update

Dave RegneryPresident and Chief Operating Officer

Questions?



Commercial HVAC AmericasBusiness Update

Donny Simmons, President

OUR MISSION

It’s our duty to protect the global environment we

all share. That’s why energy intensity reduction is

the guiding principle in everything we do.

HOW WE WINTrane makes buildings better and delivers

outcomes so our customers can achieve their

mission. We combine leadership technology,

deep expertise, and unmatched customer

experience. Simply, we’ve got the best people.

Our Unmatched Talent

Provides Application Expertise

Our Approach Delivers Outcomes

for the Life of our Customer’s

Building(s)

Leading Provider of Integrated

HVAC Products, Systems and

Controls

Leading Provider of Maintenance

and Rental Services, Energy

Management Services, and

Turnkey Solutions

Leading Provider of Connected

Solutions that Provide Data to

Improve Overall Building and

System Performance

SYSTEMS

SERVICES

DIGITAL

+17k

• Clarksville, TN

• Columbia, SC

• Curitiba, Brazil

• Fair Lawn, NJ

• Fort Smith, AK

• Grand Rapids, MI

• La Crosse, WI

• Lexington, KY

OUR PLANTSOUR PEOPLE

• 17k+ Associates

• 1500+ Account Managers

• 2400+ Technicians

OUR OFFICES

• 150 Sales Offices

• 10 Independent Sales

Representatives

COMMERCIAL HVAC AMERICAS PROFILE

• Lynn Haven, FL

• Monterrey, MX

• Newberry, SC

• Ontario, CAN

• Pueblo, CO

• Rushville, IN

• St. Paul, MN

• Waco, TX

Uplift Our People, Culture & Communities

• Employee Experience & Diversity

• Community Engagement

• Sustainability

Innovate for Our Customers

• Excellence in Pricing, Direct Materials, Digital,

Quality, Service & Contracting

• Market Growth

World Class Lean Enterprise

• Transformation

• World Class Lean Regions and Plants

COMMERCIAL HVAC AMERICAS 2021 PRIORITIES

KEY PRIORITIES:

A CLOSER LOOK

COMMERCIAL HVAC SUPPLIER QUALITY EXPECTATIONS

• Partner with Trane to Create an Exceptional Customer Experience

• Comply with the Global Supplier Quality Manual

• Actively Drive Failure Analysis and Product Improvements

• Focus on 2021 KPI Continual Improvement

• On-Site Assessment (OSA) Compliance

• Supplier Caused Non-Conforming Material (NCM) Reduction @Manufacturing Sites

• Supplier Corrective Action Requests (SCAR) Response Time

• 24 Hour Initial Response & Containment

• 30-Day Irreversible Corrective Action Implementation

• Contractual Financial Reimbursement for Failures as Required

We’re

Starting

To Keep

Score By

Supplier

Need Quality Help From Us – Contact Kevin Bollom/Maggie Nibbe

Our

2021

Focus

Areas

• Trane knows Buildings and IAQ

• Balance with Energy and

Sustainability

• Hundreds of IAQ Assessments

completed in response to COVID

• Portfolio of IAQ Mitigation Solutions

to meet customers’ unique needs

TRANE and INDOOR AIR QUALITY

TRANE’S APPROACH TO INDOOR AIR QUALITY

Dilute Exhaust Contain Clean

A Balanced Approach

Each of ASHRAE/CDC’s recommendations has an

effect on other building considerations. Our Trane

professional engineers find the balance and make

improvement recommendations that will result in the

best return on investment.

• Fact based, data-driven analysis

of your building’s indoor air quality

• Aligned to latest CDC and ASHRAE

guidelines for operating HVAC systems

• Recommend ways to improve IAQ today

• Highlight opportunities for future

investment

Trane® Indoor Air Quality Assessment

Questions?

Residential HVAC & SupplyBusiness Update

Jason Bingham, President

19

OUR VISIONOne team delivering the best experience

OUR PURPOSEServing moments that matter most for

customers, communities, and the environment

CUSTOMERS

COMMUNITIES ENVIRONMENT

20

Residential HVAC & Supply Profile

Bridgeton, MORegional Distribution Ctr.

Vidalia, GAAir Handlers & Coils

Trenton, NJGas Furnaces & Coils

Tyler, TXOutdoor Units

Operational Footprint

Charlotte, NCAftermarket

Memphis, TNSupply Distribution Ctr.

Channel Footprint

Stores

~200 Trane Supply

Retail Stores

~25 Commercial

Independent Stores

Sales and Distribution

21 Company Owned

(DSOs)

42 Independent

Wholesale Distributors

20,000+ Affiliated Dealers

Atlanta, GARegional Distribution Center

21

Manufacture (GISC)

• Quality

• On-time delivery

• Productivity

We Deliver the Best Experience to Every Customer

21

End-customer

• Comfort

• Satisfaction

Dealers

• Right products

at the right time

Independent Distributors

• Reliability

• Shared Success

Supply Stores

• Availability

• Convenience

• Consistency

District Sales Office

22

Residential HVAC & Supply

Diverse

& Engaged

Workforce

Dealer

Efficiency

Consumer

Experience

Supply

Transformation

One Team

Lean

Culture

Operational

Innovation

Sustainability

1

4

5

6

7

2021

BIGROCKS

2

3

23

Where is the Opportunity?

• Looking

• Seeing

• Testing

• Maturing

• Faster than others

24

Where are We Finding Opportunity?

• Consumers want “whole home health” – taking care of the

castle

• Adoption of digital tools

• Virtual customer interactions or working

• Acceleration of e-commerce… for everything

• Shift working location; home, hybrid, geographic flexibility

• Resiliency of manufacturing becomes important

• Supply chain relationships are critical

Questions?



Trane Technologies Transformation Ray Pittard & David Brennan

27

27

Brand Transformation

Purpose, Strategy, and Leadership

Principles Refresh

Structural Transformation

Trane Supply Transformation

Investment Transformation

Agenda

Our New Name

Elevating the Trane name to the enterprise level

harnesses the powerful brand we’ve already built

in a way that will benefit the entire organization.

The word “Technologies” - accompanied by a

new and very different visual identity - allows us

to celebrate our commitment to the innovations

that will lead us into the future and to differentiate

from the strategic brand Trane.

Our strong strategic brands

Thermo King and Trane will continue to serve

their customers and markets and drive our

business performance.

28

29

Our brand story

Our world contends with unprecedented

challenges. Our future has never been

more uncertain. Urbanization is dramatically

reshaping our communities, our resources are

more constrained than ever before, and climate

change is accelerating at an astonishing rate. At

Trane Technologies, we view this as a call to

lead. It inspires us to think bigger, act bolder,

and take actions that not only improve our own

performance but also influence global change.

With sustainability embedded in all that we do, we have a

responsibility to push the boundaries of what’s possible.

As a climate control leader, we operate where global

megatrends and innovation intersect, giving us a unique

ability to envision audacious solutions for our customers

and for the world.

The goals we’ve set for ourselves seemed implausible

not so long ago. Not only have we exceeded them,

we’re now intent on inspiring others to rise to the

challenge. Leading a coalition of our peers, customers,

and partners, Trane Technologies is redefining what’s

possible for a more sustainable future.

The New Trane Technologies: Reimagined to Unlock Our Full Potential

30

Sustainable OperatingLeverage Improvement

Business Transformation Delivers $300M in Cost Savings to Fund Continued Market Outgrowth With 25% Sustainable Leverage

Increased

reinvestment in

innovation

1

2Above market

growth profile

Improved cost

structure

Sustainable

leverage (25%

plus) & margin

improvement

4

3

High Performance Flywheel

16%

2017-2019 Actual Transformational Model

31

25% +

Operating leverage calculated based on change in historical Climate

segment adjusted operating income less adjusted unallocated corporate

costs divided by change in Climate segment revenues.

Structural Transformation: Four Focus Areas

32

• Lean-based, customer-focused organizational model

• Increased speed and agility to lead in the marketplace

• Strong competitive position with full spectrum of capabilities

Transformed Platform

Fit For Purpose Organizational

Model

1

Strategic Choice

Budgeting

2

RepositioningIT

3

Supply Chain Excellence

4

Fit-For-Purpose Organizational Model – More Focused, Less Complex

33

Realigned for customer focus and agility with G&A workforce to regions

Redeployed ~20% of corporate functions to business enhancing cost transparency

Achieved reduced cost at benchmark levels in functions

Minimized global reporting for simplicity & optimized spans of control for reduced cost

Maintained strong control environment

Actions

Alignregionally

Strengthen accountability

Streamline functions

Flatten organization

Controlenvironment

TransformedOrganization

Outcomes

Strategic Choice Budgeting Delivers Structural Cost Reductions Aligned with Climate-Focused Strategy

34

All spend aligns with climate-focused priorities

Eliminates spend not tied to customer or shareholder value

Outcomes

G&A alignment to functional benchmarks

Climate Focus

• Clean sheet framework

CostTransparency

• Expenditures analyzed in detail

CostOwnership

• Strategic Choice decisions and accountability

Benchmarking

• Industry benchmarks for effectiveness and efficiency

Demand Orientated

• Focus on what’s driving costs

Clean Sheet Approach

By Spend Category

Reimagine role

of technology

Reinvent

technology

delivery

Future-proof

the foundation

Repositioning IT to Fuel Growth Supports Further Margin Expansion

35

• IT redeployed closer to customer with direct accountability to business and optimized spans and layers

• Redeploying savings to high return investments

• Architecture deliberately designed for speed and value with increased cloud based systems

• Rationalized application portfolio with 40% reduction

• Strategic sourced services to optimize efficiency & effectiveness

Repositioned Outcome

$XXMSavings

36

Best in Class Benchmark

Accelerating deployment of sourcing productivity levers (e.g. price evaluation analytics, “should cost” modeling)

Key Initiatives

Supply Chain Excellence Initiatives Support Further Margin Expansion

Strategic Sourcing

Aligning procurement, engineering, and manufacturing to drive productivity across 70+ spend categories

Digitization of Supply Chain

Deploying advanced eProcurement / analytics tools to drive productivity

Lean Cycle Time Reduction

Cross functional teams driving cycle time reductions

25-30% to increase productivity

37

Trane Supply: Growth Opportunity within Our Installed Base

• Aftermarket parts and supplies has opportunity for accretive growth

• Trane can grow by capturing “entitlement” market share

• Developing plans to capture in next three years

• Work stream focused on refreshing growth strategy

Investment Transformation for Improved Returns & Growth Acceleration

Accelerated investment process for increased efficiency

Capability development at all levels of the company around investment decision making and management

Better returns through better decision making

Investment Review Transformation

Growth acceleration through better projects, alignment and accountability

Advancer, Latest Innovation in European Trailer Refrigeration

38

Questions?



Voice of Supplier

Gene Hahnenberg

41

▪ What has been the 2021 impact of COVID-19 to our businesses?

▪ The pandemic has changed how we do business. What changes will we keep

after the pandemic?

▪ Share your experience with increasing diversity and inclusion at Trane

Technologies.

▪ How do you get more involved in NPD projects at Trane Technologies?

▪ What is the long-term vision of how suppliers help us with sustainability?

Questions from Voice of the Supplier Survey

42

▪ Forecasts continue to be inaccurate. How are we improving forecasting of

our demand?

▪ How do we insure on-time payment to suppliers?

▪ Quarterly Business Reviews are not happening consistently. What actions

are we taking?

▪ It takes too long to implement change in product design. What is being done

to reduce this cycle time?

Questions from Voice of the Supplier Survey

Questions?



Closing

Keith Sultana

45

Post Conference Survey

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➢ Click continue, to be taken to a survey

to get your feedback for that day’s

conference.

➢ We would love to hear from you!

➢ The presentations from both days will

be posted to the registration site

following the close of the conference.

welcome 2021 supplier conference

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