Episode summary
This HVAC CEO Says 'It's OK to Disrupt Yourself' | At Barron's
At Barron's
· · Hosts: Andy Serwer · Guests: Dave Regnery
Summary
Trane Technologies’ CEO Dave Regnery argued that the company is no longer just an old-line HVAC supplier, but a broader efficiency and controls business with exposure to buildings, services, transport refrigeration and data centers. He said the company has grown from about $12 billion in revenue six years ago to a little over $21 billion last year, with bottom-line growth above 20% and a tripling of market cap over that period.
A central theme was that sustainability and profitability are aligned. Regnery said Trane’s systems can combine heating and cooling, raise efficiency, and cut waste in buildings, which he described as a major opportunity because buildings consume about 30% of global energy and waste about 30% of what they pay for. He also pushed back on the idea that sustainable products must cost more.
He highlighted data centers as an important but not exclusive growth driver, and said Trane’s direct sales force and broad vertical coverage keep it from becoming a one-theme company. He also discussed technician shortages, a U.S. apprenticeship pipeline, regional manufacturing, tariff exposure, and Thermo King’s cyclical recovery as electrification advances.
Key takeaways
- Regnery said Trane has grown revenue from about $12 billion to just over $21 billion in six years, with bottom-line CAGR above 20%.
- He argued that building efficiency is still a huge market because buildings use 30% of global energy and waste about 30% of what they pay for.
- Regnery said Trane’s combined heating-and-cooling systems can push coefficient of performance above six, versus roughly three to 3.5 historically.
- He said data centers are a strong vertical, but 95% plus of account managers still focus on core end markets.
- Regnery said Trane manufactures in-region for-region, including 21 plants in North America, and tariff pressure has reinforced that model.
- He expects Thermo King to recover as electrification gains traction, especially in Europe, after a COVID hangover and a year-five-of-a-two-year-downturn.
Notable quotes
“we were a company that was about 12 billion dollars in revenue. And last year, we finished at a little over 21 billion”
“our purpose is to challenge what's possible and innovate for a sustainable world”
“Most buildings waste about 30% of the energy that they pay for”
“You don't normally find the incumbent being the disruptor”
How the episode opens
Hello everyone and welcome to At Barrens. I'm Andy Surwart and welcome to our guest Dave Regary, CEO of Train Technologies. Dave, great to see you. Thanks for joining us. — Oh, I'm glad to be here today. — So, Train is an old school HVAC company or was there's a lot more going on today. Tell us fundamentally how your company makes money. What is this business that you're in? Well, we are a global player in HVAC, heating, ventilation, and air conditioning as well as in transport refrigeration and
Thermal King, right?
Thermal King, our Thermal King brand, which is a great brand. Let me give you a little bit of history. So, six years ago, we were Ingresol Rand.
And at that time, we made a decision to spin off our industrial business and merge it with a company called Gardener Denver. And we let that become Ingresol Rand. And then we rebranded ourselves Train Technologies.
And six years ago, we were a company that was about 12 billion dollars in revenue. And last year, we finished at a little over 21 billion. So we had tremendous growth over the last five years.
Um compound annual growth rates a little bit over 11% on a reported basis. Compound annual growth rate on the bottom line is over 20%. And during that time period, we basically tripled the market cap of the company.
So it's been a great run as Train Technologies. And you know, our purpose is to challenge what's possible and innovate for a sustainable world.
And I know that it's not very fashionable right now in the in the US to maybe talk about sustainability, but we do all the time, right? Because that's who we are as a company. And our solutions have such great paybacks for our customers and they lower their carbon footprint.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- hvac disruption
- data centers
- sustainability
- self-disruption mindset
- investing in infrastructure
Companies and tickers mentioned
- TT
- Trane Technologies
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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