This is Matt Reustle. Today we venture into the world of HVAC to break down Trane Technologies. Now, it's not often that I come across an industrial company with a $50 billion market cap that I just hadn't heard of. So when our guest today, Brett Larson, investor at NZS Capital, suggested Trane, it was as easy of a 'yes' as they come.
Brett and I cover the long corporate history of Trane, the dynamics that separate residential HVAC from commercial HVAC, and how Trane has helped create this unique consolidated industry. You may never look at your thermostat the same after this episode. Please enjoy this breakdown of Trane Technologies.
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Show Notes:
(00:00:00) Welcome to Business Breakdowns
(00:01:59) Brett tells us what Trane is
(00:02:34) The companies corporate history and how it became Trane
(00:04:05) Overall size of the commercial market
(00:05:18) He explains the go to market sales strategy
(00:09:20) An additional breakdown of business cost
(00:10:55) Revenue received from Trane software
(00:14:53) Trane’s market share in the residential space
(00:15:52) Differentiated products available on the commercial side
(00:17:17) Included commercial software components
(00:19:15) Average life cycle for commercial units
(00:21:19) Demand on commercial and residential sides of the market
(00:25:31) The cyclicality of the business and how revenue has trended over time
(00:27:35) A look at share gains and industry consolidation over recent years
(00:31:09) How the management team is viewed by the industry
(00:34:46) Key contributions from MNA and future consolidation
(00:37:02) Data center demand for HVAC units
(00:39:40) Transport refrigerators key role in the industry market
(00:41:02) Risks associated with the business
(00:43:30) What he’s learned from studying Trane
Business Breakdowns