IR - Earnings call transcript Q3 2021

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Operator

Hello. Welcome to the Rand Third Quarter 2021 Earnings Conference Call. My name is Harry and I'll be your operator today. [Operator Instructions]. I will now hand the call over to your host, Chris Miorin, Vice President of Investor Relations. now. ahead go please Chris,

Chris Miorin

and Thank you, call Quarter of Rand Third We Reynal, the Relations, Kini, and Chief Financial welcome Call. I'm to Officer. President Vicente Earnings are President joining Ingersoll Executive Chris Officer and Vik XXXX, issued me and Chief Miorin, website Investor and Vice of our available Relations Investor on yesterday, reference be [Indiscernible] addition, during replay we will our a In release conference today. earnings presentation the later these this the section will and call. are available of Both

in certain Slide I on nature on provided Before to X the in you on we start, Please conjunction want call. subject this read SEC are call remind risks the for in with everyone forward-looking the previous forward-looking that uncertainties details. statements discussed which our statements information are and more review to this filings, and should

refer non-GAAP today's addition, certain financial we to will measures. In remarks, in

measure are XXXX the a we provide You presentation reconciliation find comparable both our highlights, Company our available our update, in with section and can Relations presented segment of measures strategy and our in guidance. slide updated will earnings review of to in GAAP release, accordance most calculated which these and Company and a today's On offer on financial Investor website. the call, of

time, participants. this to and X Vicente. question At X follow-up to will Q&A today's keep call time that we session, for allow caller For turn over other each ask to the I

Vicente Reynal

execution right our it. how a purpose-driven remain ourselves has strength. again Starting in and Thanks, proven remains environment, third our X, Ingersoll our coming advantage. of Chris. Slide be out Demonstrating on to IRX we nimbleness agility, do in now, the everyone. the a competitive for find quarter, In grounded Company, to as morning speed using of Rand that, we And we good to what position do we and in

We're commercial on be again but in chain not and immune outperform micro-economic are commitments, supply market a operational to continue global raising inorganic challenge. inflation our investments factors And and and course, Of to to long-term the conditions, continue we is drive compound labor demand focused to stockholder our organic M&A capital our guidance. by by continued fueled organization. strategy returns. value allocation out-performance create propelled This and our is into and we comprehensive

Moving to our imperatives, and committed remarks strategic and our on growth X, Slide our we remain we'll X focus today capital allocation to strategies.

those, to move we I call Before important X outs. have

across employee our us participation. deploy scores to this survey well benchmarks is and XX% had of paying year, employees participation to at in globally. above organization again, improved And am share, I engagement concluded off. strategy all outstanding talent we and our our several relevant Our across results XX,XXX proud second We the manufacturing just placing extremely

an Rand to are thank Without each employees. the one possible. organizations. and responses talk to highly tremendous for our on manufacturing turnover of and want fact, ownership our that performance XX,XXX X%, them, and contributions inspire challenging people. Ingersoll of a is In at with we performance. you about culture workforce engaged the voluntary it's not culture. say now highly how When we moment rank than every even catalyst working combination top how to mindset of we because in the because our our of The and in also always happy We less agility, our believe of nimbleness, that, to of of IRX, nurturing take our a is be environment long-term this coupled we're these will continue results I is speaks employees. our fact a XX% This and the acknowledge

twice than the in to imperative, improvement Sustainably Company Great the XX bottom continue is MSCI,and by ESG our X/X of sit made less ratings approximately which we This the from of accelerate top a being see A. been In capital an the strides moves. based upgraded rating improve on by at strategic speed now, at work, to providers. our various the now have also highlights Operate months, growth companies allocate X/X Our our have rating year effectively. rated MSCI. with believe, been and this we to will We we

deployed announced completed announced QX, and both we towards or As X In and acquisition, we Maximus week. Solutions last the Air billion have Seepex M&A. Dimension approximately acquisitions

an We week. repurchase as our trench as large initiated as taken program. Company, earlier final this COVID. more prepayment we board million new that September. in onset And during out We with we also share well KKR stake you allocation authorized equity QX a focus a sale of shared began expensive year of in with comprehensive Along last on the acquire M&A, debt repurchase earlier agreement addition, of of dividend Pumps announced in a completed $XXX their the the of strategy part Tuthill our to the capital and quarterly in share

for come On and in XXth what's help how preview to make stakeholders. partial at address to Ingersoll detail about We more the the and services to our slide, Virtual look it's Investor talking Rand November next all life forward Day, our seeking in our of are mega better a customers products trends. where we

Digitization, our organic advantages. compound address Megatrends, contribution and Sustainability, where all have Life enablers, in to growth as specific such enables of strategy Quality we Our through to

million and and XXX,XXX leads marketing demand continue own per a we end-user already example, qualified year. buying leverage to One customer drive our us approach to engine proprietary contents over over has allows generate holistic unique to that patterns. to generation For captured X

our in platform. industrial invest to continued also IoT We

that digitally-enable meaningful million have the a portion of $X As connect we aim in we field. assets identified the to or

of X, Slide effectively chain the needing to Moving challenges in current we're not supply to environment. manage the unique

Ingersoll supply to to We team gaps. our at our as impacts and sourcing buyers conditions. is differentiator going respond well the thank minimize ability saw challenging chain creative data and challenges to key on their important would agility very effectively for be factory with early discipline tireless chain delivery logistics and from through like in planners efforts issue. IRX overcome use our to logistics and Rand, global back and However, that our were of I quickly negative to supply thinking using as an analytics especially

So we invested in we capabilities that have area this This place and to results. succeed. processes produced rigorous to guarantee outstanding in has

signed technology and Moving segment. close which of part Tuthill both more will will to expected X, to recent of in at Air closely acquire look we We slide Pumps, Dimensions, agreements which achievements. inorganic become to is our And definitive QX. science the precision now

which employees, family. and inorganic a than in our of the acquisition market over pumps, frontlines us bio-gas. to Factor, be of Dimension, pumping diaphragm another assets the and of to like with specialized the Company basis This of supports expansion aftermarket to second replacement This their we're ownership M&A. of market. example Lab equipment Industrial in the an its on multi-generation because is positive unique businesses, are strategy. approach another closed Pump, we part allows which will is gear us family-owned XX% XX%. is parts. the leader our These that testament become have margins existing in and the the pre Corporation. Air piston from Science more Ingersoll with that Lawrence our Company, how at as original leader is for It complementary pump Which and displacement employee the and saw is and they built applications acquisitions our is for has an of segment. portfolio. of gas approached opportunities is And exclusive emission part and of and the asset Technology Rand premium we a impressive Life targeting environmental of a Tuthill comes have growth monitoring characteristics relationship like-to-like EBITDA also representative revenue Tuthill key from, It Service We X to -synergy of purchased

IPS a making that an lives Lawrence Factor, with also closed reside example of better. aligned our the Lawrence Company will great Factor, We segment. acquisition is of of purpose in well is acquisition which

with over to work presentation X ensures multiple, synergy these were who activities and valued to on air post-synergy our their by X, and line purchase sampling technology attractive provide realization in the on proprietary for -deal year air depend play to mid-single-digit our pre of disciplined As gas, and screening turn update acquisitions execution through All our deliver offerings. and financial is Vik on expected performance. now will safe QX an I people process. compressed our aftermarket

Vik Kini

Thanks Vicente.

fueled continue IRX QX, challenging saw which to strong environment. to operational to Company supply the balance commercial and inflationary use X, a the in by we and slide be chain constrained of the performance with of Moving a of overcome execution, pleased

basis, continue orders IRX in of and and of XX%, segment a each million by XX% attributable remains as-reported and year-over-year, on double-digit respectively, Rand COVID XX% driven $XXX Total on drive up to the acquisition the deliver productivity revenue performance catalyst. across XXXX. as as segment. the Our highlighting intact, in Compared performance impacted and were to irrespective commitment orders to growth the strong respectively, using initiatives Ingersoll and synergy, QX increased strong XXXX orders quarter-to-date our organic year-to-date XX% we Company to business industrial cost synergy

X.X $XXX liquidity was million, of The a unique from $X.X free into our well, orders records improvement flow slide. This was Company Company us into the third-quarter XX.X%, for of the leverage eclipsing pointed move year-over-year. QX in EBITDA billion XXX improvement as cash for point prior as a from the of margins X.X prior $XXX and were at account year. million, the and on to $X.X million, a basis out year-over-year now times, net and takes $XX adjusted improvement up taking Total revenue up quarter the approximately quarter QX. billion setting after adjusted year. items delivered Our times we EBITDA Adjusted quarter-end

X.XXx nine XX% increased orders adjusted by FX the from moving a saw Turning slide of strong up on improved year-over-year improvement quarter. XXXX, remain segments revenue We ITS and in of XXX Overall, for our basis PST an both ITS strength approximately backlog EBITDA encouraged The into which the XX%, post margin of is Company XX% adjusted on basis. we the end QX, and increased points. book-to-bill both EBITDA. total for the a to

SEEPEX basis which basis and While both Solutions acquisitions, adjusted SEEPEX by the impact XX Maximus the Maximus margins in acquisitions, of the of driven in impact declined increased closed QX. of margin the to XXX exclude PST PST points. When the segment by points

demand-generation. incentive Finally, in corporate as million higher Up investments quarter. primarily well year-over-year, at to in costs, commercial like, areas due compensation as growth targeted $XX cost came the for

the for remain royalty rate IP note at foreign at other rate One our that is implementation adjusted restructuring at few We a drivers. elevated same from quarter came driven nonrecurring year-to-date and movement as the of as specifically tax on before benefiting and expect adjusted stands in of to utilization of of a QX and tax comparable a item The structure, basis. our due the corporate XX% efforts to carry-forward we've by cost levels outlined in is well which the credits. tax impacts XX%

As in we items. adjusted the of result, to expect the the as mid-teens. But these to rate XXXX, rate be the expect some to to do back of a low XXs the ahead year in for the due we look be would non-repeat we

quarter management. Turning to $XXX operational capital of related flow flow a business the basis and CapEx performance $X $XX quarter outflows across during synergy to continuing cash on IR for million free ops prudent strong driven with and the stand-up by included the the merger. million working and cash Slide Free totaled XX. million

included tax gains in cash realized to free million cash HPS also the $XXX segments. capital payments related addition, the and In SVT divestitures to of due the flow

million Trane Finally, to free included $XX post-closing a also adjustments payment the IR cash Technologies for merger. flow related from

million. discuss in $X.X sale $XXX prepaid considerable free quarter balance maintain debt year. of equity cash turn $XXX M&A, Leverage out targeted I times, we the portfolio interest the taken strategically by for rate. billion billion onset in part X.X the the $XXX Total cash, our to We and Excluding strategy these drive of higher was during our segments. million strategy of on Company sustainable continue back investment flexibility credit X.X as to now through internal with over deployed to up items, it adjusted compared stands based coupled which buying remove Liquidity X organic the was of Vicente which of quarter was carried decreased to of billion our as million by back COVID-XX, and M&A $XXX stake, remaining KKR times at sheet prior to will improvement liquidity approximately tranche billion transformation to debt, in allocation capital executed shares the $X $X.X nearly a to growth. facility. on availability million $X as approximately revolving flow now

Vicente Reynal

Thanks, Vik.

to India in and Organic an Industrial XX%. Mainline recovery and compressors, incremental Latin segment, orders up and Service basis was strong orders into were XX%. was mid-XXs, strong Moving order XX% XX.X%, up our orders in of In year-over-year, and oil the delivered Starting shows were The with up high Slide XX% breakdown margin rates of oil-free up XXs. lubricated Middle in up XXX and team orders revenue XX%. oil-lubricated America XX% with the Europe points up of up year-over-year, excess over high a Technology adjusted margin while continued so up strong of we products delivered Americas, with up adjusted XX%, while performance were in oil-free XX XX%. high East, over saw up XXs, an EBITDA North EBITDA America further

Asia-Pacific low growth continues and each Asia-Pacific. [Indiscernible], in up a to In were basis on orders across double-digit China, rest regions. XXs perform strong global high up decline the with well strong banking XXs, across of mid-single-digit mid-XX% driven with always our of growth by

power the driven and mid so, up and launches. for on e-commerce next tools total execution new were Moving lifting, improve product business XXs continued orders growth mainly enhanced positive our by capabilities to and

to that, like more the will ways customers highlight our We of enable sustainable. also become to one many we

capture from landfills, immediate facilities. to farms, used are bio-gas dairy compressors wastewater gas LeROI and Our

XXX% cleaning reinjection both enables XX% is economic to capture to generation, pipelines such which storage for the to LeROI our released compressor or capture as, into bio-gas. the value. captures be emitted methane gas methane of it, dioxide. from carbon gas up Whereas the enabled atmosphere. will compresses the hydrogen emitted, As gas, of The the the additional other of power for customer the system without gases into the the and sulfide And product

internally and the million economic to from not bio-gas value units impact significant water, these such into years. taking our with we're create to ESG cubic feet across capture enable our in XX,XXX portfolio but only advance our usage, of base XXX steps both customers for X our Technology Our will help significant perspectives. reduce energy carbon the also footprint, and sustainability next as of us

encouraging XXXX segment, Moving and to the Slide due XX, organically, XX% business. revenue the to COVID-related and the Precision given and was tough comps for revenue up Science remains which Technology orders in QX of medical

businesses lines driven basis orders points, Dosatron serve which and excluding markets. delivers water, was strong was segment of the the Additionally, EBITDA driven and and Solutions. organic of life acquisitions. year-over-year, Maximus impact and team SEEPEX animal and XX% was, ARO up Overall, million impact up Adjusted of Roy Lab, the And $XX were XX.X% down points XXX by Milton product those health the the basis sciences, PST XX%. adjusted Medical and up XX which margin by the again, EBITDA

these Incremental in we SEEPEX were when double-digits this quarter. margins like up continues solution Haskell more momentum sustainable Maximus. better our build to segment a as excluding businesses up making world. the through XX% XX% reported, highlight were would All hydrogen and the and business of life to to In

a about for totality across the XXXX. supply refueling with played agreement stations, long-term the on of a we're announced will investments incredibly these stations be have about order capabilities Hiringa basis. producing to Hiringa, hydrogen stations our our has making nationwide in expand growth. high-growth XX excited we a capacity these to of manufacturing through revenue s double hydrogen And of technologies and quarter, a high Zealand. New total network hydrogen spoke X this with partnership. market alone, We're last to as Refueling provided Haskel business The frame commitment agreement We green first refueling meaningful are

guidance outlook, for Moving continued the we're to strong increasing Company's given Slide performance in and QX XXXX. XX,

Our as as Pumps. segments, acquisition high-pressure Specialty well guidance Solutions the the divested Tuthill pending excludes technology and Vehicle both

Lawrence However, Sypex, in Factor guidance. Dimensions, Maximus Air Solutions, and our included are

improvement organic comprised a total low organic low across guiding in on basis, was both growth. We're Our now up expected double-digit Dimensions, with of guidance was closed to million that M&A a expected mid-teens contribution our of high-teens segments. contribute prior to at of on to the increasing revenue reported up XXXX growth and double-digit guidance we're guidance reflects million approximately the growth the total Company increasing But to prior is billion approximately for growth $XX previously revenue. expected tailwind. across basis adjusted in guidance. these to to an a compared $X.XXX Maximus, This revenue EBITDA organic Seepex, point segments. continue range. Factor, low billion in single-digit Air from XXX $XX the assumptions, of to both $XXX represents acquisition million. increase which FX, prior as Based given be $X.XXX midpoint Lawrence we're

generation, to to revenues. cash of earlier. to rate free our is of expected cash tax terms year remain equal be a for for In CapEx or the And to adjusted conversion approximately Income expect reasons XXX%. than expect to greater in Net Vik the we we be flow adjusted adjusted provided [Indiscernible] the finally, X.X%

strategy Virtual be outlining November very Investor held Turning look XX. fast Slide forward with our our We Megatrends and unique and organic XX, will enablers. on by we're Day, which fueled about to excited compounded approaching by our upcoming is long-term growth alignment growth to

capabilities, sustainable advantages provide discuss creates how Company. demand We markets strong competitive and our and mindset detail execution, generation, further incredible operational and coupled our a M&A growth for will our on talent, technologies, with

also outline targets. financial future will We

on forward look register to XX webcast. on using can for many the I seeing event link you of You Slide the and the

XX, employees, is to position. an poised despite that environment. They throughout performance. challenging a great Rand our absolutely reiterate up It want want year, wrap Moving efforts quarter. to to outstanding say appreciated. we I to as is execute XXXX Company's relentless Ingersoll be today's problems I is to you call, in are and thank your tough the To Slide again our for the solve in apparent

organically We growth, both are through deliver of to in outpaced to portfolio. increase our and actively investing quality M&A, the continue

We leadership serious. transformation leader IRX to turn sustainability employees as embraced compound the And the Q&A. at the value of shareholders. that, and in take industry our achieved a are us role proud very that open have continue opportunity our to the that minded back call position. of we future We're puts eagerly I'll deliver Operator increased and Rand With Ingersoll and excited growth to our about all to for

Operator

Thanks [Operator Instructions]. very much.

first proceed question to Our line is if Mike open from from with Baird. is Halloran your your question. like you'd Mike,

Mike Halloran

Great. morning, Good you. Thank everyone.

Vik Kini

Good morning, Mike.

Vicente Reynal

Mike. Hi,

Mike Halloran

let's in quarter basis the on good here. the of trend you the on organic what was So good some lower coming maybe feels XQ up sales. a like, are guys the fourth about performance, the start acquisitions terms margins how conditions you imply. sequential a guide, little layering you're year an thinking about on Obviously, what like if would than feel are quarter and demand look

that some about on the you assumption you're and move how if So commentary as wrong maybe certainly fourth correct thinking I into have the there. quarter, me

Vicente Reynal

$XX our -- of Mike, heard, as prior is as taking you our the by midpoint guidance, of of million. guidance

situation X/X X/X prudent, is hear supply out of environment You M&A noise can based continue the on it chain think that overall you be this organic. In about there. environment, current we and to being

investments, which continued this for of XXXX segment excluding of the margin addition, decretive discretionary margin the to PST business, that In a guidance and margin gross XXX M&A basis core increases we year-over-year, is solid is EBITDA for actions reaching we XX% execute, very implies all margins to we're that to in be inflation, going environment, even up points that the What were puts ITS And spend, speaks our out, performance teams accretive. kind believe. all that which great the the said in is but kind flattish margins. QX, to just with and expansion margins here in point to

XX's on The some And XXXX quarter. that we is view as as margin here doing on still healthy the profile we in given of that range, do comps still the EBITDA accelerated we have do order of kind based just we're fourth investment and as top the which that in Hydrogen quite well and in received. shipments frame investment the the done to in medical XXXX, -- discretionary plan inflation that

and time, prudent So the we see good there. of in we at supply how about feel that, chain terms same out

Mike Halloran

headwinds -- like I'm on Since in not right, you you're transportation, the hearing logistics, XQ line terms margin that. market If you expenses, accelerate of labor, implying chain for supply the to things XQ that

Vik Kini

into we've kind like pricing I saying offsetting Clearly, wouldn't it. [Indiscernible] you No, in doing, kind think -- saw headwinds of in obviously, Mike, like interpreting those remain taken we've lot is exactly how been Yes, line same persist line actions those with what headwinds, we I in But of to a of you're much with think QX. prudent QX.

So QX respect that in I QX comparable mitigating the we price of fairly terms to inflationary think in risks. see

Mike Halloran

are I'm good to highlighted then you. Got more thinking the strong those as of a coming obviously MRO well. -- orders on you funnel Obviously, in you more side, hydrogen, type the or or of is some broadly. kind thoughts on nature move CapEx starting but what short those types just through little more project orders, are Maybe a or to the see cycle this short-cycle some And bit really see. orders, type order

Vicente Reynal

of -- actually I with with well. released. a see have able we during project pleased being a meaningful too one, you that our Mike, is are what any that some in technologies long-cycle level pretty well We're on how to we're have this really that tailwind our momentum lot but continue business, those And sustainable with technologies portfolio, same seeing growth. the the pretty that of time across quickly, to and markets see as getting hear we're At some seeing. to from short-cycle. The We we to bio-gas, is can Day we very the that seeing I some it's we're more others to the we're that tell substantial those Yes, of what kind are sustain And end capture accelerating in think, about the agility of you're both. going like, Investor is, to rates. positioned see projects reallocate continue order hydrogen momentum the of level the markets

Mike Halloran

it, gentlemen. you. Thank Appreciate Great.

Vik Kini

Thank you, Mike.

Operator

is question Ritchie next from to Our now, will Joe your Sachs. Goldman from like line proceed. you'd if open Joe, be

Joe Ritchie

Great. Good everyone. Thank you. morning,

Vik Kini

Joe. Hey,

Vicente Reynal

Morning, Joe.

Joe Ritchie

Maybe hear customers this to in you coming to in staying little supply incredibly curious, we're with predominantly this still I'm to CapEx given being clearly today, a what looking obviously, quarter. starting -- of strongest CapEx or is here? bit a fairly chain, orders, decisions that's is that's environment more is just lot been given, are it more unprecedented the your made, Vicente, through are experiencing OpEx where this deploy

Vicente Reynal

and exciting for lot on definitely to radically enablers are I And we China. you exciting lot energy compressors that that, And the has consumption with how and reduce technologies see technologies, and even it's the And to really has our ESG too of also can see sustainability. across mainland CapEx here a we're Joe, hearing CapEx, beneficiary ESG. is do thing as more it a and the increased of Europe majority can energy when think well. hear the about really older

spoken always back-ends, efficiency. and blowers a energy our about have compressors, lot we whether So

themselves up by I by and so to starting think XXXX, make the set are to on achieving move they be that XXXX. And the XXXX customers based targets

in going see, some is it's of it to think still I this continue view. really lot seem my -- a can momentum So

Joe Ritchie

end that cost curious helpful. was what we Got if a pretty to as the the it. how head cost maybe the of continue pricing your through I quarter, is bit and parse out this positive just coming into expectation price to just price numbers? hear That's XXXX, we commentary And equation I'd year, you little see then should be the guess could more. through decent benefit

Vik Kini

that take one. I'll Joe, Sure, Yes.

of price-cost healthy and context in which we QX, realization to enterprise, equation our obviously frankly, Pricing QX, performance that that positive a in X% so the be the entire speaks was to frankly bit were outweigh across the QX. of inflation So the fairly in proactive at excess all little of the of taking. QX, business did of context price in expect is would in slightly comparable we measures

that compared Now not expected inflation, got the noting the half second pricing actions. it why we're to the we is and risen obviously of always worth ahead We that's the in the that seeing. with a that, unexpectedly of first headwind year momentum performance quite and obviously, lot have Again, the half. we're pleased

price XXXX, to we we obviously, As healthy early list taken the on about numbers are, pricing think on would start little bit actions just guiding we but to yet, a too of the pricing see expect say frankly, I'd majority our carryover oriented. that the have actions.

XXXX, as inflation will be dealing So obviously, into that, obviously, well. should little it carryover some a be inherently bit But with stickier. we have do obviously we

of we'll on the in equation into But price year. think price commentary say, of positive the yet I the quite encouraged by cost has we're XXXX. just this team taken to actions -- reserve half still we're second context So cost the the

Joe Ritchie

job Nice good. Sounds guys.

Vik Kini

Joe. Thanks,

Operator

Wolfe Nigel, your Research. open is is from Coe if now, proceed. you'd like Our from next to Nigel line question

Nigel Coe

guys. Good Thanks. morning,

attack Just question, of wanted that to on the inflation. back

input define some orders Do you increasing synergies That'll inflation? board, about do you balanced Can on interesting showing you the you materials, from to the obviously on we the a definition revenue how curious look just Just costs, labor just that at But hear. freight? direct is be and a the where much more portfolio product. are clear merger? Obviously, put very across together strong. the maybe synergy capture talk the

is the synergies come some So, through? seeing order this just of some of wondering strength if

Vik Kini

second the Vicente Nigel, to let and the synergies. I'll revenue take speak first I'll one on one the

I'll at, of we what or cost logistics all, the the frankly to what our this measure inflation and with cost, year. labor I that that The call, majority Obviously, inflation. is, I inflationary and we'll reality direct of labor course, comments expectations On call price material really been The line was on freight. look the numbers are, in specifically has speaking made. largely

of the it, while and labor at put our the think commentary our mentioned environment that culture, logistics. quite look which is. one Vicente Vicente initiatives quite is, frankly, retention prepared everyone very Speaks versus rates I thing voluntary specifically low And made price labor been comments. we're pleased think material really what do around the we that turnover, we call was yes, while lot I and pleased again, So is very of and direct and ownership spoke to else a that that highly in forth. We've engagement here employee we're same it the with, we'll in I than with the

Vicente Reynal

on Yeah, from some coming of seeing orders in yes, the question definitely we're revenue synergies I'll the that. draw transaction, the around of second terms

that You're of on show to multi-brand us a on have hear momentum how will good is during product pleased that. that that moving, on the we our more some very we with case oil-free we line giving some stories through -- strategy really lot the tailwinds clearly good product is we're launched compressor little Investor multichannel, and the with how you Day. going But air that of a global have basis a treatment

Nigel Coe

XXXX? here looking targets, longer-term Day, Investor we said sort at the wondering, on but secondly, target, are And just of not three-year you

Vik Kini

formally targets We'll correct. in guide XXXX next to call our we be That's earnings framework about. we'll will talking when we And think then the call. XXXX about do

Nigel Coe

Thank guys. Great. you,

Operator

is Jeff, next your from Sprague is question your from line now. Vertical Jeff open And Research.

Jeff Sprague

inflation. cost on than offset X% coming Good guessed, one everyone. you Thank more also more might morning, to price I would've just actually need you. back Maybe

assume But harder just in time. the in So you're you on us kind here. inflation are direct at sourcing where merger-related passage wondering of role that's I'm it and if you with to kind playing benefits. you're maybe what of that and gets separate update I of those Sure, and that, the harder just would materials, battle including, helping

Vik Kini

or Just between enterprise. and be it's the see clear net X.X% anything of the of point of And the to in Fairly you're put incorporating, kind covering around speaking ITS related finer of entire into tomorrow, merger it. headwinds, pricing The on a that numbers and to going X.X%- cue call when number it not any right terms across to issued PST. comparable was in that, synergies, equation. I of that the inflationary what let's in we're context

buckets a it manage pretty to but we terms run in we've and of disciplined the right, bit and exercise, organization. You're of score a actually those keeping become prudent does keep separate, how been

we the things of we're I committed of merger, the on direct Those we as part innovative still the X as are the of and kind that of the at the million which value. productivity synergies or call, the to deliver was some year like the to. separate, $XXX beginning some of So material number say, track will said

Jeff Sprague

hear. revenue of additional to what the great the are? you And us annualized you one through revenue the those of checking gave Thanks. just total on mind each M&A, contribution. That's new then X, would But just those

Vik Kini

Sure. that. I do can absolutely

is good sampling can Pumps comparable small. revenue. $X terms purchase which very to very here, a a our we've acquisitions and Factor IPS million of mid-single-digits, use. It's Dimensions, think Dimensions and technology the the leverage aftermarket offerings terms air $X price, kind right in is very on around in Tuthill to relatively actually is is a Pumps, of double-digit exciting $XX million we The which Tuthill And Factor. in about So and that but that XX we revenue highly to the which million spoken X low number is Air to in of Lawrence within million, base portfolio. are annualized probably $XX Air mid-XXs Lawrence

Jeff Sprague

Great, for the appreciate it. Thanks color.

Operator

open would will if be from line like is proceed question next Mitchell Julian with your you from Our Julian, question. your now Barclays. to

Julian Mitchell

Good morning. or operating circling margin Good leverage. Hi. just on just aggregate incremental Maybe back morning. Maybe --

moving this affecting in sort into acquisitions constraints, So around something quickly? just how that firm-wide, the and that. the coming But new you operating quite leverage at half quickly, Do look quickly, Understand think to just given mid-XXs, the think or XXs. given year. is that the of can fairly next and in running the too cost see as of happen I early tell that cost in acquisitions it's environment I we these move guess, back you do back it's come year,

Vik Kini

Yes.

that latter true. probably think your part of the statement's I

views I budgeting the expect would think working now. obviously we're on you process as XXXX right and through annual our

to too call. it's think I little a early

the dynamics is the the same Obviously, first the now of view going of headwinds, we're XXXX. with half we're think right facing I to now some be some inflationary still of to facing regards if will then to some we the pricing momentum continuing And to acquisitions. that, all to offset continue have we be that. obviously those of yes, of and not of lot frankly, integrate a

forget expectations I more because kind integration as can synergies the trend business, have that well we and see on to we into move as base web. see price, We and merger-related shouldn't XXXX acquired year now that XXXX, through continue continued expect the we what get the the to for well as the assets. inflation still based So, as to carryover client think closer as then improve third given the of would synergy nationally the of we frankly,

that give timing we've little Let's right XX bit formal our not the But do I earnings cadence XXXX. for say we and been if of – is the exact guidance call segments, type bit it healthier. through. working ish we'll think next as I'd a seeing a we're number specific across that call percent more color something And now,

Julian Mitchell

should of you Thank the or ones should average. dollars above the margin X in you maybe or expansion that where one you. what this billion sort Maybe a specific year deployed? funds capital year. X those or return, dollars can of sort the so particular of yes, interested if more there's at on when do out those be sort X billion you metric total have deployment, or on so then think about And think or across M&A acquisitions X be in deployed you deployment, you And maybe call acquisitions just look two of the or

integrated all Now Ingersoll. that they once, are they're into

Vicente Reynal

transactions a to double-digit that We're think, in able is to that provide be I that. financial post-synergy commercial We to of acumen, that, And low our definitely we still that, of activities have see we finding lot said of do. on should that can deals. technology, kind we that and transactions. a return are all criteria a from great Julian, complementary from expect these on still ROIC highly good financial always mid-teen based outcome

Julian Mitchell

And transactions offer expansion margin Vicente scope. above-average of sort sort that, color think specific on any of then you

Vicente Reynal

SEEPEX, that SEEPEX, sure, now, to EBITDA. But I'll a one to say When business for we that Well, level to we be PST. said right see segment comes acquired mid-teens we way that mind was right? like a

a Also, Tuthill, expansion, When see recently think on about I the recently is expanding margin the that still -- that. was we phenomenal Pumps. a acquired mean, the prior to momentum expect good it tremendous ITS, So Tuthill signed transaction so you some expansion. margin on the that on

more then we that. that on growth is in organic that we acquired to growth the expand commercial to on So, that transactions across of the the you Air opportunities I look think be, to spanning And difficult good Clearly, when a also, footprint expansion. to really we already PST look that. Board, continue see, Board, Maximus difficult than meaningful see lot there. expect some the And Dimensions, those our in XXs, focus as more tend the is into the at global at

Julian Mitchell

Great. Thank you.

Vicente Reynal

Thank you.

Operator

is line Andy Citigroup. you'd if question And is like from proceed. now to open our from next your Andy, Kaplowitz

Andy Kaplowitz

guys. morning, Good

Vicente Reynal

[Indiscernible]. Morning

Andy Kaplowitz

'XX really newer couple average, the like and growth, to that you at order we given animal PST niche health, average some you've of water, beyond? back think hard pushing which of obviously growth say the mid-single-digits focus over that saw. lab these the markets. is to said what higher Denver into like markets seems than fair If business Gardner Is PST it PST could into look of growth been revenue, years, XX% XX% you in in higher-growth I sort as but go all mid-single-digit and medical of last sciences, something is life leading You that

Vicente Reynal

Yes. Absolutely.

that. you off in doing into really some we're commanding new very old lot that investments are leadership mean, of redirecting said, product. I on feel think and niche markets I paying of, compelled positions, we a think strong good, I terms as these launching

how You're now into the Day, dramatically. new [Indiscernible] on [Indiscernible]product the the we're and Even here product about during going come next lot the has just the been team development new? seeing year. more hear COVID of that days, for? accelerated Investors that on also through accelerated a cadence to and

Andy Kaplowitz

bit regionally And but then compressors. your in I Great. It initiatives China. rest had one a for you growth more APAC of China, color for the of were in particularly down the you a little what's guys, going strong it's in compressor maybe little bit Company, into orders really know key looks like and on combined a

what's talk particularly about going just maybe So Asia. on, regionally, in

Vicente Reynal

what team saw with execute which quarter-over-quarter, is the companies. contradictory we we incredibly there pleased in of QX, momentum in through how orders actually particularly think of other in QX in Asia-Pacific accelerate And we're the and China. some things you hear of continues that China, I saw Andy, really to out the kind to

Rand leveraging action phenomenal and Denver. product Ingersoll portfolio China. with has done it and be into then in spoke and the relaunching Gardner job, lot said super of particularly we multi-channel tremendous The the is compressors, -- multi-brand, about, an to a entire the strategy, team a that to about relaunch something proven always success the Denver excited So, that We to [Indiscernible] were was have the combination initiative because we that could speak a Denver which of a doing. we obviously initiatives just Gardner has self-help team Gardner an

The bit second overcoming have And end-markets where can Australia, Vietnam dedication Blowers emerging split countries and China. the terms of still of and and seen small the But of The emerging some Vacuums. some penetrating lot we that's that other in piece between again, the is perform portion or of for like are it I in meaningful the well, fairly still Asia-Pacific, shutdowns that of little growth maybe a good applications drive team vacuums business. developing, of putting Asia-Pacific. was to localizing decline again, on on was regions. And small that's fairly of continued a really good due rest to China softness we quarter COVID. saw for a of Therefore, our as think was Philippines Blowers example. and in like created and a fairly is piece in lot I

Andy Kaplowitz

you. Very Thank Vicente. helpful,

Vicente Reynal

you. thank Yeah,

Operator

open, is Wertheimer like from Research. to Rob Rob, from Melius your is question next you'd if Our line proceed. now

Rob Wertheimer

or few color to cost quarter, whether it that switched more on [Indiscernible] chain stable, outlook on think chain supply of that Hi, couple upper up because months, thank through deal I'd and have or to unexpected that. issues a you. that see are risk is We I'm rose handle if how on process and lasts to to if guys it's would. general the a unexpected avoided you surprises next you hear IRX you the and the the of and you the you've cadence surprises Vicente, curious was had or industrial maybe you few love issues got applied more just it anyway, first added maybe outflow quarterly entirely. quarter, of across the then if of nil have another over quarters you. whether supply that Thank just you more any pop whether with,

Vicente Reynal

-- IRX overcome. clearly and continue doing. will tool so and up. results, lot how have Great supported on the can to And a I mean, the we I everyone that definitely work you great great Absolutely. pop will even I say, there. things that of speaks you can process the question It tell see that though we is And work use. really to based by

and allowed high execute and So us the the used proper Company items. critical we you redirect us touch global do there. have the create teams happening accelerate fairly And agility a definitely nimbleness, to the as allows priorities we're this how even to really out very cadence, high leveraged massive we has know, that and just that reprioritize teams, though to the are IRX tool that obviously, we to large a mechanism it's

And that when fulfill and can as the see But giving say, a a It's tool be. could to weekly to simple continued you that you team as see issue. go that acquire go factor we prioritize now were to major need the for momentum to how the mean we containers IRX ensuring I as track again, we leveraging a that of good IRX here. cadence was example, commodities that And perspective. we what's really and example, IRX an us after. the the see the into to So needed leveraged suppliers that to daily, you could example. we're backlog leveraging outcome of for good has and logistics

a very we nimbleness some we that think live think challenges. great mean, well. use agility a sense advantage, I world teams continue and is as a able just have we that I really But execute, we core see competitive said to to tool be why maybe that's that going will we'll that continue to is follow to giving be perform through in comforts the us IRX dynamic to of as of continue, So the zone always

Rob Wertheimer

Right. Thank you.

Operator

line Our from next is Morgan Josh is question Pokrzywinski, your Stanley. from if now Josh, open like you'd proceed. to

Josh Pokrzywinski

Good morning, guys.

Vik Kini

Josh. Morning

Josh Pokrzywinski

there, would of understand stand there's compressor any virtuous Obviously, new highs gaining today? to that you I combination. historical where Just kind And the on, a of tools some idea all-time is imagine some lot you're the the lot going market the relative are on a recovery and on, orders guys? we done of on of on like, [Indiscernible] compressor a -- Because question of those well. a orders. pieces guess of I the on at shares I think do there you going has apparently what question there's basis but with IRX but sort a portfolio of

Vicente Reynal

And above record think one way definitely we're orders, compressor it be that, could of terms at in think I a George, Yes, XXXX could level. levels.

combined share. done We're to reassess and solid really done continue the execute take to on, and haven't just but record levels that. we haven't to going these not, with if focused or market -- companies backwards We

of see in a market, So in I against provider the position products. what think premium as we terms of ourselves continue compressor to we

You see growth, profitability. the on on but only focused we're also that in the not

team launching, key total our think positioned has us new compressor. has most radical in that. growth technology, that reductions, of Europe, to in one technologies I continue launch sizable energy of unique and So efficient size has that large, power to share compressors market well continue with for that is example, reduced teams of some and new us. what of a differentiation ownership is it the products a compressor to profitable terms launched believe that we're And some the the that drivers help the take we fairly is today. One CompAir with of cost one in really great and in enablers that and Very and

market. what -- innovation to command some to So, we customers, a lot deliver And then that of because that in view. is we're positioning the value continued price have driving to momentum my to continue able able we're the the is really the in differentiated

Josh Pokrzywinski

That's helpful. in guys? help It in to ITS pricing power awful comment steel would that of kind content prices portfolio, down notice Ingersoll ferrous pricing to maybe cost tailwind that but start just following steel in particularly on of an got value. say imagine it. on here. you sort fairly cut of what in becoming environment. I has the last guess, pricing seems would and Because lot Can't up half, to that Rand product, the I like average the If be that stays sticky could

Vicente Reynal

initiatives but should as margin yes, we funnel. even Great from very as lot that only the to we we our commodity, continue point and we get stabilized, to in also the forward, there, Josh. continue Definite are sticky, see a that have to and progression commodities accelerate. IXB pricing execute Not of look

thanks guess, inflationary power tools to to in we but fairly point -- team So market the we opinion, again, see in we're XXXX, situation accelerate. well. market the earnings as overcoming continue subsides this current leveraging have at a I current should that In my like IRX, time some in the

Josh Pokrzywinski

of Great. luck. Thanks, guys. Best

Vik Kini

you. Thank

Operator

from open. Nicole, Our now DeBlase is Bank. is Nicole next from Deutsche question your line

Nicole Deblase

Yes, morning, guys. thanks. Good

Vicente Reynal

Nicole. Hi,

Nicole Deblase

have through been guess pretty a few here, brief I just we've So ones. I but a lot

a First, clarification. just

I drag in have expected more you I quarter. was fourth M&A in, the in think from you XQ? talked organic. XX% be pretty PST deals the but quarter, about, know that margins to to folding like, some fourth Vik Is similar the

Vik Kini

X acquisitions, clear, in month the Obviously which you quarter full of only the to had that's overall XX% because base just QX. off now That's have business. online the great, be a unlock SEEPEX, all -- primarily the you

PST, upfront here. overall dilutive, profile the will So it obviously, margin be for

at XXs But in You're of SEEPEX upper is range. probably more discretely impact or little margin than dilutive proxy saw gross [Indiscernible] you on That's maybe accretive on the here, the [Indiscernible] because a point impact views QX in of the full-quarter kind decent the business. to the SEEPEX. thinking just probably a more the bit as

to meaningful there's XXXX admittedly, start on opportunity onward. you're very execute synergy obviously see us So going shortly here into to that

Nicole Deblase

do on Vik. million thanks, no the into guys thinking you then puts profile, all in the But $XX walk change it, year. XXXX? and the Got takes secondly, about And synergy expecting still run the I big I'm know about to to million full just in rate incremental next are $XXX synergies.

Vik Kini

lot puts and point, this But, takes. a Definitely of correct. that's at Nicole,

into $XX in point $XXX $XXX this million tail Just At in this expect to will the next then million a re-calibrate, XXXX, $XX year, nothing's delivered and XXXX and as was clearly year, IXV into move we say million And of which be time, the really million components probably more we are drivers prominent that I'd of forward. synergy the moving changed phasing. and in onwards, footprint terms that of XXXX. profile, the equation

Nicole Deblase

Got I'll it. it pass Thanks. on.

Vicente Reynal

Nicole. Thanks,

Operator

line Mittermaier open. Markus from from Markus, is question now next Our your is UBS.

Markus Mittermaier

wanted everyone. I to Yes. Hi, good -- morning,

Vicente Reynal

Hi, Mark

Markus Mittermaier

peers, may question, they're it's this if you -- is channel, product, on compared hi, this few Hey, availability if managing in I impressive. look if quarters going may, And is at wonder that be good large for morning. on Follow-up been -- quite particularly I on orders 's has European George I your this now. to guys compressor better.

that, order that some much just these Obviously, do could there that, do for elaborate to build concerns great. And how be slots, backlog? you [Indiscernible] the into customers, the visibility just massive I could have of wonder think at the some if adjust be on I how that would intake you then numbers, you risk connected that?

Vicente Reynal

first because brands, you the question product how product, because you I'll this of will again, great go growth. also terms growth, actually tell we is we studies It's the about compressors are it's I we to the our to the on accelerated think also the multiple into the accelerated that we we as question And of across little channel. it product lead a is case leveraging have everything. have Day, channel show portfolio Investors how and definitely reposition entire Markus, orders, in that bit the really a to really expanded Markus,

the to done product do think of I it summits. with a we work that So has have lot the since

the in very how back about thoughtful IRX product you spoke ago lot use about the know, and products channel reposition I with to out a executed so If don't any just remember, way a -- the being lot of it's and creating with really year a of summit the then we conflict. on team, the

the customers when fourth that increases think best with how products actually specific this And be surcharge many is because I [Indiscernible] -order contract we accelerating you more quarter. that larger -- compressor, business. they on your been successful we to -- recipe. multistage of that in lot backlog, can the and of long-cycle a some the customize that that the because visibility to one we Blowers that is doing specific Availability have we're visibility saw any those application. in marketing chain of customer, proven more in on or we options the of seeing cost environment. for are supply even the as To done be has actually a times And and the compressors, have the just times the as here question compressor could have is backlog pre caveats the There's now pass momentum terms optionality. not that a has in see the of compressors, to team that through in really a that pretty we for centrifugal quite compressors positioned the lead have we're where good. I in

of obviously, that that doing and we to down. at terms cost continues in we can go in commodities not position. how level a good think I ourselves we're to from think I inflation stay case protect feel So we feel But do everything that, we're ourselves this protecting

Markus Mittermaier

that's very thanks. which to just those XX% That's orders. increased related is so cycle that And backlog, follow-u longer helpful, to last probably very brief a comments,

You re-price could, have to understand that, if write-off. that you

Vik Kini

Let me here. let clarify me

So is backlog increase the total. in it's XX% overall,

the of type cycle portion not a is longer the orders the just So projects course some it of larger to are that that good But medium sure. of compressor, I'll call compressors. normal that, part typically taken of also what it are cycle for some shorter things and obviously we've

can on you In terms of whether backlog. comment the re-price

there's you the most of types have As those already do a re-price components couple typically of I items. of that. mean, optionality. of cycle is rest though, I no. expect like, said, longer the the the in to to duration, Clearly, months taken, we've you backlog of pricing actions those it's that typical and wouldn't some By but large of and not inclusive backlog re-price

Vicente Reynal

we how is backlog done. doing we of a I'll Kind have indicator price point increases have it the more against we pricing that really so track great [Indiscernible] the on Markus. that know mean, say there, leading one I on we bookings,

Markus Mittermaier

you. Thank Super.

Vicente Reynal

you. Thank

Operator

further no have we And questions registered.

to So closing remarks. for hand Vicente call back over the to Vicente, you.

Vicente Reynal

to Great. that employees of in employees interest many know the many call. you participating I acquisitions I in our from call. want for see just the are thank on I the of that the Ingersoll say our Rand. also are new

everything welcome day I that for that time, to our to you are board, customers, those So just better obviously to want our all more communities, our shareholders. very and every thankful you of doing are of life make on for have employees, to everyone say one exciting how our that Exciting new.

Thank So and to you. leave with talk soon. here we'll for you now, that, it

Operator

lines. us and now This you concludes call to joined disconnect may everyone has today. you your Thank the who

Ingersoll Rand (IR) 4 Nov 212021 Q3 Earnings call transcript