IR - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Ingersoll Rand Q3 2024 Earnings Call.

[Operator Instructions] And finally, I would like to advise all participants that this call is being recorded.

I'd now like to welcome Matthew Fort, Vice President of Investor Relations to begin the conference. Matthew, over to you.

Matthew Fort

Good morning, and welcome to the Ingersoll Rand 2024 Third Quarter Earnings Call. President Relations. Vice Fort, Matthew of Investor I'm And and Financial CEO; this morning Officer. Reynal, Chairman are Vicente and joining me Vik Kini, Chief will We yesterday, call. release earnings reference we issued the these and during our and presentation are website. Both of on Relations the section available our Investor

replay conference call a today. available will this of addition, be later In

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

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

earnings You measure both available are the of calculated reconciliation GAAP of these Investor comparable in on of our Relations presented the our accordance with most presentation can website. release, find and slide in which measures a our section to in and

review we an and On update will our financial provide XXXX to today's our guidance. highlights and company call, segment

to ask For and today's we to session, participants. X Q&A caller that X time other follow-up question allow for keep each

time, turn the to Vicente. will this I call over At

Vicente Reynal

thank for on I good by [indiscernible] our Starting strong And to differentiator, all. quarter our acknowledge and leveraging for X, employees continuing Matthew, and to IRI. delivered Thanks, of team to morning results want our owners. Slide competitive another that, think

free And targets in margin strong growth margins. strong long-term Investor X% flow adjusted our record highlighted adjusted XXX and of cash expect the orders XXXX. EBITDA free flow to by double-digit EPS of environment, execution we cash adjusted expansion, on was basis EPS Our and difficult Day generation revenue. and points deliver Over XX% macro growth despite

compounding growth X, how engine Slide we deliver our results. durable describes Turning economic to

flow outcomes on cycle, target right-hand delivering We page, As the margins. over of page. strong side are remain our cash free of this intended Day as long-term the stated earnings outlined to committed strategy growth on our and double-digit the ultimately, the Investor

is IR will ownership, long-term Our drive combined that creation. unique our with value help which competitive culture of differentiator,

on in our mind, that update a initiatives. brief growth With let me provide

the pleased transactions slide, are closed by which our start achieve growth On highlight X month, this I together X. past year inorganic ROIC mid-teens am a we'll that with expected next initiatives. to to

Let me these deals. through walk

which vacuum manufacturing First, fluid which expansion, strengthens transport power is leader example position design and market in the strategic markets APSCO our a innovative energy-efficient equipment. for of mobile a dry solutions. with is blower in and and systems This liquid the of great further

high-growth, biogas technology Blutek, is industrial in and which markets end and potential capture. expands Next carbon including aftermarket sustainable and capabilities, expertise

left-hand our which Continuing X, page, in on beverage the pump and Page on we have portfolio side technology high-pressure new including water, to wastewater, Pumps, food, markets, of life sciences. end the adds UT

positive leading of displacement and And industries. is Valley with next for pump Pump, double the which Penn is a manufacturer disk finally pumps industrial, technology food chemical in patented use is municipal,

which bodes the we On page, I we XX inorganic exceeded revenue like XXXX. XXXX. well have of the closed towards we as a far our year-to-date, target, in transactions total that already would have to highlight right-hand And on annualized side look of

primarily to The fit will sciences grow active into life transactions deals the are our including created and addition, in continues very currently bolt-on deals including size. under In XX funnel business. LOI, that with LOI under the recently additional remain funnel

driving take as to across Turning a digitally are connected and asked X growth highlight often minute we how organic we questions. to our Slide X. I wanted assets get

assets; on receive revenue. with our First, how what we that do we the data connected leverage two, do additional do data to and we drive

over gathered example efficiency we outcome XX with that for of our over the The real-time the The We million dive countries a revenue the operate. creating just agility new a that in a to customers around teams that opportunities. which simply products. and uptime, our to stated, X volumes demonstrates into meaningful a goal X As period are on recently connected identified impact do of energy on slide over employees translate figure focused speaks was days. data for incremental across XX we asset revenue, potential collectively data-driven different about $XX could unlock innovation was to deep revenue-generating insights our positive

machine the innovative the from of examples act have page, As And the you think ways consumption customer owners. range and to optimization to and experiences, middle we better. we and can by better see our level of new making our improving of advance of empower organization people life these those at bringing insights. maximizing thinking in working the us our uptime. defining of like They mission When energy every of make

I will presentation provide the over now financial to an update to our QX performance. on turn Vik

Vikram Kini

company Thanks, finishing orders organically, X% Vicente. deliver to grew line results with up despite able Starting or our differentiator expectations. IRX, on competitive Total environment. strong XX% the largely Slide macroeconomic the X. of were we continued challenging Utilizing in within quarter

Book-to-bill previous to reported the below was in up in half second due large readiness X% down X% that or local which organically. and in we X.XX, customer pushing out line orders our Xx of the Total onetime some half. approvals. above with first and did part as see in Worth site is was noting guidance revenue

are seen cancellations not that feel nor we cancellations risk. order have significant we do However,

for to company $XXX X% adjusted through point margins the demonstrates was of end, was in predominantly per prior quarter with Adjusted billion, $X basis a flow Free cash XX% expansion. third improvement and share quarter, year-over-year XXX a $XXX free delivering cash $X.X earnings our of the was balance EBITDA million, flow adjusted XX% margin year-over-year improvement and cash quarter, is at hand of billion margin the gross XX.X% solid the driven EBITDA the $X.XX million, for quarter The total strength sheet. a up delivered of liquidity compared and on year. quarter which which

enable will allocation flow us generation cash on to free in remain strength our capital focused continued Our strategy.

and additional LOI, have in XX under we our to momentum As still we funnel. mentioned Vicente building M&A continue earlier, transactions currently have

Turning X. to Slide

XX% total XX company increased Total adjusted new a the reaching up basis company, EBITDA nearly basis, increased points year-over-year, prior XXX QX points, XX%. margin basis revenue high PST X%. earnings the and margin segment and remains XX%, increased from decreased segment For year of on the ITS FX-adjusted while were XX% but above

true-up Rand large margin and by XXX in quarter, Overall, adjusted to in Ingersoll incentive of the came expanded a costs management EBITDA basis at million costs. due corporate for $XX part year-to-date points

rate Finally, adjusted up $X.XX to quarter the for X% adjusted was quarter XX.X%. per EPS an including year-over-year tax for of the share,

primarily on was slide, facility. which company year-over-year versus of credit cash CapEx, quarter based cash driven was now increase next for the $X.X was was $XXX improvement QX. the revolving billion increase totaled of IOCs of to billion this million. stands Total including year-over-year turns, $XX turn the free On X.X flow X.X Leverage which $X.X million, $X X.X purchase liquidity The a billion at earlier quarter approximately our availability and and sequentially the due turn for a on year.

and Specifically $XX within to deployed the shareholders million dividend as payment. quarter, million share cash in well our outflows included through $XX million for $X repurchases as to million $XX returned M&A

our use being expect be capital with ahead. M&A Our cash M&A primary we as unchanged to of remains priority, look continue top our allocation strategy and we to

Vicente discuss will our to segment results. I now back call to turn the

Vicente Reynal

Thanks, Vik.

XX. Slide to Moving

on up of was last delivered year, segment XX% QX in record with driven which Adjusted year-over-year single XXX solid largely low revenue EBITDA finished year. top growth high basis Technologies approximately finished the over Industrial of and points primarily X.XXx line up approximately Our incrementals EBITDA XXX%. margin gross prior at growth of from margins was organic XX.X% expectations. Adjusted Service finishing margins orders with expansion. in digits, Book-to-bill X% with by a of of

up the the single compared digits. digits, to Industrial and while low orders single revenue China. continue up up were Compressor blower Moving digits low high excluding were to line revenue product see highlights single to in digits was orders Bank up orders globally, and our quarter, we an positive and mid-single was

markets is on for Scope clean emission of food, our technology targets. This high-growth, the we're XX% oil-free customers our new reduction like Scope For and in achieve great customer return and that beverage driving our X action, and offers technology. helping X on cost energy. total in innovation sustainable a their highlighting focused reduction investment end ownership, patented a patented

Turning EBITDA adjusted to delivered of margin Slide approximately XX. of and growth The achieved million X% PST organic order $XX a with segment XX%.

was within and XX%. We of PSC continue to segment $X.XX The growth or many on of the X.XX with encouraging see basis. an growth signs book-to-bill sequential order sequential revenue organic XX%

growth demand the with In about ongoing PST momentum single generation addition, We're driven the the in mainly segment see and organic to stabilizing year-over-year, business. health order by and organic orders of of orders book remain PST orders pleased remain our underlying continued demonstrating high we short-cycle positive, digits efforts. positive up ship

Sequentially, double the component potential business revenue the pleased medical wanted to with biopharma XXs I drive about Year-over-year, Finally, We're optimistic quarter. business the revenue to up we're low digits. and digits up device double for business total is above-market within double business performance very the ILCA ILC the digits. performance growth. the highlight Dove low improved the of up biopharma with and low Dover

without provide PST disasters. access Planet need and in drinking clean of Water a Hurricane Planet for the electricity. the help was to shows in can deployed water provides The can wake our people innovation of in Helene. recently mission-critical safe the natural North Dosatron in pumps, water Water products Our system community example drinking action X,XXX System the after our Carolina, Nashville, Foundation how emergencies Using up

like And floating impacted several they our team weekends would support which members homes. to our in recent our also damage customers. late despite of many the about area, to moment the Tampa I take experienced Dosatron this, to their of work a talk site hurricanes, and where nights the

our thank resiliency. dedication, and Dosatron special for team, So hard to you your work a

our we and with what can show actions achieve culture. Your mindset ownership

the market we leading business. a On of provide questions of MQLs an our as me trends are our leads cycle Marketing qualified slide, lot always indicators. short- let the a leading or about update key on to indicator get current next medium

page, chart side the of As to on illustrated in the continue left-hand grow. MQLs our the

organic are quarter, XX% the X% year-over-year sequentially. For up up are MQLs and

elongated. for Consistent component As key impacting systems, longer cycle discussed decision-making remains happening and site what capacity. to for which remain last year-over-year. of is that activity process is projects activity readiness for the funnel the up here around the formal centered compressor XX% with to engineered-to-order at quarter, continues time, is the feedback portfolio. we One at we engineering be indicator our encouraged same many we EPC customer and The QX we look the

versus points revenue now is X%, expected XXXX revenue prior Total look to we our adjusted is we company overall down XXX EBITDA which XX, and basis X% guidance for year updated have grow to our to As full adjusted EPS. between guidance. Slide

our organic adjusting basis orders down For XXX by into driven the predominantly of timing converting points, revenue guidance shipments.

delivery we activity, very strength in by continued market other momentum to improvement customer largely driven and the organic encouraged we upcoming by continue site the QX customer including election. factors, see While delays readiness are order and in

these orders be delivered to XXXX. in We expect

our look the is project data, order As to basis growth, MQL previous XXX remains cycle XXXX. we into at now is as our points encouraging flat we for which guide. expected situation to as compared QX FX and long full this year approximately move funnel, approximately organic be

expected is $X.XX completed and and EBITDA October billion Total to at for midpoint. remains of is the $XX which and within at Adjusted is projected Corporate midpoint. $XXX $X.XX XX% XX% in as all the to the year-over-year of be company $X.XX, at range range and around is which XX M&A million. contribute is approximately transactions XXXX. be of adjusted up projected reflects the year-over-year $XXX billion, to EPS approximately cost million, approximately the which closed

line a guidance year previous of have side income to on changes interest towards remain right-hand in guidance our as bottom flow provided August. compared the previous latest to been net and spend, conversion a in our with have made tax showing our included CapEx page, all On guidance XXXX adjusted rate, guidance. revenue expenses, the percentage free No in cash we guidance bridge of as the changes full our

execute the let questions, wrap to for very am Finally, before current pleased conditions. as by up despite Slide we I we turn continue call market open the how into with XX, our saying me that teams

a XXXX, well strong nearly share and As a growth where differentiating of have our expansion we end compounder. growth the financial economic focused XX margins, close into earnings the The real we we model. flow terms have adjusted Rand track portfolio have part durable with we're M&A which XX on able difficult more total to in will deliver, is distinct added momentum look LOI down. initiatives despite markets. model to unlock XX% growth double-digit Year-to-date, even in again, a that power geographies macro execute results, momentum to our this to we're through improving driving teams underpenetrated. solid value bolt-on We're targets XXXX, and with And goal. generation. X deliver lower able triple-digit in we company be to to incision focus slowing to don't over been of differentiated growth the is a organic exceptional EBITDA to free historically a which continue targeted where see past our created strong high-growth What CAGR continue environment, on we differentiate sustainable add through premier and track that gains in to gross translate on companies as in engine under to organic expected margin for We continues stated cash Xx as Ingersoll years, the growth out in believe this deliver technologies we're continues

I'll Q&A. for that, open turn to the call the the back operator call With to

Operator

from comes first from Mike of Your question Instructions] line Baird. [Operator the Holleran

Michael Halloran

growth maybe But I a here, of down, slide think So partially MQLs me. because time a been of but correlate And on around as those that organic guidance to kind the because commentary example, worked underlying heard again, But on push-outs. prepared is put an that's I remarks an leading all start through I'm XX. seeing now you MQLs little lead -- certainly the the pieces context a you guessing you're what pushouts. bit moved the probably as Slide could project project moving indicator, right has basis year excuse in the or shorter-term improving let's the maybe

trends what to and trend of the underlying portfolio? kind to needs that happen in your put context that with order and and so in related slide underlying And sync demand have maybe all just then the the

Vicente Reynal

we demand I And Mike, instigating that's what activity I'd that generation Yes, will of by mean, see recall, also said we're of MQL the our first as always in we're categorize engine we demand. say market activity. you margin terms all, I definitely encouraged that that

this to said the past, purchased we basically, MOLs X Rand So customers that is always penetrate have not XX% to new customer years. from accounts. those anything how it, going that continue over Ingersoll We of call

how about we continue do share. it's to take So

happen saying is the in than an we elongated what clearly, that of do as translate been. [indiscernible] to what is that, order are and see what only with past, some but to commentary that, election the the readiness, has definitely that market. not not might it over that longer of Now customer And predicting be of X or mean, will MQL maybe but has X historically, up to weeks. what as you definitely others lot an a to said is historically lately in getting instability a kind seeing. into that we're We're making the a of period at of to now could I kind how is clearly, here But hold allocated. much

very we leaving And a closure. in is putting to our the through of a purchase matter the is I don't our customers these until qualified an lead The order is us are that products. going a to customers This really we funnel. the cancellations. encouragement now of those this So get customers just see it's question, for that a that as think interested don't asking interested I is real right? customer mean, funnel. just that a is nurturing in We customer not continuing is just real see activity goods well

to close We see rates. have continued good

What that to around encouraging the just orders. going they a projects those and lot did in designed, that a and of is X announced, through. projects as travel been movement continue of engineering And not when have of we so maybe is cycle the EPCs, are years, spent to into a we're I seeing process And of of we're lot have they that been through that's companies, over good projects, and in they Keep a get very seen translated a the why call the contracting activity companies mind that there's think because market kind the in similar the seeing over we that design And make few they have do the fairly that those. lot to be I typically encouraged I past about long project there's large mega generating. you past get we're need world. are it on weeks, scope. have to lot engineering

I it's Saudi is What us forward. projects and taking customers control to what encouraging we'll any continue look And just deliver can in East, Middle time just about the control we get bodes that in and that well can to saying from seeing. here think and continue with to just again, the actually customers. we're deliver. perspective of to that And and Dubai to in execute that firsthand very talk as we're performance specific But what even longer. just we weekend those meantime, we it's to

Michael Halloran

mean take you fact if algorithm the growth more doesn't, prevents starts that the point? you year, these of then are tracking that about variables? timing And if right tracking next projects, there when from optimism, the indicators the normal So a other viewing it Does at the comments I for think getting towards your Market, it any that what company? this way.

Vicente Reynal

Yes.

here a the that gradual market we how recovery to go see I grew as mean, other actually that we want recovery. fourth year-over-year always that don't is and is do, continuation lays we we of everything point way going view bodes and I to in the And here, the XXXX. think the earnings as next But call. QX, for give kind it XXXX, we backlog us guidance out I in that sequentially. our the kind quarter, is of for going our see into view We're on to think, even rate we Mike, see preparation in that, well

bode kind cycle. about be think well it we guidance as we'll continues to go next provide of we again, to XXXX earnings our into able So as better color and but

Operator

Julian Mitchell from Barclays.

Julian Mitchell

sort flesh around of first just bit Maybe more. question, little just Vicente, current out trend, demand a the that

was big that's orders since headwind of there backlogs the that But at look and summer understand X we But back factor of Is conversion have industries at very size of good, broadening think sluggish on kind or I your step than It's are China sales markets, the quarter, overall the just China I things and geographies, the those last I last process ITS. to And of generally the present. early exposure good. pace seen that call, orders maybe kind lag in are to your good. more speaks into those gradual point out when was months. China clear ex Is that take you are those a it back that recovery the compressor a a earlier very weakness of factor? in pushouts? project would it say And year. of fair perhaps cycle see the kind next

Vicente Reynal

do, as commentary I always week lot with ago, a customers. a China X of a Yes. good I team. the weeks And spend of back actually I about Thanks, spent in to the China, amount travel. Julian. time with

bring technologies terms only to leveraging the M&A terms I customer I'll care U.S. said about year So clearly, well. very of was, ability bit China, China mindset has ownership of challenged on was as and done into as through to been and technology we the you well incredibly our with And China, themes a our customers for in has move think this to early a we good I largely, spend that you have and China, not I to investments, color help but of that market in around was at good from can remained growth as China, tone the able say that positive what China around I do very do even and thing, guess, maybe XXX their same them it and countries customer point can was I take give also of back in also with little could their I thematics company and very them. maybe expand all the parts facilities customer that how the kind starting change the China give now commented this when time we QX initiatives. what over large China, operational towards the they in kind -- and but the facilities Rand close And be of employees we, say, for in to then account. how they that in only particularly across to world. of across I say, positive has alone of for continue It's like point the them X,XXX outside to of incredible facilities enthusiastic energy seeing just we mean, the particularly factories our customer they're a Ingersoll and service-oriented not feel this Africa. that of efficiency a improve on in go and the customer fairly of think it's I'll

customers think I how they So to continue efficiencies. invest and see continue to to to are willing see willing accelerate we their

customers takedown. take And any saying, is question, negatively. we guidance see assume driver to we're going we're and other no customers move pushouts across now most to In regions guidance actually this that's is by delays for our mean of -- hey, that some that XXXX, we're product as and really think of terms -- driven have the of the just this to to guidance getting of we into we and here, I organic say largely seeing just them. versus going seen anything the say some the those part. said, shipment now broadly the And the of willingness I'll I is this timing. the do inflected

In do we terms see to in business question the movement. that the of and sense industries we traditionally your ITS how right absolutely process see driven about that you're gradual expect

I you have that have clearly, pockets we seen that very have view diverse growth And digit We with we over PMIs of territory see. diverse, that ITS we said technologies may think we products the and as our compete in and always a to nature last in year, double grew mean, been have we for that. we outperformed that believe I organically versus example, months. contraction XX that -- be and mean, said more PMS to But again, expect that these come than territory improve, showing. PMIs to from this yes, V-shape we growth flattish. recovery will we expect contraction are more growth continue it's year X that, but kind Well, that of gradually. quarter and snap better having another, believe we more think gradually or to will I don't we as

Julian Mitchell

And That's my helpful. the just front. follow-up margin on

rates in put EBITDA margin So of the point finer QX. on just sort maybe a

that think about be about that? bit a I incremental as maybe spend sequentially year, but I QX. know incrementals year maybe normally as in historically, would it's sort you little investment think up but give this we or back normalization like of next that think anything any of XXXX, because down exceptional of or I sequentially, have wrong, And you

Vikram Kini

is this Vik. Yes. Julian,

one. take Let me that

things think I frankly, foremost, and first really it's largely teams by of worth think, I the the the and really gross margin performance noting of by that a were proud to things to teams driven been labor exceptional deliver QX, what you in recurring I'd for say, So and revenue that are nature able see, the of starting fruits while. expansion quite like that we've about and talking margin

see think in are the the to to probably as going It's segments to move easiest range. EBITDA that X you're QX, say I XX% margin think you sequentially, I still essentially it. way

million corporate probably range. costs little think that normalize million a $XX in will $XX to bit I

so that algorithm that's QX. the kind think margin for way And to of about

margin but is is nature, a I don't that anything next there to that We or back we it. be the "giving of there's And Now margins" point, to a make think I will specifically think ongoing no, anything different bit normal But that expansion think investments several out. where and us probably the good seen not if historically innovation, you'll us question are. say, see resources. probably right laid in you've outperform about generation we margin front, to we like to seen think for say giving the would and in really the for make line right we've hopefully guidance the around investments requisite ITS, of I what and we're about as think in is growth. about of continue with room kind that obviously, but do on to as I don't most demand levels QX feel this always commercial do QX, that's your specifically. we XX% in necessarily continue going quarters. anything about we year that And we importantly, think XXXX think To at necessarily think areas you've way

Operator

Your Research next of Partners. Vertical Sprague Jeff from question from comes the line

Jeffrey Sprague

are of see way you with the your to over that? excuse an and and try lot that other about pointing dealt. impacting or uncertainty. of or But to your uncertainty. kind the back is kind would What delays business just Just hand and to with view on outcome reality this on Is What the can companies of we some EPCs a outcome move is X interesting. just getting election you project whatever list substantially a the uncertainty, said having or an

Vicente Reynal

come and reason or and it they in out it And and doesn't is pretty we of as them mean, often why interesting. it the is voice because call of are cycle. intimate close of their we too top terms buying chart I the reason we don't to why of elongation. It's Yes. the as lot out table customer, do through the go a of the

of been mentioned Now often. is kind the top we the been But to definitely it not yes, getting naturally, here. Has the said election list. it have verbally more of closer as more is it often. definitely Also, more

I after election see that. with, or going how better reality of of it I snaps little we pent-up big to is we demand So much bit and be outcome. think mean a or kind is how go over the there's of a a can

think that's controlling to focused Jeff. lot election remain be our But on the time. what still I again, control what a can happens and determined play basically clearly based here, on we'll we at

So little question, not we yes, but how often? answer #X a more reason say innovation. the maybe it your that to the I'll for is yes, heard definitely bit

Jeffrey Sprague

It global. U.S.? The project to though delays quite sounds it's the skewed like actually just

Vicente Reynal

Jeff. not That's global, is project global. EPC. it's the X. customers, and the election time is only I Saudi of It it why reason, and spend delay because mean is honest, Arabia to very those readiness with Yes, site be quite basically definitely

Jeffrey Sprague

just a pivoting on quick, seemingly the Vik expect service is, how rate be or mentioned just update Can how and service performing, growth just mix, obviously side. positive, maybe softer, service. sort equipment close give is what you out of on little of just us would the real given XXXX And an bit you to

Vicente Reynal

good amount India. have, well. I Investor And the are U.S. teams other China momentum quarter. really service on that the clearly saw and of I want. are in time is very giving working X said the think just, organically a launching I it's And recurring we of only the everything team. focus Day really even and and customers, Jeff, we the That they how side. Europe solution and of not great mean, it the Service again, service-oriented, encouraging momentum we not that the now at see positive, also was that spend teams revenue that Yes. is in that the that but also with country in biggest the India our engines we

So we're Good good. I seeing. yes, say, momentum it's will that

Operator

from from question the of comes Melius Rob Wertheimer next line Your Research.

Robert Wertheimer

oriented. to about if Your margin potential just behind performance much And to if shifting lies little continues maybe there IT do than more bit be versus you're see I'm still a much growth-oriented workflows be we extraordinary. your ahead, margin you curious as how opportunity

Just because the maybe years. you've last of obviously, over comment things done amazing couple that

Vicente Reynal

about is is start growth say Internally, the I'd and internally, margin. to with like the of power Rob, last Yes, end I'll question. we'd say the

at sure we're yes, of look So profitably. that we're growing, always And at quality making that, we growing look the but we earnings.

Part Vik we So have incrementals, to we've that gross despite we the revenue seen a that continue investments, investments not product volatility margin of and and solutions only on like the also developed I exciting go done year-to-date, market both. the I Yes, to recurring I'll lot make the things also and say innovation. spent we as specifically that, mean that speaks my that streams leveraging Asia China, for very we're -- said, has around see activities exceptional trip unique innovative a of full And team think very that from with here technology. are and now to day in the global new things basis. team in a

definitely revenue So cotton the the example terms of that as out in that we That's drive of will put investment. some also part here incremental well. our

So I'll here where positive have expansion say to about we ITS. margin be we continue in

Vikram Kini

guidance point, the and I how segments right with in And X seen as Rob, expansion pleased question it's to maybe poised margin of largely back -- seen, out. another of We're we've side, thinking things you've the been percentage triple-digit to we think kind you incredibly I'll your year can as I think implies to we've just kind 'XX. on we about the for momentum the about forward, laid flash maybe and as add ITS

seen opportunity still much. see going Are that pace ITS. We in expect as in is to maybe you there much historically, as ITS as probably not the you've

little probably think I there's to much targets to still mid-XXs outsized back margin. of EBITDA there's a opportunity and our do Investor Day more how stated think with that very closer to get But PST I opportunity bit fits in there. a

and of now I lot PST about ILT the we opportunity as think also now business integrated. a And think pleased. the really great we see that business still particularly fully So being Dover with

Operator

line comes from Your the next Andy from Citigroup. question Kaplowitz of

Andrew Kaplowitz

landscape X Vicente, you give talk about -- about or start the can think a you color 'XX. us acquisition to as about

been You obviously you active, said, as very 'XX. have for

little a up I LOIs, bit think, went sequentially. Your

other 'XX? see as nature. Is potentially you the know you in incremental expect would said is activity a that XX? that And more generally M&A type bolt-on in as 'XX you activities do robust year So of for the I

Vicente Reynal

remarks as we're mean activity. to definitely ILC over answer lot opening The that -- good we is the heard of well seeing I yes. answer on you see a simple Clearly, with to the with that terms have funnel. an comes those acquisitions, acquisition that in our and expansion few addressable bolt-on gave billion in us already market of we in a bolt-on looking $XX and of into a

yes, So encouraging we say, I'll the looks mean, it as we Yes. I XXXX, to that still momentum be have very also today. see

Andrew Kaplowitz

up And ship, and in mentioned high digits it's then still book Vicente. PST single year-over-year. you Helpful, Okay.

for mentioned up organic segment. stubbornly growth been now has I know sequential in orders You revenue a while negative that XX%.

suggests better just on in of to commentary Maybe on update positive have you there. ILC-Dover, relatively environment that the So you good visibility improve a but an in it, growth lot does particular, do order just 'XX?

Vikram Kini

is and let I'll Vik. I'll start, this Vicente add Andy, in. Maybe

with encouraged now to separately, Dover business, by that on just momentum been positive regards the for order a comment PST base of think few of the you've I we'll kind seen kind we've very and ILC quarters.

the that that, QX, We expect I of specifically XXXX We'll We in I'll think as algorithm, encouraged as here of kind guidance guide. which full into we're have is combination good PST [indiscernible]. by for a been you better. necessarily base move say, and of of both QX XXXX, us you are the And comment our bit a kind Vicente, news pause integrated, really well we example, lot as of the acquisitions, starting let business. now I'll to of as well business fully base commentary. to positions growth think, be to see But part year translate that do the on get part a what the I as

Vicente Reynal

And well. then continues the that I'll go on the very LLC, integration to say

and the terms in in not innovation device piece numbers of generation, And business. as to important really on over demand the only both opportunities the the of in business IOC doing the target I in commercial of investments component most some growth Device and growth the make see investments saw already biopharma Medical are for investments we biopharma are You also just well. to think at and accelerate medical is talent. continue and we product that but investment

said new we're business P&Ls before, the new general in We we with the into we managers. I the managers now -- structured general have reinforcing multiple distinct P&L think X functional area. and support We

up move of the scale lot scale and a forward. that investments that prerequisite business making we as good we're to So

Operator

Your question comes next Research. from from the line Coe of Nigel Wolfe

Nigel Coe

maybe M&A we in I PST the return outlook looks this on just the wondering of for just to easier. sort hone to obviously wanted wanted and we're pointing conflict fourth like of that's then growth make And quarter, a Just contribution. and sort could in if just XQ. case. to just towards It the sure nail I try

penciling a your had within more want of guess, just for of bit and a I just definitely from, if acquisitions. for quarter. there's third what address And ILC just the Dover. Does below to from the quarter fourth X.XX that ILT-Dover book-to-bill suggest reported that You kind And you know core. revenue just for in bit X.XX maybe X.X book-to-bill

Just us. maybe for unpack that just

Vikram Kini

Nigel, Yes. answer I'll of those. try all to

of the context a into PST X of QX. specifically growth positive to M&A that contribution, to state algorithm the organic terms of that in the the expectation, QX, on return in In yes, simply. specifically, is So kind just

QX. trend a in wouldn't it again, of market I that. you But touch like the in think you'll comparable, that context anything see lower any I saw what than as maybe take

really continuing think you book-to-bill what the medical would is seeing to the the see expect very and they, to the device QX. a of from tonic see I'll space. and Specifically your call, you're sequential normal to growth business contracts. momentum what and times what ILC level as quite exactly of lot with platform expect biopharma they the time of tend it And Dover, frankly, an the Vicente see orders, you even what at question, to then to be can tied comes now stable, you said, because quite that's in equation, saw over frame, larger more you multi-quarter, typically, much lumpy a multiyear where side kind they ship frankly, I are

normal that see That some subsequent of outside and quarters, book-to-bill to norm So see the how the those fleet operates. space we future course is a business that literally you nothing was was business. book did inverse with driven would and contracts, the by the in the actually And consistent average. exact you that's reality once below you'll very speak

numbers performance fairly calling but it you're So think with -- say again, are have We're the it's A very bit the I actually noise, would there. consistent. little we very accurate. the way look pleased I of you characterized and

Nigel Coe

XXX on XXX, Okay. be for track And then just we ILC? guide to for still are clear,

Vikram Kini

Nigel, repeat can the you question?

Nigel Coe

contribution on at is think Are XXX, Yes. for the from XXX full year we range. still I the ILC track

Vikram Kini

Yes.

that's ballpark. the right think in I

Operator

Your next from question Ritchie comes from Joe Sachs. the Goldman of line

Joseph Ritchie

and that know questions -- on earlier. referenced East. nose the and that I book-to-bill kind these fourth elaborate around quarter. actually readiness just site that what the you means? you very EPC like I'm I book-to-bill separate could than brownfield people assuming know there's guess Vicente, will the discussion orders And then I this also concern the dive Middle are of a in we and the had all is project asking

expectation in. the the any typically it of is typically of kind that fully for is X your And in below around what half book-to-bill, second the so just comments recognizing year,

Vicente Reynal

terms to even be of about In of greenfields expansion basically terms readiness, in [indiscernible] is terms the I site be what permits of range be mean cases, it of why you or to Yes. cases, capacities is wide mean as we're pretty project in to some on. the labor -- in permitting the permitting, it reason the some Joe, I the a some a things entire process. get piece in of could able

certain have many cases, time. the are in ready, in we come a not other So to and pieces

just So has of of these logistics put the in getting activities do a lot kind with it I'm place. to just

but don't in approximately said X%. we you for In kind be we we that terms range. basically, we said what the of can the that mind think guide that full to And book-to-bill keep book-to-bill, expect of, mean, year, orders, in I that are I on that see, we on

So be X. we above year and to the said half we usually expect the of that going book-to-bill first be to is

the in here of the than came usually of of the quarter, And be that's we will year fourth The what exactly less as exactly same that will see that third [indiscernible]. happened. second quarter, kind half as -- And we kind in the case. is

be quarter. approximately book-to-bill to that orders bode means the well expect for we'll that X, organic continue full the fourth So in expect squiggly year, to we and that basically should

Joseph Ritchie

being And others helpful. That's -- margin very good the guess could see on maybe little I And hearing see Typically, Great. then more just bit places or that a the that XX%. elaborate we super radiopharma just that years. then really we're theranostics thought really from to in there's nice as coming accretive out to growth of business. like biopharma,

that piece you're So specifically good momentum. elaborate of and on your where business maybe seeing just

Vicente Reynal

Yes.

even now where high of antibodies potency the generate there's good are they're powder just in. you powder, We and now activity. model But order development. of development, drug the come gene these mean, think reduction you containment presentation even therapies weight and for I in whether great that a compounds. these move have been that is piece and that's for processes stated biopharma focused as high -- with exciting the the monoclonal these potency need is said handling far, these I to cancer think, in simply of lot research APIs, that a about APIs developments. a I we of generation so by medicines. of of approach potency is before, or powder that, in And all is And think think high single and drugs potency we need as on that on compounds, well into customization to use as of these a come the I very And nature. GLP-Xs in treatment lot terms next going there's kind laser-focused basically high you of of lot new and

be the And focused on so team to on accelerating development very very our I focused think drug. intends growth, early on

I it growth very said mean, you think just a there's well. say that business. I I'll of lot good biopharma momentum on So

Operator

from comes line Stanley. question of Morgan from next Your the Chris Snyder

Christopher Snyder

labor follow commentary appears tied Much readiness. it the of capacity site and there. to want to I around up constraints on

demand that that U.S. at speak when for So Because these customers, to is continues an with know the go like activity there better? pushing employment, and I seems least the and is expectation that, gets you higher. higher, any projects in it here

So constraint. like a that seems remain could

Vicente Reynal

many said that's Yes. mean, mean, are gradual well. is I and think labor labor smart about varies continue country why think about very I is be other for country, main that will to you in by how countries I continue momentum But mean in to yes, a we cases this very U.S. skilled for constraint the I world. here needed exactly that's be about it thinking it the constraint constrained I this think and highly -- across we a No, is very protect. recovery the And Chris, because sure. complicated

Christopher Snyder

When guess, an stimulus environment I the I as at appreciate think part the the then seeing really out you But that. into being stimulus all impact to have on the early to QX. And there there look do the that guess, will And said for when maybe between is just from potentially I [indiscernible] any that stands China on XXXX? the impact about of through. that us timing measures, you in could of think impactful Any [indiscernible]. filter anything you're or you know the the not policy operating specifically. in Ingersoll. I of economy

Vicente Reynal

great question, Yes, Chris.

the get national higher total all equipment again, got is most stimulus the and -- latest the by think upgrading in priority a and level then I region really is at region. impactful you that X cases you many to this go these is around and

goes this to are we energy that conversions energy those improvement. are efficiency. high those terms of of have what along we clearly, And deliver the on going to in story all capable the doing exactly but saying projects efficiency is and priority -- So been

could stimulus where see think Ingersoll be Rand. is I we So that that the impactful for

the then it takes In the down stimulus, timing, announces of time. terms provinces it the that and to and trickle has time. and to to I mean, takes regions, government central

again, bode kind hear and it for fruition? that's see and perspective. just week to on it did about? China of fourth yet lot Not Now could we talking a were come XXXX, say was we a ago, But when yet. the often that quarter well the in how teams I more seen we Yes. Have we'll why

Operator

Your of next question O'Dea Wells comes from Fargo. from the line Joe

Joseph O'Dea

you talk about how a think multiyear project order, in the get of ship what engaged engagement of ground the an Vicente, about relative a be large customer think frame? when we of kind about with ground go shovels when your it can pipeline in time could you're when to Ingersoll's to, growing you line a projects time in relative in the shovels the to say, when multiyear you when involvement

Vicente Reynal

experts. projects the a have from we They're I get SME, beginnings, mean, technology specifically Joe, these subject of Also, processing what rotating matter subject sure. side, at matter a experts the components. on have like call large they Yes, involved. EP they early they typical lot

great ground. we a project after and of so later it shipment. And XX When months do. with the between have XX months And typical relationship XX can to time could to products really those that goes gets our the contact into the call educating time what order be decision, the lead shuttle the the is maybe

to could gets time clearly the anywhere the based years customer it, it could and when the I X order is size for scope our be gets is by mean XX of removed XX call project. But between of it that time be and varies But up initial months ready the to when the -- site. it the puts the the time when on the project of kind customer So project completion. the on the varies. the lead to to

Joseph O'Dea

QX. then back when whether book-to-bill softened the sequentially orders trends. actually seems as organic outlook lead quarter. wanted the And from the helpful. at would look sequentially QX from PSD just The order of X the to to years, framework growth, X QX and the PST suggests to come That's stacks, well like improve in would QX. mean that I of guide the growth year it. of Got It to that those sort it's and some within we fourth sort

lumpiness the within looking in Not sure but improving weather a events would how fourth that's any and factor, were quarter details helpful. for if the And be any on color there third just quarter. so

Vikram Kini

Yes, that any nature? well. I weather-related things that Joe, Maybe or this in point the part. with is that of and Vik. I'd major point add Vicente one, I'll Any let as Would of I'll I'll start start, No, note nothing latter to.

of said does of do trends. the some comments projects. showing we I encouraged And the positive quarters of be that PST in nicely. one, piece organic think that we of and about say legacy Rand while. PST about think terms more also say, as I about. to cycle prepared it anything of historical we But this the necessarily continues at some the Medical sequential quarters have industrial Ingersoll lot seen continue consumed comps meaningful call or clouding lot what think there? had are type and year-over-year we've those, was of remember, point Have book in what would was or been to for longer No, that of we've of are can time. I talking the sciences I'll is headwinds we've And comped what any a kind that growth. or multiple think It's now the necessarily not of business, the now of I'll that obviously, then that -- news, good I was, ship a good X speaking that, been do fully that. recovery I life the noise think I'd a call Vicente I create or the kind in

more that I we think the it in of is some space, PST. talked there prevalently ITS about in much but

sequential of good now news and that So organic particularly the orders couple positive a is you I quarters all together, think here growth. put when of

QX. that see in we expect see start to to expect positive we revenue translating Now bit, specifically and to organic a little do growth,

Operator

comes Your from of David Evercore ISI. next the question Raso from line

David Raso

a between million. a quarter? on same just the compressors, and that to -- what question. how just Page of the to a vacuum, bottoming other ex of Page ITS. figure splits given those order currency. to organic easy It's tools X.X for acquisitions, But us out much China organic orders as those quick I'm the are not Can organic within is? power boost to the the ex trying I XX just you help given all-in sort get XX, give know in the all can Just you currency. X.X The provides organically be

Vikram Kini

that are the power closer has flattish. The driving Probably negative lot way a lack to Yes, what's M&A tools that think, I comparatively. of It That's seeing think bringing this, the high by a was David, do more of trends couple about China comp, negative. it think say, of when of piece at components. organic, I'd I'll better on say, X, that's the Americas definitely I obviously isn't specific. and region to of been been, the, definitely clearly, smaller essentially a meaningfully impacting in of that There and that's probably of leader again, in right? business, out give you at more pack a negative down. was a called the the it. clearly that kind China or the number stack The big also, and I'll about detractors I'd -- say average, the that's would for there side of you least Asia all I'd the fleet way level, special we hasn't organic China comment, say, slightly is you're commentary, positive numbers And the a say, the to below overall kind

of year. were We in the different of East, is on say of QX, say, have [indiscernible] terms comps has Western Middle the terms little I'd the India, frankly, in India of, Africa X places growth and some middle. of organic Europe in the the middle just timing a And the of solid mixed thought myself kind been bit and last Vicente Europe, some regions. of speaking, comparatively given drivers. I'd about of in also having been that easier that probably Middle projects been East,

product tools, I think technologies there, have of the X the follow middle you probably give dramatically the is I would the is a the it. power China And So say trends delineate Europe to been to in definitely way wouldn't spectrum Americas about fairly regional [indiscernible] well. those to lesser and best between to kind biggest and attractors tend or

David Raso

guess if organic XX% about China slightly maybe at down I China this What of year-over-year China say, ITS in ITS, directly, even is ex con? asked were point, smaller. ex orders the

Vikram Kini

here much would a be but you it that's will that, positive say I is, in we David, -- that haven't fair would [indiscernible]. given what low more realm, Yes. single-digit probably

David Raso

Okay.

So something like up down X% China and XX%.

of something sort the math. that is So like

Operator

the Your of question comes line Paribas. BNP Andrew next from from Buscaglia

Andrew Buscaglia

it of water that? behind comment you that comment caught And quite guess on Something really is in eye your there to was a accelerate that some my more you I what treatment. seeing seemed Can incremental is bit. interesting on in market? are kind that, activity Because more

Vicente Reynal

as [indiscernible] the as ITS Milton creating when aeriation lot of of is Andrew, in we technologies which the we go example have X even the X the segment, And yes, in treatment facilities. cavity of very technologies wastewater market is have for example we leaders the give saw well here. basically which Yes. Roy, basically with the lower even progressive so within you the for Dosatron CapEx, a leaders waste that well do have in play mean facility. that you the But pumps word for good facilities treatment. I doing into we're we technology you like market wastewater

lower of leader including the India a in only company put yes, that India, that is market treatment called we is processing and Everest years we about treated. attention, have lot a even acquisitions, a if wastewater XX% been facilities has water ago, for wastewater the acquired think market of So of about you a couple end wastewater aeriation an

in growth market. great that So

So and opportunity yes, are areas of grow. treatment wastewater water water us and to for

Andrew Buscaglia

Interesting.

delayed you Another as comment trying some obviously time. I And sort other expansion. see your gauge a what Any out comment EBITDA as keep forward. get of try and margin other projects, you other maybe move that of fundamental of really we next story some color free especially in some flow tailwinds these cash -- than are any a model to year. was is -- kind long hoping was incremental I But Do to here, for your puts takes on mind to XXXX. good

Vikram Kini

that cash question be clear, or? side the the nature equation? Was to on just Andrew, was of flow that of the the

Andrew Buscaglia

Yes, cash some have flow. Yes. incremental the projects. It seems you of like pent-up certain tailwinds, especially with

Vikram Kini

Yes.

in I necessarily think Sure. maybe a couple not particular of things order.

I business, just growth the frankly, or base it projects business the think just whether be the absolutely.

working think focal a capital point. I to continues huge be

transactional strides some think I make the pieces, great accounts continue we to more payable in country. of

that model inventory have. we to that I to especially the opportunity continues unlock given think an be

of a frankly higher just capital speaking lot kind working are -- that profile that's frankly, big of probably held a companies Generally comparatively capital M&A talk it as working we the don't much but majority where speaking, in, a are. them think vast I privately side. underappreciated by also much, smaller M&A bring because, touch maybe on is has to piece we probably quite we about of the it a less focus

call I'll working capital, blocking And that forward, spectrum opportunity. so opportunity and what tackling, as things an them to taxes continue and say, generally And full integrate across cash in then bring of interest more look cash nature. of listen, of the as we that's I'd we'll we optimize, the

XXX% really the that of opportunities I cash operated. realm, So a to we And being flow be been teams levers. with those that with target We've continue said, where to I the free conversion and think that some levels I mentioned. will lot have continue of to there pleased be in continue

Operator

of Stifel. next line from the from comes Your question Nathan Jones

Nathan Jones

again? process now. to are Or Just if Is of Vicente, these need getting for the -- And customer weeks time. Or materially it said stabilized? back we is site exist. of readiness still X conditions the wait you the that major longer to MQLs velocity will through Are over funnel. and to these has shorter? it historically other just a and that time insufficient longer? EPC move reasons on Is things couple X questions the engineering have that getting decision-making the things naturally through to really that accelerate are there capacity, it

Vicente Reynal

no say longer, Yes, conversion X be X-week Nathan, clearly, that elongation in above definitely, much to -- much sure would the material that rates. it's honest, getting more Yes. I but to change simply

terms don't is just Could additional here case. any that question, finalize In how here don't not elections kind mainly time the to week driver. we clearly, we really just and made it be this of in -- dramatic with counting this maybe for it's be this accelerate impact a about the of the see not But to potentially, next saw of never commentary that as as we're yes, rates We I the order on. of think being kind that something change. interest we but get time.

Nathan Jones

have move start and to a into things. the bit there intelligence that have time visibility little into you things guys You the suggest forward? we're kind do Is going of shrink those when than to might have outside markets MQL an these expectation? to more from might of that Or lead start kinds would

Vicente Reynal

situations by I customer country mean I varies would tell you, projects. depending depending Nathan, dramatically country it on on and

But So do to have say very and on externally? projects yes, going we -- intelligence of Are data verbalize know well. would that not. I lot we do a Likely of Yes. we the a lot

Nathan Jones

And bit? boding Could things a just orders. that you you on that for well little a Fair enough. organic comment made elaborate are

Vikram Kini

of Yes. would you that Nathan, still positioned something it think imply of And kind onetime and it of kind in X growth I you'll what math of in the around That's variables, the organic the the math kind maybe single-digit the would kind kind you book-to-bill. for math imply. orders. kind all realm the be know was, of And low with I comment think of us if around behind out the quarters book-to-bill. the was run now

said, think I PST. good good year-over-year organic orders to you've orders, Vicente's -- you're quarters of of like in growth seen X and sequential point what kind I seeing,

return You positive QX. in did back organic see realm ITS to

market relatively indicator, relatively leading stable the the we'll what again, healthy. and is say So general remain to continues

encouraged fourth So of of quarter. kind the we we're here move as into kind

Operator

Vicente There questions for are Reynal call I'd like time. at no back to remarks. hand further closing the this to

Vicente Reynal

I'll very the for well say teams to macroeconomic be, it's environment, that good my great results our another working to Thank fact our very see. you engine Yes. and big a very remark deliver quarter economic even will to despite is you. again, last thank exciting

time So speaking again, Thank thanks, everyone, for with the you interest and you. soon. look forward to any

Operator

our conclude participating. today. for for you conference Thank does That

now You disconnect. may all

Ingersoll Rand (IR) 1 Nov 242024 Q3 Earnings call transcript