IR - Earnings call transcript Q4 2024

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Operator

Hello, and welcome to the Ingersoll Rand 2024 Fourth Quarter Earnings Call. [Operator Instructions]

I would now like to turn the conference over to Matthew Fort, Vice President of Investor Relations.

You may begin.

Matthew Fort

Thank you, and welcome to the Ingersoll Rand 2024 Fourth 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

we the Investor We yesterday section of the release earnings Relations Both will website. and call. on issued during reference available and are our these our afternoon presentation

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

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

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

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

On financial full highlights guidance. company year XXXX today's and and segment review we provide call, our will

[Operator Q&A session, Instructions] today's For

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

Vicente Reynal

engine, financial all. is Matthew, to very global and growth good flow key despite Slide our cash deliver margin our in us helped market. Thanks, a X, dynamic double-digit and economic the on Starting adjusted EPS to to morning growth outperformance which with durability XXXX strong free

the investments competitive by expect with Looking also the plenty towards execution And over in XXXX, our targets differentiation, organic runway operational and active funnel. for strong of we underpinned growth inorganic through XXX continued of IRX. our growth, see use we

like world and and our want always I importantly, company. the all acting of the their contributions around of to for thinking Most employees owners thank

company's employees have common our financial our engine. XX,XXX ownership profile with we economic On company over we IRX, delivered our by employee the differentiated With model, working an growth innovative increasingly created underpinned highlight through goals. results towards Slide X, durable

As across our either over cycle, targets the have shown page, targets. we or all delivered on Day outperformed Investor the long-term

be delivering in and the sustainability, On X, performance planet, we also continue to good Slide while a for our community our doing leader employees. financial

left-hand the Assessment. Indices, in row, third industry #X named and in to a Jones were we for page, Dow year of the the On the ranking top of the finishing the Sustainability Corporate side Best-in-class our X% in

Also is the CDP's by commitment a the our leadership row, named gold Rand as the environmental to disclosure in second year for globally Ingersoll annual recognized was corporate standard CDP. to List A global process scoring transparency. environmental for and for

As you to can of see for side work employees. on approximately provided $XXX and we through performance true to have is company mindset of combination that strongly believe our of the We catalyst the incremental for the with grants creating equity ownership date, performance. long-term our created the the place million and of right-hand great page, wealth ownership the a a

divesting XXXX, markets. into high-growth growth the our We merger have reduced reinvested on sustainable Clubcard billion Rand next approximately Since company we accretive in Ingersoll through the HP have the focused acquisitions premier we to Moving cyclicality a end with and compounder. into businesses, and transformed $X.X page.

footprint, commercial billion and $XX strategy through operational and of highly the which multichannel, robust total within positioned the innovative believe in product addressable Through that investments service share environment. doubled organic market to this and for our the we grow just nearly through We positioned combination in well dynamic is years, uniquely portfolio, transformation, we're have acquisitions continued very X our both with product current market our macro multi-brand and market, innovation. fragmented

approach for continue attractive side of the will further to unchanged, that creating end in and highly value execution, our highlight to M&A On strategy M&A that remains our shareholder markets. we in page, the right-hand positioning want be while I ourselves disciplined

X. Slide to Turning

high-growth and portfolios acquisitions diversify We We $XX and end acquired annualized sustainable to at from million purchase. approximately XXx markets, products adjusted in in have revenue approximately expanded addressable our $XXX less billion XX continue pre-synergy EBITDA XXXX. into than market our by multiple total

QX And the acquisitions. closed X have we of currently, including additional channel X page. we stage, as on Since have side at the the on transactions shown LOI companies, right-hand call, our earnings

X We to transaction. X stage added have companies LOI the abandoned new and

in strong be outlined we revenue Our to in deck. later XXX companies the our of this tunnel which basis annualized over acquire expect points with remains to additional will to in incremental currently XXX M&A and an guidance XXXX, inorganic funnel XXX current

our year, On highly in aligned high-growth to technologies closed capabilities our this we're to to on which sustainability revenue our off acquired already On the we're acquisitions having this XXXX start focused strong next highlighting core acquisitions strategy. page, are these expand annualized transactions a in target. markets. in inorganic X nature, multiple Bolt-on achieving slide, M&A

an M&A to deals approach multiple, average expect mid-teens average for our the end year by less of XXx of a than to to and pre-synergy disciplined meet with adjusted purchase And demonstrate these ownership. continue EBITDA the of on third we ROIC

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

Vikram Kini

despite we differentiator, a IRX, Vicente. our market. dynamic delivered Starting Slide strong X, global results competitive Thanks, on very through

which growth investments revenue with China, saw the sequentially, robust to excluding America, and make these revenue. markets. India the line both East, APAC, In in continue markets, Total underpenetrated Middle growth expectations. orders of results which and in both finished for we we underscore and company include focused in our Latin orders improved These largely

adjusted through third XX%, and margin improvement, a improvement million, adjusted delivered basis The driven X% $XXX near-record year-over-year of EBITDA of year-over-year quarter gross EBITDA a expansion. company point margin XX predominantly

$X.XX share per $X.XX full earnings the the was and for Adjusted year. quarter for

XXXX. compared long-term year to continue finishing our for of Investor Day EPS to We growth, on deliver the targets XX% up full double-digit

a liquidity was our $X.X in hand balance sheet. at Total demonstrating the quarter. on with was for billion, of flow flow cash $X.X the robust delivering cash margin free billion Free tremendous of $XXX end, the strength million, cash quarter quarter XX%

XX. Slide to Turning

the total and line for Xx half in X% For X%. the first below our increased in finishing of the revenue QX in quarter orders the Book-to-bill Xx previous by half. above and were with was guidance up X.XX, second company,

$XX million increased Total year, company is from costs. expanding year-over-year the adjusted with year-over-year, XX the which prior points EBITDA in in incentive X% corporate large to quarter, at for coming part down basis due costs management million margins $XX

adjusted including Finally, adjusted EPS for QX a tax of XX.X%. the $X.XX per share, rate finished quarter

adjusted company year. and X.XX, X% adjusted finished in Book-to-bill On the increased expectations. margin of at revenue XX% Slide company year-over-year, up prior from up levels Total XX, at orders for year the full X%. increased record XX.X%, finished finishing total largely which were XXX the with EBITDA with basis EBITDA year, line points

is in to the $XXX million, which management The $XX as declines, to incentive at year costs are costs year-over-year. Corporate the approximately prior year-over-year year. compared finished again, down once attributable million reduction largely

full year-over-year year at per adjusted finished adjusted full year EPS of XX% Finally, XX.X%. $X.XX rate share, with tax up a

cash of $X.X $X.X availability facility. $X.X quarter million. Total and stands including for free $XX which cash slide, billion liquidity next at the million billion million, the our company on of now $XXX totaled was on revolving On flow based CapEx, approximately credit

ability still annualized our we With flow revenue inorganic targeting in X basis points currently are we acquired confident earlier, strength continued generation, and additional mentioned of to under and companies in XXX in the Vicente XXX XXX have target. free XXXX, currently to are funnel over on in this As transactions LOI. our deliver cash

was a and Leverage year-over-year for a sequentially which the versus X turns, QX. turn X.X turn quarter improvement X.X was increase

purchase earlier in in a the driven was primarily of Dover As ILC reminder, XXXX. year-over-year leverage to due increase the

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

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

Vicente Reynal

On fourth approximately organically. up finished orders Vik. flat ITS Slide year-over-year Thanks, were XX, quarter and X% for

organic power business, and digits. the impact and of China grew tools low lifting Excluding single the QX orders

largest from finished China coming impact with digits business. our low Revenue single down the organically,

Our Full level our margin finished XX.X%, targets delivered of adjusted ahead record margin XXXX schedule. points of year-over-year of margin years near basis expansion record-level adjusted ITS year meeting solid top X from a at EBITDA of year. on prior already segment EBITDA XX the

With great product digitally applications sustainable enabled This with example efficiency is an FDA providing a XX% energy which technology, digits, Moving is for multichannel, our PureAir innovative, down XXX% were a to the vacuum require and product of approval. orders and strategy, single oil-less multi-brand orders Rand's were market-leading compressor. action oil-free industrial solution our blower orders on product new power were is up mid-teens, line Highlighted low up highlights. here innovation in lifting Compressor and mid-single this perfect tools improvement. Ingersoll digits.

were organic orders largely up XX% XX. quarter XX% PST revenue finished down year-over-year. driven Slide to Turning slightly financed and Orders Fourth by in M&A. year-over-year

However, is of to important order low the did note that see impact single-digit China. we excluding organic growth, it

PST the as to adjusted & declines, margin to China. delivered margin volume the business the within a in to of flow-through in XX.X%. ILC up primarily XX% decline well with organic attributed adjusted business, $XXX EBITDA The EBITDA lower due as which of of year-over-year largely volumes Aerospace was Defense approximately Dover million, QX year-over-year related the was impact

to organic fourth demonstrated margin approximately Important digits, market to minute a deliver the which take Dover full to the ILC to some year highlights note business revenue Science ability like at that PST ILC above grew growth key I EBITDA finished within quarter, headwinds. continued In also business. the Dover XX% our growth. their Life would double adjusted review despite

XXXX announce am plus the legacy agreement This growth guidance, & Defense been our reached our opportunities long-term in multiyear I business. $XXX incorporated we business. and about has deal the Also, for within in we pleased million that, Aerospace for [indiscernible] optimistic to remain December,

perfect opportunities additional that we're highlighting metering innovation over diaphram efficiency new action, This ownership. which example in cost in a markets For reduction total key our energy a water of include and innovation, generating PST increased in $XX is XX% market and offers million of pump wastewater.

is our FX Total and revenue be company Page XX. X%. X% X%, expected X% We between is to price for introducing Moving volume where to headwind approximately to organic and split of year. grow We're anticipate guidance. XX% X% to a the XX%. are expected growth and XXXX

M&A costs be closed at the reflects as planned per are M&A and and transactions discussed $XXX year. earlier. which of expected completed in is all quarter projected to the $XXX acquisitions million well as Systems evenly Excelsior XXXX, and Blower SSI incurred at are Aeration million Corporate throughout

expected billion within range the EBITDA company net of XX%, adjusted $X.XX, and in expense anticipate our be $X.XX to interest adjusted range roughly EPS the the the At to and and of We tax is $X.XX the which billion. is X% million the midpoint. fall to table, for about bottom to of approximately up around rate projected Total CapEx X% $X.XX be of at to be revenue. adjusted be $XXX is

have income On and tax side and year count. and showing associated right-hand a the of corporate the FX, the page, with impacts interest we included guidance with associated XXXX bridge the the activity cost share operational growth expense, rate, full

On phasing the regarding of some full our XXXX we the commentary slide, next have provided additional guidance. year

a key touch So on few let highlights. me

growth We in at revenue few we expect year, approximately improvement half the quarter we what first over second with QX both X% with to be revenue. the X%. of the the past expect sequential to consistent of have year and seen across lowest years, terms being throughout total Consistent the the

a put in total we a that terms first prior revenue QX in percentage we year. very of the 'XX But on quarter. should to similar growth To expect to in from a low decline 'XX what QX revenue saw the to point see finer single-digit equal to QX,

showing adjusted consistent of The historical phasig is XXXX XXXX. our side revenue and years. our revenue both XXXX since And EBITDA and assumptions page, illustrated on phasing both our with prior the and of right-hand adjusted for this EBITDA remains the

first XX% XX% the Finally, half we between adjusted and the of expect to EPS with a phasing, adjusted split to year. second EBITDA the follow

for positioned in about We strong what global and Slide to to be performance market remain environment. a very in dynamic XX. XXXX. to we're prepared Ingersoll be operational Rand well Turning continues is nimble

revenue continue differentiate and We double-digit to Rand investment growth adjusted XXXX. on average Ingersoll since as EBITDA delivering an

growth our I another engine demonstrating meeting year. for of and executing our To again use economic delivered in results targets We employees, delivering by part our thank you to record strong to financial the your IRX. commitment want through our

positioned Today, our upon success XXXX stronger sheet and than we balance remains ever, enter to to well build date. our

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

Operator

Mike from comes with You Instructions] [Operator question Halloran first Baird.

Michael Halloran

improvement like thinking we the perspective. from how play in qualitatively? Are on you embedded how growth bit kind about cadence any what markets? expecting looks out assumptions forward? year think about Can just Thoughts talk underlying a of Essentially, end as year, you demand assuming this More we're you demand stability? in what and are the some we guidance little assumptions a the more orders the move through

Vicente Reynal

Mike. Yes,

So this let it kind of me way. frame

As phasing, we to very what we're total revenue we seen discussed quite of to similar historically. in terms look have expecting

from volume. think can about perspective, And the know. and you and is prior positive from control just reminder, approximately if XX% price years with other as growth we So total -- an the a total, and EBITDA, as is in consistent XX% the you from is revenue it that, of overall then clearly coming organic

encouraged we're very acceleration we revenue. growth be such talked product new many targeted the specific as by our for recurring highly the continued progress obviously, driving, unpenetrated we And region continue that development and, about, that, on initiatives to that

you is expected approximately back approximately half organic When of And the the again, X% of with first that about X% approximately of through realized year. growth, growth that will back think expected half in pricing. organic the half year, of in growth half be flat the the

So yes, in a talking of in I organic comps driving. investments lot said, just good as the also And also a second back that X% half. we're volume And which of the year, that organic about half we're helps. moderate

towards Europe Middle the mid-single-digit planned of high-level low think growth end terms then Mainland upper regional low of assuming be digits. the East, at and the digits. lower of about a from perspective, the is In single the when And level, planned you China, assuming end rest to completely assumptions regional of single India it range. is Asia America in the flattish. the the

Michael Halloran

where an Is today? Okay. for here stability And just it there improvement market point we embedded is there. relative assumption the from Or a in final end guidance? sit

Vicente Reynal

from today, where we yes. sit Reliability here

Michael Halloran

about next Okay. worse then through bit think can maybe year? PST we the little And the ramp were work just on how And this the about we margins expecting. as you to little that a in side, than talk a quarter,

Vikram Kini

that Yes. This take one. Sure, Mike. is Vik. I'll

So in of the that X within terms specifically, we'd major point drivers quarter out.

called think of out we I comments. kind during prepared the

the Aerospace business. ILC we as and of talked First is specifically kind about lower volumes within Defense Dover

the lack talked the you of historically. So deleveraging you had a and volume, bit of largely nature of of spaces the the coming contract about with saw large from there that lack things we've that

from is, the piece China. driver other impact the which coming from is say, The the that organic volume I'd is largest declines, of

profile time. think the those we long-term over remain get Day of going we the as to to targets forward, optimistic our I quite about of mid-XXs kind Now margin and think about Investor ability

owned year expect, first year. see into we've now for months, over start expansion to you that's we pretty When seen historically. activities, kind margin remain 'XX. that, Two, move drivers, continue like we you of that done. you've let's the there what of seen we the been have single And typically been And of we're the say little think quarter and to would here exactly that then expecting you like foremost, expect lot the really lot Dover to productivity as robust the about things ramp first price as as positive integration do is, a the, ILC a say, has other activity, restructuring through throughout see targeted we that every historically, some X I'd piece a into synergy cost second you've as of one, has a funnel. equation Three,

see We returning we expect through to profile XX% as would EBITDA the to pretty back forward. margin XXXX. profile comfortable about we going margin feel that that ability progress control So to

Operator

Mitchell The next with question Julian from Barclays. comes

Julian Mitchell

related anything seasonality. X year-on-year Was organic And Maybe happening to when the normal with that first slightly of we we're single for seemed down fell just quarter, just start Ingersoll in mechanically think a thought. sales for light you else book-to-bill thinking all versus orders. the year-on-year thinking maybe or touch assuming there? so, QX had about low wanted above a what Are QX? I they in flattish or China are orders digits to that It sort

Vicente Reynal

Yes, Julian.

making I organic it the So bit a first basically by essentially of order flat. was timing than to driven kind kind China answer driven growth large the company China. question, anticipated, mean couple that was yes. primarily a on softer of largely orders of overall by

it's think mean, important actually which X, was note is QX -- I China also to approximately that, in encouraging. book-to-bill I

half excluding half in across was XXXX stability. orders China you which of And China organic essentially speaks will second the the which despite orders, XXXX first heard, China, to speaks basically you we single as the also up environment. low Also, this of when in moving to regions the terms in digits sideways for of both finished of terms to some segments, dynamic ever-changing have resiliency continued other compare

in I forward, of respect They're looking think orders, kind they're I sideways. just timing moved those to gone. the large And of not mean,

to enter news dialogue momentum But cycle haven't is of yet. good we see good that the on bodes well. they funnel very the remains just kind active. very And which these converted continue We longer very, is of XXXX, kind as projects,

Vikram Kini

with kind with single of low -- of expectations. regards on Yes. on in with And organic to line part your with line read your that's Julian, think is down growth second revenue your QX, digits of question I in the

sitting here is we've say On seen around said, on we externally. basis. materially as today, full on this think we And be I business what orders front. seasonality don't we've front, the different see historically that historically I'll than the to X orders anything on tends But don't a year guide a

Julian Mitchell

back of wanted circle And thinking I through ILC question, PST, and helpful. on of how satisfaction sort just the performance. Dover EBITDA about then general with margin cadence the you're second sort my to XXXX That's

Vicente Reynal

large also conversation, businesses well a Life start and improve the lot of market. margin synergy but I event cadence. then in I with I but doing think the growth, ILC ILC very happened mean Science they're above line that's goes Dover to good as just and the not pulling revenue ILC ILC in with very, really conversation Vik just would into pretty happy that well. And a pretty past Julian, we total I'll with Ingersoll cross-selling that Dover very holistically see. expectations, let as that's us and to We're revenue which Dover, Rand. And maybe and device way the is here to continues about opportunity. continue see some the double-digit talk say customers, continuing weeks, with the a over exciting recent medical couple that of having

now we're greater [indiscernible] We've around lot is restructuring, mentioned. Vik including into of and visibility and the ILC And is a done IRX this organized a all going the Dover, also that focus implementation really But around. X new leadership well. some side. at including work as in Everything driving distinct P&L

of of end that a which quarter, Excellence bolts tool the is session in Execution, the IRX. we're Commercial our we at tool Here around we going have call what to have nice another

see the happy pursue business.. the say, So momentum performance on to to the and continued I'll continue very good

Vikram Kini

calibrate. we would than we here step Investor basis of slightly And the back margin Day, on XXX guide basis. did and take And the better in we that Julian, annual of reality kind expect then, let PST, the think just kind in our points baked an When that. I what's actually expansion said kind is front, a me Yes. of on margin of approximately

line side, obviously, improving, year. closer historically, lower in kind where I'd we you being of finished obviously, to than now the more we integration margin, in playing at range to a you've the seen QX that But with XXXX Vicente transition XX.X% said, at full see, back of of that ILC sequentially kind that slightly comp number into on year Dover and here the QX. next a the say, of we If XX% in factors with EBITDA the PST, as look lot expect easiest for would

Operator

The Research. next Vertical question of Sprague comes from Jeff

Jeffrey Sprague

Wanted on to business. touch base defense aerospace and the

may the think it's makes and you seems I obviously, Science Life the a liked bought and and that But time, of the right, like kind the sense, you build ILC spacesuits grow at more ride. distraction It for came become for business along there. indicate you business, of than did Dover anything. and

air your and really, my commit this in would there additional space? funnel defense-related into that question these So businesses? Is or you actually is, your capital pipeline stuff plays to

Vicente Reynal

Jeff. Yes,

selling as optionality, the economy an many the always that customers and that of industry. blanketing more ships. clearly, or kind has Dover relationship about was learn recall, both some aerospace with we that the aerospace defense to compressor relationship our you space optionality like of for led the with that helium that So has rocket the kind cross-revenue other of businesses ways. said shipment And synergies Haskel side and rocket in some One, of to ILC as it on strong some

optionality Now of your terms we do is... have the the M&A, in things? said, of that The we the question defense for in answer anything and aerospace kind to as funnel the to

Jeffrey Sprague

just on on bps wanted to XXX of clear Okay. then the be I just of Great. M&A that. impact. to And XXX kind on the

So did annualized be would of impact XXXX? what XXXX, you what get that's sort in effect of accomplished excluding from just and might any in the wraparound

Vicente Reynal

That is Yes. correct.

in So guidance. that, to that have we're saying we incremental XXX the is basis what XXX points to

Operator

comes question line Rob, next Wertheimer perhaps Rob on with Melius mute? Research. is The from your

Robert Wertheimer

on me not now? I'm you hear mute. Can

Vicente Reynal

Yes. hear you. We can

Robert Wertheimer

on wasn't anyway. I

So sorry about that.

comps. But clarifying like slowdown to for a now. think sense? on general doesn't a but It's been China and rather about you China were I So could talk tough you more that the a seem of while your experienced in kind quarter, in order macro call comments

Vicente Reynal

what is so think I your away question there we and of you about talk faded kind -- think of really Rob, see Yes, for kind I just China there.

good business. half you rates, to when fairly some actually second in first the you kind the business look stable single of vacuum very the unpack China, of some we see high Also, like of stability. are there at and growth. when I I mean half, we think organically the at businesses order blower growing pockets kind I have digits. that mean is

that specific it kind focused in of the targeted seeing markets, of we're some China. and investments in investments we're end into the localizing positive So growth seems some very in payback making technology those some organic

of So the news. that's kind good

think coming comps I China did which growing some electric we vehicle a very from in year XXXX, reoccur solar were investment, in pretty production, we XXXX, clearly, into I that mean by had XXXX. tough were pace at that in obviously driven a the accelerated China battery, not XXXX. team

And could spent I progress would last that in movement stability. terms I in China that the of Xx in year, so I see say

China. the I add have the in that been we what away that was energy weeks encouraging. of as And you're that of initiatives we it into momentum some to those in teams very And is kind very, investments investments countries of exciting seeing that regions. move is as the the of growth and I see those push here, few trying Rob, pivot we're only from see commentary well I'll just So China of Very some based said that through on our Australia making, we the in with ago. see as outside a that's we I to organic exactly just thing reinvest made. to mean, also and Vietnam. a the we the and lot was

Operator

of Citigroup. comes Kaplowitz from next Andy question The

Andrew Kaplowitz

update extended. you that lead can still MQL you you mentioned quarter, but up? outside want your sequentially. do year-over-year, get away were how you speak extended getting u didn't MQLs how feel back, that, maybe further? are of an they they MQL interesting China? quarter, It's at But about this short-cycle that on us maybe you Last Or stepping X% were give still times XX% MQLs Have looking? businesses from to your about

Vicente Reynal

for full Yes. there, in question MQL quarter both the the remains finished up good digits, fourth activity year and low of Andy. and XXXX. the strong double year No, And

that kind long-cycle So would what we that, I of did the is would historically, we here not we as but continue double on to now that I we also be by MQL. And mention talked year we though encouraging. low for full verbally up say that also say it's -- the mean see I also move encouraged very cycle, as the pipeline about loan digit for XXXX, here. which pipeline,

So and cycle. growth saw in the we by strong we're those encouraged MQLs loan

spoke will the activity Now we of on news, as XXXX. historically into happening of as case. things to been, move that and about say a before potentially I clearly, increased, conversation decision-making we customer some better better elongation the turning fast here and the are continues we that has also happening as be and see has into momentum conversations decision-making

our team taking demand a that So also was in the the with be just say of into demand generation creating we that but level. continue I -- would generation center ago, this an incredible is we that next talented to encouraged, the will highlight is Poland taking and few there Andy. have And other weeks to thing I team I it MQLs,

So...

Andrew Kaplowitz

for times of second, margin integrate back when improvement to a lot I that acquisitions, X by helpful. company does the the a hard margins slowed slows. margin PST lot be to Very understand we weaker improvement it's think to then But of And a just M&A, organic.

at XX%, already which high. You're is

But learned differently strategy differently, you you a for like Do acquisition targeted approach acquisitions of Vik, think, larger restructuring. mentioned you? greater Maybe know. very because was this all? in at integrate lessons deal you you some at integrating, any as as good I maybe the terms So

Vikram Kini

speak No, Yes, we've Andy, had assets. that I experience think the I simple to would answer of is specifically. integrating -- any nothing larger

and area Seepex kind had get was a margin we to playing the kind to you essentially of business, right we were healthy average PST, margins, call for explicit the example, fleet of in gross had and path that profile but glide of mid-teens it's that's years that, PST that's in now. differentiated it, let's kind and As for where a the EBITDA few ago, technology, fantastic pretty

core kind mentioned, P&Ls, some there of getting had think ILC terms business, the things the the absolutely. I of Vicente As side. to nature new X yes, restructure distinct kind that of leadership on some ability Dover, you've far I integration, aerospace and of in defense and of, But as volume as deleverage the bit little more and think, streamlined, the obviously, a

would ILC day-to-day in frankly, core integration has I I'd of that IRX quite on a of tackling that Ingersoll blocking and terms from lot you've Rand. you kind processes seen tell say, and pure end the core, in and our progressed utilizing kind perspective, the of then processes, really an of Dover a

nothing So to bolt-ons from really same perspective. the smaller balance point that also as for, of XXXX well. I'd be that dramatically Dover I the saw And can you said in the is different ILC it's noting worth the say, would

Operator

The comes question Stephen from of Jefferies. Volkmann next

Stephen Volkmann

missed if pretty those XX%, of about I Sorry you talked I similarly, this. about Vik, in Should the both incrementals think segments? know XX%. we

Vikram Kini

Thanks, Yes. Steve.

half that is, the as generally the the you I So just yes, I generally think speaking, margin to opportunity given PST the some ballpark. on side, more a back I speaking, comparable think comps of of particularly But That's in maybe think correct. get they're XXXX, answer there's you bit little have.

Stephen Volkmann

XXX PST, also to X the relative basis then, Andy, on XXX me question was And to of you to especially of have targets touched on Okay. All I drive almost to feels I to points but margins, continuing here it going ask, right. but that M&A. that like sort think, competing

come acquisition. As a little margins these often lower you bit in well, at know M&A

think balance PST of like Vicente, at with And X mid-XXs. just in targets you that the feels you hitting how those each are odds I'm other. so And kind sort about those curious, margin of goals as

Vicente Reynal

margin. A of couple a acquisitions PST had the it's are pump like that ABI, XX% EBITDA like XX% question you highlight things want a maybe Good a segment acquired Today, remember, that high-pressure all margin couple I'll business we And in to there, accretive. if was one ago. Not which margins. I Steve. years called say. we EBITDA of Yes. acquired

better. So we speaks and -- can I them with make mean, good the continue solid margin businesses that do to we think even what power can I of good to great it

balance. we that say would I So

Our perspective see it end the of not is on continue fleet can growth, average to from if we exposure with improve. that is M&A we based end profile business the that that margin quality high markets, an see market a at we sustainable approach can that that

that say we in of than margin an that PST. our companies -- could PST fleet higher go that that Even good today, would the portfolio I to at So a basically funnel look M&A average are land. have could

it's look is again, we not margin fact And -- say at that I be consistently. every So to the going accretive. that is would business

Stephen Volkmann

Got it.

Okay.

XX% EBITDA X LOIs, So should those are margin? assume just I

Vicente Reynal

of Not them. all

Operator

question next Chris Morgan Stanley. with comes from The Snyder

Christopher Snyder

same expectation You tariffs right that in couple the Do China coming? the the the China just just mean projects incremental this following QX. outcome election related U.S. that in in bigger pushing that to mentioned conversations changed customer think vein, and a has election? I to you was are in

Vicente Reynal

Yes. No, great question, Chris.

to a I China pretty not mean, project, is this to related is This from you large China no, becoming -- mean, EPC to they the election. were Specifically were and of our an when that I -- critical to with contracting it kind project technical end conversations as these and require had more projects some technology. user engineering specifications companies, perspective, of and do

cases, those it related in election. to the So was not

further we could as related, here of team seen Chinese what from for of be I as -- very terms of the the dramatic. in have our the typically that China that overall, mind China conversations that could things is nature. be of anything would But New but kind negative. we And continue with elections, positive they about happen of in nothing or election-wise related to not have seen kind positive XXXX, and Year think slow because say keeping in In January to China

Christopher Snyder

to following And sounds up sequential for the in Last down maybe we're year, this lower with one that. like step-down that. step then that a It QX. going Vik. on we year, accompanied is didn't revenue Usually, margins get that volumes. Appreciate typical by into get

down QX? feels year-on-year QX particularly that appreciated. on in Any color expect to be difficult. it this is Should So like margin maybe be would margins comp we

Vikram Kini

year. and QX similar a let prepared very the of me of down comment see you that prior I I of with sequential think step you terms Vicente going you're Chris, in to to think our from saw mentioned start level your QX, Yes. -- see in remarks, kind normal first kind

that's completely think fair. I So

in I think into profile, quite year relatively XXXX in healthy the the margins. of context came we margin kind of the you're right,

our I year-over-year. of think steepest context comp that will be the in

earlier, back in expect of the you that's say should the margin. wouldn't I to step So continue though, you clearly, margin the the taper as would No, to I up think expansion QX, said where those expectations I meaningful see do year in and through think QX? see that. particularly year, progress you respect. I in as to you'll and that I half as get

have kind synergies, bear. means of some the as into I is, restructuring a already -- good pricing, are that mentioned of as you And those kind productivity, the going I historically which existed see to actions the some of rate, go I them run occurred, of think all target kind have lot of which into kind news of the of M&A the same levers well think before, here

And piece haven't then maybe actually is mentioned mention the progress yet the recurring revenue. other that we on to here

kind to continue bit with that see of on across kind pickup of recurring the seeing kind expected, the revenue of be as board. with comes We a of trends margin that a expectations. with in premium. nice did really the a we're line And We pleased

well So on the side as and definitely you ITS say, are that seeing helping, profile. that as largely the is on side, margin mix the I'd

Operator

The comes Bank. with DeBlase next from Nicole question Deutsche

Nicole DeBlase

you're I percent to election you Canada, you before? and to perspective. whatever with of have, tariff willing any actions? plans an COGS tariff that issue exposure can guess guys from the to provide, continuing talk then we've question, a more that with the bit just offset Mexico, cost about respect what Maybe things haven't little respect as And already seen a to been a

Vikram Kini

Yes. Nicole, great question here.

kind me start let high level. of So just

First in incremental what or actions. with to the just by mitigation explicitly tariffs saying actually regards there's and of start our I'll any call nothing let me foremost, guidance

but I situation think, impacts. dynamic, tariff remains pretty mitigate the to know, you of any As we positioned, believe we're those really well

I'll and say, sold, say, first region the maybe tariffs domestic not to an to kind to of China So all, of of impact largely the, kind and, foremost, of of of which and specifically, first of I'd U.S. That of limits from we're of it's right? kind there's muted, insulate being the goods bit manufacturing there. endpoint, purchases little but size from a the immune a overall relatively others. bit kind single-digit percentage compared region cost a impact overall a So does said, in tariffs, for us we're from perspective,

third-party based chain tariffs. include, you I'll would we executed ready of procured plans severity be expect, the leveraging As sources say, through tiered shift then global what certain based I'd would material have be mitigation level balance the of impact and And the kind our of as vary That mitigated does expect, call supply they alternate to on will to you of the actions. tariffs. pricing to tariff on

after We merger, we of of a both you dollar soon positive of and reminder. kind kind of in those kind back throughout duration. pretty and situation stated the a and accretive waters us, navigate very Just a little bit faced were frame, to saw the able well. the similar margin time We XXXX

impact. about it expect, And as feel through And our pretty tariff pretty so we continuing closely. monitor overall, ability you'd the manage to to good we're

where specific fairly China from on Mexico, question again, perspective, So of Canada similar, and your now, we routine balance and feel kind their where good same pretty small mitigating right through needed kind the of but relatively moving sit to But of we're limited. a impacts. then price. And going again,

Nicole DeBlase

business. about you legacy about Got with guys And that are respect are to the then the Dover recovery play you side? it. -- helpful. What business, you and continued a ILC out can Rand seeing life Ingersoll sciences biopharma like about PST, the That was seeing on we talk just what super talked on lot Sciences Life

Vicente Reynal

say Ingersoll that I'll we don't fairly acceleration has the say there on the Rand quarter. medical fourth Nicole, saw stable. I in that here an to legacy been business, want or

it And And of move kind call I'll QX to it being even sequentially you so can say, out you also I'll actually see kind stable fairly stable. QX. as as of

So that we'll XXXX. of see into move we as kind

kind we of the a bit of of with Ion of our to in keep meet as tools that comps. overcome a we good in same those kind We expected stable that and where decided news a in all kind nothing muted segment for at kind recovery. have -- into we clearly, guidance science the as Medical customers of of lot business that -- of it participates. XXXX, don't a tough look kind That's life our and of as And lot see And expect to in vein an recovery we V-shaped and actually fairly business.

Operator

comes Research. Nigel The from Coe next of question Wolfe

Nigel Coe

around half, above second for We've a the level and a of XQ half XX% PST. kind Any in of been first terms specific XX%, questions comments And that similar we that around sort range in XX%? on more Q-to-Q, start if, comments there? maybe from year But be then about ramp do be helpful. dancing at I would path you based the margin back of wonder bit your wondering PST can margins that I'm

Vikram Kini

that take I'll Nigel, one. Yes.

half the XXs It's you'll is it probably in QX. closer a than whether should then And that it's think little think you play. of of see the in than is PST exit rate kind I So upper total that, there. -- or kind expectation bit be better some probably saw you first from here where realm healthier I slight ramp to expect in to sequential XQ,

of And actually of a into So year to muted like kind year the of in bit be do on basis will were that midyear back happens June, more as of mentioned a Day XXX we half expect kind again, the But do start I'll say then than our full little Dover targets We full ILC points? as, that approximately on year. on I kind expect point it better see, inflection basis. second before, to a bit basis comp of begin of kind an more Investor see should as the kind we frankly, year. you of the a

Nigel Coe

you I kind And at in called XX. between out [indiscernible] XXXX? growth, question Okay. Dover, you that's then Maybe about sciences of what of [indiscernible] in think A&D out for the the maybe ILC What dissect hood double-digit Nicole's the Science just and are just you life growth portion. spending seeing Life seeing on

Vicente Reynal

we sit single-digit biopharma. momentum and For as see that in to side the low Science today. Life that the flows, expectations as here kind here of Science, kind of to that exposure of we largely market Dover high is our double-digit end has on terms And due expect of we the continued track business the of to, -- remains long-term continue kind we ILC to Life do which the spoke to that of

example, are of we GLP-X as treatment, As that treatments immuno are to the that personalized also therapy which to related see then that. one APIs, the gene also or happening it [indiscernible] relates acceleration

very I kind So that think position a exposed kind to and like ILC the of what markets is pretty command side. good Dover they're on that of some good we

Operator

The Nathan next of from comes question Jones Stifel.

Nathan Jones

on Maybe things we an could of some start quarter. talked the with update last about you

of site that. holding engineering, projects you of kinds talking capacity projects Maybe were on these just about, of back some with on those forward. update some think on an I start tight moving things preparations, those

Vicente Reynal

about change last But it was freeing I dramatic capacity I now. thing the the is it I changed think that with theorize up think of mean, would think not I -- from do end December, the of one that releasing getting I was as, I customer Nathan, met of it key actually was the Yes, customers, a XX, these a then user basically in basically, week some of procurement, eventually that translates these spoke December and week to of it orders. customer a lot the which into

same similar conversations just one more not and our in had Australia, that It's projects. customers time are large often. And was thing. the I getting a thing. canceled. more one of But spent kind those with happening of again, I of definitely When

happening. that is the So up it a conversations of going mean or dramatic but kind -- say really rapidly I that's now I kind not But that's freeing the would dramatic case. and change, No. anything is the of are not a accelerating that, gangbusters? improvement or

fact and the of have positive But again, that been projects canceled. the the with conversations none

the some a right direction. kind of in of them of As moving fact, matter are

Nathan Jones

happening. and happening a guess what's follow-up people's their been relates obviously noise pockets when I keep lot investments. There's a it policy. uncertainty to capital U.S. around question hands tariffs it And in what's to and to making tend does on that as not comes of

around Mexico, more probably is the impact that kind around that policy U.S. Europe, today. happens be Canada, With what the those of U.S. of outside unknown to of I kind U.S. Is that where uncertainty, sitting uncertainty moving impact might in people projects bit what right? policy? China, of waiting with some think like places a to further see

Vicente Reynal

say changed in the are how of -- purchase changed. in it's to we not not activity, that behaving MQL will -- one I has patterns, of terms understand to that points has way like and this of And the customers data to much is that their Yes, that, be desire track terms clearly almost a is which honest. like dynamic

continued and -- be here. trying to and see we even that day so fairly can continue about momentum understand robust on we that So continue they to as customers the watch make we decisions, and that weekly

way movement at one or least a So that of policy no, that other. have we U.S. the nothing the is creating seen significance

Nathan Jones

need see and What get you moving a projects decisions these catalyst a do to to as made forward at better get rate? these

Vicente Reynal

Yes.

to by of kind varies project project, it honest. be think I

customer a customer of here new because the that comfortable the more customer got policies the in I difficult feeling So of December, with of point. administration. case and it's mean the at reference -- things the some the pinpoint U.S. end to a that the stance think energy to specific of made end in released the kind of I I

customer one, the reason can EPC about sole Europe, to constraint very another been I that If them. we in work of engineering. this And talk has large a with continue capacity

moving. some varies But to would to putting fact, say of kind kind matter customer to of customer of project help to customer. a As things that we or of are I actually project our engineers get

Nathan Jones

from David ISI. comes with Evercore next question The Raso

David Raso

X%. said So half is be guide, year sales the of is going to going you then organic the alluded the On be the to X.X%. right? priced, But XX% to second you pricing in

just or the was you're is something start you prices then price in you're curious, midyear that that about expecting seeing layering that? increase are year. backlog? I And to So pricing, where this the maybe And acceleration a on

of goes the as Just see sense trying year get on. a we pricing accelerating to why

Vikram Kini

you the David, it on hit head. right

actions You don't can -- business they actions. happen. attribute where of in course the instances when for in pricing uniform in fact, the multiple typically some And have of pricing kind of you year. there take midyear the every of given have to for environment, it actions many that terms pricing one We date the been take

that is business the fairly expectation consistent I pricing phasing a actions bit expectation comment worth some that in would back attribute what and in-year the that, half P&L. noting coming But kind across kind of that between little planned the of also to a into the of of healthier It's both of it is price and the actually segments.

Operator

BNP The next Andrew question comes from Buscaglia of Paribas.

Andrew Buscaglia

focus I a M&A for on just wanted to minute.

got this asking. along of lines pipeline was question the and of the You kind Nathan

small of see than might forward? setup do And some move deals -- uncertainty moving sort acquisition of a you where across? more you single-double of ILC year Dover then influence kind Just rather deals type any do see the that types

Vicente Reynal

situation to to there's to a a pretty of and as that way the continues transaction. world where companies lot And nature. geopolitical environment say bolt-on leveraging lines the across I our more clearly, absolutely. is I'll And move keep move family-owned whey into to a continuously be I'll we're uncertainty. be No, the current categorize well. of Yes. side mean worrying basically dynamic pipeline in this the push along in a Like

announced Aeration, continue Excelsior and the think great addressable those and a yes, companies in great side at technologies incremental for we Blower about market to So provide that SSI ones purchased the prepared in remarks, on the multiple us. kind bolt-on Same to nature, funnel, Toshniwal. of a be that similar today

Andrew Buscaglia

of pertains platform of that ILC M&A, life of deals to you medical Are other to with I like life add adjacencies for with new know that a then probably on. consumable sticking Dover, it kind sciences intend as other med And Okay. into that's application, kind there sciences pipeline? to kind get for to in tech, selling arena you less applications? do but maybe you medical see so plan And in

Vicente Reynal

of fact, the And as go nature are and side some in additions matter they them good of in very team. of mean, if again, -- -- the the a of X have life the science we Yes. bolt-on through the business. life in Andrew, I to the

shows that good some able were quickly how So you transactions. gravitate we and find to

medical have device adjacencies, business companies specialized of -- on we terms around I it's a In to ILC and medical mean, of componentry, device all side component. kind we highly of sell that business, also which medtech the to

talked silicon or that package. a is molding I our and can get the of that a about pump of as injection highly kind to we silicone sell a then of extrusion lot then specialized, componentry think patch

at. looking that look the LOI we're I a So of more, in Nothing but I some think that more we funnel yes, have technologies and companies that cannot in nature. phase,

Operator

turn I'll Vicente for the the CEO, session. question-and-answer to remarks. call concludes This Reynal closing

Vicente Reynal

Thank think and listening Rand. you all XXXX. I want to continue in Ingersoll employees say I who very you another to you, are thanks in to like for call just Sarah. to know your a interest our drive strong the all And owners of them to to and thank that special are, act many performance continue of

have a conclude great the So call, and day. that, with

Operator

you conference concludes Thank today's joining. for This call.

You may disconnect. now

Ingersoll Rand (IR) 14 Feb 252024 Q4 Earnings call transcript