Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Investor Day (November 2021)
154 slides from Ingersoll Rand's investor day presentation, Nov 18, 2021
Slide 1: Charting the Course for Continued Stakeholder Value Creation
Charting the Course for Continued Stakeholder Value Creation Investor Day | November 18, 2021
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements relat
Slide 3: Today's Agenda
Today’s Agenda Opening Remarks Q&A Session (Above Presenters) 8:00 am Welcome and Safe Harbor Christopher Miorin – VP, Investor Relations 9:50 am Break Company Overview and Strategy Industrial Technologies and Services Creating a Compounder Leveraging Technology Leadership Vicente Reynal – Chairman
Slide 4: Company Overview and Strategy: Creating a Compounder
Company Overview and Strategy: Creating a Compounder Vicente Reynal Chairman and CEO
Slide 5: A Leadership Team Who Cares and Wants To Win
A Leadership Team Who Cares and Wants To Win… Newly appointed to role in last two years VICENTE REYNAL SIA ABBASZADEH MARY BETSCH JENNY CLEMENTE CARY COLLINS GARY GILLESPIE LIZ HEPDING Chairman and CEO SVP, Strategy and VP, Sustainability Global Director, VP, PM, Digitally Connected SVP, GM, ITS SVP
Slide 6: An Increasingly Diverse Board with Expertise
…and an Increasingly Diverse Board with Expertise that Supports Our Long-Term Vision NEWLY FORMED SUSTAINABILITY COMMITTEE MARC JONES ELIZABETH CENTONI VICENTE REYNAL CEO & Chairman, Chief Strategy Officer Chairman and CEO Aeris Communications and GM, Applications, Cisco Systems Multi-skilled Board
Slide 7: What You Will Hear Today
What You Will Hear Today Ingersoll Rand is an attractive long-term investment with a clear profitable growth model and 1 track record of transformation and value creation Unwavering commitment to Ingersoll Rand Execution Excellence (IRX), which guides us to 2 consistently deliver operational outperf
Slide 8: It All Starts With Being a Purpose-driven Company
It All Starts With Being a Purpose-driven Company 8
Slide 9: In 2016, We Began a Transformation
In 2016, We Began a Transformation 9
Slide 10: 10
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Slide 11: Over the Last 5+ Years, We Have Been Executing a Transformation
Over the Last 5+ Years, We Have Been Executing a Transformation Restructured company as a private entity and re-emerged stronger upon our 2017 IPO… now building a premier industrial compounder Developed and Expanded employee Continued to build our implemented Ingersoll ownership model M&A engine, su
Slide 12: We Have Delivered Strong Results
Through a Lot of Heavy Lifting and Execution, We Have Delivered Strong Results Transformation of Gardner Denver… …Being Recreated with Ingersoll Rand 2016 Private 2018 Public Change 20195 2021E7 Change Total Revenue $1.9B $2.7B 39% $4.9B ~$5.2B ~6% Revenue Ex-HPS¹ $1.7B $2.0B 16% n/a n/a Adj. EBITDA
Slide 13: Strong Market Performance with Continued Growth Engine
Strong Market Performance with Continued Growth Engine Nov 2021 Sep 2021 Q3 2021 Capital Allocation Earnings Webcast Aug 2021 Sustainability March 2020 April 2021 Webcast GD/IR Transaction Closes Announced Sale Since 2017 IPO¹ COVID-19 Global Pandemic of Club Car Impacts Equity Markets February 2021
Slide 14: We Have Transformed
We Have Transformed 14
Slide 15: Making Life Better
Our Vision for the Future Ingersoll Rand is Guided by Our Company Purpose Our Purpose: Lean on us to help you make life better Making Life Better For our For our For our For our EMPLOYEES PLANET CUSTOMERS STOCKHOLDERS 15
Slide 16: Making Life Better for our employees
Making Life Better for our employees Stock Ownership Giving employees a stake in the company • Value of stock ownership increasing over time, from initial $250M in equity awards granted since 2017, which if held would now be valued at ~$600M • When issued in 2017, hourly employee received an average
Slide 17: Making Life Better for our planet
Making Life Better for our planet Our Company Established aggressive 2030 and 2050 long-term environmental targets • 2030: 60% reduction in GHG emissions • 2050: Net Zero GHG emissions Our Products Our products are enablers and beneficiaries of ESG • >30% total revenue improving water consumption, m
Slide 18: Making Life Better for our customers
Making Life Better for our customers Partner With Our Customers Lowering our customers’ total cost of ownership • Increased uptime reliability, serviceability and predictive maintenance • Demand Generation engine is aligned with customer buying cycle Global Portfolio Providing broad range of product
Slide 19: Making Life Better for our stockholders
Making Life Better for our stockholders 2019 – 2021E Business Performance • Adj. EBITDA CAGR1 of 11%² • Adj. EBITDA Margin1 expansion >300 bps² • Estimated Adj. FCF1 generation of ~$800M in 2021E Disciplined Capital Deployment IR Share Price Performance vs. S&P 500 vs. Premium Industrial Peers³ • De
Slide 20: This is Ingersoll Rand Today
This is Ingersoll Rand Today (NYSE: IR) Key Company Stats 2021E Key Financial Metrics Revenue by OE / AMT1 Revenue by Geography1 Davidson, NC Headquarters ~$5.2B Total Revenue 33% ~15,700 Total Employees¹ ~$1.2B Adjusted EBITDA² ■ Americas 64% ■ Equipment 36% 45% ■ EMEIA ■ Aftermarket ■ Asia Pacific
Slide 21: Focused on a Coherent Set of Attractive End Markets
Focused on a Coherent Set of Attractive End Markets1 General Manufacturing Food & Beverage Life & Sciences Infrastructure Water & Wastewater 20% 12% 9% 7% 6% Clean Energy / Metals & Mining Chemical Processing Pulp & Paper Downstream Renewable 6% 5% 5% 4% 4% Midstream Transport / Transit Machinery El
Slide 22: Portfolio With Strong Earnings Power and Compounding Ability
Creating a Portfolio With Strong Earnings Power and Continued Compounding Ability Industrial Technologies and Services (ITS) Precision and Science Technologies (PST) Broad range of compressor, vacuum and blower Highly specialized range of technologies including fluid solutions as well as industrial
Slide 23: Aligning Our Portfolio to Three Global Megatrends
We Are Structurally Aligning Our Portfolio to Three Global Megatrends Ingersoll Rand is at the optimal intersection to maximize benefits from these megatrends Sustainability & Digitization Quality of Life Efficiency Demand for intelligent and connected Achieving the 1.5°C target requires an Aging po
Slide 24: Multiple Organic Growth Enablers
Multiple Organic Growth Enablers Deepen Our Ability to Capture Global Megatrend Opportunities Our Organic Growth Enablers Digitization Demand for intelligent and connected equipment to improve quality, reduce downtime and waste expected to yield $500B IIoT market by 20251 Demand Generation Global Su
Slide 25: Organic Growth Enabler: Demand Generation
Organic Growth Enabler: Demand Generation Demand Generation accelerates profitable organic growth Demand Generation has evolved into a comprehensive growth engine focused on improving customer experience to deliver sustainable and profitable growth Demand Generation today includes the generation and
Slide 26: Organic Growth Enabler: IIoT
Organic Growth Enabler: Industrial Internet of Things (IIoT) IIoT will enable us to capture a greater level of recurring revenue Identified > 5 Million Ingersoll Rand products in the field that we are aiming to digitally connect over time to generate recurring revenue…currently <1% ~10% of our reven
Slide 27: Organic Growth Enabler: Product / Service Innovation
Organic Growth Enabler: Product / Service Innovation Our innovation efforts are centered on enabling and benefiting from the macro trends to which we have aligned 95% increase in product innovation cadence: delivering over 200 new products in 2021 100% of new products have measurable energy / GHG im
Slide 28: Growth Enablers: Portfolio Optimization, M&A and Digital Technologies
Growth Enablers: Portfolio Optimization, M&A and Enabling Digital Technologies Pumps HIGH PRESSURE SOLUTIONS Segment Divestitures of Deployed on acquisitions since Increase in non-core businesses1 investment in ~$2B ~$1.2B 20151,2 400% Reinvesting cash enabling digital ~$1.0B since GD/IR technologie
Slide 29: Our Addressable Market Is Large and Will Expand
Our Addressable Market Is Large; Will Expand with Growth Initiatives and Expansion into Markets Aligned to Secular Megatrends1 Serving more customers in new markets with new technologies increases our Total Addressable Market Growth initiatives to extend TAM from current core Fully replaced cyclical
Slide 30: We Are Confident In Our Ability to Achieve Our Goals
We Are Confident In Our Ability to Achieve Our Goals We believe our proven economic engine will deliver compounding annual results Demand Generation Double-digit Digitization Earnings Growth Product & Quality of Service M&A Industrial Internet Earnings Sustainability and of Things (Price/AMT) Effici
Slide 31: Introducing 2025 Financial Targets
Introducing 2025 Financial Targets We expect to achieve the following financial targets: In support of total revenue growth, we also expect to achieve: 2021E 2025 2021E 2025 Total Revenue Growth High Teens LDD IIoT-Ready Products³ (% of Revenue) ~10% >25% (2021-2025 CAGR) Aftermarket Revenue High 30
Slide 32: Best Days for IR Are Ahead
We Are Proud of our Progress To Date, But We Believe the Best Days for IR Are Ahead Focus on attachment to megatrends oriented to high growth, sustainable end markets and 1 supporting MSD organic growth and significant margin expansion Demand Generation, IIoT and Product / Service Innovation capabil
Slide 33: IRX: Our Competitive Differentiator
IRX: Our Competitive Differentiator Mike Weatherred SVP, IRX
Slide 34: What You Will Hear Today
What You Will Hear Today Simple-to-use execution engine, providing employees 1 with a consistent, simple process to drive high performance Weekly meetings of “Self-directed” work teams focus 2 on the highest priorities, executing in 100-day sprints “Nimble” 40-minute weekly sessions increase focus 3
Slide 35: It's all about the HOW
IRX is a Competitive Differentiator IRX makes leaders and employees better by providing a robust, repeatable process It’s about utilizing IMPACT Daily Management (IDM) It’s all about the “HOW” Most Business Systems are focused to get things done faster on the “WHAT” and are event driven IRX is emb
Slide 36: Momentum and Areas of Execution Focus of IRX
The Momentum and Areas of Execution Focus of IRX Continue to Expand Functional Expertise + Robust Processes = High Performance IMPACT New + Expanded Areas of • TRX – Talent Review Focus Excellence • Integration Synergy Capture • Lean 2.0 (+SQDIP) • Improving the Customer • Employee Engagement • Inno
Slide 37: IRX is All About Execution – The Statistics
IRX is All About Execution – The Statistics 30 months ago, we executed 70 IDM sessions per week Today… IDMs By Area of Focus 270 IDM 750+ 22% sessions executing weekly across We are getting regular meetings eliminated all functions and geographies more done with faster results 53% 13% and more contr
Slide 38: How the IRX IMPACT Daily Management Process Works
How the IRX IMPACT Daily Management Process Works Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Determine Specific Form Team and Build Growth Build Swim Lanes Execute Weekly IDM Recalibrate Bridge Area of Focus Identify Leader Bridge Focus on lagging 40-minute sessions and Repeat Where is execution Owne
Slide 39: What an IRX IMPACT Daily Management Process Looks Like
What an IRX IMPACT Daily Management Process Looks Like 3 IMPACT Daily Management Status 2 Growth Bridge 1 Header Visual Wireframe / Format for IDM & Policy Deployment IDM AREA OF FOCUS Attendance 4 Overall Status IMPACT Daily Management 14 Self-Audit Discussion Guide 5 13 We Need Help Follow-Ups fro
Slide 40: Connecting the Dots from Strategic Plan to Implementation
IRX Enables “Connecting the Dots” from Strategic Plan to Implementation Initiative Owner 2022 2023 2024 HR James Demand Gen Hiram Operations Liang Sales Mary Sourcing Luis 1 1. Strategic 3-year Plan 22. Top 5 Growth Initiatives 33. 3-year Financial Bridge 4 4. IDM & Team Sele
Slide 41: IRX is Driving Meaningful IMPACT – Video
IRX is Driving Meaningful IMPACT Across Ingersoll Rand – Video “In the IDM session, it's of critical importance in how we connect the dots. IRX is our competitive advantage for our organization.” – Arnold Li, SVP, GM ITS Asia Pacific “The biggest benefit to me as a leader is the structure. The abili
Slide 42: Many More Success Stories
Many More Success Stories – Across All Businesses, Functions and Geographies Area of Focus Location Situation IDM Results 1 MSG Margin Improvement Asia Pacific Lack of coordination among functions = project cost variances Improved GM % and reduced variances 2 Lead Management & NPS Focus India Implem
Slide 43: IRX Key Takeaways
IRX Key Takeaways 1 It’s very simple – easy to implement and easy to use 2 IRX is how we get things done 3 There are unlimited areas of focus and uses for IRX 4 IRX continues to enable faster execution 5 We’re just getting started in building this high-performance execution engine 43
Slide 44: Demand Generation: Our Proprietary Growth Engine
Demand Generation: Our Proprietary Growth Engine Cesare Trabattoni VP, Demand Generation
Slide 45: What You Will Hear Today
What You Will Hear Today Proprietary growth engine that goes beyond marketing to deliver great customer experience 1 while delivering outstanding results Combination of marketing and commercial technologies, pricing excellence, data analytics, 2 talent and IRX standard work allows us to thrive in ve
Slide 46: Demand Generation is a Proprietary Growth Engine
Demand Generation is a Proprietary Growth Engine That Goes Beyond Marketing… Four Areas of Focus • Strategic, value-based A comprehensive digital marketing capability 1 Pricing • Leakage control that ensures targeted, cost-effective lead • Data analytics driving opportunities generation and conversi
Slide 47: Why Demand Generation Is Critical to Business Success
…And This Is Why Demand Generation Is Critical to Business Success Highly cost effective way to target an extremely fragmented market – driving timely closure of the right opportunities Customer Market Control Over Sales Traceability & Driving First Digitalization Timing Acceleration Scalability Gro
Slide 48: Demand Generation Drives Revenue Growth and Margin Expansion
Demand Generation Drives Revenue Growth and Margin Expansion The more we know about our customer, the more satisfying AND profitable we can make that relationship Revenue Growth Margin Expansion New Customer Acquisition and Channel Strategy and Target Marketing Customer Territory Balancing Journey O
Slide 49: Demand Generation Makes Customers' Lives Better
Demand Generation Makes Our Customers’ Lives Better by Providing the Data They Need at the Right Time Meeting prospects and customers at each stage of their buying journey Demand Generation is supporting and enhancing business capabilities through the entire Customer Lifecycle Right MESSAGE Right CH
Slide 50: Demand Generation Has Delivered Results
Demand Generation Has Delivered Results Marketing Areas of Demand Generation Investing for Impact Targeted Emails and Integrated Campaigns • Webinars • Telemarketing • Inbound Calls • Social Media • 2016 Today Results Tradeshows • Website SEO • Search Engine Ads • Contacts 100K 3M 30x Account-Based
Slide 51: Demand Generation Maturity Model
Premier Global Industrial Company: Demand Generation Maturity Model Increasing Maturity Level • Applying Account Based Marketing • Predictive analytics & ROI reporting 2023/ Stage 4 • Applying predictive lead scoring • Having a 360° view on contacts and customers 2024 “We can optimize the • ML-based
Slide 52: Better Data Enables Better Analytics
Better Data Enables Better Analytics and Increases Potential Value Creation Potential Value Creation To get here, we for Enterprise Characteristics Illustrative Outputs need to combine good data from multiple sources • Optimization algorithms to maximize revenue, margin, Prescriptive share price, et
Slide 53: Case Study: Demand Generation
Case Study: Demand Generation Rapid on-boarding of the MD-Kinney acquisition OPPORTUNITY OUTCOME • Quickly integrate the MD-Kinney acquisition Rapidly on-boarded to Stage 1 maturity level for Demand Generation in less than 90 days • Capture synergies using Demand Generation Driving more than 170
Slide 54: Case Study: Demand Generation
Case Study: Demand Generation Demand Generation expansion to our channel partners to drive growth OPPORTUNITY OUTCOME • 75% of audited ITS partners have a poor website with low visibility in search Completed training for 50% of distributors with balance expected by YE 2021 engines, or no website a
Slide 55: Case Study: E-commerce Breakthrough Lab
Case Study: E-commerce Breakthrough Lab (EBL) E-commerce as a sustainable and scalable differentiator OPPORTUNITY OUTCOME • B2B and B2C consumers’ demands are blending 17 businesses currently working in EBL, with the first 2 in Asia Pacific deployed • COVID-19 and other macroeconomic trends are ac
Slide 56: Demand Generation Key Takeaways
Demand Generation Key Takeaways Demand Generation is more than campaigns and leads; it is a proprietary assembly of 1 capabilities that drive enhanced organic growth 2 Highly scalable growth engine led by customer insight and targeted needs Creating a better customer experience with Ingersoll Rand b
Slide 57: IIoT: Delivering Value and Winning Market Share
IIoT: Delivering Value and Winning Market Share Mike Medaska VP, Strategy
Slide 58: What You Will Hear Today
What You Will Hear Today 1 The Industrial Internet of Things (IIoT) market is large and growing rapidly Ingersoll Rand’s IIoT strategy is built on a deep understanding of customer needs and is already 2 in-motion IIoT-Ready Products Revenue anticipated to grow from ~10% of total revenue today to >25
Slide 59: The IIoT Market is Large and Growing Fast
The IIoT Market is Large and Growing Fast; We Are Acting Boldly IIoT will be a $500B market by 2025 as advances in its essential IIoT-Ready Products technologies drive increased demand Revenue 2 2020 2025 1 IIoT Spending ~35% ($B) $500 ~$0.5B CAGR ~$2.1B ~10% of revenue >25% of revenue $290 +12% • I
Slide 60: Strategy Built on Understanding Jobs To Be Done
Our Strategy is Built on a Deep Understanding of the “Jobs To Be Done” by IIoT Job 3 Job 1 Job 2 Keep employees safe, Avoid unplanned downtime Reduce energy consumption productive, and inspired • IR products are essential components of • Virtually all large customers are working • Monitored machines
Slide 61: Meeting Customers on Their IIoT Journey
Winning Requires Meeting Customers on Their IIoT Journey Desired direction of travel Value to Customer Budget constraints; lack of in-house equipment expertise; outdated IT systems; outdated Headwinds controls systems; unclear cybersecurity protocols; dozens of OEM and third-party vendors Optimized
Slide 62: IIoT Technology Stack and Roadmap
Our IIoT Technology Stack and Roadmap Position Us to Deliver Increasing Value Ready now In development Business CARE offering Service contracts Parts subscriptions “Flow as a Service” Energy services System optimization + More Models Intelligence IR human Machine data Modeling / ERP/MES/CMMS/CRM AI/
Slide 63: Our Differentiated Position Enables Us to Win
Our Differentiated Position is Already Enabling Us to Deliver Value and Win IR Customer >3 million Installed >5 million Key Contacts across regions, markets, product lines compressors, blowers, vacuums, pumps, other Assets Base • Tremendous reach into all key vertical markets and • Each asset repres
Slide 64: Monetization will Assume Multiple Forms
Monetization will Assume Multiple Forms ITS EXAMPLE PST EXAMPLE Connected Compressor Seepex Service Point A connected compressor communicates its health to our IR monitoring service; A unique QR code is placed on pumps before shipment any performance anomaly triggers a text or email indicating t
Slide 65: IIoT Key Takeaways
IIoT Key Takeaways 1 Acting decisively to capitalize on the large and rapidly growing IIoT market IIoT strategy is built on a deep understanding of customer “jobs to be done” and on meeting 2 them on their IIoT journey Roadmap includes products, hardware, software, intelligence and business models t
Slide 66: Sustainability: Beneficiary and Enabler of Growth
Sustainability: Beneficiary and Enabler of Growth Mary Betsch VP, Sustainability
Slide 67: What You Will Hear Today
What You Will Hear Today Operating sustainably supports and reinforces Ingersoll Rand’s strategic imperatives with IRX 1 driving rapid execution and change Employee ownership culture empowers employees to contribute to sustainability efforts, fulfill 2 our purpose to make life better and feel a sens
Slide 68: Sustainability Supports Our Strategic Imperatives
Sustainability Focus Supports and Reinforces Our Other Strategic Imperatives Deploy Talent Accelerate Growth Ownership culture drives diversity Sustainability and efficiency-focused equity and inclusion and attracts talent investment in innovation and new product development Align with higher growth
Slide 69: Noteworthy Progress On Our ESG Journey
Noteworthy Progress On Our Journey as a Leader in ESG… and More to Come The speed of improvement in sustainability is gaining recognition with rating agencies and scores continuously improving Established Key Focus Areas Acted as Owners in Stewardship of Employee, Accelerate IR Commitment Customer a
Slide 70: Employees as Owners are Vital
Employees as Owners are Vital To Everything We Achieve Equity granted to all 15,000+ employees 1 • $250M in grant date value awarded since 2017 2 • Current value of equity granted ~$600M • Nearly 70% of employees continue to hold their 2020 equity grant shares Newly launched employee equity grant pr
Slide 71: Owners Deliver World Class Safety Performance
Owners Deliver World Class Safety Performance Safety ranks as the #1 employee engagement score Recordable Rate overall Industrial Machinery 2021E Industry Average: 1.41 100 Days of Safety campaign achieved three of World Class1 the four lowest months in injuries Benchmark: ≤0.60 2019 COVID-19
Slide 72: Owners Value Diversity, Equity and Inclusion
Owners Value Diversity, Equity and Inclusion Increase representation for Help navigate career paths and Foster a sense of belonging and under-represented (URT)1 employee groups ensure equal opportunities build global networks / relationships 2025 Goals • Increase under-represented talent in the • In
Slide 73: Making Life Better for Neighbors and Shared Planet
Owners Care About Making Life Better for Our Neighbors and Shared Planet Focus Area Sustainable Development and Community Infrastructure Social Strategic Partnerships Engineers Without Borders: Build a better world Empower communities to meet their basic human needs and equip leaders to solve the wo
Slide 74: Environmental Goals
Ingersoll Rand Environmental Goals: Creating Value through Our Operations and Efficiency-focused Products Make Life Better through environmental stewardship for our employees, customers, communities and planet Ingersoll Rand Operations Goals Customer Impact Goals 60% 100% GHG Emissions Reduction Ren
Slide 75: Driving Value in Energy, Water and Waste
Driving Value in Energy, Water and Waste through Operationalizing Sustainability ENERGY IMPACT We are proud of our environmental excellence trajectory as we leverage IRX to execute our ambitious operational goals Vignate, Italy 100% from on-site solar and purchased renewable energy IDM Objectives WA
Slide 76: Sustainability & Efficiency Megatrend Driving Growth
Sustainability & Efficiency Megatrend Driving Growth For Ingersoll Rand Sustainability & efficiency trends are rapidly Ingersoll Rand is an enabler and a beneficiary changing the world of sustainability & efficiency megatrend Sustainability Businesses are under pressure to improve Our products offer
Slide 77: Case Study: Energy Efficiency
Case Study: Energy Efficiency Compressed Air Dryer innovation OPPORTUNITY OUTCOME • Businesses are under pressure to reduce GHG emissions and improve energy efficiency Deliver above market growth by helping customers transition to energy efficient products • Solve Scope 1 and 2 challenges for our
Slide 78: Case Study: Water Conservation
Case Study: Water Conservation Improving water management through our products OPPORTUNITY OUTCOME • Water-scarcity as a result of climate change is on the rise 90% average water savings per installation • The pulp and paper industry is a substantial user of fresh water 45% average energy saving
Slide 79: Sustainability Key Takeaways
Sustainability Key Takeaways Operating sustainably supports and reinforces Ingersoll Rand’s strategic imperatives, with IRX 1 driving rapid execution and change With employees as owners, the mindset changes from “this is the company I work for” to “this 2 is my company” Operating sustainably is abou
Slide 80: Donation to Engineers Without Borders
On Behalf of Our Stockholders, Gold Partner with Engineers Without Borders We Are Making a Donation Today to Make Life Better! Our partnership helps build sustainable water, sanitation, energy and disaster response solutions for underserved communities around the world 150 Dosatron pumps donated for
Slide 81: Q&A Session #1 will Begin Momentarily
Q&A Session #1 will Begin Momentarily Investor Day | November 18, 2021
Slide 82: Industrial Technologies and Services: Leveraging Technology Leadership
Industrial Technologies and Services: Leveraging Technology Leadership Enrique Minarro Viseras SVP and GM, ITS EMEIA Gary Gillespie SVP and GM, ITS Americas
Slide 83: What You Will Hear Today
What You Will Hear Today A global market leader with a broad range of innovative compressed air solutions that drive 1 superior total cost of ownership and contribute to customers’ sustainability initiatives and goals Driving mid-single digit growth through Organic Growth Enablers: Demand Generation
Slide 84: Industrial Technologies and Services (ITS) Segment
Industrial Technologies and Services (ITS) Segment A global market leader with one of the broadest platforms of innovative compressed air solutions Overview Financial Key Takeaways • Premium brands, #1 or #2 in mission-critical applications¹ ($M) $4,500 29% $4,058 $4,044 • Broad product base enablin
Slide 85: Broad Platform of Mission-Critical Flow Creation Technologies
Broad Platform of Mission-Critical Flow Creation Technologies¹ Compressors (~65%) Vacuum and Blower (~20%) Other (~15%) Compressors Air Treatment Vacuum Blower Small Reciprocating Filters Screw Screw Power Tools Scroll Refrigerated Dryers Claw Rotary Lobe Lifting Equipment Oil-lubricated Screw Desic
Slide 86: Multiple Levers to Drive Above Market Growth
Multiple Levers to Drive Above Market Growth Megatrends Organic Growth Enablers Developing MSD robust suite of Driving higher Organic Revenue Aligning exposure differentiated Relentlessly aftermarket Growth to high growth technology pursuing i2V attachment rate end markets initiatives Enhancing Capt
Slide 87: Case Study: Taking Share in an Established Market
Case Study: Taking Share in an Established Market Driving growth in California with enhanced go to market strategy OPPORTUNITY OUTCOME • At GD/IR transaction close, IR was underpenetrated in California, one of the 350 bps 24% 14% largest industrial markets in the US Market Share Gain1 Orders Growth
Slide 88: Case Study: Taking Share in a High Growth End Market
Case Study: Taking Share in a High Growth End Market Capturing the hydrogen / CO2 opportunity OPPORTUNITY OUTCOME • ~$20M revenue YTD with strong and growing funnel of future opportunities • IR’s TAM of global hydrogen and adjacent carbon capture and storage (CCS) market (ex-mobility) is ~$2B and es
Slide 89: Case Study: Technology Innovation – Oil Free
Case Study: Technology Innovation Optimizing the oil free compressor portfolio OPPORTUNITY OUTCOME • Global oil free TAM of ~$3B growing at MSD CAGR through 20251 that serves food Optimized portfolio with full breadth offering to 4,000 kW & beverage, pharma, electronics and auto (including EV) mar
Slide 90: Case Study: Technology Innovation – Air Treatment
Case Study: Technology Innovation Reinvigorating the air treatment portfolio OPPORTUNITY OUTCOME • Global TAM of ~$4B1 Refrigerated Dryer Portfolio • 80%+ of all industrial compressed air applications require air treatment to remove moisture and particulates • Pre-GD/IR transaction, IR’s offering co
Slide 91: Case Study: Aftermarket Growth & Margin Enhancement
Case Study: Aftermarket Growth & Margin Enhancement Growing attachment of long-term service agreements OPPORTUNITY OUTCOME • Long-term service agreements on compressors above 50 horsepower and total oil ~10-15% >$150M 3000 bps free offering represent a $1B+ opportunity for Ingersoll Rand based on cu
Slide 92: Case Study: Technology Innovation & Margin Enhancement
Case Study: Technology Innovation & Margin Enhancement Building the largest offering of blower solutions OPPORTUNITY OUTCOME • Incomplete portfolio with stagnant market position in a ~$900M 3 ~30% ~40% ~25% blower wastewater TAM1 New Technologies Blower SAM Orders Revenue • Utilizing the power of th
Slide 93: ITS Key Takeaways
ITS Key Takeaways 2025 ITS Profile Strong global #2 player in air compression technologies with a broad, Organic Revenue MSD 1 differentiated and optimized product range Growth (2021-2025 CAGR) Increasing exposure to higher growth, sustainable end markets through Aftermarket Mid 40s 2 the applicatio
Slide 94: Precision and Science Technologies: Scaling Platforms in Higher Growth Markets
Precision and Science Technologies: Scaling Platforms in Higher Growth Markets Nick Kendall-Jones SVP and GM, PST
Slide 95: What You Will Hear Today
What You Will Hear Today 1 Market leader in precision dosing, fluid management and niche compression technologies Establishing leadership positions in mission-critical, high-growth, sustainability-focused 2 end markets: Medical, Water, Food/Agritech, Clean Energy Significant organic and inorganic gr
Slide 96: Precision and Science Technologies (PST) Segment
Precision and Science Technologies (PST) Segment Leading manufacturer of specialized precision dosing, fluid management and niche compression technologies Overview Financial Key Takeaways • Premium brands, #1 or #2 in niche, mission-critical applications1 ($M) 2019 – LTM Q3’21 Change 33% • Sustainab
Slide 97: PST Strategy: Expand in Core Technologies & High Growth End Markets
PST Strategy: Expand in Core Technologies & High Growth End Markets PST is a market-leading positive displacement (PD) pump manufacturer By Technology Type Diaphragm Vane Piston Progressive Peristaltic Gear Screw Lobe TAM Cavity $11B¹ Pump Leadership High-Growth Application Examples in Niches End Ma
Slide 98: PST Strategy Execution
PST Strategy Execution: Disciplined Focus on Industry Leading Performance Megatrends Organic Growth Enablers MSD+ Developing Adding adjacent, Organic Revenue Aligning exposure Relentlessly robust suite of accretive Growth to high growth pursuing i2V differentiated technologies end markets initiative
Slide 99: Case Study: Medical – Lab & Life Sciences
Case Study: Medical – Lab & Life Sciences Leveraging customers to an adjacent market OPPORTUNITY OUTCOME • Build-out lab automation to access high-growth biopharma market in addition to As of Q3 2021, medical business YTD organic revenue growth: 10% growing the profitable core business in patient
Slide 100: Case Study: Water Treatment
Case Study: Water Treatment Synergy realization from channel, geography and technology expansion OPPORTUNITY OUTCOME • IR well-positioned to provide solutions to solve unique industry demands of some As of Q3 2021, water business YTD organic revenue growth: 12% of the highest growth needs of the m
Slide 101: Case Study: Food – Agritech
Case Study: Food – Agritech Growth from IIoT software & services OPPORTUNITY OUTCOME • Climate change, food security and food safety issues are giving rise to the As of Q3 2021, agritech business YTD organic growth: 17% need for precision and controlled environment agriculture (CEA) • However, agr
Slide 102: Case Study: Clean Energy – Hydrogen Mobility
Case Study: Clean Energy – Hydrogen Mobility Pivoting a core technology into a new market OPPORTUNITY OUTCOME As of Q3 2021, PST hydrogen’s organic YoY growth: 100% • Hydrogen is rapidly developing as a key part of the future energy infrastructure landscape as it facilitates decarbonization and en
Slide 103: PST Key Takeaways
PST Key Takeaways 2025 PST Profile Premium brands, #1 or #2 in precision dosing and transfer in niche, Organic Revenue MSD+ 1 mission-critical applications Growth (2021-2025 CAGR) Leveraging differentiated technology platform to drive growth in Adj. EBITDA ~100 2 targeted end markets: Medical, Water
Slide 104: M&A: Extending Capabilities and Fueling Growth
M&A: Extending Capabilities and Fueling Growth Elizabeth Hepding SVP, Corporate Development
Slide 105: What You Will Hear Today
What You Will Hear Today Utilization of IRX has delivered a repeatable, highly efficient process to build our funnel, 1 evaluate and execute transactions and capture meaningful value through integration Strong business development teams in the P&Ls identify opportunities, build relationships and 2 d
Slide 106: Highly Strategic and Programmatic View Towards M&A
We Take a Highly Strategic and Programmatic View Towards M&A M&A Focus Strategic Criteria Financial Criteria • Mission-critical flow creation Market Leader Revenue Growth technologies Market leadership in niche markets, applications or geographies MSD or greater organic growth Strong Organic Growth
Slide 107: Track Record of Execution in Alignment with Acquisition Criteria
Demonstrated Track Record of Execution in Alignment with Our Acquisition Criteria Strategic Criteria Financial Criteria Strong Sustainable Strong Enhance <20% Net 2020 / 2021 Market Organic End Aftermarket Synergy Digital ~40% Gross Working Segment Leader Growth Markets >35% Potential Capabilities M
Slide 108: Active Funnel Management Underpins Our M&A Program
Active Funnel Management Underpins Our M&A Program Active Funnel Development Key Funnel Metrics • IRX process used to manage funnel 6 Stage Weighted Average Funnel and track KPIs Weighted funnel size remains ~5x larger than • Focused on highly synergistic, 0% Prospect growth-oriented bolt-on targets
Slide 109: Accelerated Acquisition Activity
Accelerated Acquisition Activity Supports Our Ambition to Outperform the Market Disciplined Track Record of M&A Execution Since IPO in 2017 through Q1 20211 11.3x 7.1x 37% Weighted Average Weighted Average Reduction in Pre-Synergy Post-Synergy Purchase Post-Synergy Purchase Purchase Multiple Multipl
Slide 110: IRX Core of Our Integration Playbook
IRX is at the Core of Our Integration Playbook and Drives Long-Term Value Creation Integration Overview Integration Process from GD/IR Transaction Applied in All Transactions • Integration driven by IRX, which enables us to execute and integrate multiple deals simultaneously • Strong repeatable play
Slide 111: Ownership Mindset and Culture Are Differentiators
Ownership Mindset and Culture Are Differentiators “With IR, I felt that I had a partner that would continue to develop and grow my business.” What Christian said about selling to IR: • IR gave me confidence by maintaining contact over a long period of time; it showed commitment • It was a team appro
Slide 112: M&A Key Takeaways
M&A Key Takeaways 1 Utilization of IRX in all aspects of M&A, from funnel building to integration Inorganic growth goals are strongly aligned at all levels of the organization, with dedicated 2 M&A resources in the P&Ls leveraging market-specific expertise and relationships 3 Disciplined M&A decisio
Slide 113: Financial Strategy and Performance
Financial Strategy and Performance: Building the Framework for Sustained Outperformance Vik Kini SVP and CFO
Slide 114: What You Will Hear Today
What You Will Hear Today Proven track record of driving growth, capturing synergies, improving margins and delivering 1 strong free cash flow, all enabled by IRX Compelling growth profile driven by low capital intensity, mission-critical flow creation 2 technologies and services in high growth, sust
Slide 115: History of Consistently Achieving Stronger Results
Our History Demonstrates a Commitment to Consistently Achieving Stronger Results1 Orders ($M) Revenue ($M) Adj. EBITDA ($M) & Margin % $6,000 $6,000 $1,400 $5,475 $5,000 $4,830 $5,000 $4,908 $4,952 $1,200 $1,147 $4,410 $4,344 $1,000 $960 $934 $4,000 $4,000 $800 23.2% $3,000 $3,000 21.5% $600 $2,000
Slide 116: Strong Execution on Synergy Delivery
Strong Execution on Synergy Delivery from GD/IR Transaction1 $350M+ Synergy Funnel • Reaffirming $300M cost savings target2 ~$300M2 Run-Rate • Annual cadence of savings: Synergy Estimate • ~40% in 2020: ~$115M (~$85M structural reductions, ~$30M procurement) Manufacturing • ~33% in 2021E: ~$100M (~$
Slide 117: Strong Adj. EBITDA and Margin Execution
Strong Adj. EBITDA and Margin Execution With Continued Runway Adj. EBITDA¹ ($M) & Margin % Industrial Technologies and Services $1,200 $1,000 $1,007 • Unwavering focus on high quality organic growth through $816 $800 demand generation, IIoT expansion and product / service $800 24.9% $600 22.6% innov
Slide 118: Committed to an Asset Light Model
Committed to an Asset Light Model Capital Expenditures ($M) Operating Working Capital¹ ($M) (% of LTM Revenue) (% of LTM Revenue) 0 . 70 0 • Capex remains ~1-2% of annual 2 $1,250 5 50.0% revenue with focus on high return 60 0 $1,050 investments $54 . 0 $992 2 $929 50 • Strong focus on inventory 40.
Slide 119: Strong Cash Flow Generation
Strong Cash Flow Generation, Margin and Conversion with More Opportunity Ahead Adj. Free Cash Flow¹ ($M) • Strong Adj. FCF¹ and conversion: targeting ≥100% conversion to ~$800 Adjusted Net Income¹ • Adj. FCF margin¹ of mid-teens currently with room to improve: • Tax rate improvement • Interest expen
Slide 120: Significantly Improved Balance Sheet
Significantly Improved Balance Sheet Provides Flexibility Going Forward Net Debt / Adj. EBITDA1 Capital Structure (as of 9/30/2021) 4.2x GD/IR Transaction Completed Facility Rate Maturity Balance 2.9x 2.6x USD Term Loan B L+175 bps Feb 2027 $2,783M 2.1x 2.0x 2.0x EUR Term Loan B L+200 bps Feb 2027 $
Slide 121: Comprehensive Capital Allocation Strategy
Comprehensive Capital Allocation Strategy to Fuel Growth M&A Go-Forward Principal focal point of capital allocation strategy Capital Allocation Supported by robust pipeline of highly synergistic and growth-oriented targets to drive Framework outsized market performance Share Repurchase Complet
Slide 122: Strong Market Performance with Continued Growth Engine
Strong Market Performance with Continued Growth Engine Nov 2021 Sep 2021 Q3 2021 Capital Allocation Earnings Webcast Aug 2021 Sustainability March 2020 April 2021 Webcast GD/IR Transaction Closes Announced Sale Since 2017 IPO¹ COVID-19 Global Pandemic of Club Car Impacts Equity Markets February 2021
Slide 123: Introducing 2025 Financial Targets
Introducing 2025 Financial Targets We expect to achieve the following financial targets: In support of total revenue growth, we also expect to achieve: 2021E 2025 2021E 2025 Total Revenue Growth High Teens LDD IIoT-Ready Products³ (% of Revenue) ~10% >25% (2021-2025 CAGR) Aftermarket Revenue High 30
Slide 124: Reaffirming 2021 Guidance
Reaffirming 2021 Guidance Reaffirming guidance: Up ~100 bps Organic Revenue Growth; Up ~$20M Adj. EBITDA Other Assumptions Prior (as of 7/29/21) Revised (as of 11/3/21) • Guidance does not include divested businesses (HPS, SVT) Revenue Adjusted Revenue Adjusted nor pending acquisition of Tuthill Gro
Slide 125: Committed to Best-in-Class Investor Relations
Committed to Best-in-Class Investor Relations Appointed head of IR, Chris Miorin IR Investor Relations Key Performance Metrics1 2021 Perception Study Conduct ongoing shareholder outreach – completed 2021 Perception Study Hosted webcasts on two of our five strategic imperatives in 2H 2021 • Sus
Slide 126: Finance Key Takeaways
Finance Key Takeaways Our employees’ continued relentless execution through IRX establishes Ingersoll Rand 1 as a sustainability-focused industry leader Actively investing to deliver outpaced growth, both organically and through M&A 2 to continue increasing the quality of our portfolio Rigorous exec
Slide 127: Closing Remarks
Closing Remarks Vicente Reynal Chairman and CEO
Slide 128: Ingersoll Rand Key Takeaways
Ingersoll Rand Key Takeaways Invest with Us Differentiated, employee-ownership culture that accelerates execution and performance IRX is our backbone and continues to enable outperformance in every facet of the company Poised to deliver LDD total revenue growth with expanded margins through alignmen
Slide 129: Q&A Session #2
Q&A Session #2 Investor Day | November 18, 2021
Slide 130: Thank you for attending
Thank you for attending Investor Day | November 18, 2021
Slide 131: Appendix
am) Ingersoll Rand Appendix ‘ ann ;
Slide 132: Glossary of Acronyms
Glossary of Acronyms 4D – Dull, Dirty, Dangerous, Delicate GD – Gardner Denver NA – North America AI – Artificial Intelligence GDP – Gross Domestic Product NPD – New Product Development AIRD – Association of Ingersoll Rand Distributors GHG – Greenhouse Gas NPS – Net Promoter Score AMT – Aftermarket
Slide 133: Non-U.S. GAAP Measures of Financial Performance
Non-U.S. GAAP Measures of Financial Performance In addition to consolidated GAAP financial measures, Ingersoll Rand reviews various non-GAAP financial measures, including “Adjusted EBITDA,” “Free Cash Flow,” and “Incrementals/Decrementals.” Ingersoll Rand believes Adjusted EBITDA is a helpful supple
Slide 134: Reconciliation of Revenue to Revenue Ex-HPS
Reconciliation of Revenue to Revenue Ex-HPS (Gardner Denver, Inc. Only) (Unaudited; in millions) For the Twelve Month Period Ended December 31, 2018 2017 2016 Revenue $ 2,689.8 $ 2,375.4 $ 1,939.4 Minus: High Pressure Solutions 670.1 579.8 193.2 Revenue Ex-HPS $ 2,019.7 $ 1,795.6 $ 1,746.2 134
Slide 135: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Gardner Denver, Inc. Only) (Unaudited; in millions) For the Twelve Month Period Ended December 31, 2018 2017 2016 Net Income (Loss) $ 269.4 $ 18.5 $ (31.3) Plus: Interest expense 99.6 140.7 170.3 Provision (benefit) for income taxes 80.1 (131.2
Slide 136: Reconciliation of Operating Working Capital
Reconciliation of Operating Working Capital (Gardner Denver, Inc. Only) (Unaudited; in millions) As of and for the Twelve Month Period Ended December 31, 2019 2018 2017 2016 Accounts receivable and contract assets $ 488.1 $ 545.0 $ 536.3 $ 441.6 Plus: Inventories (excluding LIFO) 489.5 510.7 481.1 4
Slide 137: Reconciliation of Operating Working Capital
Reconciliation of Operating Working Capital (Unaudited; in millions) As of and for the Twelve Month Period Ended September 30, 2021 December 31, 2020 Accounts receivable and contract assets $ 986.1 $ 922.2 Plus: Inventories (excluding LIFO) 854.8 707.9 Less: Accounts payable 632.9 536.4 Less: Contra
Slide 138: Reconciliation of Cash Flow from Operating Activities to FCF
Reconciliation of Cash Flow from Operating Activities to FCF (Gardner Denver, Inc. Only) (Unaudited; in millions) For the Twelve Month Period Ended December 31, 2018 2017 2016 Cash Flow from Operating Activities $ 444.5 $ 200.5 $ 165.6 Minus: Capital expenditures 52.2 56.8 74.4 Free Cash Flow $ 392.
Slide 139: Reconciliation of Net Leverage
Reconciliation of Net Leverage (Gardner Denver, Inc. Only) (Unaudited; in millions) December 31, 2018 2017 2016 Gross debt $ 1,675.4 $ 2,045.1 $ 2,837.2 Less: Cash and cash equivalents 221.2 393.3 255.8 Net Debt $ 1,454.2 $ 1,651.8 $ 2,581.4 Adjusted EBITDA $ 681.8 $ 561.5 $ 400.7 Net Leverage 2.1x
Slide 140: Combined Financial Information
Combined Financial Information (Unaudited; in millions) For the Twelve Month For the Three Month Period Ended Period Ended December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 September 30, 2021 Orders Industrial Technologies and Services $ 996.8 $ 1,042.4 $ 1,204.0 $ 1,231.3 $ 4,474.5
Slide 141: Reconciliation of Net Income to Adjusted EBITDA and Further Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA and Further Adjusted EBITDA For the Three Month Period Ended (Unaudited; in millions) December 31, 2020 Net Income $ 151.1 Plus: Interest expense 24.4 Provision for income taxes (42.2) Depreciation expense 26.9 Amortization expense 111.8 Restructuring
Slide 142: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited; in millions) For the Three Month Period Ended March 31, 2021 June 30, 2021 September 30, 2021 Net Income (Loss) $ (90.1) $ 234.6 $ 126.8 Less: Income (loss) from discontinued operations (177.8) 258.5 (7.6) Less: Income tax benefit (p
Slide 143: Reconciliation of Cash Flow from Operating Activities to Adjusted FCF
Reconciliation of Cash Flow from Operating Activities to Adjusted Cash Flow from Operating Activities and Adjusted FCF (Unaudited; in millions) For the Nine Month Period Ended September 30, 2021 Cash Flow from Operating Activities from Continuing Operations $ 380.9 Plus: Synergy delivery and stand-u
Slide 144: Unaudited Supplemental Adjusted Combined Financial Information
Unaudited Supplemental Adjusted Combined Financial Information Ingersoll Rand is providing the below unaudited supplemental historical financial information of the Company on a non-GAAP adjusted basis for the fiscal years ended December 31, 2020 and 2019 as if the transaction between Ingersoll-Rand
Slide 145: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment For the Twelve Month Period (Unaudited; in millions) Ended December 31, 2020 2019 Ingersoll Rand Supplemental Adjusted Orders $ 4,410.4 $ 4,829.9 Supplemental Adjusted Revenue (non-GAAP) 4,344.4 4,907.8 Supplemental A
Slide 146: Table 2: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue
Table 2: Reconciliation of GAAP Revenue to Supplemental Adjusted Revenue by Segment and for the Company and Segment Adjusted EBITDA to Supplemental Segment Adjusted EBITDA For the Twelve Month Period Ended For the Twelve Month Period Ended December 31, 2020 December 31, 2019 Supplemental Supplementa
Slide 147: Table 3: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Table 3: Reconciliation of Net Income (Loss) to Adjusted EBITDA, Supplemental Adjusted EBITDA and Supplemental Further Adjusted EBITDA For the Twelve Month Period (Unaudited; in millions) Ended December 31, 2020 2019 Net Income (Loss) (GAAP) $ (32.3) $ 159.1 Plus (1): Interest expense 111.1 88.9 Pro
Slide 148: Presenter Biographies
Presenter Biographies
Slide 149: Presenter Biographies
Presenter Biographies Vicente Reynal Vikram Kini Chairman, President & CEO SVP, CFO Vicente Reynal is chairman, president and chief executive officer of Ingersoll Rand. He Vikram “Vik” Kini is a senior vice president and chief financial officer at Ingersoll Rand. was appointed chairman in November 2
Slide 150: Presenter Biographies
Presenter Biographies Cesare Trabattoni Mike Weatherred VP, Demand Generation, Pricing & SVP, IRX & Business Excellence Commercial Excellence Mike Weatherred is senior vice president, IRX & Business Excellence where he leads Cesare Trabattoni is vice president, Demand Generation, Pricing & Commercia
Slide 151: Presenter Biographies
Presenter Biographies Mike Medaska Mary Betsch VP, Strategy VP, Sustainability Mike Medaska is vice president, strategy of Ingersoll Rand. In this role, he leads strategy Bringing nearly 30 years of experience in environmental health and safety, Mary is globally development and key research and long
Slide 152: Presenter Biographies
Presenter Biographies Enrique Minarro Viseras SVP & GM – ITS, EMEIA and Gary Gillespie Pressure & Vacuum Solutions Group SVP & GM – ITS, Americas Enrique Minarro Viseras is senior vice president and general manager, Industrial Gary Gillespie is senior vice president and general manager, Industrial T
Slide 153: Presenter Biographies
Presenter Biographies Nick Kendall-Jones Liz Meloy Hepding SVP & GM, PST SVP, Corporate Development Nick Kendall-Jones is senior vice president and general manager, Precision and Science Elizabeth “Liz” Hepding is senior vice president, Business Development. In this role, she Technologies. A seasone
Slide 154: Presenter Biographies
Presenter Biographies Christopher Miorin VP, Investor Relations Chris Miorin is vice president of investor relations at Ingersoll Rand. In this role, he communicates the company’s strategy, goals and performance to the financial markets and is responsible for growing the size and quality of the inve