Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Investor Day (November 2023)
144 slides from Ingersoll Rand's investor day presentation, Nov 30, 2023
Slide 1: 2023 Investor Day
2023 INVESTOR DAY November 30, 2023 New York City 1
Slide 2: Opening Remarks
OPENING REMARKS Matthew Fort VP, Investor Relations Making Life Better 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation by Ingersoll Rand Inc. (the “Company” or “Ingersoll Rand”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related the Company’s expectations regarding the performance
Slide 4: Agenda
Agenda 08:00 a.m. Opening Remarks and Safe Harbor 10:05 a.m. Industrial Technologies and Services (IT&S) Matthew Fort Amar Kaul, VP and GM, IT&S EMEIA Compression VP, Investor Relations Arnold Li, SVP and GM, IT&S Asia Pacific Strategy and Execution Precision and Science Technologies (P&ST) Vicente
Slide 5: Strategy and Execution
STRATEGY AND EXECUTION Vicente Reynal Chairman and CEO
Slide 6: Team
Team 1 Presenting Supporting Vicente Reynal Vik Kini Mike Weatherred Mary Betsch Matt Emmerich Chairman and CEO SVP, CFO SVP, IRX VP, Sustainability SVP, CIO 8 years 12 years 5 years 18 years <1 year Danaher, Allied Signal, General Electric, SABIC Danaher, Allied Signal, Sanmina-SCI, Fluor Polaris T
Slide 7: Our Board of Directors
Our Board of Directors: Diverse experience and unique domain expertise Kirk E. Arnold William P. Donnelly Gary D. Forsee Jennifer Hartsock* John Humphrey Former CEO, Lead Independent Director Retired Chairman Chief Information and Retired EVP and CFO, Data Intensity Retired EVP, and CEO, Digital Off
Slide 8: What you will hear today
What you will hear today Ingersoll Rand is an attractive, long-term investment with a proven economic growth engine that consistently delivers 01 double-digit earnings growth and strong free cash flow (FCF) We have dramatically improved profitability and our growth profile, reduced cyclicality by di
Slide 9: This is Ingersoll Rand today
This is Ingersoll Rand today... A leading global provider of mission-critical and sustainable flow creation solutions with 164-year history ~$6.8B ~$1.8B ~26% ~$1.1B ~$28.5B 252% FY 2023E FY 2023E FY 2023E FY 2023E Total Shareholder Return Market Cap2 Revenue1 Adj. EBITDA1,4 Adj. EBITDA Margin1,4 Fr
Slide 10: Making Life Better
…guided by our purpose Making Life Better For our For our For our For our Employees Customers Planet Shareholders • High levels of engagement • Ensuring production uptime • Enabling decarbonization • Stock price appreciation • Broad-based ownership • Reducing operating expense • Advancing human well
Slide 11: Executing our Economic Growth Engine
…executing our Economic Growth Engine Our Economic Growth Engine is the set of actions and priorities to compound value High Performance Premier Growth Megatrends Sustainability Digitalization Quality of Life Execution Process Compounder Ownership Double-Digit Mindset Earnings Growth Organic Growth
Slide 12: …with a unique culture
…with a unique culture Ingersoll Rand Execution Excellence (IRX) guides every aspect of our work 12
Slide 13: Transforming our financial profile through deployment of IRX
…transforming our financial profile through deployment of IRX Deploying IRX to transform our financial profile… … while becoming a premier growth compounder CAGR Reduced cyclicality from our business by divesting the 20161 20202 2021 2023E3 (’23E vs ‘20) Club Car and High Pressure Solutions business
Slide 14: Delivering performance while doing good for the planet and community
…delivering performance while doing good for the planet and community1 Industry-Leading ESG Results Achieving Corporate Responsibility Leading Sustainably #1 in North America Ingersoll Rand’s total recordable incident rate (TRIR) is Member of DJSI World and member of DJSI North America; as of Octobe
Slide 15: Amazing employees with an ownership mindset
…supported by amazing employees with an ownership mindset Proud to be a pioneer in employee ownership What our employees are saying about ownership grants: 17,500+ “My wife was diagnosed with a degenerative disease, and Current Ingersoll Rand employees in my country, we had no treatment for this dis
Slide 16: Outperformance in the market; ~$25B value creation
This has led to an outperformance in the market; ~$25B value creation June 2023 Announced March 2023 Purchase of November 2023 April 2021 November 2021 Received Howden Roots Q3 2023 Earnings Announced Sale Investor Day Upgrade to of Club Car Investment Grade (BBB-) Since 2017 IPO1 From S&P October 2
Slide 17: Focus on high-growth, sustainable end markets
Continuing to focus on high-growth, sustainable end markets1 While enabling traditional end markets to improve productivity and energy efficiency Life Sciences 15% Food and Beverage 12% Clean Energy 12% General Manufacturing 12% Infrastructure 6% Water 5% Transport/Distribution 5% Pulp and Paper 5%
Slide 18: Expanding our TAM
…while continuing to expand our TAM through organic and inorganic actions Ingersoll Rand Total Addressable Market1 Global +25% Expansion Drivers +36% Expansion Drivers • High-growth, sustainable market focus • High-growth, sustainable market focus • System optimization • New clean energy application
Slide 19: Why we win: Product and technology leadership
Why we win: Product and technology leadership Broad flow creation and industrial product portfolio across air, gas, and liquid handling applications #1 •• North America air compressors Oil-free compressors in China • Diaphragm/piston gas pumps Reciprocating Scroll Rotary Oil-free Rotary Air Treatmen
Slide 20: Why we win: Premium brands
Why we win: Premium brands with incredible reputations Multi-brand strategy balances global strength of flagship Ingersoll Rand brand while preserving niche brands in focused applications and/or regions Added since Merger in February 2020 Industrial Technologies and Services Precision and Science Te
Slide 21: Why we win: Massive installed base
Why we win: Massive installed base supported by global channel and sales network Unmatched commercial and operational reach to serve customers and sell and service equipment around the world EMEIA 29 Sites1 62K+ Direct accounts Americas 25K+ Indirect accounts Asia Pacific 28 9 5K+ Sales, service, an
Slide 22: Delivering results across compounder model
We are delivering results across all elements of our compounder model High Performance Premier Growth Execution Process Compounder Megatrends Sustainability Digitalization Quality of Life Target 2021 2022 2023E1 Ownership Double-Digit Mindset Earnings Growth Organic Organic Revenue YoY Improvement G
Slide 23: Confidence in delivering long-term financial targets
Confidence in delivering our long-term financial targets 2025 Targets On Track to New 2027 (Prior Investor Day) Deliver Targets Total Revenue Growth Low-Double Digits (2021-2025 CAGR) P Low-Double Digits (2023E-2027 CAGR) Organic1 Mid-Single Digits (2021-2025 CAGR) P Mid-Single Digits (2023E-2027 CA
Slide 24: Proud of our results and employees
Proud of our results and of our employees – and we are just getting started United States France Mexico Poland India Canada China 24
Slide 25: Key takeaways
Key takeaways Ingersoll Rand has a proven Economic Growth Engine that has consistently delivered double-digit earnings growth and 01 strong free cash flow 02 We have made strategic investments to drive ongoing growth and improve profitability 03 We have the right foundation and capabilities to deliv
Slide 26: Ingersoll Rand Execution Excellence (IRX)
INGERSOLL RAND EXECUTION EXCELLENCE (IRX) Mike Weatherred SVP, IRX 26
Slide 27: What you will hear today
What you will hear today 01 IRX is the way we operate globally and enables faster execution 02 Our IRX coaching process enables leaders to align on the highest priorities and execute in 100-day sprints IRX is well-suited for integration planning and execution with new teams using the process within
Slide 28: IRX is the competitive differentiator
IRX is the competitive differentiator in our Economic Growth Engine It’s HOW we get things done High Performance Premier Growth Megatrends Sustainability Digitalization Quality of Life Execution Process Compounder Ownership Double-Digit Mindset Earnings Growth Organic Growth Product Enablers Demand
Slide 29: What is IRX?
What is IRX? An enabler to get things done faster while controlling what we can control Ingersoll Rand Execution Excellence (IRX) provides employees with a consistent, simple process to drive high performance through 100- day sprints Weekly meetings, called IMPACT Daily Management (IDMs), provide fo
Slide 30: Goal deployment and focus enable rigorous execution
Goal deployment and focus on the highest priorities enable rigorous execution How do we execute on the highest priorities? 1 2 3 • Annual execution cycle → leaders and • Enterprise and segment priorities • IDMs translate those priorities into employees focus on a robust, defined during annual Make L
Slide 31: How the IRX IDM process works
How the IRX IMPACT Daily Management (IDM) process works Simple and repeatable six step approach Align resources and teams to focus Determine what success looks like Keep score weekly, create forum for asking on the highest priorities in 100-day sprints for help, and countermeasure regularly 1 2 3 4
Slide 32: What an IDM workbook looks like
What an IRX IMPACT Daily Management workbook looks like IMPACT Daily Growth 1 Header 3 Management Status 2 Bridge IMPACT Daily Attendance 4 14 Management Self-Audit Discussion 13 We Need Help Guide 5 Follow-Ups Follow-Ups 12 For This Week From Last Week 6 Sales Marketing Growth Growth Growth Standar
Slide 33: IRX by the numbers
IRX by the numbers: We are getting more things done faster IRX continues to scale …with representation across …and we use it across the enterprise… functions/types… everywhere IDMs by Area of Focus 2023 Integration planning and integration ~400 M&A Integration 3% execution of acquired companies Dive
Slide 34: Key takeaways
Key takeaways IRX is simple and easy to implement 01 IRX continues to enable faster execution, while controlling what we can control 02 Our teams gain momentum after each 100-day sprint 03 There are unlimited usages and areas of focus for IRX 04 We are just getting started in leveraging this high pe
Slide 35: Demand Generation Excellence (DGX)
DEMAND GENERATION EXCELLENCE (DGX) Mike Weatherred SVP, IRX
Slide 36: What you will hear today
What you will hear today DGX is a proprietary growth engine that goes beyond marketing and designed to drive a great customer 01 experience while delivering outstanding growth results and expanding market share DGX is a combination of customer insight, digital marketing, commercial execution, afterm
Slide 37: How we expect to compound our value
How we expect to compound our value High Performance Premier Growth Megatrends Sustainability Digitalization Quality of Life Execution Process Compounder Ownership Double-Digit Mindset Earnings Growth Organic Growth Product Enablers Demand IIoT and Service Mid-Single Digits Generation Innovation + ×
Slide 38: What is Demand Generation Excellence (DGX)?
What is Demand Generation Excellence (DGX)? Web/Digital Marketing A centralized and comprehensive • 78 individual websites hosted on a single platform go-to-market capability that Customer Insights • Multiple web and app-based messaging and communication capabilities enables targeted, cost-effective
Slide 39: DGX works across multi-brand, multi-channel model
DGX works seamlessly across our multi-brand, multi-channel model Eliminating complexity and leveraging a common approach (what good looks like) around the world 80+ Brands Centralized • Team of experts • Contact database • Web/digital capability • Sales standard work • Aftermarket focus Direct Indir
Slide 40: Why it works: We address customer needs
Why it works: We address the needs of our customers Clearly understanding where customers are, how engaged they are, and what information they need next is the key to success Professional purchasers are challenged… Customer Insight Buying Criteria and have expectations of consumer-like P Gather info
Slide 41: How does DGX work?
How does DGX work? 1. Choose Strategic Area of Focus 2. Leverage Contact Database 3. Launch Integrated Campaign Execution Market Segmentation 1 Acquired Business/Brand Targeted Food & Pulp & Clean Life General Markets Pharma Water Beverage Paper Energy Sciences MFG New Product Launch 78 Brands Brand
Slide 42: Where do we use DGX?
Where do we use DGX? We focus the commercial execution team with precision where we can profitably grow and increase market share Demand Generation Excellence Focusing On new customer acquisition based on Web/Digital Marketing targeted markets Pivoting and solutions Quickly to targeted applications
Slide 43: DGX is delivering impactful results
DGX is delivering impactful results -98% We are performing at a considerably higher level than when we began our journey in 2016 >50X >15X -95% >30X Confirmed Contacts Annual MQLs Cost Per Lead Sales Funnel Additions (Million) from DGX ~$500 5.1 ~300K ~$1.5B ~20K ~$25 ~$50M 0.1 2016 2023E 2016 2023E
Slide 44: DGX in action: Food and beverage and life sciences
DGX in action: Growth in established food and beverage and life sciences markets Focusing Customer acquisition based on targeted markets Sample Campaign Elements Outcome for Short-Term Campaign Food and Beverage Market 21 $17M Integrated multi-touch Funnel additions campaigns activated 340,000+ ~4,0
Slide 45: DGX in action: RNG and EV battery
DGX in action: Growth in high-growth, sustainable Renewable Natural Gas (RNG) Pivoting and electric vehicle (EV) battery applications Quickly to targeted applications based on microtrends Sample Campaign Elements Outcome for Short-Term Campaign Clean Energy Market (RNG) 10 ~$7M Integrated multi-touc
Slide 46: DGX in action: Rapid integration of an acquisition
DGX in action: Rapid integration of an acquisition for immediate impact Accelerating Start and implementation with newly acquired brands using IRX Integration Execution Excellence Eliminated SPX Flow brand and relaunched Hankinson, Delair, Deltech, Jemaco, and Pneumatic Products – all well-known bra
Slide 47: Highly capable in Commercial Leverage range of maturity
We are highly capable today and solidly in the “Commercial Leverage” range of maturity Beginning 2015 Current State World Class “Trying Hard” Basic Utilization Significant Learning Commercial Leverage Commercial Leadership • Lead nurturing campaigns • Campaigns along full customer • Account-based ma
Slide 48: Key takeaways
Key takeaways DGX is more than campaigns and leads; it is a proprietary collection of capabilities and data insights that is 01 designed to drive enhanced organic growth and accelerate inorganic growth 02 DGX is a highly scalable growth engine led by customer insight and understanding of targeted ne
Slide 49: Recurring Revenue
RECURRING REVENUE Mike Medaska VP, Corporate Strategy 49
Slide 50: What you will hear today
What you will hear today We expect to double the percentage of revenue from IIoT-ready products from 10% in 2020 to 20% in 2023 and are on 01 track to achieve our 25% target by 2025 02 We are setting a target to grow enterprise recurring revenue from ~$200M in 2023 to ~$1B by 2027 We are working to
Slide 51: On track to meet 25% by 2025 digital target
On track to meet 25% by 2025 digital target, transitioning to monetization We have invested in resources, processes, and technology to build a strong foundation as we focus on revenue generation Monetization Pathways ~2X Growth in % of revenue from IIoT-Ready products and services (2023E vs. 2020) T
Slide 52: Aftermarket solutions meet customer needs
Our aftermarket solutions meet longstanding and accelerating customer needs Customer Needs Our Aftermarket Solutions Longstanding Replacement Parts Consumables Accessories “Hard parts” that wear over Materials consumed in the Components adjacent to time from friction, heat, or use, normal course of
Slide 53: Bringing the opportunity to life
Bringing the opportunity to life Customers, energy managers, and automation providers are increasingly reliant on our compressed air system expertise Compressed air is the 4th utility; vital and ubiquitous … but complex … … and usually not optimized1 • >70% of sites use air compressors1 Inappropriat
Slide 54: Air system assessments catalyze customer action
Air system assessments create awareness of issues and catalyze customer action Team of dedicated Ingersoll Rand experts equipped with world-class tools and trained in the science of compressed air Air System Assessment Process SCORE 1 ASSESS 2 IMPLEMENT 3 • Walk-through of customer site by Ingersoll
Slide 55: Air system assessment impact
Air system assessment impact Generating above-market growth in traditional and high-growth sustainable markets 1,300+ >$130M ~12% ~2X Orders won via system assessments Value of orders won via 2022 YoY growth in Average value of jobs won via in North America in 2022 assessments in 2022 assessment ord
Slide 56: Attractive unit economics in aftermarket
Attractive unit economics illustrate a significant growth opportunity Electricity and maintenance …creating an opportunity for Ingersoll Rand costs are significant over a to generate revenue from multiple …and extensible to other 10+ year useful life… streams1… high-value, long-lived assets Equipmen
Slide 57: Path to $1B recurring revenue
Path to $1B recurring revenue We are committed to growing our recurring offering given its importance to our customers and its margin contribution to Ingersoll Rand Air Quality 5 System Optimization 4 CARE 3 ~$1.0B Recurring Revenue Recurring Revenue Revenue derived from contracts or multi-year agre
Slide 58: CARE comprehensive service
CARE comprehensive service Our differentiated solution for world-class compressor and equipment service • Comprehensive service agreement Customer Benefits • Ingersoll Rand handles all planned and unscheduled maintenance • Uptime, reliable equipment performance, and peace of mind • All-inclusive ris
Slide 59: CARE for compressors is delivering high impact
CARE for compressors is delivering high impact across industries and regions Demonstrated ability to improve customer operations and satisfaction >80% 20 pts ~20% >$375M Growth in bookings Higher customer satisfaction scores (NPS) Average increase in equipment uptime Future value of all current CARE
Slide 60: Ecoplant: AI-driven system optimization
Ecoplant: Revolutionary energy savings through dynamic, AI-driven system optimization Combining the patented technology of an agile software startup with the global commercial reach of an industry leader System capacity use • Patented technology and proprietary algorithms in AI/ML • System provides
Slide 61: Air quality analysis
Air quality analysis to improve system performance and regulatory compliance • Founded in 1989 “Anyone that is looking to get their air tested, this is the route to go. I utilized Trace and • Joined Ingersoll Rand in 2023 the process from beginning to end was quite simple.” • A2LA-accredited laborat
Slide 62: Expanding and integrating equipment and system services
Where we are going: Expanding and integrating our equipment and system services We believe that we are better positioned than our competitors to service and optimize our equipment and related systems Base offering 2023 2024-2027 Planned Expansion Extension to follow Extension to P&ST Integrated offe
Slide 63: Key takeaways
Key takeaways Our investments in digitalization are paying off and we are on track to achieve our 25% revenue target with IIoT- 01 ready products We are setting a bold $1B target for enterprise recurring revenue by addressing customer needs for process 02 uptime, reduced energy consumption and GHG e
Slide 64: Q&A
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Slide 65: Industrial Technologies and Services (IT&S)
INDUSTRIAL TECHNOLOGIES AND SERVICES (IT&S) Amar Kaul, VP and GM, IT&S EMEIA Compression Arnold Li, SVP and GM, IT&S Asia Pacific
Slide 66: What you will hear today
What you will hear today IT&S is a ~$6B segment operating in a ~$40B highly fragmented market with continued opportunities for 01 organic and inorganic growth We are achieving and continue to target above-market growth by: 02 • Delivering products and services that have a compelling ROI with enhance
Slide 67: IT&S segment summary
Industrial Technologies and Services (IT&S) segment summary • Premium brands, #1 or #2 in mission-critical applications Revenue Growth ($B) Adj. EBITDA Margin Growth • Leading technology platforms allow customers to reduce energy consumption and increase sustainability 5.4 and efficiency 4.7 27.5% •
Slide 68: Leading global products
Leading global products Air/gas compressors and Industrial vacuum pumps Power tools and air treatment Blowers and systems lifting equipment ~70% of segment revenue1 ~25% of segment revenue1 ~5% of segment revenue1 #2 global position #1 in U.S. pneumatic impact tools #1 North America position #2 glob
Slide 69: In the upcoming case studies
In the upcoming case studies, we will discuss… Organic Growth Driven by ROI and Sustainability Driving Organic Growth in Challenged Markets Delivering exemplary ROI through air system assessments and Pivoting to higher growth end markets through demand asset replacements to global leaders in the foo
Slide 70: Case study: Our journey of growth in India
Case study: Our journey of growth in India Sustainability Demand Product & Aftermarket Demonstrating the power of leadership, culture, and regional autonomy to deliver results Generation Service Innovation Markets 7x new products 26% revenue CAGR • Focus on high-growth sustainable markets including
Slide 71: Case study: Energy and cost savings in food and beverage
Case study: Energy and cost savings in the food and beverage market Sustainability IIoT Product & Aftermarket Delivering sustainability in a traditional industry Service Innovation Situation Solution Outcome 1 Global leader in packaging, • Air system assessment conducted and warehousing, and distrib
Slide 72: Case study: >50% energy reduction in pulp and paper
Case study: >50% energy reduction in the pulp and paper industry Sustainability Product & Delivering sustainability in a traditional industry Service Innovation Situation Solution Outcome Net zero 2050 carbon target as a public sustainability commitment + ~57% average • Runtech was engaged by DS Smi
Slide 73: Case study: Hydrogen compressors for green steel
Case study: Hydrogen compressors for green steel Sustainability Product and Enabling growth of a high-growth sustainable market critical to decarbonization Service M&A Situation Solution Outcome 11% of annual total global CO2 emissions + originate from conventional steel production1 ~$15M value per
Slide 74: China: Influencing outcomes and outperforming the market
China: Influencing outcomes and outperforming the market Demand Product & Generation Service Innovation Demonstrated Capabilities + Market Trends = China Growth Strategy Leading position in the Chinese market (oil-free rotary and centrifugal) Technology ~18% revenue CAGR >4x growth • Silicon age and
Slide 75: Case study: EV battery production
Case study: EV battery production Sustainability Demand Product & Enabling growth of a high-growth sustainable market critical to decarbonization Generation Service Innovation Situation Solution Outcome $8B global EV battery market1 • Ingersoll Rand has partnered with EV 14x revenue growth battery m
Slide 76: Case study: Oil-free rotary compressor growth
Case study: Ingersoll Rand oil-free rotary compressor growth Sustainability Demand IIoT i2V Product & Focused on high-growth, sustainable end markets Generation Service Innovation #1 position in oil-free rotary compressors in China1 …with bold aspiration for double digit growth and margin expansion
Slide 77: Case study: Gardner Denver compressor relaunch
Case study: Gardner Denver compressor relaunch Demand IIoT Product & Product and i2V Multi-brand and multi channel strategy driving differentiated growth Generation Service Service M&A Innovation Product Innovation 60% CAGR +680 bps Gardner Denver compressor Gardner Denver compressor • Developed a c
Slide 78: Case study: Blower and vacuum localization in China
Case study: Blower and vacuum product localization in China Demand Product & Product and i2V Accelerating growth through localization and innovation Generation Service Service M&A Innovation Product Localization and Innovation 23% revenue CAGR +200 bps Blower and vacuum Blower and vacuum gross • Com
Slide 79: Key takeaways
Key takeaways IT&S has a strong portfolio of products and services with market leading positions, supported by a team 01 that consistently delivers on its commitments IT&S is winning in both traditional markets and high-growth, sustainable markets through products and 02 services that deliver strong
Slide 80: Precision and Science Technologies (P&ST)
PRECISION AND SCIENCE TECHNOLOGIES (P&ST) Santiago Arias Duval, SVP and GM, P&ST Andy Hider, VP Strategy and Marketing, P&ST Pam Temko, GM, Agritech Americas, P&ST 80
Slide 81: What you will hear today
What you will hear today P&ST is a ~$1.3B segment operating in a ~$15B highly fragmented market with strong secular growth trends 01 and significant M&A runway P&ST differentiates through its precision flow portfolio, niche application/market expertise, and the ability to 02 connect and automate flu
Slide 82: P&ST segment summary
Precision and Science Technologies (P&ST) segment summary • Premium pump and fluidic solutions brands with leading positions (typically #1 or #2) in niche, mission-critical Revenue Growth ($B) Adj. EBITDA Margin Growth applications in large, high-growth markets • Diverse end markets and geographies
Slide 83: P&ST: Niche fluidics solutions with leadership positions
P&ST: Niche fluidics solutions with leadership positions in high-growth markets Materials and Water and Controlled-Environment Clean Energy Life Sciences and Composites Wastewater Agriculture Renewable Gas Bioproduction How PST Wins: #1 in materials, composites, and #1 in disinfection dosing and #1
Slide 84: P&ST: Niche fluidics solutions with leadership positions
P&ST: Niche fluidics solutions with leadership positions in high-growth markets Materials and Water and Controlled-Environment Clean Energy Life Sciences and Composites Wastewater Agriculture Renewable Gas Bioproduction How PST Wins: #1 in materials, composites, and #1 in disinfection dosing and #1
Slide 85: Case study: EV battery production within materials and composites
Case study: EV battery production within materials and composites Sustainability Demand Product & Leveraging P&ST’s broad portfolio of pump solutions to reduce EV battery costs at each stage of the production process Generation Service Innovation Situation Solution Outcome $8B EV battery equipment m
Slide 86: Case study: Sludge processing within water market
Case study: Sludge processing within water market Sustainability IIoT Aftermarket Patented pump innovation solving one of water’s most pressing problems Situation Solution Outcome $8B market of municipal and industrial wastewater sludge treatment is a mission- harnessed Ingersoll Rand’s compression
Slide 87: Case study: Indoor farming
Case study: Indoor farming within controlled agriculture environment Sustainability Digitalization Product and Innovating digitized solutions to optimize fertigation Service M&A Situation Solution Outcome With the acquisition of Dosatron and Climate change, food security, and food safety issues are
Slide 88: Case study: Renewable and conventional gas distribution
Case study: Renewable and conventional gas distribution Sustainability IIoT Product and Bolting a high-growth IIoT acquisition into an established market leader for rapid growth in clean energy and methane leak reduction Service M&A Situation Solution Outcome The gas pipeline injection market (growi
Slide 89: Case study: Genomics and biotech within life sciences
Case study: Genomics and biotech within life sciences Quality IIoT Technology Combining P&ST’s extensive fluidics expertise and automation capabilities to accelerate personalization of medicine of Life Investments Situation Solution Outcome As populations age, cancer risks increase New diagnostic, s
Slide 90: Key takeaways
Key takeaways P&ST has a strong portfolio of niche fluidics solutions with leadership positions in high-growth, 01 sustainable end markets P&ST will continue to leverage our organic growth enablers of demand generation, IIoT, and product 02 and service innovation combined with newly acquired technol
Slide 91: M&A
M&A Liz Hepding SVP, Strategy & Corporate Development 91
Slide 92: What you will hear today
What you will hear today M&A is a key pillar of our compounder model, and we have a track record of making acquisitions that improve 01 the quality of our portfolio 02 We execute a focused and disciplined M&A process that is guided by our acquisition criteria 03 IRX integration (IRXi) is a competiti
Slide 93: Track record of disciplined acquisitions
Track record of disciplined acquisitions that enhance our portfolio 41 Acquisitions completed since March 20201 ~$2.3B capital deployed Air Treatment Business ~12x weighted average Adjusted EBITDA purchase multiple Pump Business >4x average purchase multiple reduction through synergy realization ~90
Slide 94: Value creation driven by growth and margin improvement
Value creation driven by growth and margin improvement Strong track record of meeting or exceeding our acquisition business cases Pump Business Air Treatment Leader in vacuum Indian domestic Manufacturer of U.S. manufacturer of #2 global provider of diaphragm pumps Manufacturer of gear market leader
Slide 95: Defined criteria guide acquisition process
Defined criteria guide acquisition process M&A Focus Strategic Criteria Financial Criteria Mission-critical flow creation Market Leader Revenue Growth technologies Market leadership in niche markets, applications or MSD or greater organic growth geographies Data gathering/digital solutions Gross Mar
Slide 96: IRX integration (IRXi) in all deals
We deploy IRX integration (IRXi) in all deals and it drives our acquisition performance IRX integration is a standard process and toolkit that can be adapted for each individual acquisition and integration team Pre-Close: Integration Planning Integration Phase 1: Ingersoll Rand/“NewCo” • Day 1 plann
Slide 97: Proactive approach to funnel creation and management
Proactive approach to funnel creation and management Funnel Development Process Funnel Metrics • Understand how and where inorganic growth can accelerate 6-stage funnel with business unit strategic plans weightings from • Build on deep knowledge of core and adjacent products and 0% to 100% based on
Slide 98: Significant runway for ongoing inorganic growth
We have significant runway for ongoing inorganic growth Meaningful opportunities to expand our TAM by making disciplined acquisitions that continue to improve the quality of our portfolio Aligned Framework for Inorganic Growth 50%+ • Mission-critical flow creation is a large market with significant
Slide 99: Key takeaways
Key takeaways 01 We are well-positioned to continue to drive mid-single digit annual inorganic growth Our differentiated positioning and employee ownership model coupled with our focused cultivation efforts drives 02 our large and growing pipeline of proprietary opportunities Our adherence to our M&
Slide 100: Financials
FINANCIALS Vik Kini SVP, CFO 100
Slide 101: What you will hear today
What you will hear today We have a proven track record of delivering strong financial results including revenue growth, margin expansion, 01 and free cash flow generation, all enabled by IRX Our compelling growth profile is driven by mission-critical flow creation technologies and services in high-
Slide 102: Double-digit orders and revenue growth
We consistently deliver double-digit orders and revenue growth Orders ($M) Revenue ($M) $6,636 $6,678 $6,368 $5,916 $5,765 $5,152 $4,411 $4,344 1 2 2020 2021 2022 LTM Q3'23 2020 2021 2022 LTM Q3'23 102 1 Supplemental Adjusted Orders. 2 Supplemental Adjusted Revenue is a non-GAAP measure (definitions
Slide 103: Compounding Adjusted EBITDA margin and EPS growth
…leading to compounding results in both Adjusted EBITDA margin and Adjusted EPS growth Adj. EBITDA1 ($M) and Margin1 % Adj. Earnings Per Share1 $1,707 $2.81 $1,435 $2.39 $2.09 $1,192 25.6% $934 24.3% $1.28 23.1% 21.5% 2 2 2020 2021 2022 LTM Q3'23 2020 2021 2022 LTM Q3'23 1 Non-GAAP measure (definiti
Slide 104: Adjusted EBITDA margin expansion with continued opportunities
Strong momentum on Adjusted EBITDA margin expansion with continued opportunities Adj. EBITDA ($M) and Margin % Improvements driven by: Industrial Technologies and Services • IRX enabling operational execution • Execution of Merger-related synergies $1,495 $1,214 • Improvements in pricing vs. cost $1
Slide 105: Committed to an asset-light model
We remain committed to an asset-light model Capital Expenditures ($M) Operating Working Capital ($M) 1 Strong Position, (% of LTM Revenue) (% of LTM Revenue) with Work Left to Do $109 • CAPEX remains at ~1-2% of annual revenue $1,424 focused on high-return investments $95 • Continued opportunities f
Slide 106: Cash flow generation enables capital deployment
Our cash flow generation continues to enable our capital deployment strategy Free Cash Flow1 ($M) and Free Cash Flow Margin1,2 (%) Solid Performance on Free Cash Flow • Continue to target ≥100% conversion to Adjusted Net Income1 $1,041 • FCF margin1 of mid-teens with opportunities for improvement th
Slide 107: Delivering results across compounder model
We are delivering results across all elements of our compounder model High Performance Premier Growth Execution Process Compounder Megatrends Sustainability Digitalization Quality of Life Target 2021 2022 2023E1 Ownership Double-Digit Mindset Earnings Growth Organic Organic Revenue YoY Improvement G
Slide 108: Transforming debt portfolio to investment grade
We continue to transform our debt portfolio to investment grade Achieved investment grade credit rating from all three ratings agencies Facility Rate Maturity Q3 2023 Balance Net Debt / Adj. EBITDA1 USD Term Loans S+185bps Feb 2027 $1,248M 5-year Senior Unsecured Bond2 5.4% Aug 2028 $500M 10-year Se
Slide 109: Capital allocation strategy remains unchanged
Our capital allocation strategy remains unchanged Total Capital Deployed1,2 Capital Allocation Framework Dividend M&A 3% • Remains the focal point of our capital allocation strategy Share Repurchase M&A • Supported by a robust pipeline focused on high-growth, sustainable end markets 15% 82% • Strong
Slide 110: Economic Growth Engine delivers compounding results
Our Economic Growth Engine continues to deliver compounding results June 2023 Announced March 2023 Purchase of November 2023 April 2021 November 2021 Received Howden Roots Q3 2023 Earnings Announced Sale Investor Day Upgrade to of Club Car Investment Grade (BBB-) Since 2017 IPO1 From S&P October 202
Slide 111: Confidence in delivering long-term financial targets
Confidence in delivering our long-term financial targets 2025 Targets On Track to New 2027 2021 – 2023E1 2023E1 – 2027 2021 – 2027 (Prior Investor Day) Deliver Targets Total Revenue Growth Low-Double Digits (2021-2025 CAGR) P Low-Double Digits (2023E-2027 CAGR) Mid Teens (2021-2023E CAGR) Low-Double
Slide 112: Revenue growth and margin expansion across both segments
Continued opportunity for revenue growth and margin expansion across both segments Industrial Technologies and Services (IT&S) IT&S • Continued expectation of mid-single digit average annual organic revenue 2025 Targets On Track to 2027 growth through execution of DGX, IIoT, and product and service
Slide 113: Reaffirming our 2023 guidance
Reaffirming our 2023 guidance1 Key Metrics Change at Previous Guidance Previous Guidance Revised Guidance Midpoint vs. Full Year 2023 Assumptions as of 5/3/23 as of 8/2/23 as of 11/1/23 Previous Guidance • 2023 incremental margins of ~35% Revenue - Total Ingersoll Rand2 10-12% 12-14% 14-16% +200 bps
Slide 114: Key takeaways
Key takeaways Our Economic Growth Engine, fueled by our competitive differentiator of IRX, continues to deliver compounding 01 results and create significant value for our shareholders Our capital allocation strategy remains unchanged with a primary focus on highly-accretive M&A 02 We remain committ
Slide 115: Closing Remarks
CLOSING REMARKS Vicente Reynal Chairman and CEO 115
Slide 116: Closing remarks
Closing remarks Ingersoll Rand is an attractive long-term investment with a proven economic growth engine that consistently delivers 01 double-digit earnings growth and strong free cash flow We have dramatically improved our profitability and our growth profile, reduced cyclicality by divesting non-
Slide 117: Q&A
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Slide 118: Appendix
ED ngerson Rand.
Slide 119: GAAP Reconciliation
i K ay, UF, Nkiaetcesaniaoe GAA 1 REDONLIATION ‘ i aa dP, Ingersoll Rand.
Slide 120: Non-GAAP Measures of Financial Performance
Non-GAAP Measures of Financial Performance In addition to consolidated GAAP financial measures, Ingersoll Rand reviews various non-GAAP financial measures, including “Organic Revenue Growth,” “Adjusted EBITDA,” “Adjusted Net Income,” “Adjusted Diluted EPS,” “Free Cash Flow,” “Adjusted Free Cash Flow
Slide 121: Combined Financial Information
Combined Financial Information (Unaudited; in millions) For the Twelve Month For the Three Month Period Ended Period Ended December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 September 30, 2023 Orders Industrial Technologies and Services $ 1,191.5 $ 1,450.3 $ 1,444.3 $ 1,346.9 $ 5,433.
Slide 122: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA (Unaudited; in millions) For the Twelve For the Three Month Period Ended Month Period Ended December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 September 30, 2023 Net Income $ 218.7 $ 163.2 $ 180.8 $ 209.6 $ 772.3 Less: Loss from disconti
Slide 123: 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 Twelve Month Period Ended December 31, 2021 2020 Cash Flow from Operating Activities from Continuing Operations $ 627.8 $ 653.5 Plus: Synergy delive
Slide 124: Reconciliation of Diluted Net Income Per Share to Adjusted
Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Income Per Share from Continuing Operations (Unaudited; in millions, except per share amounts) For the Twelve Month Period Ended December 31, 2022 2021 Diluted Net Income Per Share (As Reported)1 $ 1.47 $ 1.34 Less: Diluted Net I
Slide 125: Reconciliation of Net Income to Adjusted EBITDA and Free Cash Flow
Reconciliation of Net Income to Adjusted EBITDA and Adjusted Income from Continuing Operations, Net of Tax and Cash Flows from Operating Activities from Continuing Operations to Free Cash Flow (Unaudited; in millions) For the Twelve Month Period For the Twelve Month Period Ended Ended December 31, (
Slide 126: Reconciliation of Net Loss to Adjusted EBITDA and Cash Flows
Reconciliation of Net Loss to Adjusted EBITDA and Adjusted Net Income and Cash Flows from Operating Activities to Free Cash Flow (Unaudited; in millions) For the Twelve Month (Unaudited; in millions) For the Twelve Month Period Ended Period Ended December 31, December 31, 2016 2016 Net Loss $ (31.3)
Slide 127: Reconciliation of Diluted Loss Per Share to Adjusted EPS
Reconciliation of Diluted Loss Per Share to Adjusted Diluted Earnings Per Share (Unaudited; in millions, except per share amounts) For the Twelve Month Period Ended December 31, 2016 Net Loss $ (31.3) Basic Loss Per Share (As Reported)1 $ (0.25) Diluted Loss Per Share (As Reported)1 $ (0.25) Plus: B
Slide 128: Reconciliation of Operating Working Capital
Reconciliation of Operating Working Capital (Unaudited; in millions) As of and for the Twelve Month Period Ended September 30, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Accounts receivable $ 1,216.1 $ 1,122.0 $ 948.6 $ 861.8 Plus: Inventories (excluding LIFO) 1,157.4 1,085.9 878.6 7
Slide 129: Orders and Revenue Growth by Segment
Orders and Revenue Growth by Segment1 (Unaudited) For the Twelve Month Period Ended December 31, 2022 2021 Ingersoll Rand Organic growth (decline) 16.1% 13.6% Impact of foreign currency (5.7%) 2.6% Impact of acquisitions 4.4% 13.5% Total orders and revenue growth (decline) 14.8% 29.7% Industrial Tec
Slide 130: Supplemental Footnote Disclosures to Slide 14
Supplemental Footnote Disclosures to Slide 14 2 Receipt of an S&P Global ESG Score does not represent a sponsorship, endorsement or recommendation on the part of S&P Global to buy, sell or hold any security and a decision to invest in any subject company should not be made based on the receipt of an
Slide 131: 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 Merger was completed on January 1,
Slide 132: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment (Unaudited; in millions) For the Twelve Month Period 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 F
Slide 133: 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 For the Twelve Month Period Ended December 31, 2020 Ended December 31, 2019 GAAP Adjustments Supplem
Slide 134: Table 3: Reconciliation of Net Loss to Adjusted EBITDA
Table 3: Reconciliation of Net Loss to Adjusted EBITDA, Supplemental Adjusted EBITDA and Supplemental Further Adjusted EBITDA1 (Unaudited; in millions) For the Twelve Month Period Ended December 31, 2020 2019 Net Loss (GAAP) $ (32.3) $ 159.1 Plus (1): Interest expense 111.1 88.9 Provision for income
Slide 135: Table 4: Reconciliation of GAAP Diluted EPS
Table 4: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted Diluted EPS (Shares in millions, per share amounts in whole dollars) For the Year Ended December 31, 2020 Diluted Loss Per Share (GAAP) $ (0.09) Diluted Earnings Per Share from Discontinued Operations (GAAP) 0.06 Diluted Lo
Slide 136: Presenter Biographies
PRESENTER BIOGRAPHIES
Slide 137: Presenter biographies
Presenter biographies Vicente Reynal Mike Weatherred Chairman and Chief Executive Officer Senior Vice President, Ingersoll Rand Execution (IRX) Vicente Reynal is chairman and chief executive officer (CEO) of Ingersoll Rand. Mike Weatherred is senior vice president, Ingersoll Rand Execution (IRX), an
Slide 138: Presenter biographies
Presenter biographies Mike Medaska Amar Kaul Vice President, Corporate Strategy Vice President and General Manager, Compression Systems and Services, Industrial Technologies and Services EMEIA Mike Medaska is vice president, Corporate Strategy for Ingersoll Rand. In this Amar Kaul is vice president
Slide 139: Presenter biographies
Presenter biographies Arnold Li Santiago Arias Duval Senior Vice President and General Manager, Senior Vice President and General Manager, Industrial Technologies and Services Asia Pacific Precision and Science Technologies Arnold Li is senior vice president and general manager, Industrial Technolog
Slide 140: Presenter biographies
Presenter biographies Andy Hider Pam Temko Vice President, Strategy and Marketing, General Manager, Agritech Americas, Precision and Science Technologies Precision and Science Technologies Andy Hider is vice president of Strategy and Marketing, Precision and Science Pam Temko is the general manager
Slide 141: Presenter biographies
Presenter biographies Liz Hepding Vikram Kini Senior Vice President, Strategy and Corporate Senior Vice President, Chief Financial Officer Development Elizabeth “Liz” Hepding is senior vice president, Strategy and Corporate Vikram “Vik” Kini is a senior vice president and chief financial officer (CF
Slide 142: Presenter biographies
Presenter biographies Matthew Fort Vice President, Investor Relations Matthew Fort is vice president, Investor Relations and Corporate FP&A for Ingersoll Rand. In this role, he leads the investor relations function as well as the company’s global corporate financial planning and analysis team. He jo
Slide 143: Glossary
UD ngersott Rand.
Slide 144: Glossary of acronyms
Glossary of acronyms AI – Artificial intelligence IIoT – Industrial Internet of Things M&A – Mergers and acquisitions BPS – Basis points (1/100th of a percentage) IT&S – Industrial Technologies and Services NGS – Next-generation sequencing CAGR – Compound Annual Growth Rate IROPE – Ingersoll Rand Op