Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Q4 2023 Earnings Presentation
36 slides from Ingersoll Rand's earnings presentation, Feb 16, 2024
Slide 1: Q4 and Full Year 2023 Earnings Presentation
Q4 and Full Year 2023 Earnings Presentation Making Life Better 1
Slide 2: 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 3: Exceeding our Commitments
Exceeding our Commitments We are a 1 Continue to outperform our long-term targets with Premier growth Double-digit growth in Revenue, Adjusted EBITDA1, Adjusted EPS1, and Free Cash Flow1 compounder with iconic brands and Remaining Nimble and Focused market-leading 2 Concentrating on controlling what
Slide 4: An increasingly durable financial profile through IRX, underpinned by our ownership model
An increasingly durable financial profile through IRX, underpinned by our ownership model 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 2023 (’23 vs ‘20) Club Car and High Pr
Slide 5: ...and are uniquely positioned to grow market share
…and are uniquely positioned to grow market share Within the $55B highly fragmented markets where we currently play Broad flow creation and industrial product portfolio across air, gas, and liquid Multi-brand strategy balances global strength of flagship Ingersoll Rand brand handling applications wh
Slide 6: ...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 Globally Ingersoll Rand’s total recordable incident rate (TRIR) is As of February 7, 2024, Ingersoll Rand ranked as the number one performer i
Slide 7: ...supported by 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: 18,000+ “My wife was diagnosed with a degenerative disease, and Current Ingersoll Rand employees in my country, we had no treatment for this dis
Slide 8: ...which is delivering results across all elements of our compounder model
…which is 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 2023 Ownership Double-Digit Mindset Earnings Growth Organic Organic Revenue YoY Improvement
Slide 9: ...and our results support our confidence in delivering our long-term financial targets
…and our results support our confidence in delivering our long-term financial targets 2025 Targets On Track to 2027 Targets (2021 Investor Day) Deliver (2023 Investor Day) Total Revenue Growth Low-Double Digits (2021-2025 CAGR) P Low-Double Digits (2023-2027 CAGR) Organic1 Mid-Single Digits (2021-20
Slide 10: Delivered our annualized inorganic growth commitment
Delivered our annualized inorganic growth commitment 2023 Year in Review1 Closed M&A Funnel Update 5 Friulair S.r.l. (“Friulair”) $450M >5x Invested in inorganic growth Description: Expands our technology ecosystem 4 Weighted funnel size vs Q2 2020 with a company recognized globally for its design a
Slide 11: Q4 Highlights
Q4 Highlights IRX is our Competitive Differentiator Continued momentum • Organic Orders and Revenue1: up 3% and 4% YoY Revenue • Incremental margin of 41% • Ended Q4’23 with backlog up ~8% YoY $501M with margin of 27.5% Adj. EBITDA1 • Up $80M YoY, an increase of 19% • 160 bps improvement YoY Adjuste
Slide 12: Q4 2023 financial performance vs. Q4 2022
Q4 2023 financial performance vs. Q4 2022 financial information ($M, excl. EPS) Orders Revenue Adj. EBITDA & Margin1 Adj. Diluted EPS1,2 Up 13%; Up 11% ex-FX Up 12%; Up 11% ex-FX Up 19% 5 Up $0.14 4 Adj. EBITDA Margin Change Industrial Technologies and Services 260 bps Precision and Science Technolo
Slide 13: FY 2023 financial performance vs. FY 2022
FY 2023 financial performance vs. FY 2022 financial information ($M, excl. EPS) Orders Revenue Adj. EBITDA & Margin1 Adj. Diluted EPS1,2 Up 7%; Up 8% ex-FX Up 16%; Up 17% ex-FX Up 25% Up $0.60 Adj. EBITDA Margin Change Industrial Technologies and Services 240 bps Precision and Science Technologies 1
Slide 14: Q4 2023 financial performance
Q4 2023 financial performance ($M, excl. EPS) Free Cash Flow1 Leverage Cash Flows from Operations less Capex (Net Debt / LTM Adjusted EBITDA) Liquidity and Leverage 4 • In 2023, returned $295M to shareholders through share repurchases and dividends • Total available liquidity of $3.6B including: • C
Slide 15: Industrial Technologies and Services
Industrial Technologies and Services Broad Range of Compressor, Vacuum, Blower, and Air Treatment Solutions as well as Industrial Technologies Including Power Tools and Lifting Equipment Q4 2023 vs. Q4 2022 ($M) Q4 2023 vs. Q4 2022 Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Orga
Slide 16: Precision and Science Technologies
Precision and Science Technologies Highly Specialized Fluid Management Solutions Including Precision Liquid and Gas Pumps and Niche Compression Technologies Q4 2023 vs. Q4 2022 ($M) Q4 2023 vs. Q4 2022 Revenue/Orders Bridge Current Year Prior Year YoY ∆ Ex-FX YoY ∆ Organic FX M&A YoY ∆ Revenue $312.
Slide 17: 2024 Full Year Guidance
2024 Full Year Guidance1 Full Year 2024 Assumptions • Incremental margins of 35-40% Key Metrics Phasing • Gross Interest Expense: ~$155M; Net Interest Expense: ~$135M • Adj. Tax Rate: ~23% H1 Growth: 4-6% • Capex: ~2% of revenue Revenue - Total Ingersoll Rand2 5-7% H2 Growth: 6-8% • FCF3 to Adj. Net
Slide 18: Key Takeaways
Robust results in 2023; poised for continued outperformance in 2024: • Delivering record results while navigating ongoing macro challenges 01 • Year end backlog provides confidence in 2024 • Prepared and nimble in the event of a downturn Key Takeaways Continuing to differentiate Ingersoll Rand as an
Slide 19: Appendix
Appendix Making Life Better 19
Slide 20: Non-GAAP Measures of Financial Performance
Non-GAAP Measures of Financial Performance In addition to consolidated GAAP financial measures, Ingersoll Rand reviews various non-GAAP financial measures, including “Organic Revenue Growth,” “Adjusted EBITDA,” “Adjusted Net Income,” “Adjusted Diluted EPS,” “Free Cash Flow,” “Adjusted Free Cash Flow
Slide 21: Industrial Technologies and Services Product Line Results
Industrial Technologies and Services Product Line Results Segment Mix Orders Performance1,2,4 Revenue Performance1,2,4 Product3 Q4’23 Q4’22 YoY Q4’23 YoY 2-Year Stack Q4’22 YoY Q4’23 YoY 2-Year Stack 4 Compressors ~65% ↑ Low Single Digits ↑ Low Double Digits ↑ Mid Teens ↑ Mid 20s ↑ Mid Single Digits
Slide 22: Q4 2023 Financial Performance – As Reported
Q4 2023 Financial Performance – As Reported ($M, excl. EPS) Net Income1 Diluted EPS2 Up 6% Up $0.03 22 1 Net Income as reported defined as Net Income (Loss) Attributable to Ingersoll Rand Inc. 2 Diluted EPS defined as (Net Income (Loss) Attributable to Ingersoll Rand Inc.) / (Diluted Average Shares
Slide 23: FY 2023 Financial Performance – As Reported
FY 2023 Financial Performance – As Reported ($M, excl. EPS) Net Income1 Diluted EPS2 Up 29% Up $0.43 4 23 1 Net Income as reported defined as Net Income (Loss) Attributable to Ingersoll Rand Inc. 2 Diluted EPS defined as (Net Income (Loss) Attributable to Ingersoll Rand Inc.) / (Diluted Average Shar
Slide 24: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income (Unaudited; in millions) For the Three Month Period For the Twelve Month Ended December 31, Period Ended December 31, 2023 2022 2023 2022 Net Income $ 231.5 $ 218.7 $ 785.1 $ 608.5 Less: Income (Loss) from Discontinued Operations — (0.3) — 0.5 Less
Slide 25: Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Income Per Share
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 Three Month Period For the Twelve Month Period Ended December 31, Ended December 31, 2023 2022 2023 2022 Diluted Net Income Pe
Slide 26: 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 For the Three Month Period For the Twelve Month Period (Unaudited; in millions) Ended December 31, Ended De
Slide 27: Reconciliation of Segment Adjusted EBITDA to Net Income
Reconciliation of Segment Adjusted EBITDA to Net Income (Unaudited; in millions) For the Three Month Period For the Twelve Month Period Ended December 31, Ended December 31, 2023 2022 2023 2022 Segment Adjusted EBITDA Industrial Technologies and Services $ 453.3 $ 360.6 $ 1,587.3 $ 1,214.0 Precision
Slide 28: Combined Financial Information by Segment
Combined Financial Information by Segment For the Three Months For the Twelve Months Ended December 31, 2023 Ended December 31, 2023 Ingersoll Rand Orders $ 1,670.4 $ 6,822.4 Revenue 1,821.4 4 6,876.1 Adjusted EBITDA (non-GAAP) 500.5 1,786.8 Adjusted EBITDA Margin (non-GAAP) 27.5% 26.0% Adjusted Net
Slide 29: Orders and Revenue Growth/(Decline) by Segment
1 Orders and Revenue Growth/(Decline) by Segment (Unaudited) For the Three Month Period Ended December 31, 2023 Orders Revenue Ingersoll Rand Organic growth 3.4% 3.8% Impact of foreign currency 1.7% 1.7% 4 Impact of acquisitions 7.5% 6.7% Total adjusted orders and revenue growth 12.6% 12.2% Industri
Slide 30: 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 4 Month Period Ended December 31, 2021 Cash Flow from Operating Activities from Continuing Operations $ 865.4 Plus: Synergy delivery and stan
Slide 31: Supplemental Footnote Disclosures to Slide 6
Supplemental Footnote Disclosures to Slide 6 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 any
Slide 32: 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 33: Table 1: Supplemental Adjusted Combined Financial Information by Segment
Table 1: Unaudited Supplemental Adjusted Combined Financial Information by Segment For the Twelve Month Period Ended (Unaudited; in millions) December 31, 2020 2019 Ingersoll Rand Supplemental Adjusted Orders $ 4,410.4 $ 4 4,829.9 Supplemental Adjusted Revenue (non-GAAP) 4,344.4 4,907.8 Supplemental
Slide 34: 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 GAAP Adjustments Supplem
Slide 35: 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 EBITDA For the Twelve Month Period (Unaudited; in millions) Ended December 31, 2020 2019 Net Loss (GAAP) $ (32.3) $ 159.1 Plus (1): Interest expense 111.1 88.9 Provision for income
Slide 36: Table 4: Reconciliation of GAAP Diluted EPS to Supplemental Further Adjusted 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