Ingersoll Rand Inc.

Ladies and gentlemen, thank you for standing by and welcome to Ingersoll Rand's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, Kirkham Kinney, Chief Financial Officer. Thank you. Please go ahead, sir.

Thank you, and welcome to the Ingersoll Rand 2020 third quarter earnings call. I'm Vic Kinney, Ingersoll Rand's chief financial officer, and with me today is Vicente Reynold, chief executive officer. Our earnings release, which was issued yesterday, and a supplemental presentation, which will be referenced during the call, are both available on the investor relations section of our website, www.irco.com. In addition, a replay of this morning's conference call will be available later today. Before we get started, I want to remind everyone that certain statements on this call are forward-looking in nature and are subject to the risks and uncertainties discussed in our previous SEC filings, which you should read in conjunction with the information provided on this call. Please review the forward-looking statements on slide two for more details. In addition, in today's remarks, we will refer to certain non-GAAP financial measures. You can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP in our slide presentation and in our earnings release, which are both available on the investor relations section of our website. Turning to slide three, on today's call, we will provide an update on the integration efforts of the company, as well as review our third quarter and total company and segment highlights. We will conclude today's call with a Q&A session. We ask that each caller keep to one question and one follow-up to allow for enough time for other participants. At this time, I'll turn the call over to Vicente.

Thanks, Vic, and good morning to everyone. I want to start our call by thanking all our employees around the world for their hard work and commitment to the health and safety of our teens and their families. as we continue to navigate the COVID-19 pandemic, as well as their dedication to serving our customers at the highest level. Their focus and consistent contribution coupled with the continued proliferation of IRX throughout our organization delivered strong results we can all be proud of. Turning to slide four, I want to spend some time on our culture because it is a competitive advantage for us. particularly in the midst of a COVID-19 pandemic, our progress has been impressive. Let me point out a few examples of the in-flight initiatives that are helping to foster our unique culture as we integrate both companies. We have now rolled out our purpose and values activation to nearly the entire company. These are highly engaging one-on-one sessions where we work with our employees to discuss our purpose and values. and what it means to leave them every day. In addition, we have continued the Owning Our Future forums, which are virtual micro town hall meetings to create open dialogue. Today, we have engaged and heard from over 7,000 employees, and their feedback is helping us simplify our internal processes. In the third quarter, we also conducted our first all-employee engagement survey. We had a 95 participation rate across the entire company, which is nearly 15 percentage points higher than the manufacturing index we benchmark, and puts us in the top quartile of participation. Our high engagement level is a positive reflection of employee satisfaction with working at Ingersoll Run, and employee happiness is very important to us. And a great example of our employees living our purpose and values and making a positive impact in our community is the Dosatron team, which sits in our precision and science technology segment. The Dosatron team helped develop a method to deliver clean drinking water to an orphanage in a remote location in Madagascar using our technology of electricity-free dosing pumps. Examples like these are happening around the company and are a strong proof of the culture we're building at Ingersoll Grand, which firmly supports our purpose of leaning on us to help you make life better. Moving to slide five, one of our key values is thinking and acting like an owner. In the third quarter, we took a major step forward in bringing that value to life by making all of our employees shareholders of the company. On September 21st, we were proud to virtually ring the opening bell at the New York Stock Exchange and announce the issuance of $150 million in equity awards across our entire employee base. This is a meaningful distribution equal to 20% of an individual's base cash compensation. And as I have said before, this is not a thank you note to the team. Instead, this is a catalyst to have all 16,000 owners all moving in the same direction to drive change and create value for all shareholders, including themselves. And like we did at Garner Denver, we're tying the equity grant to a specific initiative of improving networking capital. We're training all employees on what it means to be an owner. And when we launched this in 2017, we improved working capital as percentage of sales at Garner Denver by over 500 basis points in less than three years. So for us, we feel the future is extremely bright at Ingersoll Grand, and with 16,000 employee owners moving in a common direction, I am confident in our ability to create meaningful value. Turning to slide six, let me now provide an update on our integration efforts. We have built a strong foundation and are now pivoting to growth with a specific focus on executing our talent priorities, continuing to capture supply chain synergies, and driving free cash flow. which is allowing us to accelerate investments in IoT, digital and e-commerce initiatives. And finally, advancing our work on the ESG front as we look to be a recognized leader in corporate social responsibility. It is an exciting time at Ingersoll Run, and as we continue to meld complementary cultures, as well as leverage our deep product portfolio to serve niche end markets and accelerate growth. Speaking about growth, let's turn to slide seven to showcase a few examples. The first example is focused on how we're leveraging a differentiated compression technology to penetrate the hydrogen refueling and dispensing niche market, which is a high growth and rapidly changing market. As part of the integration planning process, we did a lot of work to better understand these end markets and the potential it could bring to our combined company. Haskell, with over 70 years of industry experience, is one of the world leaders in offering the most reliable high-pressure equipment and technology today. We're very excited about Haskell's comprehensive portfolio of specialized compression solutions, as we're well-positioned to win share, with turnkey refueling stations used for heavy-duty vehicles and buses. and light-duty passenger vehicles, we have now over 100 stations across the world and a technology leadership edge that we created over the past 12 months. One example of our investments in innovation here is the launch of a new small-scale, cost-effective standalone hydrogen fueling station, which is designed for small, simple plug-and-play installations. But with a complexible configuration, it can be relocated from one location to another very easily for forklift applications. As we look ahead, the growth prospects in this space are extremely promising, as the continued penetration of hydrogen fueling into key markets is expected to create a $2.5 billion addressable market for us by 2027. Turning to slide A, This second example demonstrates how we can leverage the breadth of our technologies across multiple segments to win in targeted end markets like water and wastewater. Take, for example, a wastewater treatment plan shown on the picture. We have begun to leverage our technologies across the ICS and PST segment to drive further penetration in what is estimated to be a nearly $5 billion addressable market with a five-year CAGR of at least two times GDP. Utilizing IRX tools, we're focused on capturing quick wins within our combined broader portfolio. First, we're focused on increasing customer share wallet by offering a broader set of product solutions. We have identified already by more than 50 new sales channels to penetrate. Second, we're coordinating internally our large project funnel. to ensure all relevant businesses and brands are involved in bids with the goal of maximizing the content of Ingersoll Rand products in any project. And third, by combining demand generation database contact across the two segments, we have now over 32,000 contacts with an expectation to increase by 40% in the US alone as part of our impact data management process. We're now beginning to educate this entire universe of potential customers of our technologies and solutions to dedicated digital campaigns. And while we're still in the early days, as we just launched this initiative, we have already seen an increase of over $30 million in our funnel. This commercial synergy is just the beginning of what we believe will be a future where we connect all the technologies to optimize the entire process. And given the work we are already doing on IoT, we feel that we're well-positioned to capture this opportunity, given our deep know-how of the types of sensors and controllers required in our products to best optimize the data acquisition and analytics. Let me now turn over the call to Vic for an overview on the financials. Vic?