Ingersoll Rand Inc.

Ladies and gentlemen, hello and welcome to the Ingersoll Rand first quarter 2021 earnings conference call. My name is Maxine and I'll be coordinating the call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to your host Chris Myron from Ingersoll Rand to begin. Chris, please go ahead when you're ready.

Thank you and welcome to the Ingersoll Rand 2021 First Quarter Earnings Call. I'm Chris Myron, Vice President of Investor Relations, and joining me is Vicente Reynaud, President and Chief Executive Officer, and Vic Kinney, Chief Financial Officer. This is my first earnings call in the Investor Relations role, and I look forward to working with you all. We issued our earnings release and presentation yesterday that we will reference during the call. Both are available on the Investor Relations section of our website, www.irco.com. In addition, a replay of this conference call will be available later today. Before we start, 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, both of which are available on the investor relations section of our website. On today's call, we will provide a company strategy update review our company and segment financial highlights, and offer updated 2021 guidance. For today's Q&A session, we ask each caller keep to one question and one follow-up to allow time for other participants. At this time, I'll turn the call over to Vicente.

Thanks, Chris, and good morning to everyone. Let me begin by welcoming Chris to his role. As Vice President of Investor Relations, Chris replaces Vic in the role who was appointed to CFO in in June of last year. I am delighted to be working alongside both of them. Chris previously led corporate development for the company and played a critical role in accelerating our growth strategy, most recently with the acquisitions of Toothill and Albin Pump, as well as the completed divestitures of HPS and announced divestiture of Club Car. I would like to especially thank Chris for his military service in the U.S. Army. During his military career, he served as infantry officer and ranger. including a deployment in support of Operation Iraqi Freedom, Chris also held leadership roles in the Old Guard at Arlington National Cemetery and served as an aide to the President of the United States. Following the military, Chris held roles in finance and investment banking before joining us to direct strategy and corporate development efforts. He is a proud veteran who continues to help fellow veterans transitioning from military to civilian life. and he is integral to executing our strategic plan to deliver value for our shareholders. Chris is one example among our 16,000 employees who live our company purpose inside and outside the company. And as you see on slide three, anchoring to our purpose is working. We're realizing the achievement of our desired target. You will hear three key things today. First, we're accelerating our transformation It's amazing to think a year ago we closed the Ingersoll-run industrial transaction, and today we're unlocking approximately $2 billion of value with two strategic investitures, putting us in a great position to continue our portfolio transformation. Second, you will hear about how we are over-delivering to our expectations. As you will recall, during the down year of 2020, we controlled incremental margins, And now in the up cycle, we're delivering solid incremental margins. We're delivering strong organic growth in orders and revenue. And that illustrates our organic investments in demand generation and new product development are also working. And third, you'll hear how Ingersoll Rand Execution Excellence, what we call IRX, is becoming our economic engine to unlock in our potential. Our processes are only as good as the team that executes them. Culture and human capital management are key differentiators at Ingersoll Rand. We have a highly engaged workforce who act like owners because they are owners. Every day, our employees make decisions that demonstrate thinking and acting like owners with the power of IRX behind them. Our employees all around the world deserve sincere thanks for their adaptability, resiliency, dedication, and determination. we will continue supporting our employees with an unwavering focus on health, safety, and mental wellbeing. And on that point, our thoughts are with everyone dealing with pandemic situations, particularly in India right now. Moving to slide four, you see the roadmap we highlighted during our Q3 2020 earnings call. And since then, we have achieved substantial traction. Today, I will concentrate remarks around the last two strategies, as we have had a lot of recent momentum across these areas. Starting with operate sustainably and turning to slide five, operating sustainably is one of our strategic pillars because it engages employees, customers, and communities while delivering shareholder returns. In February, we committed to some aggressive targets around climate goals. I am proud that our teams continue to deliver and execute on these goals. For example, last week was Earth Day, and our employees participated in planting more than 3,000 trees and collecting over 4,000 pounds of waste while recycling almost 20% of that. However, advancing our ESG journey goes beyond our environmental commitments. It is also about our social and governance actions. Last week, you saw we announced our 2025 Diversity, Equity, and Inclusion Goals. We set these goals to accelerate and illustrate our commitment to the representation of talent and the career advancement and sense of belonging of all employees. And actually, one of the boldest and most belonging acts we have done in support our diversity, equity, and inclusion efforts, a connection that some may not really make, was around our $150 million equity last September to all of our employees worldwide. Broad-based employee ownership has an equity component not often explored. Equity grants and broad-based employee ownership, such as what we did, provide employees a tangible financial stake in company performance, and that benefits employees, families, communities, and the economy at large. Repeatedly, studies show underrepresented populations increase their earnings and wealth if they are employed in organizations that offer equity grants. And that's a powerful aspect of our thinking and acting like an owner that ties into equity and how we directly impact global ESG efforts. As I said last quarter, we see broad-based employee ownership as a game changer. Our human capital management priorities are part of why we added operate sustainably as a strategic pillar. Our diversity, equity, and inclusion goals are the latest advancements. And we will use IRX as our key enabler to deliver on these goals as we do every other critical initiative in our company. Moving to slide six, we have also used IRX to deliver against our capital allocation strategy. And as we see here, the outcome have been extremely effective. On the first of this month, we completed the majority interest sale of the high-pressure solution segment and a little more than a week later announced an agreement to sell ClubCar. IRX enables us to accelerate these transactions and make them happen. We have solid processes executed by engaged teams to ensure we always maximize value creation in an expedited way. And that's our special and unique economic engine. With these signatures, we're proud the buyers will continue the commitment to employee ownership, which may be a little unusual for this type of transaction, but as I have said before, it is important to us on many fronts. And with these divestitures, we're unlocking approximately $2 billion in value. And on Flight 7, we see a visual illustrating the volume and timing of transaction milestones in our evolution over the last four years, including the completed and announced divestitures this month. Last quarter, I mentioned capital allocation is a huge part of my personal focus, and I have been actively discussing this with our board. Those discussions continue. And as we have done all along with our capital allocation strategy, we will inform you when there is something significant to share. Aligned with this, today I'll give you some additional color on how we have enhanced our inorganic growth strategy. So let's look at slide eight. I have mentioned IRX discipline a lot this morning. It is an execution engine to drive change in every area of the business. from our environmental goals and networking capital goals to our new product development goals and our diversity, equity, and inclusion goals. IRX has been transformational in helping us with the integration of companies like Tothill and Albin, as well as helping us with divestitures and accelerating our M&A funnel. You can see our funnel has increased 5x since Q2 of last year. The average revenue of the companies in the funnel has increased by more than 50%. And we're moving potential acquisitions through the funnel much faster. And we have not only been integrating industry-run and government member over the past year, but we have also completed eight Bolton acquisitions, with Tuthill vacuum and blower systems being the most recent one. And we have already seen solid progress with Tuthill, such as growth outside the U.S., where we highlighted that as a great opportunity. and already received a multimillion-dollar order in Asia Pacific during the first quarter. The simultaneous execution of funnel growth, acquisitions, and divestitures highlights how IRX enables capabilities to drive significant inorganic growth. I will now turn it over to Vic to provide an update on our financials. Vic?