Ingersoll Rand Inc.

My name is Harry and I'll be your operator today. If you'd like to ask a question during the Q&A session, you may do so by pressing start followed by one on your telephone keypad. And I'll now hand the call over to your host, Chris Boylan, Vice President of Investor Relations. Chris, please go ahead now.

Thank you and welcome to the Ingersoll Rand 2021 Third Quarter Earnings Call. I'm Chris Myron, Vice President of Investor Relations, and joining me are Vicente Reynal, President and Chief Executive Officer, and Vic Kinney, Chief Financial Officer. We issued our earnings release and presentation yesterday, and we will reference these 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 that 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. Starting on slide three, coming out of the third quarter, Ingus O'Brien remains in a position of strength, demonstrating again that as a purpose-driven company, we remain grounded in what we do and how we do it. In the environment we find ourselves in right now, our agility, our nimbleness, and using IRX for speed to execution has proven to be our competitive advantage. Of course, global microeconomic factors continue to be a challenge. We're not immune to demanding supply chain inflation and labor market conditions, but we continue to outperform on our commercial and operational commitments. And we are again raising our guidance. This outperformance is propelled by continued organic and inorganic investments into the organization, and our comprehensive M&A-focused capital allocation strategy is fueled by our drive to create long-term value and compound stockholder returns. Moving to slide four, we remain committed to our five strategic imperatives, and we'll focus our remarks today on our growth and capital allocation strategies. Before we move to those, I have two important call-outs. Our strategy to deploy talent across our organization is paying off. We just concluded our second employee engagement survey this year across all 16,000 employees globally. And I am extremely proud to share we had outstanding participation at 91%. And several of our scores improved again, placing us well above the relevant manufacturing benchmarks. in results and participation. In fact, on responses to how happy are you working at Ingersoll Rand, we now rank in the top 10% of manufacturing organizations. When we talk about outperforming because of our agility, nimbleness, and IRX, it's because of our people. This is our culture. We always say and continue to believe that the combination of a highly engaged workforce coupled with an ownership mindset is a catalyst for long-term performance. The fact that our voluntary turnover is less than 3%, even in this challenging environment, also speaks highly of the culture we're nurturing and how we inspire our employees. I want to take a moment to acknowledge and thank the tremendous contributions of each and every one of our 16,000 employees without whom these results would not be possible. Our Operate Sustainably strategic imperative also highlights the speed at which our company moves. In less than 18 months, we have been upgraded twice by MSCI, and we sit now at a rating of A. This is an improvement from approximately the bottom one-third to now being in the top one-third of the companies rated by MSCI. And we believe, based on our work, we will continue to see our ratings improve with the various ESG rating providers. Great strides have been made this year to accelerate growth and allocate capital effectively, as we have announced or deployed approximately $1 billion towards M&A. In Q3, we completed both the CPEX and Maximum Solutions acquisitions and announced Air Dimensions acquisition last week. We also announced an agreement to acquire 2 fuel pumps earlier this week. We shared our comprehensive capital allocation strategy with you earlier in September. Along with our focus on M&A, we completed a large share repurchase as part of KKR's sale of their final equity stake in the company, as well as the prepayment of the more expensive tranche of debt taken out last year during the onset of COVID. And in addition, we initiated a quarterly dividend that began in Q4 and a new board-authorized $750 million share repurchase program. On the next slide, it's a partial preview of what's to come at our November 18th Virtual Investor Day, where we look forward to talking in more detail about the megatrends we and our customers are seeking to address and how Ingersoll Brand products and services help make life better for all our stakeholders. The strategy enables us to compound our contribution to addressing megatrends such as digitization, sustainability, and quality of life through organic growth enablers where we have specific advantages. For example, we continue to leverage our own unique and proprietary demand generation engine to drive a holistic approach to customer buying patterns, one that has already captured over 3 million end user contacts. and allows us to generate over 200,000 marketing qualified leads per year. We also continue to invest in our industrial IoT platform as we aim to connect or digitally enable a meaningful portion of the 5 million assets that we have identified in the field. Moving to slide six, we're not unique in needing to effectively manage the challenges of the current supply chain environment. However, our key differentiator is our ability to respond. with agility and discipline through the use of IRX to quickly and effectively minimize negative impacts from challenging supply chain conditions. I would like to especially thank our global sourcing and logistics team at Ingersoll Run, as well as our factory buyers and planners for their tireless efforts and creative thinking using data-backed analytics to overcome delivery gaps. We saw very early on that supply chain and logistics challenges were going to be an important issue. So we invested in this area to guarantee that we have rigorous processes and capabilities in place to succeed. And this has produced outstanding results. Moving to slide seven, we will now look more closely at our recent inorganic achievements. We signed a definitive agreement to acquire Tuthill pumps, which is expected to close in Q4. and their dimensions, both of which will become part of the precision and science technology segment. We also close the acquisition of Lawrence Factor, which will become part of the industrial technology and service segment. These three acquisitions are representative of the key characteristics we're targeting with our inorganic growth strategy. Toothill Pumps is the second asset we have purchased from Toothill Corporation. It is a leader in the gear and piston pumping market. which supports the expansion of our positive displacement pump portfolio. This is another example of a multi-generation family-owned company with premium assets that approached us on an exclusive basis because of the relationship that we have built and the opportunities they saw for their company and employees as part of the Ingus O'Brien family. This is another testament to how our unique approach to employee ownership allows us to be at the front lines in M&A. Air Dimension is a market leader in gas diaphragm pumps, which is complementary to our existing lab and life science businesses and is specialized for environmental applications like emission monitoring and biogas. It has an impressive pre-synergy EBITDA margins of over 50%. And more than 70% of its revenue comes from like-to-like replacement of original equipment and aftermarket parts. We also close the acquisition of Lawrence Factor, which will reside in the ICS segment. Lawrence Factor is a great example of an acquisition that is well aligned with our company purpose of making life better, as the technology ensures safe work and play activities for people who depend on compressed air and gas through their proprietary air sampling and aftermarket offerings. All three of these acquisitions were valued in an attractive purchase multiple, and our synergy execution is expected to deliver mid-single-digit post-synergy realization by year three, in line with our discipline pre-deal screening process. I will now turn the presentation over to Vic to provide an update on our Q3 financial performance.