Ingersoll Rand Inc.

Good morning, ladies and gentlemen, and welcome to the Ingersoll Rand second quarter 2022 earnings call. Our host for today's call is Matthew Fort, Vice President of Investor Relations. At this time, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host, Mr. Fort. You may begin, sir.

Thank you, and welcome to the Ingersoll Rand 2022 Second Quarter Earnings Call. I'm Matthew Ford, Vice President of Investor Relations, and joining me this morning are Vicente Rinal, Chairman and CEO, 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 in this call. Please review the forward-looking statements on slide two for more details. In addition, in today's remarks, we'll 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 strategy update, review our company and segment financial highlights, and provide an update to 2022 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, Matthew, and good morning to everyone. Moving to slide three, I would like to start by welcoming Matthew to his new role as the head of investor relations after several successful years leading our power tools and lifting business as a finance leader and helping to return the business to profitable growth and a strong marketing profile. In addition, I am also very happy to welcome Katherine Freitag as our new chief information officer. Both appointments demonstrate the deep bench of talent that we continue to develop at Ingersoll Running. I would also like to say thank you to our employees worldwide for exemplifying our purpose through an ownership mindset and entrepreneurial spirit and delivering on our customer needs. Our teams continue to impress me on how we're leveraging our own IRX process to outperform in the most challenging microenvironment. Our performance in the second quarter and here today exemplifies how our employees think and act like owners. Demand remains very strong as we sit here today. And when we see the supply chain risk and geopolitical and macroeconomic uncertainties continue to be a concern, we stay focused on what we can control while leveraging our strong balance sheet and operational mindset to deliver on our own 2022 commitments and beyond. We also remain very agile in this environment, and you will see today how we continue to accelerate organic investments for growth around innovation and demand generation. We also remain committed to our capital allocation strategy that is very focused on inorganic growth through Bolton acquisitions, and today we're highlighting three new acquisitions that are very well aligned with our stated M&A strategy and will enhance the quality of our portfolio. Starting on slide four, staying true to our five strategic imperatives where operate sustainably is at the center, we continue to align our portfolio to sustainable high growth and markets supported by global megatrends. There are four points I would like to briefly highlight on this page. First is that we have a simple two-prong approach of growing sustainably and operating sustainably. Second, we released our 2021 sustainability report in June, highlighting our progress across all aspects of our sustainability journey and how we continue to remain on track to hit our 2030 targets. Third, our efforts have resulted in another upgrade from MSCI to AA from A, which puts us in the upper quartile of our peer group. It is also worth noting that we now have moved from a double B rating to a double A rating in less than two and a half years. and this recent upgrade was done before the release of our 2021 sustainability report, so we will be watching carefully, and we will expect to see continued positive momentum in our ratings from the other sustainability rating agencies. Last, I want to remind everyone to save the date for our annual sustainability webcast on September 22nd, where we will provide a comprehensive update on our current efforts around sustainability. Moving to slide five, we want to highlight today An exciting innovation, which is a testament to our commitment to sustainability and organic growth through differentiated technology. Later this year, we will officially launch this first-of-its-kind water treatment system called Ion Solutions. This is a very compact solution in the box where a small compressor and liquid pump technology are combined with our own patented cold plasma technology to produce nanobubbles that contain a high concentration of oxygen. This innovation allows for chemical-free disinfection and enhanced oxygenation of water. You can see some of the incredible benefits this technology produces on the slide, including higher disinfection efficacy and increased oxygen concentration, all while delivering and driving a lower total cost of ownership and footprint. We're officially launching this product later this year for indoor farming as well as water disinfection applications. And we will continue to expand our reach into other high growth sustainable end markets like medical, food, and pharma. What excites me even more is the speed in which the team has moved to develop and commercialize the ion solution technology. Through the utilization of the Ingus O'Brien Execution Excellence, or IRS, the team moved from the acquisition of the technology and IP behind Ion Solutions to the launch of the product in less than 15 months. In addition, the development was self-funded within the PST segment, and we continue to increase our investments in R&D to drive future organic growth opportunities like this. Turning to slide six. We're also very pleased to highlight the most recent inorganic investment, which remain our top priority from a capital allocation perspective. Our M&A funnel remains very healthy. And as of the end of Q2 of 2022, the funnel remains over five times larger than it was in Q2 of 2020. Earlier this week, we announced the signing of three Bolton acquisitions, which are well aligned with our strategic and financial criteria. In addition, These three companies have grown on an aggregate of more than 20% CAGR over the past three years. Let me quickly walk through the sign deals. First, Holtec, which is a leading provider of onsite systems that generate high-purity nitrogen gas. This is a great example of a Bolton acquisition that extends our addressable market to very close adjacencies within the ICS business. In this case, the nitrogen generation can be connected to a compressor and produce nitrogen on-site. And there are huge benefits for these, including the elimination of large nitrogen storage tanks at a customer site, which typically also requires frequent refilling via trucks. In addition, the purity and quality of the gas can be much better controlled on-site with a drastic reduction in cost. Second is Hanye, which is a manufacturer of dryer technology. that has served as a long-term OEM partner of our ICS Asia Pacific business. Hanye brings differentiated and patented technology to our China compressor business. Both Holtec and Hanye are great examples of expanding our solutions and offerings in the broader compressor ecosystem to better serve our customer needs. And finally, HydroProcast, an India-based manufacturer of progressive gravity pumps and retrofit spare parts. HydroProcast generates more than 80% of its revenue through the sale of aftermarket parts and serves as a complementary addition to the recent CPEX acquisition to further penetrate the growing market in India. We continue to be very prudent in our sourcing and execution of M&A deals, as illustrated by the single-digit aggregate pre-synergy adjusted EBITDA purchase multiples for these three deals. In addition, we expect to have several more Bolton acquisitions to announce in the second half of the year, as shown by the fact that we have eight additional deals under LOI. As a result, we're confident on being able to reaffirm our stated target of 400 to 500 basis points of annualized growth coming from M&A. I will now turn the presentation over to Kavik to provide an update on our Q2 financial performance.