Ingersoll Rand Inc.

Thank you for standing by. My name is Kayla Baker and I will be your conference operator today. At this time, I would like to welcome everyone to the Ingersoll-Rand Q2 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star and one. I would now like to turn the call over to Vice President of Investor Relations, Matthew Fort. You may begin.

Thank you, and welcome to the Ingersoll Rand 2023 Second Quarter Earnings Call. I'm Matthew Fort, 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. 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 2 for more details. In addition, today's remarks 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 review our company and segment financial highlights and provide an update to our 2023 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 will turn the call over to Vicente.

Thanks Matthew and good morning to all. I would like to begin by thanking and acknowledging all of our employees for their hard work in helping us to deliver another record quarter in Q2. Our employees continue to deliver on our commitments despite the constantly changing macroeconomic environment and consistently exemplify our purpose while thinking and acting like owners. I would also like to welcome our new employees from our recent acquisitions. Together, we have a great opportunity to build upon our strong complementary brands, products, and capabilities, providing customers and the industry with a broader spectrum of solutions. Beginning on slide three, fueled by our competitive differentiator, IRX, in the second quarter, we delivered double-digit growth in revenue, adjusted EBITDA, adjusted EPS, and free cash flow. We recently published our 2022 sustainability report, where we yet again deliver industry-leading results while remaining on track to meet our 2030 sustainability goals. Finally, based on our continued robust performance in Q2, we're once again raising our 2023 full-year guidance. As we move to slide four, our economic growth engine is the key to how we deliver compounding annual results. During our last investor day in Q4 of 2021, we presented this model and highlighted our organic, inorganic, and quality-of-earning growth enablers. we remain committed to our strategy and our long-term investor day targets outlined in this page. On the next slides, I will provide you with deeper insights into our organic initiatives, which are centered around product innovation and innovative value, also known as I2V. In addition, we will provide an update on our progress towards our inorganic goals. Turning to slide five, we start with our organic growth initiatives. Here we have some examples of how, in China, We have leveraged products, localization, as well as I2V to drive organic growth. On the left-hand side of the page, we show how localization has created new product offerings and enabled channel expansion, all with a focus on high-growth, sustainable end markets. Since the Garnet Denver and Ingersoll Rand merger, our blower and vacuum product lines have grown organically at a 17% CAGR. On the right-hand side of the page, we have an example of organic growth through the combination of recently acquired M&A and I2V. And as you can see on the pictures at the bottom right-hand side of the page, the Asia-Pacific team conducted a teardown event with legacy products, recently acquired M&A, and competitive technologies. The outcome of that teardown event is the development of a new oil-free screw vacuum pump. This new product will expand our addressable market by over $350 million. and will go from development to launch in approximately six months. Next on slide six, M&A continues to be at the forefront of our capital allocation strategy. We are thrilled to highlight our recently signed M&A deal, Roots. This iconic Roots brand is a leading provider of low-pressure compression and vacuum technology. This brand is synonymous with blowers in the same way that Kleenex and Band-Aids are recognized in consumer markets. We're very excited to acquire this iconic brand, which had been in business for almost 200 years. The acquisition also expands our capabilities in both low-pressure technology and centrifugal technology, and this technology is a critical component in the process of green steel manufacturing. Our M&A funnel remains strong, and as of today, it continues to be over five times larger than it was at the time of the R&D. We currently have seven transactions at the LOI stage, And more importantly, we have several other transactions in process, which are close to the LOI stage. Based on acquisitions to date, the seven transactions under LOI, at our current M&A funnel, we are reaffirming our commitment to an additional $200 to $300 million in annualized inorganic revenue to be acquired in 2023. On slide seven, we recently released our 2022 sustainability report, showcasing the commitment and results of our strategic imperative, Lead Sustainably. We have made significant progress in establishing ourselves as a top quartile ESG company by leveraging our competitive differentiator, IRX, to deliver results in a very short period of time. In fact, we have received several industry-leading sustainability acknowledgments of our efforts, including being named to both the Dow Jones Sustainability World Index and the Dow Jones Sustainability North America Index. Ingersoll Rand was ranked as the number one performer in the IEQ machinery and electrical equipment industry in North America and number four globally in 2022. As of April of 2023, Ingersoll Rand received an ESG risk rating of low at 12.8 from Morningstand Sustainalytics. We also received an ESG rating improvement to AA in 2023 from MSCI and rank as a leader among 47 companies in the industrial machinery category. More important, we're also leading the way in the social aspect of ESG with our employee ownership model. We believe employee ownership creates economic opportunity for our employees and their families while driving increased employee engagement as our long-term shareholder. To that end, we have awarded approximately $275 million since 2017 in equity to our employees. employees that are not already on the Management Equity Program. This has increased to over $660 million in value as of June 30, 2023. We also continue to offer our Ownership Works Program that grants equity to all new employees after their one-year anniversary. Our employees are a critical element of our business, and making life better for them begins with opportunity. Through their engagement and commitment, we are on track to meet our 2030 sustainability objectives. With this, I'll turn now the presentation over to Vic to provide an update on our Q2 financial performance.