Ingersoll Rand Inc.

draw your question again, press the star 1. Thank you. I'd now like to turn the call over to your host, Matthew Fort, Vice President of Investor Relations. You may begin.

Thank you, and welcome to the Ingersoll Rand 2024 First 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 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 measures 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 2024 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 our employees for their hard work, dedication, and continuing to think and act like owners, helping us to deliver another record quarter in Q1. Starting on slide three, despite the constantly changing macroeconomic environment, our team delivered another solid start to the year, demonstrating the continuous strength of our execution engine, IRX. We remain nimble, and we're prepared to pivot if market conditions were to change. And based on our solid Q1 performance, we are raising our 2024 full-year guidance. Turning to slide four, our economic growth engine continues to deliver compounding results. We remain committed to our strategy and our long-term investors' day target outlined on this page. IRX is our competitive differentiator, and combined with our unique ownership mindset, we expect to continue to deliver above-market growth in 2024. With that in mind, I would like to provide a brief update on our growth initiatives. On slide five, let me start with our inorganic growth initiatives. We're pleased to highlight two recently closed transactions. Let me walk you through these two deals that are adjacent to our core. In other words, both companies' products can be used by attaching them to our existing compressor or pump technologies. First, ETA filter. which expands the technology by extending our reach into highly attractive end markets with the additional of sterile filtration technology. Next is Control Fluidics, which expands our technology with specialization in thermoplastics, high-performance plastic bonding, and custom plastic assembly products for life sciences, aerospace, and industrial applications. And finally, on the right-hand side of the page, I would like to highlight that with the announced acquisition of ILC Dover, which is expected to close later this quarter, we have already exceeded our analyzed inorganic revenue target of 400 to 500 basis points. Having said that, we continue to execute our bolt-on M&A strategy and expect more deals to be announced later in the year, further exceeding our analyzed inorganic revenue target. Turning to slide six, I want to provide some additional information on the acquisition of IOC Dover with an overview of the portfolio. This slide details the breakdown of the business by end market, as well as the long-term caregiver for each portion of the business, core competencies, and future growth creation opportunities. Approximately 75% of the total business falls into life sciences end market, which can be split roughly 60-40 between key markets of biopharma, and medical components . We expect this portion of the business to grow in the high single digit plus range over the long term. Let me dive a bit deeper, starting with biopharma, in which the core competencies are in powder and liquid handling, where we see future growth opportunities for pull-through on pumps and compressors, as well as the new customer and direct channel access to these customers. Some of the most exciting growth drivers in the biopharma market where ILC Dover has great presence is in supplying single-use and containment technologies in support of the manufacturing of fast-growing monoclonal antibodies and antibody derivatives in therapeutics to treat cancer and rare diseases. ILC Dover also plays a crucial role in the growing markets for novel diabetes and obesity therapies. and the increase in demand for flexible next-generation cell culture facilities to serve the cell and gene therapy market. The primary benefits for this single-use equipment produced by Alice Udover are a lower cross-contamination risk, reduced cleaning and sterilization efforts, a highly flexible manufacturing process, much shorter batch turnaround times, and reduced plant footprint and capital investment. Respectively, all of which play an important role in the customer ROI, which is core to how we at Ingersoll Rand support our customers with our current products and solutions. Moving on to the medical component CDMO portion of the business, where the core competency is extrusion and molding of complex custom silicon and thermoplastic components, as well as sub-assemblies. This business gives us access to a wide range of new customers on the medical technology side, focusing high growth segments like cardiovascular and neurology. In addition, we see a lot of future growth opportunities to leverage this niche technology for the creation of high consumable items like tubing for the biopharma business, as well as pull through on pumps and compression systems in the subassemblies they produce today. Moving on to the aerospace and defense end market, which accounts for approximately 25% of the total business. Although small in nature, we're very excited to have this business within our portfolio for multiple reasons. First, this is a very solid business in terms of growth and profitability. And second, it has given us a great point of entry into the global space market, which is estimated to be worth $1.8 trillion by 2035, nearly tripling from $630 billion in 2023. As described on the slide, the majority of the volume is comprised of human mobility and habitation. Over the long term, in this end market, we anticipate a mid-single to high single-digit growth rate. With core competencies of spaceships to inflatable habitats, lighter-than-air vehicles, and other inflatables, we believe that there is an opportunity for pull-through on our core technologies a future growth opportunity. For example, oxygen generation is needed across all these products, and we're currently a market leader in compression technology for portable oxygen concentrators. And this is just one example to provide some additional perspective on how we see the pull-through of our technologies where today we're not present. As we move to slide seven, let me spend some time talking about the alignment of ILC Dover against our stated strategic importance for M&A. First, we start with an example of adjacent technologies. Within the life science end market, we have always targeted the consumable portion of bioprocessing, which focuses on single-use technology, including powder containment, liquid management, tubing and components, isolator protectors, and many others. With ILC Dover, we get exactly that, a very clear adjacent market in which we can combine our pumps to those consumables, and offer a more complete product portfolio to our customers. An example of this is combining our peristaltic pump technology with the newly launched ILC Dover tubing technology to deliver liquids to single-use devices, which are also made by ILC Dover. This is merely one example of how we can help support customers across multiple steps within their biopharma workflow. Moving into the Align category, first, we're getting mission-critical equipment like flexible isolators for biopharma manufacturing. Isolators made by ILC Dover are best-in-class, single-use, and an essential step in the manufacturing process of therapies requiring high-potency APIs, one of which is antibody drug conjugate, or ABCs, which is a fast-growing class of biopharmaceutical drugs designed to target and treat cancer. Second, the medical component CDMO business enabled us to enter a highly fragmented, high-growth segment of medtech and biomanufacturing. As mentioned on the previous slide, we believe that there's a significant opportunity for pull-through on our existing pumps and compression technology, and also access to new customers and a direct channel of communication with them. Finally, ILC Dover is giving us the optionality to access the fast-growing market of aerospace and defense. With ILC Dover's deep relationship with NASA, Boeing, and Sierra Space to just limit fuel, we believe that we can leverage these relationships for pull-through opportunities on many of India's current existing flow creation technology. The acquisition of ILC Dover now provides us a larger platform to continue to build our life sciences business through both an M&A and optionality with a fast-growing market of aerospace and defense. Moving to slide A, let me touch base on our organic initiative. Total organic orders in the first quarter were down 7%, due primarily to large project order timing. As we have discussed before, large loan cycle projects, usually driven by mega project investment, tend to be lumpy in nature. And this can create a dynamic of tough comparison in a single quarter. We believe that we're getting an outside share of this project. And we continue to be focused on book-to-bill. In Q1, as expected, we saw book-to-bill greater than 1. building backlog, which was up 2% year over year. Moving to the chart on the left side of the page, we're encouraged by both the organic order acceleration through Q1 and the increased marketing qualified leads or MQL activity in the second half of the quarter. On the left-hand side of the page, we illustrate the sequential order we saw throughout the quarter. February saw 5% sequential order growth as compared to January, and March, organic orders were up 18%. sequentially versus February. Consistently with our initial guidance, book to build was above 1 at 1.02 in the quarter, continuing to build backlog in support of our organic growth target. As we had mentioned on our last earnings call, Q1 2024 had some very tough comps due to large and long cycle project order timing. For a two-year stack, organic orders remained positive. Moving now to the right-hand side of the page, we illustrate our MQL activity acceleration throughout the first quarter of this year. In Q1 of 2024, MQLs finished up 4% year-over-year, and this is on top of 9% growth in Q1 of the prior year. We remain encouraged by sequential momentum in MQLs throughout the quarter, where we saw an 11% increase in MQLs during the second half of the quarter as compared to the first half of the quarter. we do acknowledge that market conditions are constantly changing, and we remain nimble and prepared to pivot with those changing market conditions. I will now turn the presentation over to Vic to provide an update on our Q1 financial performance.