Ingersoll Rand Inc.

Good day and welcome to the Ingersoll Rand Q3 2024 earnings 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, please press star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Matthew Fort, Vice President of Investor Relations, to begin the conference. Matthew, over to you.

Good morning and welcome to the Ingersoll Rand 2024 Third 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. 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 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. Starting on slide three, our team delivered another strong quarter of results by leveraging our competitive differentiator, IRX. And for that, I want to thank and acknowledge our employees for continuing to think and act like owners. Our strong execution was highlighted by record orders and revenue. over 200 basis points of adjusted EBITDA margin expansion, 9% adjusted EPS growth, and 20% free cash flow margins. And despite the difficult microenvironment, we expect to deliver on our long-term investor day targets of double-digit adjusted EPS growth and strong free cash flow generation in 2024. Turning to slide four, our economic growth engine describes how we deliver durable compounding results. As stated on the right-hand side of the page, Ultimately, the intended outcomes are double-digit earnings growth and strong free cash flow margins. We remain committed to our strategy of delivering over the cycle our long-term investor day targets as outlined on this page. Our unique culture of ownership combined with IRX is our competitive differentiator, which will help drive that long-term value creation. With that in mind, let me provide a brief update on our growth initiatives. On the next slide, We'll start with our inorganic growth initiatives. I am pleased to highlight four transactions that closed this past month, which together are expected to achieve a mid-teens ROIC by year three. Let me walk through these deals. First, APSCO, which is a leader in the design and manufacturing of fluid power systems for mobile transport equipment. This is a great example of strategic market expansion which further strengthens our position in the dry and liquid blower and vacuum markets with energy-efficient, innovative solutions. Next is Bluetech, which expands Ingersoll Rand's technology capabilities, expertise, and aftermarket potential in high-growth, sustainable end markets, including biogas and carbon capture. Continuing on page six, on the left-hand side of the page, we have UT Pumps, which adds new high-pressure pump technology to our portfolio. in end markets including water, wastewater, food, beverage, and life sciences. And finally, next is Penn Valley Pump, which is a leading manufacturer of positive displacement pumps with patented double-disc pump technology for use in the municipal, industrial, chemical, and food industries. On the right-hand side of the page, I would like to highlight that year-to-date, we have already closed on a total of 15 transactions in 2024. and we have far exceeded our analyzed inorganic revenue target, which bodes well as we look towards 2025. In addition, the funnel continues to grow and remains very active with 10 additional transactions currently under LOI, including deals that will fit into our recently created life sciences business. The funnel, including the deals under LOI, are primarily bolt-on in size. Turning to slide seven, I wanted to take a minute and highlight how we're driving organic growth across our digitally connected assets. As we often get asked two questions. First, what do we do with the data we receive on our connected assets? And two, how do we leverage that data to drive additional revenue? And simply stated, our teams are focused on creating a meaningful positive impact for our customers around energy efficiency and uptime. The example on the slide demonstrates the agility with which we operate. We recently gathered 45 employees across seven countries over a period of just two days. The goal was to do a deep dive into real-time connected asset data to unlock new revenue opportunities. The outcome was that we identified over 40 different revenue-generating insights that collectively could translate to over $25 million in incremental revenue, a figure that speaks volumes about the potential of data-driven innovation for our products. As you can see in the middle of the page, we have examples of those insights, and these range from the optimization of energy consumption and maximizing machine uptime. When we empower our people at every level of the organization to think and act like owners, they make us better by defining new customer experiences, improving our ways of working, and bringing innovative thinking to advance our mission of making life better. I will now turn the presentation over to Vic to provide an update on our Q3 financial performance.