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    Ingersoll Rand Inc (IR)

    Business Description

    Ingersoll Rand Inc. is a global leader in providing mission-critical flow creation products and industrial solutions, focusing on air, fluid, energy, and medical technologies. The company operates through two main segments: Industrial Technologies and Services, and Precision and Science Technologies, offering a wide range of compressors, pumps, vacuums, and blowers under more than 80 market-leading brands such as Ingersoll Rand and Gardner Denver . Revenue is generated from the sale of original equipment and associated aftermarket parts, consumables, and services, with the aftermarket segment representing a significant portion of their business . Ingersoll Rand's products are essential in various industries, including life sciences, food and beverage production, and clean energy, with a strong emphasis on innovation and sustainability .

    1. Industrial Technologies and Services - Provides a comprehensive range of compressors, pumps, vacuums, and blowers, focusing on air, fluid, and energy technologies. This segment includes the sale of original equipment and aftermarket parts, consumables, and services, ensuring critical operational uptime for customers .

    2. Precision and Science Technologies - Offers advanced solutions for critical applications in industries such as life sciences, food and beverage production, and clean energy. Emphasizes innovation and sustainability with products like energy-efficient compressors .

    Q2 2024 Summary

    Initial Price$94.93April 1, 2024
    Final Price$89.54July 1, 2024
    Price Change$-5.39
    % Change-5.68%

    What went well

    • Disciplined M&A strategy enhances shareholder value, as Ingersoll Rand walked away from a large acquisition due to valuation concerns, demonstrating effective capital allocation.
    • Acquisition of CAPS expands footprint in Australia, providing access to a large install base and strong customer relationships, and opening new market opportunities.
    • Life Sciences business shows strong growth and profitability, with margins comparable to the Precision Tech segment, enhanced by the ILC Dover acquisition, boosting overall profitability.

    Key Metrics

    View all financials →

    Executive Team

    NamePositionStart DateShort Bio
    Vicente ReynalChairman, President, and Chief Executive OfficerJanuary 2016Vicente Reynal has served as the CEO, President, and a member of the Board of Directors of Ingersoll Rand since January 2016. He was appointed Chairman in November 2021. He is responsible for leading the company and driving its growth and profitability as a global supplier of innovative flow control products .
    Vikram KiniSenior Vice President and Chief Financial OfficerJune 15, 2020Vikram Kini has been the Senior Vice President and CFO of Ingersoll Rand since June 15, 2020. He joined Gardner Denver in 2011 and has held various finance leadership roles. Before Gardner Denver, he worked at General Electric Company and SABIC .
    Andrew SchieslSenior Vice President, General Counsel, Chief Compliance Officer, SecretaryCompletion of mergerAndrew Schiesl has served as the Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary of Ingersoll Rand since the completion of the merger. He leads legal, compliance, and corporate governance, as well as EHS and sustainability efforts .
    Michael WeatherredSenior Vice President, IR Execution Excellence (IRX) and Business ExcellenceCompletion of mergerMichael A. Weatherred has served as the Senior Vice President of Ingersoll Rand, leading IRX and Business Excellence since the completion of the merger with Gardner Denver. He joined Gardner Denver in May 2018 .
    Santiago Arias DuvalLeader of the Precision and Science Technologies (P&ST) business segmentSeptember 2023Santiago Arias Duval has been with Ingersoll Rand since 2017, initially joining Gardner Denver. He has held various leadership roles and since September 2023, he has led the P&ST business segment .
    Matt EmmerichChief Information OfficerJuly 2023Matt Emmerich has served as the CIO at Ingersoll Rand since July 2023. He leads the strategy and execution of the company’s global technology footprint, including technology operations, infrastructure, applications, and information security .
    Elizabeth M. HepdingSenior Vice President of Strategy and Corporate DevelopmentJuly 2021Elizabeth M. Hepding has served as the Senior Vice President of Strategy and Corporate Development at Ingersoll Rand since July 2021. She has over 20 years of experience in mergers and acquisitions and strategy .
    Kathleen M. KeeneSenior Vice President and Chief Human Resources OfficerJune 2021Kathleen M. Keene has served as the Senior Vice President and Chief Human Resources Officer at Ingersoll Rand since June 2021. She oversees the company's communications function and has held various HR leadership roles since joining Ingersoll Rand in 2016 .

    Questions to Ask Management

    1. "With the delays in mega-projects due to EPC capacity constraints and site readiness issues pushing some projects into 2025, how confident are you in meeting your revenue guidance for the next year, and what strategies are you implementing to mitigate these delays? "
    2. "Given that you decided to walk away from a potential $1 billion acquisition, can you elaborate on the reasons behind this decision and how it aligns with your disciplined approach to M&A and exceeding your inorganic revenue targets? "
    3. "Organic orders declined by 1% in Q2, and with an increasingly challenging macroeconomic environment, what specific initiatives are you pursuing to drive order growth and ensure your backlog converts to revenue in the back half of the year? "
    4. "Your gross interest expense is expected to increase from approximately $215 million in 2024 to about $260 million in 2025; how will this rising expense affect your capital allocation priorities, particularly regarding bolt-on acquisitions and maintaining investment-grade status? "
    5. "You've mentioned an elongation in the velocity of projects through the funnel; what steps are you taking to accelerate project execution, and do you foresee any impact on your win rates or overall financial performance because of this elongation? "

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateAugust 24, 2021
    End Date/DurationNo expiration date
    Total Additional Amount$1.0 billion
    Remaining Authorization$1,055,533,139
    DetailsPart of capital allocation strategy; share repurchases are significant, with M&A as the top priority

    Past Guidance

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Revenue Growth: Expected to grow between 6% to 8%; organic growth 0% to 2%.
      2. FX Impact: 1% headwind for the full year.
      3. M&A Contribution: Approximately $440 million to revenue.
      4. Corporate Costs: $170 million, evenly per quarter.
      5. Adjusted EBITDA: $2.01 billion to $2.06 billion.
      6. Adjusted EPS: $3.27 to $3.37.
      7. Gross Interest Expense: Approximately $250 million; net interest $170 million.
      8. Adjusted Tax Rate: 22% to 23%.
      9. CapEx, Free Cash Flow, and Share Count: No changes from previous guidance.
      10. Net Leverage: Approximately 1.5 turns .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Revenue Growth: 4% to 6%; organic growth 2% to 4%.
      2. Adjusted EBITDA: $1.94 billion to $2 billion.
      3. Adjusted EPS: $3.20 to $3.30.
      4. FX Impact: Relatively flat for the full year.
      5. M&A Contribution: Approximately $170 million.
      6. Corporate Costs: $170 million, evenly per quarter.
      7. Interest Expense: Approximately $130 million.
      8. CapEx: In line with initial guidance.
      9. Adjusted Tax Rate: No changes from previous guidance .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: FY 2024
    • Guidance:
      1. Total Company Revenue Growth: 5% to 7%; organic growth 2% to 4%.
      2. Adjusted EBITDA: $1.915 billion to $1.975 billion.
      3. Adjusted EPS: $3.14 to $3.24.
      4. Adjusted Tax Rate: Approximately 23%.
      5. Gross Interest Expenses: About $155 million.
      6. CapEx: Around 2% of revenue.
      7. M&A Revenue Contribution: Approximately $160 million.
      8. Corporate Costs: $160 million, evenly per quarter.
      9. Incremental Margin Target: 35% to 40% for ITS business.
      10. Free Cash Flow Margin: Context set by $1.3 billion free cash flow in 2023 .

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: N/A
    • Guidance: The documents do not contain information from the Q3 2024 earnings call for Ingersoll Rand, so specific guidance metrics are unavailable.

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Atlas Copco: Principal competitor in sales of compression, vacuum, and blower products .
    • Flowserve: Principal competitor in sales of compression, vacuum, and blower products .
    • IDEX Corporation: Principal competitor in sales of compression, vacuum, and blower products; also a primary competitor in the Precision and Science Technologies segment .
    • Kaeser Compressors: Principal competitor in sales of compression, vacuum, and blower products .
    • Dover: Primary competitor in the Precision and Science Technologies segment .
    • Graco: Primary competitor in the Precision and Science Technologies segment .
    • KNF Neuberger: Primary competitor in the Precision and Science Technologies segment .
    • Netzsch: Primary competitor in the Precision and Science Technologies segment .
    • NOV: Primary competitor in the Precision and Science Technologies segment .
    • SPX Flow: Primary competitor in the Precision and Science Technologies segment .
    • Thermo Fisher Scientific: Primary competitor in the Precision and Science Technologies segment .
    • Watson-Marlow: Primary competitor in the Precision and Science Technologies segment .