Ingersoll Rand (IR) 21 Feb 232022 Q4 Earnings call transcript

Thank you all for standing by. I would like to welcome you all to the Ingersoll Rand Q4 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, we will conduct a question-and-answer session. [Operator Instructions] Thank you.

to Fort conference of like our over now Matthew host Ingersoll. would turn call the to I Matthew, please go ahead.

Thank you, quarter fourth Rand Ingersoll and welcome earnings to call. the XXXX

me of I CEO; and Kini, Relations. am Vice Officer. Vik are President Financial Matthew And Reynal, Fort, and joining this Chief Chairman morning Vicente Investor

section presentation our call. on available Both and and of website. will this Relations our issued We release reference we are the morning earnings these the Investor during

later available this conference call addition, In replay be a of will today.

I and start, everybody uncertainties certain more statements forward-looking the call. we conjunction SEC remind Before want forward X the details. Slide in that on read previous and with statements this to Please are filings, information call review looking risks should on for which discussed our the on subject this in in you nature to provided

will addition, to refer certain remarks, non-GAAP today's In measures. in we financial

You GAAP section and can measure which of website. presented comparable reconciliation both Relations release, on and in are measures our our most the of available in the these to find our earnings a Investor accordance of slide with calculated in presentation

today's On will company our segment highlights we and guidance. XXXX review financial provide and call,

we and Q&A for ask caller today's one each question session, For for other to one keep allow to follow-up that time participants.

will At to Vicente. call I the this time, over turn

Thanks, Matthew, and good morning to all.

and rates, in and constraints for I supply by interest full year and finished work We despite hard their geopolitical ongoing employees strong helping uncertainty. year would fourth in note, start inflation, deliver on our year with quarter to record XXXX. like thanking a chain the us a acknowledging rising results high

clearly acting this our to purpose, owners commitment. on the Ingersoll as we Our employees have year impact And Rand. deliver of like owners our exemplify thinking our while and performance reinforces consistently

we commitments. XXXX, we deliver our over on in continue X, Investor how demonstrated Day again to Slide with Starting

Jones XXXX named tremendous sustainability that made Sustainability We goals, progress was the very Rand I'm also to Index. Ingersoll Dow proud our against but

As be supply macroeconomic, demand solid. to on commitments. on our agile mind, remains performance can is while we XXXX, the focused to IRX control. And and of at remain geopolitical everyone's execute to continue our look and continue our fuel and will we what global uncertainties top to chain differentiator we

to Slide Turning X.

Investor its highlighted We we this through page. success results During our last strategy how engine. our compounding bottom the our and outlined given results evident, we committed Day, delivered is growth to remain at economic the of

megatrends, sustainability Our quality portfolio is global positioned of on capitalize and [digitization] (ph), to life.

(ph) see, growth enablers to growth. XXXX. We expect And through to year-over-year delivered XX% organic X% from as again The digit deliver M&A XXXX, you basis. low-double this our organic surpassed] commitment. we growth XXXX, In of organic inorganic commitment a revenue in-year XX% annual growth X% [also and mid-single organic growth on leverage growth in digit combined can growth or we delivering outperformed of an

look to XXXX deliver reaffirm total growth our we low-double commitment As of through we digits average XXXX. and beyond, to

productivity with iXV to will incremental expected basis adjusted operating generation, Our an as growth EBITDA aftermarket margin as demand strong initiatives leverage year levers, of enable on improvement well XXX points us generate per our average. and organic

XXXX, average premier a to being XX%. by growth year. digit encourages as Daily of continued adjusted across EPS goal support week, to competitive focus IMPACT achieve that IDMs, consistently our IRX continues XXX a differentiator This company high-performance or on company over we execution. that With Management, of our our each on goal In our each culture compounds and with double strong earnings

of we Aftermarket continues delivered strategic to In of and Moving we XX%, to Slide and excluding X. a focus FX. saw strong XX% XX% and growth organic growth XXXX, order revenue be respectively.

revenue our of basis part gross and growth in actions. in driven iXV margin pricing, improvement by aftermarket was points expansion to adjusted EBITDA XXX margin Our due

As we our important note create the align revenue to investment team how at we our level. that business we we total to trends, XX% streams. formalized continue new to from have to our mega growth incremental IR-Digital to coming IIoT-ready accelerate It's of this we business our an products, teams Investor made the targets. revenues the With that already in XXXX reside is addition exceeded Day

provider On were permanently ability gas world the XXXX will tons deliver project on megatrend. for when million side store of organic million year. and the capture selected largest carbon be than of Ingersoll critical online carbon a in great capture more our to efficiency and the storage XXXX. deliver by the right one comes XX be the it and We to between focusing example is page sustainability for a to This growth technology will $XX dioxide of a every of and Rand capacity With value XXXX. in project what

including technologies, our X, of forefront to On revenue the the annualized transaction market Slide Flow acquisitions M&A allocation adjacencies. acquisitions and approximately These added while XX million in being at close continues market-leading from capital accelerating acquisitions our XXXX, addressable both $XXX invested the over be SPX these in We products million. with $XXX trends. have with

And And Our to have today, XX was more under it importantly, continues M&A LOI. strong. it than as be the of at times larger time of the transactions we funnel over remains five R&D. currently

acquired $XXX to in be We additional million million annualized expect in to inorganic an revenue XXXX. $XXX

a we and executing recently with of solutions loading started in well our for of as demanding unloading and Truck, regards industrial dry Tank with used acquisition liquid to as completed on inorganic strategy leading and the tanks environments year provider Paragon food bulk beverage. the Finally, well

share. exciting some World have DJSI on DJSI Indices. we America We achieved X, Slide news North and placement the to to Moving

now the which go use XX% XX top case, and companies the execution of own example in this a North at Number within to of of how by Corporate execution One S&P our companies. in leverage This of top our in puts is on Number us perfect Sustainability Global. S&P in across the to IRX America world score means [revealed] agile the we we Global are our all IRX Assessment we process Our the of business. unranked that being (ph) for aspects Four In global decile all industry, from

turn the presentation provide financial XXXX on now year an QX update to performance. full and will over Vik to I our

Vicente. Thanks,

On through Slide ongoing of uncertainty. the a strong finished X, strong execution, in macroeconomic the with performance and balance by we despite QX operational commercial year fueled IRX

XXXX organic orders and enter which gives billion provides over company to backlog. XX% Total respectively. a equate remain us and year-over-year, backlog, of of year-over-year, our guidance. our conviction in backlog by increased the up $X This XXXX as and revenue strength XX% X% we healthy encouraged is on execute revenue We delivering

delivered from a point year-over-year a XX% adjusted year-over-year and EBITDA EBITDA million, basis adjusted a margins of The $XXX and improvement, point fourth XX.X%, sequentially QX. improvement quarter XXX improvement company XXX basis

quarter, the up This EPS X% shortly. For meaningful headwinds prior explain versus despite adjusted year. will is that was some I

due despite the chain the from Free was global support inventory to $XXX million, as quarter ongoing challenges well as headwinds for cash flow supply need to backlog.

$X.X of $XXX at liquidity up was sequentially. billion million approximately quarter-end Total

net to sequentially. than the turns, At improve and quarter. year-over-year turns X.X and than continues leverage X.X prior prior better X.X Our we're year turns better

X. Slide to Turning

increased grew the basis. For QX orders an on FX-adjusted company, X% XX%, and revenue both total

while with positive, the which actions company increased improving and team nimble basis headwinds. margin the prior are segments It's points, to margin price/cost, XXX the important of that ongoing to both segment dollar ITS PST XXX EBITDA basis speaks adjusted points. Total from segment year, inflationary the note our increasing margin XX% despite

came million the costs for $XX Corporate at in quarter.

benefits well EPS as significant for $X.XX favorability headwind an as finally, headwinds FX prior tax were X% that per to adjusted the ongoing up X% growth And expected interest was associated expense. the rate year recur associated with to with includes not quarter one-time to share. due This and in

finishing year below the XX%. was The XX.X%, rate adjusted the tax slightly adjusted for rate quarter with full

XX, Slide FX-adjusted total XX% company and on XX%, increased orders revenue both grew On full basis. year an

increased the adjusted adjusted ITS XX EBITDA basis XXXX, adjusted year. segment basis largely while company prior margin PST XX PST of the margin from EBITDA margin impact increased increased declined When points. XXX points, in to Total M&A basis completed exclude points. The the XX% by segment

due throughout in acquisition. the the recall, year EBITDA was most As decline of you Seepex the margins to adjusted

I am is five quarters the margin in acquisition, mid-teens in where QX, rate Seepex pleased at story exit to EBITDA another the report is after the a just business that mid-XX%s. we acquired amazing and

We to our margin. Seepex EBITDA fleet getting to well average PST underway are

to back in increases generally margins see in with line sequential and now continue PST's are seen we We PST adjusted them have EBITDA approximately where margins XX%. at historically,

major margin expansion. the finished of segments, year company's triple-digit was Both dollar EBITDA price/cost, the adjusted margin positive, which overall and a driver

million, costs incentive management in largely the $XXX from due to at year, prior year down $X Corporate finished adjustments costs. million

year tax growth share. headwinds adjusted includes $X.XX and lastly, It the expense. EPS one-time interest to XX% year significant adjusted that FX, is was up with prior associated the And EPS per important to note rate for

have adjusted If would of over been these XX%. you EPS headwinds, exclude impact the our growth

through of cash, the billion, $X.X dividends. to Treatment now revolving $XX figures deployed business availability XXXX, Flow's shareholders X, to based CapEx, It's acquisition next and subsequently in Moving the $XXX million cash which at totaled for million. flow share $XXX include for to on approximately been slide, January XXXX. billion our has of $X.X repurchases $X.X on returned million stands company and including And Free liquidity quarter we million, was the which cash total $XXX important facility. note of billion Air these credit approximately that on SPX

outflows was repurchases. which for improvement dividend M&A for year-over-year. quarter quarter and our primary included to million the to million a $X cash of was and for allocation capital to X.X payment deployed the million priority M&A we Leverage remains M&A, expect be top And usage our flow cash. for continue turns, $XXX turn to our $X X.X share

our will turn Vicente now discuss call to back segments. the I to

Thanks, Vik.

of Slide XX%, Services organic Industrial delivered from pricing. XX, strong year-over-year and growth segment volume our revenue Technologies On with outpacing growth growth

XX% XXX incremental of from an XX%. of with year-over-year adjusted an margin XX.X%, increased EBITDA with prior up EBITDA basis margin year Adjusted points

QX. We XXX margin points from QX to basis also delivered expansion sequential of

X%. solid XX%. more continue our products up stack see We with grew demand for orders organic organic Note the orders on that a segment than two-year ITS to

product total [XX] year-over-year (ph) figures on orders segment the of revenue. Moving across OpEx, to categories. percentage the of the Each impact and exclude both the individual headwind which point negative was

from above we orders double with deliver be continues QX Orders the in Starting large you in COVID-related think to first orders growth The oil of digit even mid-single order were by up the team products. free a Asia-Pacific China orders is outpacing in lubricated when with impressive with which continue great delivered disruptions. growth and mid-teens, our market, performance push digits. the and quarter saw up to closures team oil down in throughout to that mid-single demand orders XXXX. digits EMEIA the continues products to about driven digits Americas, compressors, low-single see the we

orders global lifting were vacuum and orders And the up power and mid-single blowers, digits. level. grew In low-XX%s tool

in Moving innovation to which we're the of footprint investment another highlighting action we're expansion drive. in India, initiatives our is slide, the portion organic

for continue We significant India and in region opportunities driving have is our seen which we to growth for manufacturing, region in the footprint. need in for increase drive

X% XX. Slide Technologies Revenue Science to Turning the segment organically. Precision in and grew

Additionally, million, $XX up margins the of which of XX%. with delivered points Adjusted adjusted year-over-year, EBITDA up incremental was basis EBITDA was XXX over PST XX.X%, team XX% year-over-year. margin

margins our orders orders comps continue these order X% hydrogen of our two-year are by up as as headwinds EBITDA to for We adjusted digits. due were organic network a Organic Zealand. a such deliver of delivery from up XXXX, orders were to Seepex. order, on stations in New synergy hydrogen on organic improvement refueling large in intake completed which QX in QX slightly. double price/cost recently And and see normalized challenged sequential M&A, improvement a down year-over-year stack, Adjusting will were single driven

deliver Diaphragm as batteries, the vehicle and utilizing applications. only-electric customers. sustainability in highlighting for offers Electric innovation faster markets, EVO is growth sustainable significant beverage product and on perfect earnings specialty times of manufacturing and double-digit savings, pump such as we're end This driver focus end our product market. the markets, action, The Series And For diaphragm high-growth to pump another recently chemical food PST payback in leading Pump. EVO us growth. our launched a example to our This high-growth enabling this our triple-chamber energy yet is electric is

revenue to volume at company where of Flow X%, is Tank $XXX As and to first to expected grow anticipate organic and XXXX of the million, Total is half which X% closed growth expected as X% primarily to half the a the between as year, acquisition FX we approximately to introducing X% XX% X%, the for the in the and impact Slide X% half guidance. Air to all of approximately contribute We is to Treatment growth well X% of be growth of completed second move XX, realized headwind SPX we're M&A of of X%. transactions orders XX%. XXXX our with which year. projected first Truck. price and is will the in M&A reflects XX% Paragon

Corporate planned quarter increase driven year-over-year per demand $XXX evenly in be incurred year. generation. IIoT are will by costs The at million throughout and and investment is the largely

is billion $X.XX the range and expected adjusted to in of Total for the $X.XX company EBITDA billion. be

the At we're introducing the table, bottom adjusted guidance. of EPS

we have While forward. will we historically guided now (ph) key] moving [these EPS, not include metrics

EPS CapEx range We to in $X.XX anticipate tax to of Adjusted the to million around $X.XX. of low-XX%s, approximately is our interest rate expense be X% the to and projected within revenue. fall $XXX and be adjusted be

Based is approximately tax adjusted in from associated growth a headwinds activity includes EPS interest performance, FX expenses, with XX%, growth year The to right adjusted bridge with the rate. expense, adjusted XXXX approximately in above associated the operational the interest full and headwinds the hand attributed on the page tax showing X% and the offset operational XX% guidance guidance, to and side rate. of changes by FX

to As some is basis expectations. noting worth to with continue the and February, is we QX it which be week consistent sit that seen first organic we quarter-to-date commentary, here of a mid-February have through positive provide our on in orders

Turning Slide to XX.

results. reiterate As want I wrap strong solid up Ingersoll a call, position. we finished in is XXXX Rand with today's QX We to that

for while any continue the may that remaining prepared and dynamic We market conditions, challenges come. to agile monitor

as These To company. impact I hard an and the and targets demonstrating to of our through commitment your the We the delivered resiliency show our excellent engine strong our to the growth strong year. work, results you Thank meet economic actions. our of employees, thank you you owners for again use finish by want focus to have for IRX. financial results executing

we Our we continue allocation and policy track balance capital capital the and And remain is and have of sheet to deploy comprehensive as the market capacity strategy, with strong. with investments return our disciplined to resilient our outperformance. highest record

I that, to back call open the will for With turn and operator the Q&A.

you. Thank

begin now from session. have of Instructions] our the We question Halloran first line question-and-answer will Baird. the [Operator We Mike of

now line is Your open.

Hey, everyone. good morning,

Good morning, Mike.

Good morning.

of Just favorable is on slowing. is it of an through price? then, we and it Can of the you're little just being half-second And but Obviously, versus back you the the any a half the assumption growth talking takes factors on year, the organic versus go acquisitions? a environment of in Is first the think cadencing macro little kind how XH? much more seasonal that's about bit puts about? phasing FX rate half worse? gets just XH How

our half as anything or either. the related guidance to commodity that I'll chain watch facing back and/or comps seen comparable to in supply the we to year. as of the that, to normalization is phasing assume item Yes. don't say significant what Clearly, more historically. expected, become meaningful deflation Hey, have have to returning we go Mike. And into we the

And in flattish. of organic, the mean, the I based of continued that remarks, And on the see on we say tough and price. said so, comps, that half, terms good kind as we momentum roughly we on second

cycle long expect call of continued And what that spoken megatrends and the that. about kind around year onshoring things these driven by in what we past we as of are we've on orders, the we expect see lot through strength like sustainability, before a we to the is that go which

see XXXX. believe as that in that backlog leads changes just net-net, to go don't we significant we So, through our us

interpret if a and in change normal the assuming pretty much backdrop, not correctly, Vicente? I sequential macro you're So, that cadencing essentially

that's a as prudency here correct. can basically, in And the a of you correct. That's Yes, half. bit see, second

Yes. bit, M&A No, has obviously, little all. that side, backdrop the helps. the And you for then, a on not changed

you've mentality LOIs You that got seen high is? success all? guys buyer's in transactions? change Maybe of seem consummate high. still Obviously, you there what these of talk you're see to buyers just Have levels the at Has a very deals about any landscape lot some willingness working on, to are a move forward greater could of here. been you the and by

simple we our Yes, stronger as Mike, sourced. seeing sellers to the yes, sense deals transactions we're in the in in much because is, out a answer I that will of mind, -- say -- has are talk that that yes, of lot there. sole And it XX%-plus the and keep momentum do primarily mind to but keep

have with to we long-standing to really cultivating So, the for we're attracted Rand. that relationships company Ingersoll be looking

all every know, great of along legacy continues ownership we goes that, continue the treat we (ph) And and place be of are these [how the is the relationship much the to being bring the driving lot there Rand. of the them way happen conversation do. want many] and and of lines to that to a that keep companies changes you understanding in for to hey, kind able way that realizing year, And very with employees a these unique we that door Ingersoll to is a a to have better continued open momentum

fact So, I the confidence what still that that's the M&A LOI be we to that and very continues get have gives under XX again, And our you funnel accelerated. think transactions momentum to that see continues strong. the us

pleased very seeing what with So, yes, we're we're here.

Vicente. it. Appreciate Thanks,

Thanks, Mike.

you. Thank Barclays. have now from We Julian Mitchell

open. is line Your

Hi, Maybe good just... morning.

Good morning.

so wanted organic about think book sounds $X bill at morning, outlook. And with backlog of it, start around a half, function it's to ...the it you to any guide, stays destocking second through then, softening slightly, whole. but to sales just region good particular comps, billion top-line a the the sort for first -- or to a just to I that? related of are down question like anything or year, assuming like the understand solely not start the volumes X with that year that, as that's And within you're

well, and, the that's And as the we is Yes, was not what viewing as again, XXXX. continue the we answer -- going absolutely to as Julian. we're update said at year we're I Yes, accurate. to these did similar stage, add we'll correct, Julian, before kind that goes, on view now know, to these right that, to as a as in to of as you here perfect. No, saying that this I prudency too

helpful. That's thinking fretting spent XXXX, the year, QX, the the EBITDA because implied sort earnings in And I we seasonality, back just whole margins of of half then, know on the it. rest and all ramp and in the the the of about in sort about the people QX incrementals

So, back the EPS and you roughly consensus of first in around anything at Is moving half the for okay to XXXX, just kind XX/XX calling half? then much are kind of sort year-on-year split? you're understand, assuming second half, split out of

that. Yes. Julian, Vik. is this I'll take

I think the correct. is answer that, that's

the very you've you of with seen to of the historically. think what consistent I phasing the side top-line want equation about talk whether earnings is or on

implication last basis speaking, XXX consistent roughly I we an right our on points close with total perspective remains relatively for Investor company, and Day. to line margin at EBITDA year think is, which from in messaged the on adjusted what a basis total

is different dramatically there, you've consistent yes, So, the much again, seen in years very past. what nothing but with phasing

That's you. great. Thank

Partners. go now are Please Thank Research you. Jeff ready. you Vertical of when have ahead Sprague We

the Good on you. price/cost... Thank just Hey, morning.

morning. Good

Hey, Thanks for good morning. the question.

in of total for would us other some growth you organic said on XXXX? perspective embedded to guide price, in But price be maybe is just XXXX the XX% there give are the just be could or And just I question was just carryover actions equation think for you flight the also guide? price/cost clear, the confirming that want that. Just

Jeff. Yes,

still we price one incremental new correct. year. communicated. which price past, -- as -- in it's X% gets what realized have regular the we increase, X% way that done yes, but portion to that we the about throughout normalized So price carryover. doing price, think more we to We're And that as call that, maybe it that a is the it of the another good is XX% will on is

So what we're that of perspective seeing you gives in terms price. the on

yes, we side be with a And price/cost the that perspective, [so from year. -- this cost it and going a price/cost throughout level. that, stays basically to have that expect the And (ph) we we're at and report so] positive

So, deflationary assuming we're not a major market.

just And profitable product more initiative. totally the some maybe And the shifting the are To what has kind service enabled initiatives capacity? paying -- streams? given or to in capability, driving particular revenue in higher or that extent, the then, it thinking about is just for additional of gears, actually other customers what of IIoT extent that

Yes, great question there, Jeff.

(ph), now So, you comes that which additional as the paying to with offering. the added is services referenced in [OEM] from we're

better higher device. we service our So, connected having we streams revenue -- see. a with to generates therefore, agreements are a remotely that able We're customers recurrent that have that and,

the why are we our have So of, nature that's that new on selling the want IIoT whole generate of because we revenue obviously, to streams purpose machines, enable to more want recurrent ready and device. top in

So, what I we're think that's seeing.

to pay benefits terms to it, yes, that in today dependent a be lack companies demonstrate labor because say, customers of we I more are can there's cost OEMs customers I'll and able like skilled of added on the kind lot there to out willing of And have. and of mean, for

one So way on they efficiency. just as adding it's quick customers what see And add return to way yes, very those energy net-net, it we for of the think increased pay. services, increased of I that a it's

Great. Thank you.

you, Thank Jeff.

next when from Melius the Research. ready. you Rob Please comes Your ahead are question Wertheimer of of line go

Thank you. everybody. Good morning,

Rob. morning, Good

XX%, and revenue hey, where price So, to I X% -- up, X%. covered outlook I (ph), growth back to go just organic [X%] the up for have a yes, for wanted revenue by outlook backlog you think, minute, to

in whole there of not lot there? supply backlog up, do Is earlier, the orders the still is by you're upside sort constrained loosens I you the mentioned revenue of assuming improvement we so, And in outlook? chain foot supply If think revenue and Vicente, How chain? the cost. that a that

well by I Rob, but keep too mean, labor. supply constraint as some mind also in chain, Yes.

as think the kind but continue we that better I So, have. shift productivity, we more we to will typically the on it's and current our that say normal see continue much as why towards to continue backlog year of stay more throughout we at prudency so phasing the level more and we really

chain yes, factories majority, the people supply labor more bring to but more. able more able some to I'll say, constraints, So, be of and be to constraints ship to

perfect. Okay, spot. don't color ITS apologize missed things in large, or if know the I are and if [picking kind And orders away? additional remarks, projects if fading were in then, America Thank you're but North prepared broad-based you. I I weak strength up] or of the Any small seeing order only (ph) there?

Rob. sometimes cycle that. capture, a That's example, basically the more as energy of bit orders, more CapEx cycles long that actually little very what what And Yes, efficiency, call related seeing thanks. of cargo which strong into quarter-to-quarter. we trends, is great that momentum projects for maybe good acceleration of growth we like see a to see. question, of we secular so onshoring, a are get We're driving And creates the lumpiness we

you look -- second to had of into biggest when to at one that the you first and that that it actually the quarter, important half, something the we the where the to half. third and saw better book from second look for half But is ITS ITS, close when going first was note bill X.X quarters organically can we acceleration back compared -- Americas also to half to at recollect it's to it's And in we in QX. because ITS the America,

in a momentum again, think fundamental here the kind Americas, the order strength first we're really also go demand. continued as including continued we in And we of kind the was on -- into remarks, much pretty into half. seeing us Americans. regions, all as positive what gives ITS XXXX, confidence So, which solid acceleration the the it I across said we saw half from into we organic ITS going And good more view order second of

Great. Thank you.

now We you. Wolfe Nigel Thank have from Research. Coe

Your line is open, Nigel.

morning, Good Thanks. everyone.

Good morning.

-- like it So, seems morning. yes, good

order in hydrogen America prior this XXXX. about year talking into order North slipping and in You're the

these we've -- got seems project orders we And that, will it orders, I my run orders given to we comparable on should expect, decarb-reassuring So, these you of that question which particularly agree do rate? with larger like through, mega -- larger type that is, mean, real have coming projects, lumpier orders with sequentially versus we as from here? sort do get larger have margins we lumpier

good in through the tell large, that said projects come being always So, P&L. pretty that to lot of of really are we that to will historically, release. question, I have I see well. -- obviously, us we can these we answer so kind first the lot create And of go mean, in a -- flow-through I it yes. that's mega And with getting margin a CapEx these the think projects of a that yes, mean good kind and as they

news CapEx pretty growth same a for seeing long sustainability, aligned like. of a secular So, trends better us, we're visibility. cycle, lot with good it's efficiency, release around they're and the our -- of well we're the gives projects. They're these onshoring that that more at energy it's seeing And the time,

revenue. with long as Okay. Yes, growth. lumpy (ph) I the service as nothing can they And to go wrong [contribute] revenue to want on then,

said you think, XX% I ex FX.

which service implies, growth, I -- pretty don't that organic good. low so know, mid-teens is mid-teens Just

Or we kind question some to come be just catch-up? devices driven this of by, So being enabled I starting wondering revenue any don't Jeff's would to service deferred contribute to there are meaningfully -- to extent seeing helpful. thoughts back IIoT growth what know, the is And to growth?

I say, is, more regards. It in of some would it's Yes. latter the

we we and developed good as seeing Day, trends spoke that able during they driven related our is services. not can remember, able in by as that we IIoT-related can but -- of service, Investor or not and customer repair provide very be as able been that and that. in maintain And to energy reduction efficiency a can other devices you provide our the to service As benefits. efficiency other agreements have we to our labor in packages compressors we're energy guarantee, definitely that to get factory customers And to about visibly acceleration find such that, see needed the care the skilled where to addition an addition

for see good are So, and good to news it is [indiscernible] doing momentum that. that teams very well actually on solid us

Thanks it leave questions. the I'll Great. for there.

Thank you.

Raso David Your ISI. next question comes from Evercore of

up Hi. the ITS the orders pick to Thank 'XX, just wanted commentary. in you. excluding has orders in be clear? order saying X.X%. so comp, hydrogen 'XX Are I while up you far was were on the so X.X%, just PST Even obviously the up growth to year-over-year, basically accelerated far flattish

David, order segments. we're the that two positive again, across momentum is Well, saying actually the

about is correct. So, yes, I a mean, it perspective, percentage if you think from that

And of the projects sense some what's to to in new that of, want the dynamic in orders new already? the book? the get I pricing pricing what's assuming getting, type just is costs these understand reaccelerate, the don't you're versus what backlog Just order in

trending speaking, the half to exiting that, that across dynamic, Yes, would are comparatively would you to David, it's is in seen first would say on given the within I have both an pricing in carryover organic what of which, segments comparable expect, basis. as year, I remarks I'd positive Vicente pricing more orders first quarter, quarter-to-date say Vicente's say And that dynamic evident you obviously mentioned, XXXX. the the

business. the that respect. projects, more on the or levels you are asked healthy margin to pricing comparable dramatically commensurate has book/ship of was the that what think I And see standard in some and profile in is those those projects the on changed to before, type So, nothing question

our and So, of across comparable we've cycle performance business. margin cycle and shorter longer been pricing components the seeing both comparable

it. you. Appreciate Thank All right.

you. are Thank ahead Volkmann have ready. now Jefferies. of go when We Please Steve you

morning, guys. you the Thanks. to are improving want that us the to can give like I chain. back really conditions? of go in Good was hearing But you I things your interested Because the just sort the broadly seems current we're year. project it Great. supply improving. comments sort anything through didn't of

just kind of those I wanted So, to up. square

and bottlenecks there's that pop improving but it is mean, so that as here some year. saying issues I and is to What Yes. last definitely we're there. -- up compared still

the is -- it foresee we long So, it's It we're it is whether not in we into there's that be And to conditions. of normal that again, as with we is CapEx to terms constraints saying continued lot XXXX, in cycle, what the cycle back releases we're not that go of not here of chain. perfect. think or is China going seeing supply reopening a the what

that hey, things terms of there's the not So, in a back from to seeing just supply based perspective continue of second we're that these normal happening kind being that of indicators or go trends other realizing going lot be kind and our chain to more realizing lot to are half, we in as need are of teams do to proactive that, that work a into of a on these there. were

versus one Okay. segments two anything Great. points just basis And EBITDA think or the XXX to the relative Anything the Vik, of I through margin mentioned then, about -- other? year. to you think

It's question. Yes. a good

XXX points approximately basis yes, enterprise-wide. So,

than You're trend I going XXXX. bit inverse around think not little a probably outsized do probably happening a because of both overly segments see in little ITS, PST the an bit surprising, more is you right to had there.

XXXX, still run, of part XXX to be trending now, So, side with, probably average I of this largest margins fleet closer got to on think I basis frankly, now speaking, a headwind but PST closer business should is a you're on outpace that's coming Seepex, to comparatively as through frankly, see now going to we've lot little the total the bit points. was room which the EBITDA quite think better more

Thank you, guys. Great.

We have from Stanley. now Pokrzywinski you. Josh Morgan Thank

Your now Josh. line is open,

morning, good guys. Hi,

Josh. morning, Good

Josh. Hey,

hey, dig to morning. wanted into -- good Just

on more into to what compressor of you're seeing complexion across the the dig (ph). maybe even or side broadly wanted Just [IT&S]

You lot about broader talked I know big of as what adding replacement of long. that are to missing roofline? of like more of Or numbers. this this kind it an you sort versus they post-COVID customers, detail, by adding caused some But replacement. cycle can like equipment, looks around drivers, larger those some seeing we mean, cycle. seen the the just I interruption? that a of a like just haven't things been all nearshoring, one has of Are in like I'm in is of capacity? talk pieces go kind so extended capacity wondering you are of CapEx Vincente, they

little that capacity. Rand seeing what new a in Ingersoll just or rooftops expanding we're to perspective, Yes, of even as good ourselves. both I'll of And say bit I a dissimilar of as blend terms in were well we Josh, put to it's doing mean, not

we year, Buffalo our last remember, facility. reopened you as So,

as an -- could consider So of that you expansion that capacity. was

our invested Brazil. We in also in expanding factory

could is creation an footprint We of which So rooftop. building announced top about in you in was facility our that facilities and new just think India, manufacturing actually of a the our India. four here already of expansion on incremental

and as doing think strategic doing to uniqueness goes because believe a it's be from company, we to our that and we're region are and in that close we the -- I factor days very region we same, this customers most way that. for customers the the the So, our and back were have Denver all is Gardner

a seeing that US, driving ability our momentum region I seeing not it we're for China, the onshoring good India, it of that, Europe. products region continuation again, would that So localization momentum, we good in And in of think it see but our because to pretty lot of we're and we flex it's in only say. to our see in in I

where growth. to good on accelerated solutions prepared kind towards solid from said again, question, more that to we which food, seeing news high-growth and unique beverage, we're free, pharma momentum more can provide that your a and, the -- those markets we these because perspective, on end customers, moving And is therefore, technology remarks see that oil of sustainable we're

are order alongside just there when Got just track lot That's out FID, helpful. norm] been there's hydrogen, maybe the established go us [a could you follow-up see timing clarity And IRA there's think on not of could yet. specifically then, that's I that? another making to you're hasn't are of about because watching stuff you But thinking (ph) in it. the guys specifically. a wondering how ready that that that quite a And in wave there? help projects discussion, anything And

that so is in Europe in to kind momentum XXXX buckets. happened on Sure, see leveraging here I'll Europe. are more as dispensing cycles maybe the hydrogen that in One and so we put make where on more expect go acceleration -- we're we And the seeing countries we early in hydrogen Pacific. see of said was kind in US. of that always Europe it and as hydrogen gets start it's And to the Asia are Europe, conversations very we're well about. eventually was and like US, Started seeing in that and that. that, see better it really The we PST we better momentum -- Pacific, going budgetary the moving the the here of read PST core side, IRA two on Josh. said, to in networks then dispensing about it we're seeing move that where Maybe things units, we you and to Asia commentary to

in seeing the through large that or yet side. about terms the been capital ITS, that But we're side have dissimilar. fruition of the talked I too within of not ITS investments come On the that hydrogen, say not it's kind compressor will

be so may projects very we come in that years still to think IRA expect good -- And released. or some of we kind some of you Europe, gets a of on that. But whether funds tailwinds that So, said, as more for getting room that hopefully, couple come. are well the to other there the of

leave Great. it Thanks I'll for color. there. the

Joe now of Thank Fargo. you. have Wells We O'Dea

You may proceed.

over backlog. I'm strong be backlog for quite sounds be wanted start been said it historically, hasn't bit taking guess, that, the more as view on I relative a little a and my normalized like But a of revenue. revenue. billion XX% would over the I questions. that's backlog, guessing, little level, to to think would I Thanks trending, Hi. of you XXXX $X

So, sort confidence you about structurally seeing more we talk the that just normalized of level? what backlog could that sort of a thinking of as that, about should you're within be

normalized Yes, in that say now Joe, would maybe XXXX. I here right

go than get things XXXX mean, way they we'll longer to back As we that that, will and before. see. expect we into were I the

as this at continue cycle again fundamental Our seeing these should long-cycle is releases of view also maybe backlog to in kind to of to we on see solid terms just we're level why continue CapEx backlog to see add that lot we growth have on of while short higher that should a we because that, continue that stated. of the

we're norm expectation we'll that is see of just or on be at right think we this I now, to basically that is saying that we're billion. So, that the for our that continue backlog deplete XXXX, in going new rest going it's the $X saying based what XX% not It's the point to through is not is -- to what we're that year. the coming that

you revenue in the Okay. XXXX annualized to all $XXX the sort amount LOIs M&A revenue include Of that that And acquired. is on of then, just a And currently million of clarification contribution? inorganic that, does included of $XXX XX have? how the much million to be

Yes, Joe, so let pieces. me take it in two

That the and/or closed So, the million of to included date. for to completed in guide. acquisitions if million slide, M&A you is guidance the $XXX go $XXX guidance -- is

beginning SPX two the So the any of being well probably closed the what year, carryover and as but effectively, $XXX Tank Truck Flow everything of impact the right the business, closed of That's this at has the That you've seen which bigger then included. Treatment million. is degree the beginning acquisition, comprises at through as contributions Paragon month. comparatively smaller all XXXX that Air

of guidance. non-closed terms expectations, In any include not forward transactions we do in

as additional we'll like done, current them and if in LOI transactions those that to And XX close, the the including when guidance subsequent stage, incremental would we've at obviously you see start So, transactions all historically, those be transactions guidance. that close.

non-completed or non-closed would be XXXX. for the M&A yes, again, to So, guidance current additive

talking in over you're but -- the course included acquiring million $XXX of the to $XXX that are And about XX those Okay. then million XXXX?

is Yes. correct. That

includes in but XXXX, of $XXX that [re-] impact of $XXX on So, correct. will affirmation on of allocation capital contingent our strategy And million actually what terms to (ph) expect think, to another obviously, kind that the we close is that's basis. million an just annualized the I timing

lot. a Thanks helpful. That's it. Got

of Jones Nathan Stifel. have now We

is now open. line Your

Farley Good Nathan. This morning. for Adam is on

Good morning.

performed you with in XXXX some you China reopening? very expect how despite headwinds. COVID And in you outperformed? specifically maybe color what you in China, well Could So, XXXX, in provide on

a XXXX. just that, kind a just Yes, thank Pacific, to high was whom say lot and having into celebratory a initiatives gear in them of you China team big of last in actually I in night Adam, our so I'll with and off our team call kicking to Asia

are generation vectors our to products our nimble demand of that and team end think those into I unique repositioned those markets. technologies very our the growth seen they've leveraging finding agile generally, the and accelerate penetration as pretty them to So, and China, to being be taken continues and in

finding So, our around electric it's teams all even well very very vehicle agile and are I production those could I what photovoltaic and or very that about mean, ensuring exactly be growth they're think nimble these battery and good as for production. they're that's production, doing. solar vectors panels

acquire to market technology the So demand the and just -- share. they be generation leverage and then incremental to able

early close days you cost work? given the it's of that opportunity, And or Okay. SPX on synergy on provide revenue Treatment then, integration of Air the recent business, could color any Flow still

sure, Yes, Adam.

do did so ITS SPX right in to this year. And as segment drive at $XXX revenue the and did do to seen coming rough January basis, EBITDA due slightly when that be we cost close to in line over M&A see contribution, at and historically. lot with numbers, million, It's that less opportunities in see $XXX type the the multiyear of say course. the -- in we repeat, beginning to very of opportunities X, kind we us you've announced much mid-XX%s Flow kind of a we can we synergy of accretive of expect margins margin Using we than something a So, around transaction do right million range. transaction,

of biggest [Technical integration kind that's and I much days well and in $XXX XX would you guide the as using million guidance. process, expect, say, again, So, as IDM to that's started. tracking the we our expect, going in, included about you things very Difficulty] the are would integration, as single expected, would line contributor process we're it's as M&A of with the had whole And of IRX within the

my Okay. questions. Thank you taking for

Thank you.

Thank have are Snyder ahead you. you Chris. Please when UBS. We now ready, go of Chris

want you. up I to the follow trends. order Thank some of on

the an it going is to to what the we go a out? X.XX jump of beyond into bill X.X then as Should that take book in in an back visibility couple QX Thank And QX, expect XXXX. back quarters or immediate X.X will play from to type of up to you into in we QX, expected have So, maybe you. of orders do level half 'XX?

Yes. Sure, Chris.

shipping obviously the particularly to in the And see on and we is in performance. than bill that the what saw So, book And primarily the QX. well I I attributable half. relatively second here, business. to it guess, largely revenue the a cycle did of see described you X to And business Worth the quite half little way the year, I'll think start during in second you -- over that's QX the in in by Yes, orders see larger, longer X.X the less accurate. that's saying, we ITS exactly strong normal noting QX. it's as longer as

through are despite organic which Chinese -- book this in in the is first first So timing, year. But February the of the in Year to week up. New quarter-to-date January and the in driven the orders is be And seeing commentary, it's that's headwind to February. the point year worth Vicente's versus here to we performance X. drive last noting, Orders the that some order did bill of less than quarter, momentum continuing

be continued the trending. again, by So, encouraged to

backlog Vicente continue longer with cycle As which from over healthy the to remain projects, continues XX-month will a XX- to to good said, a contribution timeframe. extend

into QX but XXXX. and about yes, X, than bill again, to in here So what book be less quite see normal moving we encouraged to continue

EBITDA the my at appreciate margin on No, math XX so up appreciate that and of bps XX to the then, implied bps, the on I And kind year-on-year the margins pegged up seasonality. maybe guidance, yes, color I midpoint.

that run So of it points. the like basis and kind favor. to XXX obviously, of seen multiyear company continue target we've sounds But be out will a laid in at bit your kind that the below below the has rate price/cost the

So, maybe build we talk can side Thank you as parts on just guide? the to the margin there you. the of about some up moving

take one, Chris. Sure. I'll that

to So, in XXX yes, XX points basis that's line. right points, basis slightly basis right XX points, below probably

points that XXX worth it's over note. a said gave I basis noting multiyear expect that on When timeframe. outpaced average years. we in a have few to targets, prior Obviously, Investor things think the our to Day we two we about

we're still that. much tracking in with So, very line

in We to spot of guidance, do is the positive. And be expect I your think terms continue on. point to price/cost

of productivity driving the are the to well of still merit and/or synergies are merger-led earlier. the we merger obviously phase labor inflation, and as seeing point offset to last synergies, degree which Vicente's speaks We any as to

But reinvest is the other here to I think target. part is Day Investor of and growth, for much thing are continuing that organic to growth we drive which ongoing very our

-- resources around corporate are commercial we and as level growth seeing investments in business you and even So, investments resources the at generation of demand IIoT. well requisite some the in the appropriate the specifically to out called as

continue So, we'll be again, prudent. to very

move through as from QX, much to as margin you could like year. the we expansion margins sequentially, XXXX. the QX go in sequentially continue to year-over-year saw we We continue quarter-to-quarter expect to And increase

taking Appreciate all of that. questions. Thanks the for

bet. You

Vicente, like some turn it final now CEO, would the to I you. remarks. to Thank back for

Thank you so much.

to that ourselves of Ingersoll challenges, a think and a continue organically sustainability, believe, say like and solutions. And inorganically the there's innovative throughout kind ongoing that, that the the teams I have our global in lot and at and continue call owners here positioning XXXX, we to in of I done that's because truly macro and Rand our As job clearly demonstrated just as despite because are executing outstanding wrap focus to product invest owners, our act plan we is Rand. to we have business today, as an up they Ingersoll want they And resiliency leader. company

time the you. So, Thank thank attention for you today. and

today's Please call. for may lines. you day, disconnect and lovely a joining. now Thank That conclude does have all your you