Ingersoll Rand (IR) 2 Nov 232023 Q3 Earnings call transcript

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Ingersoll Rand Third Quarter 2023 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Matthew Fort, Vice President of Investor Relations. Please go ahead.

to Rand welcome Earnings Third and Call. you, the XXXX Ingersoll Quarter Thank Vice Relations. of Matthew President I'm Fort, Investor And joining me and CEO; this morning are Vik Chief Vicente Kini, Financial Officer. and Reynal, Chairman and earnings and the our reference issued We call. presentation yesterday, these we release during will available Relations section on website. of Investor the are our Both

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

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

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

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

will we will turn segment XXXX Vicente. At I time, call, update financial this guidance. call [Operator today's over our an provide review the to to On and Instructions] highlights and company

of do, Thanks, to continue new like to acting [indiscernible]. and recent commitments our our our Oxywise, always quarter record I our the consistently Matthew, purpose on to environment, all. and I owners. Roots like and acquisitions, deliver Despite would hard constantly while by in for from employees would thanking and to our macroeconomic thinking employees also changing good acknowledging employees we as Fraserwoods, and deliver another welcome exemplify like their start, morning all work our us to helping in QX.

to high-growth again third growth towards remain can nimble demand X, differentiator, continue our competitive control we delivered EBITDA, activities and direct markets revenue, and and free market IRX, Slide adjusted We in share quarter, the accelerate on gains. on sustainable generation focused what flow. end EPS adjusted by controlling to double-digit cash fueled in Beginning our we

based year once year-to-date, robust our we XXXX our full on guidance. continued are Finally, performance again raising

move key to delivering our to growth As engine Slide economic we X, compounding results. annual is the

XXXX, growth our our model our earnings Day remain Investor presented we committed enablers. of organic, in on During and highlighted We and targets inorganic Day our long-term quality this to last and outlined strategy as page. Investor November this

have an years. per In revenue points organic including exceeded CAGR expansion fact, and XX% margin commitments, we last the and so growth orders over margin and far XXX of X of our basis year

how are slide, On previously we the provide acquired in will next businesses. growth accelerating with organic I into insights deeper you

Slide So the turning to to page X.

Here, we to have is some examples we both examples on from recently recently we acquired This compound testament have PST ITS and growth our driven and segments. organic expansion margin how from growth M&A. of acquired businesses how outsized have and a

have achieved we're the solution acquisition. focus the ecosystem offering for On business of footprint LeROI our this over market highlighting high-growth, acquired markets, of end our acquisition XXx side time we of a commercial growth a multiple leveraging the pivoting left-hand our from We by end and of complete June page, sustainable since to XXX% XXXX. purchase

In multiple. addition, XXX% resulting our post-tax in post-synergy a ROIC adjusted EBITDA X.X is purchase

our can on result IRX technologies we we impressive an what them incorporate do with and once Just how into process.

purchase last already over also this years, over On ROIC delivering high-growth Dimension acquired at was X-year rapidly the is team And end exceed right-hand Air markets demonstrated delivered well has November EBITDA growth environmental our leveraging services. by technologies. the serves Xx. XXx target business, our page multiple business years in delivered the revenue the IRX, of which multiple. post-tax process side given the Dimension demand X XX% and Air past to adjusted on sustainable growth purchase of integrating our generation And X the very like by new innovative an XXXX, of we're launching track a outsized post-synergy has

similar X, on strategy recent previous to be examples Slide value allocation on we transactions. the M&A closed Next, continues to pleased to the of our slide. at We're forefront displayed highlight compound to the X capital

With we doubt these of $XXX million inorganic inorganic puts ability X of approximately annualized deliver the of the forth very year, revenue, have revenue acquisitions, beginning to of year. we at on our which in set target the $XXX closed our annualized we have $XXX us end no to the targets close and to million bottom this million

Let me acquisitions. walk recent X through you these

provider with on-site a in Slovakia, systems. our generation. a broader oxygen to air increases in point-of-use complementary Rand's Ingersoll generation nitrogen This based and is acquisition and of expands treatment the product is which oxygen Oxywise, ecosystem capabilities leading First, technology compressor

Next and Rand's technical expertise Ingersoll Fraserwoods, in leading which for provider is market. capabilities of aftermarket is This Western in pumps services a Canada. truck vacuum the acquisition expands blowers service and

today, was the bolt-on Xx continues are it be billion $X purchase target it than that remains the over funnel the be our The M&A of to strong. of as nature continue approximately exception with time the couple at Our to a larger characteristics very in price. funnel in of RMT. And of

On of citizens the corporate the corporate continue employee us recently XXX ranked we're ownership named a that We're the XXXX. of on recently corporate and Being the Slide Russell our XXXX. X one in XBL top X, as best is to we high-performance highlighted our be among part in the responsibility middle citizen recognized Media culture. top of page, as proud for

organizations the Bucket The Our of making do, In Association, Escuelita Heart with as deeply life Drop FeedNC, La we Bilingual everything better Preschool. and company purpose ingrained is American community-focused partnerships into including such

employees for in responsible be our for to We engagement. to their industrials economic named receiving ownership striving and Companies shareholder, be drives Work increased citizen, our high a employee a to to families. long-term in And Best business believe we're sector, creates addition employee thrilled belonging. service of and corporate sense In model as employee opportunity it marks

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

On again Thanks, IRX, by we balance and in results fueled QX Slide a Vicente. through delivered record operational of commercial X, execution.

X.XXx, incremental with with expectations. increased of which revenue organic was line Book-to-bill margins XX%. year-over-year in company X% was Total

we is backlog to remain in of the As XXXX in year book-to-bill a first momentum the due We encouraged revenue. into X above project cycle, and longer look visibility year-over-year. quarter the of The by move and provides a X convert and the large see below our book-to-bill typically second which backlog, half strength strength received to the approximately longer-cycle in the reminder, begin those up into as XXXX. half we orders projects of fourth as our large towards X% good

of these quarter basis XX% XX.X%, targets a and point long-term improvement million, are adjusted approaching our delivered important $XXX during It Day. XXXX EBITDA margins third adjusted improvement. year-over-year to company set of forth closely that results year-over-year The is Investor note EBITDA a XXX our

per XX% prior Free adjusted versus year. finished the share XX%. for quarter, flow earnings the for year. at million, flow was prior the margins Free $XXX diluted $X.XX, the generation versus cash was XX% cash the quarter quarter up For up

lows. to Total the at are our than liquidity continues turns leverage we quarter which prior near compared billion, both remain $X.X to net was X.X better and quarter. X.X all-time turns, At the end prior year prior And quarter. was flat

X. Slide to Turning

margin the The PST adjusted and company, improved and increased to declined headwinds. basis segments margin nimble points, our the basis inflationary points. price while positive, persistent remain speaks XXX actions cost both of despite segment Notably, which dollar the FX total teams EBITDA prior increased XX% year. segment an QX XXX both ITS from XX%, X% Total revenue increased adjusted on orders margin the company For basis.

share. growth costs $X.XX in headwind for Corporate million year-over-year from and finally, to approximately increase $X.XX up the rate came by expense. for per adjustments. the the in the IoT like adjusted to earnings areas demand generation This incentive interest $X.XX includes driven compensation at as as per was impact was quarter, share quarter well tax And investments XX% $XX quarter a diluted XX%. support the for Adjusted continued of

cash quarter Moving M&A, of billion to liquidity $XXX for on acquisition flow $X $X.X Cash including driven slide. credit cash totaled revolving the availability next deployed to the included $X.X outflows $XXX $XX billion of CapEx, million, on which Roots. and on Total largely the based million. quarter million of the billion facility. for company approximately was by Free our was

dividends $X repurchases top our priority share of $XXX and plan returned year. made of although quarter, million for approximately usage expect primary we third remains continue shareholders the and be no M&A share foreseeable remain full during repurchase the were our cash We the to our annual for future. to in allocation, million we to for to committed capital M&A

to X an the acquired scope of healthy continue and funnel M&A, and we've We relatively This active primarily to bolt-on have past consists opportunities. over the X growth inorganic assets to similar size, in of nature years. funnel

Slide to Turning XX.

to we After an $X.X transform have loans the issuance secured our we across of always billion through planned, refinanced in term debt upgraded we quarter. investment-grade bonds rating to credit X the all portfolio. As of investment-grade continue unsecured rating agencies, being

capital continues structure having capital remain future. allocation unsecured in committed we to fully Our and and near strategy, to facilitate our designed structure is evolve to investment-grade capital a the

fixed of improved floating, weighted result have years to X from moved and and a average on years. As our debt this our maturity X XX% has we fixed-to-floating to debt ratio portfolio XX% transformation,

realized of an an approximately earnings been should annualized share, our million. reduced deliver will annualized has and be on basis, approximately across both of XXXX. XXXX $XX expense by interest Finally, This which per $X.XX improvement

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

year-over-year Industrial segment I margin that XXXX basis an delivered the of Day X.X%. XXs are take points XX% increased note adjusted organic Vik. margin up our Investor line revenue XX, to targets with prior Adjusted high XX.X%, during with year, and set in XXX our XXXX. minute margins with Technologies a our On EBITDA of like incremental EBITDA would in long-term XX%. adjusted EBITDA Slide growth Services these to year-over-year Thanks, strong from of

we're ahead book-to-bill for line anticipate schedule these results. with track in Book-to-bill the in previous we year. of of Xx X achieving on approximately with remains So terms at a guidance, of almost expectations Consistent X.XXx. finished and years

as X-year X the is orders see down those organic QX longer-cycle highlight in for the teens in we longer reminder, that quarter, on expectations, orders second larger and growth are last ITS a we X line a comping first as high of X%. above half cycle grown orders with X.X% larger placed stack organic third As it to are below orders our shipped. typically came year. a have orders as the Therefore, good from Organic book-to-bill in are half

up were and to a up lines X-year low Moving blowers. the product stack, was Industrial Blower double and Treatment FX low the a on XXs. to and On recent Roots' Air continued highlights. mid-XXs. stack, excluding digits excluding were SPX Vacuum up was and also and acquisitions mid-teens revenue orders orders momentum of up X-year line Product compressor show strong revenue

And on and double was Lifting and low the Tools revenue. Power up digits both orders

moved to information product included For previously was which splits, this and in XX we additional Slide the detail have appendix. the lines on on chart page regional

Moving product more efficient competition. is oil-free This to launched efficiency. slide, than the in deliver the previous IIoT we're model, innovation than to a leveraging and X% great products Ingersoll action portion This of is compressor, it ready efficient Rand the in with compressor iXV highlighting recently a of new America. best-in-class XX% new more North the example is

underlying Turning declined markets. We orders X% health biopharma to sequentially short orders which the the remain in industrial experience by Science primarily positive Precision segment decline positive softness the revenue in and and of businesses to in business, both the The Slide were the were the continues XX. Science and about Technology cycle PST driven year-over-year. and end in oxygen Life business Revenue and concentration mechanically.

were The left-hand and page. bottom organic plus of X-year meet respectively, order the side as by business on the growth. targets lead Day and long-term the activities Investor generation track CAGR X%, revenue The on the short-cycle our segment increases long-term Day X% driven in chart illustrated line of growth Overall, and with PST are to time Investor demand in on mid-single-digit reductions. the remains commitments the of

primarily is declines up which XXX X% cost in year-over-year. delivered by was improvement the XX.X%, and our price EBITDA The million, basis margins EBITDA revenue. up team Adjusted adjusted on in margin improvements PST businesses. acquired year-over-year of points synergy Additionally, driven EBITDA continued year-over-year delivery is adjusted despite $XX

Europe, highlighting with brand in innovation transmitter we're the PSP YZ our in largest our gas For partnership natural GRDF. action,

of equipment has X years. lost During European for X we executed Russian Union as with to the and XX% gas replacing the or excited XX-year plenty about RNG there odorization provide growth contract a over XXXX, believe this with committed to to second natural of partnership that We're the very of mission-critical quarter gas next GRDF future renewable are opportunities RNG. supply

Moving XX. to Slide

guidance. and raising continued solid our year-to-date backlog, again we're once the XXXX momentum from performance Given

For is of approximately full improvement XX% approximately and XX%, a previous revenue the We full remains split XX-XX. is XXX where headwind X% a between FX on basis. to a and growth expected grow basis point organic now year, XX%, expected is price X% total company to anticipate slight our volume show which of guidance. to versus year

the has up and at the X, transactions versus to XXXX. to are full billion, the company $XXX from million which for the the closed $XX midpoint. $XXX $X.XX versus M&A of the guidance X% planned for be X% million all and as revenue for adjusted is by increased increase and impact expected EBITDA initial from November up Our year. our $X.XX of year. Total is approximately guidance in billion costs range prior Corporate at completed This million M&A reflects

At the is of a will within XX% at look we the is the table, up compared to finish XXXX. X the will adjusted of approximately XX% puts on we backlog approximately midpoint. year, Based full a full us our at the of current EPS in end the with the as position year-over-year balance also $X.XX, for backlog higher level highs, be reaffirming book-to-bill to near at XXXX. of which and outlook, $X.XX projected bottom which year year record range the We're solid end to enter and

or million, as guidance. earlier with have made in percentage of realized our portion a debt now at XXXX. guidance been on interest initial revenue. As savings the of tax changes being line with and expense prior a is from in Vik projected rate the call, both mentioned $XXX CapEx the expense interest had on They restructuring No spend the remain to adjusted

specifically QX. the we and organic do commentary, year-over-year. On We to included around the right-hand side bottom page, expect of orders sequentially be both some additional positive

QX to revenue we both anticipate and approximately addition, both price to all expected the year. In full and volume be margins in year-over-year. Incremental organic be for positive are XX%

Turning to Slide XX.

today's in Rand even As Ingersoll difficult proving we're position, resilient want to how up are remains a we we wrap I strong that macro and call, in reiterate environment.

quarter show the results These of and Ingersoll thank momentum. is record of results. We continue as performance backlog to Rand. our ongoing want to record you have our year-to-date I of for guidance updated deliver our To and you another reflective each of employees, owners results impact

will executing our targets We focused meeting remain using to engine commitment on IRX. financial our and our economic growth

come. our dynamic capital for highest may strong we to of our continue the have return. challenges and outperformance, sheet And the that nimble to comprehensive is remain ever. deploy As remain investments our and record we allocation strategy, continue to as resilient as monitor are with the market capital and track market and with conditions prepared capacity We balance disciplined the

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

comes from question line from Your Baird. the Halloran [Operator first Instructions] of Mike

of couple a questions here. So

context look recoveries industrial of have, trends the look as us? some in at trajectory I we you portfolio? understand to you stuff. put could you that do seeing momentum any why Are and the the fourth in look you order First, when the for science order about you assets quarter? think life in of signs the points the underlying certainly the the you to of business more But of And the confidence as how software XXXX? just

maybe things first. of Yes. a Mike, so here couple

saw of in XX% -- ITS really XXXX, year we the PST is due what in on kind call, QX as QX -- a on QX X%. you earlier comps to we mentioned and -- really of large QX from been was mean, is prior up tough up the saw As I year-over-year

question So with were orders expectations also had what QX the demand. even we finished other in that line your we seeing to underlying about

will to ITS which up even driven QX a made year-over-year that be up highlight higher perspective is reference at QX really business you was Mainland saw on short organically. actually that cycle business, to than even Europe, cycle more order and side, from being the an order I PST sequentially momentum you that also industrial QX -- the when look QX. look segment, We I mean, when industrial our also short side, by we at

expectations. feel performing underlying that our we So still the to are businesses

you really We MQL also, leads, on momentum this as know, look that. from at an kind we we perspective, qualified see continued marketing stability, the solid of see

on by driven of as the long have we the of kind head orders said of a quarter, kind coming well fourth about that visibility into confidence of fourth cycle is year-over-year we we as sequentially quarter. also points these a level up And into being data and lot what as on the

help rate And things, you where interest in and picture funnel close about sentiment you're all and certainly the with visibility tone the I more the is? demand the thought people think then change on Does My on conversations? you're how on from on should the of to with seen thoughts the that M&A everything the the slide color side some on just maybe like you maybe you and an that. around rates? to interacting process talking And appreciate hurt the lack and LOIs perspective, of question people have gave any is,

enticing side many will lot for sole is our of sentiment see these know, about that Yes, owned us work that think of I do no a we you in to you really a do And that's like big and to, [indiscernible]. And a really I cases, the us. been to you outreach we factor those the has the multi-generation encouraging Mike. I macro in company think to the of what continue M&A where, a driven lot ownership, different, of for think great to transition say and around for as a companies know, the employee on is source positive lot ours, companies. employee to -- well family engagement, transition as how as attractive a others companies that family market by the environment, to buyers lot

I So continued very think M&A. activity we're strong seeing on the

of comes Barclays. Mitchell question from the next from Your line Julian

looking demand looks mid-XXs mid-single-digit normal the fourth growth represents somewhat or I sort organic last somewhat margin. price/cost guide, year incremental wondered, as just more like quarter -- probably QX normal it's sort a at it the X. of and sales Maybe so and the more environment in of

assume that starting a in of for leverage sort price QX, is So placeholder mid-single-digit operating ahead, of growth? top as we beyond next a to sort than point that but there's should year period that, good look the And maybe mid-XXs sales the organic bit for we line, less a little is good rate on low QX?

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

you're accords. on spot think I both

where range of In slightly mid-XXs And indicated we but but or terms go I steady the seen the right is whether full higher this, holding been of forward think that's think very range operating we play, a well. to in. with on ITS leverage, as not where expect be it and call pretty side, year, now, historically, kind it, roughly just consistent the you've expect XX% we QX where to we've that would us maybe incrementals mid-XXs, kind of operate we've to on is

of price single-digit as of and normalized that now the But X% years. into you're And And net much seen get frankly, we more kind lower side move much, the I'd a a into equation, comped then to terms over of obviously, to now would proxy expect to that starting say, realization seen we good last in falling yes, X% be price quite a XXXX. the elevated few you've lot more of pricing you've realm.

think I So on, on spot you're both. yes,

we tricky and PST there, bid else kind view And my And moving best specifically, it has sort from as is good. pretty of here? well. iterated is on the you as how Vicente that year? the parts be now called quick outside piece your of then that medical out from still the PST just this bad, industrial can large biopharma The to understand short-cycle bid follow-up. What's exit of everyone the of biopharma piece that is which revenue

we me when that in people at obvious some year, would think to wanted your biopharma. I but at not talked look next all, why perspectives. It's a have just V-shape about happen

Julian. Sure,

a well. I'll maybe of as too couple So things say

think all XX business, when on -- the even you life been you revenue. past when on actually about of organic exclude science So as about the think XX the orders organic out PST, positive PST quarters it has and

the PST strength you So tells that kind good rest of segment. the of the of

been order life has science, with is about has of this PST the I of but organic been science kind X/X situation X quarters. mean momentum the on concentration. roughly negative for biopharma, which the also business pretty clearly, oxygen life And the probably past growth

now while, a while it's been has been sciences the So little positive. non-life

life even the within exposure when it, oxygen mean, the that I The earlier way these is acceleration others biopharma, the have we our think saw for us days, that for some we think PST. And the one biggest our the of concentration. and think more science I into concentration, yes, really us, exposure. life than So experiencing negative, market indicated that COVID challenges great we I have is biopharma. really the you pronounced during sciences. biggest we're the a yes, piece is But building on end oxygen it's mean, it not about about exposure

So it indicator was for us. leading like almost a

of maybe uptick, we next a V-shape, So maybe next that year, go side of but quarter here so an into not of oxygen as we continue kind better an half concentration the more the in first and the doing business. see from fourth year in

PST growth plus a over revenue be and orders mean, So that see on cycle to segment and momentum slide, even the time. CAGR organically, continues mid-single-digit segment that to we as continue we'll think over you saw that PST, I that

on mean, it's that. improve continuing in characteristics with great to I

a think into V-shape, don't big if don't it's it's biopharma. So Again, -- have again, to exposure we even not that I be it's that but going a one V-shape,

line Vertical Jeff next Partners. Sprague Your of the comes Research from from question

they're that a this question mentioned little orders on mega few of kind visible. we've is, is and a earnings kind elaborate you spirit kind orders into HVAC companies more of starting becoming And of kind more kind of of view? visibility bit of building you of been to and a Are color pipeline electrical sort are if yet, the come long-cycle come bit of see maybe the lot booking there maybe of nature starting that companies booked project season, not, my into just orders the But QX. on kind that on any in the this from you Or companies, Vicente, cycle. a of dynamic? share haven't heard little maybe, seeing of the long-cycle to

Yes.

to exactly that's the some refer what of a remember Jeff, kind that a funds. we're a definitely now those spoke in release there of year, that to was we seeing even or definitely of if seeing conversations. about last being think you I lot quarters lot is before of we're And few these I trying projects large were

build us of gives a And also of giving go visibility, level so how continues so say, a not XXXX. yes, that's good higher terms company the only to as QX a I'll level cycle funnel long bit a what's that us we in but in of into confidence of

couple deals bit It there's I then the in like saying sounds talking billion maybe getting that things little likelihood pipeline. a in and you of the what's of think a deals about likely, you of color kind And which the something done dollar Vik, on it maybe range? was expect going But natural. bolt-ons size was most it guess, in on bigger of I be, would

Yes.

couple And funnel of purchase bolt-on company. really nature, about mostly but M&A mean that's price. third the and those line we are that be on I'll $X it to said as not a that say above our So with the we well I in being and right. very in continues call We a strong there's leg billion should the -- are strategy. think that

to very a It in yes, For strong kind details, excited competitive even of and what where feel of and to transaction. our a net ratio. to actually we next get are move this we're things position puts want getting in from M&A sheet funnel perspective with kind of very Xx but see the balance to how don't couple less executed build we we But very of the being continues adjusted we here over into us with forward a lot terms of than comfortable with quarters. EBITDA debt reasons, on

next of from Andy Kaplowitz line the Your Citigroup. question from comes

can Are Vicente, you're China more your and geography? you've think us you active as give in seeing in market what very color been own generating but such instance, regions growth positive? as orders for Germany, you gains confident on really demand I but exposure that big in compressor are how you think down, share I compressor by Chinese I think turned you will thinking EMEIA remain And to have obviously, don't about EMEIA Europe. well?

Andy. Sure,

from side again, is and Chinese orders overall choppy Day. particularly Investor which continued compressor, in team the quarter market, we deliver. clearly, to the of the be, growth performance Pacific, not time, perspective, an examples China to compressor we'll and and the kind continued speaks demonstrated how the and market saw I So that the soft; into and in that has overall however, Asia another self-help relative leading in the clearly say, of all, we first as the to of surprisingly, revenue on head share more mean, I'll China, one organically The team of you in more driving

solid. in activities changes no remain MQL I'll demand. I significant mean Europe, say in

we the for I even markets, for QX. Europe come mean, on demand We engine saw orders continue is I sustainable side actually generation own to in our sequentially our the end to economic QX sequentially focus remarks, high-growth grew working. in Mainland made And as compressor

see we're worried the gives that these of demand self-help not year-over-year just encouragement that, on this about, tough the is kind comps underlying we one based working. And continued that as So are again, continue initiatives us self-help.

And following just Vicente, maybe up on that.

how the and sort energy As do customers bit your the U.S., and sustainability, when are least how financing you trumping focus do higher efficiency provide cost them versus maybe up the here interest energy products, your higher to balance a with little normalizing in efficiency of sustainability and been conversations they rates has ability on your at customers, -- environment still through cost? have of that's

different energy Yes. And about into the how CapEx as prioritize do where at as definitely the drive be they I'll driving ROI. efficiency what about now say at great customers savings, and it's ROI all can beyond, to this do conversation and -- customers it XXXX the that ourselves even these top we all And Andy, level go it's internally. energy do No payback. are all what they C-suite could for is going payback. to the to looking

this guys on our sell. based again, sell ROI. of how ownership is So They sales and cost total

line comes next Wertheimer from of Your Melius Rob from question Research. the

up the competitive you've response? results that's in this that Just blown continued kind have increasingly Is of comments on you so. And kind quarter has think outperformance deliver, the a sense those few seen growth couple great. market widening what gap of in up have because you've maybe any I market done follow of been it's you in a China the as not weakening. China to the is been a and Do to impressive of able

how on York are And you're comments softening you Are if a not orders I just are New market? constructive. meant really relatively and may, better IRX to softening? they reflect Vicente, seen Or generating your in

Great. Yes.

what quarters, over think ISM and have have momentum. revenue is And great the orders when you we the few helping in below against really outperformance market. is think and that mean are that I XX, seeing PMIs in backdrop and still definitely think to IRX strength been that about able as the deliver tied. even us X been it, past the well drive we're pretty I this I

leveraging us differentiator. I of terms think uniqueness IRX that gives what is that in a as

And by just clearly, about it's what to for done obviously, we're market, viewed exceptionally self-help and strategy the China I'll overdrive. that controlling we perspective a we're almost past think not to like China is it's And I've in And our teams can leverage the and market that firsthand. have of continues through immune in and the this always very but from to also as the say player, local what be getting engine and how we're all that said, is China guided slowdown -- lot myself IRX is and well, in we I of to just use a months, what But quality local IRX. executed execution reputation X China that teams Rob, continue to it launching. as the a the control, we soft driven I we're of choppy. there, see was China in -- now innovation twice great with question because -- as again, China to multinational and helping been and there we're a do But great being the a China, the a incredible. over really

the Wolfe line comes question Coe Research. of next from Your from Nigel

A couple as well.

quarter in then You on the segment assuming covered after correction mid-single-digit biopharma ground. minus a of a low think, of I On is to I could And growth X% that this PST, obviously, we're just this, fourth PST, a now? maybe there. to, lot you where us think remind as proportion

than to heavier up the QX QX is from I bit think normal. a step

So just improvement? what wondering seeing you're driving that term near

the PST the Yes. so biopharma, the on maybe is about quarter I'll on and maybe more segment. Nigel, is, first it side the oxygen is don't science And of for us, say life life maybe the concentration equation. here know, X/X of big I -- of X/X that PST, science overall

been put note kind the segment quarters. of think revenue you that positive have last organic out XX look I and on ex able XX momentum at we of it's to important PST science, when to life orders

kind and diversity cycle the on strength overall or the mid-single-digit cycle plus. that the over segment, confidence gives us that So that good shows long of of that

I the second think was your movement to QX? your part And of Yes. sequential question QX from

That's right. Yes. Yes.

industrial businesses. Yes, It's I relatively a of a have comparatively consistent of slight nominal a we I things. quarter that good, couple order would the healthy expect I we in this seasonality business, would being QX ship business Vicente say, other doesn't, relatively continue Yes. combination remind good say, as that and is to of to see still say I'd QX But have speaking a intake think what what continue healthy QX, call, see, momentum indicated, the, in to and terms to as expect uptick a said, the from QX. amount you you strong and to into expect to see in that backlog, side well I'll on we reflected to quarter. what QX. One, of that to do of I'll a would tremendous relatively where continue

QX we historically. relatively I'd to to would see to nominal consistent uptick from again, So what a expect say QX. you've seen those slight reasons, for

sourced the -- just transactions. but as And banking typical then of Or of Okay. up asked are investment Are processes? auction-type well, a mean, these on I more That's billion properly I follow the great. sort couple Jeff to driven negotiated deals? these the want on question $X type

No, they are for some ones I time. have cultivating they're been property mean we sourced. that quite

comes Ritchie the Sachs. Joe question line from next Goldman of from Your

of lot So color just a today.

you XXXX, kind we expect Just XXXX, to be MQL? first half to thinking X to you're seeing that and orders IPS today your what in so based book-to-bill the continue would of of as the as into expand head above in through order expectation a you're rates on again, then the just book-to-bill is in the

into guidance Joe, yes, what I going obviously, think but for XXXX you with consistent we're to not indicated. construct think I get remains the yet,

half. funnel below a of of say, any above that half in no orders led generally in half, year, as anything And second combination kind then X to think through. normal above to progress the X combined that project typically I a with book-to-bill of that first year, of below through of typical dynamic half will in what and X, the longer differently now, book-to-bill think to the Right cycle seasonality for longer book-to-bill degree the through reason first the X normal shipping XXXX. particularly the I'd continues back cycle, larger

sector. hearing And rate lot you're just the environment of little that what end concern follow-up to think, the right, with bit having a Are any then been, in I'm guys you a I -- what right, with just projects been push certain given at around market you're that. the renewable there's maybe out Great. to concerns just curious conversations least and seeing specifically seeing the markets, to the your the a projects a there's like pushing like Okay. customers? like looks in today like

of material projects Joe, been see not I'll we nothing been we significant the -- mainly to it ready change. or right, has if to pushed really say and is labor on And heard about be the having if sites to which driven due anything, for get just pushed the to done driver context the of getting the projects by sites right. more when being much track rates finding interest the these

comes question the O'Dea from Wells Joe next of Fargo. from Your line

resource I I be where allocation a And start allows wanted on got as growth planning you've of growth that pretty you just 'XX. exploit think to to you is. nimble model for sort

And positioning kind and now? you're that? so how attractive doing underway from those thinking perspective, what perspective, growth in you for are position terms want to What's how see where you market geographic end an of you And resources. most of a is from

are where a we demand seeing in to -- particularly see were what And together in team demand level today question. few go what in interesting the our really I a and had XXXX? week and to we position good how us actually we we -- strength long -- we of looking were next and we position an weeks at it's as generation do thinking do session, our also XXXX? Joe, activities into team expect Poland generation we with again, maybe ago,

kind Europe, very in in that might the lot that be I tell we're doing that what that is can countries we that So click -- detail, you what one from is what doing all the varies and a different work of in even country in undergoing. micro example, for I'll is -- it double by level France driven be tell the might region-by-region of And we Like Mainland at you, on as of you the seeing region. U.K. is of level. within

detail we, the the which at that growth level the few of of we level put those do that's a if not seeing the versus macro, you're micro going it undergo as you together wrong. a vectors So team, that is, really best we're macro to it at at products to keeping kind understand get and

So the exciting piece. that's

a team, a 'XX pretty of we're here and together, that shape. in get we good we feel in good to momentum start As kind

XX% be would customers stage? of more when perspective ROI to would it. Or previous sort of And on system? been that than ROI of any then the the of Appreciate you and efficient ask that natural gave replacement encourage a that about the And previous on the payback sense and to the such I would a just compressor more get to ahead what model the on side prior aging replace wanted compelling of examples just launched oil-free have them kind the natural model it is model.

seeing vary right Yes. XX -- Joe, between I by but could we're say region, to it ROIs now, that again, would XX and months. ROIs

driven really by but higher great of a by also combination payback, it's efficiency, energy So driven energy again, a costs.

XX Scope XX and hard. So than really X or payback it, I think less see of customers, we're of And they it's when to just and those many that to had them great is that what with Scope tailwind. months factor X driving of kind of other one years combine a do the call gives sustainability a great X us that and the with

the Chris from UBS. comes Snyder from question line next of Your

wanted of puts to variables that end? drive from the end pretty the the you about outcomes the the outcomes down range takes I high low quarter. from by organic just range and math. of maybe of would talk the X% guide, ask to or to guide up fourth the a -- anywhere growth on my in The X% wide Can some

of the tell if than I But we Yes. Sure, X a view of What by tighter growth starting ITS and a to spread Chris. expect you here maybe it across that. kind said, we would both is I'll Like the probably, year-over-year it the on I we organic as probably do kind positive segments, that bit on talk based see of includes components, side. here. take frankly, guide

would year-over-year. imply growth range approximately If something organic you're roughly X% the in thinking, of the guide

think expectation upside there's if can said an as kind of would of exactly I kind all I'm record of be really think levels. the well as the backlog pricing continues sorry, equation, in guide organic opportunity again, X/X QX, as speaking, side remain the momentum we we've it on of volume. And on volume given growth, X/X of to volume organic the probably as is price, it context what side, -- seen would ITS back Again, at fall of that you where effectively particularly think that year the I roughly we an about the on and

more seen to a quicker ITS. earlier got course a X you've side, last to of see to to really than the expect go pricing PST in ITS so of years. what little over front. growth, made I'll more that we And to would back some attribute I we've the said continue speaking kind bit the X probably -- positive the out frankly probably to just bit organic pricing on of tailwind organic On little Again, a of PST here. commentary the comparatively what

comments. those expect. to a would on the dynamics see of And as But prepared But be the sides the both equation such, midpoint pricing at the would on longer-lasting of equation. effectively the the expect PST falling side of the we now guide would little us as in saw positive kind of again, we bit you has make tail of a probably again,

follow-up, Really, order around QX, really like doesn't the helpful. seasonal. to on prior Maybe it expecting typically, really improvement seems lower. that's commentary not are QX, into just sequential like for my QXs similar if seem It

these demand of bigger is take if timing of improving? least So Is that through? at we not just of signal Or a that stabilizing, coming some that? should projects is around

it's actually a of function would I probably both. Yes. say

QX. Vicente to of these was some some longer-cycle context QX heard back say perspective kind second things more example, right? on go in QX in think saw we about you saw we of comp, speaking to from -- you comments, the orders, an it some kind prepared year if that of of half and biogas that acknowledged for year, year last last you basis, tough peak indicated And a that we where orders even normalize a created comparatively the So we orders, orders did last see

side facing equation. other of of kind that Now you're the

in QX, acknowledged. very which obviously, comps So we tough

MQLs, You now to. of Vicente play you saw longer kind some demand think I that of spoke a the QX itself stable And patterns, of QX, that think stable kind as to cycle consistent, combination dynamics out. of

think terms trajectory, I QX what sets basis. the QX to both in on expecting as positive that for of up we're to year-over-year from as see a well

on of point or But seen some last haven't bit PST. seasonality noise, itself the the you some with few is that be any the necessarily degree particularly I Yes. whether seasonality more that ITS dramatic wouldn't this other a years. speak there ITS Is little I obviously, as side? of prevalent, guess, of no particularly in it to out year,

Jones line comes from from of question next Stifel. Nathan the Your

of for question channel on if impact inventory Nathan. first This is any, on Farley is correction your inventory. business? What, having Adam channel on My

again, closely sell-in sell-through ITS the nature ensure serves well really sell-out to the the PST monitor that from of kind an really there's sell for overstock our -- destocking that and businesses Yes. of given the on would And serves prevent I the the the getting or products, distribution, kind on for customized into activities we segment material that that segment. no those of through highly we our situation. customers really risk say, Adam,

probably -- have the that to this X points doing been as really distribution to I view over on have data good past mean, we what's the -- we channel. a going have we years And way for in

on That my Lifting your show under and follow-up, really sense. Tools ownership. growth. solid to And business continues improved really has That the business Power then makes Okay.

So what's past. been has business driving noncore the the that considered strength believe in there? I And

So portfolio you for thinking the an portfolio maybe about update could potential on, the you provide and are rationalization?

Sure.

acquired the now PTL ITS kind average of Ingersoll that well. with mid-teens that point right to really point. So margin that getting out, close you're blended And PTL came absolutely to we in and kind EBITDA incredibly pretty done of business Rand, get has it's to when

the So while still business. growing great improvement

of product been new nature has real The a performance lot really introduction. of this

new has tools be that could exciting is So here piece some of launching performance. to next-generation product. continue well done think lifting the as think we we And into really to job going they're reinvigorating set the look as good great a that a team of I see mechanisms XXXX, as

at we further turn And questions time. back call I no closing remarks. the for in will over the have queue Vicente this to

our Ingersoll all owners Great. across into I to said and thank, Thanks, as of Rand close want a we kind XX,XXX for year who have employees we level great Ingersoll and the everyone, XXXX. as of here of are of we on performance go call, And your the Rand, as again, interest.

and everybody. So for of interest forward up you, thanks many catching you. thank Thank you, the again look with to

conference Thank concludes participation, call. This now today's disconnect. and for you you your may