Ingersoll Rand (IR) 1 Aug 242024 Q2 Earnings call transcript

Good morning. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ingersoll Rand Second Quarter 2024 Earnings Call. Please note that this call is being recorded.

[Operator Instructions]

the Relations. to turn President Fort, now Investor of will call Matthew over Vice I

begin conference. may You your

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

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

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

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

these our an presented on comparable guidance. to a on most call, measures will the are You the reconciliation available presentation slide segment Investor both our accordance highlights can in our earnings financial of and in which review section On our of today's find and provide website. release, to we of our and company with Relations XXXX and calculated measure GAAP update

over time call ask other the participants. each For today's question time, allow caller will follow-up session, turn Q&A for to and that At Vicente. we keep to X X I to this

quarter on another record Despite quarter X. environment, challenging corners think demonstrating engine, and acknowledging Thanks, and to of work, continued us employees like hard to strength record would to the [ our for IRX. the dedication and execution Slide like begin our by team another Matthew, QX. morning macroeconomic our ] in Starting thanking and to delivered good I results deliver all. continuing helping act their

again raising and our performance, guidance. year our change. conditions once nimble we And XXXX pivot to are solid remain based on are full We prepared as market

to Slide X. Turning

to growth page. and Day describes the durable delivering deliver committed competitive cycle, IRX our strategy how this We remain outlined Investor our is economic Our over differentiator. on long-term engine we targets as compounding results. our

to And unique like we Slide long-term X, expect recently pleased update provide closed let With on a me expected that deliver I creation. value continue growth our which ROIC mind, X. to year achieve We're to highlight mid-teens together transactions, with inorganic combined in ownership an average initiatives. to On start initiatives. our to our mindset, with would of are brief by X growth

through you these deals. walk quickly me Let

complete giving CAPS, a which generation access provider of end-user is relationships strategic example This leading a us channel of First, services. technician install large expansion, base, strong a air is and robust to and network. power great

we pumping technology Fruitland, Pumps, high-margin have mission-critical, across lastly, applications. which markets a is high-growth expands And solution low-flow Next India. sustainable end with our Del in

XXX good On of our of page, the exceeded of revenue the us for to already have basis of target highlight Dover along like I'd XXXX. start ILC to with within quarter, points, the far inorganic well the closure these we setting in up annualized bottom the transactions, XXX a with that closure

funnel. that purchase In price deals couple with size. earnings in active in and On to addition, continues a bolt-on we call, $X billion our stay the of funnel mostly grow mentioned prior had very deals we the also

M&A to and shareholder second of these is the committed decided this transactions. from approach remain creation through to in very away And continue that we to one effective walk long-term disciplined our we larger During value quarter, capital proved to allocation.

annualized year, inorganic bolt-on further revenue targets. exceeding expect be deals later announced the We to more our in

the biopharma Dover deliver the exposure want On so XXXX the ILC niche excited of positioned acquisition, you walk unique like dive speaks to business accounts well is to which market With approximately why through X. growth product double-digit to Slide Turning to about business, much this slide, into offerings take high-growth for in minute business. than the have. to current I the we're this and half a better of total ADCs, and and GLP-X and in solutions nature beyond. and we the therapies to and biopharma The is performance deep

used therapies, with glucagon-like start of peptide-X management. or type-X diabetics treatment Let's GLP-X are which in weight and the

manufacturers annual are to With both and XX% market to growing their the capacity years, X XX% rate growth of the meet rapidly the market projected current over next expanding demand. GLP-X

already into bill We of proprietary of single-use have becoming for qualified production. with process, an production our deep and integral GLP-X long-lasting our materials customers, their technology part validated where relationships is the

our As their these CMOs, products, within for validation all lines time to start-up own risk. our cost new either customers required and inputs expand production lines, or facilities minimize capacity,

used the products provides As and illustrated they the in of consumables reducing are page, compliant technology side best-in-class proprietary our the their the on deliver the across customers of in ILC variety other manufacturing market GLP-X process, a assurances single-use right-hand to giving to containment steps that bags, Dover liners risk. and of require drug terms cross-contamination

next the conjugates, type approvals of been of drug on to development a recent used cancer X is primarily drug market or therapies. have treatment for with ADC ADCs which years, in the double robust annually several technology. driven to expected digits in There efficacy are years over grow therapy. pipeline This by Moving antibody new the this

is alternatives. perform we than more XX% clean-in-place Our And a and proven technology. to clean-in-place than better patented cost-effective technology our both containment technology believe is XX% to single-use

single-use capacity lines and to existing new leveraging continue We see customers their convert our containment technology. production install

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

organic challenged largely We on growth our and QX we provides with X.Xx. Vicente. healthy guidance. Organic for a orders through full operational a revenue macroeconomic a results the book-to-bill environment, improvement year-over-year XXXX EPS XXX balance was with as company commercial out X.Xx. point declined XX execute book-to-bill to solid of The Slide of delivered back Total quarter IRX. SG&A. EBITDA X-year year fueled the stack. XX% year XXXX. This with orders of in the X%, X. with saw $X.XX of quarters QX and million, backlog XX% finished gross double-digit for per EPS expansion, to and year-over-year line up strong of the margin us adjusted second the conviction by was X% half delivered margins the up Consistent X% our growth the in on partially which for EBITDA above basis Thanks, investments earnings marks Starting in gives finishing first predominantly Despite growth in at year. the increasingly company revenue improvement, of a delivering $XXX expectations. by of of up growth of for XX in sequential through guidance, XX.X%, total us company This offset the and in a X execution with quarter half adjusted last of the driven is Adjusted consecutive quarters XX% double-digit compared prior share quarter, beginning X and

billion, for total cash was at flow hand cash Free $X.X $X.X the end. and quarter on quarter with $XXX liquidity of billion million, was

by which prior year. the is net was Dover. the up driven increase of versus turn ILC This primarily is $X.XXX Our X.X billion acquisition X leverage turns,

at leverage anticipate do we net turns. year, full the X.X approximately finishing For

X. Slide to Turning

ITS in increased XX% and the increased revenue PST largely basis up points margin from at Ingersoll adjusted For margins line for expanded FX-adjusted EBITDA basis, year. increased quarter, XXX points, The prior an X%. company QX EBITDA Overall, Total million the the segment while with Corporate XXX total costs Rand margin in increased the on basis orders X% segment basis XXX $XX adjusted expectations. company year-over-year. points. by were came

was XX.X%. finally, EPS And adjusted the to XX% for adjusted share of up an $X.XX the including year-over-year for quarter rate tax quarter per

billion cash which which next approximately $XXX totaled quarter at a turns, based facility. X quarter X.X the million, availability million. increase on for billion on flow revolving billion slide, $XX company of CapEx, free liquidity of year-over-year. cash was $X.X $X.X now our Leverage turn is the and for credit was the On Total $X.X stands including

through was and billion which of As noted $XXX $X the earlier, in bonds by in million this increase ILC Dover, was cash. primarily purchase funded driven

well share $XX within cash included quarter, dividend overall million our for M&A to $X.X Specifically $XX shareholders the in $X as as to and deployed returned through million repurchases payment. outflows billion million

strategy as we cash M&A continue being we with expect and top use Our ahead. primary unchanged to capital priority of our our look remains M&A allocation to be

that On page, portfolio. debt a we I'd our important can the the see note which right within side investment-grade quarter, the X rating fully to highlighted of the a say on like notch minute have from This Also that now transformation take for solidifying several we you agencies, our of Slide to underway status. further XX, transformation a each X received upgrade to structure. I'm investment-grade highlight to pleased of been years, and has the

in for unsecured of structure, billion terms $X.XX with secured acquisition we Dover In investment-grade of capital purposes. of remainder issuance billion $X to used the partially bond May, billion general ILC and repay were term issued overall was legacy $X.X of bonds. our to used loans fund proceeds the the The of the retained

In to on further to $X.X from billion, $X flexibility to the provides opportunity addition, which billion of increase we our initiatives. execute took strategic the size revolver our

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

allocation capital investment-grade and new designed remain is our strategy, maintaining committed facilitate long-term we our status. Our structure to capital to

into $XXX annualized to we $XXX our move expect Finally, outlook is XXXX now XXXX. million gross On interest basis, an be million. approximately we gross expense interest as approximately

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

Vik. Thanks,

Moving to Slide XX.

XXX expectations. X% note was we segment X% order down year-over-year growth of sequential Our basis primarily margins up on Industrial with of XX% XX.X%, by margin revenue driven primarily in approximately were were to last EBITDA points organic year, Service by gross which Adjusted was saw onetime, orders was Technologies year. from with growth QX which growth line of X.X%, top Important and delivered largely prior of compressors. expansion. Book-to-bill driven the in which that solid

was highlights. note in double-digit QX low we positive that up Compressor digits we EMEIA mid-teens. were after growth to growth good revenue mid-teens a of in Moving Compressor in the and of program healthy up comping up orders were still single order mid-single view banking digits Americas, orders which single China. quarter, saw was QX across still Industrial to the It's Asia XXXX. low XXXX. excluding and while growth Pacific, revenue up low digits

action, recently Rietschle traditional XX% launched patented in the This blower was high-speed For a technology, and consumption new we're a in cost ownership to for by technology, offers up blower Europe. energy enabling productivity oil-free technology innovation XX%. reducing total customer compared of which Elmo in highlighting to reduction

is It achieved the encouraging to The growth of million deliver organic segment business X% X%. a organic Science Turning of XX. PST $XXX order EBITDA Life and approximately Rand to saw XX.X%. that with Ingersoll see order of Slide legacy margin adjusted growth

orders with on short track orders In the segment business remain ship year-over-year. Investor remained remains organic the and addition, see the in meet long-term book positive up about order growth growth We commitments. of digits it Day stabilizing, mid-single and cycle our positive health PST to PST underlying we and

For for within brands, our innovative production a a biotech micro-fluidics the handling well highlighting of developed Combining labs Rand legacy different Ingersoll the offering to product as in across multiple personalized as automated technology extremely create innovation liquid system in PST customized action, business. we're an therapeutics. we have R&D Science technologies Life

through expected to technology to is existing This up XX% versus XXXX. processes productivity drives XX% that a in grow approximately innovative market

qualified the as MQLs. A slide, cycle we of about market a our next always of short-to-medium spend business would On to the questions leading a I leads trends our indicators. lot get key indicator marketing current discussing minute or is leading like

on illustrated top continues grow. the our As chart, to MQL

organic QX, In year-over-year. saw we MQLs XX% up

encouraged of As systems. our funnel the at funnel for compressor activities activity the the key half first longer-cycle we up remain one for indicator as the component year-over-year. is engineered-to-order look XX% in portfolio, We

prolonging an While the convert have MQL been indicators another. decision-making the elongation time to an we to have process seen of leading the encouraging, with in the

customer are expectations, we in very primarily stable, EMEIA The contains which of feedback cited XXXX is this perspective, is to Middle same back many time growth, on most some engineering hear too reasons. is of to But EPC and India growth. pockets readiness Switching the this, XXXX. look the deliver projects and markets of Having situation site mid-single-digit said at happening and emerging we capacity. we multiple revenue regional often encouraging impacting Americas a pace organic the East. see the remains from good to as

growth and in specifically the Asia China key Pacific driver is a of our reduction guidance. organic

acquired recently as on approximately deck double-digit $XXX growth. Moving remain the from ILC largest M&A. driver, million revenue next deliver business of incremental in strong approximately We're The million revenue biopharma anticipating highlighted growth. earlier to of XXXX. contributing Dover inorganic our track to in the is $XXX and

Aerospace be lower-than-expected which & is business, levels and revenue related predominantly spacesuit, However, million we expectations referred the space do next-generation initial $XX to Defense our anticipate that to as activity down driven versus in this to approximately by often is our xEVAS. the

move in acquired and the expectation is up solid overall our As recently our basis IRX, The XXX M&A performance we between Slide initial to grow to points XXXX X%, execution is versus given our half, expected to operational guidance. of the again XX, guidance. we are which once X% raising continued fueled company our revenue by first

prior X%. our anticipate The guidance growth expectations, slide, largely the in on previous in specifically attributable organic X% range lower in discussed to we is the range positive the versus growth reduction to organic As China. of

now be Corporate our for as XXXX. are to at year, incurred $X.XX is be is and projected up XXX the for M&A will which the for XX, basis EBITDA which of the and M&A guidance. billion $XXX all headwind as quarter costs relatively per and to expected X% completed the compared of billion, million midpoint. balance year. down transactions a closed range Total full approximately to which of to July evenly is $XXX $X.XX year-over-year expected planned approximately XX% million, the the in contribute company previous be FX is is at reflects approximately points adjusted

the be and versus up XX% to approximately year-over-year of guidance X% at $X.XX, projected $X.XX the within range and is midpoint. is EPS which Adjusted prior

side On changes of provided right-hand compared May. included the bottom we year XXXX in latest guidance the the our have showing full previous page, as guidance a our in to bridge, guidance

is the $X.XX improvement can see, in adjusted year offset from associated driver in operational EPS the our execution and EPS a adjusted an also net primary adjusted guidance rate. compared growth impact in FX. you We're full improvement by tax interest partially to previous our As with as of increases seeing from our

the to The Gross interest be quarter net million a guidance line expense is approximately count, the in will approximately relatively tax to and $XXX per finish be rate is for $XXX balance evenly incurred now expected expected expense to of and CapEx percentage or year. cash be between adjusted made on million our will interest with XX%. changes guidance. to adjusted and curvation No spend share revenue, XX% in all previous year of our have free been as flow remain net the income

Finally, to pleased as we Slide I'm very teams turn to overall with how despite our execute conditions. XX, continue market

the our the our deliver recent our results momentum. on is continue first our Day durable of guidance continues CAGR X-year half year we That inorganic execution guidance, adjusted deliver of ongoing for updated organic CAGR with we IRX, above growth, targets. to over full outperformance deliver and robust to We and cycle. continue to show We expect to excess for of approximately will of reflective growth this X-year think performance combination and XX%. expansion our results XX% a midpoint margin With Investor most record revenue expect be in of long-term our to the EPS. in guidance, XXXX Based

of We you To hard for durability leading showing our of with as while Thank to and combined owners impact portfolios, value company. to want you far your delivering of attention. the company long-term the shareholders. each the of I believe our the strong focused power results work our ownership for employees, you IRX, strengthens and have thank mindset thus resiliency, the

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

Instructions] [Operator

Halloran with Baird. from Our comes the first of line Mike question

a change I all the assumptions. quarter at a with Revenue half If coming start line reasonable look quarter. how the consistent let's it progressed, came the at levels in to feels generally second into equal. on orders book-to-bill, in down talking The level, second were organic little with else the the you top So what bit.

commentary the piece. about the on as of close transactions these some and well understand of longer China little as certainly to I pushouts the a orders

that saw July you're maybe any environment if from beyond And just the of some things changes you So there two, demand comments? out and twofold some the change seeing that that One, you excluding could underlying parse of the project there's about was something China question. pushouts trajectory? elsewhere a

you, I Mike. quite No, mean I thank Yes. up you think actually priming well.

of the So saw the is think question how kind we concern change mean, in answer nothing to first no. your gives that the definitely us I we July about in it. that and

of expected. I think said, first as I the also, half operating as in think you we kind mean things I exactly are

still sequential saw ITS the improvement on segments, but actually -- half, we orders be positive that very even improvement with not good think see good that to we continue second between some the about X% to obviously can years, and implies of similar improving in guidance some organic to you anticipate both EBITDA that we'll PST QX but a and which to we the sequentially. good also phase-in in improving do saw and prior only and kind see revenue very when revenue here You QX kind of also growth

in the out by kind the of driven we're of these in programs the government place of although which in reduction replacing driven that the of in predominantly we improvements the together we level really July, I of saw activity Again, guidance, China, teams hear we fairly terms with is also putting by QX QX from month of by to also encouraged China. equipment what our terms encouraged market. was think what is positive. in were And But in new

market I also will onwards. prudent from of say, second what and and be half not kind stable here China it changes taking feel I of more, -- in indicators would We we're of say that very to necessarily market continues pretty kind that the the of is in terms I activity we in keep that other here in approach market good. materially leading terms the not I acceleration, MQLs were mean any actually terms just of about, show mean, that be talk to we changes dynamics. which in to transparent and see necessarily, funnel always

by this velocity through those kind what or little it some either more process, call the to be seems of we think a of converting bit elongation the MQLs formal I is we in elongated. of of driven few bit little what driven that Could points. elections obviously, and about and by There's a that site constraints EPC be readiness. a be could or geopolitical different capacity hear

I just we is based to prudent think, in could this XXXX. as into that about into here of indicators, our kind we the what good do view, more out we wanted as visibility these on of kind be And second leading play half. see on head go we good how feeling again,

remember makes change that That that it it? pushouts orders correctly, the guys but cadence were to negative book-to-bill way numbers? quarter, I still order if positive back half inverse you Or shift of And from the was on that these think some does how Is sense. book-to-bill. and then the and front half, about slightly do last articulating the

No, that's exactly the way spot Yes. to think about it, on. Mike,

next from question with comes Mitchell Our Barclays. Julian of line the

seems the like of it on organic guide. pivot Vicente, point sort Maybe the the China was

bit maybe more color So little a there.

ground midpoint guide embed of teams then first Ingersoll the sales in revenue exposure the sound organic it, of some for mentioned please? half in just what revenue but put does the China what second maybe the of in were sort Rand trends remind And the year-on-year of and more the total us, half China, down year? around China guess, on I numbers optimistic, You

color add is Maybe let this Vicente and Julian, well. Vik. I'll start I'll Yes. as some

described in consistent And base China. question, APAC that so segments, that In base. note with think both and consistent it's percent your in historically, important about terms XX% is PST. ITS roughly how is of somewhere Total of the this the China share revenue I of we've about of APAC and a it both is statement lion's across the fairly preponderance that, is the high-teens revenue -- probably to of the first part

that I'll and which, the of To the first in the kind half, my the growth expectations, we APAC, it the effectively is half in call side. important In down, It's biggest of the of just is then stability some stability as do expect year-over-year, first of revenue little half commentary digits see give note, total also and course, let's actually revenue And move rough the the half, still comps to from we Vicente back obviously, be a focus year-over-year, to on say, progress terms driver low indicated, meaningful sequential, speaking, specifically second comps numbers half double China. we to half revenue do base. the as get from year. more of probably first flattish that note half year, to back to pretty first on a from the the in the bit China closer perspective, to And continue to I'd half. but to easier, important comparatively moving in both second

even The especially add the of large we to that kind kind of in that to there, you which of this momentum is some cycle, projects, still kind excludes of China exclude there, good other I these projects, long were long core is of order cycle some thing think color of fairly business, Julian. see and if terms that

quite even challenging performing that say though environment, well. actually this they're still I'll So in

And then quick just follow-up. my

the under versus half to thinking sequentially $X.X XX% quarter in QX about are your revenue-wise, way kind some of just it? billion because don't of kind I have EPS. early QX seasonality. and think sort the just over fourth then the And in you that as distortions think when in is, know, QX. guidance Is year's we $X.X second XX%, I of about within sort the billion that QX maybe of about of closed of Just realize guide, of we kind But third June. acquisitions think in we into there's

Yes.

think it, think So, think around I to probably about that's you're right way it. I and the enough close

is not back slightly towards on seen side be half what So earnings interesting half. than year, in That weighted whether seasonal dramatically side, prior more revenue you've enough, on the the I'd say the front the than it correct. phasing, different or the

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

Vicente, markets. of a kind of in bit general, little the particular? like you're sound more but in the maybe PST of in channels cleared, kind can remainder drill the what's for and the turn what biopharma feeling of the markets is just to It outlook does you there. in those seeing But on the kind on or going of speak in year kind channel

kind Yes, in Life and let's absolutely. couple as it Jeff, first let very, of all, very about so business business good mean, talk break me in momentum I you at of of a things. into saw, QX Rand the very the legacy Science nice Ingersoll X%. quarter medical growth with

see. actually encouraging very that's So to

to some, put there. wins continue I'd we in product innovation action, -- saw we in say, action And the you the good as that

team medicine, -- good particularly getting around getting that I'm is see to very which is personalized so very cancer some And treatment, to exposure encouraging that.

continues teams, see be stay double-digit the And expect able saw continued of business think ILC there. remarks we months X generate this growth that that that the momentum and into And we're with encouraging good ownership there go the they're the of now some we meet as think to still to biopharma. And with on I out in year. I prepared to seeing for that, you kind of we top Dover pretty team now I what mean, I and think on

growth. technology outside how that seeing particularly to end focused markets and specific are our again, kind be we're nicheness to So product trying of speaks the on of and very innovation good

kind a just But How half? does here? And maybe industrial the this total maybe shifting attachment? into service, towards Is with it then tech. bit more is little of on biases what's growing look going back it IR, maybe service

question. Jeff. Thank the Great, for Yes. you asking

about think I care to and excited that the packages attachment. we're actions all be the around very we doing continue service the

of a I the a continuation getting week matter here, right level. together talk now As of this have even taking service we to next team to about kind of activities mean, fact, the

kind even in service with Ecoplant better called saw very So acquired continues also with us is And a Australia, and Ecoplant of we you regular some that's what just we're give attachment, whether company to on of access continue to we also larger more CAPS it and footprint to see be ready but service. a seeing better progression. channel, that as encouraged

to for continues be priority all forward. us we high service of very move So a as

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

It quarter. I So cost price in the and my market. gross of and you're share on the a not question on you wonder touch competitive winning could And Curious price little is in margin. how that have if curiosity, great bit or increased it was bit, dynamic increased how kind then spending a be. just can spend. you what into out when you might you that higher wasn't margin, but and lean more manage gross that of of -- kind

IXV initiatives as gross that about talking even were The higher on recurring Yes, the as pleased question. question. but expansion, as a great mentioned, And Rob, last we margin see very revenue the just you of well execution like that. streams [indiscernible], to lot of the driven through

mean, deliver demand definitely absolutely, technician areas service margin to our many that of on like force to R&D continue So other recurring want needed, that? we expansion as EBITDA generation, invest areas to is and activity you gross to inflecting into all very our in on whether revenue. margin. and I can grow And Vik, investing. do sales price do I'm good cost, the comment that into sorry, us that some we're really helped expansion

Yes.

direct entire fairly approximately On inflationary kind we quarter, similar the what say, the material to segments. between X.X% the just the saw X And price of perspective, the was, then very so say equation, move from in sideways. across is enterprise, an in side price to I'd commentary comparable the let's the cost continues QX. specifically side, say it of I'd

course. say labor a not but lot the kind on I headwinds a side, of And what sideways. normal then would say, I'd So relatively year-over-year of on basis,

continue translation other see spoke to of momentum organization, to the reflected gross some along good initiatives the to. that good that So line from with profile, Vicente the bottom again, pricing margin the you in see and

follow-up. minor Got then just a it. And

forward, feel going the looking any forward new you Or X does stop. can now? as same. And commentary? price or as the roughly pricing years? normal Is And far Just like it see and I'll X or what

Yes.

it to simple. keep Just relatively

of said which I to where think we've think say. norm the last a pricing that should of net seen more little kind or will expectation of be. should that think X% we indicative back year half. expect if half as range to 'XX level, I I onwards. We a you've back I'd pricing the that X% we still is of gross probably kind in half, the for pricing carryover is of X% around here as you where the that's pricing the bit XXXX levels first X% little some good return were would bit about for of between to, well headed we're from actions And historically, benefiting to probably a But from say,

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

come that activity. there's activity, U.S. double-click the with you're of I'm particularly point, really quickly have And around we in if Vicente, the these lot but curious, the seeing look, guys that's happening ground. can projects commentary like, started, they're as orders the wondering because at just have of, just projects on just I'm and mega on obviously, seeing? broken the project but MQLs aren't plays this a a function you that

Just us that around be any helpful. give could color would other you

long the perhaps cases, funnel creating of years would that the to medium in I long would we a increases, seen X slide, kind there the release elongation to question. by backlog good short where of X more I in separate EPCs and Joe, Yes, we continue I And And say of projects those to view kind we cycle. that say to have but that on then kind of some having see -- cycle, cycle they things, more some on orders. into is on of continued the think and driven projects that the how try mega to basically large continue delay X

see there we as when think is they made think released, news lot So ahead I it's better said, we I think the why just a on around even and that's perhaps "Hey, it's think we this good -- that that." as particularly of momentum maybe get we will we some commentary, that about projects XXXX, as

So mean show continues that's on to that the -- made some short mean, second translate double-digit getting we're is of activity cycle PST. good for that mid-single double-digit digit into a the MQL, growth to kind us actually to commentary to wanted even of of on ongoing kind we're from leading which all a seeing how on customer NPL cycle, quite that indicator be really on short performance I for I and just I the We us. perspective, medium growth an at new business orders, we it quarter. and PST Clearly, is market in a an new year-over-year. penetrated think but doesn't them orders the And is as just great we're accounts instigating how indicator base. not that as into and good around

this is guys know number. the take year great a to you. the take congrats from interesting from like, down number value other for a how you defense $XX up the see I I It been question, going standpoint know but helpful, for has aerospace it. And different for you and sheet to Got and M&A standpoint. super it debt ways, important by a is then a variety that's forward and leverage of million. how look, a balance small on shoring That's my Vicente. creator

that part just acquisition you of And piece of I that came the think that, that's Dover completed. the out the ILC

is, the like forward about you you might acquisitions evaluation as of that have that are going I buy managing thinking you pieces How these that these thinking be you'll you're and your look of companies through inherent process? volatility. So question there as acquired guess through kind

great Yes, Joe. question,

a a with biopharma Sciences we this business things exposure, good aerospace an better to between medical if but particularly XX% we talk our device about, also we're I the excited spoke for about think about is that of the think optionality. blend very good Good about business. is to -- case, you company, the ILC Dover, understand. always Life total Sciences, And and bit And exposure basically component. very good which Dover into XX% when of Life being learn, of approximately remember ILC in if you about excited

can the or -- what a think But with the business. like we is So higher as always versus it's to another. we on the one know we side the doing that I of and you ILC forward about emphasizing view that and penetration to then more we on continue more it, the selecting Life strategic bases we purpose of been whether do had Science business, Dover with it pleased carve-outs have learn historically, go with is that

Andy from next the Citi. comes question of Our Kaplowitz line with

of out in of Vik, the the In revenue center, growth in flat terms first half essentially 'XX. you started organic

grow in of end think half. to X% So I that second for the guide high the now of hit to the order your you to need X% midpoint

So that you in basically status your see need assuming have constrained short-cycle midpoint? in of easier but incremental we Are long-cycle more remaining any you acceleration short-cycle to just growth? more comps, to somewhat achieve do contributing know terms in quo markets you now markets businesses

Yes. Andy, this is Vik.

way you've is correct. described it the think I

the calibrate to just numbers. So

I X% back way half about think you're it the right the X% is of year right, growth to in to the think probably system-wide. organic

think let's what the effectively think hockey call of which the stability, expectations, that terms say of preponderance down yes, I implied. the no in we pieces, stick changed here China nature organic just moving components growth the would relative guide. I it, and half dramatic, taken Obviously, anything the is improvement is in of back or what the we've

of execution I it's think So the backlog. now

half, factors little this are have other You think business seasonality bit in where half year. I And a we know the largely different that's is you no than stronger that of typically accurate. second mentioned first here do the

the comfortable guidance So I think as with provided. feel we

then about in mean you That's EBITDA down PST significantly what maybe happened it's helpful. And QX? talk I can to margin revenue. adjusted sequentially higher despite

recognize the else there acquisition-related of revenue But quarter? ILC in I happens margins something I margins was we or there. the coming accretive think thought in in fair Are segment. acquisition there's in Dover a at amount

just to first, bottom ILC both and and so we say Andy, have with Yes, line address a largely the results X Dover profitability perspective. And month expectations second part in top line question I'd from your in QX. of of line did

QX, think, margins revenue the some just attribute EBITDA XX.X%. more I I to nature XX.X% think balance back you from and should that read mix from going we Nothing and then generally the the those wouldn't frankly, into better QX that course of here about I half QX closer than QX trending any here, than of of think, sequentially that normal as and to speaking forward numbers into about business. year, of absolutely. to things into the anything the that further

to line that think margin targets I So PST. Day EBITDA Investor don't next over with changed a in has far getting anything the years in mid-XXs for as our few context as our profile

So nothing respect. in that changed really has

Our the line of Volkmann Jefferies. next Steve from comes question with

answered. the back Most go of my activity. I'm questions the indicators, to But of curious to your are MQL and kind funnel

or changes track must kind as or time You win conversion there? to of something over rates well. Any note

we Yes, on changes no that. do. And

through But basically we no has velocity kind why change changed win it orders the then that projects of the that, what more that reason of of basically maybe funnel and think terms or because been and would has call elongation. rates in those in say I the track and all also is change I the we that.

then sure this rest of addressable than be of And which sort think, not a providing a I Does to more open kind but customers, power-by-the-hour I'm of bigger you you CAPS what this sounds power of of type can curious most like and where acquisition. new air supplier a I'm about this Okay. reading a across up the kind right, actually if different of service, market? this I'm you're is area do.

distributor. power the power mean, I nature, but would I have mean, in small is They all have things. do interestingly -- of Yes, they're enough, mainly I for Steve. side that centers, they some some including that, say business even actually I compressor mean provided primarily amongst data a

it's think some how and I that So learning, an can that technology Friulair seeing we're have we just interesting with we chiller interact. we're area

I that learning we're So a definitely on side. lot mean,

have I the like Rand over with the the I legacy our Ingersoll about Rand. cases. that very do terms it tremendous to with a programs connectivity addition that, level of of those think of we're some place to air, we strong of already customer already base have Ingersoll or by great in In we footprint good many side fence air and hour and the of even in things CAPS. in Australia, mean business, great us very a Australia of in But gives it amount in air call excited revenue base we

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

a already. got half the just second of we've that we've ground got sure here. lined I sort want up Yes, lot of to make book-to-bill

response I half. think think question, I the the you first in talked of to Mark's about inverse

to back So or of are book-to-bill a close high half sort the about like we X.X, in talking maybe like Xx ITS?

And mid- obviously, up to single that would digits. orders high suggest

larger really projects the sure for do I here? not of that message. we project until we breaking just expecting Are these want make XXXX. EPC Do see the China like see it bundle some better start And to what sounds is free? getting we that's improving? Because So breaking

and to into just try dial So that just comment. want

Nigel. Yes. Sure,

of And would that kind it, imply of I low and kind to the book-to-bill, maybe I mean, in QX but of half, QX QX. definitely we said way the what yes, So our half single slightly [indiscernible] would normal second always less we digits basically which -- the about less then is year-over-year think than in half. say, X second and different, this is first back numbers, and it's imply in and X than QX of kind in X since to That's there.

do on second on continues to the envelope second calculation the orders, still be mind tend question, large guide that the can and mean in EPC the of in to half. we don't here back but project Although there. And I play keep the the at you

these we're that market what to in better for this that might we're even the of longer. visibility projects discounting much is they out saying back whether view active that are there into way be saying or may think I and And taking We further. they as in great to us. as is are the what's or will decision-making letter that elongation go happen But it, half eventually second as that coming happen XXXX. of we

Okay.

sort beverage. verticals issue make still the as digit sure seeing year, so in across China trends of And thinking here. helpful. I low of right mean, obviously, your the and the EV or the had okay. there. business. is to that's maybe some single noisy half second we just in zone I are globe. want battery China food about And I the growth That's So the the of XX%

whether So curious in if I'm trends well. there as noise some just you're there's or food beverage seeing stable and

comment market, typically battery, to of like within Yes. just, I in order but are year. the we obviously, the think as regions, don't fair still specific but And on call contribution at same you terms markets, that food seen Vicente, revenue and prior were designations and level Nigel, XXXX. of on say first I'll the solar the end too what beverage. let in markets it, end our frankly, active kind just let's I'd it's not in they say you've talk about part, EV meaningful

ability I of will the honest whether think to mean, agreements. food of sell just and in to as Nigel. service do provide on it terms be Food beverage, continue to to based here, beverage and always is we Yes. I note on savings, sustainability, nothing be mean on return able based I energy investment

return all spend it's we are solutions, combination with our investment, get facilities. as can about in and and we a on And technologies So long show of great we a good us. into as those the our prioritizing that which

right? clarify, that's organic, And the low to single reported, not Vicente, just digit,

exactly That's right. That's yes. right,

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

just half project seem wanted doesn't you've why that EPC seen not dynamics on And you're eases any also some mega any emerging that It that sort your of of environment like all past that's if as just challenge a sure relates now. the to this but evaluation kind I of and a the And as expectation back or embed on year, such and the we more kind talking would guide the over that some of I'm the quarters about. much. demand these what more it readiness about EPC or of is should of upside? changed of in of of as projects be that So then move the X the ask kind of this capacity now. the expectations X that think site reflection funnel, has does course to that of if happens, forward emerging

I'll kind the first and one take Yes. the let one. Vik about second talk of

said and from But you have few think revenue the it past approval for been know, not you years. I megaprojects those there's someone and as projects. a lot I seen said As it well. all been mean, those of orders and

they is hear some through light, seems to saying bring here but of good to to get orders And in in projects example so of customer currently in potentially we backlog that like to well some And kind of about second XXXX has an the site made those process. definitely years that got that process. EPC as half. having Europe of readiness I an capacity. hear X.X something and there's And bottlenecks that what the but that push is throughout basically it due perhaps what as EPC here the released labor we're also

Second question, Vik?

Yes.

I No. think, of there terms Joe, directly in the half, embedded? is second anything

you've lead that up view time XX-month potential I solutions like of years. orders. as answer. to includes are component I seen some remember, most Obviously, think on the simple X- great. backlog. project. would maybe execution these second prior some of half that, a this our said, type degree, of projects there's like existing is a But Obviously, or Vicente as To things longer-cycle in the

to is convert will until or not reality So revenue those later. XXXX

or No, kind it would as And softer the so, in helpful. that, comments that is the of then kind And the half less Yes. in seems terms sense, half it. adjustment the half out guidance it's makes year, so anticipated. China of China, just than of also reflective Got half. more second more it like China more first played year? of of little And right stable second expected, a to first if the of be in

you did little to in better what like might a bit it's time out doesn't that point think And at way? seem this going play so get

some be say saw So building in that will see say being well all better of the that even China of half. in because of put I team sequential on here we we from improvement any everything China and kind in based QX which prudent material we onwards. more slightly in definitely see to seeing put regards, terms in kind that very and coming here played versus improvement out we first geopolitical decided the elections just were and I'll we and QX together, the China to to surprised more that orders that kind China, of saw what in second can We that as stable of half whether decided backlog. of out some

next from of the DeBlase comes Bank. line Nicole with question Our Deutsche

project what an I of from cycle order perspective We've had short a large you in talk lot the the on bit the of business discussion guys throughout guess activity ITS. part little around can quarter? you about the saw a

a Nicole, I obviously some actually that in all that well. China, momentum -- about actually think the the very other ITS you when all kind is And good growth in including talked the good cycle side, as would see. say of mean, that except they side, the to too very PST kind I regions, on lot point short one we about of mid-single-digit QX, data which is saw

you we of which quarter, to As perspective, as can the in compressor for compressors on talked up from is the the well, kind terms about been indicated, kind to short obviously of the that's medium compressor that second short cycle. driving an product majority that of of a of side, see has orders line in and some lot aspect as cycle us

of the zone Got on kind in ITS expectation half? the margins, then in remain slightly that below-XX% it. this second And is margins the

a XX% Yes. pretty that's is number. Around a good fair Yes. Nicole, conclusion.

question from Raso David final comes Our with ISI. Evercore

larger walk to to I Was morning. could coming? or decision that walk walk a little made the that away a lot I from to comment But on more Maybe Can away missed transactions. deciding color? something strictly things. could you be deals it, about provide anything enlighten markets us away you why quick or apologize, larger of of you'd how learn one price-related you maybe Two you about about a the -- earnings think this to a other

there, question David. Good Yes.

think I X of a for is for first cultivated of all, transaction say the that, kind this I past we reason is that years. that

watching yes, lot been I to sidelines valuation. really them highly transaction, we've learning be we So of ultimately, vacuum. the of I about would continue a them. was I mean, offering fell this And it and all think, mean I on more say, as kind compressor disciplined. adjacent our blower the and about But into category compared to core

how assume so that we versus analysis we ROI do and know, the that activity revenue a to around can well we tend control on heavily. on that we lot we can And that very to line, extrapolating areas of business things discount tend our control do view we

performance that that it ultimately, that, that a the right timing for to say decided led will was I we've us. not So just

billion don't. I is And one be, $X.X it, -- business. call follow-up, I right, a new should with PST a but this, to know maybe The rate, ILC, run going

the then will and now Life I other think Science $XXX piece billion million a be or Tech. so the is $X Precision

Tech Within and of call the something total this Sciences? Life like that, between XX% it, of, Precision the year, the difference margins what's segment margin

you around quite segment say, interesting David, playing between Yes, are and Both a to other. I'd profile. in meaningful Yes, the comparable there's X. I each differential that, wouldn't mix enough. average tell

comparable. So actually quite

over This call closing the Vicente I back session. remarks. will our question-and-answer for conclude will now turn to

another here call, have again here thank of you day. let's say the thank Thank that year. the listening the of to and and that good half just are the the for you, much, for second and thank now out our your to employees all very I'd appreciate just execute and say of level great a Briana. again you of I'll call I listening know all many are those questions With in interest, I actually performance. participants to And that, to the you get quarter

This will you for Thank today's call. all your conference conclude participation.

now disconnect. may You