Ingersoll Rand FY Conference Summary Company Overview - **Company**: Ingersoll Rand (NYSE: IR) - **Date of Conference**: September 11, 2025 - **Key Speakers**: CEO Vicente Reynal, CFO Vikram Kini Key Points M&A Strategy - Ingersoll Rand differentiates itself through a strong M&A engine, identifying 4-5 growth opportunities annually and integrating them effectively to enhance margins [3][4] - The company has completed 75 acquisitions over the past five years, with 90% being family-owned or founder-based, achieving an average pre-synergy EBITDA multiple of 9.5 times [4][12] - The integration process is decentralized, occurring within nine P&L leaders, allowing for rapid synergy realization [5][6] Financial Performance - The company generates a free cash flow margin of 15-20%, which is reinvested into bolt-on acquisitions [3][4] - Ingersoll Rand aims for a mid-teens return on invested capital (ROIC) by year three post-acquisition [4] Market Position and Growth - The company operates in a $75 billion addressable market with $7.5 billion in revenue, indicating significant growth potential in a fragmented market [11] - Ingersoll Rand focuses on acquiring companies with gross margins in the mid-30s or higher, emphasizing pricing power and unique technology [9][10] Energy Efficiency and ROI - Compressors account for 30-40% of energy consumption in manufacturing facilities, with 80% of ownership costs attributed to electricity over a 10-year lifespan [13][14] - The average payback period for energy-efficient compressors is now less than two years, with many customers realizing the need for energy savings [15][16] Service Model Transition - Ingersoll Rand is transitioning from a traditional parts business to a care model, targeting $1 billion in recurring revenue by 2027, with $300 million achieved in 2024 [17][18] - The care model includes performance guarantees and multi-year contracts, enhancing gross margins significantly [19][24] Market Dynamics - The company reports stable market conditions, with positive organic growth in China and strong performance in Europe, while North America remains cautious due to tariff uncertainties [26][29][30] - Ingersoll Rand is focusing on underpenetrated markets in Latin America and Southeast Asia, leveraging local partnerships to drive growth [33][34] Tariff Impact - The recent tariff policies have created uncertainty, but Ingersoll Rand believes its U.S. manufacturing capabilities provide a competitive advantage [51][52] - The company is managing cost increases due to tariffs without passing on margin increases to customers, maintaining a neutral impact on EBITDA [56] Pricing Strategy - Ingersoll Rand employs a total cost of ownership approach in pricing, ensuring that price increases are justified by ROI for customers [58][59] - There is some pricing fatigue in the market due to frequent price adjustments, but the company remains agile in navigating these dynamics [58][59] Margin Outlook - The company anticipates margin expansion in the second half of the year, driven by seasonal volume increases and prudent cost management [62][64] - Integration of recent acquisitions, such as ILC Dover, is expected to contribute positively to margins [64][65] Additional Insights - The care model is seen as the biggest organic growth initiative for Ingersoll Rand, with potential for expansion across various product lines [21][22] - The company is exploring innovative solutions to enhance recurring revenue and improve gross margins further [25][26] This summary encapsulates the key insights and strategic directions discussed during the Ingersoll Rand FY Conference, highlighting the company's focus on M&A, energy efficiency, service model transformation, and market dynamics.

Core Viewpoint - The IPO market has seen a resurgence this year, with over 40 companies reapplying for A-share listings after previously withdrawing their applications, primarily shifting their focus to the Beijing Stock Exchange (BSE) after initial failures in other markets [1][2]. Group 1: Company Strategies - Many companies that previously withdrew their IPO applications are now targeting the BSE, indicating a strategic shift in their listing approach [2]. - Companies like Zhongke Instrument and Baiying Bio have adjusted their fundraising goals significantly, with Baiying Bio reducing its target from 10.5 billion yuan to 4.91 billion yuan [3][4]. - Companies are reassessing their business performance and market conditions before reapplying, often optimizing their operational status based on previous feedback from regulatory inquiries [1][4]. Group 2: Financial Adjustments - A trend of lowering fundraising amounts has been observed among companies reapplying for IPOs, with many adjusting their project funding allocations accordingly [4][5]. - For instance, HuiKe Co. reduced its fundraising target from 95 billion yuan to 85 billion yuan, reflecting improvements in its financial performance [5][6]. - The financial performance of companies like HuiKe Co. has shown significant recovery, with revenues projected to grow from 271.34 billion yuan in 2022 to 403.10 billion yuan in 2024 [6]. Group 3: Market Dynamics - The BSE is becoming increasingly attractive for companies that may not meet the criteria of other exchanges, as it is more accommodating to growth-oriented small and medium-sized enterprises [3][4]. - The characteristics of different market segments are highlighted, with the Sci-Tech Innovation Board focusing on technology rather than financial metrics, while the BSE is more inclusive for companies with solid profitability [3].