Ingersoll Rand (NYSE:IR) 2026 Conference February 19, 2026 08:50 AM ET Company ParticipantsVik Kini - CFONone - Company RepresentativeConference Call ParticipantsNone - AnalystNoneGetting it started again, we are very excited to have Ingersoll Rand with us. We've got Vik Kini, who is the CFO of Ingersoll Rand. And Vik, as I walk over to you, it's been about five years since you closed the RMT. A lot's gone on. I think you had a vision then, to be the premier industrial compounder. So maybe what's gone right ...

Q4 and full year 2025 earnings presentation Making Life Better Forward-looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to expectations of Ingersoll Rand Inc. (the "Company" or "Ingersoll Rand") regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. These forward-looking statements generally are ...

Financial Data and Key Metrics Changes - IDEX delivered better-than-expected Q4 results with organic revenue growth of 1% and adjusted EBITDA margin expanding by 40 basis points year-over-year [16][17] - Free cash flow for the full year 2025 was $617 million, a 2% increase compared to the previous year, with a free cash flow conversion rate of 103% of adjusted net income [19][23] - Adjusted EPS for Q4 came in higher than the guided range, reflecting strong performance across segments [16][17] Business Line Data and Key Metrics Changes - Health & Science Technologies (HST) segment saw organic orders increase by 34% and revenue grow by 5%, driven by demand in data center applications and semiconductor consumables [12][20] - Fluid & Metering Technologies (FMT) reported organic orders growth of 4% and organic sales growth of 1%, with strong performance in municipal water and mining sectors [13][20] - Fire & Safety / Diversified Products (FSDP) experienced flat organic orders and a 5% decline in organic sales, impacted by external pressures outside the U.S. [15][22] Market Data and Key Metrics Changes - The municipal water-facing businesses within FMT grew mid-single digits, supported by increased capital spending on infrastructure refurbishment [90] - The industrial landscape remains flattish, with no significant signs of demand improvement, although there is an emerging consensus that 2026 may see a return to growth after three years of PMI contraction [14][15] - Demand in chemical, energy, and agriculture markets remains soft, contributing to challenges in FMT [21][22] Company Strategy and Development Direction - IDEX is focusing on a purposeful evolution, expanding capabilities in targeted advantage markets through organic growth and M&A, supported by their 80/20 playbook [7][28] - The company aims to leverage cross-business unit collaboration to drive growth and margin expansion, particularly within the HST segment [11][28] - M&A strategy will focus on integrating recently acquired businesses and pursuing bolt-on acquisitions, while maintaining a disciplined approach to capital allocation [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting that while there are signs of improvement, they have not yet observed a significant inflection point in demand [15][36] - The outlook for 2026 includes expected organic growth of 1%-2%, with HST anticipated to grow mid-single digits, while FMT and FSDP are expected to remain flat to slightly down [25][26] - Management highlighted the importance of maintaining a strong balance sheet and disciplined capital allocation to support growth initiatives [23][24] Other Important Information - The company completed a small acquisition of Micro-LAM, which is expected to enhance their optics capabilities and contribute to growth in 2026 [10] - IDEX ended the year with strong liquidity of approximately $1.1 billion and repurchased nearly $250 million worth of shares in 2025 [19][23] Q&A Session Summary Question: Thoughts on demand outlook based on PMI data - Management noted that while they were pleased to see PMI above 50, they have not yet seen a corresponding inflection in demand across their businesses [34][36] Question: Fresh perspective on priorities from new CFO - The new CFO emphasized the strength of IDEX's franchise and the focus on M&A strategy and execution to drive growth [38][40] Question: Price contribution to top line in 2025 and outlook for 2026 - Price contributed around 3% to revenue in 2025, with expectations for a decrease to 0.0 to 0.2% in 2026 [45][46] Question: Disconnect between order strength and revenue conversion - Management explained that typical seasonal factors and larger orders from HST are contributing to the disconnect, with expectations for normalization in the coming quarters [54][56] Question: Insights on Life Sciences segment and growth expectations - The Life Sciences segment is expected to continue low single-digit growth, with some uncertainty due to external factors like government funding [60][61] Question: Order activity in HST and sustainability of growth - Management confirmed that January has shown strong order activity, indicating momentum beyond year-end budget spending [82] Question: Capital intensity for new markets like data centers - The capital intensity for new markets is expected to remain light, with opportunities to leverage existing equipment and resources [70][71]

Financial Data and Key Metrics Changes - IDEX delivered organic revenue growth of 1% in Q4 2025, with adjusted EBITDA margin expanding by 40 basis points year-over-year [16][19] - Free cash flow for the full year 2025 was $617 million, a 2% increase compared to the previous year, with a free cash flow conversion rate of 103% of adjusted net income [19][23] - Adjusted EPS for Q4 came in higher than the guided range, reflecting strong performance [16][19] Business Line Data and Key Metrics Changes - Health and Science Technology (HST) segment saw organic orders increase by 34% and revenue grow by 5%, driven by demand in data centers and semiconductor applications [12][20] - Fluid and Metering Technologies (FMT) experienced organic orders growth of 4% and organic sales growth of 1%, with strong performance in municipal water but softness in chemical and energy markets [13][20][21] - Fire and Safety Diversified Products (FSDP) had flat organic orders and a 5% decline in organic sales, with growth in North American fire OEM offset by weakness outside the U.S. [22] Market Data and Key Metrics Changes - The municipal water-facing businesses within FMT grew mid-single digits, supported by increased capital spending on infrastructure [90] - The general industrial landscape remains flattish, with no significant signs of demand improvement, although there is an emerging consensus that 2026 may see a return to growth [14][15] Company Strategy and Development Direction - IDEX is focusing on expanding and integrating capabilities in targeted advantage markets through its 80/20 playbook, which supports organic growth and M&A [7][29] - The company aims to maintain a balanced capital deployment strategy, focusing on organic investments, M&A, and returning capital to shareholders [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are signs of order strength, particularly in HST, there has not yet been a clear inflection point in demand across all sectors [15][36] - The outlook for 2026 includes expected organic growth of 1%-2%, with mid-single-digit growth anticipated for HST and flat to slightly down outlooks for FMT and FSDP [25][26] Other Important Information - IDEX completed a small acquisition of Micro-LAM, which is expected to contribute positively to growth in 2026 [10] - The company ended 2025 with strong liquidity of approximately $1.1 billion and repurchased nearly $250 million worth of shares during the year [19][23] Q&A Session Summary Question: Demand outlook based on PMI and order size - Management acknowledged the recent PMI improvement but noted that they have not yet seen a corresponding inflection in demand, with steady order rates but no significant upward movement [34][35] Question: Fresh perspective on IDEX's operations - The new CFO highlighted the strong financial foundation of IDEX and expressed focus on M&A strategy and execution to drive growth [38][39] Question: Price contribution to top line growth - Price contributed approximately 3% to overall growth in 2025, with expectations for a decrease to 0.0% to 0.2% in 2026 [45][46] Question: Disconnect between order strength and revenue conversion - Management explained that while orders have been strong, revenue conversion may lag due to seasonal factors and the nature of longer-cycle applications [54][56] Question: Insights on life sciences segment - The life sciences segment experienced low single-digit growth, with expectations for normalization as government funding uncertainties resolve [60][61] Question: Order activity in municipal and industrial water - Management reported double-digit growth in municipal water orders in Q4, with confidence in sustainable mid-single-digit growth driven by critical infrastructure needs [90][91]

Financial Data and Key Metrics Changes - IDEX reported organic revenue growth of 1% in Q4 2025, with adjusted EBITDA margin expanding by 40 basis points year-over-year [15][18] - Free cash flow for the full year 2025 was $617 million, a 2% increase compared to the previous year, with a free cash flow conversion rate of 103% of adjusted net income [18][21] - Adjusted EPS for Q4 exceeded guidance, reflecting strong financial performance [15][18] Business Line Data and Key Metrics Changes - Health and Science Technology (HST) segment saw organic orders increase by 34% and revenue grow by 5%, driven by demand in data centers and semiconductor applications [19][12] - Fluid and Metering Technologies (FMT) reported organic orders growth of 4% and organic sales growth of 1%, with strong performance in municipal water but softness in chemical and agricultural markets [19][20] - Fire and Safety Diversified Products (FSDP) experienced flat organic orders and a 5% decline in organic sales, with growth in North America offset by weakness outside the U.S. [20][12] Market Data and Key Metrics Changes - The municipal water-facing businesses within FMT grew mid-single digits, supported by increased capital investment in infrastructure [90] - The general industrial landscape remains flattish, with expectations for a return to growth in 2026 after three years of PMI contraction [12][13] - Demand for precious metals in mining continues to be a strength for FMT [12] Company Strategy and Development Direction - IDEX is focusing on a strategic evolution through organic growth and M&A, leveraging its 80/20 playbook to optimize resources and drive growth in targeted markets [5][27] - The company aims to maintain a balanced capital deployment strategy, prioritizing organic investments, M&A, and returning capital to shareholders [21][23] - IDEX is committed to integrating recently acquired businesses and exploring bolt-on acquisitions to enhance its portfolio [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the macroeconomic environment, noting that while there are signs of potential growth, current indicators do not yet show a significant inflection point [12][13] - The company anticipates organic growth of 1%-2% for 2026, with mid-single digit growth expected for HST and flat to slightly down outlooks for FMT and FSDP [24][25] - Management highlighted the importance of maintaining operational excellence and leveraging growth opportunities in data centers and life sciences [12][19] Other Important Information - IDEX completed a small acquisition of Micro-LAM, which is expected to enhance its capabilities in optics [9] - The company ended 2025 with strong liquidity of approximately $1.1 billion and repurchased nearly $250 million worth of shares during the year [18][21] Q&A Session Summary Question: Thoughts on demand outlook based on PMI data - Management noted that while they were pleased with the PMI reading, they have not yet seen a corresponding inflection in demand across their businesses [34][35] Question: Insights from a new CFO's perspective - The new CFO emphasized the strength of IDEX's franchise and the focus on capital allocation to drive growth, particularly in M&A strategy [36][37] Question: Contribution of price to top line growth - Price contributed approximately 3% to overall growth in 2025, with expectations for a lower contribution in 2026 [43][44] Question: Disconnect between order strength and revenue conversion - Management explained that typical seasonal patterns and larger orders from HST are influencing the timing of revenue recognition [52][53] Question: Insights on life sciences growth - Life sciences experienced low single-digit growth, with expectations for normalization as government funding uncertainties resolve [58][59] Question: Order cadence in FMT and HST - Management indicated that sectors like energy and chemicals remain pressured, while HST is seeing strong order momentum, particularly in data centers [75][76]

Ingersoll Rand Conference Call Summary Company Overview - **Company Name**: Ingersoll Rand - **Revenue**: $7.5 billion - **Market Capitalization**: $34 billion - **EBITDA Margin**: 27% - **Free Cash Flow Margin**: 17% - **Total Shareholder Return (TSR)**: Over 330% since 2017 IPO [2][3] Business Segments - **Industrial Technologies and Services (ITS)**: Includes compressors, vacuums, blowers, and air treatment solutions [4] - **Precision and Science Technologies (PST)**: Focuses on precision liquid, gas, air, and powder handling technologies for life sciences and industrial applications [4] Life Science Technologies Platform - **Acquisition of ILC Dover**: Enhanced capabilities in biopharma and medical device manufacturing [12] - **Revenue Composition**: Approximately 85% of revenue from consumables, indicating a strong recurring revenue model [14] - **Market Focus**: Targeting high-growth areas such as biopharma, oncology, and minimally invasive procedures with expected growth rates in the high single digits to mid-teens [13] Growth Strategy - **M&A Activity**: Acquired 76 companies in the past five years, focusing on founder-led and family-owned businesses [6][17] - **Future M&A Pipeline**: Actively tracking about 100 companies with ongoing discussions with around 10 at any time [42] - **Targeted EBITDA Multiples**: Recent acquisitions achieved an average EBITDA multiple of around 10 times [18] Financial Performance - **EPS Growth**: Double-digit CAGR in EPS over the past few years [3][26] - **Balance Sheet Strength**: Less than two times leverage, indicating a strong financial position [7] - **Value Creation**: Created approximately $30 billion in shareholder value over eight years [26] Operational Excellence - **IRX (Ingersoll Rand Execution Excellence Process)**: A proprietary operating system aimed at continuous improvement and efficiency [5][27] - **Employee Ownership**: Approximately $300 million in equity given to employees, fostering an ownership mindset [8][9] Market Trends and Customer Sentiment - **Pharma Market Dynamics**: Customers are focused on speed to market for new products, indicating a strong demand for Ingersoll Rand's solutions [46] - **Global Expansion**: Growing presence in Asia as customers regionalize supply chains [13] Key Takeaways - **Diversification**: Ingersoll Rand aims to maintain a diversified portfolio, with life sciences expected to grow from 20% to potentially 30-40% of total revenue [30] - **Long-term Margin Goals**: PST segment operates around 30% EBITDA margins, with potential to reach mid-30s in the medium term [38] - **Commitment to Innovation**: Continuous investment in unique technologies and customer partnerships to drive growth [25] This summary encapsulates the key points discussed during the Ingersoll Rand conference call, highlighting the company's strategic direction, financial performance, and market opportunities.

Core Viewpoint - Shandong Zhanggu's stock price plummeted following the announcement of a regulatory investigation for financial disclosure violations, despite a positive earnings forecast for 2025 [1][3][6]. Group 1: Earnings Forecast - Shandong Zhanggu expects a net profit attributable to shareholders of 72 million to 80 million yuan for 2025, representing a year-on-year growth of 0.65% to 11.83% [1][7]. - The forecasted net profit excluding non-recurring items is projected to be between 66 million and 74 million yuan, with a growth rate of 1.32% to 13.6% [1][7]. - The company attributes the expected performance to strategic focus on core competitive advantages, increased R&D investment, and improved supply chain management [7]. Group 2: Regulatory Issues - The company received a notice from the China Securities Regulatory Commission (CSRC) regarding an investigation into alleged violations of financial disclosure regulations [3][5]. - Prior to the investigation, Shandong Zhanggu had already faced administrative penalties for issues related to related party transactions, fundraising misuse, and governance irregularities [4][5]. - Specific violations included inaccurate disclosures of related party transactions and improper use of raised funds for non-principal guaranteed financial products [4][5]. Group 3: Stock Performance - Following the announcement of the investigation, Shandong Zhanggu's stock hit the daily limit down on January 5, and continued to decline by 2.18% on January 6, totaling a 12% drop over two trading days [1][6][8]. - Despite the earnings forecast, the stock's performance remained negatively impacted, reflecting ongoing concerns about compliance and profitability [8].

Core Viewpoint - Shandong Zhanggu's stock price plummeted following the announcement of an investigation by the China Securities Regulatory Commission (CSRC) for alleged financial disclosure violations, despite the company releasing a positive earnings forecast for 2025 [1][2][5]. Group 1: Earnings Forecast - Shandong Zhanggu expects a net profit attributable to shareholders of 72 million to 80 million yuan for 2025, representing a year-on-year growth of 0.65% to 11.83% [1][6]. - The company anticipates a net profit of 66 million to 74 million yuan after excluding non-recurring gains and losses, indicating a growth of 1.32% to 13.6% [1][6]. - The earnings forecast is supported by strategic initiatives such as increased R&D investment, improved accounts receivable management, and supply chain upgrades [6]. Group 2: Compliance Issues - Shandong Zhanggu has been placed under investigation by the CSRC for suspected violations related to financial information disclosure [2][4]. - The company has previously faced administrative measures from the Shandong Securities Regulatory Bureau for issues including improper related party transactions and governance irregularities [2][3]. - Specific violations include inaccurate disclosures of related party transactions and improper use of raised funds, which have led to regulatory scrutiny [3][4]. Group 3: Stock Performance - Following the announcement of the investigation, Shandong Zhanggu's stock hit the daily limit down on January 5, and continued to decline by 2.18% on January 6, totaling a 12% drop over two trading days [1][5][7]. - Despite the positive earnings forecast, the stock's performance remains negatively impacted by ongoing compliance issues and a significant decline in net profit compared to three years ago [1][7].

Group 1: Financial Reporting Violations - The company, Shandong Zhanggu, announced on December 31, 2025, that it received a notice from the Securities Regulatory Commission regarding suspected violations in financial information disclosure [1][8] - The company claims it will cooperate with the investigation, asserting that it will not affect operations, but the market reacted negatively with a stock price drop following the announcement [2][8] - Investors who purchased shares before December 31, 2025, and sold or held them at a loss after January 1, 2026, are eligible to participate in legal actions for compensation [2][8] Group 2: Regulatory Measures - On December 18, 2025, the Shandong Securities Regulatory Bureau and the Shenzhen Stock Exchange issued warnings, identifying three main issues: improper disclosure of related party transactions, failure to follow approval procedures for certain transactions, and misuse of raised funds [3][9] - The company was found to have used raised funds for non-principal guaranteed financial products and failed to fully redeem certain cash management products within the authorized period [3][9] - Governance issues were also noted, including related shareholders acting as monitors during votes on related matters, which did not adequately avoid conflicts of interest [3][9] Group 3: Company Performance and Outlook - Since its listing, Shandong Zhanggu has not achieved stable growth, with a trend of declining performance; the company has invested approximately 300 million in various sectors but has seen limited success [4][11] - The company's net profit attributable to shareholders for the third quarter was 62 million, a year-on-year decrease of 39.12% [4][11] - As of December 31, 2025, the company's market value had shrunk to 3.336 billion, reflecting its declining performance and regulatory issues [5][11] - The future remains uncertain due to the ongoing investigation and potential administrative penalties [6][11]

Core Perspective - The transformation of Shenyang's Tiexi District from an old industrial base to a vibrant area showcasing new industries and cultural developments is highlighted, emphasizing its historical significance and ongoing revitalization efforts [2][3][4]. Group 1: Historical Significance - Shenyang, known for its rich historical background, is home to Tiexi District, which is referred to as the "Eastern Ruhr" and symbolizes the industrial heritage of Northeast China [2]. - Tiexi District has been pivotal in China's industrial history, being the site of the first metal national emblem and the first ordinary lathe produced in the country [2]. Group 2: Industrial Transformation - The district is undergoing a significant industrial transformation, with a focus on high-end equipment manufacturing, as exemplified by the success of Shenyuan Group in developing world-class compressors and blowers [3]. - BMW's investment in the Shenyang production base has exceeded 116 billion yuan since 2010, making it the largest production base for the company globally, which reflects the increasing foreign investment in the area [3]. Group 3: Cultural and Community Development - The revitalization of old industrial sites, such as the Hongmei Cultural and Creative Park, is attracting young people and fostering a vibrant cultural scene, blending the past with modern creativity [4]. - The community's resilience and character are evident in the stories of local residents and their contributions to the area's transformation, showcasing a blend of tradition and innovation [4][5]. Group 4: Future Prospects - The ongoing changes in Tiexi District are seen as a testament to the potential for old industrial bases to reinvent themselves, with a promising future ahead as they evolve into hubs of new industries and cultural activities [5].