Ingersoll Rand (IR) 16th Annual Wells Fargo Industrials & Materials Conference summary

Demand and growth trends

• Short cycle demand is improving, with normalization of trends and prior headwinds from tariffs and China largely behind.

• About 20%-25% of original equipment business is long cycle, with healthy order funnels and timing-driven revenue recognition.

• Aftermarket represents roughly 40% of ITS, showing steady growth and recurring revenue as a key initiative.

• Americas account for about half of revenue, Europe a third, and Asia Pacific 15%, with China now stabilized at 11%.

• India is the fastest-growing region, while Europe remains stable and China is showing organic order momentum.

Pricing, costs, and margin dynamics

• Pricing has normalized to 1%-2% annual increases after elevated levels due to tariffs; China remains a tougher pricing environment.

• Tariff-related cost headwinds have been offset by pricing, resulting in margin dilution but dollar neutrality; normalization expected in the back half of the year.

• Raw material inflation and Middle East tensions are being managed through staggered, business-specific pricing actions.

• In-region-for-region manufacturing model helps manage supply chain and lead times, with limited intercompany exposure.

• Seasonal volume increases and productivity improvements, along with restructuring, are expected to drive margin expansion in the second half.

Segment and regional performance

• ITS sees 75% of original equipment as short to medium cycle, with order-to-shipment cycles of 30-90 days; long cycle projects take 6-18 months.

• PST has achieved three consecutive quarters of 30%+ EBITDA margins, driven by life sciences and biopharma growth.

• Life sciences business is $600M-$700M, with medical, biopharma, and device components as key drivers; recent bolt-ons enhance capabilities.

• M&A activity remains robust, with a focus on bolt-ons across both segments and a healthy pipeline of deals under LOI.