Ingersoll Rand (IR) Barclays 42nd Annual Industrial Select Conference summary

Short-term performance and regional outlook

• Q4 organic orders were slightly negative, but excluding China, growth was in the low single digits, indicating portfolio stability.

• 2025 organic growth guidance is 1%-3%, with the Americas at the high end, Europe lower, and China expected to be flat.

• Under-penetrated markets like Latin America, India, Middle East, and Southeast Asia are targeted for higher growth through investments and commercial expansion.

• China’s revenue share has declined to about 10%-11% due to market softness, but margins remain healthy and no strategic de-emphasis is planned.

• Cost actions in China have been implemented to maintain earnings quality, with flattish growth expected for the year.

Business segment performance and growth drivers

• Life sciences at ILC Dover grew double digits in Q4 and is expected to see high single-digit to low double-digit growth in 2025.

• Aerospace and defense at ILC Dover is stable but at a lower base after a major contract reset; a $150M+ legacy spacesuit contract was signed.

• ITS businesses outside China are stable, with Americas leading growth and EMEA in the middle; organic and inorganic growth are balanced.

• Recurring revenue initiatives, especially Care contracts, drove recurring revenue from $200M to $300M in 2024, targeting $1B by 2027.

• Compressor demand is driven by energy efficiency, sustainability, and digitization, with paybacks under two years even at current energy prices.

M&A strategy and integration

• 18 M&A transactions were completed in 2024, with a healthy pipeline and seven LOIs announced for 2025.

• M&A will continue to augment organic growth, focusing on bolt-ons and channel acquisitions to expand recurring revenue.

• Over 60 deals have been completed in about 60 months, averaging one per month; 2025 is expected to follow this pattern with bolt-on deals.

• Acquisitions are expected to contribute 4-5% annualized inorganic revenue growth, with disciplined focus on fleet margins and high-growth end markets.