Ingersoll Rand Morgan Stanley's 14th Annual Laguna Conference

Yeah. I will say, the first quarter you saw that organic revenues, we were down about 1%, and Q2 moved into positive mid-single digits, around 4% organic revenue growth. We also, on the last earnings call, we gave a bit of a color into the July number. Something typically that we do not tend to do, but it was just to talk about that not only the short cycle businesses was picking up, but also that long cycle business we are starting to see. I think the importance there is that it was not a one-time event, it was not a one-time single project, it was not an easy comp, and it was fairly broad-based in terms of end markets and regional side. I think we sit here fairly optimistic with what we are seeing.

We also feel that this is not just some of the market moving, but the investments that we have done over the past 12 to 18 months on the organic side, whether it is feet on the street, new facilities. About this time last year, we were celebrating an opening of our new facility in Latin America, in Brazil, where we can actually localize technologies. We also expanded our compressor facility in India after continuing to see phenomenal double-digit growth in India. I think a lot of these investments are paying off as we see here moving forward.

Yeah. I'll say over the past couple of years or few years, the European business has been the most, I'll say, stable. Albeit not growing, but fairly stable. If you remember, we spoke about the North America business seeing a bit of a headwind about 12 to 18 months ago when renewable natural gas was kind of peaking around late 2024, early 2025, in terms of orders, and then basically coming out to almost zero. Now we're just kind of offsetting that. Offsetting that, but also seeing general manufacturing, food and beverage, power gen, some of the kind of more general industrial end markets seeing better momentum and obviously leading to what we saw in the second quarter, which it was basically high single-digit organic order momentum in the Americas business.

It's a little bit of both. It's kind of what we like to say. Power, PMIs, as we all know, they turn to be in about 15 January. We always said that ITS business in particular takes about a couple quarters to see the turn, and that's kind of what you kind of saw here in the second quarter. So there's a little bit of that market tailwind that is happening. Again, I go back to and make reference to the comment that I made on the investments that we have done. Another investment that we have done that we're putting a lot of effort into it over the past 12, 18 months that we expect to see benefit of that is our engineer-to-order solution. If you think about as a company, we tend to be very decentralized and we operate in individual P&Ls.

We have two segments, but there's nine P&Ls that report directly into me. We launched an initiative on applying some vertical market approach for creating solutions. Whether it will be wastewater facilities or things of that nature, we can take technologies from both ITS and PST, combine them, and be able to provide a very unique solution to the customer. Or kind of working with specific end users that may want to take the same approach in a more modularized approach where we can take a kit with multiple technologies and then provide that to the customer so it facilitates the installation at the site. I think a lot of those solutions is something that we have been doing a lot of investments. We have manufacturing locations across the world that are dedicated to this. We have engineers globally that are dedicated to this.

We think that this is going to be a good outcome for Ingersoll Rand moving forward. Be able to provide the solutions that, combined with a little bit of a tailwind in the market, could accelerate how we view things organically.

That's our view. Mm-hmm. Great.

Yeah, no, I think we are very encouraged by what we saw in July. To Vicente Reynal's point, it is not our norm to give an inter-quarter orders update, but we thought it was important to give a little bit of color on what we saw in July. We had the benefit of sitting at the end of July. We had the first four weeks of July behind us. Excuse me. What we said was that orders in the ITS side of the equation was up mid-teens. The way to think about that is, I would say comparable momentum on the short to medium cycle is what you saw in Q2. But obviously, the kicker, for lack of a better way to say this, or the outpaced growth was driven a lot by the long cycle side of the equation.