Ingersoll Rand raises revenue guidance after Q2 performance
Ingersoll Rand Inc. reported second quarter orders of $1,737 million, up 9%, or 5% organic; it's Q2 revenues were $1,687 million, up 17%, or 12% organic.
Reported net income attributable to Ingersoll Rand Inc. was $180 million for the quarter, or earnings of $0.44 per share.
The company is raising full-year 2023 organic revenue growth range expectation by 200 bps to 8%–10%, and raising total revenue growth to a range of 12%–14%
“We continue 2023 with incredible momentum, delivering an outstanding performance during the second quarter with strong organic revenue growth across the business segments while seizing opportunities to deliver on our inorganic growth commitments,” said Chairman and CEO Vicente Reynal. “These results have led us to raise our full year guidance on total revenue growth, organic revenue growth, Adjusted EBITDA, and Adjusted EPS. We also recently shared our 2022 Sustainability Report, demonstrating that we don’t just help our customers meet their sustainability goals, but continue to push ourselves and the entire industry forward by improving our own operations through energy efficiency and water use reduction.”
Second Quarter 2023 Segment Review: Industrial Technologies and Services Segment (IT&S). Broad range of compressor, vacuum and blower solutions as well as industrial technologies including power tools and lifting equipment
- Reported Orders of $1,444 million, up 13%, or 8% organic
- Reported Revenues of $1,378 million, up 20%, or 14% organic1
- Reported Segment Adjusted EBITDA of $378 million, up 29% with an incremental margin of 38%
- Reported Segment Adjusted EBITDA Margin of 27.4%, up 200 basis points, due to continued pricing strength and IRX driving strong operational execution
IT&S saw continued strong demand with organic orders up 8%, which was on top of 11% organic orders growth in the second quarter of the prior year. Excluding the impact of FX and the recently acquired SPX Flow Air Treatment business, orders for total compressor offerings, which represent approximately 65% of the total segment, grew low double digits, including growth in the high twenties for oil free compressor offerings.
Ingersoll Rand remains in a strong financial position with ample liquidity of $3.2 billion, according to a company press release. On a reported basis, the company generated $228 million of cash flow from operating activities from continuing operations and invested $25 million in capital expenditures, resulting in free cash flow from continuing operations1 of $204 million, compared to cash flow from operating activities from continuing operations of $186 million and free cash flow from continuing operations1 of $165 million in the prior year period. Net debt to Adjusted EBITDA leverage1 was 1.0x for the second quarter, which was an improvement of 0.1x as compared to the prior year.
In addition, Ingersoll Rand was assigned an investment grade first-time Issuer Default Rating of ‘BBB-’ by Fitch. The investment grade rating is based on the company’s well-established market positions; product, end market, and geographic diversification; solid and consistent profitability; substantial proportion of aftermarket and recurring revenue; and effective execution of the company’s acquisition strategy.
Consistent with its comprehensive capital allocation strategy led by M&A, in the second quarter of 2023, Ingersoll Rand deployed $49 million to M&A.
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