Ingersoll Rand Inc. (IR) Earnings Call Transcript & Summary

Hi, everyone. My name is Debbie Jones, and I'm the Global Head of ESG for Company Research at Deutsche Bank. You are attending our session with Ingersoll Rand. Today, we have the company's CEO, Vicente Reynal; and CFO, Vik Kini, here to discuss the company's sustainability strategy. We're going to start the session with a presentation from the company, and then we will move to Q&A. We will be taking questions for the audience, so please submit them. And with that, Vicente, Vik, thank you very much for being here, and I will turn it over to you to begin the presentation.

Thank you, Debbie, and good afternoon to everyone. Vik and I appreciate the opportunity to be here today and talk to you about Ingersoll Rand's incredible ESG journey and the growth opportunity we see ahead of us. Our remarks are based on the presentation deck that you're going to see here. Where -- we have it also posted on our web page on irco.com, under the Investors section of the homepage. Beginning with Slide 3. It really -- everything starts with what underpins everything we do, which is the pursuit of our purpose, which is Lean on us to help you make life better. Purpose-driven and sustainability-minded employees with an ownership mindset are an unstoppable force, and sustainability is strategic to us. We strive to protect and improve our environment. We strive to be an active contributor in our communities. And in all we do, we strive to make life better for our employees, our customers, our shareholders and communities. And we do this through our Ingersoll Rand execution and excellence or IRX as our competitive differentiator. On the right-hand side, we have spoken about IRX, which starts in the outer ring with our values. And then gets deployed via our strategic imperatives on the gray color ring and executed via 2 distinct tools that we call our IR operating plan execution and IMPACT Daily Management or IDM. Today, with over 275 IMPACT Daily Management meetings across our company each week, our high-performance culture encourages strong execution. On Page 4, we're now showing a snapshot of Ingersoll Rand today. 2021 was a pivotal year for Ingersoll Rand with many accomplishments and new records. We delivered record revenue of $5.2 billion and record adjusted EBITDA of $1.2 billion, with an adjusted EBITDA margin of 23.1%, which is 350 basis points higher than 2019, and adjusted free cash flow of nearly $800 million with free cash flow margin of 16%. We achieved all of this despite challenges like supply chain constraints and inflationary pressures, which shows the power of IRX and the ability of our highly-engaged team to deliver strong operating execution and commercial effectiveness. On Slide 5, I wanted to acknowledge the dedication and commitment of our Board to our ESG journey, which has enabled the company to make very swift progress and achievements in all areas of environmental, social and governance. The Board recently established a sustainability committee as part of our commitment to furthering our strategic imperative of operate sustainably. We are delighted to have Marc Jones serve as the Chair of the Committee. On Slide 6, we're proud of the recent validation of Ingersoll Rand's progress as an industry leader in ESG. In March of 2021, we committed to becoming a top quartile ESG industrial company within 3 years, and we believe we have achieved that goal in just 1 year. S&P Global agrees, and in its annual sustainability assessment release just a few weeks ago, S&P Global score Ingersoll Rand in the top 15% of ESG performing companies in each industry sector and named Ingersoll Rand to its Sustainability Yearbook for 2022. In addition, S&P Global recognized us with the Industry Mover Award, which is given each year to the most improved company in each sector. We have also been recognized for our governance efforts, specifically for a best-in-class compliance and ethics program. And based on our demonstrated progress, we received also our second upgrade in the past 18 months from MSCI, bringing us to an A rating. And finally, very excited that most recently, Sustainalytics upgraded us to medium risk, and we're on our way at the cost of the low risk, scoring us in the top 10th percentile in the industrial machinery category. These recognitions exemplify our own wavering commitment to ESG. On Slide 7, you see our 5 strategic imperatives on the left-hand side of the slide. Operate sustainably is at the center and is the central component of its woven throughout all of the other 4 strategic imperatives. We think of this strategy in 2 ways: growing sustainably and operating sustainably. I'll first talk about how we expect to leverage sustainability as an organic growth enabler to deliver mid-single-digit organic growth through 2025, and then Vik will go into more detail about how we operate sustainably, which will give you additional insights into why we have received the recognition we have. Turning to Slide 9. A key differentiator for Ingersoll Rand is that we have systematically aligned our portfolio with 3 key global megatrends, digitization, sustainability and quality of life. And each of these megatrends are expected to have meaningful growth over the next few years. With digitization, we're building out our offering of intelligent and connected equipment with a very focus on solving our customers' most present needs. In sustainability, we're focused on the conservation of water and energy. And finally, our products and solutions support rising living standards in the accelerating shift in our society as growing populations seek to achieve a higher quality of life. And we're capitalizing on these megatrends through our own organic and inorganic strategies. So moving to Slide 10. Our purpose of making lives better guides all we do. When we think about making life better, our first priority is our customers, who are hyper-focused on reducing their Scope 1 and Scope 2 greenhouse gas emissions. Our products are enormous contributors to helping our customers achieve those goals. As emissions are reduced, we make life better for our planet, ensure a better place to live for future generations. And enabling these successes will drive significant growth in demand for our products, which have market-leading efficiency and innovation. As a result, we believe we will continue to deliver returns that outperform the market and create significant value for our shareholders. Turning to the next slide, Slide 11. Our customers are increasingly realizing that air compressors and air treatment optimization is an essential opportunity to reduce their Scope 1 and Scope 2 emissions. Air compressors consume a massive amount of manufacturing sites electricity, up to 30%. And with the rise of energy costs, this will continue to accelerate. Ingersoll Rand provides industry-leading efficiency with our products that enables customers to reduce the energy cost from an air compressor up to 50% and an air treatment solution or dryers up to an incredible 90% reduction. And as we have forecasted out the potential impact of our Scope 3 emissions, we have established a goal of helping our customers achieve a combined 15% reduction in greenhouse gas emissions from the use of our products for more than 40 million megatons of CO2. This equates to the same amount of greenhouse gas emissions generated from over 100 billion miles driven by passenger vehicles or the combined electricity usage of over 9 million homes. So you can see the potential impact here is dramatic, and we're just getting started. Our customers are becoming increasingly vocal about the impact that compressor optimization can have on their emissions. We've shown here 2 examples at the bottom of the slide, where global leaders in both the consumer electronics and paper industries, who clearly identify compressor optimization as a top priority for the greenhouse gas emissions reduction in their latest sustainability reports. On the next page is a case study highlighting the impact we have made through technology innovation in our air treatment portfolio. 80% of industrial compressed air applications require these dryer technology to dry the air and remove any impurities, which is a complementary technology to our compressor portfolio. Since we completed the merger in 2020, we have taken a holistic approach to penetrating this global market in a few key ways. First, we focus on the efficiency and accelerated new product development to deliver a refrigerated dry portfolio that was 20% more efficient, a huge step change. In addition, we've reduced refrigerant usage by nearly 50% and reduced greenhouse gas emissions per unit by 40%. We also improved our heat of compression dryers to recycle waste heat to refrigerant desiccant, resulting in 90% less energy usage than a traditional desiccant dryer. And finally, we expanded our sub-freezing dryer portfolio, which is 70% more efficient than any of the traditional desiccant dryers, once again, showing that innovation drives here future growth. As a result of these efforts, we have realized a more than 500 basis points increase in market share in the U.S. over the past 2 years with more room to run. So as you can see, we deliver holistic compression and air treatment solutions, and we have addressed the energy usage of each component to provide our customers the most efficient solution to meet their needs. Turning to Page 13. In addition to energy usage, our customers are also faced with water shortage and a need to improve water management and quality. Our portfolio is once again well positioned to address these needs. Approximately 30% of our total revenue base is generated from products focused on improving water management and purification as well as reducing water consumption, both in our compression and pump technologies. We're committed to helping customers save over 1 billion gallons of water annually through the use of our products, which is equivalent to 20 million bathtubs or 1,500 Olympic swimming pools of water. You can see at the bottom of the page, where a global player in the paper industry and a world leader in a consumer packaged goods have committed to reducing water usage by 25% and 20% per unit, respectively, a significant commitment and one we're well positioned to solve with our products. So let me give you an example on how we do it on the next slide. So turning to Page 14. The pulp and paper industry, which is a substantial user of freshwater, is looking for solutions to reduce their water consumption, and our Runtech product offering is designed to provide a water-free and energy-efficient vacuum solution for our customers within this industry. For every installation, our customers realize 90% or greater water savings, 45% energy efficiency and 50% material savings. This means that this product has a threefold effect on our environment as it protects the air, the water and the land. As an example, we completed recently a rebuild with our solution in Alicante, Spain for a paper manufacturer that yielded an annual savings of 24 million gallons of water, equivalent to 36 Olympic size swimming pools. So think about it, with only one location using this mission-critical technology, we already achieved 2% of our stated goal. In addition, our customer achieved savings of 5.7 gigawatt hours of energy per year. And to top it off all, they realized an average of 13% productivity improvement due to increased dryness and faster machine speeds. This sustainably-focused customer value proposition has resulted with our Runtech product portfolio increasing its installed base by more than 65% since we acquired the business in 2018. Moving to Slide 15. Our portfolio has undergone a significant transformation over the past 3 years, becoming significantly more focused on sustainable end markets. Since the Gardner Denver Investor Day in 2019, we have expanded our pump portfolio with technologies focused on high-growth sustainable end markets, such as life and lab, precision agriculture, food and beverage and water and wastewater. We also divested our exposure to the upstream oil and gas industry and the small vehicle market. Our addressable market today is $44 billion, but we expect to leverage our unique growth enablers, such as demand generation, IoT and product innovation as well as deploying significant capital to M&A to fuel growth in our TAM to become approximately $70 billion by 2025. Turning to Slide 16. Our next case study is about an opportunity in the high-growth hydrogen market. We've been in the hydrogen compression business for 40 years. Today, the market is estimated at approximately $2 billion, where our technologies play. We believe the market will realize significant growth over the next few years, and here is why. The push to net zero and alternative fuel sources are gaining traction. We expect the global hydrogen compression market to grow 5x through 2025 to approximately $10 billion as applications for hydrogen expanding to areas like transportation, commercial and residential heating, power generation and shipping. And the great thing is that our solutions have a strong existing portfolio of brands and technologies that already play across a range of applications for hydrogen and CO2 compression through the entire value chain from production, transmission to storage and to refueling. And while we're currently a player in niche applications in this market, we see a huge opportunity to leverage our technologies in the most attractive segments of the hydrogen and carbon capture markets, including some examples as shown on the right-hand side of the page. First, our compression technology is used in the process to turn gases, hydrogen into liquid hydrogen. This process is called liquefaction, and the importance of this process is that it allows hydrogen to be stored in its densest state and transported with the highest efficiency possible. Ingersoll Rand centrifugal compressors use hydrogen and nitrogen coolants to compress to liquid state. And then our own Belliss & Morcom high-pressure reciprocating compressors are used to compress this gases hydrogen for transportation in tube trailers. The second example is the carbon capture for steel mills or steel plants. In this case, using 2 Ingersoll Rand compressors, which is a combination of our centrifugal and high-pressure reciprocating technologies, carbon dioxide is captured, compressed and injected into a local oil well to enhance production and also permanently store that carbon dioxide, reducing greenhouse emissions that in this plant alone amounts to 800,000 tons per year. And the third application I want to highlight here is related to the marine sales recovery and compression. In the future, it is said that ships arriving into a port will be required to shift from diesel engines to electric motors to reduce emissions as they get close to land. Batteries are much less powerful and durable. While using fuel cells, oxygen and hydrogen are fed into the cell. And in this case, a Nash hydrogen recycle gas compressor captures, recycles, and reinjects the hydrogen into the fuel cell, improving efficiency of the cell to provide the electric energy and to recharge the batteries. Compression technologies are mission-critical for the hydrogen and carbon capture market, and we're leveraging our rich portfolio of technologies to actively pursue the most attractive segments of that value chain. I will now turn the presentation over to Vik, who will discuss how we operate sustainably. Vik?

Thanks, Vicente. We're going to move to Slide 18. And as Vicente said, we're really proud of our journey. What's important to note here today is the volume and quantity of -- quality of achievements from the team over the last couple of years. It's really been outstanding. Even during the integration of our companies in the middle of a pandemic, not only did we achieve great financial results, but we also built a strong foundation for long-term success with ESG at the center of how we operate. And as much as we progressed, we think we're just getting started on the ESG opportunity ahead. So on Slide 19, we announced ambitious environmental goals in March 2021, and so let me take a minute to remind everyone. In the area of waste, our goal is to have 50% of our sites achieve zero waste to landfill by 2030. We already have 31 sites that have certified zero waste to landfill. And this means that 98% of nonhazardous waste is first eliminated, reused or recycled, with the remainder sent offsite to be incinerated for energy. For water, by 2030, our goal is to reduce 17% of all water used globally in our operations. And regarding energy, our goal is to reduce 60% of our greenhouse gas emissions by 2030. This includes electricity, natural gas, fuels, including gasoline and diesel as well as propane and refrigerants. Energy use is a direct contributor to climate change and the reduction of operational energy and shifting remaining energy to renewables further reduces our impact. We have one more goal, which is to achieve net-zero greenhouse gas emissions by 2050. We already have 4 plants powered by solar, 2 of which are in India and 2 of which are in China, and 3 sites currently under construction in Italy. And additionally, 14 locations have agreements with their utilities to purchase green energy, and we are just getting started. So turning to Slide 20. We don't just talk about these ambitious goals, we act upon them. We have a systematic process to accelerate the cadence of execution. We're beginning the journey using the IRX process for our operations, our products and the health and safety of our employees. And what you see on the page here, these are 3 of our 5 ESG-focused IDMs. So on this slide, I just want to show and highlight how we have leveraged IRX to drive environmental IDMs to accelerate our ESG journey. Our teams meet weekly to execute on progressing towards our goals, mitigating challenges and ensuring that a high level of focus and bias for action with regards to sustainability. So turning to Page 21. Our employees are the foundation of Ingersoll Rand. We commit to core values that foster a culture, that celebrates diversity, equity and inclusion and promotes an ownership mindset, and our passion to foster inspired teams drove us to provide all employees with equity grants totaling $250 million since 2017. And an employee was granted equity in 2017 has realized a nearly 150% increase in value. So to make this a bit more real, let me share a story about one of our employees, Rizwan Rabbani, who is based in Germany and goes by Rizzy. Rizzy grew up in an SOS children's village home in Pakistan, separated from his mother, who was working hard as a house cleaner to support her 5 children. Years later, Rizzy was in Germany, struggling with some new challenges, including language barriers, culture shock, financial instability and most importantly, difficulties in landing a permanent job. Disheartened, he was ready to give up. And when he got a job with us -- when he actually got a job with us in 2014 at Gardner Denver. And Rizzy had one big dream, uniting his family together into a home. In 2017, Rizzy was a part of the first employee equity grant during the Gardner Denver IPO, and he received equity again in 2020 when we combined Gardner Denver and the industrial segment of Ingersoll Rand. For Rizzy, the financial security these grants provided have been life-changing for him and his family. Rizzy made his dream come true by purchasing his mom her own home with initial equity he obtained during the Gardner Denver IPO. Pleased to report that Rizzy's mom is very happy in her new house and is grateful for his journey with Ingersoll Rand, and we are very much grateful for Rizzy. This is one example of how Ingersoll Rand has invested in employee equity, morale, motivation, engagement and our community at large. When our employees think and act like owners, they work more efficiently and are loyal to Ingersoll Rand. And our employees know they have skin in the game in our long-term journey. So moving to Slide 22. We are passionately committed to diversity, equity and inclusion. On this page, you see our long-term goals and critical initiatives. Our vision is to be a DE&I leader within our industry. We leverage DE&I to exceed our business goals, attract and retain the best talent and address today's global challenges. We hold ourselves accountable to building an inclusive workplace that cultivates a sense of belonging, empowerment and respect for all of our employees across the globe. We are proud that Ingersoll Rand's Board of Directors members are 50% diverse in gender or ethnicity, and our full extended leadership team is nearly 30% female and over 40% diverse in gender or ethnicity. Our 2025 DE&I goals illustrates this commitment. We are passionate about solidifying and advancing the development of our company culture by increasing diversity of talent, supporting navigation of career paths and ensuring equal opportunities while cultivating a sense of belonging. So turning to Slide 23. You can see that Ingersoll Rand's global employees care deeply about our neighbors and shared planet. We strongly believe that we have the power and the responsibility to build a better world, and we wake up every day with the desire to help make life better. Our company-wide citizenship strategy guides our philanthropic priorities and activities, which are aligned to the UN sustainable development goals and to our company's business drivers. Managing our citizenship strategy provides clear direction and enables us to use our product expertise and strength of our employee volunteers to have maximum measurable societal impact on communities and the world. So turning to Slide 24. It's also important to note that we have implemented meaningful changes that demonstrate our commitment to governance best practices. Over the past 2 years, our Board of Directors and its nominating and corporate governance committee undertook a thorough evaluation of our corporate governance, taking into consideration the views held by the investment community as the best practices. Based on this review, our Board recommended a number of changes, and 99% of the votes passed by our stockholders were in favor of the recommended changes including amendments to our certificate of incorporation that achieved several objectives as shown on the slide. It's actually the slide after this, but I think you could probably follow along as well. These changes demonstrate how we bring the same intentionality and thoughtfulness to our governance efforts as we bring to the environmental and social aspects of our ESG journey. So on Page 25. In addition to operationalizing our ESG goals, we are leveraging IRX to achieve our goal of being recognized as a top quartile ESG company, and we believe we have achieved this goal. Our team has been focused on finding and closing gaps in our ratings assessments to improve our alignment to globally recognized ESG rating agencies criteria, and those efforts have really delivered significant progress. And within the past 6 months, we've been materially upgraded by all of our targeted rating agencies, including MSCI, Sustainalytics, S&P Global and CDP. But we're not finished with this journey. We're actually just getting started. We take our role as a sustainability leader seriously, and we are committed to continuous improvement and progress towards achieving our goals. So we turn to Page 26 and conclude our remarks. Operating sustainably is a critical strategy and a critical strategic imperative for Ingersoll Rand. And with IRX accelerating the pace in which we progress on this journey, sustainability becomes an enabler for the rest of our strategic imperatives. The megatrends of digitization, sustainability and quality of life are clear examples of the opportunity that Ingersoll Rand's products and services have to make life better for our customers, the environment, our employees and our stockholders. And in addition, we're hyper focused internally on reducing our own usage of energy, water, materials and waste production. The IRX process will again accelerate the achievement of these Scope 1 and 2 goals. And finally, our engaged, employee base of 16,000 employees, who are each owners of Ingersoll Rand, ensures we are unified in our pursuit of continued ESG leadership in our industry. So with that, we're going to conclude, and we're going to turn it over for some Q&A.

Vicente, Vik, thank you very much for your presentation. I usually like to start by asking questions about the sustainability journey and who the ESG champions are of the company. I think it's pretty clear that the 2 of you are at Ingersoll Rand. So I thought I'd start by talking -- just first of all, congratulations on the ratings, upgrades. I find it funny because we were just talking about this last week, and it's changed since then, congratulations. One of the things that I had noticed was sometimes you see these rating agencies commenting on the combination of the cultures, that could be integration and whether or not that's a risk and if you disagree that it is a risk. And so I thought you could comment on that a bit and help us understand what you've been doing to kind of bring the companies together, why you feel good about the current culture.

Yes, Debbie, we're -- we saw that on one of the commentary of -- in MSCI, but we know this is just maybe a matter of maybe better understanding some of our numbers. I'll start by kind of with the factual data points. And in the fourth quarter, our turnover was less than 3% on hourly and salary. And you can imagine in this current environment, that is a testament to the culture that we have on how we're able to retain the employee base, and I would say that a lot of that has to do with the culture as a company that we have. And some of the things that we have done is that if you saw our strategic imperatives, one of them, the first one is deployed talent. And in that one, the -- what we believe is that the combination of a highly-engaged workforce with this ownership mindset is a catalyst for long-term performance. So what we have done is that we do a lot of work on employee engagement. We have our surveys. We have the actions. We have constant communication with our employees on the actions that we're taking. On the last survey that we just -- that we did last year, we had 90 -- over 91% participation over 16,000 employees. So it tells you how engaged our employees are, and we received over 30,000 comments. And this is actually important to us because we get the commentary back from our employees, and we were able to discern and kind of create better plans on top of the ongoing communication that we have with them. And then the ownership mindset is one that we -- our employees are owners in the company. In 2017, we gave equity to all employees. And as Vik said, in 2020, we gave another $150 million worth of equity to all 16,000 employees. So with the performance that we continue to achieve, this equity is now valued over $500 million for employee base. And this was given to the employees, not to the management equity participants. So again, with this kind of very unique culture of accelerating performance, we've created a great place to work, highly engaged workforce, very focused on the current issues that they may have. And on top of that, we make them owners, so that they can have a skin in the game, and we teach them how to be owners. So I think all that comprehensively, Debbie, is what kind of continues to drive very low turnover and ongoing performance that I know that the rating agencies will continue to better understand that and provide better scores.

I wanted to ask because you show or highlight a lot of products and services that you have to help your customers to act more sustainably, and I wanted to ask you a little bit more about that process. Are you engaging directly with your customers to help understand what they need? Are you engaging with their customers, perhaps? Like what is the process that helps you to identify, okay, these are the things that we really need to be able to offer to everyone to live in a more sustainable world?

Great. Absolutely. I'll give you 2 examples that are kind of correlated to the case studies that we show here. Our Runtech team, they have a sub team within the company that basically they do what they call audits, and they call it runability and wattage usage audits. So they go to a pulp and paper facility and basically, they audit the quality and the efficiency of the machinery in the process. And with that, try to understand energy usage, water usage, to then come up with a game plan as to how we can reduce the energy and the water and create this kind of holistic total cost of ownership view for the customer, all based on the products that we provide. So in the same avenue, for compressors, we do something similar. We go to a customer facility -- and these are audits that we provide, in many cases, free of charge. We go to a facility, and we do a lot of what we call air audits. So we try to understand how much air gets leaked through the entire process of the manufacturing facility that creates basically a low energy efficiency with the potential compressor. Or if the -- there is no leakage in there, then we calculate to the customer, we have our own calculators that are based on the energy input and the output needed for air compressor, what is the best technology that, that customer should have and what is the payback that, that customer can achieve with the upgrade of the technology.

I'm going to shift gears a little bit and ask a couple of related questions. If we could just focus on COVID and the impact that COVID has had on how you think about corporate responsibility, how you run your organization. What has changed as a result of this?

Yes, Debbie, I'll say that the #1 almost -- the #1 priority when COVID hit is we said that we need to make sure that #1 is the safe and health of our employees, and so we embarked into a very aggressive approach on how we provided that. Every day, we've been tracking the COVID-related incidents that we had across our company. And I think thanks to the -- obviously, the help of our employees and with the protocol situations that we used with -- during the COVID days, still, all of our factories were basically fully operational on this, except if there's a very small restriction from governments that require that the facility will be shut down, although in many cases, because our products being mission-critical, they were pretty quickly reopened in many cases. So again, I will say that during these very difficult days, imagine that 2 weeks after we closed this mega merger between Gardner Denver and Ingersoll Rand, 2 weeks later, we get the pandemic [indiscernible] And obviously, it became one of those situations that we need to get front and center with employees while still, at the same time, make tough decisions about how we structure the organization, but at the same time, protect and take care of the employees. And I think based on the results you've seen that we kind of -- we have come out very successful not only from the financial performance but also employee engagement scores continue to improve close to 20% since the time of the merger.

A couple of more questions from me. One on diversity and inclusion, you do have a set of targets out there. I'd like to see if you could talk a little bit more about how you plan to achieve this and if you look at anything kind of beyond the statistics as well, not just the percentage of the workforce that may or may not be involved with your target.

Yes, Debbie, so I'll say that this is one that we have taken a very unique approach, where we say we put some bold and aggressive targets. And then with the use of IRX or what we call the IDM, IMPACT Daily Management, we say, what are the key leading indicators that we need to do in order to get us to that level. So for example, in terms of representation, some of the KPIs that we track right now is we said, what is the number of females that are higher within bands that we are looking for. And then not only that, but what are the number of females that we're actually pulling through the funnel for the interviews. So we have 200 openings for that specific level of leadership roles. How many females are we actually moving on to the final interview? And what does it look like for that panel of interviewees that needs to be also diverse? We do the same thing for URT, under-representative hires, and so I think that's kind of how we track that level of -- are we having enough coming from the funnel in order to achieve our ultimate targets. In addition to that, we look at KPIs around advancements. So the team that we have today inside the company, how do we continue to advance and promote? So right now, we're using tools to mentor. So for example, I personally have to mentor in my team in their goals and objectives, they have to mentor at least 1 or 2 people that are going to be under this kind of URT, under-representative groups, in terms of understanding what is the potential that those individuals have and how do we continue to progress them. And then another data point that we have is around hourly workforce. So how do we continue to increase not only the representation in the groups of leadership roles but also across our entire population of employee base? So I think the big benefit that we have in our company with our culture of just continue to measure, and every week track progress on very specific KPIs, I will say is very unique usage of that tool that has positioned us to be in a pretty unique position to get to our bold and aggressive targets.

And my last question, so we do this conference to allow companies to talk about sustainability, investors to talk about sustainability, but I think more and more of that conversation is coming up than kind of what I would consider more mainstream-type investor meetings. When you have these conversations with investors, what do you think is the -- are the biggest misconception around your company as it relates to sustainability, number one? And then kind of second part of that question, what do you want to be able to tell investors in kind of a couple of years' time that your company is doing now that maybe you're not doing today?

Yes, Debbie, I would say that, as you have seen, I mean our transformation has been fast and we're a humble team, so it has been impressive. I mean the fact that not only we integrated these 2 large companies during the middle of the pandemic, but at the same time, we divested 2 businesses, pretty sizable businesses that generated over $2 billion in cash, and at the same time, we acquired more than a dozen companies into our portfolio. And again, doing all this over the past 2 years, while at the same time, getting recognized from being completely unrecognized in -- by the rating agencies and sustainability, to now being recognized in the top 15th percentile for some of the upper quartile for some of these rating agencies. I think the team has done just a phenomenal job. And maybe the -- what you call maybe the misconception, I think, is just digesting the story because it has gone really fast, very quickly. And so again, I think it's just part of time of being -- continue to get recognized and continue to have the opportunity for us to be able to tell the story. I think sessions like this are very good for us to be able to have that and have that continued dialogue with investors in terms of what we have been able to achieve, but where we think we can actually do because what we believe is that maybe the misconception here is that, yes, we do a lot of this because I know -- we know that we can make a change. But we do a lot of this because we know our customers need our products. All of our products can save energy efficiency, water improvement to our customers. So I think it's essential to know that -- for the investor community that our products are at the center point of this sustainability movement where our customers are needing it. And I think what's exciting to us is that more and more we're seeing now, the sustainability reports getting aligned to the message we've been saying, that our products can help our customers achieve their sustainability targets and environmental targets. And I think you can see it based on the sustainability reports that actually very explicitly talk about the water consumption, where our product like Runtech and others can help as well as the energy efficiency where air compressors and air treatment solutions are kind of called out very specifically as the technologies for our customers to be able to continue to improve.

Vicente, Vik, this is really helpful to go through all this. I really appreciate you being here and hope to have you back next year.

Yes. Thank you, Debbie, for the invitation.

Yes, thank you. Great conference. Thank you.