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Ingersoll Rand: Its Segments and Restructuring Efforts

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Ingersoll Rand’s background and business

Incorporated in 2009 in Ireland, Ingersoll Rand (IR) is a diversified, global company whose operations include air conditioning systems and services, climate control technologies, and industrial and security technologies. Currently, it serves customers in approximately 100 countries and employs about 43,000 people worldwide.

Ingersoll Rand operates in two segments: Climate and Industrial. In 2015, these segments contributed around 77% and 23%, respectively, to the company’s consolidated revenues. The operating margins for Climate and Industrial were12.7% and 12.1%, respectively.

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The Climate segment includes aftermarket parts and services, air cleaners, conditioners, exchangers, handlers, bus rail HVAC (heating, ventilation, and air conditioning), auxiliary temperature management, and heat pumps. The Industrial segment provides aftermarket parts and accessories, air-ends, blowers, dryers, filters, fluid handling systems, golf vehicles, power tools, and pumps.

Restructuring efforts in the last two years

In 4Q15, Ingersoll Rand agreed to sell Hussmann to Panasonic. Hussmann provides products, services, and solutions for preserving and merchandising fresh foods. The sale is subject to regulatory approvals. In 4Q13, IR completed the spin-off of its securities business into a stand-alone company called Allegion. The company manufactures door locks and locking systems for residential and commercial buildings. IR says that its restructuring efforts have helped reduce overhead costs.

IR is part of the Guggenheim Mid-Cap Core ETF (CZA) and accounts for 2.0% of the total holdings. IR has also been part of the S&P 500 (SPY) for more than five years. Some of the players in the HVAC space are Honeywell International (HON), ABB (ABB), Atlas Copco, and Lennox International (LII).

In the next part of the series, we’ll take a look at Ingersoll Rand’s (IR) mission and the impact it hopes to have on greenhouse gas emissions.

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