Vicente Reynal
Chairman, President and Chief Executive Officer at Ingersoll Rand
Thanks, Matthew, and good morning to all. I would like to begin by thanking and acknowledging all of our employees for their hard work in helping us to deliver another record quarter in Q2. Our employees continue to deliver on our commitments despite the constantly changing macroeconomic environment and consistently exemplify our purpose, while thinking and acting like owners. I would also like to welcome our new employees from our recent acquisitions. Together, we have a great opportunity to build upon our strong complementary brands, products and capabilities, providing customers and the industry with a broader spectrum of solutions.
Beginning on Slide 3, fueled by our competitive differentiator IRX, in the second quarter we delivered double-digit growth in revenue, adjusted EBITDA, adjusted EPS, and free cash flow. We recently published our 2022 Sustainability Report, where we yet again delivered industry-leading results, while remaining on track to meet our 2030 sustainability goals. Finally, based on our continued robust performance in Q2, we're once again raising our 2023 full year guidance.
As we move to Slide 4, our economic growth engine is the key to how we deliver compounding annual results. During our last Investor Day in Q4 of 2021, we presented this model and highlighted our organic, inorganic and quality of earnings growth enablers. We remain committed to our strategy and our long-term Investor Day targets outlined in this page.
On the next slides I will provide you with deeper insights into our organic initiatives which are centered around product innovation and innovative value, also known as i2V. In addition, we will provide an update on our progress towards our inorganic goals.
Turning to Slide 5, we start with our organic growth initiatives. Here we have some examples of how in China we have leveraged products localization, as well as i2V to drive organic growth. On the left-hand side of the page, we show how localization has created new product offerings and enabled channel expansion, all with a focus on high-growth, sustainable end-markets. Since the Gardner Denver and Ingersoll Rand merger, our blower and vacuum product lines have grown organically at a 17% CAGR.
On the right-hand side of the page, we have an example of organic growth through the combination of recently acquired M&A and i2V. And as you can see on the pictures at the bottom right hand side of the page, the Asia Pacific team conducted a teardown event with legacy products, recently acquired M&A and competitive technologies. The outcome of that teardown event is the development of a new oil free screw vacuum pump. This new product will expand our addressable market by over $350 million, and will go from development to launch in approximately six months.
Next on Slide 6, M&A continues to be at the forefront of our capital allocation strategy. We are thrilled to highlight our recently signed M&A deal with Roots. This iconic Roots brand is a leading provider of low-pressure compression and vacuum technology. This brand is synonymous with blowers in the same way that clinics and Band-Aids are recognized in consumer markets. We're very excited to acquire this iconic brand, which has been in business for almost 200 years.
The acquisition also expands our capabilities in both low-pressure technology and centrifugal technology, and this technology is a critical component in the process of green steel manufacturing. Our M&A funnel remains strong, and as of today, it continues to be over five times larger than it was at the time of the R&P. We currently have seven transactions at the LOI stage, and more importantly, we have several other transactions in process which are close to the LOI stage. Based on acquisitions to date, the seven transactions under LOI and our current M&A funnel, we are reaffirming our commitment to an additional $200 million to $300 million in annualized inorganic revenue to be acquired in 2023.
On Slide 7, we recently released our 2022 Sustainability Report, showcasing the commitment and results of our strategic imperative lead sustainably. We have made significant progress in establishing ourselves as a top quartile ESG company by leveraging our competitive differentiator IRX to deliver results in a very short period of time. In fact, we have received several industry-leading sustainability acknowledgements of our efforts, including being named to both the Dow Jones Sustainability World Index and the Dow Jones Sustainability North America Index. Ingersoll Rand was ranked as the number one performer in the IEQ machinery and electrical equipment industry in North America, and number four globally in 2022.
As of April of 2023, Ingersoll Rand received an ESG risk rating of low at 12.8 from Morningstar Sustainalytics. We also received an ESG rating improvement to AA in 2023 from MSCI, and ranked as a leader among 47 companies in the industrial machinery category. More important, we're also leading the way in the social aspect of ESG with our employee ownership model. We believe employee ownership creates economic opportunity for our employees and their families, while driving increased employee engagement as our long-term shareholder. To that end, we have awarded approximately $275 million since 2017 in equity to our employees, employees that are not already on the management equity program. This has increased to over $660 million in value as of June 30, 2023.
We also continue to offer our Ownership Works program that grants equity to all new employees after their one-year anniversary. Our employees are critical element of our business, and making life better for them begins with opportunity. Through their engagement and commitment, we are on track to meet our 2030 sustainability objectives.
With this, I'll turn now the presentation over to Vik to provide an update on our Q2 financial performance.
