Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Q3 2022 Earnings Presentation
26 slides from Luxfer's earnings presentation, Oct 26, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
THIRD QUARTER 2022 EARNINGS PRESENTATION October 26, 2022 1 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Examples of such forward-looking statements include but are not l
Slide 3: Executive Summary
EXECUTIVE SUMMARY Ongoing Execution Momentum Q3 2022 • Sales of $100.2M grew $9.0M or 9.9% vs. $91.2M, primarily driven by inflation pass-through Financial • Adjusted EBITDA of $16.1M increased $2.3M or 16.7% vs. $13.8M Performance1 • Adjusted diluted EPS of $0.35 increased $0.09 or 35% vs. $0.262 •
Slide 4: Business Conditions Update
BUSINESS CONDITIONS UPDATE Backlog Sound Amid Supply Chain Latest Market Remain Focused on Shifting Conditions Challenges Persist Developments Successful Execution o Alternative Fuels o U.S. Magnesium o Volatility in energy o Coordinating with and Flameless shipments curtailed; and raw materials sup
Slide 5: Recent Sales Performance by End Market
RECENT SALES PERFORMANCE BY END MARKET Year-over-Year Change FY FY Q3 YTD 2020 2021 2022 2022 Q3 2022 Commentary 33% • Strong demand for military Defense, First aerospace and medical oxygen -6.4% +5.9% +6.8% +1.3% Response, & • Lower shipments of flameless Healthcare ration heaters and chemical kits
Slide 6: Q3 2022: Consolidated Financial Results
Q3 2022: CONSOLIDATED FINANCIAL RESULTS • Sales increased by 9.9% from prior year Sales ($M) +9.9% − Price increases of $13.3M countered rising inflation $0.6 − Volume/mix contributed a positive $4.9 $0.6M $13.3 $100.2 $91.2 − FX translation headwind of $4.9M Q3 2021 FX Price Volume/Mix Q3 2022 • EB
Slide 7: Q3 2022: Segment Results
Q3 2022: SEGMENT RESULTS Q3 2022 Sales Adj. EBITDA Performance Commentary • Strong demand in industrial and transportation end markets, although lower FRH and chemical kit sales Elektron $56.8M $12.7M • Cost pass-through offset inflation year-over-year Up 24.6% Up 51.2% comparison • FX, volume/mix,
Slide 8: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS ($M) Net Debt 1 Operating Working Capital 2 $93.7 $117.2 $75.6 $60.5 $84.9 $78.8 $72.8 $34.5 % of Q3 2019 Q3 2020 Q3 2021 Q3 2022 Net Debt to Q3 2019 Q3 2020 Q3 2021 Q3 2022 Annualized LTM EBITDA 1.3x 1.2x 0.6x 1.2x Revenue 23.4% 23.4% 21.6% 29.2% Free Cash Flow
Slide 9: Narrowing 2022 EPS Guidance
NARROWING 2022 EPS GUIDANCE 2022 Guidance Expectations Revenue Growth • Translation of strong USD impacts revenue (incl. FX, acquisitions, 9% - 12% growth and price) • Narrowing guidance range to $1.35 - Adjusted Diluted EPS $1.35 - $1.40 $1.40 from $1.35 – $1.50 earlier Assumptions • Ongoing supply
Slide 10: Balanced Approach to Capital Deployment
BALANCED APPROACH TO CAPITAL DEPLOYMENT ✓ Reinforcing our existing strong capital position Reinvestment ✓ Investing thoughtfully in secular growth opportunities tied to niche in Organic materials engineering focus Growth ✓ Identifying opportunities for new product innovation and operational efficien
Slide 11: Celebrating Our History of Innovation
CELEBRATING OUR HISTORY OF INNOVATION Alternative fuel: Hydrogen and Compressed Natural Gas storage and transportation Clean Energy Emissions control for automobile and catalysts for industrial applications Lightweight carbon fiber and composite products Light Magnesium alloys for aerospace and Weig
Slide 12: Launch of the Luxfer Business System
LAUNCH OF THE “LUXFER BUSINESS SYSTEM” Strategy Commercial Introducing our new operating Deployment Excellence model: The Luxfer Business System A critical tool to realize growth potential embedded in our business People Customer Lean Excellence Operations & Growth Development is being led by key me
Slide 13: Well Positioned for Value Creation
WELL POSITIONED FOR VALUE CREATION We will help to create a safe, clean and energy-efficient world Global Industrial Attractive Leading Return Primed for Company End Markets on Capital Growth ✓ Market leading ✓ Aligned with ✓ Strong balance ✓ Broad pipeline of products secular growth sheet new produ
Slide 14: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 14 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 15: Q3 2022: Elektron Segment Results
Q3 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +24.6% +51.2% $1.0 $9.9 $0.3 $0.4 $2.3 $12.5 $56.8 $1.0 $12.5 $12.7 $45.6 $8.4 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Q3 2021 FX Price Volume/Mix Q3 2022 Red'n/Other 15 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 16: Q3 2022: Gas Cylinders Segment Results
Q3 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -4.8% -37.0% $2.6 $0.8 $0.4 $0.2 $0.8 $45.6 $43.4 $5.4 $2.6 $0.3 $0.3 $3.4 Q3 2021 FX Price Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 16 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 17: YTD Q3 2022: Consolidated Results
YTD Q3 2022: CONSOLIDATED RESULTS Sales ($M) Adj. EBITDA ($M) +11.4% +0.6% $7.1 $1.7 $9.8 $35.7 $306.7 $1.1 $35.7 $36.0 $0.9 $0.4 $275.4 $48.8 $49.1 Q3 2021 FX Price Acqusition Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 17 CUSTOMER FIRST • INTEGRITY • ACCOUNTAB
Slide 18: YTD Q3 2022: Elektron Segment Results
YTD Q3 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +18.8% +22.4% $1.0 $26.5 $0.5 $0.8 $174.8 $33.5 $4.8 $33.5 $1.5 $39.3 $147.1 $32.1 Q3 2021 FX Price Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 18 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INN
Slide 19: YTD Q3 2022: Gas Cylinders Segment Results
YTD Q3 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +2.8% -41.3% $2.2 $0.7 $0.4 $2.2 $5.0 $7.1 $128.3 $131.9 $16.7 $9.5 $0.4 $1.2 $9.8 Q3 2021 FX Acquistion Price Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 19 CUSTOMER FIRST • INTEGRITY • ACCO
Slide 20: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 20 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 20
Slide 21: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 21 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 21
Slide 22: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 22 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 22
Slide 23: Reconciliation of Non-GAAP: Net Debt, Working Capital, Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: NET DEBT, OPERATING WORKING CAPITAL, OPERATING WORKING CAPITAL AS A % OF NET ANNUALIZED NET SALES, AND FREE CASH FLOW (UNAUDITED) In millions Q3 2019 Q3 2020 Q3 2021 Q3 2022 Non-current debt $105.6 $49.7 $49.6 $61.8 Current debt - 25.0 - 25.0 Cash and c
Slide 24: Reconciliation of Non-GAAP: Adjusted Net Income, Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME FROM CONTINUING OPERATIONS, ADJUSTED EBITDA, ADJUTED EBITDA MARGIN, NET DEBT TO TRAILING 12 MONTHS ADJUSTED EBITDA, AND FREE CASH FLOW In millions Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 202
Slide 25: Reconciliation of Non-GAAP: Return on Invested Capital (ROIC)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 In millions Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 EBITA $14.4 $15.7 $17.2 $13.9 $8.1 $12.7 $7.5 $10.5 $10.5 $14.5 $13.5 $10.3 $1
Slide 26: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
26 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK