Slide 1: Q4 and Full Year 2023 Earnings Presentation
Q4 and Full Year 2023 Earnings Presentation February 15, 2024 Q4 and FY 2023 Earnings Results | 1
Slide 2: Cautionary Statements Regarding Forward-looking Statements
Cautionary Statements Regarding Forward-looking Statements This presentation may contain (and verbal statements made by MSA® Safety Incorporated (“MSA Safety”) may contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relat
Slide 3: Non-GAAP Financials
Non-GAAP Financials To supplement our Consolidated Financial Statements presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this presentation includes, certain non-GAAP financial measures. These financial measures include constant currency revenue growth, adju
Slide 4: MSA Safety (NYSE: MSA) Snapshot
MSA Safety (NYSE: MSA) Snapshot Leading Global Safety Technology Company with Proven Track Record of Value Creation DRIVEN BY OUR PURPOSE KEY STATISTICS(1) FOREFRONT OF SAFETY INNOVATION Our Mission Steady end market demand, with 1 resilient organic growth and extensive • That men and women may work
Slide 5: Purpose-Led Company Driven by Our Mission of Safety
Purpose-Led Company Driven by Our Mission of Safety Generating Sustainable Growth and Impact OUR IMPACT PILLARS PROTECTING THE WORLD’S WORKERS AND WORKPLACES WITH OUR INNOVATIVE PRODUCTS AND SOLUTIONS OUR PRODUCTS & SOLUTIONS • Be the leader in safety technologies • Invent, innovate, and develop nex
Slide 6: Evolution Into a Higher Growth, Higher Returns Company
Evolution Into a Higher Growth, Higher Returns Company Taking Deliberate Actions to Better Serve Our Customers and Advance Our Mission ORGANIC TRANSFORMATION EXPANDED TAM THROUGH M&A Innovation Commercial Operational • Leading provider of HVAC-R instrumentation • Grew electrical and • Evolved go-to-
Slide 7: Strong Track Record of Value Creation
Strong Track Record of Value Creation Robust Growth and Margin Enhancement Delivered Powerful Earnings Growth ADJUSTED OPERATING INCOME NET SALES ADJUSTED EPS AND MARGIN +6% +11% +9% CAGR CAGR CAGR $398MM $7.03 $1,788MM 22.2% $1,358MM $4.50 $235MM +490 17.3% bps 22.2% 2018 2023 2018 2023 2018 2023 S
Slide 8: 2023 Highlights
2023 Highlights Continued Execution of Our Strategy Has Transformed Our Business KEY HIGHLIGHTS New Product Development and Execution • Continued to drive growth through innovation, with solutions developed alongside customers • Rapidly addressed supply chain issues with redesign efforts and revital
Slide 9: Fourth Quarter and Full Year 2023 Performance
Fourth Quarter and Full Year 2023 Performance Broad-Based Strength Across Our Global Business KEY METRICS(1) Q4 FY PERFORMANCE HIGHLIGHTS • Strong execution supported by MSA Business System Revenue $495MM $1.8B (MBS) +12% +17% • Double-digit sales growth balanced across product Adj. Operating $115MM
Slide 10: Q4 2023 Financial Summary
Q4 2023 Financial Summary Strong Financial Results in Fourth Quarter to Conclude an Exceptional Year ADJUSTED OPERATING INCOME NET SALES ADJUSTED EPS AND MARGIN $495MM $2.06 $443MM $115MM 23.3% $1.80 $96MM 21.6% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 NET SALES GROWTH OF 12% ADJUSTED OPERATI
Slide 11: Full Year 2023 Financial Summary
Full Year 2023 Financial Summary Robust Execution Delivered Double-Digit Growth with Significant Margin Expansion ADJUSTED OPERATING INCOME NET SALES ADJUSTED EPS AND MARGIN $398MM $1,788MM $7.03 22.2% $1,528MM $290MM $5.65 19.0% FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 NET SALES GROWTH OF 17
Slide 12: Free Cash Flow and Financial Leverage
Free Cash Flow and Financial Leverage Strong Cash Generation and Ample Liquidity to Advance Our Strategy FREE CASH FLOW NET LEVERAGE Fourth Quarter Full Year $397MM $147MM 2.2x 2.0x 1.7x 1.3x 1.0x $115MM $40MM Q4 2022 Q4 2023 FY 2022 Adj. FY 2023 12/31/2022 Pro 3/31/2023 6/30/2023 9/30/2023 12/31/20
Slide 13: 2024 Outlook
2024 Outlook Mid-Single Digit Growth Outlook Reflects Resilient Demand and Strong Commercial Strategy % NET SALES(1) DIVERSE END MARKETS OPERATING ENVIRONMENT UPDATE POSITIVES FIREFIGHTER SAFETY • Government fire service • Growing global demand for safety products and solutions • SCBA • Helmets 38%
Slide 14: Key Takeaways
Key Takeaways Focused on Delivering Profitable Growth and Value Creation Over the Long-Term Strong execution in 2023 resulting in double-digit growth, healthy margin expansion, and robust cash generation Mission-driven culture and unwavering commitment to the safety of our customers and our employee
Slide 15: Investor Day 2024
INVESTOR DAY 2024 Wednesday, May 22 | NYC | REGISTRATION DETAILS TO FOLLOW FEATURING SESSIONS ON: Our commitment to safety | Innovation and new product development | Long-term strategy | Financial performance and outlook Q4 and FY 2023 Earnings Results | 15
Slide 16: Appendix
Appendix Q4 and FY 2023 Earnings Results | 16
Slide 17: Constant Currency Sales Growth – Consolidated
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – Consolidated Three Months Ended Decem ber 31, 2023 Industrial Firefighter Detection (b) PPE and Net Sales Safety(a) Other (c) GAAP reported sales change 17% 11% 5% 12% Plus: Currency translation effects (1%) (
Slide 18: Constant Currency Sales Growth – Americas Segment
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – Americas Segment Three Months Ended Decem ber 31, 2023 Industrial Firefighter Detection (b) PPE and Net Sales Safety(a) Other (c) GAAP reported sales change 22% 15% 4% 15% Plus: Currency translation effects —%
Slide 19: Constant Currency Sales Growth – International Segment
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – International Segment Three Months Ended Decem ber 31, 2023 Industrial Firefighter Detection (b) PPE and Net Sales Safety(a) Other (c) GAAP reported sales change 6% 5% 6% 6% Plus: Currency translation effects
Slide 20: Segment Information – Three Months Ended December 31
Reconciliation of Non-GAAP Financial Measures Segment Information (Unaudited) (In thousands, except percentage amounts) Am ericas International Corporate Consolidated Three Months Ended Decem ber 31, 2023 Net sales to external customers $ 332,676 $ 162,682 $ - $ 495,358 Operating income 102,250 Oper
Slide 21: Segment Information – Twelve Months Ended December 31
Reconciliation of Non-GAAP Financial Measures Segment Information (Unaudited) (In thousands, except percentage amounts) Am ericas International Corporate Consolidated Tw elve Months Ended Decem ber 31, 2023 Net sales to external customers $ 1,235,594 $ 552,053 $ - $ 1,787,647 Operating income 231,32
Slide 22: Adjusted Earnings and Adjusted Earnings per Diluted Share
Reconciliation of Non-GAAP Financial Measures Adjusted Earnings and Adjusted Earnings per Diluted Share (Unaudited) (In thousands, except per share amounts) Three Months Ended December 31, Twleve Months Ended December 31, 2023 2022 % Change 2023 2022 % Change Net income attributable to MSA Safety In
Slide 23: Adjusted Operating Income and Adjusted EPS
Reconciliation of Non-GAAP Financial Measures Adjusted Operating Income and Adjusted Earnings per Diluted Share (Unaudited) Twelve Months Ended December 31, 2023 2018 Net sales to external customers $ 1,787,647 $ 1,358,104 Operating income 231,320 173,479 Operating margin % 12.9% 12.8% Restructuring
Slide 24: Free Cash Flow
Reconciliation of Non-GAAP Financial Measures Free Cash Flow (Unaudited) Three Months Ended Twelve Months Ended (In thousands, except percentage amounts) December 31, December 31, 2023 2022 % Change 2023 2022 % Change Cash flow from operating activities $ 158,914 $ 53,552 $ 92,857 $ 157,455 Contribu
Slide 25: Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited) Twelve Months Ended (In thousands) December 31, 2023 Operating income $ 231,320 Loss on divestiture of MSA LLC 129,211 Depreciation and amortization 51,527 Product liability expense 3 Re
Slide 26: R&D Investment
Reconciliation of Non-GAAP Financial Measures R&D Investment (Unaudited) (In thousands) Twelve Months Ended December 31, 2023 2022 Research and development expense $ 67,988 $ 57,012 Capitalized software development costs $ 12,060 $ 8,713 Total R&D investment 80,048 65,725 Net sales $ 1,787,647 $ 1,5
Slide 27: Adjusted Debt Repayment
Reconciliation of Non-GAAP Financial Measures Adjusted Debt Repayment (Unaudited) (In thousands) Twelve Months Ended December 31, 2023 2022 Change in debt $ 23,898 $ (13,000) (a) Borrowings related to divestiture of MSA LLC $ (312,943) $ - Adjusted payments on debt (289,045) (13,000) (a) Net of fore