Slide 1: Second Quarter 2022 Earnings Presentation
SECOND QUARTER 2022 EARNINGS PRESENTATION Conference Call July 27, 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 Sustained Performance in 2022 Q2 2022 • Sales of $109.5M grew 10.6% vs. $99.0M, driven by price inflation and volume Financial • Adjusted EBITDA of $16.9M vs. $17.3M y-o-y and $16.1M in Q1 2022 Performance 1 • Adjusted diluted EPS of $0.36 vs. $0.36 y-o-y and $0.33 in Q1 2022 2 • N
Slide 4: Business Conditions Update
BUSINESS CONDITIONS UPDATE Healthy Backlog Pockets of Supply Monitoring Market Remain Focused on Continues Chain Uneven Developments Successful Execution o Order pace remains o Raw material price ✓ Close collaboration ✓ Securing demand sound increases slowed with customers while maintaining cost pas
Slide 5: Recent Sales Performance by End Market
RECENT SALES PERFORMANCE BY END MARKET Year-over-Year Change Q1 Q2 YTD FY 2020 FY 2021 2022 2022 2022 Q2 2022 Commentary 31% • Strong demand for military flares; decline in flameless ration Defense, First -6.4% +5.9% +2.9% -4.8% -1.2% heaters Response, & • First Response & Healthcare Healthcare stea
Slide 6: Q2 2022: Consolidated Financial Results
Q2 2022: CONSOLIDATED FINANCIAL RESULTS • Sales increased by 10.6% from prior year Sales ($M) +10.6% − Price increases of $13.0M countered rising inflation − Volume contributed a positive $1.3M $1.3 $13.0 − FX translation headwind $3.8 $109.5 $99.0 − Healthy order intake continued Q2 2021 FX Price V
Slide 7: Q2 2022: Segment Results
Q2 2022: SEGMENT RESULTS Q2 2022 Sales EBITDA Performance Commentary Elektron • Benefitting from aerospace, automotive and $63.4M $13.2M industrial demand year-over-year Up 20.8% Up 10.0% comparison • Cost pass through to offset inflation • Cost pass through continues to be limited by Gas Cylinders
Slide 8: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS ($M) Net Debt 1 Operating Working Capital 2 $88.8 $116.7 $82.4 $70.6 $84.1 $85.7 $79.7 $39.5 Q2 2019 Q2 2020 Q2 2021 Q2 2022 % of Q2 2019 Q2 2020 Q2 2021 Q2 2022 Net Debt Annualized to EBITDA 1.1x 1.5x 0.6x 1.2x Revenue 21.5% 28.0% 20.1% 26.6% Free Cash Flow 3 R
Slide 9: Affirming 2022 EPS Guidance
AFFIRMING 2022 EPS GUIDANCE 2022 Guidance Expectations Revenue Growth • First half 2022 performance on plan; order (incl. FX, acquisitions, 12% - 20% flow remains healthy and price) Adjusted Diluted EPS $1.35 - $1.50 • Second half 2022 earnings likely weighted toward Q4 Assumptions Operating Working
Slide 10: Balanced Approach to Capital Deployment
BALANCED APPROACH TO CAPITAL DEPLOYMENT ✓ Investing in secular growth opportunities tied to niche Organic materials engineering focus Reinvestment in Growth ✓ New product innovation represents preferred means of capital redeployment ✓ Repurchased $2.2M in shares during Q2 2022, following Return of $
Slide 11: Growth Strategy Development
GROWTH STRATEGY DEVELOPMENT Listening & Engaging Key Areas of Next Steps for Profitable Business Strength Growth • CEO & CFO business unit visits ✓ Technology: Leadership in our 1. Selecting Opportunities: • Engagement with the wider high-materials Harnessing growth tailwinds Luxfer team ✓ Products:
Slide 12: 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 13: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 13 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 14: Q2 2022: Elektron Segment Results
Q2 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +20.8% +10.0% $0.3 $1.8 $12.4 $63.4 $52.5 $12.4 $11.3 $0.6 $0.5 $12.0 $13.2 Q2 2021 FX Price Inflation Cost Red/Other Q2 2022 Q2 2021 FX Price Volume/Mix Q2 2022 14 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVEL
Slide 15: Q2 2022: Gas Cylinders Segment Results
Q2 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -0.9% -30.2% $2.0 $1.0 $0.6 $0.3 $0.6 $46.5 $46.1 $5.3 $1.1 $3.5 $3.7 $0.5 Q2 2021 FX Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume / Cost Q2 2022 Mix Red/Other 15 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 16: YTD Q2 2022: Consolidated Results
YTD Q2 2022: CONSOLIDATED RESULTS Sales ($M) Adj. EBITDA ($M) +12.1% -5.7% $7.1 $2.2 $5.0 $22.4 $206.5 $0.3 $22.4 $23.5 $184.2 $0.8 $0.4 $35.0 $33.0 Q2 2021 FX Price Acqusition Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume/Mix Cost Q2 2022 Red/Other 16 CUSTOMER FIRST • INTEGRITY • ACCOUNTABIL
Slide 17: YTD Q2 2022: Elektron Segment Results
YTD Q2 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +16.3% +12.2% $1.9 $2.6 $21.0 $118.0 $101.5 $16.6 $0.7 $1.3 $0.5 $21.0 $26.6 $23.7 Q2 2021 FX Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume/Mix Cost Q2 2022 Red/Other 17 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOV
Slide 18: YTD Q2 2022: Gas Cylinders Segment Results
YTD Q2 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +7.0% -43.4% $1.4 $0.3 $0.2 $1.4 $2.4 $7.1 $88.5 $11.3 $82.7 $6.9 $0.1 $0.9 $6.4 Q2 2021 FX Acquistion Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume / Cost Q2 2022 Mix Red/Other 18 CUSTOMER FIRST • INTEGRITY • ACCOUN
Slide 19: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 19 1The calculation of earnings per share is performed separately for continuing and discontinued operations. As a result, the sum of the two in any particular period may not equal the earnings-per-share amount in total. CUSTOMER FIRST 2The los
Slide 20: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 20 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 20
Slide 21: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 21 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 21
Slide 22: Reconciliation of Non-GAAP Measures: Adjusted Net Income, EPS, EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME, ADJUSTED EPS, AND ADJUSTED EBITDA (UNAUDITED) 22 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 22
Slide 23: Reconciliation of Non-GAAP Measures: Return on Invested Capital
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 (Unaudited) 2021 2021 2021 2021 2022 2022 $M Q1 Q2 Q3 Q4 Q1 Q2 EBITA 14.5 13.5 10.3 10.4 12.6 13.7 Effective tax rate - per income statement 24.8% 21.0% 24.0% 34.0% 24.5% 20.0% Notional tax (3.6) (2.8) (2.5) (3.5) (3.1
Slide 24: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK