Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Investor Presentation (November 2022)
34 slides from Luxfer's investor presentation, November 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION November 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: We are Luxfer
We are Luxfer We help to create a safe, clean and energy efficient world 3 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 4: Luxfer Overview (NYSE: LXFR)
LUXFER OVERVIEW (NYSE: LXFR) Company Description Q3 2022 Sales Breakdown Luxfer is a global industrial company innovating niche applications in materials engineering. Luxfer’s high- by End Market performance materials, components and high-pressure gas containment devices are used in defense and Defe
Slide 5: Materials Technology Leadership
MATERIALS TECHNOLOGY LEADERSHIP Innovation leader in the use High of magnesium alloys for critical Performance MAGNESIUM applications in aerospace, defense, Magnesium and other industries as well as in Alloys flameless heating applications Elektron Segment Expertise in high-performance Specialty spe
Slide 6: Aligned with Secular Growth Trends
ALIGNED WITH SECULAR GROWTH TRENDS Composite gas cylinders and systems used for $10B Addressable Market1 Alternative Fuel applications, including Hydrogen and Compressed Natural Gas ~$2B Gas Cylinders Clean Energy Zirconium-based emissions control and industrial catalysis materials Lightweight carbo
Slide 7: High Visibility Financial Performance
HIGH VISIBILITY FINANCIAL PERFORMANCE $M except EPS Revenue1 Adj. EBITDA1 2 2017-2021 CAGR: 1.8% 2017-2021 CAGR: 2.6% $401.9 $405.4 $79.6 $373.4 $374.1 $348.0 $67.1 $324.8 $63.4 $63.7 $57.2 $53.9 2017 2018 2019 2020 2021 LTM 2017 2018 2019 2020 2021 LTM Adj. Diluted EPS1 2 Net Debt1 2 2017-2021 CAGR
Slide 8: 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 9: Environmental, Social, and Governance Roadmap
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ROADMAP 1 ENVIRONMENTAL • Committed to 20% reduction in CO2 emissions, 10% reduction in freshwater 4 use, and 20% less waste to landfill by 2025; on a journey to net zero • Conducting Carbon Life Cycle Analyses to improve product sustainability • Greener operati
Slide 10: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY 2017 - Growth Capabilities 2020 2018 - • Commercial Portfolio 2023 2023 & opportunities Simplification Beyond • Demand for Clean Cost Energy Transformation Organic and • New products Inorganic Growth • Growth talent • Global presence • Strong balance sheet • Enhanced op
Slide 11: 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 12: Recent Business Highlights
RECENT BUSINESS HIGHLIGHTS ✓ Ended Q3 2022 with order book well ahead of prior year ✓ Seeing continued recovery in aerospace and automotive end markets, which for us grew 50% year-over-year in Q3 2022 ✓ Ongoing uptake of Zirconium products targeting pharmaceutical and consumer electronics markets, w
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: Q3 2022 Update
Q3 2022 UPDATE 14 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 15: 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. $0.262 •
Slide 16: Business Conditions Update
BUSINESS CONDITIONS UPDATE Backlog Sound Amid Supply Chain Latest Market Remain Focused on Shifting Conditions Challenges Persist Developments Successful Execution o Alternative Fuels o U.S. Magnesium o Volatility in energy o Coordinating with and Flameless shipments curtailed; and raw materials sup
Slide 17: Recent Sales Performance by End Market
RECENT SALES PERFORMANCE BY END MARKET Year-over-Year Change FY FY Q3 YTD 2020 2021 2022 2022 Q3 2022 Commentary 33% • Strong demand for military Defense, First aerospace and medical oxygen -6.4% +5.9% +6.8% +1.3% Response, & • Lower shipments of flameless Healthcare ration heaters and chemical kits
Slide 18: Q3 2022: Consolidated Financial Results
Q3 2022: CONSOLIDATED FINANCIAL RESULTS • Sales increased by 9.9% from prior year Sales ($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 19: 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 $12.7M • Cost pass-through offset inflation year-over-year Up 24.6% Up 51.2% comparison • FX, volume/mix,
Slide 20: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS ($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 21: 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 – $1.50 earlier Assumptions • Ongoing supply
Slide 22: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 22 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 23: Q3 2022: Elektron Segment Results
Q3 2022: ELEKTRON SEGMENT RESULTS Sales ($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 $8.4 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Q3 2021 FX Price Volume/Mix Q3 2022 Red'n/Other 23 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 24: Q3 2022: Gas Cylinders Segment Results
Q3 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($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 $3.4 Q3 2021 FX Price Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 25: YTD Q3 2022: Consolidated Results
YTD Q3 2022: CONSOLIDATED RESULTS Sales ($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 $49.1 Q3 2021 FX Price Acqusition Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 25 CUSTOMER FIRST • INTEGRITY • ACCOUNTAB
Slide 26: YTD Q3 2022: Elektron Segment Results
YTD Q3 2022: ELEKTRON SEGMENT RESULTS Sales ($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 $32.1 Q3 2021 FX Price Volume/Mix Q3 2022 Q3 2021 FX Price Inflation Volume/Mix Cost Q3 2022 Red'n/Other 26 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INN
Slide 27: YTD Q3 2022: Gas Cylinders Segment Results
YTD Q3 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($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 27 CUSTOMER FIRST • INTEGRITY • ACCO
Slide 28: Condensed Consolidated Statements of Income
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 28 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 28
Slide 29: Condensed Consolidated Balance Sheets
CONDENSED CONSOLIDATED BALANCE SHEETS 29 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 29
Slide 30: Condensed Consolidated Statements of Cash Flows
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 30 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 30
Slide 31: 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 In millions 2017 2018 2019 2020 2021 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Non-current debt $94.6 $73.6 $91.4 $53.4 $59.6 $105.6 $49.7 $49.6
Slide 32: Reconciliation of Non-GAAP: Adjusted Net Income, EBITDA (Annual)
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 (ANNUAL 2017 TO 2021) In millions 2017 2018 2019 2020 2021 Net income from continuing operations $16.4 $27.7 $8.7 $20.
Slide 33: Reconciliation of Non-GAAP: Adjusted Net Income, EBITDA (Quarterly)
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, ADJUSTED EPS (QUARTERLY Q4 2018 TO Q3 2022) In millions Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 20
Slide 34: Reconciliation of Non-GAAP: Return on Invested Capital
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
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