Lincoln Electric Holdings, Inc. · NASDAQ:LECO
Lincoln Electric — Q2 2024 Earnings Presentation
20 slides from Lincoln Electric's earnings presentation, Jul 31, 2024
Slide 1: Q2 2024 Earnings
July 31, 2024 LINCOLN ELECTRIC HOLDINGS, INC. Q2 2024 Earnings
Slide 2: Safe Harbor and Regulation G Disclosures
Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Non-GAAP Measures: Statements made during this presentation which are not Our management uses non-GAAP financial measures in historical facts may be considered forward-looking statements. assessing and evaluating the Company’s perf
Slide 3: Second Quarter 2024 Highlights
Second Quarter $1,022M 23.7% 2024 Highlights: Net Sales performance Adjusted ROIC performance -4% vs. prior year; Organic sales -4% +80 bps vs. prior year Operational execution and cost management mitigate softer sales performance 17.4% $171M Adjusted operating income Adjusted Operating Income Margi
Slide 4: Q2 organic sales performance reflects lower OEM production activity and slower capital spending
Q2 organic sales performance reflects lower OEM production activity and slower capital spending Q2 Organic sales declined 4.4% as price is offset by lower volumes Q2 global end sector performance1 All product areas impacted 2 of 5 end markets growing Automation down low single-digit percent Construc
Slide 5: Year-to-date acquisitions represent an annualized sales run rate of approximately $175 million
Year-to-date acquisitions represent an annualized sales run rate of approximately $175 million and $0.14-$0.16 of EPS accretion1 Vanair - Mobile Power Solutions Inrotech® Acquisition Vanair® Acquisition Technology acquisition (June 3, 2024) Core welding acquisition (July 30, 2024) Danish automation
Slide 6: Velion DC Fast Charger Update
Velion DC Fast Charger Update Commercialization Ramping Operationally Ready and Key Learnings Velion 150kW DC fast charger Accelerating Product Roadmap Extended selling cycle & evolving launched & expanded the team Higher power levels & mobile market requirements • NEVI-compliant & certified to UL-s
Slide 7: Income Statement – Q2 2024
Income Statement – Q2 2024 YoY % Change $ in Millions Q2 2024 % of Sales Q2 2023 % of Sales Fav/ (Unfav) Net Sales $ 1,021.7 $ 1,060.6 (3.7)% Gross Profit 383.8 37.6% 373.4 35.2% 2.8% SG&A 208.5 20.4% 192.7 18.2% (8.2)% Operating Income 148.8 14.6% 178.0 16.8% (16.4)% Special item charges1,2 28.8 2.
Slide 8: Americas Welding Segment
Americas Welding Segment % YoY ($ in Millions) Q2 2024 Q2 2023 Volumes reflect weakening Change OEM production activity and Net Sales $ 648.9 $ 677.0 (4.1)% slowing automation demand with challenging prior year comparisons in equipment Adjusted EBIT $ 136.7 $ 139.9 (2.3)% and U.S. exports. Adjusted
Slide 9: International Welding Segment
International Welding Segment % YoY ($ in Millions) Q2 2024 Q2 2023 Change Volumes reflect growth in Net Sales $ 238.8 $ 253.4 (5.8)% Automation and Asia Pacific, offset by weakening industrial activity in EMEA. Adjusted EBIT $ 25.7 $ 33.8 (23.9)% Margin performance reflects Adjusted EBIT Margin2 10
Slide 10: The Harris Products Group
The Harris Products Group % YoY ($ in Millions) Q2 2024 Q2 2023 Volume declines narrow as Change retail and specialty gas Net Sales $ 134.0 $ 130.2 2.9% growth mitigates challenged residential sector demand (HVAC). Adjusted EBIT $ 24.9 $ 19.5 27.7% Price primarily reflects Adjusted EBIT Margin2 18.2
Slide 11: Cash Flow From Operations Metrics
Cash Flow From Operations Metrics Cash Flow from Operations Average Operating Working ($ in Millions) Capital to Net Sales Ratio $323 $304 110% cash conversion1 in Q2-2024 and 97% in H1-2024 18.9% 18.0% $199 17.1% Working capital $171 performance improves vs. the comparable prior year period as inve
Slide 12: Capital Allocation
Capital Allocation1 ($ in Millions) $445 Q2 Capital Allocation & Returns 161 • Growth: $176 million $267 • Return to Shareholders: $91 million $233 • Return on Invested Capital2: 23.7% 50 82 40 85 $144 Capital Allocation Strategy 53 153 74 153 Prioritized uses of cash: 37 33 33 • Growth investments
Slide 13: Maintaining Full Year 2024 Assumptions
Maintaining Full Year 2024 Assumptions Announced May 23, 2024, and based on current demand levels Assumptions Increased Assumption Risks Mid-single digit % organic sales decline Heavy industries sector softening Neutral price/cost Timing of automotive capital spend Approximate 17.5% adjusted operati
Slide 14: Contact
Contact: Amanda Butler Vice President, Investor Relations & Communications Amanda_Butler@lincolnelectric.com 216.383.2534 14 14
Slide 15: Non-GAAP Information
Non-GAAP Information Adjusted operating income, Adjusted net income, Adjusted EBIT, EBITDA, Adjusted EBITDA, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted EPS, Organic sales, Cash conversion, and Adjusted Return on invested capital are non-GAAP financial measures. Manage
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures: Reconciliation of Operating Income, Net Income, Effective Tax Rate, and EPS to Non-GAAP Adjusted Operating Income, Adjusted Net Income, Adjusted Effective Tax Rate, and Adjusted EPS (In thousands, except per share amounts) (Unaudited) 16 Pleas
Slide 17: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures 1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate (continued) and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section. Footnotes for Non-GAAP 2) Primarily related to rationalization plans
Slide 18: Adjusted Return on Invested Capital (ROIC)
Non-GAAP Financial Measures Adjusted Return on Invested Capital (ROIC) (In thousands) (Unaudited) 1) Adjusted net operating profit after taxes and Adjusted ROIC are non-GAAP financial measures. Refer to Non-GAAP Information section. 2) Includes the net tax impact of Special items recorded during the
Slide 19: Segment EBIT
Segment EBIT EBIT and Adjusted EBIT Reconciliation – Three Months Ended June 30, 2024 (In thousands) (Unaudited) 19 Please see the following slide for corresponding footnotes
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures 1) EBIT is defined as Operating income plus Other income. (continued) 2) The primary profit measure used by management to assess segment performance is adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive adjusted EBIT. Footnotes for EBIT
Lincoln Electric Holdings — Q2 2024 Earnings Presentation on 6ix