Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Investor Presentation (May 2023)
31 slides from Luxfer's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
INVESTOR PRESENTATION May 2023 1 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This release 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 limite
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 Full Year 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 a
Slide 5: Materials Technology Leadership
MATERIALS TECHNOLOGY LEADERSHIP MAGNESIUM ALLOYS Innovation leader in the use High of magnesium alloys for critical Performance applications in aerospace, defense, Magnesium and other industries as well as in Alloys flameless heating applications Elektron Segment Expertise in high-performance ZIRCON
Slide 6: Aligned with Secular Growth Trends
ALIGNED WITH SECULAR GROWTH TRENDS Composite gas cylinders and systems used for Alternative Fuel applications, including Hydrogen and Compressed Natural Gas Clean Zirconium-based emissions control Energy and industrial catalysis materials Lightweight carbon fiber cylinders for breathing equipment us
Slide 7: Quarterly Financial Highlights
QUARTERLY FINANCIAL HIGHLIGHTS ($M except per share) ▪ Delivered quarterly EPS in line with guidance Q1 Q1 2023 2022 Change ▪ Sales rose 6.8% on constant currency basis ▪ Inflation offset by cost pass-through Sales $101.3 $97.0 +4.4% ▪ Volume/mix and increased legal expense weighed on EBITDA perform
Slide 8: Our Pathway to $2.00 Adj. EPS
OUR PATHWAY TO $2.00 ADJ. EPS 2023 Adj. EPS Guidance: Midpoint $1.25 ✓ Continuing current trajectory of Hydrogen growth PROFITABLE GROWTH ✓ Capitalize on Elektron new product introductions $0.33 ✓ Expansion of Magtech Solutions defense offerings ✓ Normalization in European industrial market conditio
Slide 9: 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 10: Environmental, Social, and Governance Roadmap
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ROADMAP 1 ENVIRONMENTAL • Committed to 20% reduction in CO2 emissions, 10% reduction in freshwater 1 use, and 20% less waste to landfill by 2025 • Conducting Carbon Life Cycle Analyses to improve product sustainability • Greener operations with more recycling; i
Slide 11: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY 2017-2020 Growth Capabilities Portfolio 2018-2023 • Commercial Simplification Cost 2023-2025 opportunities Transformation • Demand for Clean & Beyond Energy Organic and Inorganic Growth • New products • Growth talent • Global presence • Strong balance sheet • Enhanced o
Slide 12: The Luxfer Business System
THE “LUXFER BUSINESS SYSTEM” Implementing our new operating model: The Luxfer Business System A critical tool to realize growth potential embedded in our business Development led by key members of Luxfer’s leadership team Emphasis on near-term execution and long-term investment to unlock sustainable
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 Sustainable Company End Markets on Capital Growth ✓ Market leading ✓ Aligned with ✓ Strong balance ✓ Broad pipeline of products secular growth sheet new prod
Slide 14: Q1 2023 Update
Q1 2023 UPDATE 14 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 15: Latest Segment Update
LATEST SEGMENT UPDATE Elektron Gas Cylinders • Ongoing recovery in aerospace and • Ongoing recovery in aerospace End Market automotive Expectations • SCBA and medical demand firm • Expanded chemical kit volumes • Destocking and project delays • Destocking a headwind impacting Alternative Fuels • Sof
Slide 16: Sales Performance by End Market
SALES PERFORMANCE BY END MARKET Year-over-Year Change FY FY FY Q1 2020 2021 2022 2023 Q1 2023 Commentary 42% • Robust areas of Defense demand: Defense, First military aerospace and chemical kits -6.4% +5.9% +5.6% +32.3% Response, & • SCBA, medical O2 and pharmaceutical Healthcare also contribute to
Slide 17: Q1 2023 Financial Bridge: Consolidated
Q1 2023 FINANCIAL BRIDGE: CONSOLIDATED Luxfer Consolidated Sales increased by 4.4% from prior year Sales ($M) +4.4% • Price increases of $10.0M offset rising inflation • Volume contracted in both Elektron and Gas Cylinders $2.3 $3.4 $10.0 • FX headwind of $2.3M due to USD $97.0 $101.3 strengthening
Slide 18: Q1 2023: Segment Results
Q1 2023: SEGMENT RESULTS Q1 Q1 2023 2022 Change Q1 2023 Commentary Elektron: ▪ Strong aerospace, healthcare, and chemical kit demand Sales $59.8 $54.6 +9.5% ▪ Lower demand for higher margin products, including oil & gas and photoengraving plate ▪ Difficult year-over-year comparisons due to price Adj
Slide 19: Reiterating 2023 EPS Guidance
REITERATING 2023 EPS GUIDANCE 2023 Guidance Expectations Sales Growth • Sales outlook tempered amid backdrop of 4% - 7% (incl. volume, price and FX) mixed cyclical indicators Adjusted Diluted EPS $1.15 - $1.35 • Focus on cost control to maintain profitability Assumptions Free Cash Flow Conversion •
Slide 20: Luxfer Business System: Strategy Deployment
LUXFER BUSINESS SYSTEM: STRATEGY DEPLOYMENT Luxfer Business System A critical tool to realize growth potential embedded in our business Drives commonality and best practice in six critical segments Emphasis on near-term execution to unlock sustainable growth Q1 Update: Strategy Deployment ▪ Refreshe
Slide 21: Luxfer MDP
LUXFER MDP Luxfer Management Development Program Organization-wide initiative to invest in Luxfer’s emerging talent Targeted at twenty professionals earlier in their careers Focused on developing managerial, communication and leadership skills Supports high performance, retention and ultimately prof
Slide 22: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 22 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 23: Q1 2023: Elektron Segment Results
Q1 2023: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +9.5% -34.3% $0.9 $0.8 $6.9 $0.6 $6.9 $7.6 $59.8 $1.5 $54.6 $13.4 $3.0 $8.8 Q1 2022 FX Price Volume/Mix Q1 2023 Q1 2022 FX Price Inflation Volume/Mix Other Q1 2023 23 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEV
Slide 24: Q1 2023: Gas Cylinders Segment Results
Q1 2023: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -2.1% -7.4% $3.1 $2.5 $1.5 $0.2 $3.1 $3.1 $0.2 $0.2 $42.4 $41.5 $2.7 $2.5 Q1 2022 FX Price Volume/Mix Q1 2023 Q1 2022 FX Price Inflation Volume/Mix Other Q1 2023 24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL
Slide 25: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 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 25 not equal the earnings-per-share amount in total. 2The loss per share for
Slide 26: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 26 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 26
Slide 27: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 27 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 27
Slide 28: 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 2017 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Non-current debt $94.6 $56.2
Slide 29: Reconciliation of Non-GAAP: Adjusted Net Income, EPS, EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME FROM CONTINUING OPERATIONS, ADJUSTED EPS, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, NET DEBT TO TRAILING 12 MONTHS ADJUSTED EBITDA1 In millions 2017 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Net inco
Slide 30: Reconciliation of Non-GAAP: Return on Invested Capital (ROIC)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 In millions Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 EBITA $14.5 $13.5 $10.3 $10.4 $12.6 $13.7 $13.0 $10.7 $8.2 Notional tax (3.6) (2.8) (2.5) (3.5) (3.1) (2.7) (2.8) (2.4) (9.5) EBITA af
Slide 31: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
31 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK