Enovis Corporation · NYSE:ENOV
Enovis — Colfax — Investor Day (March 2022)
34 slides from Enovis's investor day presentation, Mar 14, 2022
Slide 1: Global Leader in Fabrication Technology
SS GILOBAL LEADIER IN FABRICATION TECHNOLOGY.
Slide 2: Disclaimer
DISCLAIMER This document has been prepared by ESAB Corporation, a Delaware corporation (the “Company” or “ESAB”), solely for informational purposes. Upon completion of the intended separation of Colfax Corporation’s (“Colfax”) fabrication technology and specialty medical technology businesses (the “
Slide 3: Today's Key Themes and Presenters
About ESAB Our Competitive Advantage Delivering for Our Shareholders TODAY’S KEY THEMES TODAY’S PRESENTERS Shyam P. Kambeyanda President and Chief Executive Officer Kevin Johnson Chief Financial Officer Olivier Biebuyck President, EMEA and Global Products 3
Slide 4: Global Leader in Fabrication Technology
Global Leader in Fabrication Technology 4 Rich History with Leading Brands and Solutions Driving Growth Product Sales Mix 2021 Leading Brands and Full Solutions ESAB Snapshot Founded1: 1904 2021 Revenue: $2.4B 2021 Segment aEBITDA: $434M Headquarters: Bethesda, MD Countries Served: 147 Employees: ~9
Slide 5: Market-Leading Positions Globally
#1 Europe #1 India #1 South America #3 North America #1 China (global player) #1 Middle East #1 Australia Market-Leading Positions Globally Market Position by Geography1 Differentiated Footprint Emerging Economies Expected to Grow > 2.0x Developed Markets (2022 - 2026)2 1 By revenue, 2Source: IMF Wo
Slide 6: Successful Emerging Market Franchises and Playbook
How We Win in South America How We Win in India Heritage Entered in 1955 (first global player) Entered in 1987, bought India Oxygen in 19911 Brand advantage Most recognized brands with ESAB, Westarco, and Soldexa Most recognized brands with ESAB and EWAC Strong local capabilities Largest sales and d
Slide 7: Secular Trends Driving Attractive Growth Opportunities
1 Green indicates ESAB overweight to market or key focus area, 2 Source: ESAB Internal Analysis, IHS Markit 2021, 3 Total Addressable Market (TAM) defined as established equipment and consumable products as well as new products in automation, software and services; estimated based on public data fro
Slide 8: Increasing Exposure to High-Growth Segments
Medical and Specialty Gas Control $3B+ Market Mid-single-digit growth 1 2nd Wave Robotics; 2 Based on ESAB Internal Analysis Increasing Exposure to High-Growth Segments Digital Solutions $1B+ Market opportunity Estimated double-digit Growth Industry-wide inflection point Robotics1 $1B+ Market opport
Slide 9: Strong Financial Performance
2021 2.42 6.2% Sales CAGR (‘16-’21) +300bps aEBITDA Margin Improvement (‘16-’21) Strong Financial Performance Track Record of Growing Revenue and Expanding Margins Segment aEBITDA % %
Slide 10: Shaping ESAB to Deliver Long-Term Value
Growth Strong secular trends Global footprint Leading position across Markets Product innovation Disciplined M&A Margin accretive MSD+ growth 1 Prior target was at the segment level and the new target includes public company costs; excluding public company costs the segment aEBITDA long-term strateg
Slide 11: Innovation
Innovation
Slide 12: Innovation Anchored into Customer Needs
Innovation Anchored into Customer Needs New Product Introductions Have Quadrupled Pace of Innovation Accelerating Since 2016 Customer-centric user interfaces Durability, robustness, and portability Smart and connected Five-year vitality represents ~28% of revenue Anchored into Voice of Customers and
Slide 13: Leading Digital Capabilities Driving Growth
Leading Digital Capabilities Driving Growth Robotics/Digital Products Position ESAB as Productivity Partner WeldCloud + NxG Equipment TBi Robotic Torch + HKS quality Purus Robotic Filler Metal Programming Software Offerings Drive Long-Term Benefits for ESAB $100M+ Projected Revenues2 Robotics Digita
Slide 14: Organic Growth Outpacing Peers
Organic Growth Outpacing Peers 14 Well-Positioned to Drive Long-Term Organic Growth Drivers of Historical Organic Growth Value selling Robust new product development Product portfolio Multiple Vectors of Future Growth Opportunities Innovation pipeline Attractive secular tailwinds Emerging market gro
Slide 15: M&A Strategy and ESAB Business Excellence (EBX)
M&A Strategy and ESAB Business Excellence (EBX)
Slide 16: Acquisitions Driving Growth and Margin Expansion
Successful Acquisition Process Acquisitions Driving Growth and Margin Expansion Overarching Goals Accretive to GM MSD Acquisition Growth Low Cyclicality Impact on ESAB 2019-2021 Technology Leadership Digital Growth Robotic and Automation Solutions Specialty Alloys Industrial Diversification Gross Ma
Slide 17: ESAB Business Excellence (EBX) Driving Results
ESAB Business Excellence (EBX) Driving Results EBX Results EBX Drives Repeatable Processes and Delivers Breakthrough Performance EBX – Our Values, Processes, and Tools Manufacturing Footprint Reduction (# of Facilities)1 New Product Introductions Have Quadrupled 1 Excludes five sites where we have s
Slide 18: History of Margin Expansion With Additional Opportunities
History of Margin Expansion With Additional Opportunities Multiple Opportunities to Expand Margins aEBITDA Margin Long-Term Strategic Goal 20%+ +290BPS Drivers of Historical Margin Improvement Delivered ~$20 million in footprint savings since 2018 SG&A transformation Dynamic price/cost management Ka
Slide 19: Financial Performance
Financial 1» Performance ~ \ SS > s< = Y E 7 AT i p Dy SS f- B
Slide 20: Proven Track Record of Working Capital Improvement
2021 Working Capital Improved by > 1 Turn Improved O2C processes Enhanced inventory management Vendor term renegotiations Proven Track Record of Delivering Working Capital Improvement Consistent Improvement in Working Capital Turns Driving Free Cash Flow Generation Working Capital Turns Improvement
Slide 21: Financial Targets: Growing Revenue and Expanding Margins
Financial Targets: ESAB Growing Revenue and Expanding Margins MSD Sales Growth Leverage EBX growth tools Launch innovative new product introductions Execute attractive acquisitions Strong Margin Expansion Further plant footprint rationlization Continue SG&A transformation Deliver productivity and so
Slide 22: Capital Allocation to Create Long-Term Value
Organic Investment Reinvest in identified accelerators Exciting new funnel of products and expect 110+ in 2022 Manage Leverage Cash flow supports both deleveraging and investments Target leverage ratio from 2x to 3x Acquisitions Disciplined M&A Return Capital Board considering initiating a modest qu
Slide 23: ESAB 2022 Full Year Outlook
Prior Revised Sales $2.55-2.60B $2.45-2.50B Total Growth 5%-7% 2%-4% Organic Growth 7%-10% 4%-7% Organic Growth Ex Russia 9%-12% aEBITDA 1 $420-440M $400-420M Free Cash Flow >$210M ESAB 2022 Full Year Outlook Expect $4.30 - $4.50 of Adjusted EPS in FY 20221 Guidance updated to reflect impact from Ru
Slide 24: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG)
Slide 25: ESAB Committed to ESG
ESAB Committed to ESG Building a Sustainable Business Environmental Committed to reducing ESAB’s impact on climate change Social Responsibility Creating an inclusive culture for all stakeholders Governance Serving our stakeholders the right way today and tomorrow Safety Focused on creating a safe pl
Slide 26: Talent & Summary
Talent & Summary ,
Slide 27: Strong Experienced Leadership Team
Strong Experienced Leadership Team Significant Industrial Experience Providing Platform for Growth and Expansion Shyam P. Kambeyanda President, Chief Executive Officer Kevin Johnson Chief Financial Officer Executive Officers Vusa Mlingo Senior Vice President, Strategy and Business Development Michel
Slide 28: ESAB: A Premier Fabrication Technology Company
1 Prior target was at the segment level and the new target includes public company costs; excluding public company costs the segment aEBITDA long-term strategic goal is ~21%+ 2 Free cash flow divided by adjusted net income ESAB: A Premier Fabrication Technology Company $3.0-$3.5B Revenue 20%+ aEBITD
Slide 29: Let's Start Shaping the World We Imagine
SS LETS START SHAPING THE WORLD WE IMAGINE.
Slide 30: Appendix
Appendix
Slide 31: Executive Biographies
Shyam Kambeyanda Chief Executive Officer Joined ESAB in 2016 Previously worked at Eaton Corporation for 21 years, where he rose to become president of the company's hydraulics business operation in the Americas. Served in key leadership roles, driving the company’s transformation and growth in Asia,
Slide 32: Strong Experienced Board
Strong Experienced Board Mitch Rales Chairman, ESAB Shyam Kambeyanda CEO Patrick Allender Colfax Director, Former EVP & CFO of Danaher Didier Teirlinck Colfax Director, Former EVP Ingersoll Rand Rhonda L Jordan Colfax Director, Former President Kraft Stephanie M Phillips Partner Arnold & Porter, BOD
Slide 33: 2022 Outlook – Supplemental Detail
2022 Outlook – Supplemental Detail Expect $4.30 - $4.50 of Adjusted EPS in FY 20221, 2 1 1 1 1 2 1Assumes interest expense and incremental public company costs for 12 months 2 ; Assumes ~55mm diluted shares based on a distribution ratio of 1 share of ESAB for each 3 shares of Colfax held by investor
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation Fabrication Technology1 $ $ $2,193.1 $ $ $ $ $ $220.9 10.1% $ $ $ $ $ $29.1 $ $ $ $ $ $250.0 11.4% $ $ $ $ $ $ $40.0 $ $ $ $ $290.0 $ $ $ $ $ $39.9 $ $ $ $ $ $329.9 15.0% $ $ $ 1 Dollars in millions