Slide 1: Second Quarter 2023 Earnings Conference Call
Second Quarter 2023 EARNINGS CONFERENCE CALL August 1, 2023
Slide 2: Forward-Looking Statements & Non-GAAP Disclaimer
Forward-Looking Statements & Non-GAAP Disclaimer DISCLAIMER This document has been prepared by ESAB Corporation, a Delaware corporation (the “Company” or “ESAB”), solely for informational purposes. References herein to the terms “ESAB” and the “Company” when used in the historical context prior to A
Slide 3: 2Q 2023 Highlights
2Q 2023 Highlights 2Q 2023 results: ▪ Record sales and margin ▪ End markets remain resilient $680M +8% Sales1 Total Sales Growth1 ▪ Automation sales increased >20% Organic +6% ▪ Product line simplification driving margins $127M +20% aEBITDA1 Year-over-Year ▪ EBX delivering robust cash flow ▪ Raising
Slide 4: Creating A Narrowly Diversified Premier Company
Creating A Narrowly Diversified Premier Company % of Total Revenue ▪ New equipment driving Fabtech growth Gas Control & Automation ▪ Digital and process solutions supporting 23% 2Q ‘22 double digit automation growth Fabtech 77% ▪ Geographic expansion and end-market diversification delivering gas con
Slide 5: Momentum In Our Automation Strategy
Momentum In Our Automation Strategy ESAB advantage Strong automation demand ▪ Leader in automation process design +23% ▪ Ease-of-use ▪ Smart devices enabled for welders ESAB Cobot ▪ Reduced programing time ▪ Real-time data analytics ▪ 2Q cobot sales up triple digits Y-o-Y 2Q 22 2Q 23 Data analytics
Slide 6: EBX Driving Manufacturing Efficiency
EBX Driving Manufacturing Efficiency Focus on continuous improvement Flow meter production line Kaizen 51 Total Kaizens Completed ▪ Automating to improve Manufacturing productivity 35 Transactional 16 ▪ 30% increase in units per day Before 2Q ‘23 ▪ 40% lubricant savings ▪ Mfg process stability ▪ Imp
Slide 7: Environmental, Social & Corporate Governance Progress
Environmental, Social & Corporate Governance Progress Health & Safety Community Investment Protecting Our Environment ▪ Top quartile Total Recordable ▪ Established a charitable fund ▪ Collaboration with GRI to reduce Incident Rate (TRIR) of 0.33 environmental footprint ▪ ESAB and Northern Tools dona
Slide 8: ESAB 2Q 2023 Financial Summary
ESAB 2Q 2023 Financial Summary ($ Millions) 2Q 20231 2Q 20221 YoY Sales $680 $632 8% aEBITA 118 97 22% aEBITA Margin % 17.3% 15.3% 200 bps aEBITDA 127 105 20% aEBITDA Margin % 18.6% 16.6% 200 bps 2Q Highlights: 2Q 2023 Sales Growth1: ■ Markets remain resilient Organic 6% Price 3% ■ Acquisitions perf
Slide 9: ESAB 2Q 2023 Americas
ESAB 2Q 2023 Americas 1 ($ Millions) 2Q 2023 2Q 2022 YoY Sales $310 $291 7% aEBITDA 58 49 20% aEBITDA % 18.8% 16.7% 210 bps 2Q Highlights: 2Q 2023 Sales Growth1: ■ Excluding product line simplification, volume positive Organic 4% Price 7% ■ Improved inventory days by 13 Y-o-Y Volume (3%) ■ Edge and
Slide 10: ESAB 2Q 2023 EMEA and APAC
ESAB 2Q 2023 EMEA and APAC 1 ($ Millions) 2Q 20231 2Q 20221 YoY Sales $370 $341 9% aEBITDA 68 56 21% aEBITDA % 18.4% 16.6% 180 bps 2Q Highlights: 2Q 2023 Sales Growth1: ■ End markets continue to perform well Organic 7% Price 0% ■ Strong execution driving growth and margin Volume 7% ■ Product line si
Slide 11: ESAB Delivering Strong Free Cash Flow
ESAB Delivering Strong Free Cash Flow 1 +68% $99M ▪ 2Q FCF improved 61% to $59 million $59M ▪ Working capital turns improved 0.3x Y-o-Y ▪ Cash flow reducing debt and lowering net leverage H1 2022 H1 2023 ▪ Increased quarterly dividend by 20% to 6c . 2Q 2022 2Q 2023 Net Leverage With Acquisitions 2.7
Slide 12: Raised Full Year 2023 Guidance
Raised Full Year 2023 Guidance Original FY Previous FY New FY 2023 Guidance 2023 Guidance 2023 Guidance ▪ Raised full year guidance Sales $2.48–$2.53B $2.53–$2.58B $2.56–$2.61B ▪ Increased total sales Core Organic Growth % 3%–5% 3.5%–5.5% 4.0%–5.5% ▪ aEBITDA increased ~$18M at mid-point aEBITDA $420
Slide 13: Summary
Summary ▪ Strong execution by the team ▪ EBX driving growth, margin and cash flow ▪ Acquisitions performing above expectations ▪ Raised full year 2023 guidance ▪ Delivering on our Long-term strategy Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Positive
Slide 14: Appendix
Appendix
Slide 15: Full Year 2023 Guidance
Full Year 2023 Guidance ESAB 2022 Actual 1 Previous 2023 Outlook 1 New 2023 Outlook 1 Sales ($B) 2.43 2.53 - 2.58 2.56 - 2.61 Total Growth 8% 4% - 6% 6.0% - 7.5% Core Organic Growth 12% 3.5% - 5.5% 4.0% - 5.5% FX (5)% (~2)% (0.5)% M&A 1% ~2.5% ~2.5% aEBITDA ($M) 408 430 - 450 450 - 465 Interest Expe
Slide 16: Non-GAAP Reconciliation – 2Q '23 Total and Segments
Non-GAAP Reconciliation – 2Q ’23 Total and Segments1 Three Months Ended June 30, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 310.3 $ 410.1 $ 720.4 Net Sales attributable to Russia $ - $ 40.3 $ 40.3 Core Net Sales $ 310.3 $ 369.7 $ 680.1 Operating Income $ 46.1 14.9% $
Slide 17: Non-GAAP Reconciliation – 2Q '22 Total and Segments
Non-GAAP Reconciliation – 2Q ’22 Total and Segments1 Three Months Ended July 1, 2022 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 291.1 $ 370.1 $ 661.2 Net Sales attributable to Russia $ - $ 29.5 $ 29.5 Core Net Sales $ 291.1 $ 340.6 $ 631.7 Operating Income $ 35.8 12.3% $
Slide 18: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS1 Q2 2023 Q2 2022 Net Income from Continuing operations $ 68.8 $ 57.9 Income attributable to noncontrolling interest, net of taxes $ 1.7 $ 0.8 Net Income from Continuing operations $ 67.2 $ 57.1 Restructuring and other related charges - pretax $ 5.
Slide 19: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow 2Q 2023 2Q 2022 Net cash provided by operating activities $ 62.6 $ 27.3 Purchases of property, plant and equipment $ (9.3) $ (7.8) Proceeds from the sale of certain properties $ 0.9 $ 0.0 Payments related to the Separation $ 0.0 $ 7.9 Payments related to