Slide 1: Second Quarter 2024 Earnings Conference Call
Second Quarter 2024 EARNINGS CONFERENCE CALL August 2, 2024 YEARS STRONG © 2024
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 2024 Highlights
2Q 2024 Highlights 2Q 2024 results: ▪ Strong execution in 2Q $666M +1% ▪ Equipment & automation up HSD Sales1 Organic Sales Growth1 ▪ Record margin performance $134M +6% ▪ EBX driving record free cash flow aEBITDA1 Year-over-Year ▪ Acquired welding business of Linde Bangladesh 20.1% +150bps aEBITDA
Slide 4: Successfully Executing Our 2028 Strategy
Successfully Executing Our 2028 Strategy Strategy Progress in H1 2024 Delivering Reducing cyclicality Improving product & end-market mix Investing in High-Growth markets Accelerated investment driving outperformance Digital solutions Providing differentiated workflow solutions Leveraging EBX Deliver
Slide 5: InduSuite Digital Solutions Gaining Momentum
InduSuite Digital Solutions Gaining Momentum FloCloud WeldCloud Licenses Purus Robotic Programming Wireless Solution Filler Metal Software +164% 22-Jun 23-Jun 24-Jun ▪ InduSuite pulling through equipment, WeldCloud + NxG TBi Robotic Torch + automation and filler metal revenue Equipment HKS quality ▪
Slide 6: Acquisitions Increasing Exposure To High Growth Markets
Acquisitions Increasing Exposure To High Growth Markets Bangladesh India Linde Bangladesh2: SE Asia ▪ #1 Fabtech business in Bangladesh ▪ Long-term HSD growth opportunity ▪ Significant synergies with ESAB Population2 India ~1.4B Bangladesh ~0.2B SE Asia ~0.9B Total ~2.5B ▪ ~$20 million TTM sales; aE
Slide 7: ESAB 2Q 2024 Financial Summary
ESAB 2Q 2024 Financial Summary ($ Millions) 2Q 20241 2Q 20231 YoY Sales $666 $680 (2)% aEBITA $125 $118 6% aEBITA Margin % 18.8% 17.3% 150 bps aEBITDA $134 $127 6% aEBITDA Margin % 20.1% 18.6% 150 bps 2Q Highlights: 2Q 2024 Sales Growth1: ■ Strength in high-growth markets Organic 1% Price 0% ■ Devel
Slide 8: ESAB 2Q 2024 Americas
ESAB 2Q 2024 Americas ($ Millions) 2Q 20241 2Q 20231 YoY Sales $310 $310 0% aEBITDA $65 $58 11% aEBITDA % 20.9% 18.8% 210 bps 2Q Highlights: 2Q 2024 Sales Growth1: ■ Organic growth positive Organic 4% Price 3% ■ EBX delivering share gain Volume 1% ■ End-market and automation strategy dampening cycli
Slide 9: ESAB 2Q 2024 EMEA and APAC
ESAB 2Q 2024 EMEA and APAC 1 ($ Millions) 2Q 20241 2Q 20231 YoY Sales $357 $370 (4)%2 aEBITDA $69 $68 2% aEBITDA % 19.5% 18.4% 110 bps 2Q Highlights: 2Q 2024 Sales Growth1: ■ Volume positive Organic (2)% Price (3)% ■ Maintaining net pricing discipline Volume 1% ■ European end-markets softer FX Trans
Slide 10: Strong Free Cash Flow Reducing Net Leverage
Strong Free Cash Flow Reducing Net Leverage +21% $120M $99M ▪ Robust 2Q cash flow performance ▪ Cash flow strengthening balance sheet ▪ Raised quarterly dividend 33% to $0.08 ▪ Positioned well to execute compounder strategy H1 2023 H1 2024 Net Leverage 2.4x 1.7x Cash flow increasing financial flexib
Slide 11: Updating Full Year 2024 Guidance
Updating Full Year 2024 Guidance Old FY 2024 New FY 2024 Financial Metrics Guidance1,2 Guidance1,2 ▪ Sales guidance assumes: Sales $2.66–$2.71B $2.56–$2.61B ▪ Flat price and volume ▪ FX of ~(2.5)% Core Organic Growth % ~LSD ~Flat ▪ M&A of ~1.0% including Linde Bangladesh 3 ▪ aEBITDA margin expansion
Slide 12: Summary
Summary First cohort at Welder Underground ▪ Strong performance in more challenging ® markets ▪ EBX and AI initiatives delivering margin and cash flow improvement ▪ Successfully executing our M&A strategy ▪ ESAB is a less cyclical, higher margin and stronger cash flow generating enterprise Shared He
Slide 13: Appendix
Appendix =_ ESAB © ESAB CORPORATION =_
Slide 14: Full Year 2024 Guidance
Full Year 2024 Guidance ESAB Old 2024 Outlook 1 New 2024 Outlook 1 Sales ($B) 2.66 - 2.71 2.56 - 2.61 Total Growth 1.5% - 3.5% (2.5)% - (0.5)% Core Organic Growth 2.5% - 4.5% (1.0)% - 1.0% FX (1.5)% ~(2.5)% M&A 0.5% 1.0% aEBITDA ($M) 500 - 520 495 - 515 Interest Expense & Other ($M) 71 - 74 68 - 71
Slide 15: Non-GAAP Reconciliation EBITA – 2Q '24 Total & Segments
Non-GAAP Reconciliation EBITA – 2Q '24 Total & Segments1 Dollars in millions Three Months Ended June 28, 2024 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 309.8 $ 397.3 $ 707.1 Net Sales attributable to Russia $ — $ 40.7 $ 40.7 Core Net Sales $ 309.8 $ 356.6 $
Slide 16: Non-GAAP Reconciliation EBITDA – 2Q '24 Total & Segments
Non-GAAP Reconciliation EBITDA – 2Q '24 Total &Segments1 Three Months Ended June 28, 2024 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 309.8 $ 397.3 $ 707.1 Net Sales attributable to Russia $ — $ 40.7 $ 40.7 Core Net Sales $ 309.8 $ 356.6 $ 666.3 Operating Inco
Slide 17: Non-GAAP Reconciliation EBITA – 2Q '23 Total & Segments
Non-GAAP Reconciliation EBITA – 2Q '23 Total & Segments1 Three Months Ended June 30, 2023 ($ Millions) 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 $ 369.8 $ 680.1 Operating Inco
Slide 18: Non-GAAP Reconciliation EBITDA – 2Q '23 Total & Segments
Non-GAAP Reconciliation EBITDA – 2Q '23 Total & Segments1 Three Months Ended June 30, 2023 ($ Millions) 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 $ 369.8 $ 680.1 Operating Inc
Slide 19: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS1 Three months ended ($ Millions, except Per Share Data) 2Q 2024 2Q 2023 Net income from continuing operations $ 85.5 $ 68.8 Income attributable to noncontrolling interest, net of taxes $ 1.5 $ 1.7 Net income from continuing operations attributable
Slide 20: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow Three months ended Six months ended ($ Millions) 2Q 2024 2Q 2023 2Q 2024 2Q 2023 Net cash provided by operating activities $ 83.0 $ 62.6 $ 127.5 $ 100.7 Purchases of property, plant and equipment $ (9.0) $ (9.3) $ (16.4) $ (17.0) Proceeds from the sale o