Lincoln Electric Holdings, Inc. · NASDAQ:LECO
Lincoln Electric — Q1 2023 Earnings Presentation
18 slides from Lincoln Electric's earnings presentation, Apr 27, 2023
Slide 1: Q1 2023 Earnings
April 27, 2023 LINCOLN ELECTRIC HOLDINGS, INC. Q1 2023 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: First Quarter 2023 Highlights
First Quarter 2023 $1.0B 22.4% Highlights: Record Q1 sales Adjusted ROIC performance +12% vs. prior year; Organic sales +9% Record Sales, Adjusted EPS and Cash flow from operations. 16.3% $124M Adjusted Operating Income Margin Record Q1 Cash flow from operations (130) bps vs. prior year +188% vs. pr
Slide 4: Q1 Organic Sales Momentum led by Americas
Q1 Organic Sales Momentum led by Americas Q1 Organic sales increased 8.5% led by 16% organic growth in Americas Welding Q1 global end sector performance1 Strong capital spending generated 4 of 5 end markets achieved solid organic growth in Equipment organic sales growth & Automation Energy up high-t
Slide 5: Income Statement – Q1 2023
Income Statement – Q1 2023 YoY % Change $ in Millions Q1 2023 % of Sales Q1 2022 % of Sales Fav/ (Unfav) Net Sales $ 1,039.3 $ 925.4 12.3% Gross Profit 355.4 34.2% 329.8 35.6% 7.8% SG&A 190.1 18.3% 166.7 18.0% (14.1)% Operating Income 164.4 15.8% 161.2 17.4% 2.0% Special item charges1,2 4.7 0.5% 1.9
Slide 6: Americas Welding Segment
Americas Welding Segment % YoY ($ in Millions) Q1 2023 Q1 2022 Change Volumes higher across Net Sales $ 658.6 $ 534.1 23.3% all products and in most end markets. Adjusted EBIT $ 132.5 $ 111.6 18.7% Price primarily reflects benefits of prior pricing Adjusted EBIT Margin2 19.2% 19.8% (60) bps actions
Slide 7: International Welding Segment
International Welding Segment % YoY ($ in Millions) Q1 2023 Q1 2022 Change Volume growth in Asia Pacific was offset by European Net Sales $ 252.4 $ 258.0 (2.2)% volume declines primarily due to challenging prior year comparisons. Adjusted EBIT $ 29.6 $ 37.1 (20.2)% Price primarily reflects benefits
Slide 8: The Harris Products Group
The Harris Products Group % YoY ($ in Millions) Q1 2023 Q1 2022 Change Volume growth in specialty gas and HVAC applications Net Sales $ 128.3 $ 133.4 (3.8)% was offset by soft retail channel demand. Adjusted EBIT $ 19.0 $ 19.6 (3.1)% Price relatively steady. Adjusted EBIT Margin2 14.5% 14.4% 10 bps
Slide 9: Cash Flow From Operations Metrics
Cash Flow From Operations Metrics Cash Flow from Operations Average Operating Working ($ in Millions) Capital to Net Sales Ratio 140 120 $124 100 80 85% cash conversion1 in 20.9% Q1-2023 19.6% 60 Working capital remains 40 strategically elevated to $43 mitigate supply constraints 20 0 Q1-2022 Q1-202
Slide 10: Capital Allocation
Capital Allocation1 ($ in Millions) Q1 Capital Allocation & Returns $179 • Growth: $19 million • Return to Shareholders: $70 million • Dividend Rate: +14.3% 105 • Return on Invested Capital2: 22.4% $89 32 Capital Allocation Outlook 33 22 38 Prioritized uses of cash: 19 19 • Growth investments (organ
Slide 11: Updating Full Year 2023 Assumptions
Updating Full Year 2023 Assumptions Increasing Organic sales and lowering Interest expense assumptions Assumptions Risks Low-to-mid teens % sales growth Economic and geopolitical (Mid-to-high single digit % organic sales) headwinds Neutral price/cost Supply and labor availability Mid-to-high teens %
Slide 12: Contact
Contact: Amanda Butler Vice President, Investor Relations & Communications Amanda_Butler@lincolnelectric.com 216.383.2534 12 12
Slide 13: Non-GAAP Information
Non-GAAP Information Adjusted operating income, Adjusted net income, Adjusted EBIT, 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. Management uses non-GAA
Slide 14: 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) 14 Pleas
Slide 15: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures 1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted (continued) diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section. 2) 2023 charges are primarily related to rationalization plans initia
Slide 16: 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) Related to acquisitions and are included in Selling, general &
Slide 17: Segment EBIT
Segment EBIT EBIT and Adjusted EBIT Reconciliation – Three Months Ended March 31, 2023 (In thousands) (Unaudited) 17 Please see the following slide for corresponding footnotes
Slide 18: Non-GAAP Financial Measures (continued)
Non-GAAP Financial 1) EBIT is defined as Operating income plus Other income (expense). Measures 2) The primary profit measure used by management to assess segment performance is adjusted (continued) EBIT. EBIT for each operating segment is adjusted for special items to derive adjusted EBIT. 3) Speci
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