Slide 1: First Quarter 2024 Earnings Conference Call
First Quarter 2024 EARNINGS CONFERENCE CALL May 1, 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: 1Q 2024 Highlights
1Q 2024 Highlights 1Q 2024 results: ▪ Record 1Q performance $656M +2% ▪ Automation and equipment up HSD Sales1 Organic Sales Growth1 ▪ EBX driving margins and cash flow $123M +9% ▪ Successful bond offering aEBITDA1 Year-over-Year ▪ Closed Sager acquisition and agreed to acquire SUMIG 18.8% +140bps a
Slide 4: Continuing To Improve Our Mix
Continuing To Improve Our Mix 2016 2 1Q 23 3 1Q 24 3 % of Total Revenue % of Total Revenue % of Total Revenue 26% 29% 31% EBITDA Margin % 13.3% 4 17.4% 18.8% 71% 69% 74% Equipment 1 Consumables Equipment Consumables Equipment Consumables Shifting ESAB to a more profitable mix Proprietary & Confident
Slide 5: Accelerating Our Compounder Journey
Accelerating Our Compounder Journey CRITERIA FINANCIAL FRAMEWORK Less Cyclicality Higher Margin Automation Solution TAM Expansion Financial Framework Strategic ▪ Strong secular tailwinds Criteria ▪ Limited cyclicality FM + ▪ MSD+ growth; 40%+ GM A&E Financial Criteria ▪ High synergy potential = GC V
Slide 6: ESAB 1Q 2024 Financial Summary
ESAB 1Q 2024 Financial Summary ($ Millions) 1Q 20241 1Q 20231 YoY Sales $656 $647 1% aEBITA $115 $105 10% aEBITA Margin % 17.5% 16.2% 130 bps aEBITDA $123 $113 9% aEBITDA Margin % 18.8% 17.4% 140 bps 1Q Highlights: 1Q 2024 Sales Growth1: ■ Strength in emerging markets Organic 2% Price 1% ■ Increasin
Slide 7: ESAB 1Q 2024 Americas
ESAB 1Q 2024 Americas ($ Millions) 1Q 20241 1Q 20231 YoY Sales $296 $292 2% aEBITDA $54 $49 9% aEBITDA % 18.3% 17.0% 130 bps 1Q Highlights: 1Q 2024 Sales Growth1: ■ Strength in energy end-market Organic 3% Price 5% ■ NPI driving excitement in the channel Volume (2)% ■ Value pricing momentum continue
Slide 8: ESAB 1Q 2024 EMEA and APAC
ESAB 1Q 2024 EMEA and APAC 1 ($ Millions) 1Q 20241 1Q 20231 YoY Sales $360 $355 1% aEBITDA $69 $63 9% aEBITDA % 19.2% 17.8% 140 bps 1Q Highlights: 1Q 2024 Sales Growth1: ■ Europe remains resilient Organic 1% Price (3)% ■ Middle East, India and Asia driving volumes Volume 5% ■ Continue to shift mix t
Slide 9: Strong Free Cash Flow Reducing Net Leverage
Strong Free Cash Flow Reducing Net Leverage $41M $40M ▪ Robust 1Q FCF performance $22M ▪ Achieved Ba1/BB+ credit rating ▪ Successful execution of $700 million bond ▪ Strengthened balance sheet to support M&A Q1 2022 Q1 2023 Q1 2024 Net Leverage 2.8x 1.8x Cash flow increasing financial flexibility Pr
Slide 10: Raising Full Year 2024 Guidance
Raising Full Year 2024 Guidance Old FY 2024 New FY 2024 Financial Metrics Guidance1 Guidance1 ▪ Sales guidance assumes: Sales $2.66–$2.71B $2.66–$2.71B ▪ LSD price and volume ▪ Incremental ~(0.5)% FX to ~(1.5)% ▪ ~0.5% for Sager acquisiton Core Organic Growth % 2.5%–4.5% 2.5%–4.5% ▪ aEBITDA margin e
Slide 11: Summary
Summary ▪ Driving growth and improving mix ▪ Expanding margin and cash flow with EBX ▪ Strengthened balance sheet to execute M&A ▪ Confidently moving towards our 2028 goals Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Building a focused premier compoun
Slide 12: Appendix
Appendix
Slide 13: Full Year 2024 Guidance
Full Year 2024 Guidance ESAB Old 2024 Outlook 1 New 2024 Outlook 1 Sales ($B) 2.66 - 2.71 2.66 - 2.71 Total Growth 1.5% - 3.5% 1.5% - 3.5% Core Organic Growth 2.5% - 4.5% 2.5% - 4.5% FX (1.0)% ~(1.5)% M&A - 0.5% aEBITDA ($M) 495 - 515 500 - 520 Interest Expense & Other ($M) 74 - 77 71 - 74 Adjusted
Slide 14: Non-GAAP Reconciliation EBITA – 1Q '24 Total and Segments
Non-GAAP Reconciliation EBITA – 1Q ’24 Total and Segments1 Three Months Ended March 29, 2024 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 296.0 $ 393.7 $ 689.7 Net Sales attributable to Russia $ - $ 33.6 $ 33.6 Core Net Sales $ 296.0 $ 360.1 $ 656.1 Operating Income $ 46.0
Slide 15: Non-GAAP Reconciliation EBITDA – 1Q '24 Total and Segments
Non-GAAP Reconciliation EBITDA – 1Q ’24 Total and Segments1 Three Months Ended March 29, 2024 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 296.0 $ 393.7 $ 689.7 Net Sales attributable to Russia $ - $ 33.6 $ 33.6 Core Net Sales $ 296.0 $ 360.1 $ 656.1 Operating Income $ 46.0
Slide 16: Non-GAAP Reconciliation EBITA – 1Q '23 Total and Segments
Non-GAAP Reconciliation EBITA – 1Q ’23 Total and Segments1 Three Months Ended March 31, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 291.6 $ 392.4 $ 684.0 Net Sales attributable to Russia $ - $ 37.1 $ 37.1 Core Net Sales $ 291.6 $ 355.3 $ 646.9 Operating Income $ 39.9
Slide 17: Non-GAAP Reconciliation EBITDA – 1Q '23 Total and Segments
Non-GAAP Reconciliation EBITDA – 1Q ’23 Total and Segments1 Three Months Ended March 31, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 291.6 $ 392.4 $ 684.0 Net Sales attributable to Russia $ - $ 37.1 $ 37.1 Core Net Sales $ 291.6 $ 355.3 $ 646.9 Operating Income $ 39.9
Slide 18: Non-GAAP Reconciliation – 2016 Pro Forma aEBITDA
Non-GAAP Reconciliation – 2016 Pro Forma aEBITDA1 (Dollars in millions) 12/31/2016 % of NSV Net Sales $ 1,800.5 Net Sales attributable to Russia $ 110.4 Adjusted Net Sales excluding Russia (Core) $ 1,690.1 Operating Income $ 195.4 10.9% Acquisition amortization and other related charges $ 30.9 Depre
Slide 19: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation –Net Income to Adjusted EPS1 1Q 2024 1Q 2023 Net income from continuing operations $ 62.9 $ 34.1 Income attributable to noncontrolling interest, net of taxes $ 1.6 $ 1.3 Net income from continuing operations attributable to ESAB Corporation $ 61.3 $ 32.8 Restructuring and oth
Slide 20: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow 1Q 2024 1Q 2023 Net cash provided by operating activities $ 44.5 $ 38.1 Purchases of property, plant and equipment $ (7.4) $ (7.7) Payments related to the Separation $ - $ 4.4 Payments related to discontinued operations $ 3.7 $ 5.4 Adjusted free cash flo