Esab Corporation · NYSE:ESAB
Esab — Q3 2023 Earnings Presentation
16 slides from Esab's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Earnings Conference Call
Third Quarter 2023 EARNINGS CONFERENCE CALL November 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: 3Q 2023 Highlights
3Q 2023 Highlights 3Q 2023 results: ▪ Record 3Q performance $644M +12% ▪ Equipment and automation gaining share Sales1 Total Sales Growth1 Organic +7% ▪ EBX driving margins and cash flow $118M +23% ▪ Raising full year 2023 guidance aEBITDA1 Year-over-Year 18.3% +170bps aEBITDA Margin1 Year-over-Year
Slide 4: Innovative New Products Gaining Traction
Innovative New Products Gaining Traction Successful Essen and Fabtech Trade Shows ▪ Making significant investment to drive share gain ▪ Equipment and automation volumes up LDD ▪ Triple-digit Cobot growth YTD ▪ New Renegade Volt and Warrior Edge creating excitement with customers ▪ Launched innovativ
Slide 5: ESAB 3Q 2023 Financial Summary
ESAB 3Q 2023 Financial Summary ($ Millions) 3Q 20231 3Q 20221 YoY Sales $644 $577 12% aEBITA 109 88 24% aEBITA Margin % 17.0% 15.2% 180 bps aEBITDA 118 96 23% aEBITDA Margin % 18.3% 16.6% 170 bps 3Q Highlights: 3Q 2023 Sales Growth1: ■ Markets continue to be resilient Organic 7% Price 3% ■ Acquisiti
Slide 6: ESAB 3Q 2023 Americas
ESAB 3Q 2023 Americas ($ Millions) 3Q 2023 3Q 2022 YoY Sales $306 $281 9%1 aEBITDA 57 46 23% aEBITDA % 18.7% 16.5% 220 bps 3Q Highlights: 3Q 2023 Sales Growth: ■ Excluding product line simplification, volume positive Organic 4% Price 7% ■ Robust demand for equipment and automation Volume (3)% FX Tra
Slide 7: ESAB 3Q 2023 EMEA and APAC
ESAB 3Q 2023 EMEA and APAC 1 ($ Millions) 3Q 20231 3Q 20221 YoY Sales $338 $296 14% aEBITDA 61 49 23% aEBITDA % 17.9% 16.6% 130 bps 3Q Highlights: 3Q 2023 Sales Growth1: ■ Europe resilient Organic 9% Price (2)% ■ Middle East, India and Asia driving outperformance Volume 11% FX Translation 3% ■ EBX d
Slide 8: Strong Free Cash Flow Reducing Net Leverage
Strong Free Cash Flow Reducing Net Leverage +46% $199M $136M ▪ Record 3Q FCF, up 30% Y-o-Y ▪ Net leverage lowered to <2.2x ▪ EBX delivering a 0.5x working capital turn improvement Y-o-Y YTD 2022 YTD 2023 ▪ On-track to deliver >90% FCF conversion . 3Q 2022 3Q 2023 Net Leverage With Acquisitions 2.6x
Slide 9: 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 $2.56–$2.61B $2.59–$2.61B ▪ Increased total and organic sales at Core Organic mid-point 3%–5% 4.0%–5.5% 5.0%–6.0% Growth % ▪ Includes 4Q FX headwind
Slide 10: Summary
Summary ▪ New products generating excitement ▪ EBX driving opportunities to raise the bar ▪ Raised full year 2023 guidance ▪ Solid start to 4Q ▪ Building momentum into 2024 Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Building a premier narrowly divers
Slide 11: Appendix
Appendix
Slide 12: Full Year 2023 Guidance
Full Year 2023 Guidance ESAB 2022 Actual 1 Previous 2023 Outlook 1 New 2023 Outlook 1 Sales ($B) 2.43 2.56 - 2.61 2.59 - 2.61 Total Growth 8% 6.0% - 7.5% 6.5% - 7.5% Core Organic Growth 12% 4.0% - 5.5% 5.0% - 6.0% FX (5)% (0.5)% (1.0)% - (1.5)% M&A 1% ~2.5% 2.5% - 3.0% aEBITDA ($M) 408 450 - 465 465
Slide 13: Non-GAAP Reconciliation – 3Q '23 Total and Segments
Non-GAAP Reconciliation – 3Q ’23 Total and Segments1 Three Months Ended September 29, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 305.8 $ 375.2 $ 681.0 Net Sales attributable to Russia $ - $ 36.9 $ 36.9 Core Net Sales $ 305.8 $ 338.3 $ 644.1 Operating Income $ 46.5 15
Slide 14: Non-GAAP Reconciliation – 3Q '22 Total and Segments
Non-GAAP Reconciliation – 3Q ’22 Total and Segments1 Three Months Ended September 30, 2022 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 281.4 $ 338.9 $ 620.3 Net Sales attributable to Russia $ - $ 43.3 $ 43.3 Core Net Sales $ 281.4 $ 295.6 $ 577.0 Operating Income $ 36.6 13
Slide 15: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS1 3Q 2023 3Q 2022 Net income from continuing operations $ 60.8 $ 54.3 Income attributable to noncontrolling interest, net of taxes $ 1.5 $ 1.0 Net income from continuing operations attributable to ESAB Corporations $ 59.3 $ 53.3 Restructuring and o
Slide 16: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow 3Q 2023 3Q 2022 Net cash provided by operating activities $ 107.4 $ 79.5 Purchases of property, plant and equipment $ (11.9) $ (8.3) Proceeds from the sale of certain properties $ 1.9 $ - Payments related to the Separation $ - $ 0.3 Payments related to d