Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Q1 2022 Earnings Presentation
20 slides from Luxfer's earnings presentation, Apr 26, 2022
Slide 1: First Quarter 2022 Earnings Presentation
FIRST QUARTER 2022 EARNINGS PRESENTATION Earnings Conference Call April 26, 2022 Click here to edit key takeaway CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Examples of such forward-looking statements include but are not l
Slide 3: Executive Summary
EXECUTIVE SUMMARY Strong Start to 2022 Q1 2022 • Sales of $97.0M vs. $85.2M, growth of 13.8%, driven by SCI acquisition and inflation Financial • Adjusted EBITDA of $16.1M vs $17.7M, decrease of 9.0% Performance1 • Adjusted diluted EPS of $0.33 vs. $0.392 • Net debt to EBITDA of 1.1x; free cash outf
Slide 4: Update on Supply Chain Recovery
UPDATE ON SUPPLY CHAIN RECOVERY Ongoing Material Supply Challenges Strong Order Pipeline • Material shortages & delays continue • Positive industrial and energy • Inflationary pressure on magnesium, macro carbon fiber, and aluminum • European conflict building defense • Ongoing force majeure at U.S.
Slide 5: Recent Sales Performance by End Market
RECENT SALES PERFORMANCE BY END MARKET Year-over-Year Change FY 2020 FY 2021 Q1 2022 Q1 Commentary 33% Defense, First • Lower replenishment of -6.4% +5.9% +2.9% Response, & COVID/disaster relief products Healthcare • Optimistic given recent defense wins 31% • Growth due to SCI acquisition Transporta
Slide 6: Q1 2022: Luxfer Financial Results
Q1 2022: LUXFER FINANCIAL RESULTS Performance Highlights Sales ($M) +13.8% • Sales increased by 13.8% from prior year − Price increases of $9.4M to cover rising material $3.5 inflation $9.4 $1.2 $7.1 $97.0 − SCI acquisition added $7.1M in sales or 8.3% $85.2 − Raw materials availability challenges i
Slide 7: Q1 2022: Segment Results
Q1 2022: SEGMENT RESULTS Q1 2022 Sales EBITDA Performance Commentary Elektron $54.6M $13.4M • Strong industrial demand year-over-year change Up 11.4% Up 14.5% • Good cost pass through to offset inflation • Continuing losses at SCI, as expected Gas Cylinders $42.4M $2.7M • Overall order book remains
Slide 8: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS ($M) Net Debt1 Operating Working Capital2 3 $106.4 $91.5 $78.4 $68.7 $86.5 $78.3 $71.9 $41.2 Q1 2019 Q1 2020 Q1 2021 Q1 2022 % of Q1 2019 Q1 2020 Q1 2021 Q1 2022 Net Debt Annualized 1.0x 1.4x 0.7x 1.1x Revenue 19.1% 24.5% 21.4% 27.4% to EBITDA ROIC5 Free Cash Fl
Slide 9: Capital Deployment to Support Growth
CAPITAL DEPLOYMENT TO SUPPORT GROWTH Reinvestment ✓ Investing in strategic growth opportunities and new product innovation ✓ Hydrogen bulk gas transportation Flexible balance sheet ✓ Funding transformation cost savings initiatives: $44M through Q1 2022 allows for acceleration Bolt-on M&A of investme
Slide 10: Updated 2022 Financial Guidance
UPDATED 2022 FINANCIAL GUIDANCE 2022 Guidance Expectations Revenue Growth • Strong order book while revenue remains (incl. FX, acquisitions, 12% - 20% constrained by supply chain conditions; expected and price) to improve in 2H Adjusted Diluted EPS $1.35 - $1.50 • Improving 2022 adj. diluted EPS gui
Slide 11: CEO Designate Andy Butcher
CEO DESIGNATE ANDY BUTCHER ✓ Currently leads Luxfer’s largest business unit; Gas Cylinders ✓ Part of Luxfer Executive Leadership team for 8+ years ✓ Drove 4X Growth in Composite Cylinder revenue ✓ Led multiple joint ventures, acquisitions, and divestures to Andy Butcher reshape portfolio Chief Execu
Slide 12: Luxfer: Our Best Days Are Ahead of Us
LUXFER: OUR BEST DAYS ARE AHEAD OF US Cost Transformation Achieved Accelerating Growth Key Recent achievements Next Phases of our Transformation ✓ Executed Transformation Plan with total cash ✓ Driving increased Growth savings of $30M+ ▪ Positive macro and secular demand ▪ New product development ✓
Slide 13: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS Highly Engineered Comprehensive Industrial Materials Transformation Company with Plan To Enhance Attractive End Growth and Markets Commitment Profitability To Business Strong Balance Excellence Significant Sheet, Consistent Opportunities for Cash Conversion, & Continued
Slide 14: Appendices
APPENDICES APPENDICES Financial Statements and Reconciliation of Non-GAAP Measures Click here to edit key takeaway CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 14
Slide 15: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) First Quarter In millions, except share and per-share data 2022 2021 Net sales $ 97.0 $ 85.2 Cost of goods sold (72.8) (60.0) Gross profit 24.2 25.2 Selling, general and administrative expenses (10.7) (10.6) Research and development (1.3) (0.8)
Slide 16: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 16
Slide 17: Reconciliation of Non-GAAP Measures: Adjusted Net Income, EPS, EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME, ADJUSTED EPS, AND ADJUSTED EBITDA First Quarter In millions except per share data 2022 2021 Net income $ 7.7 $ 8.6 Accounting charges relating to acquisitions and disposals of businesses: Amortization on acquired intangibles 0.2 0.2
Slide 18: Reconciliation of Non-GAAP Measures: Return on Invested Capital
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 (Unaudited) 2021 2021 2021 2021 2022 $M Q1 Q2 Q3 Q4 Q1 EBITA 14.5 13.5 10.3 10.4 12.6 Effective tax rate - per income statement 24.8% 21.0% 24.0% 34.0% 24.5% Notional tax (3.6) (2.8) (2.5) (3.5) (3.1) EBITA after notio
Slide 19: Q1 2022: Elektron Segment Results
Q1 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +11.4% +14.5% $2.2 $0.8 $8.6 $5.3 $0.7 $0.8 $54.6 $49.0 $0.1 $8.6 $13.4 $11.7 Q1 2021 FX Price Inflation Volume/Mix Supply Q1 2022 Q1 2021 FX Price Volume/Mix Q1 2022 Disrup & Other CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 20: Q1 2022: Gas Cylinders Segment Results
Q1 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +17.1% -55.0% $0.8 $1.3 $0.1 $0.8 $0.4 $7.1 $- $42.4 $6.0 $3.4 $36.2 $0.6 $0.2 $2.7 Q1 2021 FX Acquistion Price Volume/Mix Q1 2022 Q1 2021 FX Price Inflation Volume / Supply Q1 2022 Mix Disrup & Other CUSTOMER FIRST • INTEGRITY • ACC