Luxfer Holdings PLC · NYSE:LXFR
Luxfer — Q4 2021 Earnings Presentation
27 slides from Luxfer's earnings presentation, Feb 22, 2022
Slide 1: Fourth Quarter 2021 Earnings Presentation
FOURTH QUARTER 2021 EARNINGS PRESENTATION Earnings Conference Call February 22nd, 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 forward-looking statements. Examples of such forward-looking statements include but are not limited to: (i) statements regarding the Company’s results of operations and financial condition; (ii) statements of plans, objectives, or goals of the Co
Slide 3: Executive Summary
EXECUTIVE SUMMARY Better-than-Expected Results Q4 2021 • Sales of $98.7M; revenue growth of 20.2%, organic growth of 10.7%. Financial Performance • Adj. EBITDA increased to $14.6M; growth & productivity partially offset inflation • Adj. diluted EPS of $0.28 increased 3.7% from prior year; GAAP EPS o
Slide 4: 2022 Supply Chain Recovery Status
2022 SUPPLY CHAIN RECOVERY STATUS Crime and Rising Costs Have Continued Magnesium in Short Supply Impact on South Africa’s Mining Industry • China has cut production to meet emissions and energy consumption targets. • In June of 2021, Richards Bay Mine was attacked by protestors and • Expected produ
Slide 5: 2022 Demand Growth Drivers
2022 DEMAND GROWTH DRIVERS Examples of 2022 Demand Growth High • Continued aerospace recovery Performance • UGR-E introductions in MRE product line Magnesium Alloys Elektron Advanced Materials • Automotive emissions control Specialty • Medical & electronic materials penetration Zirconium Catalysts H
Slide 6: SCI Integration Update
SCI INTEGRATION UPDATE Cost Synergies Progress 2021 Results ✓ Consolidated into one building at Pomona ✓ Positive operating cash despite ✓ Exited transition services agreement EBITA losses ✓ Implemented Luxfer ERP system ✓ 2022 cost synergies expectation unchanged ✓ Better-than-expected revenue ✓ Lo
Slide 7: Recent Performance by End-User Market
RECENT PERFORMANCE BY END-USER MARKET Sales Change Y-o-Y Q1’21 Q2’21 Q3’21 Q4’21 FY FY Commentary 34% • Strong SCBA growth • Growth in Magnesium for Defense, First +2.0% +14.2% +6.2% +0.7% +5.8% defense applications Response, & • Chem Resp kits impacted by Healthcare manufacturing challenges 32% • S
Slide 8: Q4 2021: Luxfer Financial Results
Q4 2021: LUXFER FINANCIAL RESULTS Performance Highlights Sales ($M) +20.2% • Sales increased by 20.2% from prior year $6.1 $2.0 − Net volume growth of $6.1M due to industrial $7.8 and transportation end markets $0.7 $98.7 $82.1 − SCI acquisition added $7.8M in sales, or 9.5% − Price increases of $2.
Slide 9: Q4 2021: Segment Results
Q4 2021: SEGMENT RESULTS Q4 2021 Sales EBITDA Performance Commentary $48.7M $8.6M • Recovery in Industrial Magnesium products Elektron • Weaker defense sales Up 3.2% Down 5.5% • Strong industrial catalyst volume recovery • Sales growth from SCI acquisition, specialty gas Gas $50.0M $6.0M cylinders,
Slide 10: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS All in $M except ROIC Net Debt Working Capital $88.4 $81.2 $76.5 $51.9 $53.4 $71.8 Q4 2019 Q4 2020 Q4 2021 % of Q4 2019 Q4 2020 Q4 2021 Net Debt Annualized to EBITDA 1.2x 1.0x 0.8x Revenue 23.2% 21.9% 22.4% ROIC2 Free Cash Flow1 19.5% $15.8 17.4% $10.6 15.2% -$1
Slide 11: Capital Deployment to Support Growth
CAPITAL DEPLOYMENT TO SUPPORT GROWTH Reinvestment ✓ Investing in strategic growth opportunities and new product innovation Flexible balance sheet ✓ Funding transformation cost savings initiatives: $37M through 2021 allows for acceleration of investments in Bolt-on M&A organic + inorganic growth, ope
Slide 12: Key Drivers of 2022 Outlook
KEY DRIVERS OF 2022 OUTLOOK • Favorable Macros with record demand and backlog Growth Drivers • Alternative Fuel growth to continue • New products to accelerate defense growth Supply • Material availability likely to improve in second half Constraints and • Inflation pass-through to catch up with cos
Slide 13: 2022 Financial Guidance
2022 FINANCIAL GUIDANCE 2022 Guidance Expectations Revenue Growth (incl FX, Acq, & 12%- 20% • Supply disruptions and freight delays likely to Price) impact early 2022 • Expect revenue growth in all end markets EPS $1.30 - $1.50 • Cost productivity to deliver 30bps to 50bps annually Assumptions • Tax
Slide 14: Long Term Financial Outlook
LONG TERM FINANCIAL OUTLOOK 2017 – 2021 Performance Macro & Supply Chain Recovery 2023 – 2025 Targets % CAGR, total bps % CAGR, total bps • Aerospace recovery • Inflation pass through • Revenue: (2.0%) • End-market growth acceleration • Volume Growth: 3% – 7% • EBITDA: +4.5% • EBITDA: 5% - 15% • EPS
Slide 15: Strong Foundation for Long Term Success
STRONG FOUNDATION FOR LONG TERM SUCCESS Achievements Onwards Strategy Execution Accelerating Momentum CUSTOMER FIRST ✓ Developed and successfully executed • Enhanced portfolio has stronger margin Transformation Plan with total cash and growth profile with focus on savings of $30M+ Magnesium Alloys,
Slide 16: Appendices
APPENDICES APPENDICES Summary Financial Statements and Reconciliation of Non-GAAP Measures Click here to edit key takeaway CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 16
Slide 17: Summary Income Statement
SUMMARY INCOME STATEMENT1 (Unaudited) 2021 2020 Variance 2021 2020 Variance $M Q4 Q4 $M % FY FY $M % NET SALES 98.7 82.1 16.6 20.2% 374.1 324.8 49.3 15.2% Cost of sales (74.9) (62.2) (278.1) (243.9) Gross profit 23.8 19.9 3.9 19.6% 96.0 80.9 15.1 18.7% Selling, general and administrative expenses (1
Slide 18: Cash Flow
CASH FLOW (Unaudited) 2021 2020 2021 2020 $M Q4 Q4 FY FY Operating activities Net (loss) / income (0.4) 7.1 29.9 20.0 Net loss / (income) from discontinued operations 3.9 (0.5) 0.1 0.8 NET INCOME FROM CONTINUING OPERATIONS 3.5 6.6 30.0 20.8 Equity income of unconsolidated affiliates - - - 0.1 Deprec
Slide 19: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2021 2020 2021 2020 $M Q4 Q4 FY FY Net income 3.5 6.6 30.0 20.8 Accounting charges relating to acquisitions and disposals of businesses: Amortization on acquired intangibles 0.2 0.1 0.9 0.7 Acquisitions and disposal related (gains) / costs - (0.2) 1.5
Slide 20: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2020 2020 2020 2020 2021 2021 2021 2021 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBITA 12.7 7.5 10.5 10.5 14.5 13.5 10.3 10.4 Effective tax rate - per income statement 19.1% 19.0% 53.8% 16.5% 24.8% 21.0% 24.0% 34.0% Notional tax (2.4) (1.4) (5.7) (1.7) (3.6) (2.8)
Slide 21: Restatement Table for Discontinued Operations
RESTATEMENT TABLE FOR DISCONTINUED OPERATIONS (Unaudited) 2020 2020 2020 2020 2021 2021 2021 2021 2020 2021 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY Net Sales Gas Cylinders segment 37.2 37.5 32.3 34.9 36.2 46.5 45.6 50.0 141.9 178.3 Elektron Segment 51.2 39.1 45.4 47.2 49.0 52.5 45.6 48.7 182.9 195.8 Net sa
Slide 22: Q4 2021: Elektron Segment Results
Q4 2021: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +3.2% -5.5% $0.3 $1.5 $0.3 $0.1 $1.5 $2.0 $0.3 $0.2 $47.2 $48.7 $9.1 $8.6 Q4 2020 FX Price Inflation Volume/Mix Cost Q4 2021 Q4 2020 FX Price Volume Q4 2021 Reduction CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEV
Slide 23: Q4 2021: Gas Cylinders Segment Results
Q4 2021: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +43.3% +27.7% $0.5 $6.4 $0.5 $0.7 $0.4 $7.8 $50.0 $6.0 $1.5 $1.6 $34.9 $4.7 Q4 2020 FX Acquistion Price Volume Q4 2021 Q4 2020 Price Inflation Volume / Mix Net Cost Q4 2021 Reduction CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNO
Slide 24: FY 2021: Segment Results
FY 2021: SEGMENT RESULTS FY 2021 Sales EBITDA $195.8M $40.7M Elektron Up 7.1% Up 24.8% Gas $178.3M $22.7M Cylinders Up 25.7% Up 6.6% $374.1M $63.4M TOTAL Up 15.2% Up 17.6% CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 24
Slide 25: FY 2021: Luxfer Results
FY 2021: LUXFER RESULTS Sales ($M) Adj. EBITDA ($M) +15.2% +17.6% $3.6 $10.5 $3.6 $8.7 $1.0 $24.9 $374.1 $5.6 $3.8 $63.4 $10.3 $53.9 $324.8 FY 2020 FX Acquistion Price Volume FY 2021 FY 2020 FX Price Inflation Volume / Net Cost FY 2021 Mix Reduction CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNO
Slide 26: FY 2021: Gas Cylinders Segment Results
FY 2021: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +25.7% +6.6% $0.4 $1.4 $1.4 $4.1 $2.9 $1.2 $1.3 $178.3 $21.3 $22.7 $24.9 $6.0 $141.9 FY 2020 FX Acquistion Price Volume FY 2021 FY 2020 FX Price Inflation Volume / Net Cost FY 2021 Mix Reduction CUSTOMER FIRST • INTEGRITY • ACCOUNTAB
Slide 27: FY 2021: Elektron Segment Results
FY 2021: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +7.1% +24.8% $6.4 $4.3 $2.2 $1.4 $2.2 $2.7 $7.4 $2.6 $195.8 $40.7 $182.9 $32.6 FY 2020 FX Price Inflation Volume/Mix Cost FY 2021 FY 2020 FX Price Volume FY 2021 Reduction CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONA