Lincoln Electric Holdings, Inc. · NASDAQ:LECO
Lincoln Electric — Q1 2024 Earnings Presentation
19 slides from Lincoln Electric's earnings presentation, Apr 25, 2024
Slide 1: Q1 2024 Earnings
April 25, 2024 LINCOLN ELECTRIC HOLDINGS, INC. Q1 2024 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 2024 Highlights
First Quarter 2024 $981M 24.1% Highlights: Net Sales performance Adjusted ROIC performance -6% vs. prior year; Organic sales -6% +170 bps vs. prior year Operational execution and cost management mitigate softer sales performance 17.5% $133M +120 bps Adjusted operating Adjusted Operating Income Margi
Slide 4: Q1 Organic sales compression reflects challenging prior year comparisons and slower industrial activity
Q1 Organic sales compression reflects challenging prior year comparisons and slower industrial activity Q1 Organic sales declined 6.1% reflecting a slower start across all Q1 global end sector performance1 products Solid Q1 automation backlog and Energy remains resilient globally orders Equipment do
Slide 5: Milestones & Announcements
Milestones & Announcements RedViking® Acquisition 1,000th Cobot Sale New Chief Transformation Officer role Global automation portfolio Leading welding cobot in the sales run rate at $1 billion industry Accelerating profit growth Complementary material handling and Cooper welding cobot solutions incl
Slide 6: Income Statement – Q1 2024
Income Statement – Q1 2024 YoY % Change $ in Millions Q1 2024 % of Sales Q1 2023 % of Sales Fav/ (Unfav) Net Sales $ 981.2 $ 1,039.3 (5.6)% Gross Profit 368.4 37.5% 355.4 34.2% 3.7% SG&A 198.7 20.3% 190.1 18.3% (4.5)% Operating Income 165.0 16.8% 164.4 15.8% 0.4% Special item charges1,2 6.4 0.6% 4.7
Slide 7: Americas Welding Segment
Americas Welding Segment % YoY ($ in Millions) Q1 2024 Q1 2023 Change Volumes challenged by moderating industrial Net Sales $ 624.1 $ 658.6 (5.2)% activity and prior year comparisons on capital Adjusted EBIT $ 136.1 $ 132.5 2.8% equipment projects. Margin reflects effective Adjusted EBIT Margin2 20.
Slide 8: International Welding Segment
International Welding Segment % YoY ($ in Millions) Q1 2024 Q1 2023 Change Volumes soften as strength in the Middle East and Net Sales $ 235.8 $ 252.4 (6.6)% Turkey is offset by weak industrial activity in Europe Adjusted EBIT $ 27.8 $ 29.6 (6.2)% and challenging prior year comparisons in Asia Pacif
Slide 9: The Harris Products Group
The Harris Products Group % YoY ($ in Millions) Q1 2024 Q1 2023 Volumes primarily reflect Change weak residential sector Net Sales $ 121.3 $ 128.3 (5.4)% activity (HVAC, plumbing). Price reflects actions Adjusted EBIT $ 19.9 $ 19.0 4.7% taken to mitigate inflation and changes in metal Adjusted EBIT
Slide 10: Cash Flow From Operations Metrics
Cash Flow From Operations Metrics Cash Flow from Operations Average Operating Working ($ in Millions) Capital to Net Sales Ratio $133 $124 83% cash conversion1 in Q1-2024 19.6% 18.8% 17.1% Working capital performance improves vs. the comparable prior year period as inventory levels normalize Q1-2023
Slide 11: Capital Allocation
Capital Allocation1 ($ in Millions) Q1 Capital Allocation & Returns $178 • Growth: $26 million • Return to Shareholders: $152 million • Return on Invested Capital2: 24.1% 110 $89 Capital Allocation Strategy 32 Prioritized uses of cash: 41 38 • Growth investments (organic and M&A) 19 26 • Return to s
Slide 12: Maintaining Full Year 2024 Assumptions
Maintaining Full Year 2024 Assumptions Assumptions Risks Low- to Mid-single digit % organic sales Economic and geopolitical headwinds growth Inflation (raw materials & labor) Neutral price/cost Low-to-mid 20% incremental operating income margin Opportunities (not in assumptions) $45 to $50 million i
Slide 13: Contact
Contact: Amanda Butler Vice President, Investor Relations & Communications Amanda_Butler@lincolnelectric.com 216.383.2534 13 13
Slide 14: Non-GAAP Information
Non-GAAP Information Adjusted operating income, Adjusted net income, Adjusted EBIT, EBITDA, Adjusted 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. Manage
Slide 15: 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) 15 Pleas
Slide 16: Non-GAAP Financial Measures (continued)
Non-GAAP Financial 1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate Measures and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section. (continued) 2) Primarily related to rationalization plans initiated within Intern
Slide 17: Non-GAAP Financial Measures: Adjusted 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) Includes the net tax impact of Special items recorded during the
Slide 18: Segment EBIT
Segment EBIT EBIT and Adjusted EBIT Reconciliation – Three Months Ended March 31, 2024 (In thousands) (Unaudited) 18 Please see the following slide for corresponding footnotes
Slide 19: Non-GAAP Financial Measures (continued)
Non-GAAP 1) EBIT is defined as Operating income plus Other income. Financial Measures 2) The primary profit measure used by management to assess segment performance is adjusted EBIT. EBIT for each operating segment is adjusted for (continued) special items to derive adjusted EBIT. Footnotes for EBIT
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