Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Q4 2023 Earnings Presentation
27 slides from Luxfer's earnings presentation, Feb 28, 2024
Slide 1: Fourth Quarter 2023 Earnings Presentation
FOURTH QUARTER 2023 EARNINGS PRESENTATION February 28, 2024 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This release 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 limite
Slide 3: Highlights and Key Messages
HIGHLIGHTS AND KEY MESSAGES (amounts in millions, except EPS) Q4 2023 Q4 2022 FY 2023 Adj. Sales $87.8 $106.3 $373.5 Adj. EBITDA $8.1 $11.2 $43.3 Adj. Diluted EPS $0.13 $0.25 $0.80 Adj. Free Cash Flow $14.1 $15.9 $16.8 Net Debt $69.9 $68.6 $69.9 Net Debt : EBITDA 1.6x 1.2x 1.6x *Note: Adjusted finan
Slide 4: Comprehensive Strategic Review Update
COMPREHENSIVE STRATEGIC REVIEW UPDATE ACCELERATED AND EXPANDED ANNUAL STRATEGIC REVIEW PROCESS Comprehensive, 1. Graphic Arts Divestiture portfolio-wide evaluation of all ▪ Graphic Arts no longer aligns with Luxfer value proposition businesses, capital ▪ Sale process initiating with XMS Capital Part
Slide 5: Actions Taken to Improve Performance
ACTIONS TAKEN TO IMPROVE PERFORMANCE LU X F E R B U S I N E S S SYS T E M R ED U CI N G CO STS , I MP ROV ING MARGI N & CASH F LOW ▪ Consolidated Elektron Powders plants from 3 to 2 to deliver $900K in annual savings; selling closed site in H2 2024 ▪ Established insurance recovery for Elektron legal
Slide 6: Sales Performance by End Market
SALES PERFORMANCE BY END MARKET 45% 34% 21% DEFENSE, T R A N S P O R TAT I O N GENERAL T O TA L FIRST RESPONSE ( A LT E R N AT I V E F U E L , INDUSTRIAL & H E A LT H C A R E A E R O S PA C E , A U T O M O T I V E ) FY 2021 +5.9% +27.0% +15.9% +15.3% FY 2022 +5.6% +13.6% +31.1% +15.2% Q4 2023 +9.7%
Slide 7: Q4 2023: Financial Bridge
Q4 2023: FINANCIAL BRIDGE SALES ($M) ADJ. EBITDA ($M) $1.2 $7.2 $1.6 $106.3 $26.9 $1.1 $7.2 $87.8 $11.2 $9.4 $1.8 $8.1 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Vol/Mix Other Q4 2023 *Note: Adjusted financials exclude Graphic Arts Sales decreased by 17.4% Adj EBITDA decreased by
Slide 8: Q4 2023: Segment Results
Q4 2023: SEGMENT RESULTS GAS CYLINDERS ELEKTRON Sales Adj. EBITDA Sales Adj. EBITDA Q4 2022 $51.8 $3.0 $54.5 $8.2 Q4 2023 $51.7 $6.5 $36.1 $1.6 FY 2023 $186.4 $16.7 $187.1 $26.6 Q 4 2 0 2 3 C O M M E N TA R Y ▪ Higher SCBA and Medical sales offset by ▪ Sales deterioration due to continued lower sale
Slide 9: FY 2024 Outlook
FY 2024 OUTLOOK FULL YEAR 2024 GUIDANCE* ASSUMPTIONS* Sales Growth (incl. volume, price, and FX) -3% to +1% Capex $11M - $14M Adjusted EBITDA $42M - $46M Tax Rate ~23% Adjusted Diluted EPS $0.70 - $0.85 FX GBP:USD 1.25 Free Cash Flow $20M - $24M Net Debt: EBITDA ~1.5x *Note: The 2024 Full Year outlo
Slide 10: Profit Improvement and Value Creation
PROFIT IMPROVEMENT AND VALUE CREATION COMPLETION OF KEY INTERNAL PROGRAMS IS DRIVING IMPROVED EARNINGS PROJECTIONS • Improved cost base in both Elektron and Gas Cylinders with consolidation programs completed • Strengthened margins and restored profitability through new commercial arrangements for o
Slide 11: Q&A
Q&A FOURTH QUARTER 2023 EARNINGS PRESENTATION CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 11
Slide 12: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 12
Slide 13: Q4 2023: Gas Cylinders Segment Results
Q4 2023: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -0.2% +116.7% $1.2 $1.0 $5.9 $7.0 $1.1 $0.1 $51.8 $51.7 $6.5 $0.2 $5.9 $3.0 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Volume/Mix Other Q4 2023 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL D
Slide 14: Q4 2023: Elektron Segment Results exc G.A.
Q4 2023: ELEKTRON SEGMENT RESULTS EXC G.A. Sales ($M) Adj. EBITDA ($M) -33.8% -80.5% $8.3 $0.4 $0.2 $1.3 $0.9 $1.3 $54.5 $8.2 $1.7 $19.9 $36.1 $1.6 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Volume/Mix Other Q4 2023 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSO
Slide 15: YTD Q4 2023: Consolidated Total Results exc G.A.
YTD Q4 2023: CONSOLIDATED TOTAL RESULTS EXC G.A. Sales ($M) Adj. EBITDA ($M) -2.9% -21.7% $16.7 $0.6 $27.8 $38.4 $1.6 $27.8 $15.8 $5.7 $384.7 $373.5 $55.3 $43.3 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Volume/Mix Other Q4 2023 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOV
Slide 16: YTD Q4 2023: Gas Cylinders Segment Total
YTD Q4 2023: GAS CYLINDERS SEGMENT TOTAL Sales ($M) Adj. EBITDA ($M) +1.5% +30.5% $2.2 $18.2 $13.3 $10.0 $186.4 $3.2 $0.5 $183.7 $0.6 $18.2 $16.7 $12.8 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Volume/Mix Other Q4 2023 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • P
Slide 17: YTD Q4 2023: Elektron Segment exc G.A.
YTD Q4 2023: ELEKTRON SEGMENT EXC G.A. Sales ($M) Adj. EBITDA ($M) -6.9% -37.4% $1.6 $9.6 $25.1 $6.7 $1.0 $9.6 $201.0 $12.6 $187.1 $42.5 $5.2 $26.6 Q4 2022 FX Price Volume/Mix Q4 2023 Q4 2022 FX Price Inflation Volume/Mix Other Q4 2023 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSO
Slide 18: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 18
Slide 19: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 19
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 20
Slide 21: Reconciliation: Adjusted Net Income and Adjusted EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 21
Slide 22: Reconciliation: Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED EBITDA (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 22
Slide 23: Reconciliation: Net Sales and Adjusted EBITDA by Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: NET SALES AND ADJUSTED EBITDA BY SEGMENT (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 23
Slide 24: Reconciliation: Adjusted Effective Tax Rate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED EFFECTIVE TAX RATE (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 24
Slide 25: Reconciliation: Net Debt Ratio and Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: NET DEBT RATIO AND FREE CASH FLOW (UNAUDITED) CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 25
Slide 26: Reconciliation: Operating Working Capital as % of Annualized Net Sales
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: OPERATING WORKING CAPITAL AS A % ANNUALIZED NET SALES (UNAUDITED) Fourth Quarter 2023 In millions Continuing Operations Graphic Arts Adjusted Total Accounts and other receivables, net of allowances $59.9 $5.0 $54.9 Inventories 95.9 14.8 81.1 Accounts pa
Slide 27: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 27