Luxfer Holdings PLC · NYSE:LXFR
Luxfer — Investor Presentation (December 2021)
25 slides from Luxfer's investor presentation, Dec 14, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION December 14, 2021 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 Com
Slide 3: Luxfer Overview (NYSE: LXFR)
LUXFER OVERVIEW (NYSE: LXFR) COMPANY SNAPSHOT FINANCIALS (Q3 2021 TTM) 4-year CAGR/Change Founded 1898 Net Sales $358M -%3 Principal Executive Office U.S.A Adj. EBITDA2 $63M 6.1%3 Market Cap1 ~$582M Adj. EBITDA2 Margin 18% 5.5%3 Net Debt/Adj. EBITDA2 0.6x Adj. EPS2 $1.28 9.2%3 ROIC on Adj. Earnings2
Slide 4: Niche Industrial Applications of Advanced Material Products
NICHE INDUSTRIAL APPLICATIONS OF ADVANCED MATERIAL PRODUCTS Niche Application Examples Innovation leader in the use FLAMELESS RATION HEATER (FRH) High of magnesium alloys for unique, high-performance, lightweight Performance alloys, flameless heating Magnesium technology Alloys and other niche appli
Slide 5: Materials Engineering Competency Drives Growth
MATERIALS ENGINEERING COMPETENCY DRIVES GROWTH Luxfer is an industrial company Magnesium alloy expertise led to focused on materials science development of FRH Unitized Group Rations – with technical expertise in Express (UGR-E); to drive growth in defense attractive niche applications end user segm
Slide 6: ESG Achievements & Opportunities
ESG ACHIEVEMENTS & OPPORTUNITIES ENVIRONMENT • Committed to 20% reduction in CO2 emissions, 10% reduction in freshwater use, and 20% less waste to landfill by 2025; on a journey to net zero • Executing multiple projects to reduce environmental impact of operations • Conducting Carbon Life Cycle Anal
Slide 7: Solid Underlying Growth in Large Addressable Market
SOLID UNDERLYING GROWTH IN LARGE ADDRESSABLE MARKET Large Addressable Market Higher Growth Opportunity ~$10B2 5-year Profitability Industry CAGR (EBITDA%) (2021-2026) ~$2B High Performance 4% - 8% 10% - 15% Gas Cylinders Elektron 3% - 7% 15% - 25% Advanced Materials1 Alignment with Secular Growth Tr
Slide 8: Luxfer: Now Positioned to Accelerate Growth
LUXFER: NOW POSITIONED TO ACCELERATE GROWTH Simplification 2017 – 2018 Culture and Cost Transformation 2018 – 2021 Organic & Inorganic Growth Now ACCELERATING Organic Growth Drivers Inorganic Opportunities GROWTH • Commercial excellence • Pipeline of bolt-on acquisition • Growth through commercial o
Slide 9: Balance Sheet: Significantly Strengthened
BALANCE SHEET: SIGNIFICANTLY STRENGTHENED All in $M $120 Net Debt $100 Underfunded Pension Benefits $120 $80 $60 $100 $40 $20 $80 $0 YE'15 (a) YE'18 (a) YE'21 (p) $60 Net Debt $40 to EBITDA 1.5x 0.8x 0.6x $20 Cash returned to Shareholders $0 $20 YE12 (a) YE15 (a) YE18 (a) YE21 (p) $15 $10 Significan
Slide 10: Financial Performance Overview
FINANCIAL PERFORMANCE OVERVIEW1 All in $M except EPS Revenue Adj. EBITDA 5-yr CAGR: 3.2% 5-yr CAGR: (2.4)% '21 Guidance $79.6 '21 Guidance $487.9 $441.3 $443.5 @ 10/26/21 $68.1 @ 10/26/21 $414.8 $59.3 $378.0 $51.3 $54.4 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 Adj. EPS Adj. EBITDA
Slide 11: Cost Transformation Will Support Growth Actions
COST TRANSFORMATION WILL SUPPORT GROWTH ACTIONS 2021 Transformation Plan Savings ($M) Total P&L savings $6 2019 to date of $25M $4 $25 Increased P&L savings $7 $21 2018 target to $24.0M $6 $5 $14 Op expenses Launched $20M x 2021 $9 $9 Capex P&L savings target 2018 2019 2020 2021 $0 2022 TOTAL Cash c
Slide 12: M&A to Reposition Portfolio: Transportation Example
M&A TO REPOSITION PORTFOLIO: TRANSPORTATION EXAMPLE Luxfer Transportation Revenues (~1/3 of Luxfer Total Revenues) Future Growth Drivers 100% = $146.5M 100% = $120M 25% • New products and capabilities Gasoline or Diesel based vehicles 50% in lightweight alloys and higher-pressure composite Alternati
Slide 13: 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 TTM allows for acceleration 9/30/21 of investments in Bolt-on M&A organic + inorganic grow
Slide 14: Luxfer Acquisition Framework
LUXFER ACQUISITION FRAMEWORK IP, Critical Process Technology Accretive to EPS within 2-3 Cost and Niche Revenue Products, Years Synergies Applications ROIC > WACC within 3 STRATEGIC FILTERS Years Compelling Geographic Growth & Expansion Margin Profile Attractive Valuation Post Strong Cultural Custom
Slide 15: 2021 Financial Guidance – As of 10/26/21
2021 FINANCIAL GUIDANCE – AS OF 10/26/21 2021 Guidance Expectations Revenue Growth • Supply disruptions and freight delays likely to 10% - 14% continue in Q4’21 and into early 2022 (including FX & Acq) • Narrowed ‘21 guidance includes includes YTD EPS $1.20 - $1.25 acquisition dilutive impact of ~$0
Slide 16: Luxfer B.E.S.T to Support Growth Acceleration
LUXFER B.E.S.T TO SUPPORT GROWTH ACCELERATION Business Excellence Standard Toolkit CUSTOMER FIRST Developing Capability Strength Growth Lean Operations Excellence Performance Culture & Growth Talent Lean Operations Values driven performance culture Growth Excellence Environmental, Social and Governa
Slide 17: Strategic Imperatives for the Next Phase of Value Creation
STRATEGIC IMPERATIVES FOR THE NEXT PHASE OF VALUE CREATION Growth Imperatives 1 2 3 New Product Operational Bolt-on Vitality Excellence M&A B.E.S.T. Serves as the Foundation of our Continuously Improving Business Key Capabilities that Will Enable Our Success Strong, long-term Luxfer B.E.S.T used Mat
Slide 18: Luxfer Vision Next 3-5 Years
LUXFER VISION NEXT 3-5 YEARS Operational • Leading in Hydrogen / Alternative Fuels Goals • Continuing to partner with customers to invest in new product and solutions • Grow ESG excellence to complement sustainability focus • Continue to execute on strategic M&A for growth and capability extensions
Slide 19: Invest With Us
INVEST WITH US Global industrial Enhanced portfolio has Optimized cost structure company innovating stronger margin and Emphasis on and flexible balance niche applications of growth profile with focus new product vitality, sheet to reinvest in materials engineering, on Magnesium Alloys, commercial e
Slide 20: Appendix
APPENDICES APPENDIX Summary Financial Statements and Reconciliation of Non-GAAP Measures CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 20
Slide 21: Summary Income Statement
SUMMARY INCOME STATEMENT1 (Unaudited) 2021 2020 Variance 2021 2020 Variance $M Q3 Q3 $M % YTD YTD $M % NET SALES 91.2 77.7 13.5 17.4% 275.4 242.7 32.7 13.5% Cost of sales (70.1) (58.8) (203.2) (181.7) Gross profit 21.1 18.9 2.2 11.6% 72.2 61.0 11.2 18.4% Selling, general and administrative expenses
Slide 22: Cash Flow
CASH FLOW $M Q3 Q3 YTD YTD Operating activities Net income 4.8 2.6 30.3 12.9 Net loss / (income) from discontinued operations 1.2 0.2 (3.8) 1.7 NET INCOME FROM CONTINUING OPERATIONS 6.0 2.4 26.5 14.2 Equity income of unconsolidated affiliates - - 0.1 Depreciation 3.5 3.1 10.5 9.4 Amortization of pur
Slide 23: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2021 2020 2021 2020 $M Q3 Q3 YTD YTD Net income 6.0 2.4 26.5 14.2 Accounting charges relating to acquisitions and disposals of businesses: Amortization on acquired intangibles 0.3 0.2 0.7 0.6 Acquisitions and disposals 0.6 - 1.5 0.2 Defined benefit pe
Slide 24: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2020 2020 2020 2020 2021 2021 2021 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 EBITA 12.7 7.5 10.5 10.5 14.5 13.5 10.3 Effective tax rate - per income statement 19.1% 19.0% 53.8% 16.5% 24.8% 21.0% 24.0% Notional tax (2.4) (1.4) (5.7) (1.7) (3.6) (2.8) (2.5) EBITA after n
Slide 25: Restatement Table for Discontinued Operations
RESTATEMENT TABLE FOR DISCONTINUED OPERATIONS (Unaudited) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2019 2020 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY FY Net Sales Gas Cylinders segment 40.3 39.6 37.9 35.7 37.2 37.5 32.3 34.9 36.2 46.5 45.6 153.5 141.9 Elektron Segment 62.0 58.4 52.9 46.6
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