Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 EARNINGS CONFERENCE CALL February 29, 2024
Slide 2: Forward-Looking Statements & Non-GAAP Disclaimer
Forward-Looking Statements & Non-GAAP Disclaimer DISCLAIMER This document has been prepared by ESAB Corporation, a Delaware corporation (the “Company” or “ESAB”), solely for informational purposes. References herein to the terms “ESAB” and the “Company” when used in the historical context prior to A
Slide 3: 4Q 2023 Highlights
4Q 2023 Highlights 4Q 2023 results: Record 4Q performance $650M +6% NPI driving growth Sales1 Total Sales Growth1 Organic +4% Cobot sales up ~90% Gas Control sales up LDD $126M +18% aEBITDA1 Year-over-Year EBX driving margins and cash flow Taking momentum into 2024 19.4% +200bps aEBITDA
Slide 4: Full Year 2023 Highlights
Full Year 2023 Highlights Metric 1 Original Guidance 1 Guidance as of 3Q 1 Actual 20231 Delivered Sales $2.48-$2.53B $2.59-$2.61B $2.62B aEBITDA $420-$440M $465-$475M $483M aEPS $3.80-$4.00 $4.30-$4.40 $4.46 aFCF >90% No Change >100% Conversion Delivering on our commitments Proprietary & Confidentia
Slide 5: ESAB 4Q 2023 Financial Summary
ESAB 4Q 2023 Financial Summary ($ Millions) 4Q 20231 4Q 20221 YoY Sales $650 $614 6% aEBITA $117 $99 18% aEBITA Margin % 18.0% 16.1% 190 bps aEBITDA $126 $107 17% aEBITDA Margin % 19.4% 17.4% 200 bps 4Q Highlights: 4Q 2023 Sales Growth1: ■ Markets remain resilient Organic 4%2 Price 3% ■ New products
Slide 6: ESAB 4Q 2023 Americas
ESAB 4Q 2023 Americas ($ Millions) 4Q 2023 4Q 2022 YoY Sales $307 $284 8% aEBITDA $60 $50 21% aEBITDA % 19.5% 17.5% 200 bps 4Q Highlights: 4Q 2023 Sales Growth: ■ Continuing to drive value pricing Organic 9% Price 8% ■ Volume improved Volume 1% ■ Excitement around equipment and robotic solutions FX
Slide 7: ESAB 4Q 2023 EMEA and APAC
ESAB 4Q 2023 EMEA and APAC 1 ($ Millions) 4Q 20231 4Q 20221 YoY Sales $343 $331 4% aEBITDA $66 $57 15% aEBITDA % 19.3% 17.3% 200 bps 4Q Highlights: 4Q 2023 Sales Growth1: ■ Markets remain resilient Organic 0% Price (2)% ■ Middle East, India and Asia driving volumes Volume 2% ■ New products creating
Slide 8: Strong Free Cash Flow Reducing Net Leverage
Strong Free Cash Flow Reducing Net Leverage +39% $305M $219M Record FCF performance, up 39% YoY Strong balance sheet with net leverage <1.9x EBX delivered a 0.3x working capital turn improvement FY 2022 FY 2023 Building M&A capacity . 4Q 2022 4Q 2023 Net Leverage 2.7x 1.9x Robust cash flow i
Slide 9: Full Year 2024 Guidance
Full Year 2024 Guidance FY 2024 Financial Metrics Guidance1 Sales guidance assumes: Sales $2.66–$2.71B LSD in price and volume ~(1.0)% FX headwind Core Organic Growth % 2.5%–4.5% Seasonality: 1Q ~24.0%, 2Q ~25.5%, 3Q ~24.5% and 4Q ~26.0% aEBITDA $495–515M aEBITDA margin expansion and aEPS
Slide 10: Summary
Summary Continued momentum into 2024 Strong M&A funnel Raising the bar with EBX Confidently moving towards our 2028 goals Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Building a focused premier compounder Proprietary & Confidential 10 ESAB Corp
Slide 11: Appendix
Appendix
Slide 12: Full Year 2024 Guidance
Full Year 2024 Guidance ESAB 2023 Actual 1 2024 Outlook 1 Sales ($B) 2.62 2.66 - 2.71 Total Growth 8% 1.5% - 3.5% Core Organic Growth 6% 2.5% - 4.5% FX (1)% ~(1.0)% M&A 3% - aEBITDA ($M) 483 495 - 515 Interest Expense & Other ($M) 85 74 - 77 Adjusted Tax Rate 24% 23% - 24% NCI ($M) 6 ~7 aEPS ($) 4.4
Slide 13: Non-GAAP Reconciliation – 4Q '23 Total and Segments
Non-GAAP Reconciliation – 4Q ’23 Total and Segments1 Three Months Ended December 31, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 307.3 $ 382.0 $ 689.4 Net Sales attributable to Russia $ - $ 39.4 $ 39.4 Core Net Sales $ 307.3 $ 342.6 $ 649.9 Operating Income $ 50.1 16.
Slide 14: Non-GAAP Reconciliation – 4Q '22 Total and Segments
Non-GAAP Reconciliation – 4Q ’22 Total and Segments1 Three Months Ended December 31, 2022 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 283.6 $ 380.6 $ 664.1 Net Sales attributable to Russia $ - $ 49.9 $ 49.9 Core Net Sales $ 283.6 $ 330.7 $ 614.2 Operating Income $ 33.7 11.
Slide 15: Non-GAAP Reconciliation – FY '23 Total and Segments
Non-GAAP Reconciliation – FY ’23 Total and Segments1 Year Ended December 31, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 1,215.0 $ 1,559.8 $ 2,774.8 Net Sales attributable to Russia $ - $ 153.8 $ 153.8 Core Net Sales $ 1,215.0 $ 1,405.9 $ 2,620.9 Operating Income $ 18
Slide 16: Non-GAAP Reconciliation – 2023 Net Income to Adjusted EPS
Non-GAAP Reconciliation – 2023 Net Income to Adjusted EPS1 4Q 2023 FY 2023 Net income from continuing operations $ 59.6 $ 223.4 Income attributable to noncontrolling interest, net of taxes $ 1.2 $ 5.7 Net income from continuing operations attributable to ESAB Corporation $ 58.4 $ 217.7 Restructuring
Slide 17: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow 4Q 2023 4Q 2022 FY 2023 FY 2022 Net cash provided by operating activities $ 122.4 $ 91.4 $ 330.5 $ 214.4 Purchases of property, plant and equipment $ (19.3) $ (18.2) $ (48.2) $ (40.2) Proceeds from the sale of certain properties $ - $ - $ 2.8 $ 2.5 Payme