Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Investor Presentation (March 2023)
35 slides from Luxfer's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
INVESTOR PRESENTATION March 2023 1 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation 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 l
Slide 3: We are Luxfer
We are Luxfer We help to create a safe, clean and energy efficient world 3 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 4: Luxfer Overview (NYSE: LXFR)
LUXFER OVERVIEW (NYSE: LXFR) Company Description Full Year 2022 Sales Breakdown Luxfer is a global industrial company innovating niche applications in materials engineering. Luxfer’s high- by End Market performance materials, components and high-pressure gas containment devices are used in defense a
Slide 5: Materials Technology Leadership
MATERIALS TECHNOLOGY LEADERSHIP Innovation leader in the use High of magnesium alloys for critical Performance MAGNESIUM applications in aerospace, defense, Magnesium and other industries as well as in Alloys flameless heating applications Elektron Segment Expertise in high-performance Specialty spe
Slide 6: Aligned with Secular Growth Trends
ALIGNED WITH SECULAR GROWTH TRENDS Composite gas cylinders and systems used for Alternative Fuel applications, including $10B Total Addressable Market1 Hydrogen and Compressed Natural Gas Gas Cylinders ~$2B Clean Energy Zirconium-based emissions control and industrial catalysis materials Lightweight
Slide 7: Long-Term Secular Growth Trends
LONG-TERM SECULAR GROWTH TRENDS ✓ Ongoing transition to Hydrogen as part of the green energy economy ✓ Continued adoption of composites for bulk transport of gases Clean ✓ Autocatalysis benefiting from increasing emissions regulation Energy ✓ Sustained commercial aerospace market recovery post-COVID
Slide 8: Sales Performance by End Market
SALES PERFORMANCE BY END MARKET Year-over-Year Change FY FY Q4 FY 2020 2021 2022 2022 Q4 2022 Commentary 31% • Strong Defense demand: military aerospace, flameless ration heaters, and Defense, First -6.4% +5.9% +19.0% +5.6% chemical kits Response, & • First Response & Healthcare products Healthcare
Slide 9: Our Pathway to $2.00 Adj. EPS
Andy’s Slide OUR PATHWAY TO $2.00 ADJ. EPS 2023 Adj. EPS Guidance: Midpoint $1.25 ✓ Continuing current trajectory of Hydrogen growth PROFITABLE GROWTH ✓ Capitalize on Elektron new product introductions $0.33 ✓ Expansion of Magtech Solutions defense offerings ✓ Normalization in European industrial ma
Slide 10: Balanced Approach to Capital Deployment
BALANCED APPROACH TO CAPITAL DEPLOYMENT ✓ Reinforcing our existing strong capital position Reinvestment ✓ Investing thoughtfully in secular growth opportunities tied to niche in Organic materials engineering focus Growth ✓ Identifying opportunities for new product innovation and operational efficien
Slide 11: Environmental, Social, and Governance Roadmap
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ROADMAP 1 ENVIRONMENTAL • Committed to 20% reduction in CO2 emissions, 10% reduction in freshwater 1 use, and 20% less waste to landfill by 2025; on a journey to net zero • Conducting Carbon Life Cycle Analyses to improve product sustainability • Greener operati
Slide 12: Advancing Our Growth Strategy
ADVANCING OUR GROWTH STRATEGY 2017-2020 Growth Capabilities Portfolio 2018-2023 • Commercial Simplification Cost 2023-2025 opportunities Transformation • Demand for Clean & Beyond Energy Organic and Inorganic Growth • New products • Growth talent • Global presence • Strong balance sheet • Enhanced o
Slide 13: Launch of the Luxfer Business System
LAUNCH OF THE “LUXFER BUSINESS SYSTEM” Introducing our new operating model: The Luxfer Business System A critical tool to realize growth potential embedded in our business Development is being led by key members of Luxfer’s leadership team Emphasis on near-term execution and long-term investment to
Slide 14: Well Positioned for Value Creation
WELL POSITIONED FOR VALUE CREATION We will help to create a safe, clean and energy-efficient world Global Industrial Attractive Leading Return Sustainable Company End Markets on Capital Growth ✓ Market leading ✓ Aligned with ✓ Strong balance ✓ Broad pipeline of products secular growth sheet new prod
Slide 15: Q4 2022 Update
Q4 2022 UPDATE 15 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 16: Quarterly Financial Highlights
QUARTERLY FINANCIAL HIGHLIGHTS ($M except per share) Q4 Q4 ▪ Delivered EPS within guidance range amid 2022 2021 Change evolving macro and supply chain conditions Sales $116.7 $98.7 +18.2% ▪ Volumes accelerated sequentially to the best performance of the year Adj. EBITDA $14.0 $14.6 -4.1% ▪ Rising ra
Slide 17: Latest Segment Update
LATEST SEGMENT UPDATE Elektron Gas Cylinders Growing aerospace build rates Growing aerospace build rates End Market Ongoing recovery in automotive SCBA demand firm Expectations Expanded FRH / chemical kit volumes Alternative Fuels stronger 2H 2023 vs. Soft demand for mag plate in Europe 1H 2023 afte
Slide 18: Q4 2022 Financial Bridge: Consolidated
Q4 2022 FINANCIAL BRIDGE: CONSOLIDATED Luxfer Consolidated Sales increased by 18.2% from prior year Sales ($M) +18.2% • Price increases of $13.0M helped to offset rising inflation • Strong volume growth across both $9.0 segments $4.0 $116.7 $13.0 • FX translation headwind of $4.0M due to $98.7 year-
Slide 19: Q4 2022: Segment Results
Q4 2022: SEGMENT RESULTS Q4 FY 2022 2022 Q4 2022 Commentary Elektron: ▪ Sales contributions from volume/mix +$5.4M, the Sales $64.9 $239.7 highest of 2022 +33.3% +22.4% ▪ Broad-based commercial demand, especially in Adj. EBITDA $11.0 $50.3 autocatalysis, Oil & Gas and commercial powders +27.9% +23.6
Slide 20: Capital Position
CAPITAL POSITION Leverage and Liquidity (December 31, 2022) Net Debt to LTM EBITDA 1.1x • Leverage improved by 0.1x sequentially Available Liquidity $80.7M • Healthy available liquidity Q4 2022 Returns and Key Cash Sources/Uses LTM ROIC 14.9% • Return on capital improved sequentially for the second
Slide 21: Initiating 2023 EPS Guidance
INITIATING 2023 EPS GUIDANCE 2023 Guidance Expectations Sales Growth • Sales growth split evenly between incremental 6% - 10% volume and price (incl. volume, price and FX) Adjusted Diluted EPS $1.15 - $1.35 • EPS constrained by higher year-over-year legal, interest and tax of $0.10 to $0.15 Assumpti
Slide 22: Luxfer Business System Update: Sustainability
LUXFER BUSINESS SYSTEM UPDATE: SUSTAINABILITY Luxfer Business System A critical tool to realize growth potential embedded in our business Drives commonality and best practice in six critical segments Emphasis on near-term execution to unlock sustainable growth Luxfer Business System Key Segment Upda
Slide 23: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 23 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 24: Q4 2022: Elektron Segment Results
Q4 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +33.3% +27.9% $5.4 $1.2 $12.0 $64.9 $8.3 $3.1 $5.1 $48.7 $0.7 $12.0 $11.0 $8.6 Q4 2021 FX Price Inflation Volume/Mix Other Q4 2022 Q4 2021 FX Price Volume/Mix Q4 2022 24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL
Slide 25: Q4 2022: Gas Cylinders Segment Results
Q4 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +3.6% -50.0% $0.2 $1.0 $2.8 $1.0 $3.6 $6.0 $50.0 $51.8 $0.9 $3.0 $5.3 $0.6 Q4 2021 FX Price Volume/Mix Q4 2022 Q4 2021 FX Price Inflation Volume/Mix Other Q4 2022 25 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL
Slide 26: Full Year 2022: Consolidated Results
FULL YEAR 2022: CONSOLIDATED RESULTS Sales ($M) Adj. EBITDA ($M) +13.2% -0.5% $7.1 $7.4 $13.9 $48.7 $423.4 $1.7 $48.7 $49.6 $2.8 $3.9 $374.1 $63.4 $63.1 2021 FX Price Acqusition Volume/Mix 2022 2021 FX Price Inflation Volume/Mix Other 2022 26 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 27: Full Year 2022: Elektron Segment Results
FULL YEAR 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +22.4% +23.6% $4.5 $6.1 $45.5 $239.7 $34.8 $2.6 $6.0 $195.8 $45.5 $2.3 $50.3 $40.7 2021 FX Price Volume/Mix 2022 2021 FX Price Inflation Volume/Mix Other 2022 27 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL D
Slide 28: Full Year 2022: Gas Cylinders Segment Results
FULL YEAR 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +3.0% -43.6% $3.2 $2.9 $7.8 $7.1 $0.6 $3.2 $178.3 $183.7 $22.7 $14.8 $2.1 $0.2 $12.8 2021 FX Acquistion Price Volume/Mix 2022 2021 FX Price Inflation Volume/Mix Other 2022 28 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOV
Slide 29: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 29 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 30
Slide 30: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 30 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 31
Slide 31: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 31 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 32
Slide 32: Reconciliation of Non-GAAP Measures: Net Debt, Working Capital, Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: NET DEBT, OPERATING WORKING CAPITAL, OPERATING WORKING CAPITAL AS A % OF NET ANNUALIZED NET SALES, AND FREE CASH FLOW (UNAUDITED) In millions 2017 2018 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Non-current debt $94.6 $73.6 $91.4 $53.4 $59.6 $5
Slide 33: Reconciliation of Non-GAAP Measures: Adjusted Net Income, EPS, EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME FROM CONTINUING OPERATIONS, ADJUSTED EPS, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, NET DEBT TO TRAILING 12 MONTHS ADJUSTED EBITDA1 In millions 2017 2018 2019 2020 2021 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2
Slide 34: Reconciliation of Non-GAAP Measures: ROIC
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 In millions Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 EBITA $14.5 $13.5 $10.3 $10.4 $12.6 $13.7 $13.0 $10.7 Notional tax (3.6) (2.8) (2.5) (3.5) (3.1) (2.7) (2.8) (2.4) EBITA after Notional Tax $1
Slide 35: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
35 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK