Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Investor Presentation (August 2022)
36 slides from Luxfer's investor presentation, August 2022
Slide 1: Investor Presentation August 2022
INVESTOR PRESENTATION August 2022 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 Snapshot Income Statement Last 12 Months 2017 – 2021 Change Founded 1897 Revenue3 $396M 1.8% CAGR Principle Executive Offices U.S. Adj. EBITDA2 3 $61M 2.6% CAGR Equity Market Capitalization1 $457M Adj. Diluted EPS2 3 $1.24 5.8% CAGR Net Debt/Adj. EBITDA2 1.2x Bal
Slide 5: Technology Leadership Underpins Performance
TECHNOLOGY LEADERSHIP UNDERPINS PERFORMANCE Innovation leader in the use High of magnesium alloys for critical Performance applications in aerospace, MAGNESIUM Magnesium defense, and other industries Alloys Elektron Segment Expertise in high-performance Specialty specialty zirconium-based Zirconium
Slide 6: Product Technology Drives Growth
PRODUCT TECHNOLOGY DRIVES GROWTH Luxfer is a global industrial company focused on innovative materials Composite cylinder technology benefits fire engineering with expertise in fighting and aerospace applications as well as attractive niche applications Hydrogen and CNG bulk gas transportation and s
Slide 7: Financial Performance
FINANCIAL PERFORMANCE $M except EPS Revenue1 Adj. EBITDA1 2 5-yr CAGR: 1.8% 5-yr CAGR: 2.6% $401.9 $79.6 $373.4 $374.1 $348.0 $67.1 $324.8 $63.4 $57.2 $53.9 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Adj. Diluted EPS1 2 Adj. EBITDA Margin1 2 5-yr CAGR: 5.8% 5-yr Margin Expansion: 50 bps $1.73
Slide 8: Capital Position
CAPITAL POSITION $M Net Debt Pension Deficit / (Surplus) $110 $70 $100 $90 $60 $80 $50 $70 $60 $40 $50 $30 $40 $30 $20 $20 $10 $10 $0 $0 YE 2017 YE 2018 YE 2019 YE 2020 YE 2021 YE 2017 YE 2018 YE 2019 YE 2020 YE 2021 Net Debt -$10 to 1.8x 0.8x 1.2x 1.0x 0.8x Adj. EBITDA1 -$20 Reduced net debt and pe
Slide 9: Balanced Approach to Capital Deployment
BALANCED APPROACH TO CAPITAL DEPLOYMENT ✓ Investing in secular growth opportunities tied to niche Organic materials engineering focus Reinvestment in Growth ✓ New product innovation represents preferred means of capital redeployment ✓ Repurchased $2.2M in shares during Q2 2022, following Return of $
Slide 10: Environmental, Social, and Governance Roadmap
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ROADMAP 1 ENVIRONMENTAL • Committed to 20% reduction in CO2 emissions, 10% reduction in freshwater 3 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 11: Now Advancing Our Growth Strategy
NOW ADVANCING OUR GROWTH STRATEGY 2017 - Growth Capabilities 2020 2018 - • Commercial Portfolio 2023 2023 & opportunities Simplification Cost Beyond • New products Transformation Organic and • Growth talent Inorganic Growth • Global presence • Strong balance sheet • Enhanced operating model Strong F
Slide 12: Driving a Strategy for Profitable Growth
DRIVING A STRATEGY FOR PROFITABLE GROWTH Strategy Review - Four Key Areas of Next Steps for Profitable Listening & Engaging Business Strength Growth • CEO & CFO business unit visits ✓ Technology: Leadership in our 1. Selecting Opportunities: Clean • Engagement with the wider high-technology material
Slide 13: Opportunities Aligned with Secular Trends
OPPORTUNITIES ALIGNED WITH SECULAR TRENDS Secular Growth Opportunities Addressable Market Clean Light Safety, Health ~$10B 1 Total Energy Weighting and Technology ~$2B Gas Cylinders • Alternative Fuel: • Carbon fiber • Zirconium in Hydrogen and composite products consumer Compressed Natural technolo
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 Primed for Company End Markets on Capital Growth ✓ Market leading ✓ Aligned with ✓ Strong balance ✓ Broad pipeline of products secular growth sheet new produ
Slide 15: Q2 2022 Update
Q2 2022 UPDATE 15 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 16: Executive Summary
EXECUTIVE SUMMARY Sustained Performance in 2022 Q2 2022 • Sales of $109.5M grew 10.6% vs. $99.0M, driven by price inflation and volume Financial • Adjusted EBITDA of $16.9M vs. $17.3M y-o-y and $16.1M in Q1 2022 Performance 1 • Adjusted diluted EPS of $0.36 vs. $0.36 y-o-y and $0.33 in Q1 2022 2 • N
Slide 17: Business Conditions Update
BUSINESS CONDITIONS UPDATE Healthy Backlog Pockets of Supply Monitoring Market Remain Focused on Continues Chain Uneven Developments Successful Execution o Order pace remains o Raw material price ✓ Close collaboration ✓ Securing demand sound increases slowed with customers while maintaining cost pas
Slide 18: Recent Sales Performance by End Market
RECENT SALES PERFORMANCE BY END MARKET Year-over-Year Change Q1 Q2 YTD FY 2020 FY 2021 2022 2022 2022 Q2 2022 Commentary 31% • Strong demand for military flares; decline in flameless ration Defense, First -6.4% +5.9% +2.9% -4.8% -1.2% heaters Response, & • First Response & Healthcare Healthcare stea
Slide 19: Q2 2022: Consolidated Financial Results
Q2 2022: CONSOLIDATED FINANCIAL RESULTS • Sales increased by 10.6% from prior year Sales ($M) +10.6% − Price increases of $13.0M countered rising inflation − Volume contributed a positive $1.3M $1.3 $13.0 − FX translation headwind $3.8 $109.5 $99.0 − Healthy order intake continued Q2 2021 FX Price V
Slide 20: Q2 2022: Segment Results
Q2 2022: SEGMENT RESULTS Q2 2022 Sales EBITDA Performance Commentary Elektron • Benefitting from aerospace, automotive and $63.4M $13.2M industrial demand year-over-year Up 20.8% Up 10.0% comparison • Cost pass through to offset inflation • Cost pass through continues to be limited by Gas Cylinders
Slide 21: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS ($M) Net Debt 1 Operating Working Capital 2 $88.8 $116.7 $82.4 $70.6 $84.1 $85.7 $79.7 $39.5 Q2 2019 Q2 2020 Q2 2021 Q2 2022 % of Q2 2019 Q2 2020 Q2 2021 Q2 2022 Net Debt Annualized to EBITDA 1.1x 1.5x 0.6x 1.2x Revenue 21.5% 28.0% 20.1% 26.6% Free Cash Flow 3 R
Slide 22: Affirming 2022 EPS Guidance
AFFIRMING 2022 EPS GUIDANCE 2022 Guidance Expectations Revenue Growth • First half 2022 performance on plan; order (incl. FX, acquisitions, 12% - 20% flow remains healthy and price) Adjusted Diluted EPS $1.35 - $1.50 • Second half 2022 earnings likely weighted toward Q4 Assumptions Operating Working
Slide 23: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 23 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 24: Q2 2022: Elektron Segment Results
Q2 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +20.8% +10.0% $0.3 $1.8 $12.4 $63.4 $52.5 $12.4 $11.3 $0.6 $0.5 $12.0 $13.2 Q2 2021 FX Price Inflation Cost Red/Other Q2 2022 Q2 2021 FX Price Volume/Mix Q2 2022 24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVEL
Slide 25: Q2 2022: Gas Cylinders Segment Results
Q2 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -0.9% -30.2% $2.0 $1.0 $0.6 $0.3 $0.6 $46.5 $46.1 $5.3 $1.1 $3.5 $3.7 $0.5 Q2 2021 FX Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume / Cost Q2 2022 Mix Red/Other 25 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION
Slide 26: YTD Q2 2022: Consolidated Results
YTD Q2 2022: CONSOLIDATED RESULTS Sales ($M) Adj. EBITDA ($M) +12.1% -5.7% $7.1 $2.2 $5.0 $22.4 $206.5 $0.3 $22.4 $23.5 $184.2 $0.8 $0.4 $35.0 $33.0 Q2 2021 FX Price Acqusition Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume/Mix Cost Q2 2022 Red/Other 26 CUSTOMER FIRST • INTEGRITY • ACCOUNTABIL
Slide 27: YTD Q2 2022: Elektron Segment Results
YTD Q2 2022: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +16.3% +12.2% $1.9 $2.6 $21.0 $118.0 $101.5 $16.6 $0.7 $1.3 $0.5 $21.0 $26.6 $23.7 Q2 2021 FX Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume/Mix Cost Q2 2022 Red/Other 27 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOV
Slide 28: YTD Q2 2022: Gas Cylinders Segment Results
YTD Q2 2022: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +7.0% -43.4% $1.4 $0.3 $0.2 $1.4 $2.4 $7.1 $88.5 $11.3 $82.7 $6.9 $0.1 $0.9 $6.4 Q2 2021 FX Acquistion Price Volume/Mix Q2 2022 Q2 2021 FX Price Inflation Volume / Cost Q2 2022 Mix Red/Other 28 CUSTOMER FIRST • INTEGRITY • ACCOUN
Slide 29: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 29 1The calculation of earnings per share is performed separately for continuing and discontinued operations. As a result, the sum of the two in any particular period may not equal the earnings-per-share amount in total. CUSTOMER FIRST 2The los
Slide 30: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 30 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 30
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 31
Slide 32: Reconciliation: Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME, ADJUSTED EPS, AND ADJUSTED EBITDA (UNAUDITED) 32 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 32
Slide 33: Reconciliation: Return on Invested Capital (ROIC)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: RETURN ON INVESTED CAPITAL (ROIC)1 (Unaudited) 2021 2021 2021 2021 2022 2022 $M Q1 Q2 Q3 Q4 Q1 Q2 EBITA 14.5 13.5 10.3 10.4 12.6 13.7 Effective tax rate - per income statement 24.8% 21.0% 24.0% 34.0% 24.5% 20.0% Notional tax (3.6) (2.8) (2.5) (3.5) (3.1
Slide 34: Reconciliation: Adjusted Net Income and Adjusted EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (EPS) In millions except share and per share data 2017 2018 2019 2020 2021 YTD Q2 2021 YTD Q2 2022 Last 12 Months Net income from continuing operations $16.4 $27.7 $8.7 $20.8 $30.0 $20.5 $17.3 $26.8 Ac
Slide 35: Reconciliation: Adjusted EBITDA and Adjusted EBITDA Margin
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN In millions 2017 2018 2019 2020 2021 YTD Q2 2021 YTD Q2 2022 Last 12 Months Adjusted net income from continuing operations $27.4 $48.0 $40.9 $28.9 $36.2 $21.1 $19.3 $34.4 Add back: Other non-recurring tax items
Slide 36: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
36 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
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