Lincoln Electric Holdings, Inc. · NASDAQ:LECO
Lincoln Electric — Q4 2024 Earnings Presentation
20 slides from Lincoln Electric's earnings presentation, Feb 13, 2025
Slide 1: Q4 & Full Year 2024 Earnings
February 13, 2025 LINCOLN ELECTRIC HOLDINGS, INC. Q4 & Full Year 2024 Earnings
Slide 2: Safe Harbor and Regulation G Disclosures
Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Non-GAAP Measures: Statements made during this presentation which are not Our management uses non-GAAP financial measures in historical facts may be considered forward-looking statements. assessing and evaluating the Company’s perf
Slide 3: Full Year 2024 Highlights
Full Year 2024 $4.0B 21.8% Highlights: Net Sales performance Adjusted ROIC performance -4% vs. prior year; Organic sales -6.5% -230 bps vs. prior year Benefits of cost management, savings actions, and operational initiatives mitigate lower market demand 17.6% $599M Record Adjusted operating Record A
Slide 4: Higher Standard 2025 Strategy Check-in
Higher Standard Financial Metric 2020-2025 Strategy Target 2020-2024 Achievement Sales CAGR (ex-FX) High single-digit to low-double digit % 8%1 2025 Strategy Average Adjusted Operating Income Margin 16% (+/- 150 bps) 15.7% average Check-in: Americas Welding EBIT margin International Welding EBIT mar
Slide 5: Q4 organic sales challenged by lower industrial production and capital spending
Q4 organic sales continued to be challenged by lower industrial production activity & reduced capital spending Q4 Organic sales declined 7.5% as price is offset by lower volumes Q4 global end sector performance1 All product areas impacted All end markets remain challenged Consumables down low-to-mid
Slide 6: Income Statement – Q4 2024
Income Statement – Q4 2024 YoY % Change $ in Millions Q4 2024 % of Sales Q4 2023 % of Sales Fav/ (Unfav) Net Sales $ 1,022.0 $ 1,058.5 (3.4)% Gross Profit 368.6 36.1% 371.0 35.1% (0.6)% SG&A 187.1 18.3% 188.9 17.8% 1.0% Operating Income 177.0 17.3% 204.0 19.3% (13.2)% Special item charges1,2 8.6 0.8
Slide 7: Savings actions yielding higher temporary savings vs. plan
Savings actions yielding higher temporary savings vs. plan Increasing estimated annualized savings to ~$60 to $75 million vs. initial ~$40 to $50 million estimate Q3-24 Q4-24 FY-24 Q1-25 Q2-25 Annualized Playbook Actions actual actual actual est. est. Estimate Temporary Cost Savings1 (incremental Yo
Slide 8: Americas Welding Segment
Americas Welding Segment % YoY ($ in Millions) Q4 2024 Q4 2023 Volumes reflect slowing Change industrial activity and capital Net Sales $ 654.8 $ 654.7 0.0% spending, as well as challenging prior year comparisons. Adjusted EBIT $ 131.9 $ 129.5 1.9% Acquisition contribution from Adjusted EBIT Margin2
Slide 9: International Welding Segment
International Welding Segment % YoY ($ in Millions) Q4 2024 Q4 2023 Change Volumes reflect weak Net Sales $ 243.0 $ 292.2 (16.8)% industrial demand and challenging prior year comparisons. Adjusted EBIT $ 32.5 $ 42.9 (24.1)% Margin reflects impact of lower volumes partially Adjusted EBIT Margin2 12.8
Slide 10: The Harris Products Group
The Harris Products Group % YoY ($ in Millions) Q4 2024 Q4 2023 Change Volume growth reflects higher HVAC demand Net Sales $ 124.3 $ 111.6 11.3% offset by weakness in industrial. Adjusted EBIT $ 21.6 $ 15.2 42.1% Price primarily reflects changes in metal costs. Adjusted EBIT Margin2 17.0% 13.3% +370
Slide 11: Cash Flow From Operations Metrics
Cash Flow From Operations Metrics Cash Flow from Operations Average Operating Working ($ in Millions) Capital to Net Sales Ratio $668 91% cash $599 conversion1 in FY2024 17.1% 16.9% $122 $96 Q4-23 Q4-24 FY2023 FY2024 Dec 31, 2023 Dec 31, 2024 11 1Cash conversion is defined as Net cash provided by op
Slide 12: Capital Allocation
Capital Allocation1 $795 ($ in Millions) Q4 Capital Allocation & Returns 264 • Growth: $31 million (+28% YoY) $470 • Return to Shareholders: $93 million (-12 YoY) 162 • Return on Invested Capital2: 21.8% 199 253 Capital Allocation Strategy 148 $129 $124 68 53 33 Prioritized uses of cash: 40 117 37 2
Slide 13: Full Year 2025 Assumptions
Full Year 2025 Assumptions Assuming low-single digit percent net sales1 growth (excluding tariffs); margins benefit from cost management and savings actions Assumptions Risks Flat organic sales growth (excluding tariffs) Net impact of trade & regulatory policies Neutral price/cost Economic and geopo
Slide 14: Contact
Contact: Amanda Butler Vice President, Investor Relations & Communications Amanda_Butler@lincolnelectric.com 216.383.2534 14 14
Slide 15: Non-GAAP Information
Non-GAAP Information Adjusted operating income, Adjusted net income, Adjusted EBIT, EBITDA, Adjusted EBITDA, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted EPS, Organic sales, Cash conversion, and Adjusted Return on invested capital are non-GAAP financial measures. Manage
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures: Reconciliation of Operating Income, Net Income, Effective Tax Rate, and EPS to Non-GAAP Adjusted Operating Income, Adjusted Net Income, Adjusted Effective Tax Rate, and Adjusted EPS (In thousands, except per share amounts) (Unaudited) 16 Pleas
Slide 17: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures 1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section. (continued) 2) 2024 charges primarily relate to rationalization plans initiated d
Slide 18: Adjusted Return on Invested Capital (ROIC)
Non-GAAP Financial Measures Adjusted Return on Invested Capital (ROIC) (In thousands) (Unaudited) 1) Adjusted net operating profit after taxes and Adjusted ROIC are non-GAAP financial measures. Refer to Non-GAAP Information section. 2) Includes the net tax impact of Special items recorded during the
Slide 19: Segment EBIT
Segment EBIT EBIT and Adjusted EBIT Reconciliation – Three Months Ended December 31, 2024 (In thousands) (Unaudited) 19 Please see the following slide for corresponding footnotes
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures 1) EBIT is defined as Operating income plus Other income. (continued) 2) The primary profit measure used by management to assess segment performance is adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive adjusted EBIT. Footnotes for EBIT
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