Luxfer Holdings Plc · NYSE:LXFR
Luxfer — Q2 2023 Earnings Presentation
24 slides from Luxfer's earnings presentation, Jul 26, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
SECOND QUARTER 2023 EARNINGS PRESENTATION July 26, 2023 1 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This release 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 limite
Slide 3: Quarterly Financial Highlights
QUARTERLY FINANCIAL HIGHLIGHTS ($M except per share) Q2 Q2 ▪ Sales increased to $110.4 million, led by Gas 2023 2022 Change Cylinders ▪ Successfully passed through input cost inflation Sales $110.4 $109.5 +0.8% ▪ Drove sequential improvement in cash flow and reduced net debt Adj. EBITDA $14.4 $16.9
Slide 4: Business Conditions Update
BUSINESS CONDITIONS UPDATE ▪ Customer destocking amid macro uncertainty and unwinding of safety Macro stock as global supply chain constraints subside ▪ Tight labor conditions impacting pull through of customer demand amid some signs of increased price sensitivity ▪ Industrial orders lower and immed
Slide 5: Sales Performance by End Market
SALES PERFORMANCE BY END MARKET Year-over-Year Change FY FY FY Q2 YTD 2020 2021 2022 2023 2023 Q2 2023 Commentary 43% ▪ Sustained strength in Defense: Defense, First chemical kits, MREs, and military flares -6.4% +5.9% +5.6% +41.5% +37.0% Response & ▪ Medical O2 and pharmaceutical again Healthcare c
Slide 6: Q2 2023 Financial Bridge: Consolidated
Q2 2023 FINANCIAL BRIDGE: CONSOLIDATED Luxfer Consolidated Sales increased by 0.8% from prior year Sales ($M) +0.8% ▪ Price increases of $6.5M addressed input cost inflation ▪ Industrial markets drove volume contraction $0.2 $6.5 $5.8 ▪ FX impact slight positive year-on-year $110.4 $109.5 EBITDA dec
Slide 7: Q2 2023: Segment Results
Q2 2023: SEGMENT RESULTS Q2 Q2 2023 2022 Change Q2 2023 Commentary Elektron: ▪ Strong military and pharmaceutical sales tempered Sales $61.9 $63.4 -2.4% by lower industrial products ▪ Adverse mix with lower sales in photo-engraving plate and Oil & Gas Adj. EBITDA $9.5 $13.2 -28.0% ▪ Year-over-year c
Slide 8: Updating 2023 EPS Guidance
UPDATING 2023 EPS GUIDANCE 2023 Guidance Expectations Sales Growth ▪ Toughening sequential developments in -1% to -4% (incl. volume, price and FX) Industrial end markets Adjusted Diluted EPS $0.88 - $1.00 ▪ Maintaining challenging FCF conversion target Assumptions with strong focus on inventory Free
Slide 9: Luxfer Business System: Lean Operations
LUXFER BUSINESS SYSTEM: LEAN OPERATIONS Q2 Update: Lean Operations ▪ Key initiatives being executed to reduce fixed costs: ▪ Simplifying Alternative Fuel footprint to minimize costs while increasing output ▪ Consolidation of Elektron Powders plants reaching a conclusion ▪ Immediate activities to red
Slide 10: Well Positioned for Value Creation
WELL POSITIONED FOR VALUE CREATION We will help to create a safe, clean and energy-efficient world Global Industrial Attractive Leading Return Sustainable Company End Markets on Capital Growth ✓ Market leading ✓ Aligned with ✓ Strong balance ✓ Broad pipeline of products secular growth sheet new prod
Slide 11: Appendices
APPENDICES Segment Financial Detail and Reconciliation of Non-GAAP Measures 11 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
Slide 12: Q2 2023: Elektron Segment Results
Q2 2023: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) -2.4% -28.0% $0.5 $1.4 $3.4 $0.3 $1.4 $2.3 $63.4 $61.9 $2.6 $0.1 $13.2 $9.5 Q2 2022 FX Price Volume/Mix Q2 2023 Q2 2022 FX Price Inflation Volume/Mix Other Q2 2023 12 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEV
Slide 13: Q2 2023: Gas Cylinders Segment Results
Q2 2023: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +5.2% +32.4% $2.4 $0.3 $5.1 $2.6 $46.1 $48.5 $1.3 $0.1 $0.1 $5.1 $4.9 $3.7 Q2 2022 FX Price Volume/Mix Q2 2023 Q2 2022 FX Price Inflation Volume/Mix Other Q2 2023 13 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL
Slide 14: YTD Q2 2023: Consolidated Results
YTD Q2 2023: CONSOLIDATED RESULTS Sales ($M) Adj. EBITDA ($M) +2.5% -22.1% $9.2 $2.1 $16.5 $0.4 $16.5 $15.6 $206.5 $211.7 $5.6 $3.0 $33.0 $25.7 Q2 2022 FX Price Volume/Mix Q2 2023 Q2 2022 FX Price Inflation Volume/Mix Other Q2 2023 14 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSON
Slide 15: YTD Q2 2023: Elektron Segment
YTD Q2 2023: ELEKTRON SEGMENT Sales ($M) Adj. EBITDA ($M) +3.1% -31.2% $0.3 $8.3 $4.3 $0.3 $8.3 $9.9 $4.1 $118.0 $121.7 $2.9 $26.6 $18.3 Q2 2022 FX Price Volume/Mix Q2 2023 Q2 2022 FX Price Inflation Volume/Mix Other Q2 2023 15 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVE
Slide 16: YTD Q2 2023: Gas Cylinders Segment
YTD Q2 2023: GAS CYLINDERS SEGMENT Sales ($M) Adj. EBITDA ($M) +1.7% +15.6% $1.8 $8.2 $4.9 $5.7 $90.0 $0.1 $1.5 $0.1 $88.5 $8.2 $7.4 $6.4 Q2 2022 FX Price Volume/Mix Q2 2023 Q2 2022 FX Price Inflation Volume/Mix Other Q2 2023 16 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEV
Slide 17: Condensed Consolidated Statements of Income (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) 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 17 not equal the earnings-per-share amount in total. 2The loss per share for
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) 18 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 18
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 19 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 19
Slide 20: Reconciliation: Adjusted Net Income and Adjusted EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (UNAUDITED) (1) For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares outstanding during the financial year has been adjusted for the dilutive effect
Slide 21: Reconciliation: Adjusted EBITDA and Adjusted Effective Tax Rate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: ADJUSTED EBITDA AND ADJUSTED EFFECTIVE TAX RATE (UNAUDITED) 21 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 21
Slide 22: Reconciliation: Net Debt Ratio and Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: NET DEBT RATIO AND FREE CASH FLOW (UNAUDITED) 22 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 22
Slide 23: Reconciliation: Operating Working Capital as % of Annualized Net Sales
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: OPERATING WORKING CAPITAL AS A % ANNUALIZED NET SALES (UNAUDITED) Second Quarter In millions 2023 Accounts and other receivables, net of allowances $72.0 Inventories 119.3 Accounts payable (35.9) Accrued liabilities (24.4) Operating Working Capital $131
Slide 24: CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK
24 CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK