Slide 1: First Quarter 2023 Earnings Conference Call
First Quarter 2023 EARNINGS CONFERENCE CALL May 2, 2023
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: 1Q 2023 Highlights
1Q 2023 Highlights 1Q 2023 results: ▪ Strong 1Q performance $647M +7% ▪ EBX driving growth, margin and FCF Sales1 Organic Growth ▪ Acquisition integrations on track $113M +12% ▪ Issued inaugural sustainability report aEBITDA1 Year-over-Year ▪ Raising full year 2023 guidance 17.4% +80bps aEBITDA Marg
Slide 4: Shaping ESAB For The Future
Shaping ESAB For The Future Equipment1 Equipment1 Equipment1 26% 29% ~35% % of Total Revenue ‘16 2 ‘22 3 ‘26/27E Consumables Consumables Consumables 74% 71% ~65% EBITDA ~13% ~17% 20%+ Margin % Creating a premier industrial company Proprietary & Confidential 4 1 Includes welding equipment, gas contro
Slide 5: Unique Automation Solutions
Unique Automation Solutions New ESAB Cobot Secular Secular Tailwinds TailwindsDriving DrivingCobot CobotSolution Solution ▪ Welder shortage ▪ Safety requirements ▪ Lower total cost of ownership How We We Win Win ▪ Process and product expertise ▪ Focused on ease of use ▪ Open architecture ▪ Best-in-c
Slide 6: EBX: Manufacturing Case Study
EBX: Manufacturing Case Study Issue: Results: ▪ Long lead times Leveraged value stream mapping, 5S and merged ▪ Inefficent material handling production cells ▪ Space constrained Before: ▪ Freed up 2,500 sq ft of manufacturing space Kaizen Goals: ▪ Reduced backlog by 64% ▪ 30% reduction in walking ▪
Slide 7: ESAB 1Q 2023 Financial Summary
ESAB 1Q 2023 Financial Summary ($ Millions) 1Q 20231 1Q 20221 YoY Sales $647 $607 7% aEBITA 105 92 13% aEBITA Margin % 16.2% 15.2% 100 bps aEBITDA 113 101 12% aEBITDA Margin % 17.4% 16.6% 80 bps 1Q Highlights: 1Q 2023 Sales Growth1,2: ■ Markets resilient Organic 7% Price 6% ■ Strong price execution
Slide 8: ESAB 1Q 2023 Americas
ESAB 1Q 2023 Americas ($ Millions) 1Q 2023 1Q 2022 YoY Sales $292 $272 7% aEBITDA 49 44 12% aEBITDA % 17.0% 16.2% 80 bps 1Q Highlights: 1Q 2023 Sales Growth1,2: ■ Strong price execution Organic 5% Price 8% ■ EBX driving product line simplification Volume (3%) ■ EBITDA margin expanded 80 bps YoY FX T
Slide 9: ESAB 1Q 2023 EMEA and APAC
ESAB 1Q 2023 EMEA and APAC ($ Millions) 1Q 20231 1Q 20221 YoY Sales $355 $335 6% aEBITDA 63 57 11% aEBITDA % 17.8% 17.0% 80 bps 1Q Highlights: 1Q 2023 Sales Growth1: ■ Emerging markets strength continues Organic 9% Price 5% ■ Strong price and volume performance Volume 4% ■ EBX driving growth and mar
Slide 10: ESAB Delivering Strong Free Cash Flow
ESAB Delivering Strong Free Cash Flow +79% $40M ■ Record 1Q cash performance $22M ■ Continuing to delever 1Q 2022 1Q 2023 ■ Therapy Equipment funded with cash generated . 1Q 2022 1Q 2023 ■ Leveraging AI to improve working capital Net Leverage With Acquisitions 2.8x 2.7x Net Leverage Without Acquisit
Slide 11: Full Year 2023 Guidance
Full Year 2023 Guidance Previous FY New FY 2023 Guidance 2023 Guidance ■ Strong 1Q performance Sales $2.48–$2.53B $2.53–$2.58B ■ Raised organic growth 50bps Core Organic ■ FX improved 150bps to (2)% 3%–5% 3.5%–5.5% Growth % ■ aEPS increased 5 cents at mid-point aEBITDA $420–440M $430–450M ■ aEBITDA
Slide 12: Summary
Summary ■ Reshaping ESAB ■ Taking EBX up a notch ■ Acquisition integrations on track ■ Raised full year 2023 guidance Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Positive momentum continues Proprietary & Confidential 12 ESAB Corporation
Slide 13: Appendix
Appendix
Slide 14: Full Year 2023 Guidance
Full Year 2023 Guidance ESAB 2022 Actual 1 Previous 2023 Outlook 1 New 2023 Outlook 1 Sales ($B) 2.43 2.48 - 2.53 2.53 - 2.58 Total Growth 8% 2% - 4% 4% - 6% Core Organic Growth 12% 3% - 5% 3.5% - 5.5% FX (5)% (~3.5)% (~2)% M&A 1% ~2.5% ~2.5% aEBITDA ($M) 408 420 - 440 430 - 450 Interest Expense ($M
Slide 15: Non-GAAP Reconciliation – 1Q '23 Total and Segments
Non-GAAP Reconciliation – 1Q ’23 Total and Segments1 Three Months Ended March 31, 2023 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 291.6 $ 392.4 $ 684.0 Net Sales attributable to Russia $ - $ 37.1 $ 37.1 Core Net Sales $ 291.6 $ 355.3 $ 646.9 Operating Income $ 39.9 13.7%
Slide 16: Non-GAAP Reconciliation – 1Q '22 Total and Segments
Non-GAAP Reconciliation – 1Q ’22 Total and Segments1 Three Months Ended April 1, 2022 Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 272.3 $ 375.6 $ 647.9 Net Sales attributable to Russia $ - $ 40.9 $ 40.9 Core Net Sales $ 272.3 $ 334.7 $ 607.0 Operating Income $ 30.2 11.1% $
Slide 17: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS Q1 2023 Q1 2022 Net Income from Continuing operations $ 32.8 $ 57.4 Restructuring and other related charges - pretax $ 9.4 $ 5.3 Separation costs - pretax $ - $ 3.6 Acquisition - amortization and other related charges - pretax $ 9.3 $ 7.7 Tax effe
Slide 18: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow 1Q 2023 1Q 2022 Net cash provided by operating activities $ 38.1 $ 16.1 Purchases of property, plant and equipment $ (7.7) $ (5.9) Proceeds from the sale of certain properties $ - $ 2.5 Payments related to the Separation $ 4.4 $ 5.0 Payments related to d