Esab Corporation · NYSE:ESAB
Esab — Q4 2024 Earnings Presentation
24 slides from Esab's earnings presentation, Feb 20, 2025
Slide 1: Fourth Quarter 2024 Earnings Conference Call
Fourth Quarter 2024 EARNINGS CONFERENCE CALL February 20, 2025 YEARS STRONG © 2024
Slide 2: Forward-Looking Statements & Non-GAAP Disclaimer
Forward-Looking Statements & Non-GAAP Disclaimer Forward-Looking Statements This presentation includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are no
Slide 3: 4Q 2024 Highlights
4Q 2024 Highlights 4Q 2024 results: ▪ Strong execution $633M Flat Sales1 Organic Sales Growth1 ▪ Welding Equipment sales up HSD ▪ EBX delivering record margin and $129M +2% robust cash flow aEBITDA1 Year-over-Year ▪ Closed SUMIG light-automation acquisition 20.3% +90bps aEBITDA Margin1 Year-over-Yea
Slide 4: Full Year 2024 Highlights
Full Year 2024 Highlights Metric 1 ’24 Guide Actual 20241 Delivered Sales $2.58-$2.61B $2.59B aEBITDA $500-$515M $511M aEPS $4.80-$4.95 $5.06 aFCF >95% 103% Conversion Delivering on our commitments Proprietary & Confidential Proprietary & Confidential 4 1 Core – See non-GAAP reconciliation tables in
Slide 5: Shaping Our Communities
Shaping Our Communities ▪ Partnering with universities ▪ Enhancing our equipment brand thru “The Ultimate Euro Tour” ▪ Driving environmental sustainability ▪ Hydrogen Fuel Cell project with DB Bahnbau Gruppe ▪ Creating inclusive welding communities ▪ Project Ore ▪ Future fabricator tour Passing our
Slide 6: EBX Driving Higher Margins And Cash
EBX Driving Higher Margins And Cash EBX – OUR VALUES, PROCESSES, AND TOOLS Productivity Manufacturing Improvement Footprint $20 (15)% $5 2025E 2028E 2025E 2028E Back-office Working Optimization Capital Turns $40 +0.3x $10 2025E 2028E 2025E 2028E Continuing to raise the bar with EBX Proprietary & Con
Slide 7: Re-Investing To Fund Growth
Re-Investing To Fund Growth Growth Investments ($m) $103 $63 $76 $90 ▪ Invested $100M in growth initiatives $511 ▪ Commercial excellence investment to grow light-automation & equipment 2020 2021 2022 2023 2024 ▪ Leveraging AI to improve customer experience New Products Equipment Mix 109 33% ▪ Invest
Slide 8: Executing Compounder Strategy
Executing Compounder Strategy Acquisition Details & Criteria Financial Framework High-Growth Higher TAM Completed Sales Markets Margin Expansion Strategic ▪ Strong secular tailwinds Criteria ▪ Limited cyclicality Automation & Equipment 4Q 2024 ~$35M + ESAB Financial ▪ MSD+ growth; 40%+ GM Bangladesh
Slide 9: ESAB 4Q 2024 Financial Summary
ESAB 4Q 2024 Financial Summary ($ Millions) 4Q 20241 4Q 20231 YoY Organic Sales Growth Flat Total Sales $633 $650 (3)% aEBITA $120 $117 3% aEBITA Margin % 18.9% 18.0% 90 bps aEBITDA $129 $126 2% aEBITDA Margin % 20.3% 19.4% 90 bps 4Q Highlights: 4Q 2024 Sales Growth1,2: Organic 0% ■ High-growth mark
Slide 10: ESAB 4Q 2024 Americas
ESAB 4Q 2024 Americas ($ Millions) 4Q 2024 4Q 2023 YoY1 Organic Sales Growth (1.5)% Total Sales $282 $307 (8)% aEBITDA $61 $60 2% aEBITDA Margin % 21.6% 19.5% 210 bps 4Q Highlights: 4Q 2024 Sales Growth2: Organic (2)% ■ Strong price execution Price 4% ■ USD strengthened against all currencies Volume
Slide 11: ESAB 4Q 2024 EMEA and APAC
ESAB 4Q 2024 EMEA and APAC 1 ($ Millions) 4Q 20241 4Q 20231 YoY Organic Sales Growth 1% Total Sales $351 $343 3% aEBITDA $68 $66 3% aEBITDA Margin % 19.3% 19.3% Flat 4Q Highlights: 4Q 2024 Sales Growth1,2: Organic 1% ■ High-growth markets continue to outperform Price (2)% ■ Commercial Excellence inv
Slide 12: Strong Free Cash Flow Reducing Net Leverage
Strong Free Cash Flow Reducing Net Leverage $321M ▪ Record full year cash performance $305M ▪ Deployed $154M on acquisitions, while 1 reducing net leverage ▪ Consistently delivering >100% FCF Conversion 2023 2024 Net Leverage 1.9x 1.6x ▪ Positioned well to execute compounder strategy Cash Conversion
Slide 13: ESAB 2025 Outlook
ESAB 2025 Outlook FY 2025 Financial Metrics Guidance1,2 ▪ Sales guidance assumes: Sales $2.54–$2.59 ▪ Core organic growth 0-2% ▪ M&A benefit ~1.5% Core Organic Growth % 0%–2% ▪ FX headwind ~(3.5)% ▪ Seasonality: 1Q ~24.5%, 2Q ~25.5%, 3Q aEBITDA $515–530M ~24.5% and 4Q ~25.5% aEPS $5.10–$5.25 ▪ aEBIT
Slide 14: Summary
Summary ▪ Good start to 2025 ▪ Continued focus on improving mix ▪ Investing in growth initiatives ▪ EBX driving higher margins & cash ▪ Robust acquisition funnel Shared Help Each Always Purposeful Every Voice Success Other Win Improving Leadership Valued Building momentum towards our 2028 goals Prop
Slide 15: Appendix
Appendix Pd ESAB * ESAB CORPORATION =_
Slide 16: Full Year 2025 Outlook
Full Year 2025 Outlook ESAB 2024 Actuals1 2025 Outlook1 Sales ($B) 2.59 2.54 – 2.59 Total Growth 1% (2.0)% - 0.0% Core Organic Growth 1% 0.0% - 2.0% FX (3)% ~(3.5)% M&A 1% ~1.5% aEBITDA ($M) 511 515 – 530 Interest Expense & Other ($M) 65 62 – 65 Adjusted Tax Rate 23.7% 22% – 23% NCI ($M) 6 ~8 aEPS (
Slide 17: Non-GAAP Reconciliation EBITA – 4Q '24 Total & Segments
Non-GAAP Reconciliation EBITA – 4Q '24 Total & Segments1 Dollars in millions Three Months Ended December 31, 2024 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 282.1 $ 388.6 $ 670.8 Net Sales attributable to Russia — 37.6 37.6 Core Net Sales 282.1 351.0 633.2 Op
Slide 18: Non-GAAP Reconciliation EBITDA – 4Q '24 Total & Segments
Non-GAAP Reconciliation EBITDA – 4Q '24 Total & Segments1 Three Months Ended December 31, 2024 Three Months Ended December 31, 2024 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 282.1 $ 388.6 $ 670.8 Net Sales attributable to Russia — 37.6 37.6 Core Net Sales 28
Slide 19: Non-GAAP Reconciliation EBITDA – Year Ended 2024 Total
Non-GAAP Reconciliation EBITDA – Year Ended 2024 Total Three Months Ended December 31, 2024 Year Ended December 31, 2024 ($ Millions) Total ESAB % of NSV Net Sales $ 2,740.8 Net Sales attributable to Russia 149.6 Core Net Sales 2,591.2 Operating Income 447.5 16.3 % Restructuring and other related ch
Slide 20: Non-GAAP Reconciliation EBITA – 4Q '23 Total & Segments
Non-GAAP Reconciliation EBITA – 4Q '23 Total & Segments1 Three Months Ended December 31, 2023 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 307.3 $ 382.0 $ 689.4 Net Sales attributable to Russia — 39.4 39.4 Core Net Sales 307.3 342.6 649.9 Operating Income 50.1
Slide 21: Non-GAAP Reconciliation EBITDA – 4Q '23 Total & Segments
Non-GAAP Reconciliation EBITDA – 4Q '23 Total & Segments1 Three Months Ended December 31, 2023 ($ Millions) Americas % of NSV EMEA & APAC % of NSV Total ESAB % of NSV Net Sales $ 307.3 $ 382.0 $ 689.4 Net Sales attributable to Russia — 39.4 39.4 Core Net Sales 307.3 342.6 649.9 Operating Income 50.1
Slide 22: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS1 Three months ended ($ Millions, except Per Share Data) December 31, 2024 December 31, 2023 Net income from continuing operations $ 73.6 $ 59.6 Income attributable to noncontrolling interest, net of taxes 1.2 1.2 Net income from continuing operati
Slide 23: Non-GAAP Reconciliation – Net Income to Adjusted EPS
Non-GAAP Reconciliation – Net Income to Adjusted EPS1 Year ended ($ Millions, except Per Share Data) December 31, 2024 December 31, 2023 Net income from continuing operations $ 293.1 $ 223.4 Income attributable to noncontrolling interest, net of taxes 5.9 5.7 Net income from continuing operations at
Slide 24: Non-GAAP Reconciliation – Adj. Free Cash Flow
Non-GAAP Reconciliation – Adj. Free Cash Flow Year Ended ($ Millions) December 31, 2024 December 31, 2023 Net cash provided by operating activities $ 355.4 $ 330.5 Purchases of property, plant and equipment (51.8) (48.2) Proceeds from the sale of certain properties 1.9 2.8 Payments related to the Se