Luxfer Holdings PLC · NYSE:LXFR
Luxfer — Q3 2021 Earnings Presentation
21 slides from Luxfer's earnings presentation, Oct 26, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
THIRD QUARTER 2021 EARNINGS PRESENTATION Earnings Conference Call October 26th, 2021 Click here to edit key takeaway CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. Examples of such forward-looking statements include but are not limited to: (i) statements regarding the Company’s results of operations and financial condition; (ii) statements of plans, objectives, or goals of the Co
Slide 3: Executive Summary
EXECUTIVE SUMMARY Solid Execution - Results Constrained by Global Supply Chain Disruptions • Sales of $91.2M; revenue growth of 17.4%, organic volume growth of 4.5%. Q3 2021 — SCI acquisition added $7.9M in sales, or 10.2% to sales Financial Performance1 — FX benefit of $2.1M or 2.7% • Adj. EBITDA f
Slide 4: Inflation & Supply Chain Challenges Constraining Growth
INFLATION & SUPPLY CHAIN CHALLENGES CONSTRAINING GROWTH Material Supply Challenges Freight Availability and Cost Three key suppliers declared force Freight availability remains majeure in the past six months. Luxfer challenging and higher freight cost had halted accepting new customers and necessita
Slide 5: Alternate Fuel Example: Hydrogen Bulk Gas Transportation
ALTERNATE FUEL EXAMPLE: HYDROGEN BULK GAS TRANSPORTATION • Luxfer Hydrogen bulk gas transport containers can deliver >1,000kg of hydrogen per 40’ container compared to <400 Kg for conventional steel trailers • Luxfer solution uses Luxfer’s high-performance G- Stor H2 composite cylinders also used in
Slide 6: Recent Performance by End-User Market
RECENT PERFORMANCE BY END-USER MARKET Sales Change Y-o-Y Q1’21 Q2’21 Q3’21 YTD Q3 Commentary 35% • Strong SCBA growth Defense, First • Growth in Magnesium Powders +2.0% +14.2% +6.2% +7.5% Response, & • Unfavorable MRE/Chem Resp Healthcare1 kits impact 31% • Strong growth in passenger auto • Aerospac
Slide 7: Q3 2021: Luxfer Financial Results
Q3 2021: LUXFER FINANCIAL RESULTS Performance Highlights Sales ($M)1 +17.4% • Sales increased by 17.4% from prior year − Net volume growth of $3.0M due to $3.0 $0.5 transportation and industrial end markets $7.9 $91.2 − Favorable FX of 2.7% driven by UK Pound $2.1 $77.7 − SCI acquisition added $7.9M
Slide 8: Q3 2021: Segment Results
Q3 2021: SEGMENT RESULTS Q3 20211 Sales EBITDA Performance Commentary $45.6M $8.4M • Recovery in Industrial Magnesium products Elektron • Weaker defense sales Up 0.4% Up 27.3% • Strong auto catalyst volume recovery • Sales growth from SCI acquisition, specialty gas Gas $45.6M $5.4M cylinders, and SC
Slide 9: Key Balance Sheet & Cash Flow Metrics
KEY BALANCE SHEET & CASH FLOW METRICS All in $M except ROIC Net Debt1 Working Capital1 $93.7 $84.9 $78.8 $59.3 $72.8 $34.5 Q3 2019 Q3 2020 Q3 2021 % of Q3 2019 Q3 2020 Q3 2021 Net Debt Annualized to EBITDA 1.3x 1.2x 0.6x Revenue 23.4% 23.4% 21.6% Free Cash Flow2 ROIC3 $25.6 23.0% 19.0% $7.7 13.6% -$
Slide 10: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ✓ Investing in strategic growth opportunities and new product innovation STRATEGIC FILTERS Reinvestment ✓ Niche End Markets ✓ Funding transformation cost savings initiatives; $37M through 2020 ✓ Growth ✓ Attractive Margin ✓ Identifying inorganic options to drive ✓ Syner
Slide 11: 2021 Financial Guidance
2021 FINANCIAL GUIDANCE 2021 Guidance Expectations Revenue Growth 10% - 14% • Supply disruptions and freight delays likely to (including FX & Acq) continue in Q4’21 and into early 2022 EPS $1.20 - $1.25 • Narrowed ‘21 guidance includes YTD acquisition dilutive impact of ~$0.10; full year estimated d
Slide 12: 2022 Luxfer Opportunity
2022 LUXFER OPPORTUNITY • Alternative Fuel to continue driving growth Growth Drivers • New products to improve defense and first responder growth • Industrial sales outlook depends on energy prices and ISM index • Supply chain and inflation pressures to remain until at least mid year Productivity •
Slide 13: Strong Foundation for Long Term Success
STRONG FOUNDATION FOR LONG TERM SUCCESS Achievements Onwards Strategy Execution Accelerating Momentum CUSTOMER FIRST ✓ Developed and successfully executed • Enhanced portfolio has stronger margin Transformation Plan with total cash and growth profile with focus on savings of $30M+ Magnesium Alloys,
Slide 14: Appendices
APPENDICES APPENDICES Summary Financial Statements and Reconciliation of Non-GAAP Measures Click here to edit key takeaway CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK 14
Slide 15: Summary Income Statement
SUMMARY INCOME STATEMENT1 (Unaudited) 2021 2020 Variance 2021 2020 Variance $M Q3 Q3 $M % YTD YTD $M % NET SALES 91.2 77.7 13.5 17.4% 275.4 242.7 32.7 13.5% Cost of sales (70.1) (58.8) (203.2) (181.7) Gross profit 21.1 18.9 2.2 11.6% 72.2 61.0 11.2 18.4% Selling, general and administrative expenses
Slide 16: Cash Flow
CASH FLOW $M Q3 Q3 YTD YTD Operating activities Net income 4.8 2.6 30.3 12.9 Net loss / (income) from discontinued operations 1.2 0.2 (3.8) 1.7 NET INCOME FROM CONTINUING OPERATIONS 6.0 2.4 26.5 14.2 Equity income of unconsolidated affiliates - - 0.1 Depreciation 3.5 3.1 10.5 9.4 Amortization of pur
Slide 17: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2021 2020 2021 2020 $M Q3 Q3 YTD YTD Net income 6.0 2.4 26.5 14.2 Accounting charges relating to acquisitions and disposals of businesses: Amortization on acquired intangibles 0.3 0.2 0.7 0.6 Acquisitions and disposals 0.6 - 1.5 0.2 Defined benefit pe
Slide 18: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES1 (Unaudited) 2020 2020 2020 2020 2021 2021 2021 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 EBITA 12.7 7.5 10.5 10.5 14.5 13.5 10.3 Effective tax rate - per income statement 19.1% 19.0% 53.8% 16.5% 24.8% 21.0% 24.0% Notional tax (2.4) (1.4) (5.7) (1.7) (3.6) (2.8) (2.5) EBITA after n
Slide 19: Restatement Table for Discontinued Operations
RESTATEMENT TABLE FOR DISCONTINUED OPERATIONS (Unaudited) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2019 2020 $M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY FY Net Sales Gas Cylinders segment 40.3 39.6 37.9 35.7 37.2 37.5 32.3 34.9 36.2 46.5 45.6 153.5 141.9 Elektron Segment 62.0 58.4 52.9 46.6
Slide 20: Q3 2021: Elektron Segment Results
Q3 2021: ELEKTRON SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +0.4% +27.3% $0.9 $0.4 $1.1 $0.6 $0.4 $0.4 $0.5 $2.9 $8.4 $45.4 $45.6 $6.6 Q3 2020 FX Price Inflation Volume/Mix Cost Q3 2021 Q3 2020 FX Price Volume Q3 2021 Reduction Page added on 26th October at 8 AM Eastern CUSTOMER FIRST • INTEGRITY
Slide 21: Q3 2021: Gas Cylinders Segment Results
Q3 2021: GAS CYLINDERS SEGMENT RESULTS Sales ($M) Adj. EBITDA ($M) +41.2% -23.9% $0.1 $4.1 $0.2 $0.1 $0.8 $1.0 $45.6 $2.2 $1.2 $7.9 $7.1 $32.3 $5.4 Q3 2020 FX Acquistion Price Volume Q3 2021 Q3 2020 FX Price Inflation Volume / Net Cost Q3 2021 Mix Reduction Page added on 26th October at 8 AM Eastern