NYSE:ESAB ESAB Q1 2024 Earnings Report $123.54 +0.91 (+0.74%) As of 09:31 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast ESAB EPS ResultsActual EPS$1.20Consensus EPS $1.11Beat/MissBeat by +$0.09One Year Ago EPS$1.04ESAB Revenue ResultsActual Revenue$690.00 millionExpected Revenue$653.93 millionBeat/MissBeat by +$36.07 millionYoY Revenue Growth+0.90%ESAB Announcement DetailsQuarterQ1 2024Date5/1/2024TimeBefore Market OpensConference Call DateWednesday, May 1, 2024Conference Call Time8:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by ESAB Q1 2024 Earnings Call TranscriptProvided by QuartrMay 1, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Thank you for standing by, and welcome to the Eastside Solutions First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. Mark Barbolotto, Vice President of Investor Relations, you may begin your call. Speaker 100:00:30Thanks, operator. Welcome to ESAB's Q1 2024 earnings call. This morning, I'm joined by our President and CEO, Shyam Kamayanda and CFO, Kevin Johnson. Please keep in mind that some of the statements we are making are forward looking and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ, and we do not assume any obligation or intend to update these forward looking statements, except as required by law. Speaker 100:01:00With respect to any non GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation. With that, I'd like to turn the call over to our President and CEO, Sean Cambayanda. Speaker 200:01:18Thank you, Mark, and good morning, everyone. Thank you all for joining us today. We continue to make excellent progress towards our long term goal of becoming a premier industrial compounder that is less cyclical, has higher margins and delivers stronger cash flow. As you're aware, we exited 2023 with good momentum and have maintained it for the start of 2024. Throughout the quarter, our teams have continued to focus on their growth and margin expansion plans using EBX, and I'm very proud of the results we've achieved that has allowed us to raise our full year adjusted EBITDA and EPS guidance. Speaker 200:02:03Before diving into the numbers, allow me to share a story illustrating how we're actively shaping a better world and how the passion and commitment of our team is making a profound impact within ESAB and the communities we're part of. We've always believed in training the next generation of welders. In March, ESAB as part of our Future Fabricators program participated in the agriculture mechanics competition in Houston, Texas, where over 1500 high school students from over 250 school districts took part. Many students were fabricating solutions for their farm, while others were creating equipment to benefit their communities. This program aligns perfectly with our vision statement, shaping the world we imagine. Speaker 200:02:51Such events provide a fantastic opportunity to engage kids in engineering and problem solving, fostering their creativity. ESAB donated over $500,000 worth of equipment and accessories and prizes to empower these young innovators to continue creating new solutions and becoming the next generation of leaders in our industry. In the future, I plan on sharing more stories about how ESAB is shaping the world we imagine. Moving to Slide 3, another solid quarter, another step forward in the direction of our 2028 goals. Sales of $656,000,000 were a first quarter record as our team delivered 200 basis points of organic sales growth. Speaker 200:03:40Adjusted EBITDA improved by 140 basis points to a record 18.8%. Notably, what fueled our growth was our equipment and automation product lines. And within automation, our welding cobot expanded triple digits year over year and high double digits sequentially. We anticipate sustained demand for our automation products for the remainder of the year. Our gas control business also grew in the period with strong demand on the industrial side as a result of secular tailwinds associated with energy transition, while our specialty and medical gas business continues to execute well. Speaker 200:04:20Another standout aspect of the quarter was the strength of our global footprint. Our unmatched geographic strength continues to propel our growth, buoyed by sustained high demand from pivotal markets like India and the Middle East. The completion of the SAGAR acquisition and today's announcement of our agreement to acquire Sumic allows us to serve our customers better and continues to extend our portfolio to higher margin products and into less cyclical end markets. Our focus on EBX continues to uncover fresh avenues and opportunities for margin expansion. I was pleased to see the quality and the number of guidance rise within our business. Speaker 200:05:03Furthermore, to strengthen our balance sheet, we successfully executed our bond offering, positioning ESAB well to deliver as a premier industrial compounder. None of these achievements would have been possible without the focus and hard work of our global associates. So let me take a moment to thank them for their dedication and commitment to our goals. Moving to Slide 4 to discuss the progress we've made in shifting our product mix. As I mentioned in the past, in 2016, we were primarily a filler metal business. Speaker 200:05:38And today, we have positioned ESAB for growth in both filler metal and equipment. This slide highlights the transformation of our equipment product line and how it's continuing to improve ESAB globally. Since 2016, our share in equipment as part of ESAB's total sales has grown by 500 basis points. Now I'm the first to acknowledge that this is a gradual journey. But we can see what is possible as we continue to move to a more favorable mix. Speaker 200:06:11To add, our new equipment products continue to receive accolades. Most recently, our battery powered Volt, our Rustler and Rogue Equipment received the prestigious European Red Dot Award. This is on the back of accolades from Popular Mechanics and Construction Equipment Top 100 New Products. We continue to invest in new products and are excited about the rollout of several game changing products this year as well as the extension of our EndoSuite offering with FlowCloud, which will continue to differentiate ESA and add value to our value proposition to customers. Moving to Slide 5 to talk about our acquisitions. Speaker 200:06:54Sager extends our product line and helps us service our customers better in the less cyclical higher margin repair and maintenance end market. Sumic extends our product line into higher growth light automation end market and improves our higher margin equipment portfolio in the Americas. Both these acquisitions are margin accretive and were acquired at attractive multiples. These acquisitions underscore our commitment to our compounder strategy and our discipline to ensure acquisitions meet both our strategic and financial goals, and as a result allows ESAB to create long term value for our stakeholders. Our M and A pipeline continues to strengthen with over $7,000,000,000 in perspective targets and supports our long term growth objectives. Speaker 200:07:45With a strong balance sheet and free cash flow, we're well positioned to capitalize on these opportunities to achieve our 20 28 goals. Turning to Slide 6 to talk about our Q1 financial performance. As mentioned, quarterly sales reached a 1st quarter record of $656,000,000 with adjusted EBITDA also reaching a 1st quarter record of 100 and 23,000,000, expanding 140 basis points year over year to 18.8%. Our end markets continue to be resilient with strength in India and the Middle East. In addition, we continue to move ESAB into less cyclical higher margin end markets. Speaker 200:08:26Moving to Slide 7. In the Americas, organic sales grew by 300 basis points, driven by strong price performance of 500 basis points. Volumes declined, reflecting adverse weather conditions in January. FX was negative as a result of our year over year headwinds in South America. Our continued focus on EBX initiatives translated into an impressive 130 basis points expansion in adjusted EBITDA margins. Speaker 200:08:57Our new equipment products continue to generate excitement with end customers and channel partners. We are seeing strength in oil and gas, renewables and defense. This is being offset by softness in the capital goods end markets. Product simplification initiatives are now focused on growth and we're actively increasing our exposure to less cyclical end markets. Moving to Slide 8, which highlights the performance of our EMEA and APAC region. Speaker 200:09:30Another fantastic performance by our team in Europe, Asia and the Middle East with total sales growing by 100 basis points, driven by strong volume that grew 500 basis points. The region's performance reflected great execution and strong demand in India and the Middle East markets. EBX initiative, including net price management, contributed to a significant 140 basis points expansion in adjusted EBITDA margins. Our strategic focus, coupled with operational excellence, positions ESAB for continued growth and value creation. On that high note, let me hand it over to Kevin for further insights on our progress on Slide 9. Speaker 300:10:13Thanks Shyam. Good morning. We had another good quarter of free cash flow. We used this to fund the Saver acquisition and we continued to delever ending the quarter with net leverage of less than 1.8 turns. Since we last spoke, we launched a bond offering to replace our $600,000,000 term loan A3, which was maturing next year. Speaker 300:10:40We received our 1st credit rating of BA1 and BB plus We had very strong interest in the bond and priced at an attractive 6.25 percent, which was ahead of expectations. With our strong balance sheet and cash flow, we are positioned to accelerate investments to drive growth and support acquisitions. We continue to leverage EBX and AI to support delivering ever improving cash flow and our 20 28 goals. Moving to slide number 10. We are updating our 2024 guidance to reflect the strong Q1 performance and better margin outlook. Speaker 300:11:27Total sales growth reflects approximately $10,000,000 from the Siggra acquisition, which has been offset by 0.5 point of FX. We continue to expect organic growth of 2.5% to 4.5% with low single digit price and volume. EBX continues to improve our margins and we have increased our adjusted EBITDA guidance to $500,000,000 to $520,000,000 and our year over year incrementals are now around 40%. This includes $15,000,000 of investment we are making in our business to support our product mix improving and the commercialization of our innovative new equipment portfolio. Our adjusted EPS guidance increased $0.10 to $4.75 to $4.95 reflecting improved profitability and a lower expected interest expense. Speaker 300:12:30Our cash flow conversion remains on track at 95%. Our guidance does not include the recently signed Summit acquisition, which is expected to close during the second half of 2024. Summit had sales of around $30,000,000 during the last 12 months and is accretive to ESAB's adjusted EBITDA percentage. With that, let me hand back to Shyam on Slide 11 to wrap up. Speaker 200:13:02Thank you, Kevin. To summarize, we're off to a solid start to 2024. As a result, we've raised our adjusted EBITDA and EPS guidance for the year. EBX continues to raise the bar as we continue to find new opportunities to improve margins and generate strong cash flow. We've kicked off projects using AI to reduce operating expense and improve our cash flow. Speaker 200:13:27Our acquisition funnel is robust and our balance sheet is strong, allowing us to execute on our strategy to become a premier industrial compounder. We are moving the ball forward on our 2028 goals of becoming a $4,000,000,000 enterprise delivering 22% EBITDA. In the process creating significant value for all our stakeholders. With that, operator, let's open the line for questions. Operator00:14:08Your first question comes from the line of Mig Dobre from Bank of America Merrill Lynch. Your line is open. Speaker 400:14:14Good morning. Thank you for taking the question. And I'm afraid I'm going to violate the one question and one follow-up this time around if you'll allow it. I guess, where I what I'd like to start is with your comments on usage of AI. So you mentioned this several times. Speaker 400:14:30And when I'm thinking of your business, I'm not really thinking AI, but obviously you're doing something internally, operationally. And I'm curious as to what that is and what the tangible effects are going to be going forward? Speaker 200:14:48Yes. Good morning, Mig. Always good to hear from you. So let me start by answering obviously, there are a few things we'd like to keep to ourselves around what we're doing with AI. But let me sort of give you a gist of how we think about that particular technology and how it helps companies like us and ESAB in particular. Speaker 200:15:07We see it in sort of 2 buckets. 1 is commercial growth and the second side of our business. Something that I've talked about quite a bit, whether it be on Investor Day, whether it be in several 1 on 1 discussions that I've had with other investors is around the fact that we think material planning, production planning can be significantly assisted by AI to help your planning processes and as a result create a significant amount of cost advantage over a long period of time. So that's one that I've actually spoken about. And there's a couple of things that we can actually do as well on the commercial side that will help drive better efficiencies of our sales personnel. Speaker 200:15:52And those are the ones that we haven't spoken about openly, but things that we're working on. Speaker 400:15:59That's interesting. Is this a set of solutions that you've developed or customized yourself or are you using 3rd party providers? Speaker 200:16:10Yes. You know what, We're not developing it ourselves is the short answer. We are using providers outside and working on solutions for ESOP, yes. Speaker 400:16:20Okay. The thing that really stood out to me this quarter was your growth. And I know that I've asked this question in the past relative to your peers, how you're evaluating your performance and what's kind of driving some of this outgrowth. I believe this might be the Q4 in a row that you've been able to outgrow what I see from your publicly traded peers. So I'm curious if you can talk a little bit about that and maybe differentiate between Americas and EMEA and APAC? Speaker 200:16:51Yes. First of all, very happy with the team's performance both in the Americas and the rest of the world. I thought our teams took the momentum that we had in Q4, engaged hard in Q1, executed as some of the things that we talk about around policy deployment. The second piece is something that we've spoken about as well, which is back in 2016, ESAB was primarily a filler metals company and we have been over these last 7 years building out our equipment portfolio. And today as we get into the marketplace, there were several customers that bought our filler metal and our consumables, but not our equipment. Speaker 200:17:31Today that has fundamentally changed. And so we see a tremendous amount of excitement. In fact, a couple of weeks ago, I was with our distributor members and I can tell you that there is a significant amount of excitement on their side around our equipment portfolio and what we hear is that they want us to do more, make it easier to do business with ESAB to continue to put our products on their shelf and get it to their customers. And so that was an exciting reassurance for us on that particular front. So primarily number 1 is the fact that we have a portfolio today that works, that our customers want and that our channel partners want. Speaker 200:18:06The second aspect of it has been down to execution. I'm really happy as to how we've standardized our EBX process around sales planning. We had a recent review with the North American region on their sales plan and how they were looking at their customers. The aspect of how we're using our product line simplification to identify key customers, determine what the share of wallet is and what exactly needs to be done to drive share gain has been extraordinary. We're seeing that in North America. Speaker 200:18:35We're seeing that in South America. And Europe and the Middle East were a little bit ahead on that journey. Speaker 400:18:43Understood. And can you comment at all on how your gas control business has performed in the quarter and kind of what your expectations Speaker 200:18:53are for 2024? Yes. We obviously love that part of the business. We believe that that is an opportunity sort of beginning to differentiate ESAB. The big portion of that business as you know is exposed to great secular trends in our view, the use of industrial gas. Speaker 200:19:13We saw some strong demand come out of all of our regions around industrial gas. Medical and spec gas continued to stay strong, but more reasonable off of some strong comparisons to last year. So we expect that business again to continue to perform somewhere in that mid single digits this year. Margin expansion in that business was also strong. We've got a great funnel for acquisitions as well. Speaker 200:19:38So we continue to expect to compound on that business in 2024. Speaker 400:19:44Last point, just to clarify this. When we're looking at your performance relative to peers, gas control is something that's kind of unique to you. It's fair to say that the variance is not just the gas control businesses? Speaker 200:19:59No, no. We actually that's right. That's right. We actually saw a very strong performance both on the fabtech side and gas control side. So I would fundamentally say and I think we mentioned it briefly in our commentary, Mig, is that we saw really good growth in equipment and we saw strong growth in automation on the Fabtech side with filler metal kind of staying quite stable. Speaker 200:20:25And then on the gas control side, very similar strength on the industrial side of gas with med gas and spec gas staying sort of in that lower single digit range. Speaker 400:20:35Excellent. Thank you so much. Speaker 200:20:37And the other thing that I'd mentioned, we talked a bit about the weather, but otherwise really feel good about the team's performance in the Q1. Speaker 400:20:47Appreciate it. Speaker 200:20:49Thanks, Mick. Operator00:20:51Your next question comes from the line of Nathan Jones from Stifel. Your line is open. Speaker 200:20:58I'll start my one question and seven follow ups. I wanted to start on with some questions on pricing. Speaker 500:21:08Obviously, strong pricing in America, plus 5%, and the outside Americas was down 3%. Can you talk a little bit about the disparity in the pricing there? What's driving that? Whether it's just differences in the cost base that's coming in? Just any details you can give us on the disparity in pricing amongst the regions? Speaker 200:21:32Yes. Thank you for that question, Nathan. Always good to hear from you. So a couple of aspects. We've talked about 3 aspects around pricing, 1st being around just value pricing and new products coming into the market. Speaker 200:21:462nd, we talked about our PLS led initiative around pricing and then the third one was inflation based. So the piece for us in North America, we're seeing a bit of both PLS and inflation based pricing. And then in Europe, we are the rest of the world, we're focused on net price. And so by that, our teams are focused on what's happening to our cost structure and what are we doing to determine a net price situation to be positive. And so what we loved about both of our regions is that margins expanded in both the Americas and in the rest of the world as a result of that activity and shows the robustness of our process around pricing and discipline that our teams have. Speaker 500:22:34Could you then comment on what we should expect from pricing for the remainder of the year, whether it should stay nicely positive in Americas and if you expect it to continue to be on the headline number negative for the rest of the world? Speaker 200:22:50Yes, let me give that to Kevin. Nathan, go ahead. Speaker 300:22:53Yes, Nathan. So we'll continue to monitor price using our net price tool as Sean mentioned. At this point, our expectation is that we'll see low single digit price for the overall business, but we'll react to anything that happens in the market as we've shown we're able to do. Our expectation would be that there will be stronger price in the Americas as we go through the year, unless price in the EMEA and APAC region. Speaker 500:23:26Great. Thanks for taking my Speaker 200:23:28question and one follow-up. Okay. Thanks, Nathan. Operator00:23:35Your next question comes from the line of Tami Zakaria from JPMorgan. Your line is open. Speaker 600:23:42Hi, good morning. Thank you so much. And I do want to say quite a good quarter with organic revenue growth considering what some of the welding peers have reported so far. So congrats on that. So my questions are actually related to the acquisitions. Speaker 600:23:59So the first question is, you talked about incremental TAM. Can you size the total addressable market for maintenance and repair and also light automation? And how these new acquisitions would position you to penetrate in these end markets? And what's really the growth out of these both MRO and light automation as you think Speaker 400:24:25about these markets over the next few years? Speaker 600:24:25Yes. Thank you, Tammy. Speaker 200:24:29Yes. Thank you, Tammy. Yes, we are very pleased with the business performance and really thrilled for our teams as they sort of continue to execute in both the Americas and the rest of the world. In terms of the acquisition, you're spot on. I think the Sager acquisition in South America gives us greater exposure to the MRO market, which we find to be very stable, less cyclical and better margin profile. Speaker 200:24:54So it's not that you're sort of expanding into the space, our exposure into that space increases as a result of this. We expect the MRO space to be very stable and less cyclical through any cycle of the market. So that's the piece on SEGAR. On the Tsumig acquisition, you're spot on. We love the aspect that it's light automation. Speaker 200:25:16By light automation, we put it in the categories of cobots, standardized robotics, nothing that sort of has large material handling as part of the solution set. And we think if you remember our Investor Day deck, we had talked about that market equipment and automation being about $12,000,000,000 and growing to $17,000,000,000 And our intention is that those are the segments especially on the lighter side where you're focused on the process solution. We think that that's a great growth market, less capital intensive, will have better market characteristics and obviously we love the margin profile of that particular side of the business and that's what Sumit gets us, strong presence in the Americas, with some beachheads also in the U. S. Speaker 600:26:10Got it. Okay. So that's helpful. And so my follow-up is, can you sort of size what type of sales and EPS accretion you expect from Sega and Zoomig in year 1? Basically, I'm trying to understand what kind of EBITDA are these 2 businesses making now and what kind of accretion we can expect? Speaker 200:26:36Yes. Go ahead, Kevin. Speaker 300:26:38Yes. So, Tommy Sigor, we've built into the guidance already. It's around $10,000,000 of revenue we're expecting for this year. Sumig for the last 12 months, it generated around $30,000,000 of revenue. Obviously, we haven't built it into the guidance because it hasn't closed yet. Speaker 300:27:00We expect it to close in the second half of twenty twenty four. Once it closes, we'll give some update in terms of what we build into the guidance for this year. The good news is that both of these acquisitions are both EBITDA accretive and both will be EPS accretive in their 1st year. Speaker 600:27:23Got it. Okay. Thank Operator00:27:33you. Speaker 300:28:11All Speaker 200:28:12right. If there are no more questions, thank you for dialing in today and we look forward to talking to you on the next quarterly call.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallESAB Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) ESAB Earnings HeadlinesESAB (NYSE:ESAB) Price Target Raised to $126.00May 5 at 3:39 AM | americanbankingnews.comEarnings call transcript: ESAB Corp beats Q1 2025 earnings expectationsMay 3, 2025 | uk.investing.comHere’s How to Claim Your Stake in Elon’s Private Company, xAIEven though xAI is a private company, tech legend and angel investor Jeff Brown found a way for everyday folks like you… To partner with Elon on what he believes will be the biggest AI project of the century… Starting with as little as $500.May 7, 2025 | Brownstone Research (Ad)ESAB First Quarter 2025 Earnings: Revenues Beat Expectations, EPS LagsMay 3, 2025 | finance.yahoo.comESAB Corporation (ESAB) Q1 2025 Earnings Call TranscriptMay 2, 2025 | seekingalpha.comESAB Corp (ESAB) Q1 2025 Earnings Call Highlights: Record EBITDA Margin and Strategic Growth ...May 2, 2025 | uk.finance.yahoo.comSee More ESAB Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like ESAB? Sign up for Earnings360's daily newsletter to receive timely earnings updates on ESAB and other key companies, straight to your email. Email Address About ESABESAB (NYSE:ESAB) engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.View ESAB ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's Earnings Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Thank you for standing by, and welcome to the Eastside Solutions First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. Mark Barbolotto, Vice President of Investor Relations, you may begin your call. Speaker 100:00:30Thanks, operator. Welcome to ESAB's Q1 2024 earnings call. This morning, I'm joined by our President and CEO, Shyam Kamayanda and CFO, Kevin Johnson. Please keep in mind that some of the statements we are making are forward looking and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ, and we do not assume any obligation or intend to update these forward looking statements, except as required by law. Speaker 100:01:00With respect to any non GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation. With that, I'd like to turn the call over to our President and CEO, Sean Cambayanda. Speaker 200:01:18Thank you, Mark, and good morning, everyone. Thank you all for joining us today. We continue to make excellent progress towards our long term goal of becoming a premier industrial compounder that is less cyclical, has higher margins and delivers stronger cash flow. As you're aware, we exited 2023 with good momentum and have maintained it for the start of 2024. Throughout the quarter, our teams have continued to focus on their growth and margin expansion plans using EBX, and I'm very proud of the results we've achieved that has allowed us to raise our full year adjusted EBITDA and EPS guidance. Speaker 200:02:03Before diving into the numbers, allow me to share a story illustrating how we're actively shaping a better world and how the passion and commitment of our team is making a profound impact within ESAB and the communities we're part of. We've always believed in training the next generation of welders. In March, ESAB as part of our Future Fabricators program participated in the agriculture mechanics competition in Houston, Texas, where over 1500 high school students from over 250 school districts took part. Many students were fabricating solutions for their farm, while others were creating equipment to benefit their communities. This program aligns perfectly with our vision statement, shaping the world we imagine. Speaker 200:02:51Such events provide a fantastic opportunity to engage kids in engineering and problem solving, fostering their creativity. ESAB donated over $500,000 worth of equipment and accessories and prizes to empower these young innovators to continue creating new solutions and becoming the next generation of leaders in our industry. In the future, I plan on sharing more stories about how ESAB is shaping the world we imagine. Moving to Slide 3, another solid quarter, another step forward in the direction of our 2028 goals. Sales of $656,000,000 were a first quarter record as our team delivered 200 basis points of organic sales growth. Speaker 200:03:40Adjusted EBITDA improved by 140 basis points to a record 18.8%. Notably, what fueled our growth was our equipment and automation product lines. And within automation, our welding cobot expanded triple digits year over year and high double digits sequentially. We anticipate sustained demand for our automation products for the remainder of the year. Our gas control business also grew in the period with strong demand on the industrial side as a result of secular tailwinds associated with energy transition, while our specialty and medical gas business continues to execute well. Speaker 200:04:20Another standout aspect of the quarter was the strength of our global footprint. Our unmatched geographic strength continues to propel our growth, buoyed by sustained high demand from pivotal markets like India and the Middle East. The completion of the SAGAR acquisition and today's announcement of our agreement to acquire Sumic allows us to serve our customers better and continues to extend our portfolio to higher margin products and into less cyclical end markets. Our focus on EBX continues to uncover fresh avenues and opportunities for margin expansion. I was pleased to see the quality and the number of guidance rise within our business. Speaker 200:05:03Furthermore, to strengthen our balance sheet, we successfully executed our bond offering, positioning ESAB well to deliver as a premier industrial compounder. None of these achievements would have been possible without the focus and hard work of our global associates. So let me take a moment to thank them for their dedication and commitment to our goals. Moving to Slide 4 to discuss the progress we've made in shifting our product mix. As I mentioned in the past, in 2016, we were primarily a filler metal business. Speaker 200:05:38And today, we have positioned ESAB for growth in both filler metal and equipment. This slide highlights the transformation of our equipment product line and how it's continuing to improve ESAB globally. Since 2016, our share in equipment as part of ESAB's total sales has grown by 500 basis points. Now I'm the first to acknowledge that this is a gradual journey. But we can see what is possible as we continue to move to a more favorable mix. Speaker 200:06:11To add, our new equipment products continue to receive accolades. Most recently, our battery powered Volt, our Rustler and Rogue Equipment received the prestigious European Red Dot Award. This is on the back of accolades from Popular Mechanics and Construction Equipment Top 100 New Products. We continue to invest in new products and are excited about the rollout of several game changing products this year as well as the extension of our EndoSuite offering with FlowCloud, which will continue to differentiate ESA and add value to our value proposition to customers. Moving to Slide 5 to talk about our acquisitions. Speaker 200:06:54Sager extends our product line and helps us service our customers better in the less cyclical higher margin repair and maintenance end market. Sumic extends our product line into higher growth light automation end market and improves our higher margin equipment portfolio in the Americas. Both these acquisitions are margin accretive and were acquired at attractive multiples. These acquisitions underscore our commitment to our compounder strategy and our discipline to ensure acquisitions meet both our strategic and financial goals, and as a result allows ESAB to create long term value for our stakeholders. Our M and A pipeline continues to strengthen with over $7,000,000,000 in perspective targets and supports our long term growth objectives. Speaker 200:07:45With a strong balance sheet and free cash flow, we're well positioned to capitalize on these opportunities to achieve our 20 28 goals. Turning to Slide 6 to talk about our Q1 financial performance. As mentioned, quarterly sales reached a 1st quarter record of $656,000,000 with adjusted EBITDA also reaching a 1st quarter record of 100 and 23,000,000, expanding 140 basis points year over year to 18.8%. Our end markets continue to be resilient with strength in India and the Middle East. In addition, we continue to move ESAB into less cyclical higher margin end markets. Speaker 200:08:26Moving to Slide 7. In the Americas, organic sales grew by 300 basis points, driven by strong price performance of 500 basis points. Volumes declined, reflecting adverse weather conditions in January. FX was negative as a result of our year over year headwinds in South America. Our continued focus on EBX initiatives translated into an impressive 130 basis points expansion in adjusted EBITDA margins. Speaker 200:08:57Our new equipment products continue to generate excitement with end customers and channel partners. We are seeing strength in oil and gas, renewables and defense. This is being offset by softness in the capital goods end markets. Product simplification initiatives are now focused on growth and we're actively increasing our exposure to less cyclical end markets. Moving to Slide 8, which highlights the performance of our EMEA and APAC region. Speaker 200:09:30Another fantastic performance by our team in Europe, Asia and the Middle East with total sales growing by 100 basis points, driven by strong volume that grew 500 basis points. The region's performance reflected great execution and strong demand in India and the Middle East markets. EBX initiative, including net price management, contributed to a significant 140 basis points expansion in adjusted EBITDA margins. Our strategic focus, coupled with operational excellence, positions ESAB for continued growth and value creation. On that high note, let me hand it over to Kevin for further insights on our progress on Slide 9. Speaker 300:10:13Thanks Shyam. Good morning. We had another good quarter of free cash flow. We used this to fund the Saver acquisition and we continued to delever ending the quarter with net leverage of less than 1.8 turns. Since we last spoke, we launched a bond offering to replace our $600,000,000 term loan A3, which was maturing next year. Speaker 300:10:40We received our 1st credit rating of BA1 and BB plus We had very strong interest in the bond and priced at an attractive 6.25 percent, which was ahead of expectations. With our strong balance sheet and cash flow, we are positioned to accelerate investments to drive growth and support acquisitions. We continue to leverage EBX and AI to support delivering ever improving cash flow and our 20 28 goals. Moving to slide number 10. We are updating our 2024 guidance to reflect the strong Q1 performance and better margin outlook. Speaker 300:11:27Total sales growth reflects approximately $10,000,000 from the Siggra acquisition, which has been offset by 0.5 point of FX. We continue to expect organic growth of 2.5% to 4.5% with low single digit price and volume. EBX continues to improve our margins and we have increased our adjusted EBITDA guidance to $500,000,000 to $520,000,000 and our year over year incrementals are now around 40%. This includes $15,000,000 of investment we are making in our business to support our product mix improving and the commercialization of our innovative new equipment portfolio. Our adjusted EPS guidance increased $0.10 to $4.75 to $4.95 reflecting improved profitability and a lower expected interest expense. Speaker 300:12:30Our cash flow conversion remains on track at 95%. Our guidance does not include the recently signed Summit acquisition, which is expected to close during the second half of 2024. Summit had sales of around $30,000,000 during the last 12 months and is accretive to ESAB's adjusted EBITDA percentage. With that, let me hand back to Shyam on Slide 11 to wrap up. Speaker 200:13:02Thank you, Kevin. To summarize, we're off to a solid start to 2024. As a result, we've raised our adjusted EBITDA and EPS guidance for the year. EBX continues to raise the bar as we continue to find new opportunities to improve margins and generate strong cash flow. We've kicked off projects using AI to reduce operating expense and improve our cash flow. Speaker 200:13:27Our acquisition funnel is robust and our balance sheet is strong, allowing us to execute on our strategy to become a premier industrial compounder. We are moving the ball forward on our 2028 goals of becoming a $4,000,000,000 enterprise delivering 22% EBITDA. In the process creating significant value for all our stakeholders. With that, operator, let's open the line for questions. Operator00:14:08Your first question comes from the line of Mig Dobre from Bank of America Merrill Lynch. Your line is open. Speaker 400:14:14Good morning. Thank you for taking the question. And I'm afraid I'm going to violate the one question and one follow-up this time around if you'll allow it. I guess, where I what I'd like to start is with your comments on usage of AI. So you mentioned this several times. Speaker 400:14:30And when I'm thinking of your business, I'm not really thinking AI, but obviously you're doing something internally, operationally. And I'm curious as to what that is and what the tangible effects are going to be going forward? Speaker 200:14:48Yes. Good morning, Mig. Always good to hear from you. So let me start by answering obviously, there are a few things we'd like to keep to ourselves around what we're doing with AI. But let me sort of give you a gist of how we think about that particular technology and how it helps companies like us and ESAB in particular. Speaker 200:15:07We see it in sort of 2 buckets. 1 is commercial growth and the second side of our business. Something that I've talked about quite a bit, whether it be on Investor Day, whether it be in several 1 on 1 discussions that I've had with other investors is around the fact that we think material planning, production planning can be significantly assisted by AI to help your planning processes and as a result create a significant amount of cost advantage over a long period of time. So that's one that I've actually spoken about. And there's a couple of things that we can actually do as well on the commercial side that will help drive better efficiencies of our sales personnel. Speaker 200:15:52And those are the ones that we haven't spoken about openly, but things that we're working on. Speaker 400:15:59That's interesting. Is this a set of solutions that you've developed or customized yourself or are you using 3rd party providers? Speaker 200:16:10Yes. You know what, We're not developing it ourselves is the short answer. We are using providers outside and working on solutions for ESOP, yes. Speaker 400:16:20Okay. The thing that really stood out to me this quarter was your growth. And I know that I've asked this question in the past relative to your peers, how you're evaluating your performance and what's kind of driving some of this outgrowth. I believe this might be the Q4 in a row that you've been able to outgrow what I see from your publicly traded peers. So I'm curious if you can talk a little bit about that and maybe differentiate between Americas and EMEA and APAC? Speaker 200:16:51Yes. First of all, very happy with the team's performance both in the Americas and the rest of the world. I thought our teams took the momentum that we had in Q4, engaged hard in Q1, executed as some of the things that we talk about around policy deployment. The second piece is something that we've spoken about as well, which is back in 2016, ESAB was primarily a filler metals company and we have been over these last 7 years building out our equipment portfolio. And today as we get into the marketplace, there were several customers that bought our filler metal and our consumables, but not our equipment. Speaker 200:17:31Today that has fundamentally changed. And so we see a tremendous amount of excitement. In fact, a couple of weeks ago, I was with our distributor members and I can tell you that there is a significant amount of excitement on their side around our equipment portfolio and what we hear is that they want us to do more, make it easier to do business with ESAB to continue to put our products on their shelf and get it to their customers. And so that was an exciting reassurance for us on that particular front. So primarily number 1 is the fact that we have a portfolio today that works, that our customers want and that our channel partners want. Speaker 200:18:06The second aspect of it has been down to execution. I'm really happy as to how we've standardized our EBX process around sales planning. We had a recent review with the North American region on their sales plan and how they were looking at their customers. The aspect of how we're using our product line simplification to identify key customers, determine what the share of wallet is and what exactly needs to be done to drive share gain has been extraordinary. We're seeing that in North America. Speaker 200:18:35We're seeing that in South America. And Europe and the Middle East were a little bit ahead on that journey. Speaker 400:18:43Understood. And can you comment at all on how your gas control business has performed in the quarter and kind of what your expectations Speaker 200:18:53are for 2024? Yes. We obviously love that part of the business. We believe that that is an opportunity sort of beginning to differentiate ESAB. The big portion of that business as you know is exposed to great secular trends in our view, the use of industrial gas. Speaker 200:19:13We saw some strong demand come out of all of our regions around industrial gas. Medical and spec gas continued to stay strong, but more reasonable off of some strong comparisons to last year. So we expect that business again to continue to perform somewhere in that mid single digits this year. Margin expansion in that business was also strong. We've got a great funnel for acquisitions as well. Speaker 200:19:38So we continue to expect to compound on that business in 2024. Speaker 400:19:44Last point, just to clarify this. When we're looking at your performance relative to peers, gas control is something that's kind of unique to you. It's fair to say that the variance is not just the gas control businesses? Speaker 200:19:59No, no. We actually that's right. That's right. We actually saw a very strong performance both on the fabtech side and gas control side. So I would fundamentally say and I think we mentioned it briefly in our commentary, Mig, is that we saw really good growth in equipment and we saw strong growth in automation on the Fabtech side with filler metal kind of staying quite stable. Speaker 200:20:25And then on the gas control side, very similar strength on the industrial side of gas with med gas and spec gas staying sort of in that lower single digit range. Speaker 400:20:35Excellent. Thank you so much. Speaker 200:20:37And the other thing that I'd mentioned, we talked a bit about the weather, but otherwise really feel good about the team's performance in the Q1. Speaker 400:20:47Appreciate it. Speaker 200:20:49Thanks, Mick. Operator00:20:51Your next question comes from the line of Nathan Jones from Stifel. Your line is open. Speaker 200:20:58I'll start my one question and seven follow ups. I wanted to start on with some questions on pricing. Speaker 500:21:08Obviously, strong pricing in America, plus 5%, and the outside Americas was down 3%. Can you talk a little bit about the disparity in the pricing there? What's driving that? Whether it's just differences in the cost base that's coming in? Just any details you can give us on the disparity in pricing amongst the regions? Speaker 200:21:32Yes. Thank you for that question, Nathan. Always good to hear from you. So a couple of aspects. We've talked about 3 aspects around pricing, 1st being around just value pricing and new products coming into the market. Speaker 200:21:462nd, we talked about our PLS led initiative around pricing and then the third one was inflation based. So the piece for us in North America, we're seeing a bit of both PLS and inflation based pricing. And then in Europe, we are the rest of the world, we're focused on net price. And so by that, our teams are focused on what's happening to our cost structure and what are we doing to determine a net price situation to be positive. And so what we loved about both of our regions is that margins expanded in both the Americas and in the rest of the world as a result of that activity and shows the robustness of our process around pricing and discipline that our teams have. Speaker 500:22:34Could you then comment on what we should expect from pricing for the remainder of the year, whether it should stay nicely positive in Americas and if you expect it to continue to be on the headline number negative for the rest of the world? Speaker 200:22:50Yes, let me give that to Kevin. Nathan, go ahead. Speaker 300:22:53Yes, Nathan. So we'll continue to monitor price using our net price tool as Sean mentioned. At this point, our expectation is that we'll see low single digit price for the overall business, but we'll react to anything that happens in the market as we've shown we're able to do. Our expectation would be that there will be stronger price in the Americas as we go through the year, unless price in the EMEA and APAC region. Speaker 500:23:26Great. Thanks for taking my Speaker 200:23:28question and one follow-up. Okay. Thanks, Nathan. Operator00:23:35Your next question comes from the line of Tami Zakaria from JPMorgan. Your line is open. Speaker 600:23:42Hi, good morning. Thank you so much. And I do want to say quite a good quarter with organic revenue growth considering what some of the welding peers have reported so far. So congrats on that. So my questions are actually related to the acquisitions. Speaker 600:23:59So the first question is, you talked about incremental TAM. Can you size the total addressable market for maintenance and repair and also light automation? And how these new acquisitions would position you to penetrate in these end markets? And what's really the growth out of these both MRO and light automation as you think Speaker 400:24:25about these markets over the next few years? Speaker 600:24:25Yes. Thank you, Tammy. Speaker 200:24:29Yes. Thank you, Tammy. Yes, we are very pleased with the business performance and really thrilled for our teams as they sort of continue to execute in both the Americas and the rest of the world. In terms of the acquisition, you're spot on. I think the Sager acquisition in South America gives us greater exposure to the MRO market, which we find to be very stable, less cyclical and better margin profile. Speaker 200:24:54So it's not that you're sort of expanding into the space, our exposure into that space increases as a result of this. We expect the MRO space to be very stable and less cyclical through any cycle of the market. So that's the piece on SEGAR. On the Tsumig acquisition, you're spot on. We love the aspect that it's light automation. Speaker 200:25:16By light automation, we put it in the categories of cobots, standardized robotics, nothing that sort of has large material handling as part of the solution set. And we think if you remember our Investor Day deck, we had talked about that market equipment and automation being about $12,000,000,000 and growing to $17,000,000,000 And our intention is that those are the segments especially on the lighter side where you're focused on the process solution. We think that that's a great growth market, less capital intensive, will have better market characteristics and obviously we love the margin profile of that particular side of the business and that's what Sumit gets us, strong presence in the Americas, with some beachheads also in the U. S. Speaker 600:26:10Got it. Okay. So that's helpful. And so my follow-up is, can you sort of size what type of sales and EPS accretion you expect from Sega and Zoomig in year 1? Basically, I'm trying to understand what kind of EBITDA are these 2 businesses making now and what kind of accretion we can expect? Speaker 200:26:36Yes. Go ahead, Kevin. Speaker 300:26:38Yes. So, Tommy Sigor, we've built into the guidance already. It's around $10,000,000 of revenue we're expecting for this year. Sumig for the last 12 months, it generated around $30,000,000 of revenue. Obviously, we haven't built it into the guidance because it hasn't closed yet. Speaker 300:27:00We expect it to close in the second half of twenty twenty four. Once it closes, we'll give some update in terms of what we build into the guidance for this year. The good news is that both of these acquisitions are both EBITDA accretive and both will be EPS accretive in their 1st year. Speaker 600:27:23Got it. Okay. Thank Operator00:27:33you. Speaker 300:28:11All Speaker 200:28:12right. If there are no more questions, thank you for dialing in today and we look forward to talking to you on the next quarterly call.Read morePowered by