LXFR - Earnings call 2 2023 | Luxfer Holdings PLC

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Operator

Good morning. My name is Chelsea, and I will be your conference operator today. Welcome to Luxfer's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Now I will turn the call over to Mike Gaiden, Vice President of Investor Relations and Business Development from Luxfer. Mike, please go ahead.

Michael Gaiden

Chelsea. you, Thank Luxfer's to XXXX Call. Earnings Welcome, Second everyone, Quarter second Butcher, Executive Financial the Officer; With of today's me Steve press Chief Andy is our details provide Chief today release and issued reported Luxfer's Webster, we will performance yesterday. quarter as call, in Officer. On Luxfer's be webcast Today's can accompanied luxfer.com. a by at is that presentation accessed note, the presentation. of any the in Appendix references Please to reconciled non-GAAP financials are

today's to financial whether future any for forward-looking details. Before and we statements any Please results the harbor begin, are presentation information, company's the forward-looking result refer that undertake subject a We safe otherwise. further new made statement expected risks update uncertainties. events of no as friendly about to Slide or on future to of reminder obligation a statements, X

turn financial to Steve XXXX after and outlook, ahead. a Now Andy and the please Andy, our call which guidance. on comments will I offer over go of for results quarter details will some comments summary additional then before our Q&A. Andy updated will provide the

Andrew William Butcher

you, adjusted Please included Slide gains to both I'm pleased performance cash and details turn with second sequential and everyone. you Thank X. share that of in to our welcome, flow. EPS Mike, quarter

softness highest underscoring efforts Cylinders' further adjusted inflation by of us led medical our enabled again, to successfully Luxfer Combined, Gas our deliver fuel expectations with and improve First Magtech results measured last delivered QX our and segment. Whilst at alternative Gas Industrial Transportation Defense, to adjusted anchoring both years costs our in the team QX, The success outlook. Against discussed the and Our sales to highest take QX Cylinders, in these which demand to reinforce QX, became strong weighed $XXX XXXX, call. Total outlined X%, efforts a drive to quarterly areas more that markets. short-term customers manage reduce backdrop, to in and position. our since we of we've to Similar increased revenue deliver our strong Healthcare in our worked sales the our quarter however, to last by dynamic and for in flow actions to over and recover Response capital this cash increased XXXX, on results. million, ahead $X.XX, performance. environment bottom the our these General markets. pronounced in Solutions ongoing undertaken QX the few action costs, EBITDA overall EPS since impacting sectors business line in

million flow free half back in business Slide QX and net $XX reduction environment. And our to debt outlook pressured, current drive $X sales now the optimistic on related to to in Our opportunities about efficiently term. I conditions. million our our business reflects and while our cash in is current remain X earnings to for we update turn in over the would like an provide long operate growth

approach last holding. In that is an Luxfer. and in orders of demand an price we've seeing phenomenon as cautious a take we the facing in headwinds customers outlook are external the Over our impacting days, broadest-based increase the XX more The more destocking environment conditions increased interest tight markets. otherwise shown have rates, sensitivity, buoyant inventory end-user into inhibit to to higher customers of conversion continue the labor some experienced

our are Arts Graphic Turning in to further pressures There the supply chain. competitive business. now

nondomestic cost. of higher at outage magnesium U.S. raw to a driven As discussed we previously, source magnesium has us the ongoing

promising remain will factors the continues, profitability market. Two We positioning. In the by rate we help line. weakening our our approvals pound of In this also dollar constrained recent reinforce manufacturers and addition, for response, our although this remains U.S. given somewhat government competition weighing In are optimistic Asian impacted the of of and availability, increasing other European the reduce footprint. product from pushout U.K. aggressive the of delays. development macro variable manufacturing has costs inhibit growth project hydrogen, reported differentiated to working against a to product market our fuel results. new to the performance attractiveness the on market about The appreciable launch in

addition, also our higher profits lower In year-over-year. interest are rates pulling

the for our and capabilities for meaningful in for our external QX are across outlook and by profitable detail our taking investments made more now focused We details on we having in after Steve? action to XXXX these us about performance. challenges, the these business will organization later which sustained factors, will growth. Steve to beyond, the talent updated XXXX external response in remain position I discuss brought reviewing call. Despite objectives pressure

Stephen M. Webster

oxygen Thanks, on end chemical MREs and military of military end market. up begin Sales Elektron Healthcare Defense, rounded by sales expanded performance our Medical demand, for X the quarters. kits, in sustained category Andy. in by a by of led and cylinders Response summary XX%, sales this X our Slide trends pharmaceutical strength First and for driven this I'll last quarter. seen market. countermeasure sales increases gains in the in the with in flares continuing the

Transportation sales declined XX%.

substantial Following remained we while realized a inflatable lower substantial sales, but the softened in automotive period restocking, quarter. later of

Defense, growth areas and markets positives plates look cylinder, We with linkage of calls. some fuels a the prior to end of First areas However, less industrial we also QX's following magnesium Industrial saw have underscores our such secular recovery. The signs to XX% revenues high-capacity decline. of weakness turning our sales are as X% corner and of our by Response the photoengraving sectors significant Healthcare as alternative to cylinders, ties sales energy. in gas Go highlighted sales led as clean and be hydrogen of performance benefits increased, this on SoluMag well Encouragingly, quarter decreased G-Stor showing our cyclical higher. General our CNG like

financial to Now X quarter turn for second our of summary consolidated please Slide a results.

adverse price of of offset adjusted mix. Consolidated year. impact through EBITDA actions increased negative decreased of by QX foreign million costs, million. underpinned in from million inflation million, million sales of of volume year. rising was volume prior $XXX.X $X.X pass mix quarter and to Price the and $X.X million prior input a $X.X growth from exceeded Second the from partially recovery by exchange offset This $XX.X which $X.X $X.X million by $X.X million was by

to and to take demand present gains in drive well action inflationary the continue reduce as efficiency further cost We to as dynamics address environment.

helped and XX% by efforts throughout mix, of $X.X costs on by XXXX. pass-through, million as from decreased to volume Gas XX% into million prior increased the $XX.X Cylinders by $X.X Now turn this million results partially in made inflation to from partially our let's cost of Cylinders price More recovery cost we comparisons well we was year legal Gas by segment and decreased offset increases. which to margins X% foreign mix mix $X.X the as as impact projects. in due effect broadly, Elektron's of challenging for $XX.X next advance year, of our sales year. million XXXX of X. million the progress to Slide EBITDA offset rose to year-over-year our volume prior driven X%, adjusted address fees. Timing to due fixed segment expect of inflationary during volume exchange. Adjusted savings sales recovery initiatives Elektron EBITDA restore our

XXXX our on update to Slide -- X. outlook updated discuss Now like I'd

of X% demand call, a are we the in to conditions year As demand environment revenue The year. decline a external updating of Andy outlook. our suggest X% result the outlined the for full earlier

to While reduced this profitability to we to underpin EPS year target take now continue we measures full sales our $X. adjusted amid XXXX $X.XX outlook, of

in and to cash we QX our XXX% for also performance, by favorably in generation operating flow current quarter. the are were which goal of on hard $XX we cash are the this demonstrated million maintaining inventory adjusted by environment. focused working deliver free Furthermore, and the latter As levels, conversion our reduced

in $X.X to investment While the invest sustained to growth, external for to continuing we our on range positioning are only reinforce response of million growth. midpoint $XX planned progress to $XX forward million objectives, our ahead moderating million our of updating to long-term on our by financial part at for but look the year a as profitable to capital our for term, the environment. Recognizing I you the to efforts not further medium XXXX the our deliver challenges

to call Andy. like turn back to the I'd Andy? Now

Andrew William Butcher

Thank you, Steve.

now XXXX. decades, and and adjusted of variable a strong has will embedded operational Business impact business. now from mitigate in almost leveraging we the our lean are excellence to forms capabilities, Slide remove EPS of these our share for of we the on details stressed fixed business $X and Using demand part our both has culture quickly have I to which Luxfer X. Luxfer promised, X to As how heritage environment. in on a the our expertise specific operations, of turn goal Please worked costs been System

in North and total during through footprint our to Firstly, Cylinders, fuel Riverside savings. in This cost to from other both alternative million elimination fixed simplify annual our maximizes and we facilities headcount production $X.X in our efficiency our and Pomona reductions steps took of delivering Calgary. ongoing is transferring Gas other QX, output American

sites and in This very the in project a beginning X to to the one of delivers allows final consolidate manufacturing are sell stages powders annualized us just X sites. of Secondly, our we savings into Elektron, in further our QX manufacturing facilities. of owned $XXX,XXX

XX% of necessary in environment, savings our quickly our to activity our employees headcount. demand through business generate response moved in optimizing across Graphic Arts have for reduced but and example, solutions. to unfortunate by, lower Thirdly, number over the we This Magtech has

drive cash reported, as while in flow maintaining we Steve our customer are levels focused service. current reducing inventories order free Finally, of on to high

our sustained profitable initiatives our including expect operations, to emphasis these We on in for long-term current growth. drive provide significant gains lean

a defense reviewing Please position value Slide among Now safe, to create turn let's with amid Despite increasing of appreciation to for near-term preparedness XX. help other industrial mission clean areas. holds quickly the resonance growing Luxfer's conclude demand, and some challenges to climate and change by Luxfer's world, of importance creation. energy-efficient strong

our over create bottom performance cost will the will to underway help time, drive the investment term. innovation At in in long Our now actions XXXX. efficiency growth same support talent value our line and and

drivers the focused commercializing remain differentiated of long-term products. the the we us. We right strategy, deploying right are we future are are in markets ahead on confident the with We right growth bright and

would like ahead. session. I go Now Q&A Chelsea, begin back operator call to to please the the to the turn

Operator

available late joining in today. ends that it discusses webcast this The of on regularly at will call you Luxfer And no website the call further about www.luxfer.com. Thank This time. A XXXX available in us third a X results. will link conference Luxfer scheduled will the at this quarter conference call. appears be for be Instructions] encore of have recording An company hours. recording be financial October the when [Operator next to its this questions we

Luxfer (LXFR) 26 Jul 232023 Q2 Earnings call transcript