LXFR - Earnings call transcript Q4 2024

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Operator

Good morning, everyone. My name is Boe, and I will be your conference operator today. Welcome to Luxfer's Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions]

Now I will turn the call over to Mr. of and President Luxfer. Development Vice Grant, Investor Business Relations at Kevin please ahead. Kevin, go

Kevin Grant

at Boe, webcast everyone. pleased Call. Thank that Fourth good December our results and Webster, you, morning, references quarter non-GAAP fourth our Officer. of joined accessed Today's Full be Luxfer's Steve ended XXXX can today for we'll any the Quarter Executive XXXX. presentation Chief the Welcome Year a and is Earnings Please be Officer; Chief by morning, Conference to Andy I'm This XX, reviewing financials financial Butcher, to and Luxfer's in accompanied to note, are presentation. luxfer.com. be the Financial the reconciled appendix by

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

During results, today's business Graphic be call, XXXX. and Legal quarter adjusted both and from or XXXX excluding Recoveries Expenses Arts XXXX year we and full fourth will financial providing

CEO, let Andy, please turn Andy go introduce Now me to Luxfer's ahead. Please Butcher. Slide X.

Andrew William Butcher

meaningful dividends, sustainable their positioning and by and achieve throughout to success. to for decline morning, capital efforts to start to return flow robust leverage appreciation Kevin, my revenue expressing generate joining long-term enabled associates significantly in our margin a extraordinary to to everyone. through dedication good like Luxfer sincere reduce for all you, shareholders all to us. Thank slight improvements Thank you despite XXXX. while I'd cash for continue net solid us to Their Luxfer

on pleasing we significant with core gross margins, especially focus and Luxfer, sharpened was generation. elevated $X.XX as very Overall, operational cash adjusted took efficiencies. to decisive and earnings pivotal steps share for our per revenues enhance of competencies QX and XXXX strong was

the A XXXX, strategic to longer of review our profitability of opportunities. in Graphic our late completion aligns including half business, us track targets. portfolio no margin and This on XXXX Arts key first the our enabling in and with streamline concentrate on planned sale initiatives, sale remains for identified which higher-margin

our strengthened material with securing in agreements finalized and customers. long-term operations We manufacturing XXXX raw by additional supplies, we

We market remain conditions shareholder maximize assessing attentive in to future value. also

half our the We want consolidations. of I new completed of and SCBA critical specific remind our on demand Ration property Heaters Flameless cyclical and XXXX. second benefited from both executed of to briefly of Lakehurst cylinder the operational our you some in strong our sale navigated achievements businesses, contracts, Powders

already sites particular, Cylinders these manufacturing strong execution. operational one improvements operational our has demonstrating amalgamation year, directly for at of contributed higher simplification full efficiency In to our momentum. operations the driven the Gas and financial delivering led margin XX.X% has our of of the facilities adjusted performance and EBITDA U.S. our of positive and Powders to All

evolving tensions, remain changing enter cost ongoing create and policies trade macroeconomic tariffs, demand geopolitical we uncertainties, XXXX, we could of including which As mindful and pressures.

initiatives However, to strategic responsive. and the in positioned remain XXXX have flexible undertaken us

critical R&D will high-quality investments address products deep in Our as specialized and ongoing to headwinds. expertise, commitment industry be potential delivering we

commercial in long-term external we success. execute opportunities sustainable our position ability are confident While remain for a variables new Luxfer to and factor, on

Steve? more to of call I'll over With our XXXX hand financials a guidance. will Steve, our that, and review share provide the who detailed

Stephen M. Webster

morning, everyone. Thanks, and good Andy,

Slide Now let's turn X. to

in a reduced quarter, was million, at at significant $X.XX, Adjusted margin, EPS In reduction $XX.X to a of delivered results. flow net Cash EBITDA rose $XX.X were up from with was of year-over-year. debt XXXX. Sales operations marking in $XX.X strong gross million million $XX adjusted to million, yielding margin. a XX.X% came the XX% while $XX and $XX.X fourth XX.X% we with profit million gross million,

XXXX the while including in FX alternative growth over at of Elektron, sales cylinders $X totaling Looking offset. gas bridge, revenue softer orders minor a was demand headwinds defense and by million, fuel partial pull-ins significant driven volumes provided in

and Turning EBITDA the profit were and XX.X%, $XX.X EBITDA which mix. Adjusted to by increase volume bridge. margin restructuring and million, favorable pleased net underscores million success $X.X our improved the to with aided the of from We to deflation cost efforts. particularly

impact cash benefiting year, million a million, full the adjusted with Adjusted totaled ongoing $X.XX, $XXX.X the as XX.X% historic and million at flow proceeds capital focus tax, free being sales $XX.X of items, nonrecurring EBITDA our on from of For $XX.X management lower the of working sale. land legal reached the costs was while the cash margin. EPS X of well as recovery

You can find with year in full these financials bridges appendix. the along

delivered X and a detailed quarter fourth to as to XX.X% for MREs year-over-year as ongoing sales Elektron Elektron's alloy. demand turn flares for This especially our materials, was Slide financial robust automotive uplift let's in $XX.X with performance growth for propelled the Now strong sales quarter, well review million. performance. defense In by rising of fourth transportation

dipped Transportation automotive weakness. general broader competitive to macro subdued, offset face continued While Meanwhile, underlying pull-ins quarter, order the from increased remained market headwinds the end sales reflecting helped pressures some although sales seasonal XXXX in from markets. industrial slowing softness. third other catalysis early and overall,

EBITDA were a margin marking prior to consecutive sales and margin, of volumes fourth significantly Adjusted and quarter the driven year by gains product increased XX.X% These our representing increased $X.X optimized expansion. primarily million, from up mix.

and cost in expansion end our ongoing mix performance This profit highlights Elektron year. product efficiencies markets. to key sustainable commitment delivered to driving improvement targeted through discipline operational briefly margin Turning the by further deployment. supported favorable and capital full

overall across a for of particularly most gains results. as sequential offset Gas sales, Now was Compared was aerospace please about up demand North fourth as a down strong Healthcare from transportation also remained revenues but prior QX, hydrogen Response flat. X% in lines. Industrial $XX.X with mobility General Slide increased Cylinders product in while Cylinders' to stronger million quarter and turn fuel X to quarter alternative weaker fourth financial down stable, well by ended by year, relatively Gas review Defense, XX% Europe. weighed year-over-year, America, demand reflecting the detailed in First sales partly

at EBITDA representing Adjusted our the America in basis the helped pressure, improvements margin, impact. lower due $X.X a efficiencies pricing to and facilities operational production mix contractual X.X% last came at largely North and mitigate million, QX margin year, down from leverage. Despite XXX unfavorable points

leaner a were For we fuel margin renegotiations market. the sales alternative saw Nonetheless, from contractual operations. essentially flat full higher year, by offset and SCBA weaker demand, with improvement

disciplined Gas on targeted investments fuel remains to profitable Cylinders cost gains management from focused long-term efficiency coming and further support segments. alternative forward, growth its operational Going with

X year XXXX for Slide please Now turn guidance. full to

profitability. As margins us but System, long-term we and remain drive uncertainties to innovation on focused from persist, XXXX, economic positioning we and maintain operational enter Luxfer Business the efficiencies

While we adjusted anticipate time. to mix million XXXX, between and and compared of $XX million. we $XX optimization in over management revenue to cost EPS to $X.XX Disciplined remain margin project and support adjusted range EBITDA expansion flat $X.XX the should product

strong higher and legal in benefits expect million, reflecting taxes XXXX's of sheet a $XX million cash to recovery absence committed one-time and increased alongside flow remain and the efficiency investments of cash to free land growth We balance and $XX sale opportunities.

levels. strategic confident debt-to-EBITDA creation. and Luxfer share operational net to X.Xx, is to value commitment macroeconomic full-year innovation current long-term position discipline our while that Despite dividend around for maintaining buyback we plan Our uncertainties, are and focus, keep

Now the for on I'd XXXX. like back outlook to for to the Andy call turn further comments

Andrew William Butcher

Steve. Thanks,

anticipate firstly year slide, want next Before over I on see unchanged we relatively on how full to up. to some we We the shaping with move performance additional context near-term the headwinds. business provide XXXX

market mixed. clean remain Within dynamics energy,

leading launches softer term. new demand While in pace the Europe slowed, remains hydrogen the to has committed to adoption, of program short

zirconium in and the of addition, lower-cost to capability, pressure face has attracted In segment. in cylinder from competitive sluggish competitors delaying continues that North our new growth engines America auto-catalysis CNG-powered anticipated adoption and is

our this year's headwinds, role As a XXXX continues benefit year's and steady we a remains into quarter. earnings near-term Heaters pull-forward result growth. temporary strong. QX to contributor expect business those this, consistent from those core Flameless orders in arena's last Despite as Ration mentioned softer other do as first though, reinforcing applications, demand the of for to XXXX, Elektron be defense QX well of to this than QX as previously

responder At time, same the municipal agency baseline volumes position first continue has in and maintain funding stability, to we date provided where to SCBA, a margins strong market and improve. aerospace and

long-term As we maintaining me conditions, market operational on important opportunities. disciplined are and growth efficiency brings This to focus point. these navigate an execution, a we

environment invest continue we mixed, be right demand accelerates. clean the near-term the when While technologies energy in is to in ready to

Please turn to X. Slide

is excellence operational transportation is the System, A through of our drive key are progress Business ways innovation, across and to we One success which in the our strategic hydrogen long-term example this of business. continues Luxfer execution ensuring solutions.

measured, adoption trailers Pro applying such our believe our we've we this continue. market significantly will Go successfully clean near-term as While By hydrogen sector investments time and operations, data-driven global decision-making, developed infrastructure lean over processes Bundle as principles energy in and standardized G-Stor remains Hydrosphere grow cylinder G-Stor packs.

Europe, hydrogen have certifications toward commercialization for storage. cleared gaining These next-generation step key now a bulk in critical modules

already transport translating Our more Hydrosphere overall lighter customer initial seen count amount adoption confidence G-Stor hydrogen greater interest, as Pro for our design innovations. Meanwhile, Go scales. of cylinder substantially opportunities significantly a reduces our weight, these a long-term storing outperformed in We've G-Stor Bundle solutions, hydrogen revenue safer, in footprint. steel-based reinforcing efficient and the into

recently manufacture seen market important we first and to and as in our that clean I journey how confirm am energy in pleased demonstrating we module advanced this the slide, to effectively. XX-foot schedule of products bring U.K. on hitting our our an facility efficiently expanded milestone on completed have

the award-winning have market System, discipline a positions coming space gains in next-generation as transition and of Supported adoption strategy enabler these the the us clean evolves. to key potential Looking Business the agility ahead, modules years. this Luxfer in the as to of energy succeed hydrogen by our momentum transportation be the

a want As Slide presentation, turn progress few success. we XXXX take to our X. and positioned I in to moments how for is long-term summarize close today's Please to Luxfer

maintaining to during evolving XXXX, foundation. we with market our cash initiatives conditions. to financial reinforcing adapt allows while continued stability driving generation This discipline to flexibility strong to First, in execute us strategic invest and

ability as to trailers, our hydrogen our the energy we Second, certifications develops. serve evolving Go advanced economy innovation, securing Hydrosphere demand critical clean for reinforcing European G-Stor

continues Third, operations. sustained discipline deliver our our focus operational embedded results. the efficiency demonstrating excellence margin and posted We to in on improvements,

our made growth we areas. on on capitalizing first consolidations sharpen to the Arts the sale in focus of core us our half Graphic strategic business significant track allowing and Fourth, of remaining XXXX, on progress, facility complete our to

to ability macroeconomic opportunity. well strategic for for navigate our we execution investments, the on With as customers achievements create a Luxfer execution shareholders. are both value future, disciplined positioned These Finally, continued our long-term and balancing uncertainties. enter and our strengthening we commitment focus to near-term confident with we XXXX, remain reflect innovation, in to

I'd that, the turn call please back for to operator to the like Q&A ahead. the session. go With Boe,

Operator

we'll [Operator to go And Ferazani Instructions] at Steve Sidoti.

Steve Ferazani

Luxfer. what impact guidance But for for by to so the of clearly thanks out an financial I QX. much XXXX was pull Steve, was about better and impact to XXXX QX. did expectations. trying eventful the on it much impact want in was financial Obviously, the our forward I'm the color just how on your figure asking much on in than start

Andrew William Butcher

you. thank Yes,

defense with been pleased customers. in Ready-to-Eat, in U.S. award a and our was to specific by were related The There's the Flameless Heaters. strong government pull We QX. MRE, at largest $X.X million XX. particularly Ration we've forwards under from quantified The are Meals initiated both very release that both X XXXX and

the of such forward a and And military in by the shipped both some XXXX. that pull initiated was that food so was packers

flares CNG, second in the fuel that. Those pull forwards also although not alternative X and identified powder was we The overstocking million. a quantified we've export were together order. of Separately, some $X.X customers

Steve Ferazani

take there any hearing Okay. a bit in long-term about talk year, then manufacturer little developing? to new market. develops be how Can of is on is test for Certainly, but a change being is added. CNG and you your that a market us for XXXX phase more CNG truck outlook Tell XXXX how we're probably that going your

Andrew William Butcher

Yes.

X would XXXX. say in that's think I reduced fleet all growth Overall, our and slowing, potential decline Class right to all truck high is levels. I correct, North market in CNG very a inventory Despite exciting. expected in -- Steve. remains some There's expansion the very, America the current

X that Class thoughtful XX% were as preliminary example, conversion within down For operators, I in trials. CNG January truck And to new by initial would orders fleet measured, year-on-year. describe careful,

the with X seen of mentioned, offering CNG XXXN brands now OEM Nevertheless, the we've as truck engine. you trucks

So we've move I projected that is going into we the be somewhat takeaway to It's early but guess while, the be by market to market do product. providers, this we our is the strengthening XXXX related later cylinder lumpy quite light key year. used in one a the sales expect as lightweight as and to been competitive major an we've for and develops. system approved of and benefit

Steve Ferazani

Excellent. Arts Updates sale. on the Graphic

Stephen M. Webster

Steve. Thanks, that. take Yes. I'll

quarter, excited. first And exclusive fit with working complete sale say, year. half confirmed the as I I close. half said, for diligence the There'll last this in for They're basis were actually As in that on of I expecting think Andy to say pleased we're the I'm an through first good quite that be Graphic on a remarks. prepared buyer. now. to a We're track we a has working we're their Arts.

Steve Ferazani

Excellent.

in asked -- tariff can quarter, structure, getting think And is your the this you embedded Luxfer? guidance? you current everyone question change, given which tariffs impact. can how impact that do Is Another how think

Stephen M. Webster

take as Steve. I'll Yes, one well, that

yes, very fast-moving that, developed, it's So neither clearly, that responses fully mean, situation. may I entail. policy the a Trade have hasn't

prominent We sales way. third-party about respect relatively million, Canada, sort certainly highly on XX-K some talking those countries that of about the as impact minimal. our either sales, China, relatively our have data it's in section We're of $XX have of the Mexico, Risks put in and $XX million of minimal been such

So that's small.

U.K., manufacturing the is U.K. tends there Europe the to it in U.K. the further, business spread so have Cylinders for we a the the suppose between way. U.S. into go will and operations Elektron export and potential Clearly, I other the U.S. and to

a pass not have were the could we're that unable on we significantly about it So financial Steve. if said, impact to at costs. those concerned moment, That

Steve Ferazani

could Okay. one That's more helpful. just in. if And then get I

you specific You in Can mention? you provide XXXX. want any projects talked about detail, CapEx any to elevated

Andrew William Butcher

the the Yes, as with cash those well is special were This some Steve of cash generation about. very businesses in both Steve. underlying talked Andy. we from generation pleased Thanks, our XXXX, that projects as

the of that. projects XX% region So XX% higher whole we're in we CapEx related And of somewhere a to year. to projecting have basket this

Some maintenance and infrastructure restructuring. around are of some cost growth and reduction, and them around

a that's investments the nice prominent got small, very we've So capital that. or of with generation any of than business basket X last important cash rather ones, significant but X year supporting pleased but the

Operator

at turn have to it And we any time. back closing Butcher, comments. this for to appears no CEO, questions further I'd things like Andy

Andrew William Butcher

and you, everyone. you joining Thank Boe, for thank today, us

initiatives As XXXX, we undertaken reflect on it's results. clear that meaningful are strategic we've the delivering

excellence, navigate operational execution environment with on confidence. focus Our positioned to innovation with and us has macroeconomic uncertain disciplined combined an

shareholders maintaining XXXX employees clean opportunities our and committed agile, growth like ahead, remain for both staying improving areas and delivering efficiencies, challenges. strength. to presents in energy investing Looking customers, and our We financial value key by

dedication. associates work I'd Luxfer's for driving and around like hard are again to once success. our the behind force thank the their They globe

updating in the quarters. on look the you about ahead our excited forward coming to and are We path progress

Thank Luxfer. continued confidence your support you for in and

Operator

XXXX day. conclude hours. will to in conference A this Earnings this available be thanks much available www.luxfer.com. all website a we Luxfer's at joining on webcast you link about Call. A everyone, great recording wish Luxfer QX X This Goodbye. the call be of Again, recording a does so will and for us, of

Luxfer (LXFR) 26 Feb 252024 Q4 Earnings call transcript