LECO - Earnings call transcript Q1 2022 | Lincoln Electric Holdings, Inc.

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Operator

Greetings, and welcome to the Lincoln Electric First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode and this call is being recorded. It is my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you.

You may begin.

Amanda Butler

and everyone. [ph], Po you, good morning, Thank Welcome Electric's first conference call. quarter XXXX to Lincoln financial today call's results find our the Lincoln released We earlier lincolnelectric.com at as well on in attachment Electric as website our Relations and an to presentation this section. slide Investor as the release can you Chief Officer. the Gabe Bruno, and on me Chris joining Officer; today is Mapes, Chief Executive Financial Lincoln's And call Chairman, President and our Gabe the our will cover begin detail, with discussion quarter assumptions and year. performance our with will Chris Chris for trends, financial an overview first updated conclude results and business of review finally, call the in to of the a more we'll to pass

prepared happy Following remarks, questions. to we're your our take

certain be from of call and statements made are press XX-Q. Before release may some start Forms a and due discussion on we during in of affect forward-looking our our differ and the materially actual of our that may filings results our may SEC expectations factors. A in number to risks our discussion, risk note provided that and this XX-K uncertainties results please

turn our measures In at measure the release, addition, financial do non-GAAP that conform call most website with U.S. is available to in the again I'll we which over Relations GAAP. the of of reconciliation lincolnelectric.com. comparable Investor measures to GAAP financial in section is A earnings Chris found not Mapes. tables discuss to our that, the Chris? in And

Christopher Mapes

morning Amanda. Good you, everyone. Thank

start million XX% Sales XX% report growth. Turning a return quarter executing sales, XXXX. to first profitability, increased record strong and to $XXX performance, organic led pleased record we're earnings on to by slide three, to

automation accelerated, momentum pricing strength welding solutions. pricing performance continued our and from in recovery expected reinforcing volume demand our actions, for markets we While prior on end segments

a margin mix XX.X% structural to costs, operating volume income a diligent execution offset record delivering our incremental operational adjusted and margin. higher XX% savings addition and improved and of leverage, management inflation, automation, employee In

to standard profit performance high segments ranges. a cash generation. and asset XXXX $XXX to record immaterial. XX% shareholders $XXX million maintained earnings chose invested strategy Additionally, a cease in and million million and But dividends. We safety Adjusted X% repurchases the Russia of than our we achieved employees the value, $X.XX, out has In Russia. their mid this profit increased delivered on impact strong to return strong the our our represents through target capital in $XX flow so on support to All of performance is record been share we during sales our within returned higher share continued end and less operations of in approximately mid-March, paid of focus XX% per time.

ability market. and team's While our I am is to proud of through, dynamic results I execute our in this demand quarter

the first orders global on Ukraine improved Looking and four, volume quarter quarter in X% the the at our forward sales families all product benefited percent. mid-teens chains which positive increased Automation consumable sales main sales, all and achieved equipment rate regions outperformed mid-XX% organic In supply growth. Demand conflict slide through a increased were a quarter, pull organic demand sales segments, by of the geographic with organic as increased start and reportable disrupted. organic following XX% the and growth. at

achieve the year. Our over and quarter on this record million $XXX sales automation achieved a sales in million portfolio in in $XXX is to track

supply markets All supply in construction, positive end backlogs choppiness industries with mix. customer reflecting showing achieved good and growth capital automotive, low the markets quarter constraints. as achieved by tougher in and some they and industries XX% investments. of tight heavy over represent Energy despite demand, end revenue and pursued respectively, heavy momentum customer XX% led comparisons customer given growth organic teen and are above grew all the to infrastructure which Our high grow sentiment conditions fabrication, general our percent in

automotive, investments customers to now heavy pass see the from demand deployed and energy Gabe sequentially market. detail. infrastructure first as and financials energy are accelerated call continue I'll to chain into to the to expect And quarter in We industries, cover constraints resolve and more supply

Gabriel Bruno

you, Thank Chris.

in X% Moving two-thirds Lira consolidated higher increased five, the from impact acquisitions, exchange. increase FX our of slide results dollars and U.S. The sales of change accounting operations, price impact XX% impact to for first Xst the to their business. reported accounting our and X% have will million hyperinflationary use XX% X% in will the quarter. currency. a to unfavorable from accordance accounting in and with April weakening functional volumes, represented not Turkish Turkish to a transition U.S. as approximately will Starting quarter $XXX Turkey our approximately GAAP a from rules, This we foreign approximate benefit significant

automation, and basis material raw increased gross LIFO savings to XXX and XX.X% operational approximate from Our improved higher management, price to freight including margin an $X and offset million points profit volumes, charge. benefits structural execution mix, costs, as

continue warrant. We as of impact will to the actions mitigate inflation conditions to take

$XX to SG&A incentive costs as higher well employee $XX as due Our sales percent as of spending. a discretionary or approximately XXX basis XX%. and XX% million to compensation increased expense decreased SG&A points higher million from

sales. to quarter to on XX.X% Reported $XXX line income increased We in levels. million $X income or included expense dollar quarterly be XX% expect upcoming of first with of approximately Operating charges. million rationalization results XXXX SG&A basis operating

cost a or diligent of versus adjusted items, XX% to from operating volumes, increased prior $XXX $X.X from operating pension increase a and point settlement final the $X.X basis year. primarily the income a benefited XX.X% special XXX Adjusted income savings, quarter, in special million Other the million mix, sales, pricing, was Excluding plan of improved management, margin. generated representing which a million XX% income item gain termination. structural incremental

mix rate approximately our items. and was earnings tax effective quarter due XX% first discrete Our to of

discrete of to and our We to expect be earnings mix effective range, extent low in full the of year continue XX% to XXXX rate items. tax anticipated the subject tax

XX% increased earnings First $X.XX. to per quarter diluted share

share diluted per to adjusted items, earnings $X.XX. increased XX% special Excluding

to percent a that margin systems all led areas EBIT sales approximately the in adjusted XXX We The in of Americas target by XX.X% to automation, to EBIT Now, first Americas price XX% increased on low product growth growth. points growth, segments increased to moving benefit implemented in volume XXXX mitigate pricing volume area. by double-digit us reportable our in approximate EBIT approximately and product allowed which improvements achieved region, slide and in $XXX from our led achieve management to segments X% operational an margin Welding XX%, adjusted million. Welding six. quarter automation. volume inflation, equipment XX% and basis organic from increased

to in Brazil in bolt-on Lincoln will our in sales the were Welding to XXXX. acquisition Company America In we expect pleased the Xst. $XX welcome million to alloys Americas capabilities of Electric annual acquisition addition, March team Kestra contribute approximately specialty and South expands we on $XX Kestra into a as million

to demand Asia-Pacific industrial driven region. the Moving XXX inflation basis seven, initiatives. the and to a EBIT points due favorable record by continued XX segments consumer The activity XX%, primarily nearly actions to slow benefits to management, China, slide EBIT price XX% adjusted margin declined from in International improvement doubled increased Organic the region. impacted Volumes approximately taken operational price in points at million. which basis sales welding by in adjusted offset to broad $XX of mix, increased XX%

Ukrainian fabrication into persist continue in A China. the and which the by COVID and portion European from to approximately trend Automation accelerated sectors. now in this conflict rates growth the Europe second that accelerated the In on general in buying acquisition, regional a some volumes approximately including of also second subsequent quarter in surge industrial automotive activity order volume has and the raw expect anniversaried costs. quarter also the increased segment in material benefited the X% lockdowns as from our quarter. may through start The of We sales strong growth Zeman region, reflect X% following

the Group increased to and acquisition FTP serving the his Harris challenging approximately raw slide XXX points against on progress gas. EBIT eight, strength margin as sales will Products benefited first points EBIT X% rising and organic specialty to acquisition comparison. from approximately on decreased EBIT and market, million the adjusted X% the basis XXX recover higher costs increased applications year On to Harris' XX.X% our a higher the industrial also in segment reflecting improved price which from quarter initiatives. $XX basis, The a volumes prior material sequential X% adjusted sales integration August. XX% we HVAC adjusted margin X% and to a basis in in increase anniversary Moving

support from to million the on remains $XX elevated nine, increased slide in mitigate which the quarter. seasonally capital operations, and we Moving Working higher and to cash constraints. in generated lower chain recovery supply sales levels first flows is

the $XX needs, upgrades, the in investments CapEx growth pursue an quarter to projects continue increase approximately on quarter our we position. production focused and XX, in XX% improve led spending capacity long-term in slide to competitive and by cost investments Moving first with automation million

also record acquisition our contribute our to performance time. Kestra We over XX% ROI which will funded

we dividend we growth in we our will such including allocation continue shares and investments program. the to million quarter opportunistically shareholder capital shares and Additionally, $XXX returns, balance repurchased of as repurchase long-standing as between M&A,

XX% near investment to with like the the Before for Chris maturities of with of cash term this year, our and would balance and our the strength the back liquidity updated sheet balance conversion pass over expected to reiterate call I debt discuss profile to assumptions I no ample year. grade

Christopher Mapes

you, Thank Gabe.

now we're to our slide and to we incremental margin backlogs taken Welding growth better our markets, additional XX, to compares in the in in strong compared rising are organic increase of more Operational inflation. continued portfolio mid-teens savings to to rates range. than the second income percent operating prior assumptions assumption XX% Europe, increasing with double-digit and be our the volume and full and become XX% challenged order range as increases single-digit price This performance high low a reflects us now organic raw percent be environment the incrementally record improvements in and mid mitigate range to while international to Turning our in automation have entering has low year expected in rate. growth The our quarter the momentum range. to to material structural increase Americas mid prompted operating

supply XX. impacts, direct chain our and plans disruptions. conditions which our developing challenges to is challenging value and external under demonstrate monitoring regional are effectively limited, mitigate ability to secondary managing many superior continues while generate team to we're slide exposure and constraints Our are our possible teams highlighted and to for inflation contingency on We're risks,

the from barrier, grow returns We continue of program vehicle first higher to automated to or and activities Many sized capacity, weld drive various labor standard risk cycle. strategy organizational focus This automate are solution executing into prioritize their non-welders component in customers marketplace. XXXX quarter. the work weld electric maintain side-by-side the strategy safety plan technology higher our simple on of small technology service we a and low these our We're A lack and customer-first aluminum offers of over very on our our medium mobile units. feedback patented the critical to as skilled slide hotwire about last automation we've positive ability weld laser the our growing to the one entered the robotic highlighted our fastest view using and growth Cobots within fabricators recently steel to low three battery our systems. entry for addressing and excited In and represented have customers. our areas receiving growth. are product that automation is XX, of in technologies market strong

to ramping early superior offers a of on the are XD unique May for Chevron parts track. small is Plus platforms We at questions. our world. And just industry scale investment This in are and alloy the market EV And We in for when in XXX help Lincoln metal capital alternate improvements versus a a pound solution adoption customers just unique maintenance These innovation headquarters up. I'd build we're solutions brings team nickel the automotive hosting time like a refineries. EV process positive representation an one just over project call turn with finally, This announced XD spare now, market performance. printed kept the better EV our to in seeing printing large wealth our successful solution. the where for to examples of their our a days the the of them on seminar schedule to present

Operator

of will time, ahead. is session. question-and-answer Please and this Your the conducting at line [Operator first we Ladies with Instructions] a Oppenheimer. question gentlemen, Blair be from Bryan go

Bryan Blair

Impressive everyone. start morning, Good year. the to Thanks.

Christopher Mapes

Good morning Bryan. Thanks.

Bryan Blair

divergence a was I in divergence of and the in trends, more you quarter? hoping versus in seeing the provide orders with little meaningful o Welding early how second color or demand could trends trended a first you're on International whether quarter the part Americas through

Gabriel Bruno

progress when we see just you increase April. quarter. price beginning an the throughout did quarter, announce we of Bryan, based, acceleration the think a That's about did broad pretty so

a So, we of activity. forward do believe little on a we have some pull bit

And so think because being maybe second we good the traditional kind quarter about we but less, quarter, continue of into unbalanced, seasonality second good of first to that, see and into progression here. second demand quarter the strength,

pleased we're seeing. what with we're pretty So,

Christopher Mapes

And relates global within today, just Bryan, add, than the in it discussions, the Yes, of our in that saw the of XXXX there is of invasion risk regional inflection because disruptive and were that the some just with that and more in segments. And demand about positive as segments part into COVID the us. that that I in on momentum is the that with risk are the more see think things the one international such migrating moving positive to the energy right we trended momentum regional more I favorably challenges of the through we with the market the we is and there's risks certainly as is European segments as now for XXXX in side, business China. we're even there are momentum actually, the and

see where that's segments I any actually to but think the momentum, are I strong. risk our

strong, backlog Our our up. solutions are is

some of trending we're have as moving We rest into positive the XXXX very

Bryan Blair

highlight be step automation to of in the low EBIT the was speak I growth a in willing the mid-XX you and margin. to color full appreciate automation you to in there. for And year would mentioned quarter additive. revenue, expectations the And obviously double-digit up

the to that achieving So, track perhaps you goal year, that are for at on a least go higher? little could bit

Christopher Mapes

the It great and the the expected XXXX, that moving like, business, the within automation change part start positive XXXX. is was so Cobots were really certainly about initial for operating another business demand improvements that made And saw improvement industries, see we catalyst. the in what see to throughout also there. improvements year of I we're we that of we in the see the also the a automation we business an see acquisitions inside saw as now of for been the Yes, we host But business, that, are QX. inside talking across a example as we've strong those positive our the looking step we that we about that for brought some the our trends into and I a liked of

So, as end automation, strong million at you'd rate. you of where know, being at the at really million a we looked we're look run if and automation we $XXX $XXX the business, run at year the rate now a really And QX, step. entered

can that maybe was with of think work from other I performance good us a this This assist little really strong and business, I about Additive, really an bringing just a way we the and market. us into energy successful bit believe to differently. for areas as project So, that a still start. enormously a Chevron

the drive to solution still additive as and more the I in across industries. proposition it gives this and we value the with as them, think it be continues and put our competence us gives of of And for competent, a product creating granted, of release within days of Lincoln portfolio ago, still Electric that a couple to for just even of but success as a this certainly great in host long-term we're just it technology ability having us out in those Chevron, discussions the technology. confidence solution a adopted very

Bryan Blair

hear. to exciting again. Thank All you

Operator

of go from Baird. is ahead. question the Please with line Your Mig Dobre next

Mig Dobre

also to I ask automation. about morning. want Good

thinking challenges are holding about know supply some also we manufacturers your in that happening should So, and I'm automotive verticals of to if anything that the that more are chain degree are that growth. little of get impacting curious curious, driving I'm are that the a we color back I'm of can about? terms growth, then if the some of kind robot outside either the this chips, specifically And vertical

be the way here? at a faster actually that that, presuming grow So, if is business we to that than position we're wondering I'm currently And chain to sense the are related even wouldn't that Or would in still seeing be we quarters? problem, this getting have what sort improving you past are for supply the struggling the all? of been couple a of

Christopher Mapes

in comments. your for order. the So, take look, questions going reverse to thanks Mig actually a I'm

let's way So, exactly mitigating impact And using getting we components that we using exceptional our materials for engineering is balance of will doing tell an can customers. our finding the with in are that you tell will us we to systems. you to impact. that and start I globally, utilize I or think better. advance sheet our resources job teams that components as the to whether to assist our raw minimize are We're a chain potential in supply our available try products other

exceptional The I morning the Our which while, difficult. first teams chains really managing my for But comments managing realized one around an it's about our of it is for are challenged. still been just job. talking a video mitigating teams supply it. still results but We've and still doing a because an it important that this our world not I'm very We're are there. did I the challenge was very point. that's

as had base minimized and in they And as challenged we have was the that arms As minimized was Cobot some some we couple will would have -- of able supply cells and back I those to it they a robotic to growth? chip to arm for some of question minimize where our marketplace. would that the also relates without our providing we but marketplace, to relative to could minimize we're components growth we you very and challenged the those in it seen those robotic primarily be supply, scenarios of They are have can some piece, that drive And were in of the the that into of tell automation it growth it those chips probably you automation manufacturers in and relates into improvements need imagine, our the our which still half could looking to to or as to we're be XXXX. able of those that. early. be units deliver

So, slightly those we could argue could is to we've is I tell lot your and for solutions think other automotive, will relates that we the in done is, growth automation, I is segments, would which very in of potentially which that in got steel you XXXX, supply that of if what areas. then And looking some question, the in to But are structural as segment it chain of some us. in we steel. had Zeman improved. first accelerated certainly structural a have one smoother had outside very you at have areas we've focused those marketplace, we of And brought a strong acquisition work. the Structural which

and strength to continue in strength general fabrication. strong appliance, see We see we

and strong automotive was the has yes, broad portfolio, the automation a the industry So, in and execution segments. still across those very QX of real host growth but

Mig Dobre

in is been rather way analyst maybe that Ukraine? to have in was your of when well? consumables? what about Is the equipment business. all to second color. this forward, Americas is has Europe there forward as terms all quantify term Appreciate what an And and use demand pull guess demand hears full pulled forward impacting I'm in this than my related ask Then Russia I it that that, and of question, happened any to presuming the Or it.

Christopher Mapes

great I it's you. look, Mig cleaner So, and question, had wish I a a for answer

end the of Yes. at prevalent more it day, was So, the than internationally globally?

and which things some did we Americas products steel us nickel might impacts pricing did the that some it's you actions just brought commodity market, difficult global have raw volume in for to and a other here like material were in by tell you and impacted permeate do finite would I markets Although the have that give across invasion, number. the to of

Electric But important to what sequential about I probably that think is associated just proud good Lincoln So, or talk moderate we for executed and at move, think that, us between and would I'm just very but had think we start decided in fact just that normally it'll QX. it's of with mean exceptional performance. Yes, eliminate quarter irrespective QX. QX we XXXX. because my other quarter of see strong that, have the for the of I would an really to a end be might the benefit I day, comment, the slight that a a critically we

Mig Dobre

I I one final see. If make question.

were we better expecting in were margins Americas. quite international both incremental in what Your and a bit than

not on in an going pricing So, that I the made. the all margins, right impact incremental how think it as that we're quarter the presumably, to pertains my here here, on be question had given But appreciated. specifically, guess in right, seeing the about distortions forward, Turkey, any would we should directionally margins at the really be any, is maybe incremental comment international XX% to help Turkey in -- can you if assumption

Gabriel Bruno

continue on in our our EBIT XXXX, mind margin. So, as performance international to we progress, business throughout the keep increase Mig, we

So, this broad from does execution, base to our And XX% the savings, we're comparing business year. year less we than to come that structural our shape double-digits continue model. just last

year going get temporary see I the at level. as You business, from a we did mean, in a it what acceleration which is sizable step-up our that we continues pretty margins we But international the progress we model saw throughout segment incremental have the on business XXXX. to don't

a as and between FX between Turkey impact about think a go pricing. Turkey, basis the flip forward to relates it As

which X% has the impact on and U.S. Euro. targeted ties our largely pricing to that significant of FX business less represents So Dollar but that's than business,

that resulted you Turkish see when in so And in actions pricing. devaluation that Lira, the seen we on have

impact we becomes anniversary And from currency, see the dollar FX as that of you'll on functional an about moved pricing. FX So, impact U.S. impact on pricing. into two-thirds that

Christopher Mapes

But International comments look for automation we for the as for in Space, the we've, drive and our improvement And the Mig, from by into business and saw business you get year elevated our well, which region. incremental margin the don't it's margins the the really that expectations incremental at Gabe and business, business, once higher positive. space margins a we've if you this had the incremental said,

Mig Dobre

but Gabe, this that Turkey segment that you're outsize not contribution to has margin? Right, clarify, movement saying is on to something an

Gabriel Bruno

Yes, that's right.

Christopher Mapes

That's correct.

Gabriel Bruno

as think impact comments, Just it, not the U.S. we in on a we're -- my dollar functional about going Turkish currency. to significant see a to going results

Mig Dobre

appreciate Okay, it. you. Thank

Gabriel Bruno

-- the in we is Euro Because and movement. consideration again, U.S. managed manage largely business, of the dollar

Mig Dobre

Understood.

Christopher Mapes

Mig. Thanks

Operator

ahead. Your line of next with Dillon Cumming the Stanley. go Morgan question from Please is

Dillon Cumming

performance kind sustainable? you end characterize the high Thanks the quarter Good Great. year, you end obviously, would of last already one kind out, like just I quarters? in so, the might doesn't put incremental feel guess is the those Maybe international, the morning, to targets you way, question, do margin then the make ranges higher have the end you over next you're out few ask level range of of of guys. Americas at question. reevaluate to the XXXX targeted the high different a as And and current of for you but quarter. if pointed

Christopher Mapes

need And with right, say you're at end ranges those the we of that at cycle, we certainly the in those achievable. because Dillon, it's got We won't long-term Well, strategy. that on we when one the Am time. look, quarter, of in longer term the to there discussion performance QX? it's we type period be that believe think levels executed we've being We've revisit a that we them day, until employees positive talk to we And the the are are those I through sign on our about of quarter way about perform able business productivity within on globally to of out that execution it's a executing automation to operating quarter, our and achieve strategy. of execution model we in doing we obviously excited change strategy. we've I think levels our the the I achieved the a probably internationally, share looking can growth and able of initiatives step I Electric for and obviously that that within the in in double-digit and we're growth that Lincoln in strategy, business, growth, sign margins we're restructuring on we're positive what that on the automation where performance our work for, is the model on that the as double-digit the forward in breadth improvement host mean in in a the just And by areas factor QX. our it's or with gotten performed business a operating bring significant in our certainly the

performance in be to that, of show level be able able that QX. highlight lots to to So we'll is elements of positive continue to us watch but it a to for positive

Dillon Cumming

the of upper that of of getting fair Maybe super first, kind question there the – to segments. terms hitting be related able bound price start the guess a and to welding acceptable to it guess, a terms encouraging. belabor customers? And just on in if price in too inflationary hold I in point kind back to not the sustainability to certainly growing any might what's around strong both of in the obviously, Yes points moderate that, that are core on bit you. of sense you Got pressures half? I being a to second like much are it concerns

Christopher Mapes

manage that we'll then start ability if to I look, have moderate, inflationary an business shown effectively. pressures that profile. manage to Well, within And think the obviously Lincoln to has Electric

customers that dynamics the in like Lincoln share but at those Electric, with them We today to the think not have in you that, of going some of like point some don't time business. I that we've that pressures. the I'm at seen are in world inflationary look, the there any we inflationary

We've to think that marketplace, as mitigate customers it believe mitigating, we're drive inflation to way is relates still trying be the to the employee our But and the had the costs. charges processes, at our an seeing we're -- the charges their also got and and frankly, drive them Lincoln And in to. not inflation business. LIFO is this that marketplace point. we're that in that We going it's seeing our seen some recognize it discussion just we in improve around impact market. to quarter, whole has bring when there's productivity productivity take see improve moved of inflation. that. I that as in to a our inflationary that to minimize to We And it you'll in to trying with solutions we're Lincoln quite

forward. So moving inflation starting point that comfortable or cresting within the in we've moderate business. not we'll at this inflation that is as the I'm seen saying just that manage at we're to

Dillon Cumming

Got makes the for Thanks congrats the you. sense. on time and quarter. That

Christopher Mapes

Thanks, Dillon.

Operator

Instructions] Your ahead. go Barger of question next the line is [Operator Please KeyBanc Steve Markets. from with Capital

Steve Barger

morning. Hey, good

Christopher Mapes

Good morning, Steve.

Gabriel Bruno

Steve. Hi,

Steve Barger

The back you think did put from April cadence. be XQ more you forward increase. think double-digit and quarter you in that revenue say can right? price there I'm Or the about some was the you growth from then half? Do XXXX to is And comp was digit just the this reaccelerate trying strong. in It up really XX%, XQ? could pull single

Gabriel Bruno

the you second as about Steve, steady, looking cadence, strong at into going demand we're Yes, think quarter.

that in comments second more seasonality related quarter see so quarter. are Our traditional versus first the otherwise to would you

quarter on the mid-single from to to know, you progression in low of range second probably quarter. we're first So as digits

we activity be that's the quarter, just saw more with to in going we probably as the balance. first ended So that believe we

Steve Barger

Got you.

But you price mid-teens and trends the the relative about talk sales inflationary the price to accelerated, response at look seen the from from in thinking three has I to contribution environment. if the quarters over we've the volume you're growth the obviously, contribution about volume And and how can from decelerate expectation for organic last Okay. contribution the year?

Gabriel Bruno

Steve. Yes,

I'd mid-single So around digits anchor like to on volume that assumptions.

just question. So thinking about

was slightly over X%. -- quarter First over

to for the of So some we see expect volumes. the in year balance acceleration

Steve Barger

Right.

third-party rate call I a XXX% Chris, and Cobots. talking Okay. developers was said Good. working hear from attachments. great major saw there. growth with listening they And you another And really they about to they're OEM, for welding application year-over-year Cobot to

you make OEMs? share partnering going how niche? want are the market sure you're with that you with for is, you for question my Or partnering are So you specific getting to to Cobot

Christopher Mapes

they the we've in key element who out portions of got think leader why And to able to share this be those Well, about welding strong application through moving the when the got such Electric. And end the individuals with challenges, they've it's Cobot the integrator; they've Lincoln day, the going challenges. At is at partnering. more position a of we I that relationships don't customers channel the are got end importantly, be they about we're and have think with it's of because the think welding to there market technology. day, a of

I'll share applications. we're they're that solution. continue to individuals as you partnering with so host that Lincoln talk to to them to want to that and of us Cobot And with turning also have bringing it us we a relates about

utilizing in early for this way So the I in components forward marketplace. market. a and commitments will needed to last that growth year company we we the for you be that saw getting also in meet of lot And prepare with a able we sheet demand to to brought very ourselves as our the to marketplace, balance market share that

solution the accelerated We to of expect love think the rates So at positioned. we're year. within to we the grow business well it rest continue and throughout the

Steve Barger

towards tell $XXX robotic sales? this you for segment us of what that million the bigger That's the you Can versus automation over percentage Cobots for year is expect you the great. oriented

Christopher Mapes

portion It's Steve, of over solutions that well a going base to not Cobots, But with starting that minimum certainly the across growth great we but growth. solution. include seeing at of you have a help multitude it's new this that's small out. some that XXX% a As you in any technology that broader and that's telling it's growth got from anything growth. I of segments driving wouldn't a trouble is it's – that it's you the automation ratio growing a it's still doing rather the This can that, imagine, you're have with are like but it's zero,

Steve Barger

much. Thank Got you. very you

Christopher Mapes

Steve. Thanks, Great.

Operator

your Stifel. Jones Please of question the line last Nathan from And go is with ahead.

Adam Farley

Adam This for Farley is Nathan. on

Christopher Mapes

Adam. Hey,

Adam Farley

to Turning revenue there? exposure the what is China,

Gabriel Bruno

X%, than It's less Adam.

Adam Farley

when improves? to do term? that expect on in guidance with the And short you lockdowns in what's the get Shanghai, in Okay. included maybe it worse going Or with everything

Christopher Mapes

in Yes. seen had been challenges QX. China, all the and in we Look, as challenged, we've those news, has

challenges us them that those to expect material for we impacted but probably us than continue, don't more were to expect any We they be what in QX.

As required Gabe doing market. are some that in X% less to that our shared, of what we protocols than it's revenue, through our manage and of are teams the can

Adam Farley

did impact the COVID to Thank all? at wave in there impact from from the any the And quarter. you. quarter, scheduling employee the in impacted and absenteeism turning that Okay. production impact earlier Omicron Was

Christopher Mapes

manage labor Yes. manufacturers, we've challenges with various other with Look, is markets. had like or to associated base, turnover COVID-related all associated whether challenges that in the

it that, So wasn't of in confident certainly had some the But it probably business. level impact I'm material.

that teams see Electric could. as managed don't best as within quarter. a Lincoln the really Our through impact I that they material in that

Adam Farley

Thanks questions. my for taking

Christopher Mapes

you. Thank

Operator

to concludes back This closing like remarks. session. our for call to question-and-answer turn I the would Gabe Bruno

Gabriel Bruno

the I'd Thank forward for your joining like very strategic much. Lincoln discussing call you the progression look our today We and you, everyone the Thank on interest initiatives in future. thank in to Paul. us of Electric. continued to for

Operator

Ladies joining. call. conference this today's and you for Thank concludes gentlemen,

and safe now may You well. Stay disconnect.

Lincoln Electric (LECO) 28 Apr 222022 Q1 Earnings call transcript