LECO - Earnings call 3 2023 | Lincoln Electric Holdings, Inc.

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Operator

Greetings, and welcome to the Lincoln Electric's 2023 Third Quarter Financial Results Conference Call . [Operator Instructions] 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

morning, good and you, everyone. Thank website attachment Electric's Welcome on We find the XXXX slide an Call Lincoln Electric's Quarter at Financial Officer; Executive Officer. our section. And Chief to our as Gabe our Chief financial Investor as as the and joining call Steve the Operating Chief can on lincolnelectric.com Lincoln President released you Chris is results and Conference in Officer; and Hedlund, today Mapes, Relations call's Third me earlier well Lincoln's Chairman, Bruno, this to release presentation today, highlights. Chris will begin with quarterly Steve market XXXX cover detail will will discussion provide in well as a of assumption. trends and more performance financial end Gabe our as quarterly

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

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

Christopher Mapes

Good Amanda. everyone. morning, you, Thank

performance. to generate the in strong and continued X. record cash and Slide earnings to Turning maintained quarter performance We sales, profitability, flow third

growth positioned the of to higher and to the continue is and sales returns well market. our our remain is sheet profile. mix decile are We with the in and also in quarter XX.X% fund top balance growth. returns solid drive What unique maintained We shareholder positioned long-term drivers

the million to quarter $X to sales and million. Automation as our sales work accelerated quarter or billion acquisitions the $XX increased by led in This XXXX $XXX growth X% in generated our Automation portfolio sales target. automation Our Fori exceed we approximately automation global

our of volumes in delivered in points segment basis days a Volume comparison points we and performance XX Group slightly and points, more of detail. segments, Steve growth, which Gabe of compressed challenging XXX on at prior organic shipping achieved higher balance Products will The basis our business price. XX comment fewer across our reflected and Harris year

ahead a addition, in performance of In volume Automation's steady schedule strong the fourth delivery was quarter. the quarter, in relatively

generated quarter segments with yielded We adjusted reportable generated that This exceed profit margin. income, gross value superior operating adjusted standard of our respectively. a profit margin with and in XX.X% XX% margin low XXXX targets. a in their to incremental higher XX% the record EBIT operating X margins Two a teens profit high increase EBIT strategy

automation our year-over-year. addition, its portfolio continued margin In to profile advance

We the an also a adjusted per approximate in achieving XX% record $X.XX earnings in our quarter. increase share delivered

our price programs conversion. generation track record continuous in ability demonstrate higher business These management into significant through record system also the This successfully improvements and cycle cash mitigate of the improvement to with performance through effective Lincoln XXX% our initiatives. costs employee cash quarter translated in cost and

Our compounding long-term team remains and through to to value focused strategic deliver on continue executing cycle. our growth initiatives the

on call share performance. quarter more to details third the Hedlund pass the will Steve sales I Now to

Steven Hedlund

and Chris, good you, Thank morning, everyone.

X. Slide to Turning

would driven both to unseasonably automation by point HVAC Harris sales basis resilient fully a due we this X XXX seeing XX quarter reported have Group welding our consumables our sales market relatively organic our in for As quarter basis due the our growth performance equipment to does rate organic had year are with trends had and segments in Normalizing low timing. more driver effect, mid-single-digit end primary of Chris impact was unfavorable welding the fewer shipping growth volume Products XX reflect discussed, growth point basis to point organic reported project days rate. not strong consolidated steady decline. and growth in in to sales the organic the sales which prior sales the which

to the we was remained midstream revenue Welding Middle project From perspective, the Americas, be the growth in in market strong, and heavy an X led greatest energy, Europe activity. Geographically, non-European our International general while to Energy-related the of of industries which end particularly continued globally X Turkey portions demand our up demand saw In end demand and X/X in markets of our industries, the quarter. East. grow approximately strong in segment India, represent continued soft. by

at consumable our as activity, XX% factory demand a representing end of were Looking X barometer markets of of X approximately revenue. our up,

such remained due to and reflected construction Billings benchmarks year and soft infrastructure weak as sales Architectural the as Organic in challenging market conditions Index. prior comparisons

businesses. automotive in growth in strong the the sales Fori's deliveries automation timing organic automotive due in in quarter, down were sector our transportation sales of Excluding to

automotive this quarter, impact third We equipment suppliers to our levels. to see The inventory activity the the in volumes growth did and automotive restore sector automation disruptions sector we solutions. U.S. labor in as have a standard in and on production demand continue consumable globally for maintain the continue to see consumable not in significant solid their OEMs demand and

expect environment. Looking finish the dynamic despite a strong increasingly ahead, we to year

seeing order in rates of Americas given continued Welding We in and many October end markets resilience the spending. our momentum in capital strength are solid

showcased and record for new Cooper trade for show our we our with fact, equipment automation see solution. [ FabTech Cobot ] strong In orders were pleased recent orders solutions at the to new

the sales we the high quarter also We backlog scheduled deliveries levels. continue will Automation's fourth and of maintain to acceleration see an automation in to will compared organic third quarter, that lift performance

growth initiative mid-single-digit ] Velan up launch fourth DC as newest fast And pass new will growth EV national our third testing the quarter in a we the in start our in sales financial and Gabe This our will are quarter. call will milestone us for we a officially detail. charging positions to be [ proudly cover I percent for festival, fourth at which hosting also now organic quarter charger late production Bruno results more to Cleveland headquarters at November. The

Gabriel Bruno

you, Thank Steve.

Slide X. Moving to

consolidated XX Our quarter to The in sales increased X.X% XX.X% volumes. X.X% third point $X.XXX an price acquisitions, billion. a from decline benefit reflected and increase higher basis

approximately X.X% management $XX the was translation on year. or and Gross dollars XX% exchange versus by profit the million increased prior Foreign price/cost year versus favorable acquisitions. prior

benefit We in quarter. also $X.X recognized million the LIFO a

improvements price/cost management, positive gross quarter which the effective basis XXX the profit points now on first slightly third is increased margin Our operational months for of to X XX.X% and year.

costs expense primarily approximately $XX percent and increased Our XX% increased income $XXX compensation approximately XXX to acquisitions. points to basis million incentive SG&A increased XX% of million. to higher XX.X%. a operating as SG&A sales and or Reported employee-related due

of special from to $XX cost and the million adjusted from amortization acquired approximately management income of Diligent Excluding and increased dollar items $XXX charges contributions price XX% of step-up our million. acquisitions rationalization growth. profit operating inventories, drove

margin incremental a Our increased XX% basis generating to points XX.X%, XXX margin. adjusted operating income

Group reflects in International segment. improvements solid Our comparisons and and Products prior year incremental Harris Welding the operational performance easier from margin

Moving to earnings.

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

to diluted XX% share adjusted translation EPS. to exchange earnings Favorable items, $X.XX. $X.XX increased and provided foreign per special benefit Excluding a

reportable Moving on Slide X. segments to our

organic EBIT increased effective the by increased and XX% an quarter, driven sales basis a days XX.X% to XX% cost of key and which increased Organic segment's in Americas approximately impact sales. acquisitions Americas $XXX.X fewer margin to was XXX Their adjusted automation our approximate point increase a the quarter in acquisitions. million. in EBIT X% basis XX third areas management higher points Welding LIFO price from partially costs offset Welding benefit in incurred by from benefit, adjusted segment. on employee sales XX% shipping a

consumables would Americas Excluding low this standard up growth up sales approximately Welding impact, low percent. increased equipment percent double-digit have and with single-digit organic X.X%,

This demand automation factory These slight in were offset reflects by capital in project activity timing. strength a region. decline to partially due and increases the spending industrial in

million. XXX adjusted increased Moving to International on volumes, Their management region. segment's XXX cost Slide XX XX% from price points XX.X% effective by despite points impact improvements in margin basis approximately X. point productivity and increased a less volume X% and EBIT led price. the growth basis Organic adjusted higher day, to of Welding X% EBIT to X sales approximately $XX increased The basis

organic equipment standard and quarter led equipment demand. increased automation in strong by sales Consumable the

Moving to the Harris X. Products Slide Group on

increased price cost approximately a adjusted and Third XX.X% increased and favorable to EBIT higher approximately sales operational mix approximately as the EBIT organic Harris' efficiencies X% management quarter volumes prior as business XXX effective adjusted X.X% price XX% in year million. on points Their comparison. declined basis performance. margin and well reflecting lower XX% to $XX

comparison restocking year We quarter demand prior year end positively the Retail improving on sales channel performance Soft performance several activity. a cautious challenging volume channel reflected inflected and comparisons moderating in prior select through retail year-end. some on with in remain markets.

Harris' higher costs, primarily from silver price copper. performance and metal reflects

commodity year-over-year the a steady basis metal in quarter. current expect on we pricing to Given performance Harris report price trends, relatively fourth

adjusted flows from free Slide flow XX% increased ratio in net to to in record million $XXX on operations conversion to the resulting Moving X. Cash cash cash XXX% a income. quarter

to Our moderated. levels sales working XX.X% average operating improve ratio to continued capital to inventory as

maintained of and Moving approximately to and our dividend invested quarter repurchases return through CapEx of of payout. returned XX.X%. increase the invested rate. announced shareholders the $XX higher capital million in in strength We We Board $XX XX% to Slide XX. cash million dividend XXXX million an on And payout solid $XX recently business, and the a the our generation in confidence given in share

our year to full Turning in assumptions. XX Slide

of Welding. a year driven an we solid of in percent auto fourth in $XX quarter. and the by double-digit Given Americas the from impacted fourth million sales into low expected could growth to sales better change impact labor range to mid-single-digit X a full sales We industry, with labor reflect mid-single-digit the performance, progress. to the fourth increase in the largely months estimate percent the U.S. list $X plants. insight These expect the of percent in disruptions impact sales, organic volume in as at strong rates assumptions increase quarter be quarter current order This million organic negotiations auto in estimate interim

and in high the a teens We a margin basis on assumptions incremental range percent year-over-year consolidated basis. are expect outperforming on operationally

on incrementals to the XX% business. expect mix Excluding XX% acquisition, and to high the generate in we execution improved low Fori

expect both in The cash be with track this We targets. us gives cash at lower year, record rate tax at greater achieving year-to-date our in our XXX% to aligns confidence conversion long-term of and interest XXX% strategic end expense than and which ranges. outperformance the conversion

for to the would And questions. over now I like call turn

Operator

will Oppenheimer. first with Bryan Instructions] question from [Operator Our come Blair line of the

Bryan Blair

the of appreciate you. the timing Thank to With QX that color start million understandable UAW the top in on quarter. strike. negligible of $X million given solid just $XX being line Very all QX headwind. impact is the

to Just consumables. that's clarify on I assume all that.

And So try wouldn't if expect the [indiscernible] so side. factored of much terms we we on in impact, of exactly in, is what the any, can timing an whatever of resolution calibrate to . equipment

Gabriel Bruno

Brian. Yes,

to what labor we've activities talked type the that's we and consumables. short-cycle in would as primarily So by disruption, impacted past, the expect be

the and by consumables, we've as full and we So hopefully, of but type to just monitor what resolution driven quarter quarter that's seen, a view. progresses that's

Bryan Blair

and you that that just to backlog plus, that I reasonable contribution Okay. appreciate run general. into off your $X will million That XXXX? a rate for giving helpful. in in $XXX in quarter. automation, jumping now target That's place billion overall of you have visibility. figure the XXXX up QX. And hit Is Appreciate and said the believe And going that. Based us you're on I just expect step that it in you aside for to point, very

Christopher Mapes

milestone business. excited certainly be would the obviously, on achieve strategy we're that that we to and the certainly, like the we've about able we Well, execution see, that look trending had that would for

de But the context I think what been of have like through individuals the is over there mean minimis several the most the you the like solid. our those within that think things Brian, is backlog that many one the a said to little is business, or eliminated backlogs we when we very that that quarters, business of bit provide have we, in have business. chain maybe I'd challenges. by think about And normalized. very really on I more last they're And look, supply that, working

backlog backlogs in that company, the seeing level level about more we're really coming we're running really And few a that XX%, backlog within a the we of the that quarters organic think QX. mid-single-digit driving talking that those normalized XX% really of the we in about experienced We ago. peak significant, at normalized as company have and that backlog As is is is mechanism backlog a now. level that's not

kind normalized backlog have North other after a that in backlog but like for position. FabTech technologies America. here had of launched show it's But portfolio. the to out as well pretty in in we backlog right today, the very very record at I our about did way our it when position, the cobot business. So think nice we look orders relates orders several our we We marketplace FabTech a strong We product as as across normalized it's the

Gabriel Bruno

is single we've So that to mid- assumption our to $XXX as talked, currently just million in in add, Into long-term run automation, so organic high [indiscernible] our rate digits.

of revenue. much $X very billion in XXXX we're our to So on target pace

Operator

Jefferies. Our next of will line with Boroditsky come from question the Saree

Saree Boroditsky

Are seeing couple times environment the know uncertainty macro we've impact spending capital announcements on any in from spending and remarks. you seen few rates companies investments. interest the strong auto pushing referenced plans? out you a a I So higher from of

from are about how you So the just what you And customers? do cycle hearing forward? think going investment

Steven Hedlund

Yes, Saree, ease interest in customers we of of that helps of in use concerns equipment both labor the see of our Steve. offers that have have. lot marketplace productivity, terms this as is solutions as higher in the that well a a greater address lot automation We welding the that

So continuing order lot for a request and we're intake. of good see lot of we're quotation, a seeing to strong

seen capital of of impact So we business. rates on a side haven't significant higher the interest equipment our very

Saree Boroditsky

Americas maybe on coming the adjusting volume, that days. not for And down step although sequentially, framework, to shipping much guess, as I fewer then

the see Where demand quarter and more October? surprised positive? through bit of and talk you a provide to on did what soften can through cadence Just saw demand the the little anything color in you you

Gabriel Bruno

And orders as quarter talked, did as strong about activity moderation year-over-year. reported we've quarter we consumable to then we flat and We September, second end we then in our the see the essentially to had some as July. Saree, in talked results. into in markets

is And saw quarter so I discussing on what what we balance, we've third markets. the been think the in in

we the down parts organic third that to assumption. order strength in beginning quarter us Now quarter as And fourth, into seen quarter. third up into the this activity of that's now the again now wind mid-single-digit we've confidence and what wrap gives fourth maintaining the in

fourth it's and progression pointed Americas we've component we've be automation have also for So quarter, projects to the the quarter but a the about positioned to that larger talked going of cycle. in this fourth

in coming in so we projects And we and see of automation, have a progression revenue recognition strong quarter. this backlog to and fourth the

for what So fourth growth. mid-single-digit and Americas fourth that's quarter, overall into gives assumptions in volumes strength the the in side particularly us the the in the of quarter. confidence

Operator

Stifel. Our next of with question come from line will Nathan the Jones

Nathan Jones

off Good on morning, everyone. I'll the I start side the charger guess EV of business.

detail the giving at to expected previously being revenue $XXX further can to little Maybe on have talked us signed deliver give in few pretty to able I've on guys a along, been any cautious now deliver and XXXX. for from of that in You us about what on that incremental color million deliver revenue but XXXX? Any contract capacity year for you net. you first you've a that you're what we're looking business adding bit

Steven Hedlund

Sure, Nate. This Steve. is

permitting or that on control consistently, lot grid substation pacing transformers We outside and terms the factors outside of of in control and that right, have mentioned business customers' our our and relies a the hookups of like. of

very all don't how because to for a we unfold. revenue business know exactly not been we've that So that forecast will provide cautious just

rollout really slow to charging there really infrastructure of the the starting yet. support seen because vehicles their not You've some of news is are it the the OEMs to that

positive as sense the put of charging in out we call that see what in currently continued pressure So we're And for the building will it a alpha the production. infrastructure. stage would we

been out so We're launch the and instructions have that reliable details production, the we'll the to building teams product using sell The the and LP prospective and check for product is from that deploy on the feedback when we've do getting people units first market. first that the and go for off work engineering through in customers for to assemble test us all very the to to encouraging, testing the samples all tie out send robust, very to waiting come high-quality, we volume units they're to line, a to design themselves. the product all

in we're the but market. given still it, cautiously optimistic So the very uncertainties optimistic about we're

Christopher Mapes

Yes.

gave an update I I think on and at the we're just think Steve one with comment, business. exceptional where other

across capital always extensive Gabe in in the important XXXX our to our impact reinvestment one think to that about things in and the application the facilities well manufacturing I reiterate really when to both capabilities continuing the and want across automation of us that mitigate the I just we're business for talked other and equipment we're the platform that we portion can our inside of so to of meet the well that. as inflationary accelerate as things capital line some do piece world. only drive is EV that XX% deploying rest within productivity seeing that own our It's invest as the need line. is of as the productivity actually we're the able around we looking the charger demands we have, of The capital. our company for probably consumable be a to maybe small in doing that of

Nathan Jones

XXXX think a burning Can year as XXXX volume that the chains the whether and saying about the I in was XXXX? the magnitude should normalized. obviously most headwind supply follow-up question backlog and in in you've of have to A backlog around of companies talk this backlog brought backlog you as wanted to burn ask down we that off

Gabriel Bruno

automation The stable see see particularly we pockets, we supply some great Still continue our to a a our I be are progression would more equipment backlogs that that welding and is normalize. structured normalized. standard question. largely to within that's I our and business. but business, at out where I chain challenge progression the Nathan, core as look build inherently say, business growing offering

what So going kind business to type then normalization on about XXXX, the active for it's and to be going side see the welding backlog. order ship of in of core to largely automation orders, we

Nathan Jones

have not off XXXX. do in backlog burn headwind you from So a a

Just think trying to how about that up should we frame 'XX.

Christopher Mapes

as have of do really see as many of backlog as backlog out are There the a this issue. and see see end business that We a talk backlog question, we and backlog about not great think see are have the business around through our the within we think or a I the to not and to should it's companies particular you're We the the headwind day. volume we'll headwind XXXX that the eventually right. having XXXX. XXXX. and for the normalizing, the that at Look, I do utilization QX Yes. there a expectations But the when tailwind discussions about to when impacting not this

Operator

the W. Robert will with Baird. question come next line Our Dobre of Mig from

Mircea Dobre

apologize in that a about October, some $XX auto, a million kind we're September. guess you're reacceleration million was stuff which because It a yet from to demand it on sounds be of channel is the there's up demand. would I I'm checks, of fourth we here messaging the quarter been slowed that summer, have guess of that then through saying in consistent what in good $X I our little turned with but the in is own hit the negative. obviously talking I bit confused terms in like to

parse of that's where out. timing what's So reacceleration, of automation a just that? seeing your reacceleration out this these backlog? this booking And is of sort for the I'm mean, is And things exactly ship trying again, exactly of is coming function driving Or to you're this I sort materializing? if business?

Gabriel Bruno

Yes.

shipping welding Mig, steady when the business you normalize So core relatively think about being days. for

business third and in last quarter. the fourth and planned wrap into the is mix over that activity good project of that's a talked pacing the that completion we about in of automation quarter up quarters steady and the And So couple we and quarter. execution have for fourth as broadly

on in know the third than that in business of quarter. automation we what side So seen the organic automation the you've step have up we a

of So we projects. quarter flattish the third all were for That's timing automation. essentially in

sales business. the of we'll saw acquisitions You mix of the by driven see our by automation driven being strengthening automation a component organic in

Mircea Dobre

And that deliveries, to understand we're trying part order talking The right? is I orders part. about accelerating. guess about I'm figure commentary, I the that Because out talking not we're

do we that the So weaker. comment auto, how on with that's square obviously

Gabriel Bruno

saw strengthen bit about little a being little up level choppiness, strength softening the in in the welding business little But activity core August, a in back you October. September, July, think a in

core that about the driven mid-single So the labor digits. the organic into that by balanced range, as million in the that you've we're to that And think about all in welding $X that's then is disruption million built fourth overall. an in talking what component got $XX assumption as in quarter

in the considered for sales quarter. how year fourth addressed we've So the that we've the assumption and

Steven Hedlund

I would in demand for Steve. in add that good segment, segment General and Mig, we're seeing consumables Energy equipment Heavy the standard Industry even segment, Industry still very Automotive, this is just be for equipment still their to operations. invest consumables even in a standard our customers drive fourth to the quarter, though there's we're productivity seeing headwind of automotive in volume going for

holds that's the disruption in So rest then good and impact you the the you continued that at performance where and together when the we of of look are. the labor offsetting mix business, of

Mircea Dobre

question. last my Then Okay.

just we that getting interest think considered the was asked of rate about orders, is FabTech. are seem back earlier, of in you strong? slowdown receiving sizable sense think by and the It Or as great related maybe as this, what cobot being related or about customers? XXXX. any the specifically whether to you a talked are still show these business projects have going attention. are you did it's And question to business sort way automation question there's an you whole automation can your to the a the since get about cobots on this You your impact product lot to My mentioned

Christopher Mapes

solutions Lincoln cobots, I with as the with relates profile start let's a to significant probably of share great to these by that is assist Mike, times that Electric with The acknowledgment it question. not which bigger Yes, automation the is customer impact to manufacturing have leader going the we're Lincoln Electric, solutions, are us and impact. financial is going our the which you many will Electric the projects cobots Lincoln And a inside force. a to entry-level

acknowledgment So it's our with seen interest excites any activity piece. leadership what position automation in the change this solution. us That's level on the then And not I of me you, about we've the cobot tell of in will side. the

activity and that Our it's not I has very stayed complicated. think strong,

in end we're rate. of increase inflation But the of the continuing we're it X% the also that near capital. rate. XX-year a the cost At We're now that the you're see seeing side we see an to X% and day, where a near the seeing lot at of on inflation labor

scarcity the see labor automation need frankly, so for thoughts drive diminished. foreseeable the economics I cost our the has we'll And of of either as on around to not a been the continue with sharing you and business. quite automation future that And trend we've or to of because believe labor

times the have business, way it not you the orders to large business. to date, some of of may it at of choppiness have because that does the move through size So now business the because the

continue grow, organically to through our well ability to brings and invest think And we willingness achieve really love to standard also have portfolio, for the excitement have it continues in business target. the higher this organization. We to it we're inside XXXX enormous can positioned our not our our acquisitions. on and impact customers an just business, that but as both confidence But this

Steven Hedlund

can Mig, FabTech, advertisement and Steve. product you an The the to know torch welding cobot part is set this and in need to brother a part the in challenging torch is you But dozen everybody have have and has market. to the to welding. a you workpiece the opportunity give getting get their place, a the everybody teams. the by is can't to there arm once out it the you that. the to good simple resist And the at kudo do parameters I for about our dragging

rest. And the big have welding relying allows welds you you're it of the or thin that on you then that's small? app want. or that easier Lincoln these pick really Is automates basically some all of thick with a the still as it to the experts days. labor bringing you the And life these market not And the scarcity it's the software reacting challenges. a can the that of what to labor operator And to is only get their as knowledge the to deal makes labor process. we solutions welding of Is our so and Cooper picture is and factory do in quality

to use that. to to for and reacting it make the simple market's people got you've So

Operator

Steve line will the KeyBanc next Our Capital Barger question come from Markets. of with

will next come from with Our Walter Seaport question of Liptak the Research. line

Walter Liptak

talk about for and question, a go where Congratulations ask Is it a machines? seeing a too, little to on you it we pickup? what wanted the automation the in it Maybe the pickup Is channel with you're consumables? about clarifying seeing quarter. you're ready the What bit to could next I sectors? October. restocking. through Is Americas that for are

Just a clarify little to bit.

Gabriel Bruno

Yes.

we're broadly consumable commented and of the activity about on to just equipment already we've in be automation. seeing So level business. Walt, the standard both think

the into quarter. about the fourth good think pacing Just

Walter Liptak

macro of maybe numbers international, showing then slowing. that, the are some thinking And about enough. Fair Okay.

quarter sales? had the a But good what your are with You especially quarter in and profits. from international this you October seeing

Christopher Mapes

in the significant profiles Lincoln you're catalysts moving than that that Walt. wouldn't great you well. of relative time. we've seeing general And your segments those first are the trending understand And what X quarter, drive challenging demand more you've business, favorably, give profile Probably when demand think industries any energy what our those in very job the fourth doing the and markets to us question. to start thinking you especially then business change will are side have managing certainly we teams we a you the international a large say Because, here turn the the certainly a about followed when see X that confidence Americas about look, I demand industrial in Our of when start talking international the us seeing are we we about long and another comment just U.S. seen and in when pretty our talking through quarter. what we're to have positive in another for give in reason Electric really

Steven Hedlund

Well, this to the what say performing for choppiness some of we see end Chris given saw is that of talked I other exposure international Steve. particular, in weakness quarter, the growing. in in about international, their markets in parts Europe the to would third and we the more expect

Walter Liptak

if Great. maybe I sneak the could Okay. And then one. in last

thinking I for a prices more there's that You where you raise we year? in while? of a still that mentioned get take can a can inflation? if wonder or next for you you're Or break pricing still about you an do what situation inflation. idea for Are

Christopher Mapes

we've we're at here to market. marketplace the really have we effectively what that on provide have throughout Well, cost are require moving see look, we'll us can and we if able price costs I pricing to because into assure Lincoln pressures material look But cycles the multitude to the of go been a Electric. haven't in to that you inflationary input cost that XXXX. manage determinations are as made and any

XXXX. Lincoln be was But results to expectations I in there productivity programs not them and that. this sharing the ability driving larger will understand and that as drive some expecting the I trying And just in continue input that. of costs about headwind our you, business be. across will we're being organization inflation. systems And can little our to about would am will organization focus inflation. to let probably determine we're what be Steve when We mitigate we're be early morning, and what to being to that business were some to to a do to that of a me initiatives talking portfolio concerned We're with assure able we in talk point there and effectively our do QX, those to identifying sort the

Walter Liptak

Okay.

again. Sounds great. Congratulations

Operator

with [Operator Instructions] line Capital from Barger KeyBanc the question come of will Markets. Our Steve next

Amanda Butler

Steve, him we the have may call. to after to talk

we're challenge Sorry having. that about that technical

Operator

of will Our line from the come with Robert UBS. next Jameson question

Unknown Analyst

that start Power in Just Is the of any Fori. acquisition aware well. that due the to business of like to X increase Mig partially is as be seasonality in there on we just with should quarter kind

a of Just that little to wanted bit. kind unpack

Gabriel Bruno

very we Rob, the question that excited I'd business. team done integrating So I Fori. work about that to like say your our in And regarding I'm has think got first, the

we right our business, on that profile are to project-based we the as this opportunities only is schedule in and We of not choppiness with in shape EBIT the and grow appreciate integration the but business. terms term. plan some longer would continue to expect you sales where see contributions, could There

the saw significant of That's projects. third You uptick the all timing in quarter.

where And be. the overall to line And sales very quarter. pacing would a that's that in I in fourth of are different just so And tasting little much the they're where why to assumptions a is at. business we a bit the expect expect there

on strength more side. So the organic

into Fori pacing side, fourth You'll some business the acquisition particular that's on quarter. the to see the

Unknown Analyst

more? I no, it's little And that ex bit kind on way on for that. appreciate us step margin Could incrementals just impact looks the Fori a XQ, like your impact read I helps. you I up. down It incrementals. little And just the guess cadence. of No, also because in then went a it, then

$X.XX the embedded XQ. Yes, for first and [ still we what what's in $X.XX should just business year to Just the target expect other and around ownership. your any for curious, color ] there accretion is Fori on

Gabriel Bruno

Yes.

right So expectations line in are. our to Robert, Fori where is

we know, profile quarter on So third low as you so progressively right fourth The before just at talked track dynamic with to fourth that. from the quarter. the double-digit EBIT normal has were we

saw range You that were the Harris. we at above

on more we So the not in we quarter. continue to to to the general, of would expect to higher give range range. see the of the into strength end any segment the incrementals, that but the And maintain progress over particulars, versus fourth Harris

that So we're we business. saw and in as move confident the in profile up, assumptions, our did you in

Operator

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

Christopher Mapes

well. work of just a doing to with for I to our here has And make of our that going the Gabe. that the our the make exceptionally with Steve as comments exceptionally well. up transition I the to around And and is finish I continued wanted CEO in team turn ingrained couple thank Well, going But the here at front Gabe And that and us. transition and just excited share back Chris. end want leadership I'll out and at investor opportunities my that, year. Electric is the community our I the about listeners Lincoln as at is about already wanted here just work success team of before you. are company. the them. very in confident it the to This our that shared transition I sure final call we're the time close

Gabriel Bruno

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

Lincoln Electric (LECO) 27 Oct 232023 Q3 Earnings call transcript