LECO - Earnings call transcript Q4 2024 | Lincoln Electric Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Lincoln Electric 2024 Fourth Quarter Financial Results Conference Call. [Operator Instructions] This call is being recorded. [Operator Instructions] It is my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you. Ma'am, you may begin.

Amanda Butler

good and Janine, you, morning, everyone. Thank Lincoln Conference Call. to Electric's Fourth XXXX Year Full and Quarter Welcome

We financial presentation our release the released can Relations and you our Investor this results earlier call slide section. at in and lincolnelectric.com today, find

Steve the Officer; Chief Bruno, Chief is Gabe Chair Financial and Joining me Officer. today Hedlund, on our call Executive and

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

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

conform the reconciliation non-GAAP is Investor financial which lincolnelectric.com. to of U.S. In available comparable discuss most tables release, our the website addition, found we GAAP. measures in of not financial in to again measure in do measures is GAAP earnings the section our A Relations at that

with Steve Hedlund. call Steve? over that, to the I'll And turn

Steven Hedlund

Thank everyone. you, morning, Good Amanda.

customers job to focused in to across index new recent The strong I a XX% excellent new X. with did am solid report Slide introductions accelerating and trends. vitality one of financial with of pleased demand the sales an metrics full key year serving despite Turning on equipment. innovation product challenging team results staying and largest years, along product

portfolio we commitment better would Harris acquisitions, and line to our each global help a Electric drive and over which in world. brand technology in improvements, channels our margins added build who continue where our These possible in team, We been our Lincoln our Operationally, collaborate our the platforms Products our without achievements notably have expertise in efficiency XXX years improved Group, focus X also extend differentiates ahead. to the customers automation most distribution and will globally and despite not partners of points top basis successfully expands headwinds. engineering application and further underpenetrated

thank So you.

to manufacturing capital We across and $X back in our and deferred markets most sales, regions. end billion reflecting Turning spending achieved highlights. net weakness

achieved portfolio on million $X and sales our to XXXX billion remains the pace hit portfolio target. automation Our sales, $XXX in

million we X.X% diligent decline saving operating with Welding ranges. record in actions, profitability expectations. of the outperformed Despite our Harris targeted initiatives, which organic their income $XX margin sales, approximately XXXX strategy XX.X% standard Products achieved Both our cost adjusted higher a This coupled Group from management and Americas outperformed profit with our strong reflects strategic execution margin. with

in $XXX second cash performance higher the ample dividend We with in and fund to strong Heading achieved repurchases. sheet return share and through returns shareholders shareholders balance navigate $X.XX have earnings to into conversion. generation over ROIC growth million and a liquidity cycle. to and payout continue XXXX, solid investments we we rate as share to highest a and cash flow XX% maintained These our achievements XX% adjusted to strong a and cash increase contributed per performance at

Turning to Slide X.

I interim targets most or strategy Looking our our even to us am and XXXX across at our financial progress positions achieve exceed by standard higher sustainability which pleased performance, goals our to metrics. very

incremental operating Looking XXXX. to a at have we financials, our annually, a XX% within to averaged sales with performance margin and income growth improve XXXX margin from is target. adjusted Profit pacing continues XX.X%

operating of our average We basis average point our are on margin a XX% XXXX prior goal. track margin to cycle. improvement the from is This achieve XXX profit

strategic the This drive will cycle. initiatives execution margin year's reinforces record strong performance in to margin expansion in down how cycle growth our next a continue of

XXXX. closer to to capital to end In of sales continues operating average by as efficiency our advances improve addition, working performance working the capital XX%

shareholders improved committed also margin in a business's approximately strategy, confidence sustainability growth of profile. allocation billion are and have and we $X.X the to cash the Under over returned our capital to $X.X billion higher our have strategy. reinforcing balanced invested standard in We generation

year-end manufacturing trends. Slide dealer to large inventories continued to performance OEMs for organic Fourth their to most levels quarter by X across markets, reflect to activity who driven production sales curtail demand Moving in predominantly channels. continue end softer rightsize

year capital industrial we large and spending impacted declines and by addition, In demand. Pacific challenging saw automation ongoing further and automation across These Asia energy sales the equipment East project in which prior across XXXX. customers, comparisons impacted in were activity deferred Middle

continued HVAC. percent strength decline From remained in retail more and sales more a was in aided the resilient demand as our channel in to double-digit perspective, a OEM grow, direct Americas region. channel resilient, in to low Consumable by compared distribution industrial

short model We upcoming result see serving for the a continued to are in projects automotive beginning which should in longest of cycle encouraged to needed in industry, projects launches. and automation the pickup support the capital investments midyear cycle mid- starting momentum

to we as ahead growth capitalize margin So opportunities XXXX, are ready expansion. we drive to and on look

to XXXX detail. I'll pass in quarter to financial assumptions the call cover results more Gabe fourth And Bruno now and our

Gabriel Bruno

Steve. you, Thank

X. Moving to Slide

sales over volumes. Our fourth X.X% to from X% declined to $X.XXX acquisitions quarter lower Pricing X% was primarily higher, contributed X% and and billion, sales.

at profit in benefit a $XXX $X and $X our impact. had a held LIFO Gross quarter. which from relatively million the X% million, actions savings included a Foreign translation steady million exchange dollars unfavorable benefit

basis points savings gross cost lower offset as profit XX.X% efficiencies actions management XXX to effective volumes. increased margin operational and Our

expense relatively our in lower incentive steady was in costs. and as actions Our acquisitions $XXX million $XX $X from from million at SG&A by savings held higher million SG&A benefits offset

on sales rationalization XX prior $XXX million charge Reported items. to points a SG&A lower sales. declined a income lower in $X $X as basis XX% versus increased operating year sales acquisition-related million and primarily of well to million, from percent as XX.X% as

fourth quarter adjusted adjusted record a items, to X% operating of to $XXX income as XX.X%. basis special income increased XXX increased million points Excluding margin operating our

basis in actions, to contributed a portfolio all prior operational The point management, XX% record from and the XXX lower automation strong a our cost portfolio improvement resulted performance. automation in savings our Disciplined EBIT employee execution execution strong costs year. margin, in

in Interest quarter $XX XX% increased reflecting in completed expense XXXX. to refinancing the million, our net

quarter to was which Our rate of discrete in the items, the prior XX.X% XX.X% compares timing of effective to and due tax mix earnings fourth year.

Excluding our XX.X% XX.X% special items, adjusted year. rate prior tax as with compared was effective the in

year XXXX year was quarter full per full tax range. in XX.X%, $X.XX. Fourth earnings line our Our share adjusted rate was effective with diluted assumption

$X.XX share unfavorable exchange impact in translation. rate tax foreign from we a per items, special achieved a the $X.XX offset by a from $X.XX favorable lower diluted Excluding benefit adjusted record includes quarter, which earnings the partially

X. Moving to Slide

-- million these savings $XX than third until actions savings $XX rate to maintained initially cost in to annualized be improves, million largely due range temporary in are yielded of will as Our savings to million have launched quarter with we now our $XX initial the our better savings as estimated demand million. Americas Welding increasing to compared results higher $XX

run This an $XX million million rate our initial million. from quarterly estimate to increases million $XX to savings $XX to of $XX

savings to the recognize of fully incremental cost quarter. anniversary-ing in fourth expect before $XX XXXX to million in $XX We million

our activity year a foreign capital and versus a X% headwind reportable on volumes Slide acquisitions sales steady exchange Vanier American results. offset forward prior North our translation. Red and price prior from pull X. segments Viking X% challenging well steady from benefit and to the year held and projects FRE in weakness from manufacturing as of Welding contributed X% spending as an as comparison automation Moving to Americas Persistent and lower

points quarter fourth segment's lower and higher-than-expected adjusted XX cost basis Welding Americas X% management, EBIT EBIT adjusted $XXX effective fully to volumes. million. XX.X% temporary savings in strong automation execution to The as margin cost our increased increased offset portfolio

year sales in held amplified volumes. X. comparisons higher XX% Industrial Slide Welding demand and in Adjusted steady. lower strategy declined to within Pacific weakness margin XX% of repositioned Price target challenging lower Asia standard their Europe, from International automation XX.X% of and activity segment EBIT strong EBIT sales, project XXXX. adjusted back by were margin the range. compressed on Turkey approximately Moving portions and XX% prior

Effective initiatives improved actions performance. and margin contributed operational cost management, savings to

sales Harris growth. to volume higher and the XX. increased Slide benefiting Moving Group Fourth quarter XX%, price Products from on

continued and the increase This EBIT Continued a margin XX% from at million growth is to and increased management improvement the $XX an improvements, performance been ongoing in XX%. channel industrial business. and compression which Adjusted of achieved culmination applications. in sector cost offset retail strong the to XXX HVAC have a advancing basis point effective operational

million were capital $XX of conversion income. of operations to our from and a $XXX capital is the cash of ratio as with flows due We higher fourth million to payments for conversion spending ratio Cash XX% full quarter. XX. levels in sales Cash in adjusted incentive net cash flow free quarter uses year for operating we cash lower compensation Slide seasonally in to the invested improved to to working XX.X%. the higher Moving

Moving in share shareholders payout. with and year XX. dividend in the in million $XX quarter million. million bringing to to invested to higher repurchases Slide full CapEx CapEx We quarter, returned the We million $XX $XX of $XXX our

We invested on continue to XX.X%. generate a capital return of solid

we head innovative portfolio our profile and positions improved full into The assumptions. and well as XXXX Slide our to XXXX. have in Turning we the advancements year us XX expanded channel, cost made

earnings growth business, that initiatives to compound optimize demonstrated Our the have through down we long-term continue a can invest cycle. in and

issued year in the pending segments clarity our low including of starting year in the XX conservatively of we Given contemplates points we recent in to positive for ahead This in growth posturing XXX any we International actions how quarter it on price are XXXX. of Americas price the earlier first this and policies, and actions federal sales assessing, early are is impact as basis tariffs. tariff Welding single-digit

expect cautious of unfavorable foreign sales point growth rates, exchange basis acquisitions. We contemplate growth. sales. current exchange impact anticipate basis an from year net approximate outlook our not also XXXX does At to approximately foreign full volume This XXX XXX we points

heavy volume half previously key first through automotive back levels slower performance manufacturing quarter sales soft expectations half the expect and across versus be production lower the activity more industry as OEMs, for automation and discussed. second among We to given regions challenged

This XX% earnings rate percent we challenging being to in and end is volumes market Despite low growth. the decline resilient. conditions, likely modest full Americas single-digit Welding with a most Harris a low to equate margin incremental expect the year with for

management, enterprise million to units We cost continuing local will from and $XX pursue diligent our and continue from benefit an million through operational actions incremental initiatives. our improvements $XX savings level to are business to

the interest $XX expense in to million range. low estimate effective an We mid-XX% rate tax net and at to

operational $XXX We are and budgeting million efficiencies. $XXX to million investments of fund CapEx to growth

conversion not pending full year impact our year Again, net We cash do tariffs. XX-plus are anticipating of at assumptions income. the of adjusted full percent include

and in trade Overall, new any leverage headlines, from are Our impact in prior supply pricing chain to done and actions we agile tariff year we and will have ahead. our we assessing as very periods. team confident impact inflationary issue to is currently navigate ability successfully the the potential our successfully offset margin

Our drive customer-first on continue final will our approach innovation operations optimize agile and of complete as to pipeline value staying XXXX year we growth the focus capitalize strategy. higher on and opportunities standard to superior

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

Operator

question of from first Our Castillo Angel Instructions] Morgan [Operator from line Stanley. the comes

Unknown Analyst

quarters, competitor for in and pertains This I'm can growth believe as I direct Angel. Welding in looks talk Welding reversal your it start, detail XXXX. seems dynamics? business the your you to bit Maybe a seen Stefan which it is in be in trends organic more like competitive a XXXX about actually level, for Diaz. has high to X at a biggest sitting last of your to lagged just

cause you've into insight mix be divergence. and Obviously, in But geographic growth causing basically, be versus seen end business sort any in organic what any would competitive market And that whether underperformance shift of mix and peers? might dynamics helpful. can

Gabriel Bruno

Yes.

just me of key business let the Stefan, some highlight differences model. of in kind So our

about heavy revenues, So and first, in we industries I'd So the we're in largely point that. pushing of right? billion business, in automotive to mix now automation when our invested $X talk automation

X large business. that We're got the our separate other automation to pleased consider you've industry. progression of from in our So competitors dynamic the with

pointed of I points to EBIT basis improvement and XXX overall margins.

we're to continued see in to capital longer-term orders. the pointed softness in strength business we While but our in investment to mid-teens, drivers some down automation some starting was of

mix point that's scope. Americas our business So our I'd the also international to positive. and between of

single digits. We did in we pretty mention the distribution side Americas, well, held down we on were that

progressively kind So the you in models investment our relevant Large of industries difference mix how the of of are that see business mix tied has demand, of in structured. part the are and into that's a OEMs business. and each and heavy automotive

Steven Hedlund

Just difference the is business channel to mix the when echo Gabe's comments we in look significant that U.S. there in at really, a portfolio,

we our concentration competitors business some with OEMs do. of than have a stronger So much of

a the mentioned on call impact what And disparate distribution OEM earlier we we channel. see of the that demand versus

and So where we business. within Middle then the has conditions on relative Europe have places South us looking challenging what that comps other India, impact some international, mix East America that rapidly for in other more market like presents our versus the places, business I growing challenges competitors. at of leading And the an that's think the versus in are of very the

we're we at closely both of a level distributor majority the share. very at believe I do with are user will losing and our engaged that end customers, not and that add an

we're believe if gaining fact, in the at Americas, share. we channel we In look distribution the

Unknown Analyst

organic what does little bit guidance versus but additional by helpful. second I segment? half color dynamics, into half assume quarter know first And you very you would follow-on, there first That's your Great. then for went a as provide a could sales be maybe any helpful.

Gabriel Bruno

Yes, Stefan.

So first the we we to would assumptions the the by that for more of level volumes. that would half detail don't year, in comments, -- I pressure provide on we segment but point shared in that our expect of

declines So the dynamics automotive . of particularly I low heavy progressively start we of the this half the would that and in in experienced, year single-digit industries year. point until we half anniversary to first of some back the to in

Operator

Jefferies. Our Saree next from from comes of the question line Boroditsky

Unknown Analyst

like -- and the outlook, flat automation. thinking about the the kind This you end wanted from by growth. on is kind color to on more Saree. I how touch provide organic of sales your like James consumables, and Can expectation of on for markets the equipment you're contribution

Gabriel Bruno

Yes, James.

just me business. trajectory see high-level let really we of kind how So of our comments give on the

ended point to good Industries the the can we do January, mid-single with consistent digits. we need see to General a down in it trajectory but more saw we -- You before there that PMI positive -- in We was to year turned on anchor see trend.

talked in -- Gen year. general, then half the Industry, probably expect the first to we've low compressed of flattening the mid-single-digit to volumes see we in year the So type in see you be that back and do as of more continue to perspective. half out can

side side the on bit of business more the stability a the On continued of expect automotive and automotive. side, on I then would little the pressure consumables capital investment

somewhat we I Heavy digit down of all year. that's about the driven terms construction. were on quarter, percent quarter. the to we mid-teens would look the progress to point were while fourth broadly, and fourth in what in Industries, would read in so by double down I as going that we to we low ag what's throughout moderate and for

in saw. the that we We expect that continue same to levels

Fourth closely quarter pretty third the actually lined up quarter. to

year continue of then would So industries. the in first heavy and I in type to expect half flattish of outlook pressure the

I positive We're bullish for a in was Infrastructure, low down full choppy lastly, range XX% the of a on And would our business. full QX. be energy year for then to & year. that mid-teens. Construction Energy down into That's was expect part Energy. the prospectively. But

to I mid-single in some year, would market. to that of we again, the would of that So low pressure the look market part down maybe progress expect see part the in digit as I

Unknown Analyst

And it touch wanted helpful. very industrial a great to It's I Great. here. the on what color. is That's guess cautiousness just OEM

the but seeing administration, we're are think many there of cautious like I like optimism kind like still with uncertainties. new

expect to customers hearing the on from insight more what OEM industrial new office? trend provide took do OEM with after business And distribution the you you like admin can channel? you're when So

Steven Hedlund

we significant get wildcard a the as in and would that to highly between to encouraging this chains on at an the potential market America, presents have tariffs impact point Mexico, that's Canada us really turned time. North definitive tariffs integrated fact supply policy U.S., the that and really of as PMI forward we I with move the position point do plan to for trade sign, you in around difficult it. but are early very into the the positive it's in recently a James, U.S. wildcard retaliatory if and is have

organization our to but we to and ball the to a those So mentioned remarks, for very have as out. to how watchword it's this during as is quickly hard to our challenges, prepared crystal respond is going all agility play

Operator

comes Our next of from from question the Dugan Mike line Barrick.

Joseph Grabowski

green get to It's a I to at little confirm shoots seems the get for Jo and on Grabowski to color growth imply year. is more like trends for least seeing it wanted going year, organic the you're if that wanted I would in automation on morning. $X modest -- then this order that just bit billion to this true. automation is just Mike the

seeing just little automation. you're what of on color more So a kind in

Steven Hedlund

as cycle the of particularly of on focused model historically to were that had industry. talking some versus market with EV business, our long starting part which Yes, they versus the is changeovers long were project to of indecisiveness some that about in primarily and the forward our we refreshes are but we for around in to automotive which in cycles sequence, organic we tied think wanted very as the demand we balance electric ice months really business And see hybrid ago, to responding the projects. of move and vehicles X changing what XE, customers projects

us, we We're nature of see encouraging cycle through terms short business. and and the improve mid- make us long-cycle starting year. course the And expect is the customers of portions somewhat in to decisions which those to projects to now the release for the of

Joseph Grabowski

Got it.

us got year, the organic follow-up million $X sales of there how about question, could positions the quarterly $X more I wondered upturn. savings, considering guidance for for us next permanent a my maybe color tell then flat give to cost the little the little a you've it company And and Okay. Great. million demand you if

Gabriel Bruno

Yes.

that permanent these our would are cost actions that business ongoing us Joe, that shape our to structurally to emphasize for opportunities So the model. just develop actions are And I business. take, there we continue

And improvement so those an profile. over the are margin examples have we've that operating yielded in our that done years

cycle, the by our on commented points. operating basis on XXX during we've strategy Steve's current average margins is So increased

consistently value confidence model those model that give out us the So that proposition permanent we've are in continue to to on we'll changes build throughout our that operational cycles. expanded

Steven Hedlund

would footprint being optimization savings of footprint look think of the we our manufacturing to as some better have as Western things the I we Europe the about of continue evolution business from like that permanent Eastern manufacturing. Yes. some to utilize and Europe European

And things the layers in get Those improve business, leaner looking to demand. of rebound and the permanent cost efficient. combined our our some can to organization trying facilities. look as are being those yield impact that savings work that we our to effectively so with ability and at sites in share and the should able more Those of not we market at respond automation across more utilization spans to a

when like the on a those things temporary a control. and that We you we travel things side, going will tightening into through And the cycle, business of projects pause. then we just spending decide some have around go can to that back during and come But take belt process we improves. discretionary costs down the a know demand where we're

Operator

from line Our next the Nathan of Stifel. Jones comes question from

Nathan Jones

knows and have to obviously, customers. question. of Lincoln industry good tariff and before have And going record inflationary start through and through here, been costs what's passing periods track a on going industry happen to from very I'm Lincoln increased the to nobody many the the but

increases, talked the of Lincoln but neutral passed margin did period. top that COVID, being also on only during not with gross and about inflationary it margin it cost gross During the

guess I to tariffs, dollar-to-dollar the in through with during if my pass than are able different caused it it The So see perspective a a be basis, margin pass inflation position you'll is that on bit question COVID,obviously. be little through they were would markets we do it. on by you'll your that

able give neutral margins, could the at you how color on us any think to of you react will terms be just in EPS. neutral So business

Steven Hedlund

cycle. disappointed you Nate, Yes. you going given clarity I some to to managing thought initiatives I'm to look, management When think I margins your going that. We've Nate, preamble, give is business for weren't through our many cost. that business. job there's doing us were would there's price opening grow say, I levers the But and the different productivity thought expand about got as instruct on us. innovation tariffs. There's the margin, we the we're over driving and

got so very to costs track being of business. diligent profitability and price. We in the we we've And the record market. managing to that like on our It's good don't very protect a rely the price of customers to disruptive

tit concerns have that that as situation. degree of piled get to we tariffs into is the tat forward the and on get we tariffs for One we the a look

widgets As widgets. get buy less more expensive, tend to people

So there's it. volume to impact

we're jump lever, the on it's we So when have but to. eager we'll a price to not pull lever

Nathan Jones

concentrated into what's over automation. I that not The talked I is question for years on smart. acquisitions The I'm is good on enough. insight you potential guess M&A. last sheet no balance obviously the And Fair in new upside. acquisitions as shape. pretty few in about have going a to business a And happen.

potentially built You it want that business to where maybe be. out to you

big business? is, still to guess some I moved kind of have So other automation Or focus of for question you acquisitions? is the the strategically a part

Steven Hedlund

entire Yes. would us work has portfolio position business focus we And business would always acquisitions Harris in as truck done standpoint, from to to market which the last the just we Air core I acquisitions. the the we Van improve as saw in that channel, as were a acquired saw like been Group critical expansion we've of Products route the our business you in for clarify a we not to year, Nate, the the past HVAC. to business where be strong support for

ground opportunities last automation. productive to to our of types that we hunting addressable that for for that due It's fragmented of the look to So automation been we us. in the years we've the industry. couple solely it's so continue been grow solutions we us can And investment nature a and for expand the focused of just customers in more continue market on provide to not

you'll So more I think continue we'll to the us. -- of see from same

Gabriel Bruno

and our know are been at what to very and aligned basis sales that we've XXX CAGR drive you long-term Nathan, points. add, objectives much is to XXX to to Just long-term

So posture. we have strategy, maintain a continue acquisition disciplined we'll and very to that

Operator

Our line next of Liptak Walt from comes the Research Seaport question from Partners.

Walter Liptak

Let me try X on the tariffs too.

customers I think everyone's slowed these could building customers trying funnel the Does your But are Do channel how think projects the some going it to into forward? construction of seasonal inventory figure some what impact what like channel too, usually, the saying think, season. and move saying? to out you build XXXX. see the demand? tariffs are is inventory, I guess in are I around going business maybe they've these the look

Steven Hedlund

I'm to is thing I I waiting talked dynamic. Yes. that glued tariff customer is the say announcement challenge for Twitter, which that is doing the next same The policy. for a what leadership Walt, is incredibly us doing, to it's the of would we're

announced gearing up paused we on to ago, days. XX and a and Mexico announced were days we As then they or tariffs immediately, you response know, or -- Trump for to that XX week have Canada were XX%

a it's standpoint. flex from negotiating I muscle it's of is going dynamic administration trying a trade environment what everyone lack to So the and clarity its this to the I bemoaning is around understand policy really think be. is

day, the is agility. again, of word watch the So

a the When president's actually the would that look light. customers we industry, from other the I and on now it's are we things pre-buys we through note of know Obviously, business at dealers' on right we're But like to we see crosshairs. and that's that where prebuys, fairly lot at aluminum trying of can advantage amount lots when didn't trying we look things take best automotive in is to can. our you as manage the inventory steel

XXXX us production demand So nice ahead expect there in policy, absent some a should trade of we automotive from be an that catastrophic standpoint.

Walter Liptak

what savings? find for just the actions. did Great. of the the range over low changed got you more that What And range? And switching in, that now, Okay. you think or you guess, to we've impacts annual where end meeting high end I then that savings do

Gabriel Bruno

as I I mean hold discretionary entering and quarter, model examples mean, and don't on. immediately across in that were the at fourth we Well, to we things and spending the we areas that levers Walt, into have projects looking move our pulling can

So we just And better in had across largely Americas. much than impact a our business, really it we anticipated. but was the

estimates our team. So just the are and across going-forward execution and then Xx increasing increasing those strong estimates almost

higher significantly higher customer and lower going end what temporary level that we see, the whether on. make are the So cost than range it's dependent sure that in in the going to want at or we the we thought end fourth upon we're And focused of other But that's fair of range, which or it's happens quarter. what be to activities. into travel a in how the look we actions engagement

Steven Hedlund

spending tends and we budgeting for a planning quarter, ramp-up our getting some just in to be little following the the would that cost And quarter. discretionary the projections I the like as of ready add around original there went would things part particularly in year, there Walt, like. the more be we're fourth season that through for savings assume travel bit as the

on the communicate the be other rely technologies said able avoid did job direction in to unnecessary we just best to other expenditures vehicles directive the I each and and remarkable a And team doing other. set with to and their responding to

out need given some work. all going And team so environment think going keep bit a think costs the them the hard we're just customers I focus the sequential do thank back on to We're up the did in. to like. and to uncertain to travel an just market and continue job we little a from for visit get incredible cost the participating start to as do basis to We we come and of is the

Operator

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

Steve Barger

X Gabe. First for

high almost organic XX.X%, the end target of decline. an the Going that you back margin for to the operating conversation beat just is revenue on improvement, XXXX X% on and range margin

reasonable like to your a on could is it forward look cycle at what So an of up normal just the couple math run years incremental?

I expansion mean, points what done years? X over couple that or like basis conclusion you've similar of here, it the last seems to X another from be there's hundred of should the

Gabriel Bruno

we've I -- and XX the last as consistent our Yes. Steve, margins just basis XXX and related know, years over points. expanding the to you very cycles been

end of XX%, Yes, of on average the which for we planned with of on So top higher the we're this is range our right cycle. what average the

the would continue our I including we corporate average. to shaping would improve targets the the to So and see develop profile our our to segments, across all of opportunities you model. expect automation that

there's upside. know we So

see we're performing compression on the that end volume. high You with on the

we're about headed. where excited is So business the very

Steve Barger

there normal incremental upside would to So you no would the run? you any there to that where be that internal as is the cycle reason up and your an think you think initiatives to of expect about mid-XX%? have, organic change to is growth-driven kind that Or would

Gabriel Bruno

with expanding us we launch but we'll model to our shape continue strategy, you to Now margins. talk further XXXX more our as business could expect

Steve Barger

to investments automation. had you And can talk long-cycle already thinking Really Great. as hear getting maybe X Or you primarily expand increasing you Is automation inquiries their good in well? medium-sized the customers with uptick Steve. with? in customers about that And from you about customers then projects. that new for to the relationships are

Steven Hedlund

me Yes, little bit. a question Steve, of your let unpack sort

bit They're the cycle about So ones months was projects are less. comments a on driven automotive average, long projects. little little nature cycle those a making that more product tend I bit and really to typically be refresh or the by a of are the the XX around

types all We those do were customers of the with business doing already that projects.

robot growth on new at So high-mix, from customers we low-volume to historically through their that already When manufacturing more and have customers it's parts particularly new product medium very model customer getting and perspective and technology economically now look confidence more there, making the fixed an cost the applicable a setting in again, the release the not because, up to us automation It's serving business, got short-cycle of programming having is and the feasible we've for business, and base customers the plans a strategy more exposure were around high. of investment. customers. of the that more gaining

at if their long use software we're that are part. it through making the And cobots nature and medium-sized much in production and would companies they people job production. shop things so like runs had same And applicable only other things, to more more automation

the strategy, market So grow look through customers for as with it's to and to and expand the the technology innovation. continuing you and forward continuing automation got we've relevant win I think

Operator

Our Loop comes of from the Capital. line from Chris last question Dankert

Christopher Dankert

a guess the I just point of on savings. cost clarification

of correct? Given sense, the how incremental million for kind that given quarter here the half half year makes $XX almost step-up of back just in to $XX in completely million guide mean, it fourth is rolls by I the should actions new through but the roll seems in savings XQ, again, XXXX, -- off first

Gabriel Bruno

built we all that's provided That's well. Chris. the into as incremental. And incremental that margin right, assumptions That's Yes.

Christopher Dankert

Got just XQ here? that then I does it. but how me just on if impact, comp Got impact the forgive missed incentive it. it, And

Gabriel Bruno

when you consistent was fourth $X the the throughout pretty The quarter. million accruals, look with incentive year. Yes. That's for the in at, example, that consistent

So also the comp reset costs, changes incentive objectives. to the note and the our thing -- we'll in employee with

incentives, already the incrementals. an And so but that's built you'll impact into have on lesser of

current objectives compensation. ends budgets know We just our what being on are the that incentive to the set. and up They're how year, for driver are based the

already and model. has part are be incrementals will of built the that that been the So reset, that into

Operator

I Q&A Gabe over the now concludes will back for to closing This remarks. call Bruno session. our turn

Gabriel Bruno

on continued in Thank you much. us very you today for interest joining Lincoln call Electric. and to you. your Thank the thank would . I for all like

Operator

thank to call Thank your for like would the for Electric. Lincoln I you everyone joining continued interest in much. on us very and today

Lincoln Electric (LECO) 13 Feb 252024 Q4 Earnings call transcript