Non-GAAP 4) Pension net gains primarily due to the final settlement associated with the termination of a pension plan and are included in Other income (expense). Measures April 27, 2023 LINCOLN ELECTRIC HOLDINGS, INC. Q1 2023 Earnings Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events ...

Financial Performance and Targets - Lincoln Electric aims for a high teens to low 20% adjusted EPS CAGR (Compound Annual Growth Rate) from 2020 to 2025[7] - The company targets an average adjusted operating income margin of 16% (+/- 150 bps) as part of its Higher Standard 2025 Strategy[39] - Lincoln Electric targets an average ROIC (Return on Invested Capital) of 18% to 20%, aiming for top quartile performance[7, 39] - The company is targeting 15% average operating working capital as part of the 2025 strategy[7, 43] Growth Strategy and Market Position - Lincoln Electric is the 1 leader in the growing arc welding & cutting industry[7] - The company's automation sales run rate is $850 million, growing at a high single-digit to low double-digit organic sales rate with a low double-digit operating income margin[52] - Approximately 57% of 2022 equipment sales came from new products, reflecting a focus on innovation[43, 74] - Lincoln Electric estimates that 10% to 15% of its revenue serves infrastructure, EV (Electric Vehicle), and renewable energy applications[14, 51] Capital Allocation and Cash Flow - Lincoln Electric targets 100+% cash conversion[7, 43] - The company has a consecutive 27-year dividend increase history with a 13% CAGR (2018-2022)[7] Sustainability and ESG - Lincoln Electric is targeting a 52% reduction in safety incidents by 2025 compared to 2018, with a 25% reduction achieved by 2022[84]

Financial Performance - Net sales for 2022 increased to $3,761,211, a 16.3% increase from $3,234,180 in 2021[109] - Gross profit for 2022 was $1,280,760, representing 34.1% of sales, up from 33.0% in 2021, with a $212,155 increase year-over-year[109] - Operating income rose to $612,336 in 2022, a 32.6% increase compared to $461,669 in 2021[109] - Net income for 2022 was $472,224, a significant increase of 70.7% from $276,580 in 2021[109] - Consolidated net income rose by 70.8% to $472,224 in 2022 compared to $276,466 in 2021[119] - Adjusted EBIT for the consolidated entity increased by 29.7% to $636,951 in 2022 from $491,268 in 2021[119] - Adjusted diluted earnings per share increased to $8.27 in 2022 from $6.22 in 2021[128] Tax and Debt - The effective tax rate for 2022 was 20.3%, up from 14.9% in 2021, primarily due to a change in the mix of earnings[115] - The effective tax rate as reported was 20.3% in 2022, compared to 14.9% in 2021[128] - The total amount of debt outstanding as of December 31, 2022, was $1,203,879, an increase from $769,819 in 2021[142] - The Company’s total weighted average effective interest rate is 3.3%, with a remaining weighted average term of 11.4 years[144] - The Company entered into a term loan of $400,000 on November 29, 2022, maturing on November 29, 2025[147] - As of December 31, 2022, the Company had $45,000 of outstanding borrowings under its revolving credit agreement[145] - The Company had $1,118,336 in long-term debt, including the current portion, as of December 31, 2022[153] - The Company was in compliance with all debt covenants as of December 31, 2022[145] Segment Performance - The Americas Welding segment reported net sales of $2,288,934, a 25.5% increase from the previous year, driven by higher demand and product pricing[116] - International Welding segment net sales were $954,281, reflecting a slight increase of 0.6% despite unfavorable foreign exchange impacts[116] - Americas Welding net sales increased by 25.5% to $2,288,934 in 2022 from $1,824,481 in 2021[119] Cash Flow and Investments - Cash provided by operating activities increased by $18,323 to $383,386 in 2022 from $365,063 in 2021[135] - Cash used by investing activities rose significantly by $299,335 to $(504,691) in 2022 from $(205,356) in 2021, primarily due to acquisitions[135] - The company anticipates capital expenditures of $80,000 to $100,000 in 2023 to enhance capacity and operational effectiveness[137] Working Capital and Dividends - Average operating working capital to net sales increased to 20.9% in 2022 from 16.3% in 2021[139] - The company paid cash dividends of $130,724 in 2022, reflecting a 14.3% increase in the dividend payout rate[136] Investments and Expenses - The Company continues to invest in research and development to maintain its market-leading position in arc welding products[97] - The total stock-based compensation expense recognized in 2022 was $25,276, compared to $23,787 in 2021[158] - The Company's defined benefit plan expense was $(2,280) million in 2022, a significant decrease from $124,929 million in 2021, while defined contribution plan expense increased to $29,569 million in 2022 from $26,281 million in 2021[177] - The Company expects total 2023 expense related to retirement plans to increase by approximately $500 million to $1,500 million, excluding settlement charges[177] Financial Risk Management - The Company manages financial market risks, including currency exchange rates, commodity prices, and interest rates, using derivative financial instruments[194] - The gross notional dollar amount of foreign exchange contracts at December 31, 2022, was $66,296 million, with a hypothetical 10% change in the U.S. dollar potentially affecting accumulated other comprehensive income (loss) by $284 million[197] - The notional amount of commodity hedging contracts was 875,000 pounds at December 31, 2022, with a hypothetical 10% price change resulting in a value change of $319 million[200] - The gross notional dollar value of interest rate forward starting swap agreements was $100,000 million at December 31, 2022, with a hypothetical 100 basis point increase in effective interest rates potentially changing accumulated other comprehensive income (loss) by $7,584 million[201] Other Financial Metrics - The adjusted return on invested capital (ROIC) for 2022 was 22.7%, down from 23.9% in 2021[151] - The Company’s invested capital as of December 31, 2022, was $2,237,920, up from $1,633,728 in 2021[151] - The accumulated other comprehensive loss, excluding tax effects, decreased to $3,759 million as of December 31, 2022, down from $16,173 million as of December 31, 2021[178] - The excess of current cost over LIFO cost was $133,909 million at December 31, 2022, compared to $114,176 million at December 31, 2021[180] Revenue Recognition - The Company recognizes revenue primarily when control of the product is transferred to the customer, with less than 10% of net sales recognized over time[191]

Lincoln Electric Holdings, Inc. (NASDAQ:LECO) Q4 2022 Earnings Conference Call February 21, 2023 10:00 AM ET Company Participants Amanda Butler - Vice President of Investor Relations and Communications Chris Mapes - Chairman, President and Chief Executive Officer Steve Hedland - Chief Operating Officer Gabe Bruno - Chief Financial Officer Conference Call Participants Saree Boroditsky - Jefferies Bryan Blair - Oppenheimer Mig Dobre - Baird Adam Farley - Stifel Dillon Cumming - Morgan Stanley Steve Barger - K ...

Financial Performance Highlights - Full Year 2022 adjusted Return on Invested Capital (ROIC) was 22.7%[9] - Record 2022 adjusted Earnings Per Share (EPS) increased by 33% compared to the prior year[9] - Record 2022 sales increased by 16% compared to the prior year, with organic sales up by 20%[16] - Returned $312 million to shareholders through dividends and share repurchases[16] - Q4 organic sales increased 14%[10] Q4 2022 Income Statement Analysis - Net sales increased by 10.3% year-over-year, reaching $930.9 million[17] - Adjusted operating income increased by 20.2% year-over-year, reaching $146.8 million[17] - Net income increased by 46.6% year-over-year, reaching $109.1 million[17] - Adjusted diluted EPS increased by 20.5% year-over-year, reaching $1.94[17] Segment Performance in Q4 2022 - Americas Welding segment net sales increased by 19.4% year-over-year, reaching $573.6 million[19] - International Welding segment net sales decreased by 1.0% year-over-year, reaching $243.1 million[21] - The Harris Products Group net sales decreased by 3.6% year-over-year, reaching $114.2 million[25] Cash Flow and Capital Allocation - Cash flow from operations increased by 5% compared to the prior year[9] - Capital expenditure was $820 million[40] - Return to shareholders totaled $57 million in Q4[40] - The company has total debt of $1.2 billion and net debt of $1.0 billion[44]

October 27, 2022 Lincoln Electric Holdings, Inc. Overview Virtual Nondeal Roadshow May 3, 2021 Gabe Bruno EVP & Chief Financial Officer LINCOLN ELECTRIC HOLDINGS, INC. Q3 2022 Earnings Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those express ...

Financial Performance - Net sales for the three months ended September 30, 2022, increased by 16.0% to $935,240, compared to $806,454 in the same period of 2021[100] - Gross profit for the three months ended September 30, 2022, was $309,518, reflecting a 15.4% increase from $268,172 in 2021[100] - Operating income for the three months ended September 30, 2022, rose to $142,109, a 23.0% increase from $115,570 in the prior year[100] - Net income for the three months ended September 30, 2022, was $109,225, representing a 243.9% increase compared to $31,757 in 2021[100] - Diluted earnings per share for the three months ended September 30, 2022, increased to $1.87, up 253.4% from $0.53 in the same period last year[100] - For the nine months ended September 30, 2022, net sales increased by 18.4% to $2,830,277, compared to $2,389,929 in 2021[100] - Consolidated net income for Q3 2022 was $109.2 million, a 243.9% increase from $31.8 million in Q3 2021[111] - Adjusted EBIT for the consolidated segment rose by 25.6% to $156.8 million in Q3 2022 from $124.9 million in Q3 2021[111] - The company reported a 79.7% increase in net income for the nine months ended September 30, 2022, totaling $363.1 million compared to $202.0 million in 2021[114] - Adjusted diluted earnings per share for Q3 2022 was $2.04, up from $1.56 in Q3 2021[120] Segment Performance - The Americas Welding segment reported a 26.9% increase in net sales for the three months ended September 30, 2022, reaching $585,628[107] - The International Welding segment experienced a 4.7% decrease in net sales for the three months ended September 30, 2022, totaling $216,497[107] - The Harris Products Group saw a 13.0% increase in net sales for the three months ended September 30, 2022, amounting to $133,115[107] - Americas Welding net sales increased by 26.9% to $585.6 million in Q3 2022 compared to $461.5 million in Q3 2021[111] - International Welding net sales decreased by 4.7% to $216.5 million in Q3 2022 compared to $227.2 million in Q3 2021[111] - The Harris Products Group net sales increased by 13.0% to $133.1 million in Q3 2022 from $117.8 million in Q3 2021[111] - For the nine months ended September 30, 2022, Americas Welding net sales increased by 27.6% to $1.72 billion compared to $1.34 billion in the same period of 2021[114] - Adjusted EBIT for the International Welding segment increased by 25.0% to $97.3 million for the nine months ended September 30, 2022[114] Tax and Expenses - The effective tax rate for the three months ended September 30, 2022, was 20.6%, up from 17.3% in the same period of 2021[100] - The company implemented pricing actions to offset higher input costs, contributing to improved financial performance despite increased employee costs[112] Cash Flow and Investments - Cash provided by operating activities increased by $16,459, reaching $271,584 for the nine months ended September 30, 2022, compared to $255,125 in the same period of 2021[124] - Cash used by investing activities decreased significantly by $122,441, totaling $(72,257) in 2022, compared to $(194,698) in 2021, primarily due to lower acquisition costs[124] - Anticipated capital expenditures for 2022 are projected to be between $70,000 and $80,000, focusing on maintenance and efficiency improvements[126] - Cash and cash equivalents decreased by 26.8%, or $51,651, to $141,307 during the nine months ended September 30, 2022, from $192,958 as of December 31, 2021[126] Return on Investment - Return on invested capital (ROIC) as reported increased to 26.8% for the twelve months ended September 30, 2022, up from 17.5% in 2021[130] - Adjusted return on invested capital rose to 28.7% for the twelve months ended September 30, 2022, compared to 22.8% in 2021[130] Financing and Dividends - The company plans to fund global expansion primarily through operational cash flow, with potential access to capital markets for significant acquisitions[123] - The company paid a cash dividend of $0.56 per share, totaling $32,334, to shareholders as of September 30, 2022[125] - The fair value of long-term debt was approximately $597,972 as of September 30, 2022, compared to $776,655 as of December 31, 2021[133] - The company had $37,000 of outstanding borrowings under its $500,000 revolving credit agreement as of September 30, 2022[134]

Financial Data and Key Metrics Changes - The company reported record sales of $935 million, representing a 21% organic growth driven by a 13% increase in prices and a 9% increase in volumes [5][6] - Adjusted earnings per share increased 31% to $2.04, despite a $0.07 foreign currency headwind [9][17] - The adjusted operating margin reached 16.4%, with a 24% incremental margin [7][16] - Cash flows from operations increased by 19% with a 94% cash conversion rate [9][21] Business Line Data and Key Metrics Changes - The Americas Welding segment's adjusted EBIT increased approximately 41% to $119 million, with an organic sales increase of approximately 27% [17][18] - The International Welding segment's adjusted EBIT decreased approximately 13% to $25 million, impacted by unfavorable foreign exchange translation [19] - The Harris Products Group's adjusted EBIT decreased approximately 10% to $14 million, with organic sales increasing approximately 11% [20] Market Data and Key Metrics Changes - Organic sales growth was achieved across all five end sectors, particularly in automotive transportation and energy investments [10][11] - Demand in heavy industries, general industries, and construction infrastructure maintained low to mid-teens percent growth rates [11][12] - The company noted challenges in Europe and China due to unique headwinds, but remains confident in growth in the Americas and automation [12] Company Strategy and Development Direction - The company is focused on its higher standard 2025 strategic initiatives, emphasizing customer service, innovation, and operational excellence [5][8] - A definitive agreement to acquire Fori Automation was announced, expected to enhance the company's automation portfolio and drive efficiencies [25][26] - The acquisition is projected to increase annual sales run rate to over $850 million, accelerating towards the $1 billion sales goal by 2025 [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of organic sales and incremental margin range for the year, despite caution regarding international markets [23][24] - The company is optimistic about the long-term growth catalysts, including the shortage of skilled welders and government investments in infrastructure [12] - Management highlighted the importance of addressing energy inflation and its potential impact on demand models in Europe [40][41] Other Important Information - The company returned $59 million to shareholders in the quarter through dividends and share repurchases, with a year-to-date total of $255 million [9][22] - The net debt position was reported at $638 million, allowing for a balanced capital allocation strategy [22] Q&A Session Summary Question: Automation trends and revenue targets - Management confirmed that the Fori acquisition was not initially part of the $1 billion revenue target for 2025, but it could potentially exceed that target due to strong growth trends in automation [32][34] Question: DC fast charge initiative - Management expressed excitement about the EV technologies and the potential market opportunity, highlighting their power electronics competencies [36][38] Question: International market stability - Management acknowledged uncertainty in Europe due to energy crises but noted stability in Turkey and India, with investments made in those regions [40][41] Question: Organic growth guidance - Management reiterated organic growth guidance, attributing potential moderation to tougher comparisons and currency impacts [45][46] Question: Fori acquisition details - Management did not disclose specific percentage mixes of welding automation versus material handling but emphasized the complementary nature of the acquisition [68][70]

September 15, 2022 LINCOLN ELECTRIC HOLDINGS, INC. Overview Lincoln Electric Holdings, Inc. Overview Virtual Nondeal Roadshow May 3, 2021 Gabe Bruno EVP & Chief Financial Officer Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or ...

August 10, 2022 LINCOLN ELECTRIC HOLDINGS, INC. Overview Lincoln Electric Holdings, Inc. Overview Virtual Nondeal Roadshow May 3, 2021 Gabe Bruno EVP & Chief Financial Officer Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or imp ...