Financial Data and Key Metrics Changes - Sales rose 8% to $687 million, with organic sales increasing 2% year-over-year, reflecting solid sequential improvement in the Americas and continued strength in EMEA and APAC [3][4] - Adjusted EBITDA increased 7% to $133 million, with a slight reduction in adjusted EBITDA margin by about 20 basis points due to the impact of the EWM acquisition [4][11] - Free cash flow conversion exceeded 100% this quarter, driven by strong team performance [13] Business Line Data and Key Metrics Changes - In the Americas, total sales increased with mid-single-digit growth in the U.S., while equipment and automation also grew mid-single digits [7][11] - EMEA and APAC delivered volume growth of 4%, supported by strong execution in high-growth markets and high single-digit growth in equipment and automation [8][12] - The EWM acquisition contributed approximately 2 points of growth and roughly $1 million in adjusted EBITDA within Q3 results [10] Market Data and Key Metrics Changes - The U.S. market showed mid-single-digit growth, while Mexico remained stable and South America performed in line with expectations [7][11] - EMEA sales grew 14% year-over-year to $395 million, driven by growth in Asia, India, and the Middle East [12] Company Strategy and Development Direction - The company is raising its full-year guidance, expecting total sales of $2.71 billion to $2.73 billion, reflecting around 1% organic growth and contributions from the EWM acquisition [14] - The strategy includes a shift towards equipment and gas control, aiming for EBITDA margins of 22% or more by 2028 [16] - The company is committed to integrating AI into its EBX initiatives to enhance productivity and performance [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy and deliver long-term shareholder value, highlighting a robust pipeline of productivity and transformational projects [4][16] - The management noted that the fourth quarter started positively, with expectations for improved core growth compared to Q3 [53] Other Important Information - The company completed four acquisitions this year, including EWM, which enhances its equipment and automation portfolios [16] - The company is focused on reducing net leverage to one to two times and positioning for accelerated M&A activity in 2026 [13] Q&A Session Summary Question: Sequential improvement in Americas and concerns about deferred automation shipments - Management indicated there was some catch-up but emphasized good execution and stability in Mexico, with positive momentum in the U.S. market [22][23] Question: Strategic fit of EWM and year-one deal model - Management highlighted strong gross margins for EWM and the importance of investing in growth initiatives to drive sales [24][25][26] Question: EBITDA margin decline in the Americas - Management expected the decline and attributed it to investments in sales initiatives and tariff impacts, with confidence in margin expansion for 2026 [30][31] Question: Margin improvement expectations for 2026 - Management outlined three factors for margin improvement: pricing adjustments, tariff-based movements, and ongoing restructuring initiatives [36][37] Question: EMEA and APAC segment performance - Management noted strong orders in high-growth markets and significant share gains in Europe, with expectations for continued momentum [40][41] Question: EWM's legacy distribution and integration - Management described the distribution as complementary, with opportunities to leverage EWM's product lines through ESAB's global network [44][45] Question: Fourth quarter performance expectations - Management indicated a positive start to Q4, expecting core growth to improve from Q3 levels [52][53]

Financial Data and Key Metrics Changes - Total sales growth of 2% was achieved, with record adjusted EBITDA margins of 20.4% [8][27] - Adjusted EBITDA reached 20.1%, highlighting the company's resilience despite challenges [29] - Free cash flow generated in the quarter was $46 million, with expectations for improvement in cash flow during the second half of 2025 [31][32] Business Line Data and Key Metrics Changes - EMEA and APAC segments showed strong performance, with total sales rising 11% and EBITDA margins hitting a record 20.6% [30] - Organic sales in The Americas declined due to delays in automation orders and tariff impacts, but strong pricing helped balance this [28][29] - Automation orders were delayed, but the company expects recovery in the second half of the year [41][50] Market Data and Key Metrics Changes - The Middle East delivered double-digit growth, while India grew at high single digits [12] - China and Southeast Asia experienced mid-single-digit growth, supported by increased capital expenditure and ongoing LNG investments [13] - The Americas faced near-term headwinds primarily due to tariffs, particularly impacting local customers in Mexico [14][40] Company Strategy and Development Direction - The company is focused on disciplined cost control, elevating customer experience, and sharpening market differentiation [6] - Recent acquisitions, including Delta P and Active, are expected to accelerate growth and expand the product portfolio [9][22] - The company raised its full-year guidance based on confidence in its equipment portfolio and improving market conditions [9][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the automation business in North America and the overall health of the business [41][36] - The company anticipates continued strong performance in high-growth markets and expects to complete four acquisitions this year [36][37] - Management remains optimistic about the impact of EU stimulus measures and the stability of the European market [92][96] Other Important Information - The company is investing approximately $20 million in strategic growth initiatives, including university research partnerships and AI capabilities [17][81] - The Flame internship program aims to build a robust talent pipeline for the fabrication technology sector [10] Q&A Session Summary Question: Can you provide more color on the tariff impacts? - Management noted that tariffs introduced unexpected volume headwinds, particularly in Mexico, but expects recovery in the second half of the year [40][41] Question: What are the savings targets for 2024? - The company has been increasing savings over the last three years, with a focus on back office automation and productivity improvements [43][44] Question: Can you elaborate on the automation demand in Mexico? - Management indicated that automation orders were delayed but are expected to recover in Q3 and Q4, with a slow recovery in Mexico overall [50][88] Question: What is the outlook for Europe and the impact of stimulus measures? - Management expects stable growth in Europe, with stimulus measures beginning to show positive effects, although not at the anticipated rate [92][96] Question: How significant is the automation component's decline? - The decline in automation sales was noted to be in the high twenties percentage-wise, with expectations for recovery [105] Question: What is the expected growth and margin for the EWM acquisition? - The EWM acquisition is expected to have mid-single-digit growth potential and gross margins above 40% [56][57]

Financial Data and Key Metrics Changes - Total sales growth of 2% was achieved, with record adjusted EBITDA margins of 20.4% [7][26] - Adjusted EBITDA reached 20.1%, highlighting the company's resilience despite challenges [26] - Free cash flow generated in the quarter was $46 million, with expectations for improvement in cash flow during the second half of 2025 [30][31] Business Line Data and Key Metrics Changes - EMEA and APAC segments showed strong performance, with total sales rising 11% and EBITDA margins hitting a record 20.6% [28][29] - Organic sales in The Americas declined due to tariff-related delays, but strong pricing helped balance this [27][28] - Automation orders were delayed, impacting the Americas, but a robust automation funnel gives confidence for recovery in the second half [14][46] Market Data and Key Metrics Changes - The Middle East delivered double-digit growth, while India grew at high single digits [12][13] - China and Southeast Asia experienced mid-single-digit growth, supported by increased capital expenditure [13][62] - Europe remained steady, benefiting from EU stimulus measures, with expectations for stable growth [11][94] Company Strategy and Development Direction - The company is focused on disciplined cost control, enhancing customer experience, and sharpening market differentiation [5][8] - Recent acquisitions, including Delta P and Active, are expected to accelerate growth and expand product offerings [22][24] - The integration of EBX and AI initiatives aims to enhance operational excellence and innovation [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the automation business in North America and the overall health of the business [34][40] - The company raised its full-year guidance based on strong market conditions and successful acquisitions [8][32] - Management remains optimistic about the high growth markets and expects continued momentum in EMEA and APAC [34][94] Other Important Information - The Flame internship program aims to build a robust talent pipeline for the fabrication technology sector [10] - The company is committed to investing approximately $20 million in strategic growth initiatives in 2025 [17][80] Q&A Session Summary Question: Can you provide more details on the tariff impact? - Management noted that tariffs introduced unexpected volume headwinds, particularly in Mexico, but expects recovery in the second half [37][39] Question: What are the underlying order trends in The Americas? - Management indicated that automation orders are expected to recover, while Mexico's market is showing signs of life but will take longer to stabilize [46][48] Question: Can you elaborate on the EWM acquisition? - The EWM acquisition is expected to enhance the heavy industrial portfolio and is projected to have mid-single-digit growth potential with gross margins over 40% [49][52] Question: What is the outlook for Europe and the impact of EU stimulus measures? - Management expects stable growth in Europe, with stimulus measures beginning to show positive effects, although not at the anticipated rate [90][94] Question: How is the company addressing productivity improvements? - The company has increased its savings target and is investing back into the business to support long-term growth initiatives [78][80]