October 30, 2025 LINCOLN ELECTRIC HOLDINGS, INC. Q3 2025 Earnings Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Diligent cost management, mix, and $8M in incremental permanent savings mitigate dynamic operating conditions Steady Adj. operating income margin performance with a 19% incremental margin Record cash generation with 119% cash conversion year-to-date Strong shareholder returns $1.06B Statements made during this presentation which are not historical facts may be considered for ...

Oct 30, 2025 7:30 AM Eastern Daylight Time Lincoln Electric Reports Third Quarter 2025 Results Share Third Quarter 2025 Highlights CLEVELAND--(BUSINESS WIRE)--Lincoln Electric Holdings, Inc. (the "Company†) (Nasdaq: LECO) today reported third quarter 2025 net income of $122.6 million, or diluted earnings per share (EPS) of $2.21, which includes special item after-tax net charges of $14.6 million, or $0.26 EPS. This compares with prior year period net income of $100.8 million, or $1.77 EPS, which included ...

ESAB (NYSE:ESAB) Q3 2025 Earnings Call October 29, 2025 08:00 AM ET Company ParticipantsBryan Blair - Managing DirectorShyam Kambeyanda - CEOTami Zakaria - Executive DirectorKevin Johnson - CFOMircea Dobre - Associate Director of ResearchNeal Burk - Director of Industrials Equity ResearchMark Barbalato - VP of Investor RelationsConference Call ParticipantsNathan Jones - Managing Director and Industrials Equity AnalystOperatorThank you for standing by and welcome to the ESAB Third Quarter 2025 Earnings Confe ...

Core Insights - Illinois Tool Works Inc. (ITW) is set to release its third-quarter 2025 results on October 24, with a consensus estimate for revenues at $4.08 billion, reflecting a 2.9% increase year-over-year, and adjusted earnings expected at $2.69 per share, indicating a 1.5% rise from the previous year [1][2][11] Revenue Segment Analysis - The Food Equipment segment is anticipated to see a revenue increase of 3.7% year-over-year to $701.9 million, driven by growth in institutional, restaurant, and food retail markets in North America, along with strong demand in Europe [3] - The Welding segment is expected to grow by 4.3% year-over-year to $481.8 million, supported by higher demand in the Asia Pacific and Middle East markets [4] - The Specialty Products segment is projected to increase by 2.8% year-over-year to $450.3 million, fueled by strong performance in ground support equipment, consumer packaging, and specialty films [5] - The Automotive OEM segment is forecasted to grow by 4.4% year-over-year to $805.8 million, benefiting from increased auto build rates and strength in the electric vehicle market in China [6] - The Polymers & Fluids segment is expected to see a modest revenue increase of 1% year-over-year to $452.4 million, despite challenges from lower demand in North America and Europe [7] - The Test & Measurement and Electronics segment is projected to grow by 2.3% year-over-year to $712.9 million, aided by demand in the semiconductor market [8] - The Construction Products segment is anticipated to decline by 0.5% year-over-year to $476.5 million due to lower demand in commercial and residential markets [9] Margin and Profitability Insights - ITW's gross margin is expected to increase by 40 basis points to 44.2% in the second quarter, supported by effective cost management and enterprise initiatives [9] - The company's significant international operations may face foreign currency headwinds, potentially impacting profitability [10] Earnings Prediction - ITW has an Earnings ESP of +0.35%, with the most accurate estimate at $2.70 per share, suggesting a likelihood of an earnings beat [12][13]

Core Viewpoint - Lincoln Electric is a global leader in welding, demonstrating strong margin performance in a dynamic environment, with expectations for long-term earnings growth driven by automation and capital deployment strategies [2]. Group 1 - Lincoln Electric has recently reported a strong margin performance quarter [2]. - The company is positioned to compound earnings over the long term due to its strong position in automation [2]. - Capital deployment strategies are expected to further enhance the company's financial performance [2].

Summary of Lincoln Electric (LECO) 2025 Conference Call Company Overview - **Company**: Lincoln Electric (LECO) - **Industry**: Welding and Automation - **Event**: 2025 Conference Call held on September 4, 2025 Key Points Current Market Environment - Customers are still deferring capital spending, maintaining a wait-and-see approach due to uncertainty in the market [4][5] - Resilience observed in North American markets and consumables business, indicating stability despite deferrals in automation and standard equipment orders [6][7] - The impact of Section 232 tariffs is being quantified, with a focus on maintaining a price-cost neutral posture [8][10] Business Performance - Heavy industries are operating below mid-cycle levels, with a volume decline of mid-teens compared to 2019, with expectations for growth not anticipated until 2026 [11][12] - Energy sector shows strong domestic and international activity, particularly in oil and gas, with good momentum expected to continue [14][15] - Consumables, which represent 52% of the business, are a key indicator of production levels and customer demand [19] Automation and Growth Strategy - Automation sales have increased significantly, from $400 million in 2020 to nearly $1 billion, with a focus on both organic and inorganic growth strategies [29][30] - The company is exploring acquisitions to diversify its automation business geographically and by end market [31][32] - High quoting activity is noted, but translating quotes into orders remains a challenge [35][36] Margin Performance - Margin performance has exceeded expectations, with automation margins more than doubling since 2020 [38][40] - The company is focused on both temporary and structural cost management strategies to maintain margins [39][56] - Harris segment has outperformed expectations, with EBIT margins improving significantly [50][52] Capital Deployment and Financial Strategy - The company emphasizes growth through internal investments and acquisitions, with a disciplined approach to capital allocation [61][62] - Share repurchases are being executed at the largest dollar amount since 2015, with a focus on maintaining a balance between growth investments and shareholder returns [63][64] - The target leverage ratio is set at 1.75 times EBITDA, with flexibility to increase for strategic acquisitions [66] Future Outlook - The company is optimistic about long-term growth trajectories in capital and production, with a focus on innovation and technology [70] - Key metrics for 2026 and beyond include top-line growth, operating margins, cash generation, and return on invested capital (ROIC) [67][68] Additional Insights - The company is exploring the use of AI for operational efficiency, although it is still in early stages [44][45] - The management's posture is to navigate through cycles while positioning for growth, indicating a strong foundation for future expansion [70] This summary encapsulates the key insights and strategic directions discussed during the Lincoln Electric conference call, highlighting the company's resilience, growth strategies, and focus on maintaining strong margins in a dynamic market environment.

Group 1 - Lincoln Electric Holdings (LECO) is recognized as a cash-generative industrial leader specializing in welding consumables, equipment, and automation [1] - Since November 2024, LECO's stock has increased by 12%, and including all dividends paid, the total return is 13%, outperforming the S&P 500 index [1] - The company focuses on fundamental value drivers of business economics to identify high probability long-term investment opportunities [1] Group 2 - The company has a beneficial long position in its own shares, indicating confidence in its stock performance [2] - The article reflects the author's personal opinions and is not influenced by any compensation from external sources [2]

Financial Data and Key Metrics Changes - The company reported a 7% sales growth driven by price management, M&A strategy, and improved volume performance [5][6] - Adjusted earnings per share increased by 11% to $2.60, with year-to-date cash flow generation exceeding 100% cash conversion of free cash flow [6][14] - Gross profit margin held steady at 37.3%, with a slight decline of 30 basis points year-over-year [14] Business Line Data and Key Metrics Changes - Americas Welding sales increased approximately 7%, driven by a 6.5% price increase and a 5% contribution from the Vanair acquisition [17] - International Welding segment sales declined by 2.5%, with a 4% favorable foreign exchange translation offset by a 7% drop in volumes [19] - Harris Products Group saw a 19% increase in sales, with 11% higher volumes primarily from the HVAC sector [20] Market Data and Key Metrics Changes - Three out of five end markets experienced growth, largely driven by price increases, with volume growth in general industries and energy sectors [10][11] - Heavy industries faced challenges but showed incremental improvement, while agricultural machinery OEMs are expected to recover in 2026 [11] - Construction infrastructure remained choppy, but organic sales were steady in the first half of the year [11] Company Strategy and Development Direction - The company is focused on maintaining a neutral price-cost position while managing inflationary pressures and supply chain complexities [5][12] - The acquisition of Alloy Steel is expected to enhance margins and earnings immediately upon closing [8][24] - The company aims to achieve approximately $60 million in savings from a six-quarter program, with a focus on permanent structural savings [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in July order trends, indicating strength in general industries and cautiousness in heavy industries [28] - The company anticipates low single-digit organic sales growth for the full year, with acquisitions contributing approximately 270 basis points to sales growth [24] - Management remains cautious about demand trends in the near term but optimistic about future growth as trade policies stabilize [40][41] Other Important Information - The company maintained a solid adjusted return on invested capital of 21.7% and returned $169 million to shareholders through dividends and share repurchases [22][23] - The company expects to see a steady operating income margin for the full year, with a high teens percent incremental margin [26] Q&A Session Summary Question: Can you elaborate on customer demand trends and orders? - Management noted that July order trends are holding strong, particularly in general industries, while heavy industries remain cautious [28] Question: What are the underlying organic demand trends in the Harris segment? - Excluding initial inventory stocking, volumes in the Harris segment are expected to be flattish as they progress into the third quarter [31] Question: How are customers responding to tariff clarity? - Management indicated that clarity around tariff rates is helping to alleviate the wait-and-see attitude among customers regarding capital investments [34] Question: What is the outlook for automation demand? - The automation business is expected to remain steady, with strong quoting activity but a conservative outlook on immediate order inflow [40][41] Question: What should be expected for pricing in Q3? - The company anticipates an additional 200 basis points of incremental pricing impact in Q3 due to actions taken in Q2 [64] Question: What factors influenced the reinstatement of incentive compensation? - The reinstatement was based on business performance and a reassessment of market conditions, as the volume response was better than initially feared [71]

Financial Data and Key Metrics Changes - The company reported a 7% sales growth in Q2 2025, driven by price management, M&A strategy, and improved volume performance [4][5] - Adjusted earnings per share increased by 11% to $2.60, with year-to-date cash flow generation exceeding 100% cash conversion of free cash flow [5][6] - Gross profit dollars rose approximately 6% to $406 million, with a gross profit margin of 37.3%, down 30 basis points year-over-year [12] - Reported operating income increased by 29%, while adjusted operating income rose approximately 10% to $195 million, with an adjusted operating income margin of 17.9% [13][14] Business Line Data and Key Metrics Changes - Americas Welding sales increased approximately 7%, driven by a 6.5% price increase and a 5% contribution from the Vanair acquisition, despite a 3% decline in volumes [14][15] - International Welding segment sales declined 2.5%, with a 4% favorable foreign exchange impact offset by a 7% drop in volumes; adjusted EBIT increased approximately 19% to $31 million [17] - Harris Products Group saw a 19% increase in sales, with 11% higher volumes and 7% higher prices, leading to a 28% increase in adjusted EBIT to $32 million [18][19] Market Data and Key Metrics Changes - Three of five end markets experienced growth, primarily driven by price increases, with notable strength in general industries and energy sectors [9][10] - Heavy industries faced challenges but showed incremental improvement, while agricultural machinery OEMs are expected to recover in 2026 [10] - Construction infrastructure remained inconsistent, but organic sales were steady in the first half of the year [10] Company Strategy and Development Direction - The company is focused on maintaining a neutral price-cost position while pursuing operational initiatives to offset inflation [22] - The acquisition of Alloy Steel is expected to enhance margins and earnings immediately upon closing, with plans to scale their solutions into new markets [6][22] - The company aims to achieve approximately $60 million in savings from a six-quarter program, with a balanced mix of temporary and permanent savings [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are deferring capital spending due to policy uncertainty, impacting equipment and automation portfolios [7][9] - July order trends have held steady, with strength observed in general industries, while heavy industries remain cautious [27][28] - The company expects low single-digit organic sales growth for the full year, with acquisitions contributing approximately 270 basis points to sales growth [22][24] Other Important Information - The company maintained a solid adjusted return on invested capital of 21.7% and returned $169 million to shareholders through dividends and share repurchases [20][21] - The company anticipates a steady adjusted operating income margin for the full year, reflecting a high teens percent incremental margin [24] Q&A Session Summary Question: Trends in customer demand and orders - Management observed that July order trends are holding, with strength in general industries and cautiousness in heavy industries [27][28] Question: Dynamics in the Harris segment volume - The volume uplift in the Harris segment was driven by initial inventory stocking for a new retail partner, with underlying organic demand remaining flat [29][30] Question: Impact of tariff certainty on customer behavior - Management indicated that clarity around tariff rates is expected to alleviate the wait-and-see attitude among customers regarding capital investments [32] Question: Automation quoting activity and demand inflection - The quoting activity is strong, but customers are cautious due to uncertainties in trade policy, impacting their investment decisions [36][37] Question: Comments on consumables volume versus price - Pricing on consumables is higher than on equipment, with volumes holding steady, indicating resilience in the market [58][59] Question: Expectations for pricing in Q3 - The company expects an additional 200 basis points of pricing impact in Q3 due to actions taken in Q2, while monitoring trade actions for further adjustments [62][63] Question: Incentive compensation programs - The reinstatement of merit increases was based on better-than-expected volume performance and a more stable market environment [68][70]

Financial Performance Highlights - Net sales reached $1088.7 million, a 6.6% increase compared to the previous year's $1021.7 million[13] - Organic sales grew by 2.9%[8] - Adjusted operating income margin improved to 17.9%, a 50 bps increase year-over-year[8] - Adjusted EPS increased to $2.60, an 11.1% rise from the prior year's $2.34[9, 13] - Cash flow from operations was $144 million, a 16% decrease compared to the previous year[8] Segment Performance - Americas Welding segment net sales increased by 7.4% to $696.7 million[15] - International Welding segment net sales decreased by 2.5% to $232.8 million[18] - The Harris Products Group net sales increased by 18.8% to $159.1 million[21] Sales Mix and End Market Performance - Overall sales growth was driven by price increases of 5.2%, offset by a volume decrease of 2.3%[14] - General Industries saw high single-digit percent growth, while Heavy Industries experienced a low-teens percent decrease[11] Capital Allocation - The company returned $169 million to shareholders through dividends ($42 million) and share repurchases ($127 million)[9] - Capital expenditures are projected to be between $100 million and $120 million for the full year[32]