innovative solutions in material technology · innovative solutions in material technology ......
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1 LUXFERGROUP ©2017LuxferHoldingsPLC,AllRightsReserved©2017LuxferHoldingsPLC,AllRightsReserved
Innovative solutions in material technology
KeyBanc IndustrialsConferenceBostonMay2017・
2 LUXFERGROUP ©2017LuxferHoldingsPLC,AllRightsReserved
Forward-lookingstatementsThispresentationcontainsforward-lookingstatements.Examplesofsuchforward-lookingstatementsinclude,butarenotlimitedto:(i)statementsregardingtheGroup’sresultsofoperationsandfinancialcondition,(ii)statementsofplans,objectivesorgoalsoftheGrouporitsmanagement,includingthoserelatedtofinancing,productsorservices,(iii)statementsoffutureeconomicperformance;and(iv)statementsofassumptionsunderlyingsuchstatements.Wordssuchas“believes”,“anticipates”,“expects”,“intends”,“forecasts”and“plans”andsimilarexpressionsareintendedtoidentifyforward-lookingstatementsbutarenottheexclusivemeansofidentifyingsuchstatements.Bytheirverynature,forward-lookingstatementsinvolveinherentrisksanduncertainties,bothgeneralandspecific,andrisksexistthatthepredictions,forecasts,projectionsandotherforward-lookingstatementswillnotbeachieved.TheGroupcautionsthatanumberofimportantfactorscouldcauseactualresultstodiffermateriallyfromtheplans,objectives,expectations,estimatesandintentionsexpressedinsuchforward-lookingstatements.Thesefactorsinclude,butarenotlimitedto:(i)futurerevenuesbeinglowerthanexpected;(ii)increasingcompetitivepressuresintheindustry;(iii)generaleconomicconditionsorconditionsaffectingdemandfortheservicesofferedbyusinthemarketsinwhichweoperate,bothdomesticallyandinternationally,includingasaresultoftheBrexitreferendum,beinglessfavorablethanexpected;(iv)worldwideeconomicandbusinessconditionsandconditionsintheindustriesinwhichweoperate;(v)fluctuationsinthecostofrawmaterialsandutilities;(vi)currencyfluctuationsandhedgingrisks;(vii)ourabilitytoprotectourintellectualproperty;and(viii)thesignificantamountofindebtednesswehaveincurredandmayincurandtheobligationstoservicesuchindebtednessandtocomplywiththecovenantscontainedtherein.TheGroupcautionsthattheforegoinglistofimportantfactorsisnotexhaustive.Thesefactorsaremorefullydiscussedinthesections“Forward-LookingStatements”and“Riskfactors”inourAnnualReportonForm20-FfortheyearendedDecember31,2016,filedwiththeU.S.SecuritiesandExchangeCommissiononMarch14,2017.Whenrelyingonforward-lookingstatementstomakedecisionswithrespecttotheGroup,investorsandothersshouldcarefullyconsidertheforegoingfactorsandotheruncertaintiesandevents.Suchforward-lookingstatementsspeakonlyasofthedateonwhichtheyaremade,andtheGroupdoesnotundertakeanyobligationtoupdateorreviseanyofthem,whetherasaresultofnewinformation,futureeventsorotherwise.
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Luxfer foundedin1897inChicago
British advertisement, circa 1900.
Luxfer wasfoundedbyScottishinventorJamesPennycuick in1897inChicago,Illinois,toproduceprismaticglassproductstoilluminatearchitecturalinteriorsinNorthAmericanandEurope.ThenameLuxfer comesfromLatinlux(light)andferre (tocarry),soitliterallymeans“lightcarrier.”
ThecompanyestablisheditsfirstsubsidiaryinEnglandin1898,followedbyplantsinFrance,BelgiumandGermanyin1899.TheBritishcompanyisthemainancestoroftoday’sLuxfer Group.
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Luxfer’s AlcanheritageManyofthecompaniesthatnowcompriseLuxferGroupwereownedbyBritishAlcanuntil1996,whenAlcansoldthesebusinesses—andseveralothers—toagroupofinvestors,includinganumberofformerAlcanmanagers.
In2000,thenewownerssoldaluminumplate,sheetandextrusionoperations,aswellasseveraldistributionbusinesses,toAlcoa.
Theremainingfourbusinesses—LuxferGasCylinders,Superform,MagnesiumElektron andMELChemicals—werethecoreoperationsofLuxferGroupwhenthecompanylistedontheNewYorkStockExchangeonOctober3,2012.
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Luxfer’s expansiveglobalfootprint
Graham,NC
Swinton,UK(2locations)
Gerzat,France
Shanghai,China
Calgary,Canada
Manchester,UK
Worcester,UK
Nottingham,UK
Tamaqua,PA
Flemington,NJ
Lakehurst,NJ
NiagaraFalls,CanadaFindlay,OH
Shizuoka,Japan
Madison,IL
Riverside,CA(2locations)
NewDelhi,India
Sydney,Australia
1,800employees
LuxferGroupoperates20plantsinsevencountriesonfourcontinentswithjointventuresanddistributioncentersinfourmorecountries.
USA� Canada� UK� France� CzechRepublic� China� Japan� Australia� India
Cincinnati,OH
Riverhead,NY
Litvinov,CzechRepublic
BrighamCity,UT
Tulsa,OK
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Luxfer’s globalend-markets
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Luxfer’s globalbrandsGas Cylinders
Division:
Elektron Division:
Luxfer HoldingsPLC(LuxferGroup) isaglobalmaterialstechnologycompanyfocusedonsustainedvaluecreationusingitsbroadarrayofproprietarymaterialstechnologiesandtechnicalknow-how.
Organizedintotwodivisionswithfourglobalbrands,thecompanyspecializesinhigh-performancematerials,componentsandhigh-pressuregas-containmentdevices.
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Luxfer aluminumcylinders
Luxfer GasCylindersistheworld’slargestmanufacturerofhigh-pressurealuminumcylinders.Weintroducedthefirstcommercialhigh-pressure,hot-extrudedaluminumcylinderin1941andinventedthecold-extrudedaluminumcylinderin1958.Wehavealonghistoryofcylinderinnovation,includingusingourownpatentedandproprietaryalloys.
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AluminumcylindermarketsHealthcare Emergency
medical
Microchip&electronicsmanufacturing
Scubadiving
Fireextinguishers
Beverage
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Luxfer compositecylindersLuxfer isalsotheworld’slargestmanufacturerofcarboncompositecylinders,includingsmall,portablecylindersforfirefighterlifesupportandlargecylindersforalternativefuel(AF)vehicles,aswellastransportationandstorage.
Luxfermakesbothaluminum-lined(Type3)andpolymer-lined(Type4)compositecylinders.
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Luxfer compositecylinders
OurhighlyautomatedcompositecylindermanufacturingfacilityinRiverside,California.
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SuperformSuperform UKhasbeenmakingexteriorbodypartsforMorganCarsformanyyears.
Superform manufacturescomplex,one-piece,lightweightcomponentsforrailcarexteriorsandinteriors,includingLondonMetrocars(shownbelow).
Superform producedthisaluminumcomponentforadvancedwingletsontheBoeing737Max.
Luxfer inventedandremainsthegloballeaderinthesuperforming processformakinghigh-value-added,complex,sheet-basedpartsfromaluminum,magnesiumandtitaniumforautomotive,aerospace,rail,medicalandarchitecturalmarkets.Wehaverecentlyinvestedinexpandingthemetal-formingcapabilitiesofthisbusiness.
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Magnesium-ElektronMagnesium-Elektron isagloballeaderinmagnesiumaerospacealloysforbothmilitaryandcivilianapplications.Helicoptergearboxesareanimportantapplicationforouralloys.
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Magnesium-Elektron
Magensium-Elektron istheworldleaderinbespokemagnesiumpowdersforcountermeasure
flaresthat protectaircraftfromattackbyheat-seekingmissiles.
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Magnesium-Elektron
Magnesium-Elektron istheonlyWesternsupplierofhigh-qualitymagnesiumphotoengravingplate.Wealsomakemagnesiumsheet,extrusions andultra-finepowders andrunadedicatedrecycling operation.
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MELChemicals
MELChemicalsproducesanextensive,proprietaryrangeofhigh-qualityzirconium-based
products usedinawidevarietyofapplications,includingautomotiveandindustrial
catalysis,ceramics,electroniccomponents,sorption,paint,
pigments,printingink,adhesives,antiperspirants,cosmeticsand
medicalproducts.
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MELChemicals
Ourzirconiumoxidesareusedtocreateavarietyofadvancedceramicproductsusedforcircuitboards,filtrationofmoltenmetalalloysandassubstratesforcatalystsrequiringlargeinternalsurfaceareas.
Zirconiumoxideceramicfiltersremoveslag,drossandotherimpuritiesfrommoltenmetalduringproductionofhigh-qualitycastings.
X-raydiffractionensuresceramicstructuralintegrity.
Zirconiumisusedtomakehigh-qualityelectro-ceramics.
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ValuedriversLuxfer haslong-standingrelationshipswiththeseandotherblue-chipcustomers:
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Valuedrivers
Luxfer GasCylindersistheworld’slargestmanufacturerofportable,carboncomposite,self-containedbreathingapparatus(SCBA)life-supportcylindersforfirefightersandotherfirst-responders.Weoffertheworld’shighest-pressureSCBAcylinder,aswellastheworld’slightest-weightSCBAcylinder.WemaketheseproductsintheUSA,FranceandChina.
GloballeaderinportableSCBAlife-supportcylinders
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Valuedrivers
Feedbackfromcustomersonlaboratorytestingofournext-
generationG6 producthasbeenverypositive,andwearenowawaiting
resultsfromenginetests.
Luxfer’s MELChemicalsbusinessisamajorplayerinzirconium-ceriumwashcoats for
automotivecatalyticconverters.
Wehave‘migrated’ourknow-howintonewtechnologyforcatalysisandpollutioncontrolinrefineries,chemicalplants
andotherlargeindustrialmanufacturingfacilities.
Migratingtechnologies
G6automotivecatalysisproduct
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ValuedriversGeographicexpansionofLuxfer Magtech
LuxferMagtech Inc.(LMI)makesmagnesium-basedheatingpadsforself-heatingmealsusedbytheU.S.militaryandciviliandisaster-reliefagencies.WerecentlyacquiredaEuropeandistributortoexpandsalesofLMIproductsoutsidetheU.S.,andwearenowpursuingordersfromseverallargenon-U.S.buyersofself-heatingmeals.
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Ourphotoengravingplatesareusedforspecialprintingeffects,suchasfoil-stamping,embossinganddie-cuttingforbooks,stationery,luxurypackagingandgreetingcards.WehaverecentlyexpandedourbusinessintheMiddleEast,IndiaandSouthAmerica.
Valuedrivers
Geographicexpansionofphotoengravingbusiness
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• Luxfer hasalongcorporateheritageofproprietaryinnovationandacomprehensivematerialscienceknowledgebank.
• WestressmanufacturingexcellenceandIPprotection.• Wefocusonhigh-growthenvironmental,healthcareandprotection/safetyendmarkets.
• Wehavemulti-yeardevelopmentprograms,mostoftenwithpartners.• Weoperateinhighlyregulatedmarkets,andwe’readeptatobtainingrequiredapprovalsandcertificationsthatareoftenentrybarrierstocompetitors.
Continuousnewproductpipeline
• Ourpipelineofnewproductssupportsourend-marketandfinancialfocus.
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Emergingnewproducts
Biotronik’s Magmaris®scaffoldusesLuxfer’s patented
SynerMag®alloy.
SynerMag®bioresorbable alloy
Biotronik,ourpartnerinajointresearchanddevelopmentprogram,hasnowlaunchedtheirMagmaris®magnesiumscaffoldinEurope,theMiddleEastandAustralasia—andwearenowreceivingroyaltypayments.
WeproduceourexclusiveSynerMagalloyatapurpose-
builtfacilityinSwinton,England.
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Emergingnewproducts
SalesofournewSoluMag®dissolvingalloyforoilandgas
wellshavebeenincreasing,andwerecentlyintroducednew
high-ductility,high-strengthandfresh-waterversions.
SoluMag®evolvedfromourworkonourSynerMag®bioresorbable
medicalalloytechnology.
Migratingtechnologies
SoluMag®dissolvingalloySynerMag®alloy
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Emergingnewproducts
SeatscontainingLuxfermagnesiumcomponentsondisplayattheAircraft
InteriorsShowinHamburg,Germany.
Magnesiumalloysforcommercialaircraftseats
Threemagnesiumalloycomponentsarecurrentlybeingtestedforinclusioninnewdesignsforaircraftseats.Weremainconfidentthatwewillgetseatcomponentsflyingin2017.
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Emergingnewproducts
AdvancedOxygenSystem
AOSmedicaloxygendeliverysystemOurultra-lightweightsystemforambulatoryoxygenpatientsfeaturesourpatentedSmartFlow™value-regulatortechnology,a proprietaryhigh-pressurecylinderandattractiveergonomicdesign.
TheproductrecentlyreceivedCEapprovalandiscurrentlybeingcommercializedinEurope,wherepatienttestingisunderway.
TM
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Emergingnewproducts
EnhancedSuperform capabilitiesWe’veinvestedinexpandingSuperform capabilities,includingopeningournewSuperform TechnologyCenter intheU.K.,tosupplyhigher-volumecontractsforHY22017onwardswithFerrariandanothermanufacturerofprestigesportscars.
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Q12017resultsreleasedMay8
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Grouprevenue
Gas Cylinders Elektron Group
Q1 Q1 Q1$M $M $M
2016Revenue 59.1 49.7 108.8
Changesinperiod:
FXtranslation (2.0) (1.7) (3.7)
Tradingmovements (2.7) 1.0 (1.7)
2017Revenue 54.4 49.0 103.4
Tradingvariance (4.7%) 2.1% (1.6%)
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GasCylindersDivision
• Q1underlyingrevenue*downby$2.7mor4.7%comparedtoQ12016.• SCBAsalesshowedimprovementoverthelatterquartersof2016.
• HighersalesintheEuropeanmedicalsectorwithouradvancedL7X®rangeofcylinders showingimprovement.
• Alternativefuel(AF)salesweredownonQ12016.
• Superform revenuewasdownonQ12016duetothetimingofprojects.
* At constant translation exchange rates.
Gas Cylinders
Q1$M
2016Revenue 59.1
Changesinperiod:
FXtranslation (2.0)
Tradingmovements (2.7)
2017Revenue 54.4
Tradingvariance (4.7%)
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Elektron Division
• Q1underlyingrevenue*upby$1.0mor2.1%comparedtoQ12016.• LargeincreaseinourMREheatersalesfollowingtheshortageofordersseeninthelatterpartof2016.
• SalesofourproprietarySoluMag®alloyaregainingmarketacceptance.
• Q12017overallcatalysissalesimpactedbytimingofchemicalcatalysisshipments.
* At constant translation exchange rates.
ElektronQ1$M
2016Revenue 49.7
Changesinperiod:
FXtranslation (1.7)
Tradingmovements 1.0
2017Revenue 49.0
Tradingvariance 2.1%
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Geographicsalestrends
Q12016
$108.8m $103.4m
Q12017
Revenuebydestination
UK
7%
Europe(other)24%
NorthAmerica53%
SouthAmerica
3%
AsiaPacific12%
Africa1%
UK
8%
Europe(other)23%
NorthAmerica55%
SouthAmerica
2%
AsiaPacific11%
Africa1%
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TradingprofitandadjustedEBITDAanalysis
2017 2016 2015Tradingprofit$M Q1 Q1 Q1
GasCylinders Tradingprofit$M 3.3 3.0 1.3ROS% 10.2% 5.1% 2.2%
Elektron Tradingprofit$M 7.2 8.8 9.2
ROS% 18.0% 17.7% 15.7%GROUP Tradingprofit$M 10.5 11.8 10.5
ROS% 10.2% 10.8% 9.0%
Tradingprofit GasCylinders 10.0%
changesfor Elektron (18.2%)
2017v2016 GROUP (11.0%)
2017 2016 2015AdjustedEBITDA$M Q1 Q1 Q1
GasCylinders 5.2 5.0 3.2
Elektron 10.1 11.8 12.2
GROUP 15.3 16.8 15.4
GROUPadjustedEBITDAmargin% 14.8% 15.4% 13.2%
NOTE:TradingprofitisLuxfer’sIFRS8segmentprofitmeasure.AdjustedEBITDAisalsousedbythechiefoperatingdecisionmaker.Seeappendicesfornon-GAAPreconciliations.
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NetincomeandEPS
NOTE:Thecalculationofearningspershareisperformedseparatelyforeachdiscretequarterlyperiod,andfortheyear-to-dateperiod.Asaresult,thesumofthediscretequarterlyearningspershareamountsinanyparticularyear-to-dateperiodmaynotbeequaltotheearningspershareamountfortheyear-to-dateperiod.
NOTE: Adjustednetincomeisusedbythechiefoperatingdecisionmaker.Seeappendicesfornon-GAAPreconciliations.
Q1 Q12017 2016
Otherincomestatementitems: $M $M
Tradingprofit 10.5 11.8Profitonsaleofredundantsite 0.4 2.1Restructuringandotherexpense (0.2) (0.1)Operatingprofit 10.7 13.8
Netincome: $M $M
Netincome 6.6 8.7Adjustednetincome 7.2 8.1Underlyingeffectivetaxrate 24.2% 25.7%
AdjustedbasicEPS $0.27 $0.30AdjusteddilutedEPS $0.27 $0.30Dividendpershare $0.125 $0.125
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Liquidityandcapitalresources
NOTE: Seeappendicesfornon-GAAPreconciliations.
Q1 Q12017 2016$M $M
Returnoninvestedcapital 13% 13%Investedcapital 259.3 261.9
Netdebt 105.9 101.9Netdebt:AdjustedEBITDAforLTM(last12months) 2.0 1.6
Tradingworkingcapital 97.2 98.3
Netcashflowsfromcontinuingoperatingactivities 9.6 3.0
Netcashflowsbeforefinancing 6.2 3.7
Fundsreturnedtoshareholders 3.3 9.4(Dividendsandsharebuy-backs)
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Groupoutlook
• Guidance:• ThefinancialresultforQ12017representsasignificantrecovery.
• Performancehasbeenbetterthanpreviouslyindicated.
• Revenue,EPSandcashflowallshowedstrongimprovementsfollowingQ3andQ4of2016,andourorderbookshaveimproved.
• Inparticular,themagnesiumoperationsperformedwell,andtheGasCylindersDivisionimprovedonQ12016.
• WeareconfidentthattheguidanceremainssoundandthatonEPSweexpecttoachieveanimprovementofatleast10%.