Good morning, and welcome to the ESAB first quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Mark Barbalato, Vice President of Investor Relations at ESAB, you may begin your conference. Thanks operator. Welcome to ESAB's first quarter 2023 earnings call. This morning, I'm joined by our President and CEO, Shyam Kambeyanda, and CFO, Kevin Johnson. Please keep in mind that some of the statements we are making are forward-looking and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ. We do not assume any obligation or intend to update these forward-looking statements except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation. With that, I'd like to turn the call over to our President and CEO, Shyam Kambeyanda. Thank you Mark. Good morning, everyone. Thank you all for joining us today. The ESAB team has been busy. More importantly, we have been impactful and have made meaningful progress towards accomplishing our strategic goals. I'm very proud of our team's effort and focus. Our EBX business system continues to drive innovation, margin expansion, and higher cash flow. I've actually been out visiting several of our sites and recently had a chance to visit Gothenburg, Sweden, and Chennai, India, to meet with our engineering teams. I was delighted to see our truly global innovation process at work and the new products we expect to launch in the coming quarters. In Q1, we published our first sustainability report, where we highlighted our activities and governance practices. I'm pleased with our design efforts to make our products more sustainable and the continued positive community involvement of our associates globally. I'm looking forward to sharing more about our ESG initiatives during our investor day. Moving to slide three to talk specifically about the first quarter. We had another quarter of strong performance that exceeded expectations. Organic sales in the first quarter rose 7%, driven by robust demand in our APAC, Middle East, and Europe regions, and solid performance from the Americas. Adjusted EBITDA was up 12% and margins expanded 80 basis points to 17.4 as our EBX initiatives pushed margins up and improved working capital. We're pleased with the performance of our new acquisitions. The teams continue to make great strides in integrating and finding synergies for growth and margin expansion. In a few weeks, I'll visit our newest acquisitions, Therapy and Swift-Cut, for their 100-day EBX review. At this meeting, we do a deep dive into the business to review progress on synergies and resolve any roadblocks. We're off to a good start this year. I'm pleased that the positive momentum in our end markets has continued into the second quarter. As a result, we have raised our full year guidance. Kevin will share more on this later. Turning to slide four. We've been on a journey to reshape ESAB into a less cyclical, faster growing, better margin enterprise, and this slide shows our progress towards a higher mix of equipment sales that accelerates achieving this objective. Let me share how we have advanced this strategy. First, through open innovation. We've developed a complete line of light industrial equipment like Rogue, Rebel, Renegade, and have begun to introduce our new heavy-duty line of products like the Warrior Edge, Fabricator, and RobustFeed. As you know, we've always protected our R&D spend. Second, acquisitions into robotic torches, automated welding and cutting, and our digital solutions portfolio, which we call InduSuite. Last, we have strengthened our gas equipment portfolio with the 2018 acquisition of GCE. Victor Products and GCE established leadership gas equipment positions for ESAB in North America and Europe. In the last 12 months, we've expanded this business into more profitable end markets with the additions of Ohio and Therapy Equipment. We're confident that this strategy is shifting ESAB into a higher profit mix, allowing us to sustainably expand our EBITDA margins to greater than 20%. Moving to slide five. Our industry is facing a welder shortage, increased safety requirements, and the need to reduce total cost of ownership. At ESAB, we have a robust EBX stage gate process for product development that includes significant time spent gathering the voice of our customers to understand their unmet needs. To solve these broader industry issues, ESAB designed our Cobot solution with three important characteristics. One, open architecture. Two, digital workflow solution that we call InduSuite. Three, the ease of use, where one can be trained on our Cobot in a matter of hours. I'm encouraged by the funnel our teams have generated. This is just the start, and I look forward to sharing more in the coming quarters. Turning to slide six. We continue to drive EBX and lean initiatives throughout our facilities. Our continuous improvement initiatives free up manufacturing floor space, which helps with future rooftop reductions and solves any issues we face within our business. In this specific example, we solved a past due problem and freed up manufacturing space to grow and help consolidate rooftops within ESAB. Through 5S value stream mapping, we were able to merge production cells to free up 2,500 sq ft of manufacturing space and reduce past dues at this facility by 64%. Pleased with our manufacturing teams and their engagement with lean principles. We now have a lean cup competition underway, which is recognizing hard work of our teams and delivering results to the business. Turning to slide seven and our financials. First quarter sales grew 7% organically. Our markets continue to perform as expected and remain resilient. APAC, Middle East and Europe continue to show strength, while the Americas have performed in line with expectations. Acquisitions added another 300 basis points of growth. Strong price coupled with cost savings helped offset inflation and currency headwinds in the quarter. EBITDA expanded 80 basis points year-over-year to 17.4%. Moving to slide eight. Americas had a solid quarter and continues to perform in line with our expectations. Sales rose 5% organically as the team executes on price and acquisitions added 500 basis points of growth. We've accelerated our product line rationalization initiative to drive margins and operational efficiency. As a result, adjusted EBITDA increased 12% and margins expanded 80 basis points to 17%. Turning to slide nine. Another strong quarter for our EMEA and APAC segments. First quarter sales increased 9% organically, reflecting 5 points of price and 4 points of volume. Acquisitions added 200 basis points of growth. We continue to experience strong demand in 2 regions, APAC and the Middle East, with both regions continuing to benefit from strong investment in infrastructure, renewable energy, and oil and gas. As mentioned before, the European market continues to be resilient. Adjusted EBITDA improved by 13% and margins expanded 80 basis points year-over-year to 17.8%, reflecting strong execution by the team. With that, let me turn it over to Kevin for slide 10. Thanks, Shyam. Good morning. We had a strong start to the year, a record Q1 free cash flow for ESAB as we continue to use EBX to improve our performance. Our strong free cash flow allowed us to further reduce our net leverage as well as fund the Therapy acquisition that closed in the first quarter. ESAB continues to work with AI partners to identify opportunities for working capital improvement. We have projects lined up that give us confidence in delivering our 2023 guidance and long-term goal of greater than 100% cash conversion. Turning to slide 11. As Shyam mentioned earlier, we are raising our full year 2023 guidance. Total sales growth has increased two points, now guided to between 4%-6%. We have raised our organic growth guidance half a point to 3.5%-5.5% based on our strong first quarter performance. Our end markets continue to be resilient. Volume and price assumptions for the rest of the year remain unchanged at low single-digit volume, with the rest coming from price. FX has improved one and a half points on a weaker U.S. dollar. We expect a low single-digit FX headwind in the second quarter and for it to turn to a tailwind in the second half of the year. Adjusted EBITDA guidance increased by $10 million, half coming from improved organic growth in the first quarter and the other half from improved FX throughout the year. Interest guidance has been increased $3 million to $73 million-$75 million, as we now expect the Fed to increase the cash rate a further 25 basis points to around 5.25% by the end of the second quarter. Tax rate guidance remains unchanged and adjusted EPS guidance has been raised by $0.05. Finally, our cash flow conversion guidance remains on track at greater than 90%. As in prior quarters, we have included a more detailed guidance slide in the appendix. Before I hand back to Shyam, I am pleased to let you know that our 2023 Investor Day has been confirmed for October the fourth at the New York Stock Exchange. We will provide more details on this closer to the time. With that, let me hand back to Shyam on slide 12 to wrap up. Thank you, Kevin. In summary, we're making great strides towards our long-term goals. We have positive momentum in the business with more opportunities to accelerate our journey. Our bolt-on acquisition funnel is healthy, and we're pleased with the performance of our three recent acquisitions. Our teams are focused on profitable growth and taking EBX-based lean activities up a notch. As a result, ESAB is well-positioned to deliver another strong year of growth, margin expansion and cash flow. We have raised our guidance for the year and are laser-focused on delivering for our shareholders. Thank you again for joining us. Operator, please open the line for questions. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Tami Zakaria from JP Morgan. Your line is open. Hi, good morning. Thanks so much for taking my questions. My first question is on the Americas volume. It seems like it was down about 3% in the quarter. Is it because of the product line simplification you're doing in the region, or was there any end market weakness there? Any color on why the volume was down? Yeah, good morning, Tami. Thank you for that question. A couple of things. You know, one, we've always talked about reshaping our enterprise, driving our business into a less cyclical, higher margin portfolio. I think we're making great progress on that front across the globe, but specifically in our Americas region. You're absolutely spot on that product simplification has accelerated. We continue to focus on product lines that we believe have longer secular tailwind, and we're driving that through. In terms of end markets, we continue to see great strength, especially in our ag segment, renewable energy, along with automotive, where we see the retail segments being slightly down. We believe that our North America business is performing as expected. We expect to continue to see margins improve as we go into the year and into next year. Nothing really to talk about in terms of specific actions except for what I had mentioned, which was the product line simplification piece. Got it. Any thoughts on when product line simplification would be largely done and when the headwind would largely abate? Yeah, we expect to go through, you know, most of this year with that particular exercise. I'll probably share more as we get into the next quarter, Tami. We think that we're in the middle innings on that particular initiative, and expect to be, you know, in the late innings into 2024. Your next question comes from the line of Nathan Jones from Stifel. Your line is open. Good morning, everyone. I'm gonna follow up on the PLS of America's volume. You know, there was a pretty wide disparity between ESAB's America's volume and one of your main competitors' volume. I'm sure you know who that is. I'm hoping you could give us a little more color on the, you know, a quantifiable impact of PLS, whether or not you think there's any market share losses there. I know so obviously PLS is going to be some deliberate market share losses. Just hoping you can give us some more color around the disparity, of that versus your competitor and what the actual impact of PLS is here. Yeah, thanks for that question, Nathan. You know, the view that we have on that particular front is, you know, we do a deep dive across all of our product lines. We look at how we're shaped with particular end segments, particular product lines. What I can tell you is that when we looked at the data, our performance on the product lines that we wanna grow, on the customers we wanna grow with, was actually very comparable and strong, along with anybody that's sort of presented out there. That's piece number one. The second piece that we've always talked about is how our approach towards capital goods, in this particular case, automation, where we're really focused on process-driven value add. What you will find, in fact, even in the presentation that I made today around Cobots, our focus is around workflow solution and process solutions, which is better margins and lesser cyclical businesses over the long term. In the short term, there may be some noise, but over the long term, we believe we're setting ESAB up for steady growth, higher margin profile and less cyclicality. In addition to that, I think it's important to state as we go through this product line simplification, what you're seeing is margins and EPS dollars continue to improve in the region, and that's really where our focus is based. We think we're clearly on our way to creating an incredibly strong enterprise in the FabTech space. As I mentioned to Tami, we're in our middle innings on that particular front. If you look at the comparatives, Nathan, especially on the things that we're focused on, our numbers, you know, were very pleasing, to say the least. Yeah, I think that's important because PLS obviously creates some noise as it's going along. Maybe just on price cost, are your prices where they need to be in order to cover inflation? Do you need to go back out to the market with any further price increases or just where you think you're positioned on that? Nathan, we've talked about this a couple of times, but we have three processes around price. The first obviously being inflation-related price. We've seen some commodities, whether it be nickel or copper, sort of move, and we've immediately reacted to those and gone out for pricing. Then the second and third piece is where I think there's continued opportunity for ESAB, the second one being value-based pricing and the third associated with our product line simplification activity. I think that there's continued activity at ESAB, one on the inflation side that we've gone out with a couple of price increases. On the second piece, we continue to sort of evaluate our portfolio as we introduce new products, bringing it at the right value proposition, and then obviously PLS driving some additional price. That being said, you know, we've also seen some volume growth within our business, especially in the areas that we're focused on. Really pleased with how both of those are playing out as we've started the year. Again, if you would like to ask a question or any follow-up questions, please press star one on your telephone keypad. Your next question comes from the line of Mircea Dobre from Baird. Your line is open. Yeah thank you. Good morning. you know, going back to the ESAB cobot, maybe can you talk a little bit more about this, in terms of how you're selling this solution? You know, what is proprietary that you're kinda adding versus what you're sourcing from third parties. You know, as it pertains to the volume discussion in the Americas, I guess I'm curious if maybe some of the variance between you and your competitor has to do with the various exposures that you might have in automation versus what they're doing. Yeah, maybe we can start with that. Yeah. Thanks for that, Megan, and always good to hear from you. A couple of things. I think, you know, we've had a couple of questions on the Americas. I think it's also important to state that our EMEA and APAC business really had a phenomenal quarter, and we've always talked about our global enterprise and the value our franchise brings to the table. It's important to also state that what you can see is what is possible with our franchise when it gets focused and what we can drive across the enterprise. Specifically to your question around Cobots, we do have some proprietary stuff. We do have some disclosures that are waiting, so I can't share a lot of it. I think the bottom line are the three things that I spoke to you about, where we have differentiated ourselves from some of the stuff that's out there. Happy to share some of that with all of you at Investor Day, or if some of you wanna visit one of our facilities, happy to sort of showcase that particular technology. What we're seeing essentially is the ease of use being the primary reason along with our digital package that comes with our cobot as being extraordinarily valuable to our customers. I'll give you an example. We've been doing a couple of, you know, advertisements on social media. We've had a couple of influencers talk about it. We had a customer call us more recently where they were actually having some significant past dues on a requirement to a large retailer. They called us, they asked us to send them the sample. We sent the sample out to them. That afternoon, a team member of ours went out along with one other technician. By the afternoon of that Monday, they were trained. By Tuesday, they were off and running. They refused to send back the sample that we had sent them. They actually said they were gonna hold on to it until they got their order. They went from a weld of about 8,000 welds a week to about 25,000 welds a week, ran through their past due, thrilled about it. I think we're gonna be working with them to get some more press releases out. Bottom line is that, you know, we've got a really strong funnel on this particular phase. Yes, we do have some specific relationships with some software manufacturers on that particular front, along with the ease of use when I talk about it in terms of the pendant that people use to control the robot, where we think that we have a differentiated solution. We have the best solution in the marketplace. Really excited about that particular piece because it's focused on exactly where we wanna be, which is the less cyclical side, the less chunky side of automation, and it really brings to fore welding process expertise along with our industry digital solution set, creating a compact solution for our customers that allows the shift of this high-mix, low-volume products also into the automation space, creating some significant, what I'd call 5-10-year tailwind for ESAB. Understood. Maybe my follow-up is on slide number four, talking about your shift, shifting the mix over time towards equipment. As we're looking at this 2026, 2027 goal, you know, I'm curious as to how you get there. Is it a function of, again, capitalizing on automation the way you sort of described here? Or is it really primarily introducing new product and trying to take share on the equipment side? Also, as you think about the margin goal that you have outlined, you know, how much of that 20+% EBITDA margin target is really driven by this mix shift towards equipment? Maybe you can comment on that as well. Thank you. Chris, one of the things that we've mentioned several times, with this particular community has been is that we have great confidence, regardless of where our top line heads up, you know, whether on the top end of the range or the bottom of the range, that we are confident that we have the tools necessary to get past and north of 20%, as an enterprise. There's a tremendous amount of confidence, and with that comes our activity associated with price, our activities associated with EBX, where we're taking costs out, rooftop reductions, along with a significant amount of work that we're doing on OpEx transformation, and focusing our sales team. There's a significant amount of confidence that regardless of what we do on the top line, this team has line of sight to get us north of 20%. What we're talking about here are things that accelerate that journey and help us get beyond that particular percentage. On the mix, you're spot on. There's a couple of things that we've done. You know, we have a full lineup of light industrial equipment with the Renegade VOLT launching this year. A lot of excitement and a lot of pre-work being done by the teams in Q1 to drive the activity on that particular front. Later this year, we'll be launching the Warrior Edge, and I think I've mentioned this to you in the past. I'll give you another example. More recently, you know, I'd given you a Middle East example where we sort of changed out a competitor on a shop floor with a significant amount of Warrior Edge, along with our industry technology. Similarly, recently in Europe, for a very large customer that does wind, we actually had them come in, look at our Warrior Edge combination with our ICE, which is the Integrated Cold Electrode technology that we talked about. We've re-upped the game in terms of ease of use and what we control, along with some AI within that particular activity that allows the customer to do things that they have never been able to do before. We're seeing a significant amount of pull-through of ESAB equipment like we've never seen before, and a lot of excitement out there about finally our equipment line, you know, driving the kind of excitement and the entitlement that ESAB deserves globally. It's early stages, but clearly a lot of excitement. We've done a lot of work filling out our equipment portfolio. It's a combination, equipment sales, automation, and don't forget gas equipment that we've been building upon. So those targets are set up on those three platforms, and we're confident all three of them drive margins to a better spot. I don't want you to look at just those three things as what drives a margin past 20. We've got plenty in the kit, to kinda get there on our own. Your next question comes from the line of Chris Dankert from Loop Capital. Your line is open. Hey, morning. Thanks for taking the question here. I guess you cited, you know, some strength in APAC in the Middle East. Maybe could we dig in just a little bit, and if you could just give us some updates on the dynamics between China, India, Europe here, any detail you can provide? You know, I spoke about it briefly. Obviously, we don't share specific details by the region, but what I can tell you is that the APAC region in its entirety did extraordinarily well, with India being the clear outlier. A lot of us have read in the press around what's happening in India. There's a lot of manufacturing moving in. There's clearly government investment happening. It's things that we often talk about, right? The investment around infrastructure, the investment into agriculture, the investment into oil and gas refining capability, renewable energy, are all doing extraordinarily well in India. You look at China's coming out of the COVID piece. We've seen the government invest in infrastructure, invest in renewable energy, along with sort of what I'd call LNG storage tanks that's sort of driving a business forward. Then all of that actually, as you can imagine, creates a tailwind for Southeast Asia and Australia. So as a whole, that region actually is seeing some significant amount of tailwind that I think is a bit isolated from anything else that you see globally. The Middle East, in my opinion, has never seen this kind of sustained energy. You're seeing investments in infrastructure. You're obviously seeing the oil and gas steady investment come in, LNG being a big piece within that particular front. There's a fundamental shift, at least in the time that I've interacted with that region, where we're seeing a sustained amount of investment, a sustained amount of activity, both from an infrastructure, economic diversification perspective. ESAB, as you know, in this particular locations are phenomenally well-placed. I think I've mentioned this to you before, we're 4x the size of anybody in India. We have a great ground game, both in the Southeast Asia region, Australia region, and in India. In the Middle East, our team, again, continues to perform extraordinarily well, find new ways of growing the business. Some of the examples that I talked to you about on automation, driving some of our equipment sales and digital sales, they've actually been the leader. It's interesting to see that region adapt quicker than some of the other regions. The good part about that adaptation has been the fact that most of the customers are either European and US-based. The stories are filtering back. This is obviously a cycle of sales that we've got to go through, so I'm not sitting here saying that, you know, we've sort of climbed the hill yet, but we're making significant progress and are excited about our journey as we transform and reshape ESAB. No, that's really great color. Thank you. Thank you for that. Then on that slide four, I mean, we talked about it a little bit here, but, you know, equipment, you've put out some targets in terms of kind of where we wanna go from 2022 to 2026 and beyond here. Can you just kind of remind us what's automation as a% of sales today and kind of what's contemplated in that more kind of five-year outlook? As we look at the outlook, is it a combination of organic and M&A? Can you just maybe break down how we should think about automation growth kind of from nascent to 5 years from now? Well, we've set out a few targets out there. I haven't given out a specific number, but it's probably reasonable to assume that about 10% of our business today is in the automation space. We expect. Now, remember on that particular space, our focus now is getting more refined and more lasered around just working on process automation, using integrators, using partners to drive our business forward, creating a less cyclical higher margin profile, but also being reliable partners for our customers out there. The view that we have with this particular space, it's a high-quality portion of our business where margins, you know, will be accretive, and we feel that that is the right way to focus on it. Yes, the short answer to you is that yes, it does have a growth number for automation that's significant. We'll look at sort of sharing a little bit more on that during our investor day. You're spot on that, yes, it does have growth within it. Now, does it have M&A in it? The short answer is no. We do see ourselves continuing to build out any gaps that we may have through M&A, but nothing that's imminent or in the numbers today. As a last reminder, if you would like to ask a question, please press star one on your telephone now. We have a follow-up question from the line of Chris Dankert from Loop Capital. Your line is open. Hey, sorry, just one little housekeeping item. Just curious, has there been any update on the disposal of the Russia business? Anything to write home about there? No, we've nothing more to add on that particular front than what we've spoken of, you know, so nothing more to update on that front. Fair enough. Thanks so much, guys. There are no further questions at this time. Mr. Mark Barbalato, I turn the call back over to you for some final closing remarks. Thank you for joining us today, and we look forward to speaking to you on our next call. This concludes today's conference call. Thank you for your participation. 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