All right, great. Well, thanks everyone for joining us again. My name is Adam Seiden, I'm the US Machinery Construction Analyst, if I haven't met you. For this session, we're pleased to have the folks from Lincoln Electric with us. Joining us is our Chief Operating Officer, Steven Hedlund, and Gabriel Bruno from the Chief Financial Officer of Lincoln. As well as we also have Amanda Butler in the crowd from Investor Relations. The format of this chat is gonna be fireside chat with myself, Steve and Gabe. We will take some time to do the audience response questions towards the middle of the session, as well as then wrap up with any audience questions that you may have. For those that were just in the room, hope you like the new set and, we'll get started here. Guys, thanks so much for joining us. Sure. Pleasure to be here. Thank you. Great. Steve, you know, first time that I guess that we've had a chat in this setting here. You know, I was taking a look at your bio, and I couldn't help but notice that it feels like you've run just about every business at Lincoln Electric. I mean, to you, what would you say stood out the most, you know, within the businesses? What, what left a lasting impression for you? Adam, I'd have to say that around the world, the Lincoln Electric teams are very dedicated to the company and very passionate about helping customers solve welding problems. That's really uniform across the world, even though there are obviously very different cultures in Europe versus China versus South America. The dedication of our employees really is what impressed me the most. Yeah. Your employees do a good job at executing, and that's gonna be one of the transitions here. You know, for ourselves, I wanna spend a little time talking a little bit about, you know, your comfortability around the cycle and the longevity of the cycle, because I think on an execution side, your employees, yourselves, you've done certainly a very admirable job around that. If you know, if you think about Lincoln's business, right, it's a very good tie into the broader industrial economy. You have a lot of diverse end markets, that you're playing in. Some of those high-level indicators that folks look at have been, you know, trending in different spots and so forth versus, you know, your very, very strong performance. What do you think has been different about this cycle and the way you guys have been able to, you know, execute and so forth? Well, I think as we move through this part of the cycle, we have constantly compared back to 2019 from a volume perspective. You have to remember that 2019 was not a great year for industrials. We were entering a recession in the H2 of the year. As we look at it, we haven't gone back to peak yet. We're still on the upswing. We look at the end market demand in a lot of our industry segments is very robust. There's a lot of secular tailwinds that are driving investments in EV infrastructure for the automakers as they make the transition from ICE to EVs. There's a lot of investment going into energy and renewables and the like. I think where we are in the cycle is a pretty comfortable place. Gabe, you wanna comment further? Yeah. Just, you know, just to piggyback on where you see peaks at. When you think about going back to 2019, we said we're at 2019 volumes, but the mix is different. America is on top of it. The automation component of it has been an accelerator to volumes. International is still about 5% behind 2019. We're actively monitoring. You point to a lot of the broad metrics, and we're very much on top of it, whether it's the general industry, heavy industry, the automotive end. You know, we manage what we can see. We can't predict the cycles, but we have a robustness about business that we're pretty excited about. Got it. Just on the call the other day, you know, you guys were talking about a robust backlog, you know, that you have today. You know, how much of that elevated, you know, backlog that you have, would you say is tied to those, you know, demand, the demand picture versus how much is, you know, related to some of the supply challenges that everyone has been kind of dealing with for some time? Yeah. I would just emphasize that with the mix of business, it's a natural part of our automation business that we have backlogs tied to the strength of orders and investment on the automation side. We still have challenge in our standard equipment supply chain, so we have a level of backlog that remains elevated, because of that, and we continue to work through a lot of dynamics there. On the consumable side of our business, though, we've seen a lot more stability. You know, core welding, it is an order to ship type of a business, but we still have some room to progress on the equipment side. On that progression, I thought I caught a comment from Chris, you know, talking about, you know, that he's optimistic that he could see some acceleration through the year in the Americas side. Can you talk a little bit about, you know, where the end markets stand versus, you know, peak and so forth? Curious, like, which end markets would be driving that acceleration as we get through the year in the Americas? Yes. I point to, first broadly, general industries, while it's been relatively stable since the middle part of 2020, we were up in the Q4, but more stable. We saw strength during this first part of 2023. You also have fundamentals around heavy industries and automotive with strong demand profiles, at least in what we can see through for the mid part of the year. Then energy. Energy still has a long ways to go before getting back to the peaks in 2019, that the fundamentals continue to be strong. The dynamics of what we see across end markets are strong still. We see upside potential with continued demand on the consumable side. Standard equipment at very, very high levels of orders that extend beyond the first half of the year. we're pretty, well-postured to drive growth. That's good. That, that covers the demand picture, I guess. If we think about the other side of the organic growth equation on pricing, right? Very strong pricing fundamentals out there, you know, in the industry, and you guys have been very successful yourselves. You know, one thing I think from the investor side we try and gauge is how much of your, you know, how much of this industry or even your sales pricing ability is tied to your own customer's ability to, you know, price through the value chain and so forth. Well, you know, just to give you the big picture first, we talked about an organic assumption of the mid-single digits, half of that being priced. Yeah. That's the progression of pricing actions taken to date. We contemplate pricing actions in responsive to the inflationary environment that we have. You'll continue to see a very disciplined price cost neutral posture in how we manage price. Largely, the channels are very disciplined in knowing and driving an inflationary presence. You think about distribution, they'll be very disciplined in that. That environment also very disciplined. It's a function of managing through the inflationary pressures. We will respond to what we see, but we maintain that price cost neutral posture. Got it. Adam, I'd also keep in mind that for a lot of our customers, welding is a very small part of their raw material spend, and we focus a lot on the total cost of ownership, with welding. If we're charging a premium price for a consumable, but that consumable allows the customer to be a lot more productive, that's a trade-off that they're willing to take. In the environment we're in today, labor is still extremely scarce. Productivity solutions that allow customers to be able to meet their productive objectives with less labor has a lot of appeal. Got it. Got it. Key then, you know, like you're saying, it's a small part of the overall, you know, cost bucket for some of your customers, and inflation certainly has been some of the driver around pricing. You know, looking at the price trajectory as what our large customers do it and, you know, that's not necessarily the best indicator, would you say? No, I wouldn't think so. I wouldn't rely entirely on that. Okay, cool. You know, I think one of the key questions that we're, you know, a lot of folks are trying to answer at this conference is with the strong pricing momentum that's out there in the industry, the broader industrial industry, you know, does the prior, or I should say the pricing environment in the last two years, does that have any effect on, you know, your ability to get pricing as a return? Has there been any sort of pull-forward, or, you know, how do you see that playing out over the next couple of years? I see it as maintaining that same price cost neutral posture. I mean, you've got a long history of a very disciplined business in how we execute, and we're gonna maintain that posture. Got it. Yeah. There is very little pull forward of demand in our industry. The channel, the main channels don't stock a lot of product other than perhaps, you know, the retail big boxes. Our customers don't tend to buy forward and hoard materials and try and price time the markets. If they need to weld, they need our product. Got it. As Gabe said, we'll continue to price to offset inflation to remain price cost neutral. Got it. On those backlogs that we were talking about earlier, and I think, Gabe, you made the point about automation. You know, just could you give us a sense of, you know, when an order comes into, sits in your backlog? Are there any, you know, escalators or de-escalators on, you know, the raw material environment or other sort of, you know, pricing conditions in there, that we should think of? The automation side, you know, our teams are very much targeting to tighten that material, the procurement parts, the parts components of projects to the overall costs that were built into the project. We have very much disciplines to make sure we don't have inflationary pressures that lead into the margin profile projects. Got it. Now, I think we've probably beat the pricing story for the dead horse here. Maybe if you shift over to margins, right? You know, you guys gave pretty good color on, you know, where you see the margin trajectory for, you know, for this year and ultimately Harris and International, you know, it means that they'll be relatively stable, steady to improving performance, you know, certainly in the Harris case. In the Americas, though, the margin guidance implies, you know, you're staying at the, you know, around the balance at the high end, maybe even a little, you know, potentially even a little lower. I guess maybe the question is, can Americas' margin grow year- on- year, given that range that you're gonna be within the 2025 targets? Yeah. When you think about Americas' margins, first of all, the main profile would suggest we're gonna maintain that kinda mix of what you're seeing. There is a pressure on adding the Fori business into the Americas segment. We estimate that if you just take the assumptions of 75% of Fori is tied to the Americas at that low double digits, maybe 50 basis points type of an impact on the EBIT profile. We continue to drive improvements in the automation profile through our Lincoln Business System disciplines surrounding automation. I mean, there is upside opportunity, but we'll have some offsetting pressures from Fori. Fair enough. Maybe Steve, and also for Gabe. When you guys came out with your 2025 Strategy, there was about a 500 basis point delta, you know, in the midpoints of, you know, your two welding regions. You know, based off of, you know, some of your own internal execution and focus and so forth. Is there anything that's changed, you know, over the last two years here that would shift where that margin gap would be between those two segments? I think it's important to understand when you look at the international business, about Q3 of that is Europe for us. Europe tends to operate as a very high fixed cost environment with the labor policies that they have there. It tends to have very high incrementals when the business is growing, and it tends to have very poor decrementals when the business is shrinking. The market is very fragmented there. There's a lot of small private manufacturers in the market that don't have the same sort of margin ratio goals that a public company has. One of the challenges we have is when the market there gets soft, you see a lot of price competition in the market as people are trying to maintain volume to keep their factories running. That's sort of the structural difference between the two. A lot of the work that we've been doing over the last couple of years is to change our cost structure in Europe, to move more of the production east of Western Europe to give us more labor flexibility, to have lower, on average labor wages and to right size the portfolio there to the demand profile that we see. As we look back at 2022, one of the drags that we had in that business was we were probably over-capacitized from a labor standpoint, given the demand volume that we saw. As we are trying to reduce our inventory levels towards the end of the year, you have a little bit of a double whammy of soft demand, a little bit more capacity than you need, and you're drawing down production to draw down inventory. We expect that will all correct in 2023. Then we're looking at the potential need for further restructuring actions to continue the journey on getting Europe to be at the right cost structure. Great. That explains, you know, the international markets and before in your trajectory going forward as well for 2023. You know, maybe just for broader context, actually, for the audience, you know, can you remind us the split of that international business of where it sits between, you know, Europe versus, you know, APAC versus or India versus APAC? Then specifically calling out within APAC, China. How much of that is China? Overall, Europe represents about 75% of the international business overall. China is about less than 5% consolidated. It's pretty important how we progress the business model. Back to Steve's point, you know, when we think about 2022, I mean, we were at the 12% EBIT profile for international. That's a really good progression that we're getting at international. Our teams are very focused on what are the things we need to do to shape the model, considering all the uncertainty in dynamics, whether it's production, inventory levels and that. Our teams are very much focused to anchor on that 12%, 14%. Got it. I hate to, you know, I hate to take time for just 5% of the business, I do have to ask the question on China because, you know, clearly we've seen a shift in, you know, a reopening there in those markets. Those are markets that, probably have been under pressure for China. Just curious, when you look at for yourself, you know, how, you know, have you seen any change, you know, in demand in China since reopening, its early days? More so just trying to think of, like, the makeup of China, who your customer base tends to be and, you know, how that may influence what sort of, you know, recovery you might see. We're heavy into automotive, heavy industries in China, and we do believe there's upside in China. I mean, 2022 was, as we know, a very difficult environment. We believe there's upside potential in China. We also take a very disciplined approach to China. We serve primarily multinational customers that manufacture in the two industry segments that Gabe mentioned. We don't do a ton of business with the local manufacturers in those product categories 'cause it tends to be heavily price-driven. We're working with the customers that appreciate and will pay for our value. We also have a very large business importing high tech products that we make in the US or in Europe into China for specialty applications around energy and the like. Those are products we don't make in country for IP reasons, but we import them from Europe and the US. That's helpful. Maybe to conclude on the segment here for a second, just on Harris, you guys had been, you know, speaking about a bit of the stocking that you expected through the channel. It seems like, you know, that materialized. Just curious on your confidence that we've gone past that for, you know, in 2022 and ultimately in 2023, we can see a bit of that, you know, recovery here? That is, as you mentioned, Adam, was one of the challenging areas in our business in Harris. We're fairly confident that the larger given corrections to the box are behind us. That's still yet to be seen. We're, I'd say, more confident that we're back into that EBIT range that, you know, we think about. That's tied into, you know, managed metals, the retail, you know, traditional HVAC strength we should see in the springtime. We're back into the range and we feel that our business is repositioned to pass some of the volume adjustments that we went through in 2022. Excellent. At this point, we'll pivot to the audience response questions. Is that good? The first question here is, do you currently own the stock? one, yes, overweight. two, yes, market weight. three, yes, underweight. four, no. I appreciate your participation. Okay. Some potential Bimodal. There you go. Next question: What is your general bias towards the stock right now? Positive, negative, or neutral? Okay. Fairly even split as well, but more positive. Next question please. In your opinion, through cycle EPS growth for Lincoln would be above peers, in line, or below peers? That's a good one to take- Yeah, it is. Above peers. Next question please. This is Gabe's favorite question. In your opinion, what should Lincoln do with excess cash? Bolt-on M&A, larger M&A, share repos, dividends that pay down in internal investment. Okay, fairly even split here, but with repos a little bit larger. Moving to the next question. In your opinion, on what multiple of '23 earnings should Lincoln trade? These are standardized ranges across the conference, but less than 10 x and BAM's up higher than 21 x. A nice stair step up into the 19 to 21 times count. Moving to second to last one here. What do you see as the most significant share price headwind facing Lincoln today? Core growth, margin performance, capital deployment, or execution. Hope they don't say execution. Been talking a lot about how that's been going. Ah. There you go. I influenced the audience. Core growth is number one. Then, last one and new to this year is, does ESG play an active role in your investment decision relating to the company? Andrew probably wants to know this one. Yes. Yes, ESG is positive. Then there's some no answers as well. Okay. Relatively even split. A few more on the no side, actually. Okay, great. Thank you very much for your participation there. Hopefully if we can shift forward here, you know, on automation. You provided some stats on automation. You gave what your sales were. Just curious, you know, where your margins ended up for, 2020, 2022, just given I know there's been a goal of trying to get that mid-teens. Yeah. We ended up low to mid double digits. Mm-hmm. Very nice progression within our business. You know, that's almost a 100% improvement margin profile, but so very good. We're very excited that the business is progressing to the longer term targets, which is in that corporate average between double-digits mid-teens. We're pretty excited where the business is progressing. Great. You, you talked a bit about your guys' ability to exceed $1 billion, your confidence to exceed $1 billion. You know, you're adding Fori to that, but going forward, is that a goal on an organic basis or is that including future? Yeah, look, we always look for opportunities. We look at bolt-ons, but if you take the organic assumptions we have in automation, you'll see us getting pretty close to that. As we were talking about when we were tracking it to 650, that half of that would be up to organic growth and half is. Yeah. I thought you did. Maybe let's touch on Fori then, right? Fori is a little bit different of an automation solution than, I think at least we've seen in the past from the outside. Can you maybe talk a little bit about, you know, automated material handling and ultimately are there synergy opportunities with some of, you know, the more welding solutions systems business that they have there? There's three things that we really like about the Fori business. The first is they do larger line builds, so people who are retrofitting an entire factory, let's say, as opposed to individual cells within a factory. They give us the ability to do much larger projects. They have a nice international footprint. Most of our automation business is North America focused, so they have a nice footprint in Korea, China, India, Europe and Brazil, which we can leverage. Then the thing that we're probably most excited about is the automated material handling, so the AGVs or automated guided vehicles. Most people might look at that and say, "Where's the excitement? AGVs have been around for decades in warehouses. What they make is an AGV that is specifically designed to handle very large, heavy, unbalanced parts, move them through a factory and align them very precisely at the next stage of assembly. They have done that repeatedly in the automotive industry. They haven't had any real reach outside that. We look at our customers and things like heavy industries and structural steel, that's a big issue, being able to move parts from one station to the next. To date, their only real option has been overhead cranes. This gives them a much more flexible, productive solution. We're seeing great interest from customers outside automotive in those solutions. Helpful. Maybe, maybe to wrap up here just on strategy. You know, on the call, I think there was a comment that you guys are thinking about your, you know, the next phase of the strategy, you know, for Lincoln Electric. When I think about, you know, Higher Standard 2025, to me, that was a bit of, you know, a step as opposed to necessarily a pivot per se. You know, I don't expect you to break any news here, ultimately, you know, would you anticipate that the next strategy is, you know, a bit more of that, you know, more of that step, or can we see something there like a pivot going from there? You start, Al? Sure. I would say I wouldn't expect to see a big pivot from Lincoln. I think it'll be a lot more the next step in our journey. It really will come down to continuing to improve the performance of the floor welding business and trying to drive above market growth and improvement in the earnings generation of that business. Continuing to mature the automation business. We think automation has a very long runway. Automation originally started in this industry as trying to tackle the really hard jobs for a human to do and replace it with a human. We're seeing a lot of interest now in, "I just wanna eliminate labor in total. I can't get labor, I can't find reliable, high quality, trained labor. Looking at things like machine tech, which is a fairly simple operation for a human, but is a more difficult challenge for a robot. We think there's a lot of places to take the automation business where there's good differentiation and capabilities and good profit pools. Then we've got a couple of bets that we've made that really give us some optionality around EV chargers and around additive manufacturing. We look to see the additive business mature and hopefully become a nice profit contributor for the company. Then the EV space is something that we're rushing right now to participate in and have cautiously high expectations, let's put it that way. Yeah. I would add, so, you know, Steve's talking about how do we drive accelerated growth and really leverage the capabilities we have as a business, and it is very much focused on growth. We've also continued the discipline around shaping our business model. I think about this cycle strategically, and we're looking to drive 200 basis points expansion the operating profit profile of our business. That's been pretty steady progression over the last 15, 20 years of continuing to shape our business to drive a model that adds more to an operating profile. We'll continue to do that. As we progress into the next strategy, we're gonna be challenging ourselves with, you know, what are another 200 basis point type opportunities for us to continue to shape the business. That's always an area for us to shape, our model. That's great. I guess we'll all stay tuned and see how it shapes out there. I think we're about out of time here. Thank you so much for joining us and to the Lincoln Electric team. We really appreciate you being down here in Florida. Thanks for having us. Thanks again.