Slides
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July 31, 2025 LINCOLN ELECTRIC HOLDINGS, INC. Q2 2025 Earnings
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Safe Harbor and Regulation G Disclosures Forward-Looking Statements: Statements made during this presentation which are not historical facts may be considered forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. For further information concerning issues that could materially affect financial performance related to forward-looking statements, please refer to Lincoln Electric’s quarterly earnings releases and periodic filings with the Securities and Exchange Commission, which can be found on www.sec.gov or on www.lincolnelectric.com. Non-GAAP Measures: Our management uses non-GAAP financial measures in assessing and evaluating the Company’s performance, which exclude items we consider unusual or special items. We believe the use of such financial measures and information may be useful to investors. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non- GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures. 2
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Second Quarter 2025 Highlights: Effectively managing dynamic operating environment on volume trends, cost management & $11M in incremental savings Resilient Adj. operating income margin performance with a 26% incremental margin Solid cash generation with 104% cash conversion in H1-25 Strong shareholder returns 3 $1.09B Net Sales performance +6.6% vs. prior year; Organic sales +2.9% 17.9% $2.60 21.7% $144M $169M Adjusted Operating Income Margin1 +50 bps vs. prior year Adjusted EPS1 +11.1% vs. prior year Adjusted ROIC performance1 -200 bps vs. prior year Cash flow from operations -16% vs. prior year with 81% cash conversion2 Returns to shareholders ($42M in dividends + $127M in share repurchases) 1 Refer to the appendix for reconciliation of non-GAAP financial measures to U.S. GAAP. 2 Cash conversion is defined as Net cash provided by operating activities less Capital expenditures divided by Adjusted Net income.
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General Industries up high single-digit percent Energy up mid single-digit percent Automotive up low single-digit percent Infrastructure/Const. down high-single digit percent Heavy Industries down low-teens percent Q2 organic sales increase on price actions to mitigate inflation, and growth in HVAC and the retail & industrial distribution channels Q2 Organic sales by product area Led by price and consumables Consumables up high single-digit percent Automation down low single-digit percent Equipment down mid single-digit percent Q2 global end sector performance1 3 of 5 end markets grew, led by price and North American demand 1 End sector performance (organic sales) reflects direct channel organic sales trends 4
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Income Statement Highlights Q2-2025 5 ($ in Millions) Q2 2025 Q2 2024 % YoY Change Favorable / (Unfavorable) Net Sales $ 1,088.7 $ 1,021.7 6.6% Gross Profit $ 405.5 $ 383.8 5.7% Gross Profit Margin 37.3% 37.6% (30) bps SG&A as % of net sales 19.4% 20.4% 100 bps Adjusted Operating Income $ 195.1 $ 177.6 9.8% Adjusted Operating Income Margin1 17.9% 17.4% 50 bps EPS $ 2.56 $ 1.77 44.6% Adjusted EPS1 $ 2.60 $ 2.34 11.1% Q2 2025 NET SALES MIX2 Volume (2.3)% Price 5.2% Acq/Div 3.0% FX 0.7% TOTAL 6.6% 1 Refer to the appendix for reconciliation of non-GAAP financial measures to U.S. GAAP. 2 Figures may not sum due to rounding.
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Americas Welding Segment 6 Organic sales increase on price and consumable demand, offset by slow capital investment spending. Acquisition sales from Vanair. Margin reflects benefits of cost management and savings actions, offset primarily by volumes and acquisition integration. ($ in Millions) Q2 2025 Q2 2024 % YoY Change Net Sales $ 696.7 $ 648.9 7.4% Adjusted EBIT $ 137.9 $ 136.7 0.9% Adjusted EBIT Margin2 18.6% 19.9% (130) bps Q2 2025 NET SALES MIX1 Volume (3.4)% Price 6.5% Acq/Div 4.7% FX (0.4)% TOTAL 7.4% 1 Figures may not sum due to rounding. 2 Adjusted EBIT Margin is calculated using Total Sales, which includes Inter-segment sales.
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International Welding Segment 7 Organic sales challenged by end market trends in portions of EMEA and a challenging prior year comparison in Asia Pacific. Margin growth reflects effective cost management, Alloy Steel investment, and a favorable prior year comparison. ($ in Millions) Q2 2025 Q2 2024 % YoY Change Net Sales $ 232.8 $ 238.8 (2.5)% Adjusted EBIT $ 30.6 $ 25.7 18.8% Adjusted EBIT Margin2 12.7% 10.4% +230 bps Q2 2025 NET SALES MIX1 Volume (6.8)% Price 0.4% Acq/Div 0.1% FX 3.8% TOTAL (2.5)% 1 Figures may not sum due to rounding. 2 Adjusted EBIT Margin is calculated using Total Sales, which includes Inter-segment sales.
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The Harris Products Group 8 Organic sales higher on volume growth across all product areas, led by HVAC and retail channel expansion. Price reflects changes in metal costs and price actions. Margin improves on volumes and cost management. ($ in Millions) Q2 2025 Q2 2024 % YoY Change Net Sales $ 159.1 $ 134.0 18.8% Adjusted EBIT $ 31.9 $ 24.9 27.9% Adjusted EBIT Margin2 19.4% 18.2% +120 bps Q2 2025 NET SALES MIX1 Volume 11.0% Price 7.4% Acq/Div - FX 0.4% TOTAL 18.8% 1 Figures may not sum due to rounding 2 Adjusted EBIT Margin is calculated using Total Sales, which includes Inter-segment sales.
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104% cash conversion1 in H1-2025 Cash Flow From Operations & Working Capital Metrics 9 Cash Flow from Operations ($ in Millions) Average Operating Working Capital to Net Sales Ratio 1Cash conversion is defined as Net cash provided by operating activities less Capital expenditures divided by Adjusted Net income. 18.0% 16.9% 18.4% June 30, 2024 Dec 31, 2024 June 30, 2025 $171 $144 $304 $330 Q2-24 Q2-25 H1-24 H1-25
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Q2 Capital Allocation & Returns • Growth: $57 million • Return to Shareholders: $169 million • Return on Invested Capital2: 21.7% Capital Allocation Strategy Prioritized uses of cash: • Growth investments (organic and M&A) • Return to shareholders • Dividend: +5.6% 2025 pay out rate • Share repurchases Capital Allocation1 ($ in Millions) 10 1 Figures may not sum due to rounding 2 Adjusted Return on Invested Capital. Please refer to the appendix for reconciliation of Non-GAAP metrics. 23 25 49 52 153 32 153 32 40 42 82 85 50 127 161 234 Q2-24 Q2-25 H1-24 H1-25 Cap Ex Acquisitions Dividend Share Repurchases $445 $403 $266 $226
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Full Year 2025 Assumptions Raising assumptions to reflect first half performance and Alloy Steel Risks Net impact of trade & regulatory policies Economic and geopolitical headwinds Inflation (raw materials & labor) Opportunities (not in assumptions) Velion DC Fast Charger New acquisitions Assumptions LSD% organic sales growth (price partially offset by volumes) Neutral price/cost Adj Op income margin steady to up slightly at high-teens incremental margin Interest expense, net $45 to $50 million Low-to-mid 20% tax rate $100 to $120 million in cap-ex 90+% cash conversion $300 to $400 share repurchases 7-cents EPS contribution from Alloy Steel 11 11
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12 Contact: Amanda Butler Vice President, Investor Relations & Communications Amanda_Butler@lincolnelectric.com 216.383.2534 12
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Non-GAAP Information Adjusted operating income, Adjusted net income, Adjusted EBIT, EBITDA, Adjusted EBITDA, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted EPS, Organic sales, Cash conversion, and Adjusted Return on invested capital are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently. 13
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Non-GAAP Financial Measures Non-GAAP Financial Measures: Reconciliation of Operating Income, Net Income, Effective Tax Rate, and EPS to Non-GAAP Adjusted Operating Income, Adjusted Net Income, Adjusted Effective Tax Rate, and Adjusted EPS (In thousands, except per share amounts) (Unaudited) 14 Please see the following slide for corresponding footnotes
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1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section. 2) 2025 charges primarily relate to rationalization plans initiated in Americas Welding and International Welding. 2024 charges primarily relate to rationalization plans initiated within International Welding and the Harris Products Group. 3) Transaction costs related to acquisitions which are included in Selling, general & administrative expenses. 4) Costs related to acquisitions which are included in Cost of goods sold. 5) Loss on asset disposal included in Other income (expense). 6) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item. Non-GAAP Financial Measures (continued) Footnotes for Non-GAAP Financial Measures: Reconciliation of Operating Income, Net Income, Effective Tax Rate, and EPS to Non-GAAP Adjusted Operating Income, Adjusted Net Income, Adjusted Effective Tax Rate, and Adjusted EPS 15
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Non-GAAP Financial Measures Adjusted Return on Invested Capital (ROIC) (In thousands) (Unaudited) 16 1) Adjusted net operating profit after taxes and Adjusted ROIC are non-GAAP financial measures. Refer to Non-GAAP Information section. 2) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.
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Segment EBIT EBIT and Adjusted EBIT Reconciliation – Three Months Ended June 30, 2025 (In thousands) (Unaudited) 17 Please see the following slide for corresponding footnotes
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Non-GAAP Financial Measures (continued) Footnotes for EBIT and Adjusted EBIT Reconciliation – Three Months Ended June 30, 2025 18 1) EBIT is defined as Operating income plus Other income. 2) The primary profit measure used by management to assess segment performance is adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive adjusted EBIT. 3) Special items in 2025 primarily reflect Rationalization and asset impairments net charges of $905 in Americas Welding, $1,551 in International Welding and $86 in Harris Products Group, as well as acquisition transaction costs of $429 in Corporate/Eliminations. 4) Special items in 2024 primarily reflect rationalization net charges of $26,284 in International Welding, primarily due to the impact of the Company’s disposition of its Russian entity, a loss on asset disposal of $4,950 recorded to Other income (expense) in International Welding, and acquisition transaction costs of $2,182 in Corporate/Eliminations.