FIRST QUARTER 2024

EARNINGS PRESENTATION

May 01, 2024

CUSTOMER

•

TEAMWORK

1

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Examples of such forward-looking statements include but are not limited to: (i) statements regarding the Company's results of operations and financial condition; (ii) statements of plans, objectives or goals of the Company or its management, including those related to financing, products, or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "forecasts," and "plans," and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. The Company cautions that several important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates, and intentions expressed in such forward-looking statements. These factors include but are not limited to: (i) lower than expected future sales; (ii) increasing competitive industry pressures; (iii) general economic conditions or conditions affecting demand for the products and services it offers, both domestically and internationally; (iv) worldwide economic and business conditions and conditions in the industries in which the Company operates; (v) geopolitcal issues (vi) fluctuations in the cost of raw materials, utilities, and other inputs; (vii) currency fluctuations and hedging risks; (viii) the Company's ability to protect its intellectual property; (ix) the significant amount of indebtedness the Company has incurred and may incur and the obligations to service such indebtedness and to comply with the covenants contained therein; and (x) risks related to the impact of COVID-19. The Company cautions that the foregoing list of important factors is not exhaustive. These factors are more fully discussed in the sections entitled "Forward-Looking Statements" and "Risk Factors" in its Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the U.S. Securities and Exchange Commission on February 27, 2024. When relying on forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and events. Forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update or revise any such statement, whether because of new information, future events, or otherwise.

CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK

2

Q1 2024 KEY MESSAGES

Sales Met Projections:

Sales tracked to expectations for the quarter, reflecting seasonal

norms and continued general industrial softness

Market Dynamics:

Strategic approach kept business competitive, despite ongoing

market headwinds in certain sectors

Efficiency Realized:

Consolidation of manufacturing operations delivered

notable improvement to Adjusted Gross Margin

Earnings Delivery:

Adjusted EPS exceeded internal forecasts, reflecting operational

excellence

Cash Flow:

Enhanced cash flow and reduced debt aided profitability

Strategic Review:

Initiated sale process of Graphic Arts, attracting considerable

initial interest

Insurance Legal Fees:

Received first significant recovery of legal fees (post quarter end)

*Note: Adjusted financials exclude Graphic Arts; Free Cash Flow defined as Operating Cash Flow less Capital Expenditures

Q 1 ' 2 4 K E Y F I N A N C I A L S *

$83.1M

Adjusted Sales

22.3%

Adj Gross Margin

$10.5M

Adjusted EBITDA

$0.20

Adjusted EPS

$3.6M

Cash from Operations

Sequential Improvement in Profitability with Solid Cash Flow

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3

COMPREHENSIVE STRATEGIC REVIEW UPDATE

Comprehensive, portfolio-wide evaluation of all businesses, capital structure and available opportunities

A C C E L E R A T E D A N D E X P A N D E D A N N U A L S T R A T E G I C R E V I E W

1

S A L E O F G R A P H I C A R T S B U S I N E S S

•

Retained Advisor:

XMS Capital Partners

•

Sale Process:

Well underway with significant engagement from potential buyers

•

Timing:

Expectation of closing transaction by year-end

2

E N H A N C I N G G A S C Y L I N D E R S A N D E L E K T R O N T O G E N E R AT E S T R O N G

P R O F I TA B L E G R O W T H A N D R E T U R N S

  • Cost Optimization: Continue to reduce costs to improve margins

• Investment:Focused investment on profitable growth and attractive returns

  • Market Trends:Anticipating Industrial recovery and Clean Energy growth
  • Future Growth:Targeting sustainable profitable expansion in 2025 and beyond

3

C O N S I D E R A B L E S T R AT E G I C O P T I O N A L I T Y T O M A X I M I Z E V A L U E

• Independence:

Gas Cylinders and Elektron operate with no material strategic synergies

  • Ongoing Monitoring: Continuously assessing business performance and market conditions for optionality to unlock shareholder value

Optimizing Luxfer's Portfolio and Operations to Drive Growth and Maximize Shareholder Value.

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4

PERFORMANCE IMPROVEMENT ACTIVITIES

T H E LU X F E R B U S I N ES S SYST E M

  • Manufacturing Efficiencies: Elektron profitability enhanced by strategic manufacturing footprint simplification.
  • Market Leadership: Recovery in Flameless Ration Heater sales, following 2024 awards from the Defense Logistics Agency, confirming Luxfer's strong position in the Meals Ready-to-Eat market.
  • Enhanced Strategic Partnerships: Delivered Super Light SCBA cylinders to the US Air Force via a key strategic customer, bolstering defense safety and readiness.
  • Advancing Clean Energy Initiatives: Enhanced North American operations and continued construction of UK Bulk Gas Transportation Module facility.
  • Product Development Grant: Accelerating Luxfer's Type 4 hydrogen cylinder innovation for elevated performance in green energy solutions.
  • Legal Fee Recovery: Began recovering legal fees, with $1.3 million received in April, with further work ongoing.

Leveraging The Luxfer Business System for Enduring Growth and Value Creation

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5

Q1'24 FINANCIAL RESULTS & BRIDGES

(amounts in millions, except EPS)

G r o s s

G r o s s

A d j .

A d j . E B I T D A

A d j .

F r e e C a s h

N e t

S a l e s

P r o f i t

M a r g i n

E B I T D A

M a r g i n

E P S

F l o w

D e b t

Q1' 2024

$83.1

$18.5

22.3%

$10.5

12.6%

$0.20

$2.2

$71.6

vs. Q1' 2023

-11.5%

-11.5%

flat

-12.5%

-20bps

-16.7%

+$18.6

-$18.0

S A L E S ( $ M )

A d j E B I T D A ( $ M )

$0.6

$1.6

$93.9

$13.0

$83.1

Q1 2023

FX

Price

Volume/Mix

Q1 2024

  • Pricing and FX Benefits: Offset by expected volume declines linked to ongoing general industrial softness.
  • Gas Cylinders: Robust price recovery after contract renegotiations.
  • Market Trends: Overall contraction across all end markets year-over- year (YoY), yet showing sequential improvement in General Industrial.

*Note: Financials exclude Graphic Arts; Free Cash Flow defined as Operating Cash Flow less Capital Expenditures

$0.6

$1.6

$12.0

$1.6

$10.5

$7.9

$3.8

Q1 2023

FX

Price Net Deflation Vol/Mix

Other

Q1 2024

  • Pricing and Cost Dynamics: Favorable pricing and cost deflation, balanced by a decline in volume.
  • Operational Efficiencies: Gains from manufacturing efficiencies and cost reductions due to recent consolidation efforts.
  • Legal Cost Benefit: Minimal legal expenses following significant expenditures in the previous year.

Financial Results Recovering from Q4 2023 and Slightly Ahead of Expectations

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6

ELEKTRON Q1 '24 FINANCIAL RESULTS

(amounts in millions)

Q 1

C h g . v s .

C h g . v s .

2 0 2 4

Q 1 ' 2 3

Q 4 ' 2 3

Sales

$37.7

-28.1%

4.4%

Gross Margin

28.6%

-140bps

840bps

Adj. EBITDA

$6.4

-32.6%

300.0%

Adj. EBITDA Margin

17.0%

-110bps

1,260bps

F I N A N C I A L P E R F O R M A N C E O V E R V I E W :

  • Strong Turnaround: Sequentially improved profitability, with gross margin increase of 840bps from Q4'23.
  • Sales Trends: Year-over-Year reduction due to ongoing market softness, but volume recovering from the lows of Q4'23 led by recovery in Flameless Ration Heaters.
  • Manufacturing Efficiencies: Cost structure initiatives enhancing profitability with greatly improved Adjusted EBITDA Margins from Q4'23.

Q1'24 SALES

C h g .

C h g .

BY SEGMENT ($M)

v s

v s

Q 1 ' 2 3

Q 4 ' 2 3

Defense,

-$10.2

-$1.6

First Response,

$14.0

$13.9

Healthcare

Transportation

-$3.0

-$0.3

$9.8

General

-$1.5

+$3.4

Industrial

S E G M E N T C O M M E N TA R Y:

  • Market Headwinds: Navigating headwinds in subdued markets, notably in defense applications although broader industrial sector improved.
  • Defense Sector Dynamics: Defense segment sales faced pressures, linked to short term customer destocking of countermeasure flares.
  • Recovery Anticipation: Sequential improvement in General Industrial sales with improving order book hinting at future volume recovery.
  • Recovery in Margins & Profitability: Improving from H2 2023 due to better product mix, reduced legal costs, and positive self-helpinitiatives.

Sequential Recovery in Profitability from Improved Manufacturing Efficiency and Mix

CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK

7

GAS CYLINDERS Q1 '24 FINANCIAL RESULTS

(amounts in millions)

Q 1

C h g . v s .

C h g . v s .

2 0 2 4

Q 1 ' 2 3

Q 4 ' 2 3

Sales

$45.4

9.4%

-12.2%

Gross Margin

17.0%

450bps

-120bps

Adj. EBITDA

$4.1

64.0%

-36.9%

Adj. EBITDA Margin

9.0%

300bps

-360bps

Q1'24 SALES

BY SEGMENT ($M)

$5.7

$20.6

$19.1

C h g .

C h g .

v s

v s

Q 1 ' 2 3

Q 4 ' 2 3

Defense,

+$2.5

-$3.9

First Response,

Healthcare

Transportation

+$5.2

-$0.9

General

-$3.8

-$1.5

Industrial

F I N A N C I A L P E F O R M A N C E O V E R V I E W :

  • Sales Dynamics: Sustained demand in both SCBA and Alternative Fuel drove higher sales versus prior year.
  • Gross Margin Enhancement: Achieved through operational efficiencies and securing long-term SCBA contracts with key customers.
  • Cost Management Impact: Structural footprint changes have supported a 300bps improvement in Adjusted EBITDA Margins Year- over-Year.

S E G M E N T C O M M E N TA R Y:

  • First Response: Year-on-year sales uplift with new contracts with key customers of our advanced lightweight firefighter SCBA cylinders.
  • Transportation Dynamics: Notably stronger North American CNG demand counteracts slower growth in hydrogen alternative fuel sales.
  • Seasonal Demand Shifts: A dip below Q4'23 sales attributed to an unusually high Q4 demand for SCBA products.
  • Profitability Outlook: Gross Margin trajectory has secured a position in the high teens, delivered by new long-term agreements.

New SCBA Contracts Delivering Greatly Improved year-on-year Profitability

CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK

8

FY 2024 OUTLOOK

F U L L Y E A R *

P r i o r

C u r r e n t

Sales Growth

-3% to +1%

Down (LSD)

(incl. volume, price, and FX)

Adjusted EBITDA

$42M

- $46M

$44M

- $48M

Adjusted Diluted EPS

$0.70

- $0.85

$0.75

- $0.90

Free Cash Flow

$20M

- $24M

$21M

- $25M

A S S U M P T I O N S *

Capex

$11M - $14M

$11M - $14M

Tax Rate

~23%

~23%

FX GBP:USD

1.25

1.25

Net Debt: EBITDA (FY)

~1.5x

~1.5x

*Note: The 2024 Full Year outlook excludes Graphic Arts business

A S S U M P T I O N S O V E R V I E W :

  • Industrial Sector Outlook: Persistent challenges in industrial markets but improving in H2.
  • Earnings Rebound: Elektron sequential margin improvement in first quarter to be maintained.
  • Gas Cylinders Growth: Enhanced by renewed partnerships and cost-savingstrategies.
  • Strengthening Cash Flow: Efficiently managing operating working capital while leveraging our balance sheet to fuel growth capex and return capital to shareholders.
  • Legal costs: Incremental recovery of historic legal costs provides upside to earnings and cash.
  • Leverage: Net Debt: EBITDA to fall over course of year to 1.5x.

Revision to Guidance reflects Encouraging Q1 and Known Recovery of Legal Fees

CUSTOMER FIRST • INTEGRITY • ACCOUNTABILITY • INNOVATION • PERSONAL DEVELOPMENT • TEAMWORK

9

ENHANCING BUSINESS PERFORMANCE

G R O W I N G C O N F I D E N C E A N D R E S I L A N C E W I T H C L E A R PAT H T O VA L U E C R E AT I O N

Strategic

Market

Operational

Insurance

Financial Health

Commercial

Demand

Consolidations:

Legal Fees

Enhancement:

Developments:

Recovery:

"Streamlined

Resolution:

"Reduced

"Secured multi-year

"Capitalizing on

North American

"Addressed

inventories,

SCBA agreements,

early signs of

operations

insurance

improved free

including supply to

demand

and launched

coverage issues,

cash flow, and

the US Air Force,

recovery in

new UK facility,

now recovering

maintained net

emphasizing

various Elektron

boosting our role

historical

debt, enhancing

safety and support

markets."

in green energy."

legal fees."

financial stability."

with advanced

technology."

Driving Forward: Leveraging Our Materials Technology Expertise for Sustainable Long-Term Growth

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10

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Disclaimer

Luxfer Holdings plc published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 10:07:30 UTC.