UNITED STATES
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WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 7.01 | Regulation FD Disclosure. |
On March 14, 2022, Colfax Corporation (the “Company”) plans to hold virtual investor meetings for the Company and ESAB Corporation (“ESAB”) in connection with the Company’s previously announced separation of its existing fabrication technology business, which will operate as ESAB, into an independent, publicly traded company (the “Separation”). Following the Separation, the Company will change its name to Enovis Corporation and continue to operate the Company’s specialty medical technology business. Copies of the investor presentations to be used in connection with these meetings are furnished hereto as Exhibit 99.1 and Exhibit 99.2, and will be available on the investor relations section of the Company’s website.
The information furnished under this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, or the Exchange Act, except as set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Colfax Corporation (Enovis) Investor Presentation, dated March 14, 2022 | |
| 99.2 | ESAB Corporation Investor Presentation, dated March 14, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 14, 2022
| COLFAX CORPORATION | ||
| By: | /s/ Christopher M. Hix | |
| Name: | Christopher M. Hix | |
| Title: | Executive Vice President, Finance, Chief Financial Officer | |
March 14, 2022 Investor Presentation Enovis: An Innovation Driven Medical Technology Company Exhibit 99.1
Forward Looking Statement and Non-GAAP Disclaimer This document has been prepared by Colfax Corporation, a Delaware corporation (“Colfax”), solely for informational purposes. Upon completion of the intended separation of Colfax’s fabrication technology and specialty medical technology businesses (the “Separation”), Colfax will retain the specialty medical technology business and will change its name to Enovis Corporation (the “Company” or “Enovis”). References herein to the terms “Colfax” and “Enovis,” when used in a historical context, refer to Colfax and its consolidated subsidiaries before giving effect to the Separation and, when used in the future tense, refer to Enovis and its consolidated subsidiaries after giving effect to the Separation. Forward-Looking Statements This document includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Enovis’s plans, goals, objectives, outlook, expectations and intentions, including the Separation, and the timing, method and anticipated benefits of the Separation and other statements that are not historical or current fact. Forward-looking statements are based on Enovis’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including general risks and uncertainties such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Factors that could cause Enovis’s results to differ materially from current expectations include, but are not limited to, risks related to the impact of the COVID-19 global pandemic, including the rise, prevalence and severity of variants of the virus, actions by governments, businesses and individuals in response to the situation, such as the scope and duration of the outbreak, the nature and effectiveness of government actions and restrictive measures implemented in response; material delays and cancellations of medical procedures; supply chain disruptions; the impact on creditworthiness and financial viability of customers; macroeconomic conditions; the war in the Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of the Ukraine; risks relating to the Separation, including the final approval of the Separation by Colfax’s board of directors, the uncertainty of obtaining regulatory approvals, Colfax’s ability to satisfactorily complete steps necessary for the Separation and related transactions to be generally tax-free for U.S. federal income tax purposes, the ability to satisfy the necessary conditions to complete the Separation on a timely basis, or at all, the ability to realize the anticipated benefits of the Separation, developments related to the impact of the COVID-19 pandemic on the Separation, and the financial and operating performance of Enovis following the Separation; other impacts on Enovis’s business and ability to execute business continuity plans; and the other factors detailed in Colfax’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including its most recent Annual Report on Form 10-K as well as the other risks discussed in Colfax’s filings with the SEC. In addition, these statements are based on assumptions that are subject to change. This document speaks only as of the date hereof. Enovis disclaims any duty to update the information herein. Non-GAAP Financial Measures This document includes a presentation of adjusted EBITDA and adjusted EBITDA Margin and other financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”), which Enovis uses to measure the performance of its business. • Adjusted EBITDA represents net income (loss) from continuing operations excluding the effect of restructuring and other related charges, European Union Medical Device Regulation (“MDR”) and related costs, acquisition-related intangible asset amortization and other non-cash charges, intangible asset impairment charges, strategic transaction costs, pension settlement gains and losses, and debt extinguishment charges, as well as interest expense net, income tax expense (benefit), and depreciation and other amortization. Enovis presents adjusted EBITDA margin, which is subject to the same adjustments as adjusted EBITDA. Further, Enovis presents adjusted EBITDA (and adjusted EBITDA margin) on a segmented and organic/core basis, which is subject to the same adjustments as adjusted EBITDA. Lastly, Enovis presents pro forma adjusted EBITDA which includes the same adjustments above, excludes stock compensation expense, and reflects corporate cost in all periods presented. • Organic or core sales growth (decline) excludes the impact of acquisitions and foreign exchange rate fluctuations. The non-GAAP financial measures provided herein are adjusted for certain items as presented in the Appendix and should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Management believes that these non-GAAP financial measures provide useful information to investors by offering additional ways of viewing Enovis’s results. Management also believes that presenting these measures allows investors to view its performance using the same measures that Enovis uses in evaluating our financial and business performance and trends. A reconciliation of adjusted EBITDA and adjusted EBITDA Margin to the closest GAAP financial measure is not available without unreasonable efforts on a forward-looking basis due to the impact and timing on future operating results arising from items excluded from these measures. No Solicitation, No Offer, Additional Information This communication shall not constitute an offer of any securities for sale, nor shall there be any offer, safe or distribution of securities in any jurisdiction in which such offer, sale or distribution would be unlawful prior to appropriate registration or qualification under the securities law of such jurisdiction. For additional information with respect to Colfax and Enovis, please refer to Colfax’s filings with the SEC, and with respect to the Separation, please refer to the registration statement on Form 10 of ESAB Corporation, as it may be further amended, on file with the SEC (“Form 10”). The consummation of the Separation is subject to customary conditions, as further described in the Form 10. The financial information included in this document may not necessarily reflect Enovis’s financial position, results of operations, and cash flows in the future or what Enovis’s financial position results of operations, and cash flows would have been had Enovis been a standalone independent, publicly traded company during the periods presented. Certain Definitions As used in this document, references to “DD” mean “double digit,” references to “LDD” mean “low double digit,” references to “HSD” mean “high single-digit” and references to “MSD” mean “mid-single digit.”
Matt Trerotola CEO Brady Shirley President & COO Chris Hix EVP & CFO Presenters Today
Foundation in attractive orthopedic market with room for expansion Experienced leadership team leveraging proven business system Clear strategy and momentum for HSD organic growth fueled by innovation Significant margin improvement path through mix, productivity, and scale Many acquisition vectors and ample capital to accelerate growth and compound value MedTech Growth Company Positioned for Significant Value Creation
Introduction to Enovis
Enovis™ is a medical technology company focused on developing clinically differentiated solutions that generate measurably better patient outcomes and transform workflows. Powered by a culture of continuous improvement, extraordinary talent and innovation, we ‘create better together’ by partnering with healthcare professionals. Our extensive range of products, services and integrated technologies fuel active lifestyles. #CreatingBetterTogether Who is Enovis?
Strong Global Positions in Attractive Segments PF sales for full-year revenue contribution from Mathys, Trilliant, and MedShape acquisitions. PF aEBITDA for full-year aEBITDA contribution from Mathys, Trilliant and MedShape and 2021 legacy Colfax corporate costs allocated to Enovis on an on-going basis . Refer to Appendix for non-GAAP reconciliations. Positioned for significant growth and value creation Two Attractive Business Segments 2021 Performance Fast growing reconstructive platform DJO Surgical DD growth engine in US, leading in Shoulder and rapid adoption in Knee & Hip Globalized footprint and offering through acquisition of Mathys Expansion into attractive Foot & Ankle market in 2021 Global leader in prevention & recovery (P&R) Global leader in rigid bracing and soft goods Reshaping care path with MotionMD® and MotioniQ™ digital solutions Technology leader in recovery sciences with broad offering in advanced rehabilitation modalities $216mm PF aEBITDA2 $1,516mm PF Sales1
Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. Surgical Implants and Instrumentation Prevention & Rehabilitation (P&R) Market CAGR 3-4% 7-8% 3-4% 6-7% 2-3% ~4% 9 8 3 7 10 6 5 Trauma Spine Our Recon served markets $B $48B Enovis competes in half of the $53B Orthopedics market and “touches” nearly all Market Growth Trends Provide Runway Enovis is well-positioned in segments with strong long-term growth drivers 3-4% Aging but active population, rising obesity Transitioning to outpatient care Innovation improving the quality of care Our P&R served markets Addressing Large, Attractive Ortho Market
PREVENTION Off-loading braces Back braces Cold therapy SURGICAL Shoulders Knees Hips Foot/Ankle RECOVERY Post-op braces Walker boots Cold therapy PERFORMANCE Athletic braces Muscle stimulation REHAB Electrotherapy Laser therapy Heat/cold therapy Traction devices PREVENTION REPAIR RECOVERY Brand leverage with hospitals, surgeons, clinicians, patients Digital workflow solutions for clinics Connected medicine solutions for patient journey Full “episode of care” partner to ambulatory surgery centers (ASC) STRATEGIC ADVANTAGES Leveraging broad and deep market access and technology for strategic advantage Uniquely Positioned Across Full Ortho Care Continuum
Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. 2021 revenue, as reported. Enovis is positioned for share gain, scale, and expansion Competitive Ortho Landscape Big, broad majors Scaled, differentiated players Focused innovators Big enough for healthy margins but additional room to scale Small enough to operate like an innovator Can select most valuable growth paths Ample bolt-on opportunities, attractive path to market/scale for innovators ~30 players in $0.1-0.5B range >$3B $0.5 - $3B <$0.5B ~1,000 pre-revenue or early revenue players Enovis’ Attractive Position Ortho Revenue1 Scaled and Agile in Fragmented Industry
~20% aEBITDA Margin $2B+ Annual Sales HSD Organic Revenue Growth Strategic Opportunities 3-Year Goals Compounding value creation from growth, margins, and investment ü Shaping P&R platform for sustained MSD growth ü Rapidly expanding high-margin, DD growth Recon platform ü Expanding margins with a clear strategy and EGX ü Accelerating growth through technology investments and acquisitions Clear Strategy for Shareholder Value Creation
See Appendix for reconciliation of pro forma sales. Enovis Sales Performance & Goals Improve and shape P&R Aggressively grow and expand Recon Enter adjacent high-growth segments Extend P&R leadership Scale Recon 1 Clear path to $2B and beyond with HSD organic growth and expanded margin profile Realizing Our Vision – High-Value MedTech Growth Company
Joining Board upon consummation of separation. Mitch Rales Matt Trerotola Brady Shirley1 Barbara Bodem1 Liam Kelly Angie Lalor1 Phil Okala Christine Ortiz1 Clay Perfall Rajiv Vinnakota Sharon Wienbar Chairman, Colfax, Danaher Co-Founder CEO President & COO Former SVP & CFO of Hillrom CEO of Teleflex Incorporated Former SVP of HR, Danaher, 3M COO, UPenn Health Systems Prof. of Materials Sciences and Engineering, MIT Operating Executive, Tailwind Capital President, Institute for Citizens & Scholars Former Partner, Scale Venture Partners Board of Directors Enovis Senior Leadership Team Matt Trerotola CEO Chris Hix EVP & CFO Brad Tandy General Counsel Dan Pryor EVP BD, Strategy Patty Lang CHRO Brady Shirley President & COO Senior leaders with over 80 years of combined MedTech experience Strong Leadership Team, Deep MedTech Experience
EGX supporting growth acceleration and margin improvement Our Enovis Growth eXcellence business system is a set of tools, processes, and culture, incorporating continuous improvement to drive and fuel growth Drive Growth Fuel Growth Talent and Culture Our Proven, Powerful Business System, EGX
Enovis commitment to developing our talent fuels our success Actionable annual engagement survey with 90%+ participation and overall scores in top quartile Enterprise-wide focus on diversity and inclusion Powerful combination of DJO & Colfax High performance culture 63% increase in training and development programs Virtual operations boot camp in 2020 Teachable, repeatable EGX tools and processes We enable great patient outcomes The best team wins Innovation defines our future We deliver outstanding results the right way is our way of life Continuous improvement Creating Better Together Attract the Best Talent Develop Internal Talent Pipeline Retain Thru Engagement, Inclusion & Opportunity Harnessing the Power of Our Talent with Purpose, Values, Processes
Note: Refer to Appendix for non-GAAP reconciliations. Enovis EGX journey has strong momentum using tools that had big impact at ESAB Above Market Organic Growth Productivity Foundation For Further Margin Expansion Lean Supply Chain: Safety, Delivery, Productivity Agile Growth: Innovation cadence, Commercial excellence Scalable Support: Shared services, Streamline, Automate Safety, Delivery, Productivity Innov. cadence, Commercial excellence Insource, Streamline Lean Supply Chain: Agile Growth: Scalable Support: CBS/EGX Improvement Journeys 2015 2016 2017 2018 2019 2020 2021 13.8% 17.9% aEBITDA Margin Improvement $2.0B $2.4B Revenue Growth Business System Proven to Drive Significant Long-Term Value
See Appendix for reconciliation of sales pro forma for full-year revenue contribution from Mathys, Trilliant, and MedShape. 2018 2021 Recon P&R $1.5B $1.2B Ortho Market Growth Scaling top line growth and outperforming the market in Recon and P&R Recon P&R Operational improvements Investments in DD recon engine Innovation cadence High growth acquisitions Above market in Recon and P&R Above market in Recon 1 Enovis Evolution to HSD Organic Growth Underway
Note: Current revenue contribution is pro-forma for full-year revenue contribution from Mathys, Trilliant, and MedShape. Current Revenue Contribution 2022+ Expected Revenue Growth Recon 32% @ 10 - 15% P&R 68% @ 4 - 5% MSD+ ð HSD Organic Revenue Growth Demonstrated DD recon growth and P&R at/above market expected to drive us to HSD On Track for HSD Organic Growth
Focused Growth Strategies
Focused Growth Strategies Rapidly expanding high-margin, DD growth Recon platform Tremendous opportunities to drive strong and profitable growth Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX Accelerating growth through technology investments and acquisitions 1 2C 3 4 Building Foot & Ankle business with near-term pathway to $100mm+ 2B Extending US Surgical DD growth engine 2A
Focused Growth Strategies Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX Accelerating growth through technology investments and acquisitions 1 2C 3 4 Building Foot & Ankle business with near-term pathway to $100mm+ 2B Extending US Surgical DD growth engine 2A Rapidly expanding high-margin, DD growth Recon platform
Market Leader in Prevention & Recovery with Differentiated Brands Source: Based on internal Enovis analysis. P&R Sales & Market Position1 Market Leadership Technology and Brand Leadership $5B market expected to grow 3-4% per year Industry-defining products across Orthopedics Leader in fast growing Sports Medicine segment MotionMD® workflow software solution drives 45% of US Clinics Leader in therapy modalities strengthened by LiteCure™ Strong International Position: 32% ex-US Sales Aircast® EXOS® Chattanooga® LiteCure® DonJoy® Recovery Sciences ~$1.0B #1 Globally in Bracing #1 Globally in Rehab #2 In Bone Stimulation Attractive leading global positions in bracing and recovery sciences Industry Leadership 1
Prevention and Recovery Markets with Steady MSD Growth Source: Internal management estimates and SmartTrak (by BioMedGPS, LLC) projections for procedure growth in 2023 and beyond. Key Demand Drivers Segment Growth in Procedure Volume1 JOINT RECONSTRUCTION SPORTS MEDICINE TRAUMA AND INJURY Osteoarthritis prevalence Diabetes prevalence Active lifestyles GDP growth Mobility 5-6% ~6% ~3% Volume WAMGR: ~5% Diverse global market with 3-4% projected revenue growth driven by long-term trends Trends Driving Innovation Inpatient to outpatient across patient journey Conservative care expansion Outpatient to home rehab Alternatives to traditional pain management (opioid) Clinic consolidation into hospitals Growth in modality therapeutics (e.g., HP laser) ~90% of P&R 1
P&R Sales Growth Restored to Above Market Adjusted for constant currency, excludes acquisition and discontinued business lines. 2022 Guidance: MSD Sales Growth Historical Organic Sales Growth1 2019 Above market Poor service Low vitality SKU rationalization Re-establishing customer service levels Increasing vitality Leveraging clinic workflow position and channel strength for share gains Execution Strategies Acquisition COVID Impact Above market Investment and improvements driving sustained above-industry growth 1
Increased Innovation Driving Core Growth and Accelerating Key Strategies Vitality defined as new product revenue (introduced in last 3 years) as a percentage of total revenue. Does not include P&R class 3 bone stimulation revenues. Progress and pipeline innovation to drive quickly to 20%+ vitality goal P&R New Product Introductions 7% Vitality1 Index Market-Leading Innovation From… To… 2018 2021 15% Modernizing Core segments Expanding into high growth categories Leading transition to modalities Pioneering Connected Medicine MotionIQ™ 1
Leading in Digital Healthcare with MotionMD® Products transacted through MotionMD in clinics. 1 A purpose-built SaaS platform creates stickiness and enables share gain SaaS Workflow Automation Software Solution Clinic Location Growth 45% share in US clinics / used by over 30K med professionals Key driver in large Hospital clinic conversions: $15mm 2020-2021 MotionMD® revenue delivers 600 bps higher gross margin Customer Retention Rate of 99% DJO Share of wallet Direct 70% / OfficeCare® 96% (CAGR) Product Revenue Growth1 (CAGR) Winning with Workflow Solutions 2021 +57% +18% 2021 Secure. Paperless. Integrated 24% Reduction in inventory 8% Improvement in collections 40% Reduction in Billing lead time
Pioneering Connected Medicine with MotioniQ™ Enable doctors and patients to virtually walk side-by-side throughout the care continuum Ultimate Wearable Technology SmartBrace™ transforming “in-protocol” brace into wearable technology Enables Post-Op remote patient monitoring across patient journey Opens broader outcomes data collection in linked collaboration with CAS Pre-Op/Intra-Op technologies DJO leveraging global bracing leadership, continuum breadth and large installed base of MotionMD® in ~45%+ of US ortho clinics Enovis Competitive Advantage 1
Focused Growth Strategies Shaping P&R platform for sustained MSD growth Expanding margins with a clear strategy and EGX Accelerating growth through technology investments and acquisitions 1 3 4 Rapidly expanding high-margin, DD growth Recon platform Globalizing and expanding recon platform 2C Building Foot & Ankle business with near-term pathway to $100mm+ 2B Extending US Surgical DD growth engine 2A
Attractive Reconstructive Segment & Market Position Source: Based on internal Enovis analysis. 2021 sales pro forma for recent acquisitions (annualized impact vs partial year 2021 sales). 2 ~$0.5B2 Enovis ‘21 Sales Revenue Split and Market Growth1 $20B market segments; Enovis WAMGR of 5-6% Other Extremities market growing 7-8% Positioned in fast-growing segments with market-leading innovation ~50% of Recon platform in high growth extremities segments A global leader in Shoulder (Reverse, Stemless anatomic) Sustained share gain in large US Hip/Knee segments Innovative and expanding Foot & Ankle portfolio Deep advanced technology offering across platform Attractive Positions
Fast-Growing Recon Business with Proven Playbook 2A 2X market growth led by Altivate Reverse and accelerating Altivate Edge anatomic stemless Proven MatchPoint® pre-operative plan and PSI system in 35%+ of procedures Track record of sustained strong DD growth across segments 5X+ market growth powered by Empowr3D® Knee and Taperfill® Hip Stem Great implants and enabling technologies for ASC US Shoulder Revenue US Hip / Knee Revenue 14% CAGR Best-in-Class medical education across segments Unparalleled KOL leadership team Aggressive NPI cadence 18% CAGR ($ in mm) ($ in mm)
Measurably Better Demonstrated Outcomes… 2A ALTIVATE Reverse: Breakthrough in range of motion “Glenoid lateralization and inferiorization, as well as a 135o shaft angle,…are the best options to improve impingement free range of motion, to limit notching, and are not harmful for long-term longevity.” - Professor Gilles Walch, M.D. EMPOWR Knee: Breakthrough in natural kinematics “The unique dual pivot design of the Empowr® knee closely replicates the ACL-intact native knee motion through lateral conformity and results in a 20% improvement in patient satisfaction versus the balance of the market.” - Michael Meneghini, M.D. …lead to surgeon preference!
Leading Innovation Cadence Driving Rapid Adoption 2A ~65% ~75% Expansion in product bag penetration Market-Leading Innovation Cadence +23% New surgeons ($100K+) 30%+ Sustained vitality Improvement Since 2018 Significant whitespace to continue executing strategy Breadth in key Shoulder franchise Extending Empowr® Knee impact across treatment protocol Advancing modern Hip Implant systems ASC/CAS
Winning in High Growth ASC Segment Source: Based on internal Enovis analysis. 2A % of DJO Surgical Knee Revenue in ASC Rapid Expansion of Empowr® Knee in ASC Drivers of ASC Growth Enovis Advantage Medicare / Medicaid rule change 1/1/2020 Shrinking physician fee coverage by CMS à fueling physician interest in ASC ownership COVID-19 accelerated move to ASC Patient preference for outpatient / ASC care setting Enovis continuum of care coverage EMPOWR® Knee patient profile Sports medicine physicians capturing TKA ASC-enabling technologies (Insight, Adaptable +) New high-growth ASC segment favors agile innovator
Targeted Computer Assisted Surgery (CAS) Strategy 2A Enovis CAS technologies will provide a flexible and scalable approach Match Point™ System used in ~30% of Enovis shoulder cases Anatomically distinct Spanning entire workflow Platform purpose-built for ASC Suite of offerings uniquely tooled to each anatomy Pre-Op / Patient Specific Instrumentation Intra-Operative Imaging Surgical Guidance / Robotics End-to-end set of integrated components that can also be used on a standalone basis Low capital costs Time and Space Efficient Micro footprint Optimized for ASC success – effective, efficient and affordable Unique guidance platform leveraging AR Best-in-class Pre-Op Planning & PSI1 for Total Ankle Coming soon PSI stands for Patient Specific Instrumentation.
Strong Positions in Attractive Foot and Ankle Market Note: Number of procedures based on US surgical activity. 2B Integration on track, momentum accelerating Complex anatomy with many niche procedures Demographics and favorable reimbursement powering HSD growth Innovation improving outcomes by leveraging existing and next-gen technology High-Growth, Fragmented Market Forefoot ~2mm procedures Midfoot ~150k procedures Hindfoot ~100k procedures Ankle ~250k procedures Innovative Technologies with Great Outcomes STAR™ Ankle >20% revenue CAGR 2015-19 Unique shape metal fixation technology Developing technologies to span F&A and Recon 20+ years of best-in-class patient outcomes Clear pathway to modernize unique mobile bearing design ~15% revenue CAGR 2015-19 Unique polyaxial locking technology Broad portfolio of differentiated plating systems $2B Global Market HSD Market Growth
Clear Strategy to Grow, Expand, and Scale in Foot and Ankle 2B Key contributor to Recon DD growth 1 Building strong dedicated channel 2 Developing and acquiring differentiated products for other high-growth procedures 3 Modernizing STAR™ and expanding ankle portfolio 4 Globalize through Mathys Execution Leveraging Foundation + Innovation DD Organic Growth ~80%+ Gross Margins $100mm Differentiated Business 3-Year Goals
Globalization of Recon Through Mathys Acquisition US Hip/Knee/Shoulder market per Orthoworld 2021 Orthopedic Industry Annual Report. Not including Foot & Ankle ($3B globally). 2C Mathys acquisition nearly doubles addressable market and expands portfolio Pre-Acquisition Pro-Forma Reflecting Acquisition ~$160mm 2022 Expected Ex-US Sales European orthopedics leader with an extensive direct sales channel and strong local brand Highly complementary product technologies Unique, proprietary Ceramys ceramics and RM Pressfit elastic monoblock technologies Hip and Shoulder historical growth @ ~2x market Enables aggressive international rollout of Altivate® Reverse and Empowr® 3D Knee platforms Strategic Rationale $11B Pre-Acquisition TAM1 $20B Pro-Forma TAM2 Significant addressable market expansion
Realizing the Strategic Benefits from Mathys Acquisition 2C Complementary markets and technologies enable growth acceleration and margin improvement CROSS-SELL LEADING TECHNOLOGIES GLOBALIZE INNOVATION DRIVE PRODUCTIVITY Goals Strategic Pillar Expand Mathys Shoulder with Altivate® Reverse Strengthen Mathys Knee with Empowr®3D Accelerate US Surgical Hip breadth with RM Monoblock & Optimus Stem Supply chain optimization, insourcing and productivity Scaling the international business $15mm Annual Cost Synergies by 2024 MSD ð HSD / LDD International Organic Revenue Growth Create competitive advantage with ceramics in allergy-free implants spanning Recon segments Fuel RM Pressfit elastic monoblock beyond Hip Develop global CAS offering & outcomes registry
Recon Double-Digit Organic Growth Projection Source: Orthoworld 2021 Orthopedic Industry Annual Report. 2 1 % of Recon Market Growth1 Projected Growth vs. Market 2022+ Growth Projection US Shoulder ~30% 7-8% ~2x 12 – 15% US Hip / Knee ~30% 3-4% 3-5x 10 – 15% Foot / Ankle ~10% 6-7% 2-3x 15 – 18% Int’l Recon ~30% 4-5% 2-3x 7 – 10% 5-6% WAMGR 2-3X Market Growth 10-15% Clear track record and trajectory for sustained double-digit organic growth
Focused Growth Strategies Expanding margins with a clear strategy and EGX 3 Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Accelerating growth through technology investments and acquisitions 1 2C 4 Building Foot & Ankle business with near-term pathway to $100mm+ 2B Extending US Surgical DD growth engine 2A Rapidly expanding high-margin, DD growth Recon platform
Clear Short-Term Path to 20% aEBITDA Margins Note: Bridging bars from 2021 to 2024 are directional and not to scale; refer to Appendix for non-GAAP reconciliations. 2018 results are based on management’s internal reports. 3 aEBITDA Margin (%) Margin Drivers Right-size corporate costs Streamline and simplify SG&A Operating leverage from growth, positive mix and EGX productivity vs. price/investments Scale and synergy from recent acquisitions Recover COVID/inflation GM pressure through price, return to efficiency Investment COVID Acquisitions SG&A Streamlining Operating Leverage Acquisitions COVID Recovery Continuous margin improvement through EGX with longer-term headroom to 25%+
Focused Growth Strategies Accelerating growth through technology investments and acquisitions 4 Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX 1 2C 3 Building Foot & Ankle business with near-term pathway to $100mm+ 2B Extending US Surgical DD growth engine 2A Rapidly expanding high-margin, DD growth Recon platform
Recent Portfolio Investments Reshaping Our Business 4 Projected 2024 Portfolio Impact >$300mm Sales Accretive Gross Margins DD+ Organic Growth Entered Foot & Ankle >$1B Market HSD growth category Fragmented competition MedShape® / Trilliant® AR Surgical Platform Next Gen total joint arthroplasty system Footprint and cost positioned for ASC ASC Solutions Double digit procedural volume growth Provides Surgical assistance Arvis™ AR ADAPTABLE® High Growth Modalities HSD growth category Synergy opportunities Expanded applications LiteCure™ Laser Geographical Expansion Drives growth outperformance Increased scale benefits Direct market penetration
Broad Range of Opportunities to Accelerate by Acquisition 4 Expand Geographically Fill Product Line Gaps Expand Channels Apply Technology in Other Markets Enter Logical Clinic- Based Adjacencies Expand along Continuum of Care Add Digital Solutions Build around Healthcare Provider Excel Win in the core Extend Build out from core Expand Redefine boundaries Add High-Growth / High-Margin P&R Enter High-Growth Recon Sub-Segments Acquisition Criteria Fuels growth Improves gross margin Accelerates strategy Expands market reach Creates scale
Financial Section
Refer to Appendix for non-GAAP reconciliations, 2018 organic growth based on management’s internal reports. 2019 shown pro forma to include periods prior to DJO acquisition on February 22, 2019. Sales ($B) Accelerating Growth Supply chain investment and EGX improvements restored P&R growth in 2H 2019 Innovation engine investments contributing to higher organic growth across the company Acquisitions into faster-growing market segments accelerating growth Ramping investments in commercial capabilities Expecting to continue to outgrow our markets in 2022 and beyond 2% 4% (11)% 14% 6-9% 10-14% Total Organic Growth HSD Acq’d by Colfax Improving ops / customer service Strengthening innovation Investing in faster-growing segments ~$2B COVID Strong Growth Outlook
2022 Forecast Outperform markets with DD organic growth in Recon, healthy MSD growth in P&R Revenue follows typical seasonality + COVID recovery to deliver revenue pattern of ~47-48% in 1H (~23% in Q1) and ~52-53% in H2 (Q4 is strongest quarter) Key Assumptions Strong top-line growth in 2022 10-14% revenue growth 6-9% organic; (1%) FX ~$1.6B total revenue Forecasting Continued Market Outperformance in 2022
Note: 2022 includes approximately $60mm of annual pro forma costs representing the legacy Colfax corporate costs, and $73mm for the period 2018-2021. 2019 aEBITDA margin is pro-forma for pre-acquisition results. 2018 aEBITDA margin is based on management’s internal reports. Refer to Appendix for non-GAAP reconciliations. aEBITDA Margin (%) Margin Drivers COVID ~20% Fast growth + high gross margins creating powerful operating leverage Acquisitions creating additional opportunities for scaling and cost synergies (e.g., $15mm at Mathys) Actions underway to streamline and remove $20mm of cost by 2024 COVID introduced >$20mm of supply chain challenges and inflation that can be recovered as pressures subside Driving price in P&R to mitigate inflation impacts Investing to support in-sourcing and other productivity projects Investing in supply-chain, strengthen the foundation 15.1% excl. acq. Investing in innovation, high-growth acquisitions Driving productivity and scale ~17% excl. acq. Converting Growth into Margin Expansion
Assumes 1:3 reverse share split. Expect $2.20-$2.40 of adjusted EPS1 in FY 2022 $245-265mm aEBITDA Significant revenue growth and productivity initiatives support margin expansion COVID-driven inefficiencies and inflation begin to moderate in Q3/Q4 Corporate costs drop ~$15mm with path for additional efficiencies Streamlining project underway with ~$10mm of run-rate savings by year-end aEPS guidance assumes pro forma capital structure post-monetization of ESAB retained stake CapEx supports growth, insourcing and Mathys integration 2022 Forecast Key Assumptions ~16% reported margins ~17% core (ex-acq.) margins +150-200 bps yr-yr incl. 80+ bps from lower corporate costs $45-48mm Q1 aEBITDA Driving Strong Core Margin Gains in 2022
* Before further acquisition spending. Growing FCF ($mm) Strong Balance Sheet < $100 > $200 Growing aEBITDA Scaling CapEx Leveraging Inventory Investments Reducing EU MDR costs < 1.5x Net Leverage at separation 10% Retained Stake in ESAB to be exchanged for debt within 12 months of separation, expected to create a net cash position* $900mm initial 5-year revolving credit facility to support strategic growth needs Effective processes across the company to deliver cash flow commitments, balanced with growth objectives Disciplined prioritization of capital to support business growth productivity Proven acquisition program that secures key value drivers and drives attractive returns Ample Resources to Support Growth
Foundation in attractive orthopedic market with room for expansion Experienced leadership team leveraging proven business system Clear strategy and momentum for HSD organic growth fueled by innovation Significant margin improvement path through mix, productivity, and scale Many acquisition vectors and ample capital to accelerate growth and compound value MedTech Growth Company Positioned for Significant Value Creation
Appendix
Continuum of Care in Practice OA = Osteoarthritis. Fitted for shoulder support PREVENTION REPAIR RECOVERY 50+ Weekend Warrior with Knee OA 25+ with sports injury (shoulder fracture) 65+ patient with Ankle OA Laser Therapy Heat and Cold Therapy Fitted for off-loading brace Injections EMPOWR® Knee Replacement in ASC Cold Therapy Post-Op Knee Brace Electrotherapy Fitted for universal ankle brace STAR® ankle replacement in inpatient setting Cold Therapy Post-Op Ankle Brace Laser Therapy On-Going Remote Monitoring Illustrative Osteoarthritic (OA) Patient Journeys First Touch Point Continuity in ASC Environment Smart Bracing Altivate® Reverse Shoulder in ASC Recovery Rehab Prevention / Conservative Care Surgical Intervention Performance ASC Setting ASC Setting Connected care beginning at initial interaction Enovis is the only player with true start-to-end engagement across the continuum Laser Therapy Electrotherapy
Digital Strategies Span Orthopedic Care Continuum Creating unique advantages today, breakthrough potential in the future Clinic / ASC Workflows Surgical Workflows Patient Workflows Multi-pronged, anatomically-specific CAS product suite PREVENTION REPAIR RECOVERY Recovery Rehab Prevention / Conservative Care Surgical Intervention Performance Connected medicine platform across post-op outpatient rehab Purpose-built SaaS platform for multiple value-added services
2021 - 2019 Enovis Recon Performance vs Peers Growth on a sales per day basis. Recon Peers Avg. Relevant Growth 2021 vs 2019 Organic Growth1
Supplemental 2022 Guidance Information Note: Based on preliminary allocation of corporate costs, subject to audit. Depreciation expense: ~$80mm CapEx spend: $100-110mm Tax rate: Mid-20%s Share-based comp. expense ~$27mm
57 Segment-Level Performance Quarterly Sales (2019 – 2021) Segment level aEBITDA % of Sales (2021) $ millions Note: Dollars in millions. Some periods may not foot due to rounding.
58 Non-GAAP Reconciliation __________ (1) Enovis pro forma Net sales and sales components for the year ended December 31, 2019 include Medical Technology segment sales from prior to the February 22, 2019 DJO acquisition date, which are not included in Colfax's Form 10-K reports. Additionally, all Medical Technology segment sales within twelve months of the February 22, 2019 acquisition date were included in the Acquisitions line item of the change in sales reconciliation on the Company's Form 10-K filings. (2) Excludes the impact of foreign exchange rate fluctuations and acquisitions, thus providing a measure of growth due to factors such as price and volume. (3) Represents the incremental sales in comparison to the portion of the prior period during which we did not own the business. (4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates. Note: Dollars in millions. Some periods may not foot due to rounding. $ millions
59 Non-GAAP Reconciliation Note: Dollars in millions. Some periods may not foot due to rounding. $ millions
60 Non-GAAP Reconciliation Note: Dollars in millions. Some periods may not foot due to rounding. __________ (1) Includes costs related to the planned separation. (2) Includes amortization of acquired intangibles and fair value charges on acquired inventory. $ millions
Exhibit 99.2
DISCLAIMER This document has been prepared by ESAB Corporation, a Delaware corporation (the “Company” or “ESAB”), solely for informational purposes. Upon completion of the intended separation of Colfax Corporation’s (“Colfax”) fabrication technology and specialty medical technology businesses (the “Separation”), ESAB will hold the fabrication technology business and become an independent, publicly traded company. References herein to the terms “ESAB” and the “Company” when used in a historical context, refer to Colfax’s fabrication technology business before giving effect to the Separation and, when used in the future tense, refer to ESAB Corporation and its consolidated subsidiaries after giving effect to the Separation. Forward-Looking Statements This document includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning the Company’s plans, goals, objectives, outlook, expectations and intentions, including the Separation, and the timing, method and anticipated benefits of the Separation and other statements that are not historical or current fact. Forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including general risks and uncertainties such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Factors that could cause the Company’s results to differ materially from current expectations include, but are not limited to, risks related to the impact of the COVID-19 global pandemic, including the rise, prevalence and severity of variants of the virus, actions by governments, businesses and individuals in response to the situation, such as the scope and duration of the outbreak, the nature and effectiveness of government actions and restrictive measures implemented in response; the war in the Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of the Ukraine; macroeconomic conditions; supply chain disruptions; the impact on creditworthiness and financial viability of customers; risks relating to the Separation, including the final approval of the Separation by Colfax’s board of directors, the uncertainty of obtaining regulatory approvals, Colfax’s ability to satisfactorily complete steps necessary for the Separation and related transactions to be generally tax-free for U.S. federal income tax purposes, the ability to satisfy the necessary conditions to complete the Separation on a timely basis, or at all, the ability to realize the anticipated benefits of the Separation, developments related to the impact of the COVID-19 pandemic on the Separation, and the financial and operating performance of the Company following the Separation; other impacts on the Company’s business and ability to execute business continuity plans; and the other factors detailed in the Company’s registration statement on Form 10, as it may be further amended (the “Form 10”), relating to the Separation filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on assumptions that are subject to change. This document speaks only as of the date hereof. The Company disclaims any duty to update the information herein. Non-GAAP Financial Measures This document includes a presentation of adjusted EBITDA (adjusted EBITA plus depreciation and other amortization), adjusted EBITDA margin, organic (core) sales growth, and free cash flow and other financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), which ESAB uses to measure the performance of its business. The non-GAAP financial measures provided herein are adjusted for certain items as presented in the Appendix and should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Management believes that these non-GAAP financial measures provide useful information to investors by offering additional ways of viewing ESAB’s results, and represent the following: Adjusted EBITA represents net income excluding the effect of restructuring and other related charges, acquisition-related amortization and other non-cash charges, pension settlement loss, income tax expense, and interest income, net; Adjusted EBITDA represents Adjusted EBITA excluding the effect of depreciation and other amortization; Adjusted net income represents Net income (loss) excluding restructuring and other related charges, pension settlement gain (loss), acquisition-related amortization and other non-cash charges, and the tax impact of the items excluded from pre-tax income; Free cash flow represents Net cash flow from operating activities less purchases of property, plant and equipment; and Cash conversion represents Free cash flow as a percentage of Adjusted net income. Management also believes that presenting these measures allows investors to view its performance using the same measures that ESAB uses in evaluating our financial and business performance and trends. See the Appendix to this presentation for a reconciliation of these non-GAAP measures to their closest equivalent GAAP measures. No Solicitation, No Offer, Additional Information This communication shall not constitute an offer of any securities for sale, nor shall there be any offer, safe or distribution of securities in any jurisdiction in which such offer, sale or distribution would be unlawful prior to appropriate registration or qualification under the securities law of such jurisdiction. For additional information with respect to ESAB and the Separation, please refer to the Form 10. The consummation of the Separation is subject to customary conditions, as further described in the Form 10. The financial information included in this document may not necessarily reflect ESAB’s financial position, results of operations, and cash flows in the future or what ESAB’s financial position results of operations, and cash flows would have been had ESAB been a standalone independent, publicly traded company during the periods presented. Forward Looking Statement & Non-GAAP Disclaimer
About ESAB Our Competitive Advantage Delivering for Our Shareholders TODAY’S KEY THEMES TODAY’S PRESENTERS Shyam P. Kambeyanda President and Chief Executive Officer Kevin Johnson Chief Financial Officer Olivier Biebuyck President, EMEA and Global Products 3
Global Leader in Fabrication Technology 4 Rich History with Leading Brands and Solutions Driving Growth Product Sales Mix 2021 Leading Brands and Full Solutions ESAB Snapshot Founded1: 1904 2021 Revenue: $2.4B 2021 Segment aEBITDA: $434M Headquarters: Bethesda, MD Countries Served: 147 Employees: ~9,000 NYSE Ticker: ESAB 1 Refers to the establishment of Colfax’s fabrication technology operations
#1 Europe #1 India #1 South America #3 North America #1 China (global player) #1 Middle East #1 Australia Market-Leading Positions Globally Market Position by Geography1 Differentiated Footprint Emerging Economies Expected to Grow > 2.0x Developed Markets (2022 - 2026)2 1 By revenue, 2Source: IMF World Economic Outlook, October 2021 Emerging Markets Developed Markets Comparable EBITDA Margin Emerging Markets Developed Markets 2021
How We Win in South America How We Win in India Heritage Entered in 1955 (first global player) Entered in 1987, bought India Oxygen in 19911 Brand advantage Most recognized brands with ESAB, Westarco, and Soldexa Most recognized brands with ESAB and EWAC Strong local capabilities Largest sales and distributor footprint Local welding schools trained ~100,000 welders in last 15 years Largest sales and distributor footprint Trained ~25,000 welders in last 30 years at schools, customer sites, and maritime institutes Best-in-class portfolio Local product customization and innovation R&D team in India Local product customization Successful Emerging Market Franchises and Playbook Strong Ground Game and Local Innovation Drives #1 Position and Long-Term Growth2 1 India Oxygen has a ~70-year history in India, 2 Revenue growth
1 Green indicates ESAB overweight to market or key focus area, 2 Source: ESAB Internal Analysis, IHS Markit 2021, 3 Total Addressable Market (TAM) defined as established equipment and consumable products as well as new products in automation, software and services; estimated based on public data from peer companies, customer surveys, and market analysis conducted by ESAB sales function Secular Trends Driving Attractive Growth Opportunities Secular Growth Drivers Welder shortage driving robotics Infrastructure investment Advanced materials and lightweighting Connected devices / IoT Regulatory and safety Welding and cutting Gas management Positioning the Business for Higher Growth in $30B Market3 General Fabrication Infrastructure & Constr. Oil & Gas Healthcare, Laboratory, & Process $25B Market Established Markets Growing 2 - 3% p.a.2 30% 16% 13% Other (Defense, Ship, Rail) Digital Solutions Robotics Automotive & Vehicles 8% 10% $5B Market Expanding TAM Into Faster Growing Markets Est. Market Split1,2: Mobile Machinery Renewable Energy 6% 5% 12% Medical & Specialty Gas Control Increasing Exposure to Higher Growth Segments 6 - 8% p.a.2
Medical and Specialty Gas Control $3B+ Market Mid-single-digit growth 1 2nd Wave Robotics; 2 Based on ESAB Internal Analysis Increasing Exposure to High-Growth Segments Digital Solutions $1B+ Market opportunity Estimated double-digit Growth Industry-wide inflection point Robotics1 $1B+ Market opportunity Estimated mid-teens growth Attractive Growth Vectors2 Acceleration of Performance through Acquisitions and Innovation $5B+ Market Size 6-8%+ Growth Profile 50%+ Gross Margin $300M+ Estimated Future Sales
2021 2.42 6.2% Sales CAGR (‘16-’21) +300bps aEBITDA Margin Improvement (‘16-’21) Strong Financial Performance Track Record of Growing Revenue and Expanding Margins Segment aEBITDA % %
Growth Strong secular trends Global footprint Leading position across Markets Product innovation Disciplined M&A Margin accretive MSD+ growth 1 Prior target was at the segment level and the new target includes public company costs; excluding public company costs the segment aEBITDA long-term strategic goal is ~21%+ 2 Free cash flow divided by adjusted net income Shaping ESAB to Deliver Long-Term Value Margin Expansion Product-line streamlining Footprint reduction Value pricing Process digitization Cash Flow Generation Increase working capital turns Improve cash conversion Long-Term Strategic Goals $3.0-$3.5B Revenue 20%+ aEBITDA Margin Public company expense1 100%+ Cash Conversion2 ESAB Business System ( ) + Talent
Innovation
Innovation Anchored into Customer Needs New Product Introductions Have Quadrupled Pace of Innovation Accelerating Since 2016 Customer-centric user interfaces Durability, robustness, and portability Smart and connected Five-year vitality represents ~28% of revenue Anchored into Voice of Customers and rapid prototyping Clear technical roadmaps Open innovation with strategic partners R&D centers of excellence in both emerging and developed markets Commercial launch plans Proven Innovation Playbook ESAB Products “DNA” Developing Best-In-Class and Differentiated Products E ~
Leading Digital Capabilities Driving Growth Robotics/Digital Products Position ESAB as Productivity Partner WeldCloud + NxG Equipment TBi Robotic Torch + HKS quality Purus Robotic Filler Metal Programming Software Offerings Drive Long-Term Benefits for ESAB $100M+ Projected Revenues2 Robotics Digital Solutions1 1 Digital Solutions is a portfolio of several software offerings; including WeldCloud, CutCloud, WeldNote, Clarity, and Octopuz 2 Includes pull-through equipment and filler metal sales in addition to software/robotics Simplifies complex programming Works with any robot OEM Increased repeatability, quality, and productivity Insights into operations Quality and traceability metrics Driving productivity Cloud native platform collecting data from linked equipment and digitizing quality certifications Grows TAM by > $1B, access to new customers Positions ESAB as a full solution provider Synergies between digital and robotics Filler metal and equipment pull-through Helps to achieve ~$300M+ of sales from medical and specialty gas control, robotics, and digital solutions
Organic Growth Outpacing Peers 14 Well-Positioned to Drive Long-Term Organic Growth Drivers of Historical Organic Growth Value selling Robust new product development Product portfolio Multiple Vectors of Future Growth Opportunities Innovation pipeline Attractive secular tailwinds Emerging market growth Reshaping our markets Leading Organic Sales CAGR (2018 - 2021) 1.6% + 290BPS Key Welding Peer Group1 1 Welding key peer group includes: Lincoln Electric Holdings, Inc. and Illinois Tool Works, Inc.
M&A Strategy and ESAB Business Excellence (EBX)
Successful Acquisition Process Acquisitions Driving Growth and Margin Expansion Overarching Goals Accretive to GM MSD Acquisition Growth Low Cyclicality Impact on ESAB 2019-2021 Technology Leadership Digital Growth Robotic and Automation Solutions Specialty Alloys Industrial Diversification Gross Margin % Accretive Margins Sales CAGR % Accretive Growth
ESAB Business Excellence (EBX) Driving Results EBX Results EBX Drives Repeatable Processes and Delivers Breakthrough Performance EBX – Our Values, Processes, and Tools Manufacturing Footprint Reduction (# of Facilities)1 New Product Introductions Have Quadrupled 1 Excludes five sites where we have stopped production
History of Margin Expansion With Additional Opportunities Multiple Opportunities to Expand Margins aEBITDA Margin Long-Term Strategic Goal 20%+ +290BPS Drivers of Historical Margin Improvement Delivered ~$20 million in footprint savings since 2018 SG&A transformation Dynamic price/cost management Kaizen-driven improvements Opportunities to Drive Margin and Attain Margin Goals Value pricing Product streamlining Manufacturing footprint reduction Process digitization M&A drives portfolio reshaping Ex Pub Co Exp Ex Pub Co Exp Includes Pub Co Exp
Financial Performance
2021 Working Capital Improved by > 1 Turn Improved O2C processes Enhanced inventory management Vendor term renegotiations Proven Track Record of Delivering Working Capital Improvement Consistent Improvement in Working Capital Turns Driving Free Cash Flow Generation Working Capital Turns Improvement Additional Opportunities Remain to Drive Even More Cash Flow Supply chain transformation and improved inventory management Automation opportunities in O2C and P2P processes
Financial Targets: ESAB Growing Revenue and Expanding Margins MSD Sales Growth Leverage EBX growth tools Launch innovative new product introductions Execute attractive acquisitions Strong Margin Expansion Further plant footprint rationlization Continue SG&A transformation Deliver productivity and sourcing improvements Delivering Sustained Growth, Innovation, and Margin Expansion Sales Growth Bridge, $B 1 Segment EBITDA margin, 2 Includes public company expense aEBITDA Margin % Bridge 1 2 20%+2 ~$B $3.0-3.5B LSD CAGR LSD CAGR
Organic Investment Reinvest in identified accelerators Exciting new funnel of products and expect 110+ in 2022 Manage Leverage Cash flow supports both deleveraging and investments Target leverage ratio from 2x to 3x Acquisitions Disciplined M&A Return Capital Board considering initiating a modest quarterly dividend Capital Allocation to Create Long-Term Value to Investors Focused on Creating Long-Term Value
Prior Revised Sales $2.55-2.60B $2.45-2.50B Total Growth 5%-7% 2%-4% Organic Growth 7%-10% 4%-7% Organic Growth Ex Russia 9%-12% aEBITDA 1 $420-440M $400-420M Free Cash Flow >$210M ESAB 2022 Full Year Outlook Expect $4.30 - $4.50 of Adjusted EPS in FY 20221 Guidance updated to reflect impact from Russia Business excluding Russia expected to outgrow our markets Manufacturing consolidation and transformation project delivering ~$20M of savings Approximately 2.75x net leverage at seperation 1Assumes interest expense and incremental public company costs for 12 months; Assumes ~55mm diluted shares based on a distribution ratio of 1 share of ESAB for each 3 shares of Colfax held by investors at separation; distribution ratio is subject to approval by Colfax Board of Directors
Environmental, Social & Governance (ESG)
ESAB Committed to ESG Building a Sustainable Business Environmental Committed to reducing ESAB’s impact on climate change Social Responsibility Creating an inclusive culture for all stakeholders Governance Serving our stakeholders the right way today and tomorrow Safety Focused on creating a safe place to work Reduced TRIR from 0.97 in 2016 to 0.33 in 2021 Greenhouse Gas/Waste Management ~35% reduction of manufacturing footprint since 2016, reducing GHG and landfill waste Sustainability R&D investment to increase sustainability
Talent & Summary
Strong Experienced Leadership Team Significant Industrial Experience Providing Platform for Growth and Expansion Shyam P. Kambeyanda President, Chief Executive Officer Kevin Johnson Chief Financial Officer Executive Officers Vusa Mlingo Senior Vice President, Strategy and Business Development Michele Campion Chief Human Resources Officer Olivier Biebuyck President, EMEA and Global Products Larry Coble Senior Vice President, EBX, Supply Chain Curtis Jewell General Counsel and Corporate Secretary Mitch Rales Chairman
1 Prior target was at the segment level and the new target includes public company costs; excluding public company costs the segment aEBITDA long-term strategic goal is ~21%+ 2 Free cash flow divided by adjusted net income ESAB: A Premier Fabrication Technology Company $3.0-$3.5B Revenue 20%+ aEBITDA Margin Public Company Expense1 100%+ Cash Conversion2 Long-Term Strategic Goals Innovative portfolio winning with customers Focused on growing shareholder value Strong balance sheet Track record of margin expansion and revenue growth Secular tailwinds driving $30B total addressable market
Appendix
Shyam Kambeyanda Chief Executive Officer Joined ESAB in 2016 Previously worked at Eaton Corporation for 21 years, where he rose to become president of the company's hydraulics business operation in the Americas. Served in key leadership roles, driving the company’s transformation and growth in Asia, Europe and North America. Bachelor’s degrees in physics and general science from Coe College in Iowa, bachelor's of science in electrical engineering from Iowa State University and master’s in business administration from the Kellogg School of Management at Northwestern University. Olivier Biebuyck President EMEA, Equipment, and Digital Solutions Joined ESAB in 2017 Previously worked at Honeywell, LafargeHolcim, and McKinsey & Company in a variety of global leadership roles, spanning business development, product innovation and marketing, to general management. Bachelor’s degree and MBA from Solvay Brussels School of Economics and Management in Brussels, Belgium. Kevin Johnson Chief Financial Officer Joined ESAB in 2019 Previously Vice President of Finance at Colfax Corporation, which he assumed in 2017. In this role, led investor relations, FP&A, and supported acquisition diligence and integration, including being part of the team that acquired DJO Global. Joined Colfax Corporate from Howden, where he held roles of increasing responsibility including as CFO for its South African publicly-listed company. Bachelor of Science at Queen’s University in Belfast, Ireland, and MBA at the University of Hasselt, Belgium. Master’s degree in accounting at Macquarie University in Sydney, Australia and earned his CPA in Australia. Best Team Wins: ESAB Presenters
Strong Experienced Board Mitch Rales Chairman, ESAB Shyam Kambeyanda CEO Patrick Allender Colfax Director, Former EVP & CFO of Danaher Didier Teirlinck Colfax Director, Former EVP Ingersoll Rand Rhonda L Jordan Colfax Director, Former President Kraft Stephanie M Phillips Partner Arnold & Porter, BOD for Empowerment & Inclusion Chris Hix EVP & CFO Enovis Rajiv Vinnakota Colfax Director, President, Institute for Citizens & Scholars Robert S Lutz Former CAO Danaher Former Partner at Arthur Andersen Board of Directors
2022 Outlook – Supplemental Detail Expect $4.30 - $4.50 of Adjusted EPS in FY 20221, 2 1 1 1 1 2 1Assumes interest expense and incremental public company costs for 12 months 2 ; Assumes ~55mm diluted shares based on a distribution ratio of 1 share of ESAB for each 3 shares of Colfax held by investors at separation; distribution ratio is subject to approval by Colfax Board of Directors
Non-GAAP Reconciliation Fabrication Technology1 $ $ $2,193.1 $ $ $ $ $ $220.9 10.1% $ $ $ $ $ $29.1 $ $ $ $ $ $250.0 11.4% $ $ $ $ $ $ $40.0 $ $ $ $ $290.0 $ $ $ $ $ $39.9 $ $ $ $ $ $329.9 15.0% $ $ $ 1 Dollars in millions