ESAB (ESAB) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results with positive organic growth, record margins, and robust free cash flow despite challenging markets.

• Growth driven by high-performing regions (India, Asia, Middle East), commercial excellence, automation, and strategic acquisitions.

• Equipment sales grew in the low double digits, with strong momentum in new products and gas control business.

• Net income from continuing operations rose to $71.0 million in Q3 2024, up from $60.8 million in Q3 2023.

• Celebrated 120th anniversary, highlighting innovation and customer engagement.

Financial highlights

• Q3 2024 sales were $673.3 million, down 1.1% year-over-year; organic sales growth was 1%.

• Adjusted EBITDA margin expanded 130 basis points year-over-year to a record 19.6% for Q3.

• Adjusted EBITDA for Q3 2024 was $127.4 million (18.9% margin), up from $122.5 million (18.0%) in Q3 2023.

• Free cash flow for the nine months ended September 27, 2024, was $215 million, up 8% year-over-year.

• Adjusted EPS for Q3 2024 was $1.28, up from $1.13 in Q3 2023.

Outlook and guidance

• 2024 core organic sales growth expected at 0.0% to 1.0%; total core sales growth at (1.5)% to (0.5)%.

• Adjusted EBITDA guidance raised to $500–$515 million; adjusted EPS guidance raised to $4.80–$4.95.

• Free cash flow conversion expected to remain above 95%.

• FX expected to be a 2.5% headwind; M&A to contribute ~1% to growth.

• On track for 2028 goals: $4B sales, 22%+ EBITDA margin, free cash flow exceeding net income.