Luxfer Holdings PLC Q4 FY2025 earnings call

• 2025 demonstrated successful, disciplined performance with EBITDA totaling $51,900,000, up 4%, adjusted earnings per share $1.11, up 12% year over year, and strong free cash flow. • Electron's defense and aerospace platforms were key drivers, with demand for UGRE and MRE platforms, magnesium aerospace alloys strong. • Gas cylinders navigated end market variability while executing pricing actions and strengthening cost structure. • Advanced optimization initiatives like Riverside Centre of Excellence and Powder Saxonburg Centre of Excellence, with financial benefits expected in late 2026. • 2026 expected to be affected by timing factors but has long-term growth potential with core aerospace and defense demands and new product introductions.

For the fourth quarter, Electron had sales of $46,900,000, down 1.3% year over year, with an adjusted EBITDA margin of 19.6%. For the full year, Electron sales were $196,400,000, up 11.6% versus the prior year, adjusted EBITDA totaled $36,900,000, an increase of 16%, and adjusted EBITDA margin expanded to 18.8%. Gas cylinders fourth quarter sales were $43,800,000, down 9.7% year over year, with gross margin improving to 17.4% and adjusted EBITDA for the quarter $3,800,000. Full year gas cylinder sales were $174,800,000, down 6.2%, adjusted EBITDA for the year was $15,000,000, with an adjusted EBITDA margin of 8.6%.

• Adjusted earnings per share expected to be in the range of $1.5 to $1.2 with a midpoint of approximately $1.12. • Adjusted EBITDA expected to be in the range of $50,000,000 to $55,000,000. • 2026 capital expenditures expected to be above normal levels, between $15,000,000 and $20,000,000, primarily supporting optimization initiatives, growth opportunities, and productivity improvements. • Net leverage at approximately 0.7 times. • 2026 guidance excludes non-recurring advisory costs associated with the Board's ongoing evaluation of strategic alternatives.

• Exchange rate volatility could impact earnings. • 2026 first quarter expected to be softer than prior year due to equipment moves, commissioning inefficiencies, normal seasonality, and tougher comparisons. • Non-recurring advisory costs associated with the Board's ongoing evaluation of strategic alternatives could affect results.

Q: Starting on fourth quarter performance, what is driving the continued strength in electron margins?

A: Good demand throughout the year through more differentiated products like aerospace, defense, magnesium alloys, etc., along with strong manufacturing output.

Q: How should we think about electron margin trajectory in 2026?

A: Expect margin to continue around 20% mark, with mix being variable but target remains 20% with potential upsides from overperformance in core defense and aerospace and faster realization of restructuring benefits.

Q: Can you provide any additional color on the impact of the benefits from the North American gas cylinder plant consolidation and the magnesium powders plant investment?

A: Relocating aerospace and life support product lines in Pomona to Riverside has savings up to $4,000,000, equipment moves started and nearly complete, and investing over $6,000,000 in Saxonburg site with efficiency and automation benefits worth around $2,000,000.

Q: Could you elaborate on new product developments?

A: In electron, detection products for organophosphates and nerve agents like Novichuck; in gas cylinders, next-generation products for SCBA and space arenas.

Q: Can you discuss 2026 capital deployment priorities?

A: Capital expenditure projection elevated at $15,000,000 to $20,000,000, including restructuring and growth programs; dividend program continues, normal share buyback of around $2,500,000 annually with opportunity for additional opportunistic buybacks; looking at bolt-on M and A.