ESAB Corp (ESAB) 2022 Q3 法說會逐字稿

Good day and welcome to the ESAB Corporation Third Quarter 2022 Earnings Call.

美好的一天，歡迎來到伊薩公司 2022 年第三季度收益電話會議。

(Operator Instructions) And finally, I would like to advise all participants that this call is being recorded. Thank you.

（接線員說明）最後，我想通知所有參與者，此通話正在錄音中。謝謝你。

I'd now like to welcome Mark Barbalato to begin the conference.

我現在要歡迎 Mark Barbalato 開始會議。

Mark, over to you.

馬克，交給你了。

Thanks, operator. Welcome to ESAB's Third Quarter 2022 Earnings Call. This morning, I'm joined by our President and CEO, Shyam Kambeyanda; and CFO, Kevin Johnson.

謝謝，運營商。歡迎來到伊薩 2022 年第三季度財報電話會議。今天早上，我們的總裁兼首席執行官 Shyam Kambeyanda 和我一起出席了會議；和首席財務官凱文約翰遜。

Please keep in mind that some of the statements we are making are forward looking; and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ. And we do not assume any obligation or intend to update these forward-looking statements, except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation.

請記住，我們所做的一些陳述是前瞻性的；並受到風險的影響，包括我們向美國證券交易委員會提交的文件和今天的收益報告中規定的風險。實際結果可能有所不同。除非法律要求，否則我們不承擔任何義務或打算更新這些前瞻性陳述。關於今天電話會議中提到的任何非 GAAP 財務措施，與這些措施相關的隨附對賬信息可以在我們的收益新聞稿和今天的幻燈片演示中找到。

With that, I'd like to turn the call over to our President and CEO, Shyam Kambeyanda.

有了這個，我想把電話轉給我們的總裁兼首席執行官 Shyam Kambeyanda。

Thank you, Mark. Good morning, everyone, and thank you all for joining us today.

謝謝你，馬克。大家早上好，感謝大家今天加入我們。

I'm on Slide 3. ESAB delivered another solid quarter of revenue growth, margin expansion and cash flow. This quarter, we made great progress towards shaping ESAB into a faster-growing, higher-margin and less-cyclical business. Organic sales increased 10%. Adjusted EBITDA margin expanded 40 basis points to 16.6% as EBX initiatives continued to gain traction. We continue to shape our enterprise towards our long-term strategic goals by introducing exciting, new products; making bolt-on, accretive acquisitions; and using EBX to expand margins and improve cash flow. I'm proud of our team's effort and execution against these 3 goals.

我在幻燈片 3 上。伊薩在收入增長、利潤率擴張和現金流方面又取得了穩健的成績。本季度，我們在將 ESAB 打造成增長更快、利潤率更高且週期性更小的企業方面取得了巨大進展。有機銷售額增長了 10%。調整後的 EBITDA 利潤率擴大了 40 個基點，達到 16.6%，因為 EBX 計劃繼續獲得牽引力。我們通過推出令人興奮的新產品，繼續塑造我們的企業以實現我們的長期戰略目標；進行附加的、增值的收購；並使用 EBX 擴大利潤並改善現金流。我為我們團隊為實現這 3 個目標所做的努力和執行感到自豪。

Moving to Slide 4 and focusing on organic growth. Our vitality index continues to be robust at 27%. On the left of the slide, I've highlighted some of our exciting, new products. You will note on the slide that we're focused on developing industry-leading products that are eco-friendly, efficient and digitally connected. These new welding equipment and gas control products will shape ESAB towards faster organic growth and higher gross margins.

轉到幻燈片 4 並關注有機增長。我們的活力指數繼續保持在 27% 的強勁水平。在幻燈片的左側，我突出顯示了我們一些令人興奮的新產品。您會在幻燈片上註意到，我們專注於開發行業領先的環保、高效和數字連接的產品。這些新的焊接設備和氣體控制產品將使伊薩實現更快的有機增長和更高的毛利率。

Let me start with our gas control products on the slide. The new MediVital product has enhanced safety features and is digitally enabled. We also launched an upgraded GCE medical gas system, which is the most innovative medical central gas system on the market with the highest flow rates and the best precision control. These products increase safety; reduce maintenance; and most importantly for our customers, reduce gas leakage and waste, resulting in significant cost savings for our customers.

讓我從幻燈片上的氣體控制產品開始。新的 MediVital 產品具有增強的安全功能並具有數字化功能。我們還推出了升級版 GCE 醫用氣體系統，這是目前市場上最具創新性的醫用中央氣體系統，流量最高，控制精度最好。這些產品提高了安全性；減少維護；對我們的客戶來說最重要的是，減少氣體洩漏和浪費，從而為我們的客戶節省大量成本。

Moving to FABTECH, let me first talk about the Warrior Edge. This new product offers best-in-class pulse wave technology with enhanced digital connectivity and provides the market leading power source for robotics and automation. Next is our new Renegade ES, which further builds out our [light] industrial offering, providing our customers a product with lower energy consumption and a best-in-class user interface. Both the Warrior and the Renegade provide ESAB a scalable platform for our equipment growth globally.

轉到 FABTECH，讓我先談談 Warrior Edge。這種新產品提供一流的脈衝波技術和增強的數字連接，並為機器人技術和自動化提供市場領先的電源。接下來是我們的新 Renegade ES，它進一步構建了我們的 [輕型] 工業產品，為我們的客戶提供能耗更低的產品和一流的用戶界面。 Warrior 和 Renegade 都為伊薩在全球範圍內的設備增長提供了一個可擴展的平台。

Moving now to Slide 5 and continuing the conversation about our evolving equipment portfolio. Let me introduce a category-defining new product, our battery-powered welder, the Renegade VOLT. This product was developed using our EBX process of open innovation and in partnership with our friends at Stanley Black & Decker. This product will create a whole new category in the welding segment. The Renegade VOLT leverages DEWALT's industry-leading FLEXVOLT battery technology which is interchangeable with other DEWALT products. The battery is rechargeable, recyclable and noise free, making this product the most environmentally friendly welder in the market. The new battery-powered welder improves transportability, allowing users to bring a welding machine to remote and hard-to-access areas. The VOLT also opens exciting opportunities for ESAB to continue to reach new customers and channels. The Renegade VOLT is a fantastic addition to our equipment brand and, alongside the Warrior and Renegade, allows us to shape our business to a higher equipment mix and as a result expand our margins.

現在轉到幻燈片 5，繼續討論我們不斷發展的設備組合。讓我介紹一款定義類別的新產品，我們的電池供電焊機 Renegade VOLT。該產品是使用我們開放式創新的 EBX 流程開發的，並與我們在 Stanley Black & Decker 的朋友合作開發。該產品將在焊接領域創造一個全新的類別。 Renegade VOLT 採用得偉行業領先的 FLEXVOLT 電池技術，該技術可與其他得偉產品互換。電池可充電、可回收且無噪音，使該產品成為市場上最環保的焊機。新型電池供電焊機提高了可運輸性，允許用戶將焊機帶到偏遠和難以進入的地區。 VOLT 還為伊薩開啟了繼續接觸新客戶和渠道的激動人心的機會。 Renegade VOLT 是我們設備品牌的絕佳補充，與 Warrior 和 Renegade 一起，使我們能夠將我們的業務塑造成更高的設備組合，從而擴大我們的利潤。

Moving to Slide 6. I've spoken to many of you about our gas control business. Let me take a moment to calibrate all of us. Gas is an integral part of welding and cutting. And gas control is critical to a successful well, making it a natural adjacency to our core business. We acquired Victor in 2014, which included a leading mission-critical industrial gas control business. Then in 2018, we acquired GCE, a leader in industrial and medical gas control in Europe. These acquisitions provided ESAB with access to faster-growing, higher-margin and less-cyclical end markets. The gas platform today is about $350 million, with gross margins greater than 40%. This platform also generated an annual growth rate above our base business with accretive gross margins. As we move forward, we'll continue to focus on strengthening our gas control business, and that brings me to Slide 7 and our exciting acquisition of Ohio Medical.

轉到幻燈片 6。我已經和你們中的許多人談過我們的氣體控制業務。讓我花點時間來校准我們所有人。氣體是焊接和切割不可或缺的一部分。氣體控制對於一口成功的油井至關重要，使其成為我們核心業務的天然鄰接。我們於 2014 年收購了 Victor，其中包括領先的任務關鍵型工業氣體控制業務。然後在 2018 年，我們收購了歐洲工業和醫療氣體控制領域的領導者 GCE。這些收購為 ESAB 提供了進入增長更快、利潤率更高和周期性更小的終端市場的途徑。今天的天然氣平台約為 3.5 億美元，毛利率超過 40%。該平台還產生了高於我們基礎業務的年增長率，毛利率也在增加。隨著我們的前進，我們將繼續專注於加強我們的氣體控制業務，這讓我看到幻燈片 7 和我們對 Ohio Medical 的激動人心的收購。

I'm thrilled to welcome the Ohio Medical team into the ESAB family. This acquisition strengthens our position as a leader in gas control technology; and continues to shape ESAB into higher-growth, less-cyclical, mission-critical and higher-margin businesses. With Ohio Medical, we now have a $400 million global gas control platform with gross margins north of 40%. Ohio Medical is a leader in oxygen regulators and flowmeters, providing our gas control business with a strong presence in the attractive North American market.

我很高興歡迎 Ohio Medical 團隊加入 ESAB 大家庭。此次收購鞏固了我們作為氣體控制技術領導者的地位；並繼續將 ESAB 打造成增長更快、週期性更小、任務關鍵型和利潤率更高的企業。通過 Ohio Medical，我們現在擁有價值 4 億美元的全球氣體控制平台，毛利率超過 40%。 Ohio Medical 是氧氣調節器和流量計領域的領導者，使我們的氣體控制業務在極具吸引力的北美市場佔有一席之地。

When combined with our existing gas control platform, there are significant opportunities to cross-sell given our complementary geographic footprints. In addition, we will use EBX to accelerate innovation, improve efficiency and drive productivity savings. There will be more to come on this front, and I will look forward to sharing more updates with you as we continue on this exciting journey.

當與我們現有的氣體控制平台相結合時，鑑於我們互補的地理足跡，交叉銷售的機會很大。此外，我們將使用 EBX 來加速創新、提高效率並推動生產力節約。在這方面將會有更多的進展，我期待著在我們繼續這一激動人心的旅程時與您分享更多的更新。

Moving to Slide 8. As an enterprise, we are focused on growing organically through introduction of new innovative equipment like the Renegade VOLT and the Warrior Edge, supported by our InduSuite and robotics workflow solutions, improving our mix and margins going forward; bolt-on acquisitions like Ohio Medical; and EBX, driving margin expansion and improving cash flow. We are confident in our ability to achieve our long-term strategic goals of greater than $3 billion of revenue, 20%-plus EBITDA margins and 100%-plus cash conversion.

轉到幻燈片 8。作為一家企業，我們專注於通過引入新的創新設備（如 Renegade VOLT 和 Warrior Edge）實現有機增長，在我們的 InduSuite 和機器人工作流程解決方案的支持下，改善我們的組合和未來的利潤；像 Ohio Medical 這樣的補強收購；和 EBX，推動利潤率擴張並改善現金流。我們有信心實現我們的長期戰略目標，即超過 30 億美元的收入、20% 以上的 EBITDA 利潤率和 100% 以上的現金轉換。

Turning to financials on the quarter on Slide 9. Sales grew organically at 10%. Europe continues to show resiliency. North America performed as expected, and our businesses in India and the Middle East outperformed. New products continue to generate excitement with our customers. We continue to cover inflation with price using our EBX process. The teams are executing well, expanding EBITDA margins by 40 basis points year-over-year.

轉向幻燈片 9 本季度的財務。銷售額有機增長 10%。歐洲繼續表現出韌性。北美表現符合預期，我們在印度和中東的業務表現優於大市。新產品繼續讓我們的客戶興奮不已。我們繼續使用我們的 EBX 流程以價格來彌補通貨膨脹。這些團隊執行良好，EBITDA 利潤率同比增長 40 個基點。

Moving to Slide 10. Americas had a solid quarter. Sales rose 10% organically. And we continue to run our playbook, which is aimed at lowering our cyclicality and rationalizing our product lines. As I mentioned earlier, our North America business performed in line with expectations. South America continues to strengthen and is performing well sequentially but was faced with a difficult year-over-year comp as a result of post-COVID buying patterns. EBITDA increased 9% and margins expanded 10 basis points, in line with what we expected.

轉到幻燈片 10。美洲有一個穩定的季度。銷售額有機增長 10%。我們繼續運行我們的劇本，旨在降低我們的周期性並使我們的產品線合理化。正如我之前提到的，我們的北美業務表現符合預期。南美洲繼續走強，環比表現良好，但由於 COVID 後的購買模式，它面臨著同比困難的局面。 EBITDA 增長 9%，利潤率擴大 10 個基點，符合我們的預期。

Moving to Slide 11. Our EMEA and APAC business had a strong quarter. Our third quarter sales rose 9% organically. This segment was negatively impacted by a strong U.S. dollar. And despite the FX headwind, EBITDA margins improved 50 basis points year-over-year, reflecting strong execution of our EBX process to reduce costs and improve efficiency and productivity.

轉到幻燈片 11。我們的 EMEA 和 APAC 業務有一個強勁的季度。我們第三季度的銷售額有機增長了 9%。該部門受到強勢美元的負面影響。儘管外匯逆風，EBITDA 利潤率同比提高了 50 個基點，反映出我們為降低成本、提高效率和生產力而強有力地執行了 EBX 流程。

With that, let me turn it over to Kevin for Slide 12.

有了這個，讓我把它交給 Kevin 做幻燈片 12。

Thanks, Shyam. Good morning, everyone.

謝謝，夏姆。大家，早安。

ESAB had a strong quarter for cash flow. Free cash flow was up 26% versus the prior year and cash conversion was greater than 100%. Supply chains continued to improve in the quarter, allowing us to flex inventory and drive improved cash flow. As Shyam already discussed, we announced the Ohio Medical acquisition, and we have been able to fund this acquisition with our year-to-date cash flow. In the fourth quarter, we expect another strong quarter of cash flow generation; and expect to end the year with a net leverage of 2.8x or less, well within our 2x to 3x targeted leverage range.

ESAB 有一個強勁的現金流季度。自由現金流比上一年增長 26%，現金轉換率超過 100%。本季度供應鏈繼續改善，使我們能夠靈活調整庫存並推動改善現金流。正如 Shyam 已經討論過的那樣，我們宣布了對 Ohio Medical 的收購，並且我們已經能夠用我們年初至今的現金流為此次收購提供資金。在第四季度，我們預計將產生另一個強勁的現金流量季度；並預計年底淨槓桿率為 2.8 倍或更低，完全在我們 2 至 3 倍的目標槓桿範圍內。

As I spoke earlier in the year, at our Investor Day, we still have significant opportunities to further drive higher cash flow. We are embracing new technology. And our team continues to focus on improving our processes using EBX and delivering our long-term goal of consistent annual cash conversion of greater than 100%. For 2022, we remain on track to deliver greater than $210 million of free cash flow.

正如我在今年早些時候所說的那樣，在我們的投資者日，我們仍然有重要的機會進一步推動更高的現金流。我們正在擁抱新技術。我們的團隊繼續專注於使用 EBX 改進我們的流程，並實現我們的長期目標，即每年現金轉化率始終保持在 100% 以上。到 2022 年，我們仍有望實現超過 2.1 億美元的自由現金流。

Turning to Slide 13. We provide an overview of our updated 2022 guidance. Our guidance numbers exclude Russia from the second quarter of 2022 and 2021. Total sales guidance has been reduced, which reflects approximately $30 million of additional FX. Organic growth remains unchanged, with market conditions remaining in line with what we -- was expected last time we spoke.

轉到幻燈片 13。我們概述了我們更新的 2022 年指南。我們的指導數字不包括 2022 年第二季度和 2021 年第二季度的俄羅斯。總銷售指導已經減少，這反映了大約 3000 萬美元的額外外匯。有機增長保持不變，市場狀況與我們上次談話時的預期一致。

With 1 quarter to go, we narrowed our adjusted EBITDA guidance, which includes an approximately $4 million impact from FX. Adjusted EPS guidance has been raised to $4 to $4.10, reflecting improvements in our operating performance as we continue to use EBX to expand margins and from lower interest expense due to the favorable financing we secured last quarter. We expect another strong quarter in Q4 and look forward to exiting 2022 with positive momentum.

距離 1 個季度結束，我們縮小了調整後的 EBITDA 指導範圍，其中包括約 400 萬美元的外匯影響。調整後的每股收益指引已上調至 4 美元至 4.10 美元，反映出我們的經營業績有所改善，因為我們繼續使用 EBX 來擴大利潤率，以及由於我們上個季度獲得的有利融資而導致利息支出降低。我們預計第四季度將出現另一個強勁的季度，並期待以積極的勢頭結束 2022 年。

With that, let me hand back to Shyam on Slide 14 to wrap up.

有了這個，讓我回到幻燈片 14 上的 Shyam 結束。

Thank you, Kevin.

謝謝你，凱文。

To summarize. We delivered another solid quarter as we shape our business towards higher growth, less cyclicality and higher margins. We are introducing game-changing, innovative new products to the market; and these products will increase our mix towards equipment. We are positively shaping our portfolio with accretive acquisitions like Ohio Medical. We continue to drive EBX across the business to reduce our operating costs and deliver strong free cash flow. We're off to a good start in Q4 and we're well on our way to shaping our business to deliver long-term shareholder value.

總結一下。隨著我們將業務塑造成更高的增長、更少的周期性和更高的利潤率，我們又交付了一個穩定的季度。我們正在向市場推出改變遊戲規則的創新新產品；這些產品將增加我們對設備的組合。我們正在通過像 Ohio Medical 這樣的增值收購來積極塑造我們的投資組合。我們繼續在整個業務中推動 EBX，以降低我們的運營成本並提供強勁的自由現金流。我們在第四季度有了一個良好的開端，我們正在塑造我們的業務以實現長期股東價值。

Thank you again for joining us.

再次感謝您加入我們。

Operator, please open the line for questions.

接線員，請打開問題線路。

(Operator Instructions) Your first question comes from the line of Tami Zakaria from JPMorgan.

（操作員說明）您的第一個問題來自摩根大通的 Tami Zakaria。

So my first question is it seems like pricing in North America was up 9%. And it's lapping almost 20%-plus pricing from last year, so as compares get tougher on pricing, how are you thinking about price realization maybe in 2023?

所以我的第一個問題是，北美的定價似乎上漲了 9%。而且它的定價比去年高出近 20% 以上，因此隨著定價比較變得更加艱難，您如何考慮 2023 年的價格實現？

Yes. Thanks for that question, Tami. So there are a couple of things for us. I sort of mentioned this before. We have 3 different processes for pricing within ESAB as part of our EBX process. The first one was associated with inflation, and you've seen us do a really strong job on that. So price-based inflation. And I would expect, as we see the markets develop over the next 12 to 15 months, we'll see what inflation does, but pricing on that will continue to be very disciplined. But there's 2 other processes that we have in place that I think will play a larger role as we go into 2023. The first one is value-based pricing based on the new products that we're coming out with. We've done a really strong work with our teams around our stage gate process as we develop products. And we feel that these products are going to be [value priced] in the marketplace, continuing to drive margins to a better spot. And then the last piece is this piece around product line simplification and rationalization, where we think there's again opportunity for us to go out to the market with some targeted pricing going forward, so I expect pricing to continue to be positive. Kevin and I continue to work on 2023. We'll have probably more detail as we finish out the year and give you some guidance sometime in Q1 next year.

是的。謝謝你提出這個問題，塔米。所以我們有幾件事。我之前有點提到過這個。作為 EBX 流程的一部分，我們在 ESAB 內部有 3 種不同的定價流程。第一個與通貨膨脹有關，您已經看到我們在這方面做得非常出色。所以基於價格的通貨膨脹。我預計，隨著我們看到未來 12 到 15 個月的市場發展，我們將看到通貨膨脹的作用，但對此的定價將繼續非常有紀律。但我認為，隨著我們進入 2023 年，我們還有另外兩個流程將發揮更大的作用。第一個是基於我們即將推出的新產品的基於價值的定價。在我們開發產品的過程中，我們與我們的團隊圍繞我們的階段關卡流程做了非常有力的工作。我們認為這些產品將在市場上[價值定價]，繼續將利潤率推向更好的位置。然後最後一部分是關於產品線簡化和合理化的部分，我們認為我們再次有機會以一些有針對性的定價進入市場，所以我預計定價將繼續保持積極。凱文和我繼續為 2023 年工作。我們可能會在今年結束時提供更多細節，並在明年第一季度的某個時候給你一些指導。

That's actually very helpful color. And then if I can ask a follow-up: So we've been hearing about a lot of noise in Europe, demand moderation in different end markets. From your perspective, any comments on what you're seeing with regard to order trends in the EMEA region?

這實際上是非常有用的顏色。然後，如果我可以問一個後續問題：所以我們已經聽到歐洲有很多噪音，不同終端市場的需求適度。從您的角度來看，您對歐洲、中東和非洲地區的訂單趨勢有何評論？

Yes. Thanks for that question. Tami, I -- we have a very strong European business. We've talked about the strength in our European business, our team, our ground game in Europe. And as I mentioned earlier in my call, Europe continues to be resilient. We've started Q4 well in the continent. There are -- obviously we read the news. We understand what's in the press, but there are a few factors, in my view, that could be in our favor as we go through the next 12 to 15 months. We think agriculture spending in Europe is going to continue to be strong. We think renewable energy, which includes wind tower and possibly nuclear, will continue to be a strong sort of investment opportunity and growth opportunity in Europe. We also believe that oil and gas investments of some sort will continue to sort of make their way in Europe with maybe possibly LNG port investments, et cetera that will drive welding products needs. And ESAB is well equipped on all those 3 fronts, when you look at our ICE technology for the wind space, the certified products that we have for the nuclear space. And then also, as I talk about, oil and gas, we have some phenomenal products there. The last piece is defense. We think that defense will continue to sort of make its way forward as the European economy spend a little bit more of their GDP on that particular line, and ESAB is well positioned to take advantage of that. So we think that there are some negatives, but there are also some positives that could moderate the impact on ESAB as we go into the next couple of years.

是的。謝謝你的問題。塔米，我——我們有非常強大的歐洲業務。我們談到了我們歐洲業務、我們的團隊、我們在歐洲的地面比賽的實力。正如我之前在電話中提到的那樣，歐洲繼續保持彈性。我們在非洲大陸的第四季度開局良好。有——顯然我們讀過新聞。我們了解媒體報導的內容，但在我看來，在接下來的 12 到 15 個月中，有一些因素可能對我們有利。我們認為歐洲的農業支出將繼續強勁。我們認為可再生能源，包括風塔和可能的核能，將繼續成為歐洲的一種強大的投資機會和增長機會。我們還相信，某種類型的石油和天然氣投資將繼續在歐洲取得進展，可能會進行液化天然氣港口投資等，這將推動焊接產品的需求。當您查看我們用於風能空間的 ICE 技術時，伊薩在所有這 3 個方面都配備精良，我們擁有用於核能空間的認證產品。然後，正如我所說，石油和天然氣，我們在那裡有一些非凡的產品。最後一塊是防禦。我們認為，隨著歐洲經濟在該特定線路上花費更多的 GDP，國防將繼續向前發展，而 ESAB 已做好充分利用這一優勢的準備。所以我們認為有一些負面因素，但也有一些積極因素可以在我們進入未來幾年時緩和對 ESAB 的影響。

Your next question comes from the line of Mig Dobre from Baird.

您的下一個問題來自 Baird 的 Mig Dobre 系列。

I want to follow up on the discussion here with Tami and maybe since we're kind of talking about the growth outlook. Volumes clearly slowed in the business relative to where we were earlier in the year, so from your perspective, what is going on in terms of end market demand? Is this a function of comparisons and sort of like channel dynamics like you highlighted in Latin America? Or is this more about just the tone and momentum of the business? Should investors at this point sort of expect decline in volumes, especially as we're contemplating 2023? I think -- or how do you think about managing your business within that context?

我想跟進這裡與 Tami 的討論，也許是因為我們在談論增長前景。與今年早些時候相比，業務量明顯放緩，所以從您的角度來看，終端市場需求方面的情況如何？這是比較的功能嗎？有點像您在拉丁美洲強調的渠道動態？或者這更多的是關於業務的基調和勢頭？在這一點上，投資者是否應該預計交易量會下降，尤其是在我們考慮 2023 年的時候？我認為 - 或者您如何看待在這種情況下管理您的業務？

We've just started our process for 2023, so we'll sort of talk about that sometime in Q1, but what I can say to all of you today is that we started Q4 well. I don't see anything that sort of makes me, would make me want to say to you that we're seeing any downward trend in volume that sort of has us concerned. Orders continue to be at a strong rate. We continue to work our growth bridges. Our team continue to be excited about the possibility of driving share gain. The one thing, Mig, that we're really thrilled about is the new products that we're launching in the marketplace. We think that that's going to drive new customers, drive new channels and opportunities for us in all geographies; and I think that's the exciting part about what we're doing. And the other piece of that is also the acquisition that we made of Ohio Medical. We think that the geographic opportunities for us to cross-sell our products, whether it be GCE products in North America or the Ohio products globally -- we think that there's a real opportunity there for some volume growth; and build out and strengthen our gas control portfolio that, again, drives high growth, better margins, lower cyclicality and better cash flow for the business.

我們剛剛開始了 2023 年的進程，所以我們會在第一季度的某個時候討論這個問題，但我今天可以對你們所有人說的是，我們很好地開始了第四季度。我沒有看到任何讓我感興趣的事情，會讓我想對你說，我們看到任何讓我們擔心的交易量下降趨勢。訂單繼續保持強勁勢頭。我們繼續努力搭建我們的增長橋樑。我們的團隊繼續對推動份額增長的可能性感到興奮。米格，讓我們真正興奮的一件事是我們在市場上推出的新產品。我們認為這將在所有地區為我們帶來新客戶、新渠道和機會；我認為這是我們正在做的事情中令人興奮的部分。另一部分也是我們對 Ohio Medical 的收購。我們認為我們交叉銷售我們產品的地理機會，無論是北美的 GCE 產品還是全球的俄亥俄州產品——我們認為那裡有一些銷量增長的真正機會；建立並加強我們的天然氣控制產品組合，這將再次推動業務的高增長、更高的利潤率、更低的周期性和更好的現金流。

So all in all, as the team at ESAB sits here, yes, and we finish out Q3 and go into Q4, there's sufficient amount of optimism, but just like anything else -- we're strong and seasoned leaders. We're making plans for everything that could come at us, but as we sit right now, markets are resilient. Markets are performing as expected. There's as much opportunity for growth as there is sort of in the newsprint on things that could go the other way, but we're very excited about the products. We're very excited about the acquisitions that we've made and feeling really good about where the business is positioned for the long term.

所以總而言之，當 ESAB 的團隊坐在這裡時，是的，我們完成了第三季度並進入第四季度，有足夠的樂觀情緒，但就像其他任何事情一樣——我們是強大而經驗豐富的領導者。我們正在為可能發生的一切制定計劃，但正如我們現在所坐的那樣，市場是有彈性的。市場表現符合預期。增長的機會與新聞紙上關於可能走向另一條路的事情一樣多，但我們對這些產品感到非常興奮。我們對我們進行的收購感到非常興奮，並且對業務的長期定位感到非常滿意。

Okay, fair enough. And in your discussion from a moment ago on pricing, the way I was sort of interpreting your commentary is to really -- it was really pertaining to your -- to the equipment side of the business, more so than consumables, things like value pricing and so on. I am wondering, though. As you -- as we're kind of looking at raw material costs going back, do you think it's reasonable for consumable pricing to remain flat or better in 2023? Or is that going to start manifesting as a potential headwind?

好吧，很公平。在你剛才關於定價的討論中，我對你的評論的解釋方式是真的 - 它真的與你有關 - 業務的設備方面，比消耗品更重要，比如價值定價等等。不過，我想知道。正如您一樣——由於我們正在關注原材料成本的回落，您認為消耗品價格在 2023 年保持不變或更好是否合理？或者這會開始表現為潛在的逆風嗎？

Yes. Mig, the way that I would ask you to look at this is, in the past, what has happened is that we have seen commodity prices drop. And we've held onto some of the price on the way down. We're very quick as we go out with pricing to the marketplace and we sort of are very deliberate on the way down, so I think that's an expectation that we continue to have within the business going forward. The second piece that I would say to you is that [there's another] inflation out there that continues to sort of justify pricing to be where it's at or possibly move north as we go into 2023. So the team, as you know, we have a very disciplined process of understanding all inflation. As a team, we review net price on a monthly basis within the business and in every region and with all of our sales teams, so as a result, we know exactly where we're at, at any moment in time vis-à-vis where our cost position is no matter if it's commodities-based inflation or other inflation that the business sees within the month of the quarter. So I'm very comfortable with the process that we have. And the process is geared to sort of focus on net price and the impact on the business, driving margins forward, and that's really where we're focused as a leadership team.

是的。米格，我要你看待這個問題的方式是，過去發生的事情是我們看到商品價格下跌。我們在下降的過程中保持了一些價格。當我們向市場定價時我們非常快，而且我們在下降的過程中非常慎重，所以我認為這是我們在未來業務中繼續擁有的期望。我要對你說的第二點是，[還有另一種] 通貨膨脹繼續證明定價是合理的，或者在我們進入 2023 年時可能會向北移動。所以團隊，如你所知，我們有一個非常有紀律的理解所有通貨膨脹的過程。作為一個團隊，我們每個月都會與我們所有的銷售團隊一起審查業務內部和每個地區的淨價，因此，我們可以隨時準確地了解我們所處的位置——相對於我們的成本狀況，無論是基於商品的通貨膨脹還是企業在本季度內看到的其他通貨膨脹。所以我對我們的流程非常滿意。這個過程旨在某種程度上關注淨價和對業務的影響，推動利潤率向前發展，而這正是我們作為領導團隊所關注的地方。

(Operator Instructions) And your next question comes from the line of Chris Dankert from Loop Capital.

（操作員說明）你的下一個問題來自 Loop Capital 的 Chris Dankert。

I guess -- and forgive me if I missed it, but thinking about EBX in the quarter, any update just kind of on the product line rationalization, what's going on, on that front?

我想——如果我錯過了，請原諒我，但考慮到本季度的 EBX，任何更新都只是關於產品線合理化的更新，那方面發生了什麼？

Thanks for that, Chris. We continue to make progress on that particular front. The view that we have is that we're just early innings on that particular piece. We expect that initiative of ours to sort of move on to different geographies as we go through 2023, and so as a result, what I'd say to you is EBX continues to drive that piece. There's another piece right behind it that's footprint rationalization that we'll continue to kind of drive forward and then OpEx reduction within the business. And so we're sort of looking at 3 different pieces of product line rationalization, continued sort of improvement in our footprint and then OpEx transformation within the business. And so we're working all 3, early innings on the product rationalization piece, seeing some good progress actually and encouraged by what's sort of ahead of us in 2023.

謝謝你，克里斯。我們繼續在這方面取得進展。我們的觀點是，我們只是在那篇文章的早期階段。我們希望我們的倡議能夠在 2023 年之前轉移到不同的地區，因此，我想對你說的是 EBX 繼續推動這件事情。它背後還有另一部分是我們將繼續推動的足跡合理化，然後在業務中減少運營支出。因此，我們正在研究 3 個不同的產品線合理化部分，持續改進我們的足跡，然後在業務中進行 OpEx 轉型。因此，我們在產品合理化部分的所有 3 個早期階段都在努力，實際上看到了一些良好的進展，並受到 2023 年我們前面的事情的鼓舞。

Got it. Well, then that touches on something else I kind of wanted to ask you about. So I mean, on the footprint rationalization, is it fair to assume we're in the planning and evaluation stages here? That's probably like a 2024 benefit, for the most part.

知道了。好吧，這涉及到我想問你的其他事情。所以我的意思是，關於足跡合理化，假設我們在這里處於規劃和評估階段是否公平？在大多數情況下，這可能就像 2024 年的福利。

I don't think we've given out a specific number on benefit, but expect to hear from us sometime in Q1 as to what the restructuring or footprint benefits would be as we go into it. It's something that we continually do within the business as we ratchet up our performance and ratchet up the expectations within our team, and so the view for us would be that there's going to be something in there. We're just not ready to talk about it. Kevin and I are going through our budget processing for next year, and so expect to hear more about that in Q1.

我認為我們沒有給出具體的收益數字，但希望在第一季度的某個時候聽到我們關於重組或足跡收益的消息。這是我們在業務中不斷做的事情，因為我們提高了我們的績效並提高了我們團隊的期望，所以我們的觀點是那裡會有一些東西。我們只是還沒準備好談論它。凱文和我正在處理明年的預算，因此希望在第一季度聽到更多相關信息。

Your next question comes from the line of Nathan Jones from Stifel.

您的下一個問題來自 Stifel 的 Nathan Jones。

This is Adam Farley on for Nathan. So I appreciate the detail on the new products in the pipeline, vitality index. They all sound really interesting. I was wondering if you can provide a little more color on maybe how many products are you expecting to launch in 2023. Have you had any difficulties from maybe supply chain on launching new equipment? And then maybe are there any technology product gaps that ESAB might go after inorganically?

這是 Nathan 的 Adam Farley。所以我很欣賞新產品的細節，活力指數。它們聽起來都很有趣。我想知道您是否可以提供更多關於您預計在 2023 年推出多少產品的顏色。在推出新設備時，您在供應鏈方面是否遇到過任何困難？那麼伊薩可能會無機地追求任何技術產品差距嗎？

Yes. So thank you for that. So I really appreciate the question around innovation because we're really excited about what we've done over the last couple of years with ESAB. As you know, we started off with 24 products. Today, we're at 110. The bigger piece for us is, as we've made those innovations, what we've done and something that I talked about also on the call is create scalable platforms. And the view for us is when you look at the Renegade, the Warrior. What you see are platforms that are now scalable, and so what you see is design integrity. You see design sort of that are now part of the foundation. And so as a result, what we have is a better supply chain, a better production efficiency as a result of it going forward and not to mention the Renegade VOLT which was absolutely game changing. It's something that we're really excited about. You will see us talk about it at FABTECH. We're going to be launching it in a big way here next week. This was the first time that we've talked about it publicly. It's a device today that performs as well as any other product that's out there for the applications that are needed for remote welding. And it has interchangeable battery, so if somebody has a power tool that belongs to DEWALT, they can use that exact same battery to run the welding equipment. So really excited about that piece.

是的。非常感謝你的幫忙。所以我真的很欣賞關於創新的問題，因為我們對過去幾年與 ESAB 所做的事情感到非常興奮。如您所知，我們從 24 種產品開始。今天，我們在 110。對我們來說，更重要的是，因為我們已經進行了這些創新，我們所做的以及我在電話會議上也談到的事情是創建可擴展的平台。我們的觀點是當你看叛徒，勇士。您看到的是現在可擴展的平台，因此您看到的是設計完整性。您會看到設計現在已成為基礎的一部分。因此，我們擁有的是更好的供應鏈，更高的生產效率，更不用說 Renegade VOLT，它絕對改變了遊戲規則。這是我們非常興奮的事情。你會看到我們在 FABTECH 談論它。下週我們將在這里大規模推出它。這是我們第一次公開談論它。它是當今的一種設備，其性能與適用於遠程焊接所需應用的任何其他產品一樣好。它有可互換的電池，所以如果有人擁有得偉 (DEWALT) 的電動工具，他們可以使用完全相同的電池來運行焊接設備。對那件作品真的很興奮。

And to your question on will we keep up the pace, the short answer is yes. The number of innovations may sort of slow down a bit only because we're focused on some specific platform, some specific foundation. I've talked about equipment, but we continue to also innovate on the filler metal side of our business, also on the torch side of our business. So all in all, what we're doing is rationalizing the number of product lines, rationalizing the number of SKUs, creating truly innovative products that start on a foundation and a platform that can then be built upon [both] consistency and simplicity of our supply chain, really exciting stuff that in my view will continue to pay dividends in terms of margins and customer satisfaction over the next 3 to 5 years.

對於您關於我們是否會跟上步伐的問題，簡短的回答是肯定的。創新的數量可能會有所放緩，只是因為我們專注於某些特定的平台，某些特定的基礎。我已經談到了設備，但我們還在我們業務的填充金屬方面以及我們業務的火炬方面繼續創新。所以總而言之，我們正在做的是合理化產品線的數量，合理化 SKU 的數量，創造真正創新的產品，從基礎和平台開始，然後可以建立在 [both] 我們的一致性和簡單性之上供應鏈，在我看來，在未來 3 到 5 年內將繼續在利潤率和客戶滿意度方面帶來紅利，這真是令人興奮的事情。

That's really helpful. I did want to ask another question on forward outlook for growth. We've heard from some other companies in our coverage of this divergence between industrial and consumer markets, so I'm wondering if maybe you're seeing that in your end markets, industrial holding stronger than maybe more of your retail-oriented markets.

這真的很有幫助。我確實想問另一個關於增長前景的問題。我們從其他一些公司那裡聽說了我們對工業市場和消費市場之間這種差異的報導，所以我想知道你是否在你的終端市場看到了這一點，工業控股比你的零售市場更強大。

So our story is a bit different on that particular front partially because we're new to the retail market. And you'll see us sort of talk about this, but another announcement that should come out in the next couple of days is our move into retail. And so we're new to that space. So as we move into that space, especially in North America, it's really all growth for ESAB. So we're actually seeing positive momentum both on the retail side because of some share activity. And the industrial side for us has actually held up. It's been resilient is the best way to sort of -- is the best word to use on that particular front both in the Americas and also in Europe. And then I sort of mentioned to you India and the Middle East have sort of been the outperformers as we look to Q3. And we're off to a good start in Q4 as well.

所以我們的故事在那個特定的方面有點不同，部分原因是我們是零售市場的新手。你會看到我們在談論這個，但接下來幾天應該發布的另一個公告是我們進軍零售業。所以我們是那個領域的新手。因此，當我們進入該領域時，尤其是在北美，這對 ESAB 來說真的是增長。因此，由於一些股票活動，我們實際上在零售方面看到了積極的勢頭。而我們的工業方面實際上已經站穩了腳跟。它一直是最好的方式 - 是在美洲和歐洲的特定戰線上使用的最好的詞。然後我有點向你提到印度和中東在我們展望第三季度時表現出色。我們在第四季度也有一個良好的開端。

(Operator Instructions) There are no further questions at this time. I would like to turn the call back over to Mark for closing statements.

（操作員說明）目前沒有其他問題。我想將電話轉回給 Mark 以進行結束陳述。

Thank you for joining us today. And we look forward to speaking to you on our next call. Have a good day.

感謝您今天加入我們。我們期待在下次通話中與您交談。祝你有美好的一天。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。