Lincoln Electric at Oppenheimer Conference: Strategic Growth Insights

On Wednesday, 07 May 2025, Lincoln Electric Holdings Inc. (NASDAQ:LECO) presented at the Oppenheimer 20th Annual Industrial Growth Conference, showcasing its progress and future plans. CFO Gabe Bruno highlighted the company’s achievements and challenges in its Higher Standard 2025 strategy, including automation growth and market positioning. Despite mixed sector performances, Lincoln Electric remains optimistic about its long-term growth prospects.

Key Takeaways

• Lincoln Electric is on track with its strategic goals, targeting high single to low double-digit growth through 2024.
• Operating profit margins are projected to reach 15.7% by the end of 2024, with an average of 17.1% over the past three years.
• Automation sales have grown significantly, expected to reach $911 million in 2024.
• The company plans to increase share repurchases to between $300 million and $400 million in 2025.
• Key growth drivers include reshoring, infrastructure spending, and electrification.

Financial Results

• Higher Standard 2025 Strategy Targets:

- High single to low double-digit growth (organic and inorganic)

- 300-400 basis points CAGR from acquisitions

- 200 basis points improvement in operating profit margins

- Working capital objectives at 15%

- Cash conversion of 100%

- EPS CAGR in the high teens to low 20s percent

• Growth and Margins:

- Tracking approximately 8% growth through 2024, or 11% excluding the pricing collar

- Operating profit margins projected at 15.7% by end of 2024, averaging 17.1% over three years

- EPS CAGR approximately 22%, at the high end of the target range

• Return on Invested Capital (ROIC):

- Target of 18% to 20%, with actual results in the low 20s (around 22%)

• Automation Sales:

- Growth from $400 million in 2020 to $911 million in 2024

Operational Updates

• End Market Performance:

- Automotive: Mixed, with capital investment up but consumables down mid-single digits

- General Industries: Up mid-single digits, driven by HVAC strength

- Heavy Industries: Down high teens, affected by agricultural destocking

- Energy: Up low-single digits, strong in power generation

- Structural: Up high-single digits, supported by construction and data centers

• Automation Platform:

- Over 2,500 engineers and technicians with two and a half million square feet of space

- 55% of sales from welding components, 45% from material handling and testing

• EV Charging and Additive Manufacturing:

- Expanded product offerings in EV charging, including mobile options

- Additive business model at breakeven, focusing on supply chain efficiency

Future Outlook

• Revenue and Pricing:

- Mid-single-digit price increases expected, offset by volume pressures

• Capital Allocation:

- Focus on internal investment and acquisitions, with increased CapEx spending

- Share repurchases projected at $300-$400 million in 2025

• Mergers and Acquisitions (M&A):

- Achieved 440 basis points of CAGR from acquisitions

- Actively reviewing potential acquisitions across business segments

• Long-Term Growth Drivers:

- Reshoring to North America, infrastructure spending, and electrification

Q&A Highlights

• Price/Cost Management:

- Aiming for price-cost neutrality through supply chain management

• Automation Differentiation:

- Emphasis on broad technology and company reputation

• Consumables:

- Strong correlation between consumable sales and automation equipment revenue

• M&A Strategy:

- Focused on strategic acquisitions to enhance portfolio and technology

In conclusion, Lincoln Electric’s strategic focus and market adaptability position it well for future growth. For more detailed insights, refer to the full conference call transcript below.

Full transcript - Oppenheimer 20th Annual Industrial Growth Conference:

Brian, Conference Host, Oppenheimer: Good afternoon, everyone. Welcome to the twentieth annual Oppenheimer Industrial Growth Conference. Next up and and the last in the fireside chat lineup today, but certainly not least, we have the Lincoln Electric team represented by, CFO, Gabe Bruno. Gabe, thanks for joining us.

Gabe Bruno, CFO, Lincoln Electric: Thanks for having us, Brian.

Brian, Conference Host, Oppenheimer: Of course. Of course. To start things off, I guess, for for those a little newer to the WICO story, I think Lincoln Electric is pretty well known in industrial circles. But for those perhaps a bit newer, maybe briefly touch on, you company history, underlying drivers, where you stand now, higher standard 25 strategy that in place, perhaps, touch on the scorecard today.

Gabe Bruno, CFO, Lincoln Electric: Yeah. So thanks, Brian. And thank you all for for joining us on in the conference and your interest in Lincoln Electric. So I could start off and just say, you know, this is our one hundred and thirtieth year business in in 2025. So, we’re excited to progress our market leading position in arc welding solutions.

We’re also a leader in industry in automation capabilities and solutions into the market. And we’ve got a couple of very interesting growth adjacencies with additive and, EV charging capabilities. So very much positioned in our key strategic theme of driving profitable growth. And along those lines, when we think about a target that we established in 2020, which is now we’re in the last year of our higher standard 2025 strategy of driving high single digit, low double digit growth that is both organic and inorganic growth that includes, drivers to our acquisition strategy of being 300 to 400 basis points of CAGR on growth and then introducing solutions, technology, the acceleration of our automation footprint within our business. So our strategy is anchored on accelerating growth.

We have a long history of continuing to shape our operating model. So we had targeted another 200 basis points of improvement in our operating profit margins during this strategy period. We continue, to drive very disciplined, operations around cash flow management. We have working capital objectives, which are in the top decile type performance at 15%. We have a target, cash conversion of 100%.

We have a balanced, strategic perspective of capital allocation, which prioritizes growth, that’s internal investment as well as acquisitions and then returning cash to shareholders. When you think about the compounding impact of our strategy on earnings, our target on CAGR on EPS is the high teens, low 20s, percent. So those are the targets that we had established across our business for our strategy. Now how are we doing? When we think about growth, one thing we did was that we put a collar around how much pricing that we take credit for in growth and put a collar of 2%.

So right now we’re tracking the high single digits, about 8%, through 2024 in growth. If you exclude the color we have on pricing, we’re we’re about 11%. So we’re we’re right within our objectives in terms of growth. When you think about the margin, profile, so we said essentially going from 14%, over the last cycle, which was 13.7% to 16%, we’re right on top of that. So we’re at 15.7%, at the end of twenty four.

Over the last three years, we’ve averaged, 17.1%. And all the discussions, even in this environment, is for the kind of margin profile that are ahead of the objective. So we’re very pleased in how that has, progressed. Generating a lot of cash. Our EPS CAGR is, on the on the, high end of the range.

So we’re into about 22% type of CAGR through the end of, 2024, very much, on top of our objectives in terms of ROIC. We’re ahead of the targets we established. Our targets to be within 18% to 20% ROIC, and that enables, growth, particularly on the M and A side of our business. And we’re ahead of that as well in the low 20s, 22% type of ROIC. So we’re progressing well in the execution of our our strategy and very much focused on driving profitable growth in our business for the long term.

Brian, Conference Host, Oppenheimer: Understood. Appreciate the, you the walk through, and kudos to your team for, you know, putting up the numbers that that you have. Certainly, over the last year and a half maintaining, you know, that kind of return on on capital is, pretty impressive. Thanks,

Gabe Bruno, CFO, Lincoln Electric: Brad.

Brian, Conference Host, Oppenheimer: I don’t think you should strip away price, though, in the framework. Price is a beautiful thing.

Gabe Bruno, CFO, Lincoln Electric: I agree. But that’s how we we that’s I agree with you, but that’s how we want we want our team to truly focus on penetrating the end markets with solutions. And pricing, while important for us and protecting our our model, we wanna lead with the solutions that we have across our business.

Brian, Conference Host, Oppenheimer: Absolutely. I understand. And you do have pretty diversified exposures there. Obviously, the there’s been some end market compression that kinda continues, to the healthiest of backdrops, I think it’s it’s fair to say. But given you do touch so much throughout, you know, manufacturing, construction, energy, etcetera, Always helpful to hear you walk through end market trends, what your team’s seeing, and then what may be on premise.

Gabe Bruno, CFO, Lincoln Electric: Yeah. So I I’d start off and just think long term. We are well positioned across all the end markets in, driving towards long term growth. So we’re pretty excited about our position in automotive and heavy industries and general industries, energy, structural and infrastructure. And we’re very well on top of how we are progressing though short term.

So I’ll give you a sense, in the first quarter, you saw, Brian, that four out of the five end markets that we track direct sales into, the markets, were up. And but the story is a little different, depending on what end market that we’re speaking to. So let just kind of walk through a little bit what that means to us. So let’s start with automotive. Automotive is about 20% of our business.

It’s a completely different story when we think about capital investment versus production. Consumable activity is servicing our production levels at our customers, while capital investment, which largely anchors around automation, was stronger. Easier comps, over year in general from an automation standpoint, but you’re seeing the progression of some of the longer lead time, projects taking hold in this first quarter. So you had positive on capital investment on the automotive side. You had consumables down kind of mid single digits, which is, an important factor when we think about where are we on the automotive production cycle, which is one of the reasons why we point to, some caution in looking at full year type volumes, when you look at our business.

But that’s the automotive part of our business. If you think about general industries, we were up mid single digits. That’s about 32% of our business. And when you think about the drivers, we saw more strength in HVAC that kind of drove some improvement in the overall end market. So that’s coming through, Harris.

We haven’t seen consistency around broad industrial production throughout all the different, geographies. And I think you’re tracking the same thing we’re tracking. So real industrial production is kind of flattish you know, slightly down to the sentiment, and PMI just not has, been consistent in in looking at any level of expansion. And there’s been a long malaise in just navigating through, contraction and then peeling the onion on P and I behind new orders, inventory levels, production, etcetera. So a little bit more challenge than some of the underlying longer term trends on industrial production or PMI.

Then when you think about heavy industries, heavy industry is about 19% of our business. I mean, we were down first quarter, high teens. It’s more of the same. We knew coming into the year that in particularly ag would continue to be constrained when you think about all the de stocking work, some of the big players in ag, needing to work through destocking. We’re seeing a little bit improvement there, but not enough for us to change our posture in how we’re servicing, that end market.

Some of the other parts of heavy industries like mining or construction, shipbuilding, that’s more resilient, that’s held up, but we expect, compression in the heavy industry end markets through the balance of the year. So that’s in a pretty important part of our market. We’re bullish on energy. Energy is about 16% of our business. We’re up, low single digits, more strength around power generation, a little bit tougher comps within oil and gas.

Oil and gas, about two thirds of our energy, end market and will be, capture. Tougher comps first half should be, easier. Second half, pipe mill pipeline activity, we’re pretty bullish the energy side. And then the last, end market structural. And when we think about that part of our business, smaller part, 13%, has historically been more choppy, but, it was up high single digits.

And, and that’s good momentum around construction factories, data centers, that sort of thing. So our team is pretty, positive on that. But I would look to the choppiness that we generally see in structural and infrastructure that are project driven. So that’s kinda how we see, the end markets as, we start off the year. But real positive long term.

Geography wise, we were slightly up in North America, a little bit more challenged in different parts of, EMEA, and then Asia had some some good projects that also led to some growth in in that part of the the business.

Brian, Conference Host, Oppenheimer: All right. Very helpful walk through. And now with that background backdrop in mind, you know, q one organic revenue was down slightly. You’ve maintained the full year outlook for, you know, flattish, in core sales, you know, implying some stabilization, potentially a bit of recovery over the coming quarters with, you know, that end market positioning in mind. What gives your team confidence in in achieving?

Gabe Bruno, CFO, Lincoln Electric: Well, it’s an interesting where we say confidence. We’re confident in the organic assumptions, but the drivers are different, right? We started off the year, and we said, look, we’re anniversarying some, price increases we put in place in the first quarter of twenty twenty four. That was about 50 to 100 bps of, positive impact, top line organic growth. We said that’s going be essentially offset, by by volume.

So it was it was a more, measured, posture on organic trends. That said, we did expect some, strength around our automation portfolio. High level of quoting activity, coming into the year, real active, which we’re tracking through our Salesforce tool opportunities, and our our team is assessing probability of of quotes becoming orders. And so we’ve seen that slip in from January to February to March to April. So that is what has caused us some pause in seeing the deferral of capital investment on the automation side, which then, gives us perspective on drivers now within our business.

So top line, we expect to have price increases that are, for the year being that mid single digit type of framework. But we do believe that the volume pressures that we’re going to see, from an automation footprint standpoint. In addition, it’s a bit of a cautious posture, but it’s important, I think, to have a cautious posture with all the uncertainty in the markets that some production could be impacted, the elasticity of the response to pricing could have an impact. So our posture is that, yes, we have increases in pricing, they’ll be mid single digit, fully matured by the third quarter, largely in place in the second quarter, but you’ll see a little bit of an impact in Q3, but that’s offset by volume. So the drivers are different.

The implications net net are similar. But it’s an I think it’s an important posture to have with so much uncertainty in the markets.

Brian, Conference Host, Oppenheimer: Yeah. Understandable. I’ll circle back to price as a beautiful thing now. It’s good have that going through. Okay.

Setting aside automation for, you know, very important part of the Lincoln Electric story. You had started to touch on, you know, some of the just secular exposures that that your team has, in this you know, in a current market environment, perhaps spending is on pause and. But, nonetheless, these these are sectors. You know, thinking of reshoring, you know, infrastructure spending, you know, broadening wave of electrification. You know, maybe offer a little more detail exactly how you’re exposed, you know, to those, those areas of spending and, you know, elaborate a bit more on on the confidence you have in, you know, leveraging those opportunities.

Gabe Bruno, CFO, Lincoln Electric: Yeah. Look. We have a very, strong position, as you know, within the North American markets and in particularly The US markets. And so with with the, with the drive the expectation that U. S.

Manufacturing investment increases, reshoring, whether it’s in The U. S. Or North American markets in general, we’re going to see a lot of positive impact for us because of our positions across all the various end markets that I just walked through. If there’s incrementally more investment in automotive in The U. S, that’s going to be important for us, and we’ll be participating in that.

If there’s more investment tied to infrastructure builds, then we see that part of our offering playing right into that in the structural aspect and of of fabrication. So our posture in The US market and broadly in North America under the strength we have is provides us a lot of confidence that as the markets increase the level of investment, reshoring infrastructure, electrification, we’re well positioned to drive incremental growth in servicing, the end markets, across all the spectrum, energy, infrastructure, heavy industries, general industries, and, and automotive. When you think about electrification, I like to think about it in multifaceted ways. One aspect of it is, think about EV vehicles. And we had this discussion in the last couple of years, little bit of a pause in kind of ICV dynamic second quarter of last year.

But with incremental investment into EVs, I mean, we’re servicing, the automotive industry on both ICE and EVs. So that’s attractive for us. We introduced, DC fast chargers as adjacency. It’s kind of upside to our growth strategy, but it fits right into the electrification opportunity, we have. And so, that’s more in servicing the demand and charge point operations in the markets or even servicing fleets.

But it does add another interesting dynamic in electrification, as it takes hold and continues to grow at whatever trajectory, that we’re well positioned to participate in that. Now you haven’t mentioned this as another driver, so you got reshoring electrification, but not in infrastructure. But I also think about automation. We think about automation still in the early innings. Still a lot to, to be had introduction in the industrial space of automation.

And so we’re excited about our position.

Brian, Conference Host, Oppenheimer: Yeah. Absolutely. And we’re we’re getting to it. It’s my my favorite topic in in these chats. I would like to quickly touch on you mentioned EV charging, and there there’s also add.

I think it both is, you know, kind of a kind of unique optionality in terms of the WICO story. You know, maybe speak to some of the the recent technology developments that that you’re seeing as as what’s, you know, through with both and, you know, how the, you know, market opportunity near versus medium versus long term, how that’s progressed.

Gabe Bruno, CFO, Lincoln Electric: Yeah. So so we look at both EV and additive as upside opportunities. So modest level of investment. They’re not core to all of our strategic objectives that I just kinda walked through for our 2025 higher standard strategy. But there are nice opportunities to leverage our technologies to to, drive to a growth position in a potentially area that can be really attractive for us.

So I’ll touch on additive, real quick. So, when you think about leveraging our robotic capabilities, software, our wire, drawing capabilities, that just becomes very attractive. And in markets like military or energy, so it becomes an opportunity for us to continue to introduce technologies that are going to shorten supply chains and and, drive a level of activity that’s incremental, type to growth. So a big accomplishment for 2024 was getting our business model into a breakeven mode. So we’re investing, we’re looking at, continuing to shape our business model, but we look to, opportunities to drive an acceleration of the adoption of additive, technologies.

When you think about, EVs, so this is the fast charging, capabilities that we’ve been navigating over the last, couple of years. That’s all about leveraging power electronics, our infrastructure. And we talked about modest investment in the operations to be able to build out capacity, that would be attractive for us. And there were three elements to our strategy. One was operations here in Cleveland and leveraging all the capabilities we have.

So it would be modest investment. Then it was the products, and the products were, anchored on that US based, NEVI standard largely. So we went out with 150 kilowatt type of an offering. What we found is that while we introduced that, the market’s evolving. And so we have now developed a a broadened product offering.

So looking to, more kilowatt capacity up to 400 kilowatts in capacity with power distribution. So that’s an important part of where we see the markets. And then we also have this mobile, option, which is a 50 kilowatt type of an option. And what that also introduced, if you look at the numbers, is our strategy around modular design and going through 50 kilowatt types of opportunities in there. So our commercialization has taken hold.

We’ve broadened out our capacity and our commercial resources. Our team is out there in in, driving activity with trade shows and and web activity, webinar activity, and that’s really to get our name out there to starting engaging and and looking at ChargePoint operator opportunities or fleet manager opportunities. And the the 150 kilowatt operation, we’ve got some in West Virginia established there, and that really is to create, the stickiness of our brands. So our our value proposition is driven around the reliability, quality of our product, our legacy of, you know, our longevity in in business, US content. And so we feel that those elements of differentiation are opportunities for us to to be patiently navigating kinda how we see this this this adjacency potentially in our business.

Brian, Conference Host, Oppenheimer: That definitely makes sense. And just to level set, yeah, assuming commercialization continues and and you have some scale to PV charging business, is the expectation still it’ll be margin accretive to fleet average?

Gabe Bruno, CFO, Lincoln Electric: Yeah. In in general, we do believe it’ll be margin accretive. I mean, obviously, it’d be depending on where volumes, but it’s it’s a it’s a fairly modest level of investment.

Brian, Conference Host, Oppenheimer: Understood. Alright. So one more quick topic and then then automation. So certainly in this environment with, you know, tariffs, trade wars, inflationary pressure kind of swirling, I’d be remiss if I didn’t ask about price cost. Your team has an excellent track record of, you know, managing price cost through the cycle to, you know, margin neutral kind of levels.

I think I know the answer here. How how are you thinking about, you know, price cost progression with, excuse me, all the moving parts of the backdrop and the complexities of just managing week by week?

Gabe Bruno, CFO, Lincoln Electric: Yeah. So we’ve our our posture So as you mentioned, pricecosts are neutral. We are looking to avenues to deal with the pressures of cost inflation, that means supply chain. We’ve been through similar types of dynamics.

Remember back in 2021, ’20 ’20 ’2, and they needing think through supply chain from our customer service, perspective. But we’re maintaining the same postures, price cost neutral. Conversations are never fun to have when you’re about price increases, but the markets in general understand the tariff dynamics that we’re working through. So we’ll continue to navigate in the same kind of posture and ensure that we’re servicing our customers appropriately and working through and ensuring no disruption in supply. So, that’s our posture.

Brian, Conference Host, Oppenheimer: Understood. Alright. I have to check the box on that. Now moving to automation. So, you know, meetings are long term.

It’s a, you know, very, very compelling aspect of your story. You’ve achieved rather significant scale. I wanna get back to that in a minute. But maybe just talk about the the overall value proposition of your automation platform really differentiates like, an electric? And and what are the most, I guess, exciting opportunities looking forward?

Gabe Bruno, CFO, Lincoln Electric: Yeah. So I’ll start off that we still believe that it’s it’s early in the adoption of industrial automation, capabilities. And so I would start off with the platform ability and just give you a revenue number to kinda anchor that. So in 2020, when we started this strategy period, our sales for in automation are about 400,000,000. In 2024, we’re at 911,000,000.

So think about that kind of growth trajectory, both organic and inorganic type of growth. One of the things that we’ve built out is a pretty broad platform. We have got over 2,500 engineers and technicians and that kind of capability that can, work through solutions for our customers with a broad, portfolio of of an offering. So we’ve been driving adoption and introducing technologies from cobots to robotic cells to larger scale, types of a of an offering. And so, having that kind of, employee base to be able to, to work through solutions are pretty important for us.

When you talk about the technology, it’s broad and and broadening. So we have, core welding capabilities. We’ve added material handling. We’re into end of line testing. So you’re looking at a a much deeper footprint of solutions that are within the automation space.

So you’ve got our people. You’ve got the technology. You got the the footprint of space in all of our different facilities to be able to complete solutions, line builds, and then be able to send those off to our our customers. So over two and a half million square feet of space across all of our operations. So those become pretty important differentiators.

And then, obviously, our brand, the longevity of our business, our reputation of, servicing customers with high quality types of of solutions are important for us. So that all ties together into a pretty strong value proposition, for our customers.

Brian, Conference Host, Oppenheimer: Absolutely. You mentioned the, yeah, the build out of of other capabilities, not just, you know, core core welding applications. What’s the mix now within your automation platform of direct welding application versus other? Then then you mentioned the 911,000,000 in revenue last year. I always like to just clarify this the way that that you you your team parses that up.

That is strictly equipment revenue. Correct? And then, you know, consumables linked to your automation strategy would be, I assume, you know, somewhat materially additive to that model?

Gabe Bruno, CFO, Lincoln Electric: Yeah. So so, Brian, I mean, that’s a a great observation in our value proposition because we are measuring, the equipment components of our automation, solutions, to our customers. But there is a consumable tie in. So when you think about robotic, welding capabilities, there’s wire as part of the offering. We don’t capture the consumables as part of our our offering and what we communicate on the automation side.

So the welding component is about 55% of our overall $911,000,000 we’ve talked about in 2024. The other 45% are all these other automation capabilities, material handling, end of line testing, positioners, and that that shore up our value proposition. And consumables are very sticky. When you think about the level of investment made in our in a automation solution, you don’t wanna be disruptive and risk productivity by buying cheap wire. So we essentially have all the business, I mean, significant amount of all the wire business tied to our robotic applications.

And when you look at overall, we’re talking about 15% of our consumable offering tied to robotic, applications. So think about when you look at holistically of almost 30 of our business within the equipment, consumables that are tied to our automation capabilities and solutions. And and that revenue stream continues. Right? So that’s an that’s an important part of how we go to market, and that WellWire becomes an important part of that ongoing revenue stream.

Brian, Conference Host, Oppenheimer: Mathematically, I’ve assumed this is the case, but I’m not certain. I assume that the, you know, consumable mix of, you know, robotic wire, you know, filter automation solutions that that is scaled kinda proportionally with the equipment revenue, I

Gabe Bruno, CFO, Lincoln Electric: Yeah. So the more robotic applications we put in place and the more wire we’re gonna sell. So, yeah, so you see a growth you see a growth trajectory that should be, I mean, it’s not all. 55% of the automation business is tied to welding applications. But as we continue to grow, within automation and the introduction of wired to support the robotic applications, you see more of that bulk packaged products being sold within the robotic space.

Brian, Conference Host, Oppenheimer: That by yourself, offsetting the 45%, you’d probably have more customization, maybe even greater stickiness of consumable sale.

Gabe Bruno, CFO, Lincoln Electric: Well, it’s it’s almost very sticky. I mean, I I don’t say a % because our team can’t assert a %, but you can say substantially all the business is our our wire.

Brian, Conference Host, Oppenheimer: Understood. Alright. You mentioned earlier within the higher standard 2025 strategy, revenue growth being, you know, on average, three to 400 basis points m and a contribution. Yep. You know, how how does the current deal pipeline look?

How is the kind of broad based uncertainty of the macro environment influencing, your your deal funnel? And, I guess, how how are you how’s your team balancing or prioritizing, you know, strategic m and a and and repurchases in in this environment? Know that, you know, the the latter you have stepped up within the 2025 guidance frame.

Gabe Bruno, CFO, Lincoln Electric: Yeah. So I’d I’d start off, Brian, with our process. So as you point out, key part of our growth strategy is to drive acquisitions. And and so our corporate team works hand in hand with our respective business units in navigating what are the kinds of opportunities, that fit within our strategy. And if we get to a point of valuation and and making it work, then, we’re we’re gonna go after an opportunity to drive growth.

So it’s a very active part of our strategic thinking. It’s a day in, day out for me type of a conversation, because it’s a key part of our our growth, strategy. When you step back and you think about how we’re doing, yes, there’s we we believe the environment’s gonna be a little bit sluggish is the word we’re using, but we’re ahead of the objectives. So our target, and our strategy was to be 300 to 400 basis points of CAGR, through acquisitions. For this period, we had we’re at four forty basis points of CAGR, so we’re ahead of this.

When you look at over the last ten years, we’re at three sixty basis points of, of CAGR from acquisitions. So we’re very disciplined. We have a very active level of review with our board in this April meetings. We just had gone through a hindsight review of all of our acquisitions. But it’s a key part of our growth strategy, and we’re we’re exceeding our objectives for this strategy period, and that’s gonna continue to be an important element of of growth for us.

When you think about capital allocation, you’re kind of inferring that with, drivers for growth versus returning cash to shareholders. We want to be balanced, but we want to prioritize growth. That’s our first priority. Internal investment, you’ve seen that we have moved up the level of CapEx spending over the last few years. So we continue to look for opportunities to drive the needs in new product introductions, capacity, productivity, safety.

Those are all areas that we’re continuing to accelerate investment for internally and then growth. So we’re going to look at acquisitions from a growth standpoint, and those are key part of our priorities and capital allocation. That said, you know, we’re generating, you know, record levels of cash flow in this first quarter. We’re very healthy position and liquidity. So we have decided to to move up the band of share repurchases and actually give a range.

We haven’t done that in some time. But we’re talking about share repurchases in in 2025 of between the 300 to 400, million. First quarter, we’re already a hundred and 7,000,000. Think about 2024, we got 264,000,000 of of share repurchases. So we’re gonna we’re gonna drive a little bit more activity in share repurchases, valuation, and otherwise are are attractive for us.

So we’re gonna we’re gonna push a little bit more on share repurchases in this in this year.

Brian, Conference Host, Oppenheimer: Understood. And you just mentioned the the review of acquisitions throughout the 2025 or higher spend in 2025 period. You know, was a major one. Now we’ve always been intrigued by that asset. You know, how how has Fourier progressed relative to the the deal model?

Any updates on, you know, commercial prospects, the, you know, broadening, you know, that end of opportune?

Gabe Bruno, CFO, Lincoln Electric: Yeah. Look. The Foray integration is just going, extremely well. We’re exceeding the margin expectations that we had built into our our base case. The integration, particularly the North American business, is, right on schedule, ahead of schedule in terms of how we’ve built out, how we look at project management and the integration of that business into what we call our Lincoln business system.

So, really, the Foray business has just done excellently in how we’ve integrated and developed, the model. So we’re excited about what we’ve been able to accomplish, with the Foray acquisition.

Brian, Conference Host, Oppenheimer: That’s great to hear. We’re relatively short on time. I guess so excuse me. Ask one more on, on m and a. If we set aside automation, you know, just thinking of, you know, core welding applications and also the Harris portfolio, you know, what what assets are of greatest interest to to your team and, you know, rounding out the portfolio and your technology capabilities?

Gabe Bruno, CFO, Lincoln Electric: Yeah. I know. Look. All parts of our business, we’re focused on driving, m and a types of activity. So I just mentioned, like, last year, we acquired Vanair, which is a a mobile, unit in the in the truck area for maintenance and repair.

This is a mobile unit that’s has, air compressors, welding power sources, equipment to serve maintenance and repair. That’s nicely tied into our America’s welding segment. We had some joint engineering work done prior to the acquisition of VanAir, and that’s just another great example, of which the integration is going very well, at VanAir. So those are just opportunities for us that are outside of automation to think through whether it’s a channel play, whether it’s a product play, for us to continue our footprint, across all of our businesses. We just announced an equity investment on the call, that’s tied into the mining market in in Asia.

So those are just opportunities for us to continue to to see how we brought in the footprint and products and regions and channels to be able to improve the the footprint and drive accelerated growth.

Brian, Conference Host, Oppenheimer: All makes sense. Alright. I think we are we’re officially out of time. Yeah. Thank you.

As always, Gabe, most great

Gabe Bruno, CFO, Lincoln Electric: to be Brian. Great to be here.

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