Luxfer : 2023 Q3 Presentation

THIRD QUARTER 2023

EARNINGS PRESENTATION

October 26, 2023

Forward-Looking Statements

This release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Examples of such forward-looking statements include but are not limited to: (i) statements regarding the

Company's results of operations and financial condition; (ii) statements of plans, objectives or goals of the Company or its management, including those

related to financing, products, or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "forecasts," and "plans," and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. The Company cautions that several important factors could cause actual results to differ materially from the plans,

objectives, expectations, estimates, and intentions expressed in such forward-looking statements. These factors include but are not limited to: (i) lower

than expected future sales; (ii) increasing competitive industry pressures; (iii) general economic conditions or conditions affecting demand for the products and services it offers, both domestically and internationally, including as a result of post-Brexit regulation, being less favorable than expected; (iv) worldwide economic and business conditions and conditions in the industries in which the Company operates; (v) our ability to execute a turnaround plan in our Graphic Arts business to safeguard revenues and reduce costs; (vi) fluctuations in the cost of raw materials, utilities, and other inputs; (vii) currency fluctuations and hedging risks; (viii) the Company's ability to protect its intellectual property; (ix) the significant amount of indebtedness the Company has incurred and may incur and the obligations to service such indebtedness and to comply with the covenants contained therein; and (x) risks related to the impact of the global COVID-19 pandemic, such as the scope and duration of the outbreak, government actions, and restrictive measures implemented in response thereto, supply chain disruptions and other impacts to the business, and the Company's ability to execute business continuity plans, as a result of the COVID-19 pandemic. The Company cautions that the foregoing list of important factors is not exhaustive. These factors are more fully discussed in the sections entitled "Forward-Looking Statements" and "Risk Factors" in its Annual Report on Form 10-K for the year ended December 31, 2022, which was

filed with the U.S. Securities and Exchange Commission on March 1, 2023. When relying on forward-looking statements to make decisions with respect to

the Company, investors and others should carefully consider the foregoing factors and other uncertainties and events. Forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update or revise any such statement, whether because of new information, future events, or otherwise.

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Quarterly Highlights and Key Messages

$M except per share	Q 3 2 0 2 3	Q 3 2 0 2 2	C H A N G E
Sales	$97.4	$100.2	(2.8%)
Adj. EBITDA	$6.0	$16.1	(62.7%)
Adj. EBITDA Margin	6.2%	16.1%	(990 bps)
Adj. Diluted EPS	$0.04	$0.35	(88.6%)
Operating Cash Flow	$11.5	$3.6	+219%
Free Cash Flow	$8.9	$1.3	+585%
Net Debt	$78.7	$75.6	+4.1%
Net-debt-to-EBITDA	1.7x	1.2x	+0.5x

Q 3 F I N A N C I A L R E S U LT S

• Sales decreased as growth in Gas Cylinders more than offset by Elektron decline
• By end market, General Industrial declined, Defense, First Response and Healthcare grew, as did Transportation
• Competitive pressures and rising costs compressed margins, especially in Graphic Arts
• Drove sequential improvement in operating and free cash flow and reduced net debt

A C T I O N S T O I M P R O V E F I N A N C I A L P E R F O R M A N C E

• Reducing costs to drive margin improvement
• Continued progress in cost pass through in Cylinders
• Focus on delivering cash flow

C O M P R E H E N S I V E S T R AT E G I C R E V I E W

• Accelerated and expanded strategic review to unlock value
• Expect update on or before FY 2023 earnings call in February

Persistent Challenges Resulted in Performance Below Expectations

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Business Conditions Update

SUPPLY CHAIN

COSTS

MACRO - ECONOMIC

ENVIRONMENT

• Fallout from U.S. Magnesium force majeure intensifying competitive pressures, especially affecting Graphic Arts in Europe
• New lower cost sources of Magnesium have been identified
• Lower priced Asia-based materials also impacting demand
• Continue to shift mix towards high value-added sales aligned with Luxfer value proposition
• Continuing macro headwinds - higher interest rates, tight labor conditions, rising geopolitical volatility - are decreasing demand in industrial end markets
• Economic pressure weighing on customer buying behaviors
• Most evident in Graphic Arts, commercial magnesium powders and industrial zirconium applications, in total accounting for 87% of the year-on-year decline in General Industrial end market sales

Combined Supply Chain and Macro Factors Creating Meaningful Headwinds

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Actions to Improve Performance

LUXFER BUSINESS SYSTEM

REDUCING COSTS AND

DRIVING CASH FLOW

▪ Reducing headcount, for example Graphic Arts and Magtech down by over 20%, as well in Cylinders

▪ Identified $750K productivity savings in Graphic Arts over 2023 & 2024

▪ Simplifying Alternative Fuel footprint to deliver $1.1M annual savings and increase output

▪ Consolidating Elektron Powders plants from 3 to 2 to deliver $900K annual savings; selling closed site in 2024

▪ Proactively working with customers in Gas Cylinders to address high carbon fiber costs

▪ Managing working capital and reducing inventories to improve cash flow; working through high-cost magnesium, which will begin to cycle in 2024

Making Structural Moves To Achieve Sustainable Benefits Over the Long-term

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Sales Performance by End Market

	41%	32%	27%
	D E F E N S E ,	T R A N S P O R TAT I O N	G E N E R A L	T O TA L
	F I R S T R E S P O N S E	( A LT E R N AT I V E F U E L ,	I N D U S T R I A L
	& H E A LT H C A R E	A E R O S PA C E , A U T O M O T I V E )
FY 2020	-6.4%	-14.7%	-18.0%	-13.0%
FY 2021	+5.9%	+27.0%	+15.5%	+15.2%
FY 2022	+5.6%	+13.6%	+20.4%	+13.2%
Q3 2023	+20.3%	+6.2%	-29.7%	-2.8%
YTD 2023	+29.1%	-5.4%	-18.6%	+0.8%
		Q3 2023 COMMENTARY

• Strong sales of lightweight firefighter SCBA cylinders
• Flameless rations heaters, chemical kits and pharmaceutical again contributed

• Automotive strengthening on increased autocatalysis and conclusion of current year RotaMag program
• Alternative Fuels, Inflatables cylinders and Aerospace alloys flat

• Challenging European conditions for photo-engraving plate and industrial gas
• Weaker commercial magnesium powders and industrial zirconium applications

Broad-based General Industrial Softness Offset by Resilient DFR&H

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Q3 2023 Financial Bridge: Consolidated

Sales ($M)

Luxfer Consolidated

				-2.8%
	$0.1	$2.0	$4.9
$100.2				$97.4
Q3 2022	FX	Price	Volume/Mix	Q3 2023

Sales decreased by 2.8% from prior year

• Favorable price and FX offset by volume decline and unfavorable mix
• Price increases in Cylinders partially offset by price concessions in Elektron
• Industrial markets drove volume contraction as Defense, First Response and Healthcare held up well

Adj. EBITDA ($M)

Luxfer Consolidated

	$0.9	$2.0
			$5.0
$16.1				$2.1		-62.7%
					$4.1
						$6.0
Q3 2022	FX	Price	Inflation	Vol/Mix	Other	Q3 2023

EBITDA decreased by 62.7% from prior year

• Overall price increase but Graphic Arts concessions on rising costs due to pressures in Europe
• Adverse mix exacerbated the impact of Industrial volume reduction
• Tougher comps in Elektron from prior year price increases ahead of higher costs plus adverse short term productivity on lower volumes
• Adverse FX, and increased legal cost in Other

Unfavorable Volume/Mix, Inflation, and Legal Costs Partially Offset by Pricing Benefits

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Q3 2023: Segment Results

	ELEKTRON	GAS CYLINDERS
	Sales	Adj. EBITDA	Sales	Adj. EBITDA
Q3 2023	$52.7	$3.2	$44.7	$2.8
Q3 2022	$56.8	$12.7	$43.4	$3.4
Change	-7.2%	-74.8%	3.0%	-17.6%

Q 3 2 0 2 3 C O M M E N TA RY

• Margin deterioration due to competitive pressures in photo-engraving market and increase in legal cost
• Slowdown in demand in General Industrial end market affecting certain product lines
• Year-over-yearcomparisons remain difficult due to accelerated pricing leading inflation in 2022

• Higher SCBA partially offset by lower sales of Industrial and Medical cylinders, with Alternative Fuels flat
• Sales momentum building in the quarter
• Continued cost pass-through and savings from fixed cost initiatives offset by lower volume and short-term productivity

General Industrial Downturn and Cost Pressures Affecting Both Segments

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Balanced Approach to Capital Deployment

REINVESTMENT

IN ORGANIC

GROWTH

RETURN OF

CAPITAL TO

SHAREHOLDERS

• Invested $2.5M in Q3, including hydrogen 'bulk gas transport system' facility in Nottingham, for a YTD total capex of $7.5M.
• Investing thoughtfully in secular growth opportunities tied to niche materials engineering focus
• Identifying opportunities for new product innovation and operational efficiency
• Paid $3.5M in dividends during Q3
• Repurchased $0.6M in shares during Q3
• Paid dividend since listing on the NYSE in 2012. More than $140M returned to shareholders via dividend over that time

Strong Balance Sheet and Cash Flow Generation Supports Value Creation

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Updating 2023 EPS Guidance

FULL YEAR 2023 GUIDANCE

Sales Growth	- 5% to -7%
(incl. volume, price, and FX)
Adjusted Diluted EPS	$0.51 - $0.56
LEVERAGE & LIQUIDITY
(October 1, 2023)
Net Debt to LTM EBITDA	1.7x
Liquidity (Headroom)	$70.6M

ASSUMPTIONS

Free Cash Flow Conversion	100%
excl. Exceptionals1
Operating Working Capital	27% to 29%
% of Sales
Capex	$10M - $11M
Tax Rate	~22%
Restructuring Cash Outlay	~$5M

E X P E C TAT I O N S

• Toughening sequential developments in Industrial end markets, and short term Magtech headwind
• Maintaining challenging FCF conversion target with continued focus on inventory

• Increasing profitability in Cylinders offset by weakness in Elektron
• Short-termrise in OWC% in anticipation of higher revenues in Q1, 2024
• Tax rate reflects UK statutory rate rise

▪ Selectively investing in organic growth, and delivering	▪ Delivering strong returns from restructuring initiatives underway
shareholder returns

1. Calculation of free cash flow conversion, excluding exceptionals, is free cash flow divided by adjusted net income. Refer to reconciliation statements.

Taking Action to Address Challenging Industrial Conditions

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