Full Press Release Details
Forward Looking Statements & Non-GAAP Disclaimer The following
information may contain forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements
concerningColfax's plans, objectives, expectations and intentions and other statements that are not historical or current fact. Forward-looking statements are based on Colfax's current expectations and involve risks and uncertainties
that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could causeColfax's results to differ materially from current expectations include, but are not limited to
factors detailed inColfax's reports filed with the U.S. Securities and Exchange Commission including its 2018 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the period ended September 27, 2019 under the caption"Risk
Factors." In addition, these statements are based on a number of assumptions that are subject to change. These materials speak only as of the date hereof. Colfax disclaims any duty to update the information herein, except as required by law.
Colfax has provided in this presentation financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are adjusted net income, adjusted net income per share, adjusted EBITA, (earnings before interest,
taxes and amortization), adjusted EBITDA, and core or organic sales growth (decline). Colfax also provides adjusted EBITA and EBITDA and core or organic sales growth (decline) on a segment basis. Adjusted net income from continuing
operations represents net income (loss) from continuing operations attributable to Colfax excluding restructuring and other related charges, pension settlement loss, debt extinguishment charges, acquisition-related amortization and other non-cash
charges, and strategic transaction costs. The effective tax rates used to calculate adjusted net income and adjusted net income per share were 26.2% for the three months ended September 27, 2019 and 32.5% for the three months ended September 28,
2018. Adjusted net income per share represents adjusted net income as defined above divided by the weighted-average diluted shares outstanding. Adjusted EBITA represents net income (loss) from continuing operations excluding restructuring
and other related charges, pension settlement loss, acquisition-related amortization and other non-cash charges, and strategic transaction costs, as well as provision (benefit) for income taxes, and interest expense, net. Adjusted EBITDA
incrementally excludes depreciation and other amortization. We also present Adjusted EBITA margin and Adjusted EBITDA margin, which are subject to the same adjustments as Adjusted EBITA and Adjusted EBITDA. Further, Colfax presents adjusted EBITA
(and adjusted EBITA margin) and adjusted EBITDA (and adjusted EBITDA margin) on a segment basis, where it excludes the impact of strategic transaction costs, and acquisition-related amortization and other non-cash charges. Adjusted EBITDA (and
adjusted EBITDA margin) on a segment basis is subject to the same adjustments as Adjusted EBITA and also excludes depreciation and other amortization. Core or organic sales growth (decline) excludes the impact of acquisitions and foreign
exchange rate fluctuations. These non-GAAP financial measures assist Colfax management in comparing its operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance
difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans that are fundamentally different from the ongoing productivity improvements of Colfax. Colfax management also believes
that presenting these measures allows investors to view its performance using the same measures that Colfax uses in evaluating its financial and business performance and trends. Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures provided in the appendix to
this presentation. In this presentation, Colfax presents forward-looking guidance regarding adjusted net income per share, adjusted EBITA margin, core and organic sales growth (decline) and free cash flow. Colfax does not provide such outlook on a
GAAP basis because changes in the items that Colfax excludes from GAAP to calculate these measures can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part ofColfax's
routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. 2Forward Looking Statements & Non-GAAP Disclaimer The
following information may contain forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to,
statements concerningColfax's plans, objectives, expectations and intentions and other statements that are not historical or current fact. Forward-looking statements are based on Colfax's current expectations and involve risks and
uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could causeColfax's results to differ materially from current expectations include, but are not
limited to factors detailed inColfax's reports filed with the U.S. Securities and Exchange Commission including its 2018 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the period ended September 27, 2019 under the
caption"Risk Factors." In addition, these statements are based on a number of assumptions that are subject to change. These materials speak only as of the date hereof. Colfax disclaims any duty to update the information herein, except as
required by law. Colfax has provided in this presentation financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are adjusted net income, adjusted net income per share, adjusted EBITA, (earnings
before interest, taxes and amortization), adjusted EBITDA, and core or organic sales growth (decline). Colfax also provides adjusted EBITA and EBITDA and core or organic sales growth (decline) on a segment basis. Adjusted net income from
continuing operations represents net income (loss) from continuing operations attributable to Colfax excluding restructuring and other related charges, pension settlement loss, debt extinguishment charges, acquisition-related amortization and other
non-cash charges, and strategic transaction costs. The effective tax rates used to calculate adjusted net income and adjusted net income per share were 26.2% for the three months ended September 27, 2019 and 32.5% for the three months ended
September 28, 2018. Adjusted net income per share represents adjusted net income as defined above divided by the weighted-average diluted shares outstanding. Adjusted EBITA represents net income (loss) from continuing operations excluding
restructuring and other related charges, pension settlement loss, acquisition-related amortization and other non-cash charges, and strategic transaction costs, as well as provision (benefit) for income taxes, and interest expense, net. Adjusted
EBITDA incrementally excludes depreciation and other amortization. We also present Adjusted EBITA margin and Adjusted EBITDA margin, which are subject to the same adjustments as Adjusted EBITA and Adjusted EBITDA. Further, Colfax presents adjusted
EBITA (and adjusted EBITA margin) and adjusted EBITDA (and adjusted EBITDA margin) on a segment basis, where it excludes the impact of strategic transaction costs, and acquisition-related amortization and other non-cash charges. Adjusted EBITDA (and
adjusted EBITDA margin) on a segment basis is subject to the same adjustments as Adjusted EBITA and also excludes depreciation and other amortization. Core or organic sales growth (decline) excludes the impact of acquisitions and foreign
exchange rate fluctuations. These non-GAAP financial measures assist Colfax management in comparing its operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance
difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans that are fundamentally different from the ongoing productivity improvements of Colfax. Colfax management also believes
that presenting these measures allows investors to view its performance using the same measures that Colfax uses in evaluating its financial and business performance and trends. Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures provided in the appendix to
this presentation. In this presentation, Colfax presents forward-looking guidance regarding adjusted net income per share, adjusted EBITA margin, core and organic sales growth (decline) and free cash flow. Colfax does not provide such outlook on a
GAAP basis because changes in the items that Colfax excludes from GAAP to calculate these measures can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part ofColfax's
routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. 2
Agenda 9:00 AM Colfax Portfolio Progress & Strategy Matt Trerotola
ESAB Overview, Strategy and Shyam Kambeyanda 9:25 AM Platform Progress DJO Overview, Strategy and Brady Shirley 9:50 AM Platform Progress Colfax Financial Update & Guidance Chris Hix 10:25 AM Q&A 10:40 AM DJO Team DJO Breakout Sessions 11:00
AM Lunch 12:15 PM 3Agenda 9:00 AM Colfax Portfolio Progress & Strategy Matt Trerotola ESAB Overview, Strategy and Shyam Kambeyanda 9:25 AM Platform Progress DJO Overview, Strategy and Brady Shirley 9:50 AM Platform Progress Colfax Financial
Update & Guidance Chris Hix 10:25 AM Q&A 10:40 AM DJO Team DJO Breakout Sessions 11:00 AM Lunch 12:15 PM 3
Colfax Portfolio Progress and Strategy Matt Trerotola | President &
CEO 4Colfax Portfolio Progress and Strategy Matt Trerotola | President & CEO 4
What You'll Hear Today Powerful strategy, proven capabilities
ESAB journey evidence of successful strategy over time DJO early progress encouraging Portfolio transformation complete Reshaped portfolio with higher margins, faster growth, less cyclicality Broader set of investment
paths, significant bolt-on runway Exciting outlook for next year and beyond Top-tier performance in Fab Tech Path to market-leading growth in Med Tech 5What You'll Hear Today Powerful strategy, proven capabilities ESAB
journey evidence of successful strategy over time DJO early progress encouraging Portfolio transformation complete Reshaped portfolio with higher margins, faster growth, less cyclicality Broader set of investment paths,
significant bolt-on runway Exciting outlook for next year and beyond Top-tier performance in Fab Tech Path to market-leading growth in Med Tech 5
Strategy to Create Shareholder Value What we are Multi-platform
enterprise of market-leading businesses What we do Compound value by continuously improving our businesses and investing in acquisitions & innovation to build-out our platforms Leverage our business system to drive sustainable process
improvements in everything we do Shape our portfolio to further improve organic growth and gross margins 6Strategy to Create Shareholder Value What we are Multi-platform enterprise of market-leading businesses What we do Compound value by
continuously improving our businesses and investing in acquisitions & innovation to build-out our platforms Leverage our business system to drive sustainable process improvements in everything we do Shape our portfolio to further improve organic
growth and gross margins 6
Transforming The Colfax Portfolio 2017-2019: Transformation 2020+:
Diversified Tech Growth DJO Global acquired, $1.2B revenue Grow existing businesses Divested Fluid Handling and Air & Accelerate growth with Gas Handling (~$2B revenue) strategic add-ons 1 ~$3.5bn sales Medical
Medical Technology Technology Fabrication Technology Fabrication Technology Air & Gas Fabrication Handling Technology Air & Gas Handling Fluid Handling Colfax 2017 Colfax 2019 Colfax Future Transformation complete; moving to aggressively
grow Med Tech and Fab Tech 7 (1) Estimate for Continuing Operations full year 2019 pro forma for acquisition of DJO; does not include Air & Gas Handling in the periodTransforming The Colfax Portfolio 2017-2019: Transformation 2020+: Diversified
Tech Growth DJO Global acquired, $1.2B revenue Grow existing businesses Divested Fluid Handling and Air & Accelerate growth with Gas Handling (~$2B revenue) strategic add-ons 1 ~$3.5bn sales Medical Medical
Technology Technology Fabrication Technology Fabrication Technology Air & Gas Fabrication Handling Technology Air & Gas Handling Fluid Handling Colfax 2017 Colfax 2019 Colfax Future Transformation complete; moving to aggressively grow Med
Tech and Fab Tech 7 (1) Estimate for Continuing Operations full year 2019 pro forma for acquisition of DJO; does not include Air & Gas Handling in the period
Stronger Portfolio With Greater Upside Recurring, run-rate
businesses A global fab tech Med Tech business Focus on innovation technology leader with steady secular Continuous growth drivers Exposure to improvement with CBS faster-growing Significant CBS
developing Consistent cash flow runway markets Many acquisition opportunities Two businesses with significant opportunities for profitable growth 8Stronger Portfolio With Greater Upside Recurring, run-rate businesses
A global fab tech Med Tech business Focus on innovation technology leader with steady secular Continuous growth drivers Exposure to improvement with CBS faster-growing Significant CBS developing
Consistent cash flow runway markets Many acquisition opportunities Two businesses with significant opportunities for profitable growth 8
The Power Of The New Colfax Portfolio EU Market-leading positions in Fab
Tech diverse & attractive US Med Tech ROW markets / applications Better organic growth with > 90% > 90% lower cyclicality (revenues Expected FCF Sales from conversion in recurring, run- and cash flow) 2020 rate products > 40%
Structurally higher margins Gross margins > 55% with industry- Gross margins with meaningful upside defining in Med Tech products and brands 9 Note: Top charts represent geographic & platform revenue estimates for 2019 pro forma for
acquisition of DJOThe Power Of The New Colfax Portfolio EU Market-leading positions in Fab Tech diverse & attractive US Med Tech ROW markets / applications Better organic growth with > 90% > 90% lower cyclicality (revenues Expected FCF
Sales from conversion in recurring, run- and cash flow) 2020 rate products > 40% Structurally higher margins Gross margins > 55% with industry- Gross margins with meaningful upside defining in Med Tech products and brands 9 Note: Top charts
represent geographic & platform revenue estimates for 2019 pro forma for acquisition of DJO
Proven Corporate Value Proposition Attract, Focus, Deploy CBS Values,
Shape and Invest in Disciplined Capital Develop, and Processes, and Winning Strategies Allocation and Empower Talent Capabilities and Innovation Deployment A proven, repeatable approach to driving strong, consistent results 10Proven Corporate Value
Proposition Attract, Focus, Deploy CBS Values, Shape and Invest in Disciplined Capital Develop, and Processes, and Winning Strategies Allocation and Empower Talent Capabilities and Innovation Deployment A proven, repeatable approach to driving
strong, consistent results 10
Strong Focus On Talent Development Our Culture Our Talent Imperatives
Outstanding Talent PURPOSE 1 CBS-capable GMs and ops What we do for Creating better together. leaders; business-minded the world functional leads Full Bench 2 Depth & breadth for growth as well as deployment into Continuous improvement is VALUES
acquisitions What we believe our way of life. Right Organization 3 Aligned for optimal performance & appropriately Thoughtful Speed incentivized Transparent Accountability BEHAVIORS Focused Curiosity Engaged 4 How we work
Collaborative Empowerment Motivated, developed, Positive Competition challenged, and supported Culture & associate development are critical to our corporate value proposition 11Strong Focus On Talent Development Our Culture Our
Talent Imperatives Outstanding Talent PURPOSE 1 CBS-capable GMs and ops What we do for Creating better together. leaders; business-minded the world functional leads Full Bench 2 Depth & breadth for growth as well as deployment into Continuous
improvement is VALUES acquisitions What we believe our way of life. Right Organization 3 Aligned for optimal performance & appropriately Thoughtful Speed incentivized Transparent Accountability BEHAVIORS Focused Curiosity
Engaged 4 How we work Collaborative Empowerment Motivated, developed, Positive Competition challenged, and supported Culture & associate development are critical to our corporate value proposition 11
CBS Impacts Multiple Areas Of Our Business... Continuous Improvement
Focus Areas Standardized Toolset Policy Deployment Leadership Value Stream Standard Work Mapping Visual / Daily Value Pricing Management Problem 5S Solving Process Accelerated Voice Of The Product Customer Development A standardized toolset applied
to talent development, operations, and product 12CBS Impacts Multiple Areas Of Our Business... Continuous Improvement Focus Areas Standardized Toolset Policy Deployment Leadership Value Stream Standard Work Mapping Visual / Daily Value Pricing
Management Problem 5S Solving Process Accelerated Voice Of The Product Customer Development A standardized toolset applied to talent development, operations, and product 12
...With Compounding Results Improvement Journey - Concept
Improvement Journey - In Practice Filler Metal On Time Delivery (% rate) Policy 92 Deployment 90 +700bps 88 Kaizen 86 Policy 84 Deployment 2014 2019F Major New Product Launches at ESAB Kaizen 14 Daily Management 11 8 Daily Daily 4 Management
Management 2 2 Y0 Y1 Y2+ 2014 2015 2016 2017 2018 2019 CBS drives measurable, sustainable growth and operating results 13...With Compounding Results Improvement Journey - Concept Improvement Journey - In Practice Filler Metal On Time
Delivery (% rate) Policy 92 Deployment 90 +700bps 88 Kaizen 86 Policy 84 Deployment 2014 2019F Major New Product Launches at ESAB Kaizen 14 Daily Management 11 8 Daily Daily 4 Management Management 2 2 Y0 Y1 Y2+ 2014 2015 2016 2017 2018 2019 CBS
drives measurable, sustainable growth and operating results 13
Investing In Winning Strategies & Innovation Strategy Shaping
Process Process Results at ESAB CFX provocation / ESAB aspiration: Expand and leverage global reach Create step change in N. American position Execution Provocation Develop innovative, leading full solution for market
CFX role: CFX role: Digitalize / diversify the business Coach & Guide Challenge & Vet Results: Truly global leader with strong local positions Formulation Large improvement in ESAB brand & channel position