ESAB earnings call transcript, November 4, 2026

Within that segment now, as a percent of sales, you know, we've talked about it being double digits for ESAB and automation. We see that business actually growing nicely. And the important part for us is that we see that as a stable business and not cyclical because of our focus on process and not on all of the material handling.

Great. Thank you.

Your next question.

comes from Brian Blair with Oppenheimer. Please go ahead. Thank you. Good morning, guys. Hi. Hi, Brian. I wanted to follow up on. Nathan's second question in terms of trends and outlook, understanding that you haven't provided 2027 guidance. But if we were to focus across your major geographies and end markets. Maybe offer high level perspectives on where your team is confident in sustained or accelerating growth next year, where you expect year over year recovery and where clear watch items remain. Yeah, Brian, let me let me start by first saying, you know, I'm very proud of our team and their agility in addressing anything that comes our way. You know, the last couple. Of years, we've had many things come at us. In 25, we had the tariffs and 26, we had the Middle East conflict. And then now these inflationary items and a little bit of a downshift. In South America that we are already seeing correcting itself in Q4. The short answer I think there is that the team is capable of addressing and working in any market environment and delivering a continuous improvement mentality around growth. Margins and cash. And I think the way that this year has progressed has reflected that. Brent gave you the numbers, you know, excluding the sort of items that we think were extraordinary in the. quarter, our core growth was actually around 5%. And so the thoughts for us here is that we are obviously building momentum in our sales process. I have to tell you that we have actually upgraded.

Some of the talent within our team. We've improved the training of our existing team. And I can tell you the focus around sales excellence, the focus around funnel generation, funnel conversion. The focus around value selling and an algorithm towards growth is the strongest it's ever been at ESAB. And so I think I've always felt good about the team that we have. But at this point in time, I believe we have the best team taking us into 2027. And so we walk into that year with some confidence. Understood. Appreciate the color. And Sean, you touched on in your prepared remarks, the unique value proposition of EWM and some of the feedback from customers. To date, what has the introduction of EWM meant to equipment growth in North America? Is there anything you can quantify on that front? And then more importantly, how significant or needle movement? Should EWM be the North American growth and mix looking forward? Well, here, taking side of North America, you know, EWM was up high single digits in the quarter. So, you know, we talked about strong growth last quarter and continuing. So I'd say that's a real success story. And I'll have Sean talk about what it means in the portfolio. Yeah, we saw equipment, you know, up sort of low double digits globally, which also is a reflection of the product. That we have developed, right? The Edge Warrior has been doing extraordinarily well on the EWM side. And that's where a lot of our investments are coming in in OPEX. You'll see us actually setting up.

Center of Excellence is showcasing EWM. We are actually putting together an additive manufacturing center of excellence here in North America to showcase the EWM product. I think I mentioned to you. The one person that I was commenting about at Fabtech told me that the React technology that EWM has truly lapsed anything else that's out there in the marketplace. And our customers are eager to place that product on their shop floor. Avenue for growth is on the TIG welding side. The power source that EWM has, in my view, is the best in the industry around TIG welding. And we see the semiconductor space as a clear avenue. And then the last piece is large customers, even distributors. If you walk Fabtech with us or if you sort of observe Fabtech for the first time, you saw EWM. Equipment in booths that were not ESAB. And that is a big win for us. I can tell you from 10 years ago when I visited Fabtech and what our equipment lineup. Was now to walk around Fabtech and actually see ESAB equipment and other people's booth placed in a prime location showcasing robotics and automation was extraordinary and a real energizer for all of our teams. We actually picked up a significant amount of leads for EWM at Fabtech. So the short answer is we're expecting strong results out of EWM and a lot of pull through from geographies that they were not participating in. Our strategy there today is to go out and get specified at as many OEMs and customers in the geographies that EWM...

EWM is not in, which is where we're spending some of our OPEX dollars. And our view is that all of that will pay dividend sometime in 2027 and beyond. Understood. Thank you again.

This concludes today's question and answer session. I will now turn the call back to Mark Barbalotto.

for closing remarks. Thank you, operator. Thank you for joining us today. We look forward to speaking to you all next quarter. This concludes today's call. Thank you for attending. You may now disconnect.