Chart Industries (GTLS) Barclays 38th Annual CEO Energy-Power Conference summary

Market Drivers and Business Overview

• Growth driven by global energy demand, clean water access, AI-driven electrification, and infrastructure modernization.

• Flexible manufacturing and a diverse portfolio serve LNG, hydrogen, biogas, CO2 capture, water treatment, and data centers.

• Aftermarket and service now comprise over 30% of annual sales, reducing cyclicality.

• Specialty markets like hydrogen, helium, water treatment, and carbon capture are key growth areas.

• Data center cooling and LNG projects present significant future opportunities.

Strategic Actions and Financial Performance

• Divested four non-core businesses in 2023 and two more underway, generating $500 million for debt paydown and capacity expansion.

• Achieved $950 million in commercial synergies and $229 million in cost synergies ahead of schedule, with further benefits expected.

• Orders up 8% year-over-year to $2.29B, sales up 18%, and gross margin expanded by 280 bps to 32.8% in H1 2024.

• Adjusted EBITDA rose 46% to $470M in H1 2024, with margin improvement to 23.6%.

• Net leverage ratio declining, targeting sub-2.5x by end of 2025, with $3 billion debt goal.

Operational Initiatives and Capacity Expansion

• Cash generation for debt paydown from divestitures, supply chain financing, and operational improvements.

• Working capital reduced from 23% to 20% of sales; capacity expansions in three locations completed in 2024.

• Added shifts, cross-trained machinists, and expanded welder training to boost throughput.

• Automation, digital workflow, and supply chain optimization reduced lead times and increased capacity.

• Operational actions led to 20% lead-time improvement in China and 60% quote lead-time reduction in Scotland.