CLEVELAND - Lincoln Electric Holdings, Inc. (NASDAQ:LECO), a global leader in welding and cutting solutions, has announced a forthcoming change in its leadership structure. Christopher L. Mapes, who has served as the company's Executive Chair, will retire from his role and from the Board of Directors on December 31, 2024. Steven B. Hedlund, currently the Chief Executive Officer and a Director, is set to succeed Mapes as Chair of the Board effective January 1, 2025, while continuing his responsibilities as President and CEO.
Curtis E. Espeland, Lincoln Electric's independent Lead Director, expressed gratitude to Mapes for his years of service, highlighting the company's record performance and leadership in industrial automation under his tenure. Espeland also extended congratulations to Hedlund, whose expanded role is expected to support the Board's dual leadership structure, aimed at serving shareholders' interests.
Hedlund, who stepped into the President and CEO role on January 1, 2024, has been a part of Lincoln Electric's executive leadership team since 2008. His experience spans across various senior management roles within the company, including Chief Operating Officer and President of both Americas Welding and International Welding segments, as well as President of Global Automation. Prior to his tenure at Lincoln Electric, Hedlund held leadership positions at Fortune Brands (NYSE:FBIN), Inc. and was a principal at Booz Allen (NYSE:BAH) & Hamilton. He is an alumnus of Dartmouth College, holding both a bachelor's degree and an MBA, and currently serves on several industry boards.
Mapes's history with Lincoln Electric dates back to 2010 when he joined the Board of Directors. He ascended to the President and CEO role in 2012 and was named Chair of the Board in 2013, before becoming Executive Chair in January 2024.
Lincoln Electric, headquartered in Cleveland, Ohio, operates 71 manufacturing locations across 21 countries and serves customers in over 160 countries. The company is widely acknowledged for its expertise in welding and holds a commanding position in the design and manufacture of advanced welding solutions and cutting equipment.
This leadership transition announcement is based on a press release statement and includes forward-looking statements subject to risks, uncertainties, and other factors that could impact the company's future performance.
In other recent news, Lincoln Electric has navigated market headwinds while focusing on strategic growth and operational efficiency. Despite a 4% dip in organic sales, the company maintained a solid operating income margin in its second-quarter earnings. Lincoln Electric's focus on expansion is evident through recent acquisitions of Inrotech and Vanair, which are expected to enhance the company's earnings run rate and add approximately $175 million in annualized sales.
Baird and KeyBanc have both adjusted their price targets for Lincoln Electric, with Baird maintaining an Outperform rating despite a reduction to $212, and KeyBanc maintaining an Overweight rating while lowering the target to $210. These adjustments are in response to the company's revised outlook and ongoing weakness in end markets.
The company has also launched the 150-kilowatt Velion fast charger for electric vehicles, with revenue from this venture expected to be delayed until late 2025. The Harris Products Group, a part of Lincoln Electric, reported a 3% sales increase with a significant 28% jump in adjusted EBIT to $25 million. These are among the recent developments for Lincoln Electric as it continues to adapt to shifting market dynamics.
InvestingPro Insights
As Lincoln Electric Holdings, Inc. (NASDAQ:LECO) prepares for its leadership transition, investors may find valuable insights from InvestingPro data and tips that shed light on the company's financial health and market position.
Lincoln Electric boasts a strong financial foundation, as evidenced by its perfect Piotroski Score of 9, according to an InvestingPro Tip. This score suggests that the company has solid fundamentals across profitability, leverage, liquidity, and operating efficiency metrics, which bodes well for the incoming leadership team led by Steven B. Hedlund.
The company's commitment to shareholder value is underscored by its impressive dividend history. An InvestingPro Tip reveals that Lincoln Electric has raised its dividend for 27 consecutive years and has maintained dividend payments for 51 consecutive years. This consistent dividend growth, coupled with a current dividend yield of 1.48%, reflects the company's financial stability and shareholder-friendly policies.
From a valuation perspective, Lincoln Electric's P/E ratio stands at 21.2, which is relatively high compared to its near-term earnings growth potential. The company's Price to Book ratio of 8.2 also suggests a premium valuation. However, these metrics should be considered in light of Lincoln Electric's strong market position and consistent performance in the welding and cutting solutions industry.
The company's financial performance remains robust, with a revenue of $4.09 billion over the last twelve months and an EBITDA growth of 12.33% during the same period. This growth, combined with an operating income margin of 17.51%, indicates that Lincoln Electric continues to operate efficiently and profitably under its current leadership.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights, with 11 more tips available for Lincoln Electric. These additional insights can provide a deeper understanding of the company's prospects as it navigates this leadership transition and continues to pursue growth in the industrial automation sector.
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