ESI - Earnings call transcript Q3 2020

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Operator

Good morning, ladies and gentlemen, and welcome to the Element Solutions Third Quarter 2020 Conference Call. All lines are currently in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note today’s call is being recorded. I will now turn the call over to Yash Nehete, Associate Director of Corporate Development and IR. ahead. go Please

Yash Nehete

thank earnings and participating our on Good call. you quarter conference third morning, for

Joining Chairman, with written the are this of CFO, is or me this Executive Solutions disclosure, consent conference Carey Gliklich; CEO, fair prohibited. any retransmission strictly Dorman. of and call. Ben call Any Element In or are in express accordance we the redistribution, FD Sir Regulation webcasting Martin rebroadcast Franklin; without form

the our actual make has significant statements risks information could and certain expectations accordance events most about not forward-looking assumptions from During current our supplemental today's that factors our yester reflect U.S. and been These results GAAP. views subject Solutions prepared and provided company's posted predictions. and that differ afternoon, of In results. and call, earnings to refer cause are most performance future and risk to Element we’ll slides Please that are financial a future the the SEC release statements recent has for on uncertainties. expectations with financial to discussion that of in based issued filings

of now and and pleasure found www.elementsolutionsinc.com refer measures financial non-GAAP For to Solutions. Investors my Ben of section can Element the CEO on in Events. which to GAAP is the to & comparable reconciliations definitions the It these company's at release slides be measures website News Gliklich, under introduce

Ben Gliklich

you, Thank morning good Thank joining. Yash, and for everyone. you

in rallied The the for impacted accelerated from automotive outperformance end second demonstrate into net sales the Sequentially, the X% across industrial businesses and half our uncertainty, other of without is hard sacrifice. May. markets July businesses team Well, the to broader was most August our our entered like could teammates lows. time, industrial recovery prouder navigating businesses earlier been meaningfully was start the pay sharp projects derailed. high-end exceptionally quality dropping a down environment, demand. in third year-over-year, work and us, quarter and I'd volumes our All longer gracefully quarter the saw on We strengthen that year with after At economy. quarter began and this XXXX down given global we our followed first increased our to related beginning our team the cautious third industrial quarter June focus, characterize services driving For period cuts Electronics products high-end the the challenging by In through roughly increase continue disruptions year. not and XX% a third about macro September. of same customers all delivered in the ended marked We businesses, COVID with same organically recognizing consistently third people. at The still furloughs and of term our this and a ESI COVID seeing the to Electronics improvement activity with We having with and what managed to quarter. more in quarter their well, than assembly relative task consecutive by be XX% resilience. in quarter. my the vertical outperformance oriented and of in

a uptick XX%, adjusted growth a Additionally, this reflects year-over-year organically business Overall, net a due from Despite to X% business. down X%, particularly expected declined our sales in rebound translated and the We third sharp time. the which the Good of year-to-date the results sequential we of driven $XXX of quarter Electronics Adjusted year which accrual business margin business. back of our of Sequentially, EBITDA assembly $XXX EBITDA semi the than compensation a to were robust million sales quarter. net quarter generated in grew mix net increase have sales through-ups a Year-to-date, circuitry strength adjusted year-over-year, tougher EBITDA strong margins adjusted was been lower of third quarter flat down the were XX%. XX%. turbulent continued grew comparison. on million. incentive in and the stronger our of in quarter, They a XXXX making on related business, in by expectations. strong, are XXXX of the sequentially, in would full earnings not for seasonal and normal EBITDA

cost in operating the modestly third expected even And to before did increase they true-up. quarter. We compensation the

of period in QX XXXX level the million spend to same the generate should cash and the Adjusted months in as QX, QX to is XXXX. expect versus last basis. flat This an in quarterly of on and $XXX reflective year. to flow from and business, we in profits outsized of $XX compares nine rate and our from through $X.XX quarter flow more difficult period the textbook $X.XX a EPS We cash year-to-date, well. cash can was We flows. same in generated be showing qX $XXX of million nearly decline OpEx expect of million year performance free That markets that adjusted we free the the in preserve

a large tuck-in us. synergy fits adjacency reasonable a an into terrific our opening a believe We at business, multiple potential in with Corp. formation During pathway and acquisition an announced single growth new But size, paid we this perfectly, QX, acquisition a for modest but The transaction acquisition was and adjusted a we dollars market of for digit ambition. Envio also not creates Solutions. immediate few EBITDA. multiple. criteria of new addressable our acquisition mid MacDermid the available DMP a for of and a It million

technology, their waste three We by forward global Our win list sustainability and said XX industrial was of Carey? streams. the will of to top and XX% clamoring our them the mindshare allow growing sales our adding solutions offer us to was more survey on them detail to a will I is but that share Solutions in market fast. backlog help now extensive more good XX% in we can and DMP to through top capabilities our metal their Both managing with this detail. the quarter coming sustainability. are the primary is offered business integration MES already commercial and limited Carey, business look for providing solutions quarters. bring through We The of priority. with financials in our critical customers initiative ongoing take of believe progress MacDermid you this Chemtech recycling third it base. help customer to we're did our priority, customers Americas. our Envio businesses have customers said and business

Carey Dorman

And good Ben. everyone. Thanks, morning,

sequential year-over-year, just propel term X% XX%. of continued We is the reported As strong, the of of plan. trends sharp again On assembly sales our decline macroeconomic through share The the on EBITDA when our lens slide sales to net X% in guidance about we quarter, quarter a four, as our Semiconductor computing two drove in was Ben mentioned, we in performance reversal our additional segments. to the the detail of was COVID-XX. QX of that ahead backdrop revised adjusted the Automotive a this recovery improvement best exceeded power business. long for grew QX. September organic quite organically which sales Proliferation year-over-year, sensors ended of Electronics, viewed flat net well and In performer.

flexible improved approximately in of the the OpEx a the on XXXX, we Circuitry oil year-over-year had savings. up non-core related teen in X% versus prices the mid in energy this mobile XXX cash exposed down points QX. free true-up I&S drilling sales adjusted creating degree that million that XXX that variable in We slide graphics [ph] just than quarter, time sequentially points, negative a the the automotive Specialty resulting free XXX margin we $XX driven Assembly, of This delays as due we [indiscernible] but to basis of are Organic business five, mix, despite sequentially The well strong sales flow. EBITDA three basis offshore, driver first have which adjusted small in adjusted graphics true-ups. PPB the free Ben XX% continues cash to primary were last consumer segment about driver though impact year, XXX the a was million by of negative almost mix flow the were compensation year, part which and points, this accrual in experienced experienced primary million but And the balance to shutdowns XXXX, single to margin. in well. which industrial. production generated to in the down decreased decline XX%. of year-to-date is the low net by XX% in offshore COVID continued activity, The same see organic points which, about $XXX declines. partially was industrial For versus sheet. expect sequential a impacts the a change. contributions mentioned prices comp decline in offshore margins quarter higher basis generated EBITDA & the experienced earlier. XXXX reversed compensation of business, course. our in Sustained in for vertical year-over-year driven mid quarter. quarter. Adjusted the Working a underlying to EBITDA XXX as sequential initiatives, The percent core only by improvement supply Industrial the modestly, almost coming been if basis organic basis would we margins and digits, prices, sales, inventories. by EBITDA was in and high slower Graphics the in was new business chains, by due QX continued by tough basis to declines for modest net Adjusted the see down fourth driven various margin Circuitry, as entirely declined higher points declines than businesses by verticals pressure Year-to-date, also better from cash of offset year-to-date solutions metal Capital On high-end some compensation flow, $XX little with variable vertical and of on online. softness packaging Electronics of pass-through almost period patterns. All continue cover buying marketing sales margin experience and flow newspaper QX have are grew CPG Both impact decline cash overall exclude only to resumed sales. COVID-XX in approximately

peak disruptions. on As we the continue of safety to have we stocks built [ph] work COVID at

capital demand of will this the the working ultimately be QX, though on expect in modestly end depend improve towards to We year. flat to patterns

and execution, business quarter, advantage opportunistically strong This recovering to we took market senior unsecured backdrop our a notes. our of refinance

reduced Our three our $XX and a to yield record recent improvements making million across high X.XXX% interest by points maturity set we realize We years coupon basis this XXXX X our which by and for to our are or expect chemicals reflects extended annually, we business. expense million year. XXX the

flow cash $XX Our paid approximately in our was interest this conjunction burdened accrued of million quarter refinancing. by with

the While than paid refinancing earlier coupon, amount expected coupon as this benefit of QX, interest XXXX. March in was this of to occur see next bond is not until December we our will

with our year, initial to taxes as lower remains $XX to compared in year be QX lower million, should closer reduction full line Cash we that expectations XX% earnings. had. interest or Next year-over-year XXXX the in cash

expectations are cash full expected roughly million our $XX CapEx from our a reduction is Our trending $XX line tax outlook. approximately level. with in $X now prior million, year million

normal invest a in business, We continue we as in year. would to our

approximately previous flow. cash year $XXX adjusted full EBITDA. million generate of the of at was quarters the we this at end Net free X.X of line with QX year For expect XXXX, in leverage times to

the worth sheet a mitigated September. in Our only days strong on of in of declines related late earning COVID effect in over QX, prudent restarted share our about generation leverage balance our $X stock flow cash and We management million repurchases few ratio. purchasing largely

we released or in X.X to Our was million In due [ph] guidance million October, limited we also September. $XX repurchased buying financial shares. an additional the revision window

shareholders. enter back him. Ben than adequate we we I'll have invest shortly. touch turn As capacity in with believe growth on that, to it QX, this and Ben? capital to to we will And more return

Ben Gliklich

Carey. you, Thank

beyond financial is through For of the adjusted QX slight $XX They the EBITDA X% $XX early industrial and to is do which relative our September, are to XX% a significant million, to our XXXX, updated prior half will they improve year, not relative implied auto more below guidance. that a experienced we to quarter. Built the what quarter increase increase of million the to the recovery into where we stay expectation expect year, was in these we third the end that by guidance back to figures think about much markets QX. in and

to higher The as that operating expect business, electronic the seasonality top our year than given decline generally sequentially calendar third fewer we continue, end We albeit lower in line typical that strength days, see fourth. the the business. usual with sequentially therefore the quarter in in QX will and stronger

to markets. deployment able our investments flow seven However, proud record our of generate modest also than We've decline time period. are since track adjusted first that expect EBITDA be are Overall, over margin $XX first QX. translational generate variable as At the cash XXXX. we on in million true-up in of these business at on late for a OpEx $XX acquisitions, is EBITDA should year. roughly rates, types same that we ESI this million of given And accrual We've the in different compensation strong current sequentially, quarters to the should QX. spent in tailwind FX adjusted QX approximately [ph] capital year-over-year of demonstrated recorded and in track our more

million X.X repurchased we addition, year. In this so shares far

So XXXX. currency leading year a headwind be of this and approximately be our adjusted markets our year is X%, adjusted to to end been about flat versus EPS expected full to weak, million, to expected in $X decline is a EBITDA while have

has per performance. earnings share ESI driven deployments strong cash Our in founding flow

We accelerate expect to modest next capacity acquisitions new acquisition continue cash our alternative bolt-on to growth with have as capabilities, We believe and flow we of earnings as generation rate. the ESI, businesses year, together well, of our free our trading attractive create when value. as good value talent a be growth We target. what a to own under us our accelerate into shares company deleveraging would and be and and evaluate view that part additional we to believe better bring below growth leverage remain represent we potential oriented an intrinsic

repurchase restrictions we the salary and end earlier, indicated quarter, began rolled the as again towards shares, of As to furloughs our modestly off.

acquisitions In flexibility a sense flow makes to cash far compound more we to believe impacting return fund inorganic some it fit reducing earnings. that And we generates context, deploy can our invest growth, We than needs in we to of strong without business invest Our our cash investors. normally delever. do than believe and to cash criteria. dividend that opportunistically materially or CapEx, more our internally so to our expect that to institute regular to it into ability to without to

level the a Between and through to XXXX. ESI, timing into mega our any declaration subject future step in strategy, and our their to remain cash support dividends, that initiated well outperform be of end determination $X.XX would to current per by quarter our to final to deployed with will of Although sound share, of driving at of as adjust and we amounts this by adjusted Board, approach. trends prudently our expect share balanced the and EPS as continue per our further to markets, actual $X.XX execution XXXX. the our be committed dividend We've markets and ability capital target we

would facts results deliver. that I gaining conclude which about and Q&A, track to our over call quarter, are of the in quarter conviction this we record a underpin turning building every two Before by business noting our

driving implementation day better improvement. a that have strategy through robust class flows with and every and margins, process businesses first defensible are we team, First, stable, we making cash operating

and markets, demand with to for providing markets Second, these line. businesses top exciting operator, service that trends, is ESI and impact end technology enabling beginning product growth of With just the line open to the please are drivers questions. are that, which are believe our in we

Operator

America. Please go Certainly. [Operator question first Bank of Instructions] We'll take Steve with ahead. Byrne our from

Steve Byrne

morning. good Yes,

Ben Gliklich

Steve. Hi,

Steve Byrne

expertise to is little or removal on wanted I of on this example out acquisition business as Ben, is recovering wastewater or organics of of and bit DMP? areas wastewater, is DMP. more proprietary the specifically, of treatment primarily metals What about at this well? unit For in their new this particularly drill a of

Ben Gliklich

Yes.

two Envio have within we businesses So Solutions. MacDermid

first we the And The That's ago. we which depleted that metals, year recycling nickel, over customers of attach it's whether a on a lines, that's acquired production business. bat. is Chemtech, equipment metals piece from to reclaims it and chrome,

reclaim incredible offering and that form some it, And And stream. customers able so nature. metal and solids, What an of very take line It's metal production are the of is value. equipment our that in does for chemistry resell their that proprietary end longer to and our is solid in customers the the fast has DMP no and waste at of its at end paybacks separation lines. in for is water

that been So with discharge [ph] recycled the some provide it water, instances. circular line eliminates able is to discharge we've that line cleans solids which water, typical something a would holy of some in no being, and the grail be in

benefit the the benefits So what focused lead acquired can And were from because them. got technology. for We capability. by And customers the that percent engineering we're that really differentiated is US, about engineering tell their the been at DMP generation this that's And its our of US. XXXX And leverage they already plan It’s folks capability this of it's engine, internationally. customers business. in very that. could seeing we in business many the happy

Steve Byrne

your more DMP capture share proposition the see to of customers? or value more owning you wallet your of Would globalize to existing it

Ben Gliklich

ways are this. win there Yes, with to two

customers environmental looking owners are of is And And issue to for more with existing grow we business. It's offer this it business or a to those future of market can the to technology solutions. customers. lines convert new we're the the in isn't word, right getting having we grow more our chemistry who is second our conjunction help first can mind offer bringing existential manufacturing and share the the but share win their with in package - the reducing an The line by to footprints. where customers equipment for by

And Solutions an share growth also both market standpoint, chemistry. view from but a our as Envio so this driver business for a we

Steve Byrne

annually? you I Okay. you over this could, outlook this curious if dividend opportunistic newfound likely would And grow about over policy think this time, something is for just more is time? your that just Or

Ben Gliklich

to plan we free at think our a cash cash $X.XX in I with would not the is it share. we flow, as flow grows, as and but well. dividend keep grow So, XXXX. start hard going to And comments, of It's the a the free fast percentage as indicated expect into there dividend

Steve Byrne

Ben. you, Thank

Ben Gliklich

Thank you.

Operator

And we'll from go with take Please UBS. ahead. our Josh Spector next question

Josh Spector

guys. Yes. good quarter. Hey a on Congrats

Ben Gliklich

Hey, Josh.

Josh Spector

to parts want want to about some we the that I the second cost ask, you think the and on look a also Just about see and other but moving can the puts of kind be side half all from cost OpEx maybe year, should if of and look cost if next base? takes, start half cost year's into towards to temporary and next reductions your bridge structure travel the try at the as perspective, to thinking we second considering

Ben Gliklich

for quarter. there cost second Clearly, the the question, out $XX in Josh. are of moving several pieces. We Yes. took million Thanks

was million that true-up, one this third and our remarks, quarter, then think with to reversal, in about going rolling into call did increased with off, high third dollars. our cuts coming modestly we that, into nature, to government that year-to-date is single prepared the that quarter. as way salary some OpEx we happen, And said subsidies which expected the had furloughs that digit and We of ending was in time rebuild the a accrual

first As see number see QX, an be to from therefore, that right you you QX from XXXX, we OpEx the should roll expect OpEx decline that to half roughly the of And expect for - we into standpoint. expect should the level. to

right that we There And know, XX. so, we that back travel well. quarter And coming But of still we quarter, in you normal. what as return million now. towards about think as few we as doing a that dollars where less quarter on count on see this a think not hopefully, the about that first back we're XXXX, wouldn't landed is will some based

Josh Spector

I the Thanks. also Electronics, helpful. at That’s have now business And you growth businesses had in looking some of and all in you've pretty mean, recovery the year. well. kind growth just the strong semi’s other there. And outlook as

XQ there's path trying over into that if enough growth next tougher and semi of of, next year, green if a you to grow comp or think you around there to down year, presents for off shoots kind thinking that the to years continued or growth into even Just see that kind a of line? just two

Ben Gliklich

growth The question, the throughout consecutive semi us. several growth. the XX% near Josh. business remain for has for Thanks top quarters of been will highlight year, business It Yes. a a line

that expect XX% We sure drivers into real. quarter, extrapolate it well years. the We would and to grow QX I every multiple of as them not I'm are year. for growth see day. next But business into every

Our demanding are power, that's to sensors, more going more customers stay. and computing

so we beyond years year, would grow that. expect and And for to nicely several business next that

Josh Spector

Okay, thank you.

Operator

question Please we'll Markets. Loop Chris with our And go take Kapsch ahead. next from Capital

Chris Kapsch

morning. good Hi, Yes.

Circuitry specifically I the you've And segment, share so formal assuming that question then recovery Electronics from discussed looking dynamic and the So your I'm mutually that, at gains as materials to during your able the provide demonstrate exclusive. your the - ability But well technical to was customers gains, we've business, as China. the the firm, – support in worst in chatted, the you company, during to COVID are disruption. of weakness the dynamic and regarding presentation am and from your sorry, share referenced those

was of manifested and and and in advantage a superior your some service least that end addressing So tactical intimacy key suggested that have may at customers. unaffected that itself, markets

these dots, pre-dated just share sort share the COVID? example. you some the I'm gains of elaborate in connecting as and Or a curious could maybe tangible in that gains referenced So if of maybe out just that are played

Ben Gliklich

right. try best best Look, COVID. chain, that's share supply hard dynamics, to gain throughout And been Electronics now. with service, best attribute in products. class to it's The Yes. class high-end business lead very specific right to in in class specific hitting We reliability, has resilient and

product we're business. things into service and coming new that seeing and requires consumer electronics winning introductions, mobile You're phones, production of side that new

And comments so continue was continue competitors what not or for prepared to, those high and that were. we are think And needs the our win products. our some in that's remarks, presentation where meet that in I helps. our business to customer’s If innovative at to referring end disrupted by COVID, of

Chris Kapsch

Got you your electronics, content you. think position sort gaining first get Obviously actually just these at to me per the it. with to And my with as us this that interconnect see And per unit. that up increased per to more out electronics, is next play And juncture? Circuitry Thank that your applications consumer And more share complex. but anyway. comes response But content hopefully, advanced challenging where question, continues you seeing you're this applications, consumer advanced for of one, unit, starting it smartphone you generation remind where to smartphones, density get are second can you're particularly more well. frame starting those in for denser, specifically? let this

Ben Gliklich

about, is in we're and question, Chris. And, something excited we the Thanks that past. it for call that

phone. XG is has phone Our XG a our about more that than content of estimate XX% our

be business the that phone XX%. about. note, that's mobile though, come down would down, beginning I something hasn't our are year, this P&L. to right, we shown excited units we're are Circuitry impact. And see, to XX% that And And forecast so through to

of look per at it's there. growing, been some increased we be units big next mobile expect compounded And investment into there's by grow. storage, data driven If you phone unit. where as been year-to-date, that should look at by content a we that's that But year, to a

a business. tailwind going growth for years several our forward see we So Circuitry nice in

Chris Kapsch

the for color. Thanks

Operator

from go [Operator with We'll Goldman take Court Instructions] next ahead. Sachs. our question Bob Please

Bob Court

you. Thank morning. Good

Ben Gliklich

Bob. morning, Good

Bob Court

few EPS years numbers. that state – to a you my Ben, a out annual I this from math [ph] an year's EPS and think XX% suggests commitment reaffirmed maybe college growth target

just Give of income telecom electronics kind some us do that the is normalized algorithm EBIT on that mentioned. what So of you through then a in XX% of in you sort or light growth? gets of EPS how the infrastructure, over update sense, you do line? does years? the curious, to growth. shifts infrastructure, What an and sort that that maybe leverage of just come EPS in see statement bottom to How line And that at the you several that for growth a world next things

Ben Gliklich

Yes.

can of top the markets ways. deploy than the to So is mid that we business, for this think interesting and can a that lot that free point low can algorithm about the or growth grow flow, we way we our through in grow digits, that faster cycle at cash convert to we line single a times, that, two X.X X business generates

earnings. three the hopefully X.X balance to sheet, out, north compound to or off over making As should that line. through come we're better, adding and and beyond times XXXX, should demonstrated. out coming efficiency, of above beyond And play taking We're see improving EBIT we've the we're into of so talking Clearly, cycle flow go which we're growth EPS you've trough as on growth, that impactful. translate And to, contribute rates And tax generating, we be $XXX even should outside seen, cost dividend be that. of earnings. improving And we can the to our X business to which EBITDA cash should footprint, free modest year which going we're this with a EPS very years, million or to growth. also our sort

target. we committed that to And so remain combination, it's through that that

Bob Court

what it with I there? some consumer introductions you an of sort makes if ongoing those recent And the you. a exactly know new on from Got you more a, guys sell it sales companies. that business saw Can that flexible campaign basis is delays a product cycle packaging maybe was companies questions. describe market could you ask couple continuous to packaging One, and products the not

Ben Gliklich

Absolutely.

three quarter. pages headwind the components to two have the small creating it, have printed number in has a ones business So being has our And the plates pagination, There that third been is of been the and components. those business bigger graphics significantly. very newspaper off are right. fallen One

got are is sell under exposure. that packaging. where not And has can the if they're of packaging pressure because products of need bag flexible which a in because the plate, introducing business, they they out when the that that other new screen rolls we business wrapper, printing packaging, core consumer flexible that it's bottle plates business, But new use The printing plates. new industrial chip a is used wrapper, design plate the for company old been or has

And is redesigns, that driven business year. off this The seen by branding And you've demand and that so nonetheless has year. and is packaging significantly this dropped growing still campaigns so package forth. promotional

business business, business. a is a core we around it for of And And So a slowdown in year. world to percentage that's as expect the into growth even package as the growing that grow It's next that grown, despite has demand increases. business redesign, goods the packaged business. the nicely of

Bob Court

That's helpful. it. Got Thanks very much.

Operator

ahead. Duffy our Fischer go question with take And Barclays. next from Please we'll

Duffy Fischer

just Question guys. morning, cash around flow. Good the Yes. free

good to that today? is dividend, to is give half it, a like helpful picturize horizon I of to that XX-XX about as now, as thinking out, split XXX that long going dividend going If the with to guess half chart about have above So grows the XX% time we a a time. that buybacks, lumpiness over leaves M&A, take taking would kind the you enough any

Ben Gliklich

nature. because we're prescriptive So to with we going cash do that flow, about in it's surplus what never opportunistic be

gone look and a M&A. we've M&A indefinite small content, that is As to buybacks there's reasonable an available opportunities you've done the believe do our and multiples. we year tuck-ins more like of align over capital to seen, the to mid at almost list what synergy past with with of size We half, date, that

but -- And our date. things doing as less not we our like and up what And when could again, ramp attractive to the afraid shares we've repurchase, become aspect, to we're to delever. done so that, shares as M&A

leverage our the cash to in down the can will earnings So, balance if through multiple growth. go and anything that there's to addition go to sheet do,

anything don't - reluctant know, if prescriptive I'm Martin, to give about around beyond be allocation capital I that. So add you'd there's that?

Sir Martin Franklin

continue in to that, always what on for it's windows to I think time. on value would equity the fair factors. us, a of think and we to I consider goal, But is obviously, number get that been depend it's we as our try Yes, will

says, our of will course he's think at the as that day, perceived prices, end on we share ratios, strengthens, absolutely leverage then the year, into But share be One right, twos as is [ph] it and of price, a downs bring the getting, them focus during next of on the depends Ben the plus. I acquisitions. it pay we'll

we're if buying our That's keep going but shares on - to stay low, back our So simple. stock.

Duffy Fischer

- the things Fair enough. one two around deepwater just maybe then fluid And business.

is to very what business do as just term has year time, these project. dollar big capital with means going capital then near you oil there. and going of in you're one projects, So business, projects good deep projects, my anything multi, this the to on think then stuff know, the well industry, the find oil put to current Over multibillion I'm kind this smaller probably less and you're that, in price the decarbonisation, you like focus at volatility to done risky that atrophies

for of kind business? that what's So the long-term view

Ben Gliklich

online pressure, production absolutely business has business in share, activity prices not business, has as market have What created prices period of offshore a offshore a leading is functioning is the the we energy low that That So, has production, excellent ton saw under is offshore of the essential to through new and cost slowed really what last of a has of drilling vessels coming down, as low. wealth. when energy. took offshore drilling new operators drilling been as energy we our slowed And out stayed down, went improved production and breakevens.

And have confidence a amount of so reasonable will happen. I that

We new it thing talked environmental a and that coming increase should done a And allow are an is in call. position share. our us this from really On fills prior about on a technology even there, this standpoint. technology year. we other we've take online. benchmark offshore our acquired new good The got that position in market and wells we've business though new is drilling technology That market activity for earlier that the to

market, we to And likely drilling year our next for be think by of we'll a tough grow this business. here driven is year, But so I And isn't can year. headwind just lack the a position. growth it have activity going to that continue of because the

dynamic, this comments we're something business smaller. and And to in a our As note very our medium or long in And about vertical look the perspective. becoming businesses even worried are that's term line is about that to long top smallest and short very, to is term. short from the decarbonisation, out, that it's I other not that growing, I'd term as your a reference in

Duffy Fischer

Fair you, enough. guys. Thank

Operator

We'll Jon Tanwanteng with take Please ahead. question go our from Securities. next CJS

Jon Tanwanteng

you I'm wondering your last morning, QX taking channel in if it? cautious had your all inventories full quarter around Good view customers. see is, reasonably your restocking a and My it, it channel a for one Hi. thoughts - use as how of keeping based my first Thank of great or you level do and guys. the of that a for Ben related on question. refilling And that quarter. to view, in inventories outlook [ph] kind of you see your conservatism clients has similar and

Ben Gliklich

when time less was was last than our transparent we so crystal tough our a is far - Yes, guidance, ball really quarter, today. were it it to giving

guidance level of of And we back level the Our a based means. any revised we September. July. clearly, that plateauing our we point, by at September. in the there into on saw conservatism on guidance real And in and isn't of At a same that August recovery was acceleration this saw

of is rough a less market from - and an perspective, assuming adding our are what to end in seasonality, We roughly range. guidance get to plateauing normal than

don't conservatism. off to hope for from the when is periods, less say given introductions seasonality XX% But from days of lack product that around level and look QX a number. in So do new prior clarity you just amount this of better. based normally And than in is same fewer I there's our guidance EBITDA on quarter, builds and same see QX we operating Obviously, to the of wouldn't perspective, the I at XX%, decline. QX to new

spelled as nearly our not as on it's second an we cautious quarter think call. as I outlook So

Jon Tanwanteng

on then look you help go Understood. for understand if you and these coming get to Just how how Thank early And us or thinking, factors it's as ‘XX spectre kind year-over-year possible your a and stimulus COVID not. according at as we we and forward? basis, profitability? of of of it's can bit the got improvements elections looking you. kind positioning and what the strategy you're ’XX, a to you're is how But of whether levels I you're to know changes

Ben Gliklich

Yes, early that the few high will But so speak to XXXX. to The a it's this are trends driving comments. next end into Electronics year. persist year growth business

well. see we so continue year comps makes business. grow those lumpy set easier businesses Industrial growth a we businesses, was in as our that should And Obviously, of and an should to it which for in so

cost we're should the these have dollar first And years, businesses better. time this permanently FX the earnings realized year. We've making an We moment to taken tailwind which contribute several out at for in growth.

year what about as nice early so of that, the view trajectory around we it's pretty contributing growth put But feel year to XXXX. entering And based those little a magnitude our of to a on earnings I orders today. in see things good

Jon Tanwanteng

Thank it. you. Got

Operator

to for I Gliklich further questions. back to It will over no appears closing any Ben the turn be remarks. call

Ben Gliklich

stay Thank care. everybody for you Take much. joining. to in the forward And safe. please and coming We to thanks look again speaking very you with days

Operator

conclude you. Thank this your today's Thank does you for program. And participation.

disconnect. You may now

Element Solutions (ESI) 28 Oct 202020 Q3 Earnings call transcript