ESI - Earnings call 4 2023 | Element Solutions Inc

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Operator

Good morning, ladies and gentlemen, and welcome to the Element Solutions Q4 and Full Year 2023 Financial Results Conference Call. [Operator Instructions]

I will now turn the call over to Varun Gokarn, Senior Director of Strategy and Finance. Please go ahead.

Varun Gokarn

Good morning, and thank you for participating in our fourth quarter and full year 2023 earnings conference call.

Executive our Martin CFO, our Ben our are and Gliklich; Carey me Chairman, Franklin; Sir CEO, Joining Dorman. In are accordance webcasting we this conference with call. Regulation FD, the company's A section available be replay in will of website. the made Investors

slides to actual supplemental During uncertainties. SEC expectations. for financial reflect differ the release, Investors found current that recent earnings forward-looking and factors under that our the filings in our of be statements These our section a subject most we risk Please on are News material today's risks performance that assumptions views are from website Events. and future the and These will expectations can call, future discussion certain results of statements make company's materials could company's cause refer to and results. about and based to on events

financial materials and to accordance Please financial U.S. GAAP. in also has supplemental measures. comparable Today's for prepared the and include not non-GAAP been measures with of release these slides to information refer GAAP that earnings reconciliations definitions

pleasure introduce now my to is our Gliklich. CEO, It Ben

Benjamin Gliklich

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

together businesses Element disciplined several and hallmark XXXX. productive had improved multiple with preserved price and backdrop We Positive our emerging geographies. Solutions while offerings, vectors, cost key from demonstrating stability our high-value challenging a a markets in across for end impacts profitability. mix management,

in our high a decline higher-margin despite volumes decline an flat was single-digit margin EBITDA verticals. even and Adjusted greater in

levels. temporarily profile the both climbing back growth ESI of improving dislocation We a historical and are improved. biggest long-term our emerged Gross market electronics was their costs while margins businesses. permanently took out the in arguably XXXX and towards generation,

and Electronics segment While organic we QX. circuitry exited to last declined XXXX businesses sales returning organic the in with in growth semiconductor year, net our

annual business This has of free cash Element Solutions of hallmarks flow record environments. operating been generated year, a $XXX variety million. One of of steady cash the our across flow

through flow reduction to us returning which to consistent is cash significant debt M&A, XXXX. generation that opportunistically of whether Our or flexibility in did all cash affords we deploy capital, shareholders,

and results continue proposition manufacturers are ViaForm the as to our growth ViaForm customer opportunities transactions our XXXX beyond the engagement of and semiconductor front world. in and positioned Kuprion, well the end-of-line year, and largest fourth high-end Two and quarter, in hubs. just sizable legacy a service, quality last and disproportionately we leading unlocking are M&A reacquired deeper inventory value pipeline support in to with traction recovery long-term growth integration on is poised ability strengthen The those significant both from The look commercial electronics with for improve for our in management promising. completed the distribution rights tailwinds. We expectations participate now offering driving initial markets our our

sales In seen ViaForm monthly increased fourth significantly run January, from of XXXX. in rate quarter the the

industrial levels. sales for as data computing supply our Together, continues of devices in to chip of performance these should wafer-level back IoT design, products years month the automation. and highest some utilization X enable in generated leg next semi complexity their And ramp the improvement packaging center, increasing chain drive the products over AI, which end-of-line

be its enthusiastic. very The to customer copper continues and response to Kuprion technology active

technology with requirements. We shrinking electronic growing feature differentiated large with manufacturers. have and truly pain points and and management solves many applications underway sizes is thermal major This components active semiconductor ever and customer qualifications projects

in XXXX product significant qualification, expect capacity. manufacturing internal and progress on commercialization, building We

unit on despite product improving points basis supply and deflation high within raw expansion cost our pricing business In this volume material in streamlining addition across declining chain made of our to resulted in progress XXX value logistics over gross Positive our single year-over-year, and margins costs. some the margin digits. actions, enhancing M&A significant we sustained year mix, activity, and gross past

maintained also adjusted approximately XX%, to margins of We year. similar EBITDA the prior

As our position you'll team and balance take our Like and the hear improved, direction, Carey? we from Carey Carey, technology our positive. are is the financials volumes margins, focused, markets the right has is going through enter detail. are in more our outlook and you company-wide sheet trend strong. as XXXX, will in

Carey Dorman

our Thanks, quarter Ben. see summary a you can X, fourth of On Slide results.

basis XXX return lines. verticals, EBITDA Adjusted electronics growth XX% of to a our our for raw margins year-on-year most from easing and material high-end grew in points. logistics benefited costs business expanded We and

declined sales a net to by and Asia decline single-digit markets the continued the overall, ecosystem industrial improve, with compared electronics our environment ESI across declining growth primarily organically, across volume high globally. to year-over-year softer driven X% X% organic For year. in earlier in most of Demand

in benefit that and QX, development some Circuitry is quarter, production think for though we fourth we enter tracks QX XXXX. X% inflection X%. Our business trend of grew semiconductor line. us accrues in in given our the positive shipment growth a the organically as time vertical handsets this This global to Nonetheless, grew

management of circuit primarily mix serve Our whole, and basis Assembly year. EBITDA assembly points. XXX customers. business products as margins experienced industrial automotive that regionally XX% was the volume at for and the constant board Despite improving and in adjusted weakness a drove by China higher This and the improved muted in Europe end concentrated segment the backdrop, Electronics softness volume currency cost

of organically Solutions in in surface surcharges lower do declined driven X% industrial sales quarter, fluctuations Net contributed low declined the dollars by organic at mid-single the digits. commodity-based industrial These the quarter in input as price A commodity-based softened to organically decline. surcharges meaningfully fourth Our profit Europe and in I&S segment X% in volume in the are prices impact markets. as volumes Chinese margins. business declines automotive reduction in not treatment the this rest the with sales Industrial

customer business of driven organically, closure in by back increase material should improved, an the and actions, business, ongoing slowdown continued market. on newsprint offshore declined carry that drilling costs the Graphic into Across X% pricing trend and the in key our XX% organically of small the Energy Solutions XXXX. in new activity designs logistics the grew a packaging Solutions business, while in consumer and

I&S year-on-year. EBITDA XXX currency X%, point Constant improvement earnings in with the grew per a adjusted in roughly segment the of XX% versus basis Adjusted XXXX. quarter share fourth grew margin

On results. full Slide X, financial we year summarize our

margins electronic the raw X% by mix markets Our This declined declining remained end weak from of basis, adjusted in organically, top driven line On electronics currency which but slow. constant improved driven year demand market generally, towards EBITDA challenging Asia headwinds was half a while by largely X% the improved logistics in end declined the half. and the high-end the broad-based in and first pressures. quite and by despite mix material easing XX basis progressively second improvement points year-on-year, positive

a reflect which drove $XX headwind adjusted results fluctuations, foreign year-on-year exchange Reported to nearly EBITDA. million

Assembly our would Excluding been of EBITDA $XXX sales the have XX% the margin impact year. for million Solutions metal our business, of adjusted pass-through in

results Next, Slide businesses. on X, on each organic details additional full for we our of share year

to the customers. persisted softness end markets strength the experience for has verticals, relatively strength back end Solutions in these Our the electronics than This more and on significant of business, most automotive automotive which though volume outperformed year, towards of of the exposure our same industrial reliability we year. and Assembly high markets alloys did

overbuilt declined for an declines X% center declined down the data business the year first semiconductor unit downstream slowing quarter, disk sales year. XXXX. our started XX% This XX% Solutions with driving our vertical in circuitry investment full channel, the Smartphone in in Combined and organically Circuitry in volume in organically businesses. memory

PCB the our performed declines While the correction portfolio the seen end better than memory inventory impactful and our markets by supplier PCB in much disk across past meaningfully this the base. year, volumes of were

channel product the decline half. reduction the Semiconductor and categories. levels by packaging year, occurring fab Solutions major in of of declined inventory utilization the driven year, utilization the saw chip sales in the X our and net sales the in XX% run first performance Organic for sequentially in reflect activity months bulk with wafer-level XXXX. improving excess our the business last rates in improved Fab reduction

Asia, and customer particularly accelerated Taiwan, the quarter. in fourth Large ordering in

strong the electronics vehicle to electric market. also power We serve see our in that continued products growth

net in markets. commodity declines Industrial Specialty X% fell XX% Industrial and almost constitutes by segment X% surcharges in which Organic Solutions, driven in of & sales industrial segment price-based European year-over-year. end organically, the and software revenue, declined construction

Graphic Solutions sales were down X% in XXXX. organically

a customer business sales from reduction in growth was New contributed customer the customers lower-margin by newsprint offset from and sales packaging large a closure. but win to

and ongoing on initiatives leadership growth new to XXXX. We business in returning this focused have

in earlier sector line top organically the increased the XX% both of impact revenues Energy elevated actions production-related grew drilling pricing taken Solutions and activity and year. from as

expect We to XXXX. continue higher grow margin this in to business

million million generated a We X. free to capital. deflation in in efforts year, and of cash inventory. which $XX by $XXX Slide flow to modest $XX approximately ongoing a driven QX, the This release sequential was working of million in Moving decline, sales was raw reflecting material record a of reduce

forecast. of in cash investment CapEx expected due equipment and quarter, in of these projects including which lower to several cash were we in our original Several predicated $XX our R&D of drove CapEx came interest, uses had and electronics than projects midyear, XXXX in than the other Our CapEx At Asia key expectations. labs. taxes, deployment better million, power on delayed availability,

spend Some into of roll will over this XXXX.

So and $XX year. million we forecasting $XX million spend this are between in

and while than equipment. We of investments of emerging $XX support other customer $XX electronics systems million be XXXX, geographies million. taxes growth, targeted amount towards to expect applications fast-growing of and cash research CapEx, half assembly the and to centers interest semiconductor this maintenance we roughly better power is in customers facilities, cash and consider approximately less remainder In and growth

long-term by ratio we on decline with to the And leverage of the steps expectations. end of capital year target took believe We further trend X.Xx, ended our reduced that the to late our below Xx further transaction, in year Net barring to sheet the deployments. $XXX below on prior ceiling our line to derisk extended retired XXXX. We out debt our loans the remaining term over and our maturity that in million, ViaForm gross Term was A used by our balance finance November. Loan was

until maturities XXXX. significant no have We

Our structure rate that rate capital XXXX. XXXX our of in new XX% fixed and all eliminates ensure floating until risks remains swaps

rate at interest X.X% outstanding new on a the effective term As year-end. was loans our result,

balance value-enhancing remains us Our for strong capital flexibility allocation. sheet and affords

to to discuss with outlook. call I will that, the And Ben turn back our

Benjamin Gliklich

optimism. We Thank XXXX for grounding you, with entered Carey. solid

percentage mid-single-digit past As the industry has X experts we sequentially. appears anticipated, consecutive with parties expect orders and the the PCB and improving place After behind are levels taken correction XXXX, markets now smartphone over declines, activity some in grow third year units us. improvements. estimating of semiconductor And end inventory that years in the to

volumes therefore, XXXX than meant Our other from in which sales words supply of the in in quite unit destocking Volume a downstream could in growth chain, that captured demand market, reflected weaker our smartphones. weak unit already than growth. was greater be environment what

solutions same Overall, trends the in time, for both AI, our positive. are other growing circuitry, and cloud the of multiyear is and At for enabling across driven semiconductor many a and by opportunity generative advanced advanced, enabling device, demand solutions. packaging technologies material on assembly

remain said, in expected such peaks. MSI electronics volumes across drivers XXXX, That PCB growth solid square below smartphone, meters to as despite industry and market our are prior

range the outlook production meaningfully built unit faster than areas single-digit automotive below Electric the auto are in is should will grow production global applications for improvement. semiconductor forecasted production industrial industrial market. to Global the exposure. technology global and vehicles, XXXX where have These modest overall side, meaningful remain its is but XXXX, peak. we grow ADAS the on in Similarly, low for

efforts have businesses trends. from deployment positioned to in core strategy Our our benefit nicely us these

of XXXX, we in plan incur variable which of retain expansion these internally, activity. are demand considered some and approximately market Most flexibility context rebuild million environment and additional $XX dependent. customer we be for higher Looking in and costs what expenses OpEx in to an should

exciting with prospects. is Solutions business long-term a short-cycle Element growth

we Specialty start business to ordering customer move can year, as in Year. buoyed surface by exiting quarter of to XXXX, improve industrial the activity growth Lunar around new patterns the treatment. a organic given This segment, in the Industrial forecast through industrial slightly expect with first be year ramping New & the flat difficult The In of the slower negative. context should lumpy often we

a lap growth In quarter mid-single-digit customer million, and expect constant we organic very we QX improved we as currency Consequently, growth adjusted between activity Electronics, EBITDA expect and $XXX of first slow million year-over-year. representing sequentially, XXXX. XX% $XXX

Solutions, to X% below guiding a Element peak an or FX-adjusted to prior XX% constant markets peaks. we're growth $XXX being EBITDA level year, their adjusted would full the for For currency to approximately of that despite $XXX million, represent million

rebuild, full XX% basis. half. the indicators, depend tell and FX the second of in range Excluding electronics on land like-for-like this we variable year early There is improvement on slope in guidance to represents market. positive Where the will guidance of the a magnitude XX% comp the growth it range primarily too back but within our to are multiple half recovery

host of We our technologies to offered. advanced expect We're few cash grow the we our range that do of and The offerings $XXX of of XXXX in leveraging exciting across and demand $X.XX deepest history, existing opportunities and emerging $X.XX. a the fully leading opportunities free troughs with seized industry's dislocation applications. by the so bring in having adjusted to customers $XXX next from new electronics flow years our EPS one million million our between and

team, as advanced We pools electronics, industrial chemistries substrates, to in power have surface packaging. board playbook profit win for circuit sustainable the and fast-growing technology deep metallization, treatment and IC and such

in compound the deliver can should have time, leverage. that capable shareholder significant growth organization a above-market be investment to operating after that streamlined year year same generating deployed value. At new is and we flexibly business capabilities applications of Our flow and cash efficient and more and

grateful a our the the in for this our people for be Our in questions. please around responsible I'm to eagerly Operator, another is forward performance will world and dedicated one looking a XXXX. year and effort past and year talented better case product this year, to the simply come. of intensely of every the solid open people, to line

Operator

UBS. line [Operator of the Instructions] Spector Your Josh first with question from comes

Joshua Spector

color about about your bit your here could those You've markets So look to markets relative from are first quarter And you little this more give need you terms perspective, the you as much? how at talked year? what do to ESI hit kind little see in a to bit relative assumptions a to talked but what you of wondering improve, a you in year? market if through guidance, what outperforming was of performing the XXXX, this from I

Benjamin Gliklich

Sure.

half QX At QX. from end the seasonality, downtick sort of the first a our the So improvement guidance a then assumes range, of significant of a slight ramp electronics QX. half. normal to the an XXXX at more uptick it's back sequential sort QX end low of And of in and guidance in high slight range, in the it's in the business

end with Specialty which Our which seen expansion, year. back Industrial perspective, is from we up see and margin from wins an the coming carrying we've of only over & growth business, more the customer half market modestly -- from

has to we've that to our sequentially. industry But half, accelerated a too really quarter has the date to made it's market from There's the an first be quite case call to electronics extent That electronics guide. In back upside to significantly. guide. been ramp case, hence, our What where early perspective. in there's positive the seen some

Joshua Spector

a is it you then maybe about Can don't date? know play maybe seeing I talk normally? you uncertain? more still to than inventory have or you that rebuild. out than what more further you seen -- what visibility units of growing little Or growing you've quarter-to-date within units Yes. volumes you any have any bit more Are And to Electronics? alluded than on too your if

Benjamin Gliklich

better things not of guidance, because an year than levels the circuitry that's like inventory demand is clearance. about which Yes, last factored into that's opportunity really for thinking unit our being materials

unit over an as for that in incremental opportunity And lapping growth we're the so volume so is growth. far there

middle It's We're judgment on to sitting February. the here right? that, early have really of in

the have impact Lunar falling We which bit things of in year. the Year the New Asia, It's a does swing fully in in really February. beginning

so in Year. see of build Lunar you And a sometimes advance New

some for have strong in and quarter February. and the how We a feel we're the What the month, of I a very was on that might out outperformance would quarter, say we'll February sense be for for guide room better January falls. there once based first is confident first

Operator

Lodaya next of the comes Bhavesh Your Capital BMO from with question line Markets.

Bhavesh Lodaya

Specialty your do growth year-over-year? EBITDA mean guess a assume be for year for that I I to sales & you XXXX what segment? guide there expect Is and/or higher your And organic Industrial does segment?

Benjamin Gliklich

Yes.

to should business. grow. -- So half top lap the as I&S XXXX, going should The higher But logistics. in are the business customer and not the grow costs first and EBITDA more of particularly as but say, the line it expect higher we as in markets modestly should to electronics wins the than margins and business, input do I do to strong we the be electronics period continue stronger, have be would some we ramping end

Bhavesh Lodaya

to And moving the free ahead have year. end cash of then in that's leverage X was expectations, it. flow. the you you Got That by Historically, under business. going reinvested where of this mentioned

currently? about guess, M&A about restarting how And do how do you buybacks I you think year? markets So the think this

Benjamin Gliklich

Yes.

cash in that case. that to by of for be grow should incremental And inside and end in XXXX. room be opportunistic, So historically, of we've our on continue strong was guide been the the allocation, Based the capital XXXX, year. quite there's X we'll and flow to without

of XXXX, that the us. have we've we see We'll ViaForm themselves. to running. what have reasonable will we've and the We what now the opportunities allocation and Coventya, and integrated serves the capital integrated We for off also transaction, for Kuprion like capacity feel we'll over avail bandwidth course market up integration, is see

Operator

next of with line Duffy comes the from Fischer Sachs. question Your Goldman

Patrick Fischer

What get going that does we achieve then are is want is and of exactly cost? deeper forward? going X-year pushing that is a permanent we dig we'll if this year, is bump into that receive from that continue? we and And what Or variable that that harvest something that we to a kind that? to the in? Can little What then

Benjamin Gliklich

Sure.

one such of soft, a And that way by marketing. things and hallmarks operating business. its are the cost able nature. strong, also in end the that the costs to incentive like variable long-term we're trajectory but large, So of is demand but When business and of when preserves damage growth the travel markets isn't is profit doesn't manage compensation

us was digits. $XX XXXX, in allowed for the in incentive preserve to the despite single about down year-over-year million. high compensation So target tune margins That volumes below to being of

for full we're of compensation. and XXX% expectation incentive target, XXXX, As we a begin is a our rebuild. our That is therefore, rebuilding onetime

Of up, course, you turn will of our target year close the we should count because that be if cost out It's demand single stay on not something every years doesn't level. in most business. to should that

that that incremental excluding I'd north of the XXs. there XXXX, we that the are in note margins model including business XX%, the rebuild, rebuild in as

Patrick Fischer

for guide And what's the enough. you raw Fair your margins? assumption look material to benefit when year, at for this then the midpoint, at the

Benjamin Gliklich

Somewhere expansion around X point input of costs gross and from profit margin mix.

Operator

the next of Mizuho. with John question comes from Roberts line Your

John Ezekiel Roberts

wanted opportunities take do them advantage to think think today? portfolio? acquisition you the the Are do for add value cash about in nonelectronic I Electronics? the how Martin on additional Sir having the What portfolio to about And call. generating to you of businesses enough

Martin Franklin

question. the Well, thanks for

to think we're I as we the like of keep it is. day, And the builders. really then portfolio traders, not we're at end the

of years, asset different parts performed isn't business of -- But that better business than better. in always think I the years. different type an there be management our think I So other couldn't is we're

to So and a try portfolio, very I each invest part. to tend strong think we and we grow have

that of have organic company I foundation stronger terms in longer I we've been acquisitions we've made for In that opportunistic. terms in growth of potential. mean, years. M&A, they've set the future term their And for the think been in nature the

I But on capability again. right have view long has in we'll the heard today's if do the become as windows -- flows themselves. you are the to business the think the from think the avail opportunities M&A things strong, cash I environment acquisition, and the opened comments,

John Ezekiel Roberts

we of overall auto benefit electronics there's Or a the exposure is enough secular Ben, slowdown about small the new production? gets in the ICE between when think the then, vehicle the exposure? it autos balance in to offset cyclical that growth And do how of areas still versus

Benjamin Gliklich

Yes.

business strength you circuitry our that if XXXX, look significantly by was outperformed driven in semiconductor in automotive. it at Assembly So And businesses. largely our and

our market So in seeing not uplift and to driving high but share to markets. in we outperformance seeing is reliability that business only even content, the alloys bringing are that bear and auto we're that's innovation

the production Again, as question greater decline electric are our uplift come. of it nicely depends for a that That's in that's vehicle technology that and single-digit really, growing really each in accurately. per increases. But performance to several and we'll on power the electronics years content year. penetration magnitude been And continue market segment seeing has has been we outstanding, unit even to a and low automotive answer of to

Operator

of question next Your of Byrne America. Steve line the Bank from comes with

Steve Byrne

guide it's your incorporates like gains, $XXX curious the any or for just power? million but customer, share your in And potential your Are to EBITDA for it? Any not, those primarily customers. factors. $XXX sounds restocking, of that million I'm Ben, pricing outlook? not cross-selling for if your whether just any what's potential end-market customers' driven by macro expectations

Benjamin Gliklich

Thanks, Sure. Steve.

to realized. years, have the back for that was over past assumptions half relative several been the way off market So performance performance going-in the

And forecasts, that our we've is there end line that's have room outperformance so we think as and about on to upsides from industry draw and formulated how for perspective downsides. market based an we guide, a

basis an higher mid-teens the perspective than like-for-like in a a ways on organic again, performance, is growth Our forecast. EBITDA quite from market

the business a share. the our execution also and to held price margin that accruing in is benefit of is carrying improvement accruing new shareholders markets end that the relative on -- we've into to are guide. that benefit from to seen and we're We've top line gaining technologies outperformance mix there introducing over where is the so And

Steve Byrne

initiatives $XX that any this And might to comp, respect have potentially it? with increase productivity million in you offset do

Benjamin Gliklich

Yes.

consolidation been and we in So site systems modernization. have investing

leadership a year. the over perspective from organization the We have past streamlined

margins comp and are some that, incremental are target plan of year the And in built of exclusive we offset is that the it. a into of there so all. but not in the savings that normal which what XXs the above rebuild inclusive in again And XXs,

So driven business leverage. being though efficiency there and through as feel is operating we the good

Operator

Securities. next the CJS of comes Your with question from line Jonathan Tanwanteng

Jonathan Tanwanteng

if is applied power more dive partner? realm. I would investments any the into little more do wondering a it targeted towards pure towards could silicon your be it more And Or electronics oriented helpful. bit to to carbide? any any you was hybrids? exposure Can more in technology EV that particular have like Or you EV? there be or any particular Just player is detail

Benjamin Gliklich

Sure.

Very, our strong is power semiconductors The there assembly in EVs. provides used and to platforms. So within business opportunity electronics that certain of the then inverters. for differentiated OEMs OEMs growth new material cycle also OEMs position longer power and call that penetration those of, let's power develop are times market really have in very pure them,

EV OEMs. both as OEMs units of for penetration one with Chinese as us. the this platforms, a not the and vehicle reason There's we've not in just electric be technology no in OEM's year, labs, are the market. been of in in and we investing every electric on shouldn't we there's this opened so material vehicles traction great We've opportunity applications on exciting that market electric expands. of It's last the but lot our an all West, had and Shanghai for vehicle And EV grow high-performing

Jonathan Tanwanteng

the layer year And Where back the question you start then for a as Carey. bonus does the it. in? SG&A Got just accrual

Carey Dorman

$XX have that million quarter. So over the and bonus the we you're QX in year. big you $X where should There's We or with $X release that of did talking a landed year associated happened in take long-term in full small run difference on ago, lot some incentives a not -- make QX million other that take rate. a a things million the

call is the it way million a from probably it. right sequential So pickup to about think $X QX,

the to cost, the do to relates of which see related we Then adjustments increases. the -- other merit second piece quarter, cost start on and our get inflation we

right a think maybe step QX up So QX. incremental ballpark. to the I But slight that's

Jonathan Tanwanteng

Got going what it. was And forward taxes? cash basis you and in on large QX, wondering and tax had item just tax effective means and you I reported finally, then a for a that

Carey Dorman

Yes. Sure.

in of X allow paying a we've So X couple X where took the slightly the tax credit in next effectively you noted, picking to meaningful added will us will XXXX -- sheet pretty we of for quarter. We over tax U.S. $XX do assets U.S. is keep years. And that prior that years planning expect you million really years. correct, we on effective to did keep our in not and our But tax been We years, as tax years. rate around to that planning, next cash we to next Jon, next tax in for working benefit some deferred that or a maybe paying be asset think XX, what what that that over to estimate. will around nice basically so up from will us the the of couple balance X is we

Operator

Markets. question Kapsch Capital Loop line next from the comes of with Chris Your

Christopher Kapsch

that having formal you that, business it in assume this think your the remarks, in I market growth, was gained your some volumes is I outpaced So mentioned share. PCB indication assembly of

Just wanted sort of it your is a accurate? bit existing to actual Is get Is more a or core is Or it some little of color. outperformance, applications? gains share both? to the higher-growth of the or over-indexing business that function in

Benjamin Gliklich

has higher-end businesses. a call in both it and which much in electronics been circuit It's next-generation pace XXXX market, performance than board market the a It's business the Assembly the innovation, The consumer had by driven of with Sure. attributes. greater markets. automotive smartphone by and driven which concentration stronger semiconductor driving was terms share higher than healthier

in have alloys Assembly it and previously which are also the been just not what markets. power We've than interesting infrastructure been in business, automotive, reliability introduced very market, sits but portion sits some new -- then And higher strong. of really in within that's the a that business had our applications, electronics

market end dynamics that So there's in business. that Assembly gain share the are outperformance and innovation, market supporting

Christopher Kapsch

you Appreciate know of makers. you've progress for some more that. the one device the a you excitement if sense a you that copper there leading complex future TAM such solutions just then get to applicability That's perception? stab comments could displace to devices? for of at think And and wondering in you might or had commercializing and when helpful. Just lot starts product, the benefit architectures the technology is trying with technology, your solely a in and is the chip to there alternative more advanced Kuprion. take visibility you to the that expressed for legacy I the about success, the and want on And also move needle if, when to as have to some

Benjamin Gliklich

Chris. Thanks,

Kuprion really exciting. is So

is it commercial be. Our than towards it traction is we progress we than expected our commercialization faster would And would expected greater be.

We the in contribution a when revenue we of year bit and EBITDA probably sort this be expect It's of back contribution it journey. we this there to would be on half than XXXX. in embarked some earlier thought

span Kuprion applications The our business. Electronics for

metallize be advanced finding attach thought semiconductor it we would substrates. material, is a which that primarily material die packaging. can originally, We're it board also be used to So next-generation circuit IC a assembly and

than of our more there where that's shorter market. semiconductor qualification in because has cycles the traction are been the fact, In

The it's on So significant in wider. medium contributor the track the customer And term a pretty better. is to breadth be of is here. applications engagement

Operator

line the David CL next Silver of with comes Your from Instructions] King. question [Operator

David Silver

some comment there's -- business like your outlook year you maybe major largest onshoring, could your China, last to in for and in in definitely maybe X, terms from your on ask over et your been your couple overall the a customers X-year X, reshoring, shifts or But terms outlook. I'd I still the think of outside it's I But of positioning of of country of the some revenues trade business large restrictions U.S. -- cetera. guess if

that If for And business your just set your expect or that thoughts discuss maybe country some are market. there resourcing you that shifts on your to opportunity region if either you in evolve? in your could how in

Benjamin Gliklich

driven particular a partially quite from industrial soft. where year by business It board in perspective. circuit industrial China was the percentage in the So also down in there in is double market, bit was digits the electronics of in had the where in business a was market the and a market That economy the tough XXXX.

look business China XXXX. be, it, next in better. we expect we call The better, modestly electronics not we ramping, see growth market industrial deal to with As year I'd in great to the a

so. The from participant aren't circuit Chinese board trade market. significant as that China And see will circuit a market, see in in growth is said. and There we remain market electric very the board we on growth, we OEMs strong vehicles. remain do We restrictions in the and

I a for earlier, there. mentioned an electronics of that. power we lab opened associated with applications As lot opportunity We see

investing surface market. in business, And even in that we've our been industrial treatment

market. Our it in discharges opportunity a gain scrutiny share customers packages big innovations, is particularly getting lens that on on lower we environmental equipment the because of with with for And than share and of see are environmental there outside an is and China. supporting them traction other

a a economy of as a case in There's it soft industrial see off pretty from tepid even compelling out. do growth a in growth we reasonably years for several should coming market year. that play of China, for here, So us

Operator

no Ben further remarks. are this time. for I'll closing There call to turn the questions at

Benjamin Gliklich

and Sarah, weeks days come. Thank look you, of We in seeing to a day. many you, great you for forward joining. thank everybody, to and the Have

Operator

concludes We you joining. conference today's for thank call. This

disconnect now your may You lines.

Element Solutions (ESI) 21 Feb 242023 Q4 Earnings call transcript