ESI - Earnings call transcript Q1 2024

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Operator

Good day, everyone. My name is Ellie, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Element Solutions 2024 Quarter Finance -- First Quarter Financial Results Call. [Operator Instructions]. After the speaker's remarks, there will be a question-and-answer session. Instructions]. [Operator

to Strategy call and like Senior Varun over of Director Finance. hand now to the Gokarn, I'd

You may now begin, please.

Varun Gokarn

call. Good participating morning, conference in for our first and quarter XXXX thank you earnings

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

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

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

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

Benjamin Gliklich

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

capabilities and and markets. increasing chains. market recovering Element and mediocre overall Solutions' in industrial strong Western center softness results fast-growing execution our markets, quarter With in automotive and a data for strength electronics mixed a reflect for in the supply first events environment offset which solid smartphones general packaging macro in

back legacy impact adjusted certain deflation substantial in growth. of commodities actions XX% the leading-edge Our of currency semiconductor improving in amidst over through XXX value points technologies pricing margin grew basis on Constant expansion. and profit year-on-year drove the EBITDA proposition of investments

benefit the of and market recovery reflects quarter suggest as improvement portfolio broadens. electronics potential for Our further growth diversification this the the

profit incremental growing market generate outperformance pools should continue deep and focus strong margins. Our on to

advanced with The level Electronics recovering business applications. packaging is including a in semiconductor and wafer solutions, surge

vertical year-over-year, Our business. teens high that the volumes and in Circuitry grew market the Solutions our in outpacing

more declined U.S. improvement revenue a Europe slightly. significantly raw Specialty automotive business as of saw demand and the and price segment combination in in our ongoing in Graphics board business. strength offshore the deflated. surcharges increased an from have softer lower and segment industrially-oriented Our The business in certain metal circuit assembly and Industrial material costs, on Profitability our lower commodities

north driving start at we stable outperformance. borrowing Our markets Gross our are and us are margins price metal an levels these margins expected benchmark returned this off to quarter, be the and should roughly internal solidly of for impacts. XX%

supply prices relative our volatility XXXX margins volumes achieved are Notably, elevated few well at below chains our the in of of levels. many shortages, remained normalizing they a While period in the heightened logistics years. had quarter been and past after first to been where have

higher-margin our This of mostly applications investment in increases. and improved underscores further cost goods variable, have value, of ability the margins cost success deleveraging. higher despite While offset our our to are volume

cost of to as contributed come cost of the not taken actions benefit The This growth well. last bottom has line profitability at year capital.

products. manufacturing advanced semiconductor invest and to capacity in strategic center or continue in a We high-volume our capabilities, for assembly India packaging technologies, fast-growing Kuprion research new

and take new been we've maintained grown what technologies downturn instances, in end market to evolves as support electronics certain resources and technical in markets, our root. customers the prolonged and Throughout a sales needed

focused innovation applications. and teams commercial Our high-growth delivering high-value points to solutions on solve remain and pain customer

made ViaForm in first grew improved quarter. to in in customer afforded successful our level the our and wafer solutions technical an meaningfully packaging Our by the improving intimacy investment part circuitry highly late-stage electronic sales capabilities. is pipeline we've This in circuitry due transaction,

We the to ActiveCopper with steps XXXX and is our from the We're opportunities paid are value. same capital long-term pleased investments, progressing our product consider strategy. payment maximize first deployment their aligned sheet the rapidly. quarter operational additional milestone on we earnout the necessary outlook time, At point this Kuprion improving but balance for our our can to work with remains where

The more is our results start will solid detail. year you is outlook Carey? business Carey take through off the in quarter to and a first positive. now

Carey Dorman

Ben of morning, some Thanks, the on Ben. just talked Good highlights. where Slide Continuing everyone. X to

a can results. see our financial summary quarter You first of

mix semiconductor margins favorable year-over-year grew I&S well incremental overall from material currency Circuitry X% sales lower surface higher-margin a as recovery mix in in XX%. substantial benefit in industrial segment. and strong as raw Business These costs reflect and Organic and treatment the constant grew in adjusted EBITDA Asia

In experienced of that year. much XXXX, reduced supply the disk chain QX destocking and the high-end that significantly memory smartphone inventory with demand continued through markets

As we units recovery lap this period, circuitry in supporting solutions. we memory have and smartphone seen disk growth

levels treatment and North high offshore Industrial offset energy and our printer were surface segment organically business. America graphics declined our of in X% in declines in demand industrial sales Net Specialty improving at by activity

currency company accelerated quarter, and improving by The from points sequentially XXX X% by points margin dollar improved were X%, quarter, margin roughly XXX terms. this sales EBITDA U.S. net and basis XXXX. adjusted total Adjusted almost respectively. basis strengthening This impacted trend year-over-year in QX both EBITDA negatively constant

Solutions, the been $XX and sales adjusted of the our quarter. million would in of XX% Excluding Assembly pass-through margin metal EBITDA first impact have the

more of detail first segments. net share X in for particularly our impacted of and Industrial year sales year, we and in in that Americas On sign XXXX, destocking in growth both in consistent growth businesses, Business Slide saw Solutions the saw the X, our industrial-oriented our drivers a last Electronics, electronics. Europe, organic broad-based softness progresses. We categories significant from that In in the Assembly on positive the quarter additional as recovery grew

to industrial demand electronics automotive on alloys net use applications exposure for industrial more soft sales. with a focused drove reliability X% required The in certain business Assembly, markets cases. assembly capabilities decline board demanding Western has In circuit in high organic

and in volumes year-over-year were Americas volumes positive While Europe. in were quarter, broadly the China declined in and Asia

our primarily of declined in back growth our again picked XXXX, improved of resumed from has memory up the Circuitry storage investment for X% in in products in Inventories market recovery coming a with on computing XXXX servers. and finished customers' data this business. Solutions organically, enterprise disk cloud sales

still drives mechanism disk for represent most the storage favorable. and affordable bit Our the near-term outlook per is growth data

have market X%. signs quarter first stabilization at smartphone estimated grown of The units to other overall with showed

OEM in China-based improvement growth of quarter the XXXX However, bulk chain the not all handset the occurring manufacturers. in supply experienced of first with

content non-Chinese models. towards skew do we across we smartphone While the device most have makers,

growth broad, Customers to manufacturer correlate units globally industry a rather base second generates an than any is and expecting overall half. customer particular are Our improved our over time.

segment net sales significant in with We the wafer Semiconductor Solutions fabs led increases up and level packaging sales OSAT. growth semi saw both organic XX%. for in for Asia

of as vehicle packaging server base the a demand our grow Power to advanced manufacturers. related successfully we also Argomax supports We this continued AI expect growth sintered and first to markets. chip a customer of that electric broader continuation silver to in expand quarter, memory, Electronics products technology

like & by commodity declined in the was half net Industrial decline the reductions Specialty. Solutions driven sales Roughly metals to Industrial vertical palladium. X% X% year-over-year. surcharges Moving Organic in of for

headline of margins. the swings recurring higher price revenue sales, these impact high-margin mix value-add, While chemistry benefits

[indiscernible], quarter. in end in the to operate customers remain volumes. with reduced European construction production was global sluggish, Demand from line industrial and markets customers first continuing with at automotive auto

half surcharge we the in sales As year. XXXX, particularly through ease commodity customer volume, a wins of expect impact benefit negative second and the move we of pricing new to to

North Graphic year-on-year. Solutions sales X%, primarily increased margin Encouragingly, also customers this of EBITDA showed basis points reflecting XXX in a almost by improved demand organically in America. packaging flexible meaningful business expansion adjusted with

bright the I&S sales as portfolio organically Energy Solutions and in growth of quarter activity production with XX% remained remains strong. the in a drilling spot

this We expect energy to continue business this for year. growth

sheet. balance Slide in cash flow X of $XX million free cash QX. flow addresses We generated and the

first million, the year timing invested were semiannual projects and quarter end seasonal in of planned targets, XXXX. CapEx originally bond the certain payments that reflects We of has was The a annual primarily to which into incentive build. working run and $XX including inventory uses which payment. million expect annual cash year $XX for typical above the to the a million of rate we of integration initiatives for annualized and the quarter growth late relative the capital, is $XX $XX million the reflects

Now turning to balance sheet. the

delever Our with and once the cash our X.Xx net quickly at generation of X.Xx, our end leverage ratio of quarter inside the flow of long-range ceiling to ability demonstrating growth. earnings again was target and

of Our rate fixed capital for the year. remains structure the fully remainder

XX, our We rate until have term no debt interest effective March strong. and remains cross-currency X.X% liquidity Through loan swap, as position the XXXX. on is our fixed at maturities of

back call to the that, will With turn I Ben.

Benjamin Gliklich

Carey. here. start and the optimistic from Thank are XXXX about you, had a strong We've trajectory to

investment high leading-edge is technology incremental sets. and in Our emerging driving margin

not conversations second our uniformly with in While support and electronic our improving, the markets customers more constructive on improvement a view half. demand broad-based are suppliers

however, sluggishness year chain industrial full risk, supply the modestly expectations in reasons, Western and are of geopolitical certain level for this There given conservatism early year a participants. lower in markets from

it expected million For the not flat on second range end to $XXX to headwind be quarter growth year EBITDA million, our updating the ex or for EBITDA as recent have a as basis. the high guidance currency dollar, strengthening adjusted XX% Were of range currency to XX% be expect which greater is approximately million than U.S. sequential $XXX full constant approximately to the we FX also million. the to We're adjusted increased we $XXX the would of well. of XXXX, reflects $XX now year-over-year

for and volume Overall, opportunities we're industrial development high-quality, nano and Commercially, building we're copper growth of high-probability electronics and electronics, pleased our applications capacity geographies. future in increasing streamlining legacy start high-leverage areas, large we're execution power Operationally, pipeline manufacturing projects. to manufacturing and margin-enhancing research building as with our footprint a such XXXX. leading-edge

our make can We and of and employees improvements continue product to systems better proportion spend the increase leverage value-added development. data our service technical on time to

our to us generating improves the from this demand environment environment commitments current towards exceed as growth them and year on together, positions Taken the the in for here. delivering above-market

working I'd all objectives. support of Solutions, To to our of for the customers to Element support collaboratively a and world wrap particular, our their in thank and productively stakeholders and up, people like talented around dedicated continued

questions. With that, operator, for open please lines the

Operator

Josh Instructions] UBS. from from [Operator Spector first question Our comes

Joshua Spector

what in seeing because earlier some on here been expectations better. your talked in of you're on first comment quarter on Obviously, could kind but you your versus demand about moving line, parts. you things there's If came

stand where view are half go things of positive things today? you through more kind where have set? unchanged, So worse, a Do on second

Benjamin Gliklich

Sure.

expected half than would net-net, recovery during and electronics the is recovery in modestly I semiconductor we're side the talking So is right? was as back it think a we balance, growth. electronics what roughly second industry rent XX% is we get more the the from closer greater you of The now expect hearing participants talking who were have about growth, hear half, about On customers slower conviction year. market, But the more we in to coming, that year, entering the be that the than to it XX% the business.

On strength of air the side there's the pockets in of business, industrial pockets.

we said year, our this would outlook markets prepared playing from as are unchanged our As out remarks, roughly demand is they and perspective. in our a thought we

Joshua Spector

percent That's on here helpful. high recently I single-digit check in kind wanted talked Electronics. growth just where of to And about you

get X% way the your improvement years X X that you next perspective to to to a if from improve X years from And versus to impacts cyclical Obviously, expect how growth I you bit. run framework look delivered know growth a But how rate? the of there's things X.X first secular next you years, view more year, now? in that when you do the a quarter. think don't Over unpack

Benjamin Gliklich

Sure.

industrially in be course, we to it, talked in should and at because semiconductor, the soft. growth electronics, to and XXXX. be we had lagged growth Western first we and the Circuitry And the the By growth high a in double-digit industrial getting level this more EBITDA of Assembly quarter, we So on of oriented right, mid- year-on-year in end growth, double-digit business economy year, call single-digit was in single-digit towards will high. basis, about growth, high up getting that it's EBITDA

you'd in been electronics XXXX, industry recovery, reasonable the same if line double-digit that growth, of based electronics expectation and be about. should expect again we've EBITDA continuation be once on should around business we the the of a is top that level and see which outlook a talking

a But medium-term I for about think that's I outlook, the couple to it's of reasonable So that would there next expect years. say. we're

Operator

Roberts next Our from comes question Mizuho. from John

John Ezekiel Roberts

think you congrats but on ask When see could we'll you additional Kuprion. here, payments on us? the And the for one I'll progress scope first just do And sales? potential

Benjamin Gliklich

earn-out Kuprion acquired year this our with a quarter. So payment milestone payment we performance-based an there and is Kuprion for technology was upfront The background a structure. we first paid last large

was on first The based payment product performance.

an So at performance to payment. product we a were internal which level, that get certain and able the to was this milestone, generated perform

will based payments customer on subsequent be The success.

subsequently have year to customer I base this and product First, very several We're XXXX. to customers, and customer in closely product XXXX revenue qualification working and ramp us really and begin would expect payments with in qualification revenue.

based maximum targets, $XXX be margins revenue, $XXX million. the we low EBITDA it a all on expecting will to we're which pay That hit would for The linked be if these from we would would single-digit about Kuprion, million be business. of about of multiple this of

time able revenue, so that our for The is is could expected, customer expected. qualification stronger from our to be we of than ramp than that reaction expectation to we'll and the get market to years capability against X this and is progress faster within but do internal frame. well have pull have We we

Operator

comes next Bhavesh Our question Lodaya Markets. BMO Capital from from

Bhavesh Lodaya

If quarter unchanged, quarter slightly that sequentially expected be I recovery, EBITDA, roughly look just highlighted better. the some first have at are given well. to also seems year of building demand the inventory you guide, your on up some FY it drivers but as outlook is impacted I the you for second would

the on to guide? year you second your are sense books if in versus what the in seeing maybe quarter a So could you full near comment term guide of the trying get order

Benjamin Gliklich

Sure.

The EBITDA. the a expectation modest there's approximately to $X was is some to gets see EBITDA. It we sequentially FX of half. Our expects ramp get market in And supports the the And that ramp constant that you heard, offset industry in half. is second how quarter, currency. about the demand million which a flat quarter. for $X flat There second for consistent ramp second to Typical sequential as by million, second EBITDA the that headwind, you seasonality $XXX ramp is environment. OpEx in you electronics that's demand electronics come million

earnings seasonal when the think sequentially, performance percentage half-on-half versus greater it's you than I back look of in of half. in the first slightly uptick terms a at the normal half

So not off line the phasing, that. thought we a but generally think feel going to like is for entering extrapolate the from well. a place the second in how quarter. we with start, That's as it's it's we're year to reasonable about we April what good and

Bhavesh Lodaya

Got one the it. market And end then auto you. for is important clearly an

forecast gradually it it As consultant Western autos exposure, relates to are rising. appears your for

some at However, rates. Can your you share adoption there for are same seeing on EV the your business? view what you time, softening are concerns around

Benjamin Gliklich

is auto yes, end for important an us. So market

just markets roughly impacting auto type are is for It's that's business, industrial our units sideways outlook where not units. from it's of Our they today.

positive we getting vehicle OEM actually have us generally power for higher-end So The capabilities vehicles vehicle adoption is in vehicles, some much on vehicles. a and softer really unique higher-end chains. electric the market. We've entry-level in electric our the more of inversion, more broader seen new supply are store struggling than content despite

year, So modestly we've will pretty over had next significantly compelling that some contribute but several wins customer years. the this

by and the we So our macro albeit than weaker exposed ideal. in our this excited we're capabilities auto outlook a about to it's large, have year for auto, and businesses

Operator

Research. Wolfe Christopher from question next comes from Our Parkinson

Harris Fein

was Fein were Harris up flat quarter, neutral a is good guess top This the were I and on but amount high in for metals margins from year-on-year. level, Chris. a line pass-through

between drivers So this mix, to of you I roll-offs? of surcharge year. And lower offset the variable guided size that materials, know the cost could you rebuild some maybe raw just the just

much already the quarter? have the How in first mentioned. hit think I might of P&L that you

Benjamin Gliklich

is moving prices material businesses from are higher prices And Sure a benefiting electronics thing, those that rolled weakness mix well seeing parts that of we here. are higher The favorable are -- have simple Harris. There's surcharges lot material answer raw lower the higher lapping performing businesses that are have the raw that end macro from and off. margin. really

modest there X took was that uplift from some of I saw And variable actions offsetting so right, the cost margin would last substantial a we between of and rebuild. year, impact, the we things, those cost say,

pieces. Raw of higher rates room north driven XX% bringing by So dollar and said proposition we gross just electronics And to improvement in help deflation impact, the support what material single-digit was customers. And stably is to on line. what quantify moving time growth profit a the in million margin we're are X year-over-year are. the those those remarks low see our value over prepared we divergent high-end you are margins pieces for

our progress from far see should here. ceiling we're margin So and from

Harris Fein

That's as of lot follow-up a smartphone, the results around debates in just primary now. the right driver doesn't helpful. but that seem then Circuitry, it. And be of investors Got a to with

recovery, So server, thinking about growth you out just and what called know in with you are I like normalized that demand rates, memory disk business? looks that intermediate-term just how

Benjamin Gliklich

Yes.

Smartphone Circuitry and within this was didn't Those industrial Europe so are Americas X is in the markets grew, The business So and softened, bigger. business there moving business, really quarter. Asian Circuitry X soft. offset, Western quite our markets pieces right? our

in our than is the the more for West That to and business And disk growth. then memory hard so grew disk very memory smartphone disk softness uplift returned nicely offset business drives. the

cost in or AI lowest As this Carey is bit And all of said, demand. drive they're incremental storage driving per disk still the alternative. activity

from those is while it moving smartphone the dislocated still grew X very trend. market, So are pieces. The

memory and recovery market we improve to should believe so margin there's incremental as there. continue well. still And disk At high the

Circuitry for should high foreseeable grower to single-digit a be the mid- business future. the So here from

Operator

America. of Bank from Byrne Steve from comes question next Our

Rock Hoffman Blasko

for Byrne. on Steve Hoffman Rock

the to saw that of do year? for play think a year given of you compared benefits kind margin rest you mentioned, the what we the out near-term in the of will EBITDA in might how Just the And XQ much how the XQ? just rest for lever of mix ramp OpEx

Benjamin Gliklich

question. Thanks for the

should past away should margin as So half, be back multiple get room we're But in think maybe drive comments metal. We made EBITDA being and the modestly again, year, they we peak softer stable to right? we've because back but don't this margin in that of now they points are where around are to right levers, ramp. EBITDA we that improve ex higher margin there to OpEx down. got quarter, going I continue second volume said, the about from several

in we're business. still facing deleveraging volume And the so

we've levers from in the can margin multiple we got term. are so expansion And and drive for that here confident medium

Rock Hoffman Blasko

That's semiconductor, helpful. much that in the versus the a of operating business result that you specifically, was And in quarter. of the strength saw? gains was I guess just guys customer kind of a this how mix rates

Benjamin Gliklich

last Our semiconductor because customer contribution was our ViaForm organic of business year. growth, transaction rent that with customer rates large, of a wins. And operating by margin volume because and from

Operator

Our Chris Loop next Capital comes question from from Markets. Kapsch

Christopher Kapsch

So levels. EBITDA a more robust growth, organic growth incremental strong to my focused on the EBITDA about really margin. like The you had line the referenced, margins margin relative modest not question more implication, top less also on about -- and about incremental absolute much -- margins, you as

a than in a that implemented? balance and other out, some mix So that the OpEx? Is and case potentially previously pricing are incrementals? you've the the some structurally positive have because like mix that portfolio. growth the in think, maybe higher then seasonal Is in is some Or of of incrementals of entitlements recovery reversion if with be of both reason you just broader comes overall the back than it the plays as build hopefully that you across simply there Electronics portfolio thought your there'd just that on to there is, improvement continued question year and this

Carey Dorman

that Thanks for Chris. question,

could on incrementals incrementals But to think organic in flattish XX% margins and the a say that mix conservatively view incremental I and that idiosyncratic like the substantial cycle. much XX% I of are because higher given underlying bit in we the through here. There Obviously, on quarters changed a But they We demand. going organic those think XX% was improve. our growth. technologies our XX% future sand the than are this sure depending after in structurally, business. quarter to we're conservatism some a don't from performance EBITDA see that core the new that X some line permanently quarter. as would view the will our to draw And of carry have I'm say changed on margin and is ramp, not much,

Operator

David Our next comes King. from from Silver question CL

David Silver

as to business there repurchase much I just profitability? And was the far that that both or anything the with along where being performance was have ViaForm how how wondering, at couple strength. marketing out over the of run below called together, would kind charge this the way in be with arrangement below is think second But as -- of previous the kind and was XXXX? it just to XXXX you're a control the opposed then is I'll ESI, normal to for of distribution ask any with think distribution? purchased improvement was know struck trend of in there your being questions. company you is consecutive rights of implication or when them another its level goes, is that, say full was company I I quarter a I guess. just thinking And the might about in deal as

Benjamin Gliklich

But question. from ramp have the operating growth in transaction. has past and pipeline opportunity ViaForm that rates the has customers window applications associated felt benefited of quarters. it as been -- good timing in seen applications the is for that. used hybrid Thanks grown by it over with We bonding. has for And our at of grown driven couple about like the there's Most we've the the we

we -- than to this of ViaForm we're to by seen. product, otherwise control believe have opportunities soup commercial from with being expanding or an more opportunity would addressable expand So And there's full an in generating market. it's we for us nuts

MSI relative slightly for transaction. And compelling the very so MSI. growth and because of growth pipeline, It's a the in for this opportunities market. better outlook opportunity by long-term outperformance in than year, to digits addressable line, business double We're share significant is thrilled us. that set this grow And in will

David Silver

then Okay. spend. one Great. just And on R&D the

much quarter, more but there. Kuprion R&D higher the my intensive. business I is night But is progress that that, payment year-over-year, includes number to last is So Carey your believe sense do structurally the first related mentioned becoming the

target kind or So for revenues think for is we of forward? the or of maybe going of absolute total adjusted percentage R&D a there should spend, about balance clean the year or

Benjamin Gliklich

You're payment captured right to point the out this for Kuprion was R&D year-over-year. which quarter, that in milestone explains the increase large

business line the at R&D particularly materials technology, breadth portfolio spend doesn't really R&D to of nodes. development, and line and Our the is R&D the other captured companies. have electronics compare dollars in just also do in increased invest in and have to not service but But in the P&L P&L. We captured as P&L, captured and on our the make R&D our technical apples-to-apples it selling technical the we which the on application under service investment leading-edge electronics

our opportunities that to support to continue our where customers. target have think of I aggressively in we is invest

And line bit forward. with our hasn't in of so its should R&D be in will growing maybe sales, which business R&D a terms faster. little But needs structurally going grow changed nicely, roughly

Carey Dorman

labs portion of I the to as the as equipment decent both ramp expansion, of in a to core well David, we've to R&D been support add of last -- lab just some couple seen would has applications that. years CapEx lab and support that has support And been our that over

the flow that spend obviously, statement. in up R&D also cash just investing, showing we're that's So

Operator

question from comes Tanwanteng Securities. Next John CJS from

Jonathan Tanwanteng

next to percentage other X could the X on about the on that talk how about profits as become details a semi wanted years? ViaForm, Nice AI your through business well? you And quarter. headlines the making things obviously I as update big would of onshoring those over has ask countries. some Could flow us great your as I semi business, be a will and well gave you CHIPS as initiatives as but whole you Act percent in it been know if could to business, how revenue? of you

Benjamin Gliklich

for Thanks question, that Sure. John.

continue semi of of business. our accelerated year. rest to this of So rest we has electronics the has verticals the our to It to and lot a business the it expect grow outgrow and runway

And a so it sales. percentage will grow of as

point into and capacity right we You're rate, could just with other ViaForm, where making, the right Europe. to North overall investments fits significant we've capacity pools like out Act We're in the of in CHIPS CHIPS be it feel bringing in CHIPS incremental fab deep it been and win. which fab conceivably and in a the than R&D, we receive we're a given as increase is to of that the our seeing divergent Act, out will revenue. where a existing pointed the which business drive aggressively investment and new America. for percentage model its investing where will medium the profit our Act more opportunity stimulate And of we business Act, funding business the from market behind in get which here. Also to where are growth the we're incremental to prime very the exciting that we book of growth opportunities grow places overall we've -- share business. regard fabs, in CHIPS play pursuing that, position growth an but will our have these in to business which with in is above got we're should The only semiconductor But XX% is term. And XX-ish and percent operating some

choose play. But got capabilities where customer being is where and of for them, So we and a great lot we've for we pull invest us. circumspect are about compelling we which to and exciting

Jonathan Tanwanteng

the areas. does X handsets? as underlying versus understand that thoughts China versus EV assumptions, for what's of the and how just you guidance non-China in the mix your then impact progresses? year change Just those also And help us expectations Great. terms ICE in in And your automotive,

Benjamin Gliklich

So business non-Chinese Chinese in got local local value smartphones. smartphones So device of but have still we've OEMs, our we skews share on more right? non-Chinese and than value in makers, device towards plenty makers Chinese

OEMs non-Chinese quarter Apple were like quarter down, a or this business. being in past our so we up where group, still despite units X%, And maybe smartphone devices

have so because ICE It's year. It assumption to the for of that's that's our of with us plenty chains difficult balance any are EV supply associated thing agnostic. the baseline a EVs, with growth for the into doesn't parse driver. there And a regard or sell ICE providing smartphone that just And we smartphones. are to big powertrain that OEMs out the and

headwind, can't for general weakness that specifically. would so say And to of EV is that I our full year. a in I outlook but something answer the relative question the changed it expectations hasn't

Operator

don't have at any hand remarks. now for over We to moment. ] to Ben the I'd [ closing questions like back

Benjamin Gliklich

Thanks Thank to Great. and day. much. soon. very for joining, Have to everybody good many look seeing of forward you a we you

Operator

We the to everyone a have that conference We day. you, you call. hope attending and now would may wonderful disconnect today's session. you with Thank for thank like

Element Solutions (ESI) 30 Apr 242024 Q1 Earnings call transcript