ESI - Earnings call transcript Q3 2024

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Operator

Good morning, ladies and gentlemen, and welcome to Element Solutions Q3 2024 Financial Results Conference Call. [Operator Instructions]

Thank you. I will now turn the call over to Varun Gokarn, Vice President, Strategy Integration. Please go ahead.

Varun Gokarn

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

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

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

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

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

Benjamin Gliklich

you, Solutions Thank for executed operationally Financially, good once Thank again quarter. joining. everyone. delivered you and Varun, morning, Element this results we strong and well. strategically,

of as enablers value segments the of key chain technologies highest position fastest-growing target and multiyear the ourselves to Our effort electronic supply is and developing working.

emerging more along has our vectors, for and grown and segment with this outperformed electronics event using designs year. packaging end the markets has electronics our power of And Electronics sluggishness supporting because our centers, data vehicles, electric cutting-edge market offering, in industrial these it. As has traditional high-performance growth developed computing, for chip revenue

standout the volume level packaging quarter, wafer X% segment, growth in for which Electronics semiconductor sales assembly organically. an drove in acceleration In grew and the

however, also boards high-performance Solutions businesses organically, by accelerated grew certain circuit power market soft, third demand and driven markets. as was Circuitry The the sequentially line in storage, Our more applications remain quickly with for as Smartphone for overall, growth expected. applications stronger electronics not Electronics those computing. and and sales not accelerate as industrial data expected, over in advanced packaging electronics X% applications did uniformly for EV quarter.

the drivers Our growth legacy and results testament sectors. away are its a shifting some to towards from emerging of business

the these to high and EBITDA of The The combination demand be of actions. even segment Europe and core and more portfolio or facility from metal The digits evident adjusted which and softening benefited headwinds them, our by in Specialty when were impact incrementals. into whether so material soft we've and revenue in did price raw earnings growth cost procurement, sales strength work translated improved grew improve markets double lower however, in a Profitability, in in from pricing inevitably energy at from Industrial actions for rebound. surcharges this industrial businesses segment. rationalization done business, market through our actions end ongoing should

Solutions quarter, is MacDermid accretive. core ESI's align capital high-quality this of and the segment, and we business. Staying our model. businesses Specialty with our announced This operating Graphic not on growth, with is great Industrial with Solutions Graphic does that and transaction return margin divestiture attributes business a long-term

the of This guidance close to values for gross been the example, Pro would transaction net an first X.Xx closing quarter. to conditions is the XXXX basis should approvals. $XXX forma on CRI. half taxes XXXX. implies X%. proceeds. given growth regulatory late of our minimal of constant since increases to the have Transaction pay Ex accretive graphics, of this For multiple. EBITDA or be XXXX X% points and business at leverage And transaction that expected should attractive we rate attributes, the our average tax pending midpoint currency transaction, an The XXX legacy rate double-digit XXXX million ratio adjusted in our

we've divestitures faster growth. and innovation, for Taken together, the acquisitions profit through repositioned company

OEMs Electronics to the ESI positioned is of for variety connect fabricators they of the deliver confidence as supply supportive support the on our spanning We're in computing of the which breadth board, market, decades expertise long-term and the with unique sets performance and technologies, Electronics them the the to With chain algorithm uniquely across manufacturing increasingly material rely attachment improvements. technical circuit increasing. chip

and specifiers, subcontinental with well new in as and Element powder centers investments customers support advanced opportunities, to offerings and new in enhanced our from applications dry research Southeast technologies capitalize focused qualifiers and our and as organization With Asia packaging to nanocopper share Our die attached Solutions supply for invigorated strategic and well in is chain. positioned XXXX. and on mind this profile

through third you take now detail. quarter results our will Carey in more Carey?

Carey Dorman

which our X, year-over-year difficult OpEx QX, benefited Year-to-date, raw the and overview to of range. margins the These in to comparisons We X% morning Ben, mix of as incentive additional as material business moderate sales gross everyone. growth Thanks, results. am due given did against Electronics segments compensation comparisons, primarily continues accruals the favorability other plan. financial quarter as currency items provides the line, now in business year-over-year in targeted on organic expected growth, perform margins remained from I XX% translating both in variable good well Despite third to spend X%. constant on I&S. to well delivered for and margins EBITDA an we Slide adjusted of to and incremental ahead improved XX%

EBITDA In incentive Electronics impact are sales the board over for accruing X%, metallization and points and basis quarter Together, led chemistry in flat the organically. X% growth that Industrial we in the second XXX in compensation. were negatively below above. were company advanced in power advanced to adjusted memory of strengthening The our total an impacted packaging by segment disk solutions, the year, high-value accounts year, and Specialty by Net in acceleration circuit rebound quarter target X% margin EBITDA storage organically, quarter year-over-year this for respectively, roughly grew in and in electronics, for we U.S. net year-over-year. X% from dollar And sequential markets. adjusted continued growth a last third quarter. demand sales cloud

Constant input EBITDA treatment. sales softer improvement grew currency margins adjusted with I&S, driven grew of volumes semiconductor EBITDA solutions. circuitry higher Electronics, in in favorability, In adjusted XX% mix industrial the offshore X%, offsetting benefits in and cost in and service constant currency by

Excluding in the have compensation when our margin would is adjusted year-over-year, the $XXX Solutions, EBITDA sales but This up the of metal discussed pass-through earlier. flat impact XX% Assembly in accruals excluding of the quarter. million been

Growth detail in Slide the robust organic On Electronics X, growth X improve. net quarter of continued we on the share to in as our was chain higher segment in the drivers end the supply additional sales electronics segments.

improving in automotive Assembly in markets electronics decline quarter. for increased China, growth broader the and in region. the pace core growth grew conditions. industrial second volume particularly from organically, assembly Asia, assembly demand and India X% Western due The market to in X% products to given Volumes activity was where softer continue

our X% This new business next believe result positive gives cycle. grow Circuitry organically market. us to still despite markets devices in as a smartphone legacy of that softer-than-expected shift development, smartphone the will mix over and emerging. continue reflects Solutions is applications. the confidence medium which other This the electronics towards drive grew emerging electronics driver high-end we term a market the is AI-enabled Nonetheless, growth refresh sales

quarter a up context built OSATs, our demand inventory in for Asian timing grew due for in semi new quarter year, ViaForm in easier transaction, wafer areas. an second year. of at XX% double-digit in organic utilization online and this for customers the years growth runway closing, these in this several the the major semiconductor fabs the grown that still Solutions to high fabs third at Semiconductor plating When of related would the improved We in item, ahead comparison of have quarter. came product quarter. business made Last certain the the adjusting mid-teens chemistry see which

in from share and advanced are to are gaining applications nodes a we other emerging packaging and surge bringing demand market. legacy market innovation We seeing on

sequentially at greater due a EV for Finally, Solutions, In the higher over nickel. commodity new sales and decline as surcharges wins. metals business as of power such reductions customers Industrial the little electronics rates and half to business benefited customers X% from in was expected, palladium to production existing sales for due

chemistry As margins. revenue but has is been headline the high-margin to metal this mix year, these case of for impacted price beneficial most value-add, the of higher negatively swings sales,

Automotive demand slowed. of as course production weakened over the quarter the

with organic operate partially remained energy bottom spot fourth in levels discipline trend growth Our the business XX%. line. bright of reflect activity. the cost favorability similar continue drilling quarter expectation given Solutions margin to I&S offset though and in at the portfolio continued for should a should to the impact this Energy The sales revenues ongoing

We geographies. modestly, $XX in free capital Slide progress $XX as and levels to reflecting generated Inventory full X. line quarter growth. sales of in we to the capacity CapEx growth improved million for application year. sequential in increased initiatives working and track expansion $XXX development million deliver remain to Turning million and strategic $XXX on overall third cash at million the further flow was projects

full remain cash and Our year CapEx cash interest, unchanged. largely for expectations taxes

on highlighted month of we our X.XX%, with $XXX in we balance million XX-month when reprice market. are strength which the able have ratio believe paid In this net to leverage interest of rate to been achieve quarter the this high-yield we was our plus term debt. repricing, levels loans current SOFR at that credits Our end the conjunction trailing down loan term X.Xx. tightest was The sheet earlier

rates X.Xx expected years plus cash quarter Overall, flows. Graphic million several to net from we we of modest navigated been at When end. the we proceeds include sale, have only our with forma pro our impact leverage would interest have a ratio in elevated $XXX believe

mentioned, a great capacity for future deployment. sheet balance As are meaningful capital value-enhancing Ben with position we in

Ben to Now I'll discuss back call turn outlook. our to the Ben?

Benjamin Gliklich

you, track XXXX. Thank a on We're in year record for Carey.

electronics in as record recovery end markets X is in been as reflected of through ever months though Our by these the quarter, third mixed the the revenue it strong year. has as has even been first competitive position in segment

activity. is It stimulus for as markets automotive our a We period cuts a what expected ago, much have seen industrial for tailwind Conversely, are will months softer be expect rate remained typically of as Europe to I&S outlook like sectors seasonally weaker few to of quarter segment industrial in a remains for fourth broader-based large in than we prove XXXX. interest and the growth and be U.S. end our construction weak and in reflects markets XXXX. end well the Chinese whether that electronics

constant currency million range year guidance $XXX our to to Our million of this EBITDA translates of mid-teens growth adjusted prior midpoint XXXX narrowed and full the $XXX year. healthy guidance retains

is While proving applications solutions backdrop. our XXXX, the which growth look positioned supply there to macroeconomic critical chains with to confident broad the set business of are as in macro expertise several years. we're we've We're next resilient how the of areas, many out material uncertainty we diverse against a for address to a partner

strategy businesses optimize opportunities We have and we a company, focused the and across which to behind and costs meaningful our are to pursuing. processes invest grow

a and balance positioned deal in us Our gives year we're sheet XXXX. well short, flexibility. another shape of for In is in record great great

to the of like our thank are the foundation to another around and responsible Element exceptional stakeholders for more our strong support people for continued laid who closing, I'd particular, engaged Solutions for in all and highly world quarter their In come. that of

we business. keep begin results We on therefore around want our media don't and quarterly session, and acknowledge speculation Before to we questions on recent our ask you rumors, comment your focused Q&A the the outlook. that I

session. Q&A Now the let's begin

Operator

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

Joshua Spector

trends I Congrats solid just on electronic on to a more ask broadly. quarter. wanted

you X-year if into timing So on it is of seen looks through over there's couple some quarter wondering last view on if trend Or characterize in different the into there at some we've you the acceleration we could X-, terms year? the terms accelerating results some your stack seeing your with acknowledge Would quarters. Are effects moving look of an view? here, and Obviously, pieces you that year, like agree continue I a some that been it? into how take 'XX. of next how impacts fourth progression in but

Benjamin Gliklich

market you market been optimists when has entering the Josh. Yes. Obviously, improving, the smartphone the And year, is getting electronics and The uniformly broadly question, market year expectations there so electronics worse, this for right? not think better. about were that's big a around driver. Thanks auto

And single-digit that's today, for is some And so as in we broader technology what is growth as indicators the these somewhere here are market, the of or XXXX. business for more weakness. trends in So that double-digit right? between emerging seen traction turn we we've offsetting XXXX, sit forecasts high early general forecast improvement our in some of MSI electronics and in to

seen we're seeing research meters square growing in we've high what in backdrop the mid- single Recent than That's a digits. PCB shows to better XXXX.

a got optimistic call so electronics deceleration pretty from reason And a in -- XXXX. in we've QX see seasonal health seasonal yes, acceleration I'd we'll or in electronic But broader for, it, this year. be impact an to in

Joshua Spector

portfolio -- broadly if on Semi not the Are your could and sorry, share you gains within I up Advanced your in recent that's Assembly here? Advanced impacting seeing much So -- Packaging, your just segment acceleration there. or Assembly. that just And Circuitry? characterize Packaging quarters how follow your on within comments can comments you most Around in around

Benjamin Gliklich

Yes.

the in package we electronics business are edge enabling to base like businesses, wafer-level a and also packaging ViaForm sell of into Assembly of assembled our in all chips plays -- is our and effectively business innovation advanced and semiconductor circuit X business So on multiple its trend are boards Packaging. the that. right? this and becoming design into impacts beauty at or that which Advanced plays our leading What high-end The then packaging the

see and a in And of broader traction our the instance, slice, bigger our of to business. results So you business Packaging trajectory Assembly the divergence happens It is slice just for can accordingly. Electronics Semi Advanced the a lifting in and our business. small be

Operator

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

John Ezekiel Roberts

to up impact that. Packaging the Advanced on big you Just scope follow How segments? you if the be, would combined to X across

Benjamin Gliklich

somewhat is term Packaging generic. Advanced The Yes.

very dollars capture But precisely it's point different different I think million a it this at and people. of of means hundred couple it's revenue so to rapidly. growing And things because hard it to

John Ezekiel Roberts

think And quarter I outperformed during particularly And the were Circuitry during they then program market, I Okay. strong been that's the the think the quarter. of had. think, stimulus I China EVs, because easing.

inflect we the does as fourth go how much that Circuitry? in into So quarter

Benjamin Gliklich

Circuitry as And we where really for believe, seems and being high-performance China we to. are our but have Yes, outperformed compute, the the there finish X in of has, real market. we very EVs doing Chinese things certain pointed its one which Circuitry ahead. to were also final EV business market, well storage applications data legs look

in Electronics I that year again, Circuitry. we're business, business pretty across for continued seasonality confidence forward-looking to So results that another pointing And and us the is in first inclusive the in for Electronics normal. the think indicators the give XXXX the XXXX record I talked of to strong question,

Operator

Seaport from question of Partners. the Research Mike Next Harrison with comes line

Michael Harrison

tighter the of spend point materials supply point least makers to it need technologies? is of in quarters coming about Packaging pricing talking Ben, sounds you some capacity the as XXXX? CapEx that your of you some Advanced are and a of like for at leading-edge piece does materials chip higher about shortage question Advanced near-term, does to other large a And think that on to for additional for Packaging more

Benjamin Gliklich

Yes. Thanks Mike. for the question,

we're progress core for making more to Kuprion there. footprint existing adequate support the what for working inclusive than Packaging, really are our manufacturing and we volumes product is to that's do good complex our introducing. significantly up new quickly in example, very increased across we capability Advanced a So scale of electronics products But

the a integrated. winning part great I and at legacy winning for again, further see an nodes second is value our are of So the a actively, constraints pricing, share we just tailwind question that and indicators market, have us the chips. indicative of us are issue And of can don't capacity fair here. To to and got that robust pointing around I nodes you your conviction suggesting to of which other gives proposition. you are real instance, when backwards in on discussions opportunity side. would look that those to in we're than leading-edge for our new more being on growth They you're the support demand, -- of really and We've say, indicative believe capacity pricing,

Our uniform that are margins there's think are support our pricing But I from There and opportunities to time underpricing I a healthy. Packaging say in of that. our margins incremental time. Advanced capability, wouldn't

Michael Harrison

you on the then out some next business. that talk that All going like electronics how winning Can power electronics. about you but maybe few sounds right. like opportunity And noted sounds quarters? acceleration -- in you're is or also some And over power there additional it market you playing of that recovery, see evolving some it

Benjamin Gliklich

soft The indeed power expected in pointed question, we we it to third the the business and several Yes. electronics it Mike. things. out, quarter, product accelerate quarter the a did. That's was in Thanks of that for second and

automotive of rates, pieces power core production product enables ramping electronics, won range of we've Some value electric We've life really that were business. vehicles. the cycles customers of product seeing that some exceptional we're of traction new and for OEMs, and certain taken our and get chains And supply in because their to a today. got performance, time in proposition it's a reliability, differentiated leading capability

have for pipeline is Western are the what electronics. we emerging well. future capability the power growing market, do wins nicely. we're to OEMs them very the Those a very EV bright of strong, weak Chinese contribute is and with very electronics a and business starting some power and in the So P&L. OEMs Notwithstanding legacy as been wins There's for that see to strong, very, OEMs, our Western

Operator

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

Bhavesh Lodaya

following comments in you your on made up Just Electronics.

year next for roughly consultants We MSI twice all. metrics and calling some growth have like the seen for

and for around EBITDA but similar the on you and look growth in Now a your estimates With we putting other some place, do comments these realize and growth see we'll markets year, Electronics XX% moving at year think I consultant next growth of PCB this in segment. pieces, if MSI have profile? some ViaForm we in acceleration see we

Benjamin Gliklich

even It's Yes. the or Thanks for question, guidance guidance XXXX. for talking be early about to Bhavesh. shadow

but aware goal does every to year we hard I so. it. confidence and to year points is it's year, this and pointed conviction numbers spoke tailed durable. do and our to very early dynamics Our good. And just and and But The -- markets. ability those you outperform put that earlier, we where that. and -- commitment tailwinds trajectory to that end The are us XXXX so data the to, is just to furthermore, give the good isn't think demonstrated them are We've a how about next for estimates would would That's market I in a are supporting for long XXXX of, the trend.

And a strong isn't for from several solid but our of growth Electronics. outlook so XXXX, just in years

Bhavesh Lodaya

your in And for market base? it. are up? you you Got outside change business new existing Packaging? seen growing as volumes some have base or wins Are your customer seeing Or then your share a ramp current Advanced you customers

Benjamin Gliklich

Yes.

interesting evolved has coming computing transistor breakthroughs to the been There's through pursuing So or is from monolithic heterogeneous no scale people market in breakthroughs designs power right? as computing we've standardization, designs. moved from So multiple in gains were what's right, way that the the are unique scale, where packaging. at

into so packaging. are got you've semi coming who the moving fabs And designs from

designs from OSATs. got You've coming

materials and hyperscalers. different solid And a us the when you're table at coming really requirements designs OEMs at gives looking nonstandard from because designs. are got that You've seat

of share OSAT market I growing been. the and would than greater our is is tremendously. so qualifiers that mind specifiers it's segment And And that say with

existing we're we're seeing right, growth past. and the in new customers, in with ways customers, new haven't parties, having yes, dialogues we new specifiers we're but So in third seeing

leading growing market. of overall growing -- Our is the overall as than faster faster this And certainly, our than growing is I our segment share think market indicator. is is market and that, of the share that's share mind a even the

Operator

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

Steve Byrne

within and body whether specifically on production then Just respect just models? you could I'm vehicles, to increased ICE line new of there curious that Is any in a of end kind can market Or sales with rates? moving end market, there's metallization to With the for away Or shift shift from your auto are you. any effectively your referring on comment so that? forth? a there parts be the

Benjamin Gliklich

Yes.

a and occasionally, a when with good trend that been opportunities winning are feel where from look brakes we've lose in auto bit there certain direct to applications share. we've that pursuing move had things share fashion gain ICE where And then like we've There units been where one-for-one Our underrepresented. chrome changes paint. some And not there business is we've geographies And of value. there. market are been other are happens, we some quite success

as share though we So an our it's inevitably see direct been solid propel this pretty not is We've segment. this recovers that a our of improving. to market. committed And to and correlation. We addressable opportunity strong feel consolidating market been that market We've for that earnings growth in market. when

Steve Byrne

COGS your were like looks your Okay. And -- XX% then year-over-year. up it

there? You what pricing mentioned comp offset? rationalizations in there you Or that And a metals. is the you that that? in But also that? of are incentive doing Ben, meaningful -- highlighted bulk is your any the for Is higher remarks, procurement some is of

Benjamin Gliklich

Yes.

of what inflation. metal most is price you're So seeing

some facility done have rationalization. We

have We gotten procurement. better around

year-over-year, Our flat roughly raw materials were they were sequentially better.

what margins growing then favorably, on a environment, testament to the if metal every better doing is an price you inflation have huge and basis, business it's the but look ongoing a to quarter. we're I earnings. make the effort the quarter-by-quarter better. margins So And segment make to declining our values at productivity And we're we that's we're in not think in driving I&S volume business and a

Operator

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

Jonathan Tanwanteng

does gains just up Just general forward. in business to power EV wondering market growth and general? rate Should an ramping at on some was to that new point? up? and could catch share platforms based platform if the expect electronics we outgrow Or give us on you I expectation that in updated wins going EV

Benjamin Gliklich

No.

business significantly no We've So hard where this platforms certain white is low-end this Jon, good for of got certain very most share are today, will of pipeline we're it and There's units. question, a supports other that sit and technology. isn't adopted. the working and on to space. and EV applicable we outstrip lot thanks on EVs, platforms, high-performance EVs, from the best have a There this the technology, and significant for EVs, where we strong very an expansion. But expect be share

a this And of business grow to significantly. market. EV so there's growth runway slower as And for lot environment, we've outstripping seen a the in significantly it's

Jonathan Tanwanteng

Got share maybe of is you run an business EVs? secondarily, opportunity today? the outside that Could it. is what And rate there of

Benjamin Gliklich

$XX So product revenue, we about but think is million used this quantify there power and as is between material right? an EVs, a intensive for that's applications. million today. So opportunity it And of tend to $XXX outside somewhere not

you've And small performs. so got where high power spaces, in material densities really this

addressable and in the seeing in and smartphones we're material in a of or centers. actually applications. addressable power conversion is that's certainly data derivations utility And of bit market quite so this And this for market power untapped. transmission, There's it expanding

Operator

of Your from the Chris comes Research. Wolfe next line Parkinson question with

Christopher Parkinson

So we about your portfolio, manage don't should segment? obviously, but some a and just we back thinking kind looking the holistically, your in and couple all progression about and and puts be margin prior peak takes How thinking opportunity And be rid taking of longer-term when what should moving in worth of at you the your this what versus way, your electronics. know margin graphics business then parts getting of assessing? I key step are each are considerations?

Benjamin Gliklich

Yes. Thanks Chris. the for question,

So for metals. when pass-through we opportunity we ex about the think think it about the business, margin

peak of XXXX, selling because at it we a higher are metals XXXX, businesses that are QX margin average has average today, lower about a average than pass-through are accelerating business volumes is business overall prior was the And This than industrial margin businesses. and the our margin quarter, price. Graphics down lower ex business as in XX%. was look EBITDA And XX%. was our right,

say that And certainly, years we next business away, this get got got of quarters was a margin, So believe the a driving X we've margin ceiling. runway I to this a several it record of X margin XXs. is to that, into ex-metal not entitlement XX% but or ago. we've levels that And the wouldn't number is in years. that's path than the that forward couple new different to

Christopher Parkinson

that just couple corollary years the looks be next new customers? of to think the your the same of is everything and do going portfolio comment everyone", the And your markets you thing you Circuitry of towards product to else. be a done in portfolio do Semi over over, feel, going your new you basically is also X technologies. that me like in Do in market Ben, core there's are it terms question, kind and Kuprion exactly course where your new -- capabilities needs seems necessity it more And of looks part me, the you at basically feel and especially and of let's Or just the not business part Got of years? and the the at terms say, and of customers electronics, it. given a your about, to obviously, of you're -- last of "hey, into adding basically lot

Benjamin Gliklich

Yes. Chris. customers. our new enhance to of in Thanks done to proposition technologies a and to for the portfolio value work lot We've the question, invest reposition our

need through would our proposition our course, always to or capital is innovation the offerings add We been to ago. strong positioned. towards in that we're of the our in to our enhanced strategy that. need part don't don't acquisitions. acquired And fortunate portfolio that But market that We've some order it our feel right? that's open excellence the allocation. market well to core that our improve value feel deliver positions add the we're to of value capabilities of years prudent has We're to But inorganically our actions, Strategically, anything markets. our assets of core we XX deliberate whether markets. We in operational has do today, migrated to customers and

us M&A around strategic doesn't Importantly, position. undermine our

in don't enhance what's we market hand way. our we'll available would But forced think see to be in offerings. the our So that

Operator

the Your Barclays. next comes from with question line Mike Leithead of

Michael Leithead

stick Ben, to I the electronics. want theme on of

now, I these expected on sort has what if guess to this about medium changed, legacy or under business was talked your lot rate this the the in your on of picture, to say, X you've the some your term how all, electronics call X this big it drivers. returns from, new you think past versus when growth a about years I think electronics business at the framework? shift of business ongoing emerging drivers maybe legacy growth

Benjamin Gliklich

the Thanks Yes. for question.

reason those is that forever. in going of be is are we're broad of that particularly smartphone isn't a to to slices for traction the -- market are a be strong. And not selling There today outperform. market our the electronics The meddling will strong. us shift that going it forever. not to So is X.X in observation There for allowing globally billion, be billion X.X replenishment We're smartphones slices cycle. just

smartphone, the that then some cyclical out of durability the have recovery, some years, we're markets electronics -- should benefiting from recovery. couple have broader think a market, I whether so now that we we'll that's have automotive, And look will And when durability.

cyclical to a to the and when that the next some through should be. cyclical June. grower business of from high forward, a come. that new from of for in confidence growth trough. the higher margin in would single-digit accelerating as in of The because mid- will our can't went us electronics our the rate business couple be electronics margins have together, as recovery you'd gives the for business electronics will look should April you here. And overall the taken that a We trough traction that years, But prepared And expect segment become product from for seen for material that company. a element accrete growth and we of has larger and all rate And is and recovery because business, a and we than of technologies I&S percentage the call so investor in

Michael Leithead

have just you sale sort Should seeing today, you receive helpful. the Graphics closing? super that any buybacks to is you're just X back follow-ups we where deployment. do any X, plans? Great. on buyback you M&A speak redeployment the on then leverage One, immediate pipeline That's quick today? And capital relative And to the given of can when how of proceeds, expect

Benjamin Gliklich

Yes.

from we X sale, balance unafraid great is allocation middle quickly be to forma to when will of the move proceeds the We're capital pro the our and been So unchanged. be best. the opportunity receive opportunistic thinking around when sheet a It's and Graphic arises. going or since the XXXX

Operator

of Your from King. the line David next with question CL comes Silver

David Silver

Yes.

Kuprion. deeper to been customers over large I would was it couldn't you with it's bit So that prior a toolkit, since transactions at the very the high at or some question, maybe ancillary of year this you expanded guess, that for a ViaForm guess, And opening I an a doors completed and little deal with desirable lead benefits is maybe the same time, level highly with collaborations to the one that.

year. getting the with those a over progress newer a of it's the wondering, collaborations been bit or offering terms end the success I So line your little just going about customers? strengthening just talk Could of front in with you was

then provide on And update secondly, the you could just commercializing progress an Kuprion products? with if the

Benjamin Gliklich

David. Thanks Sure. question, for Yes. the

product and tripled we seeing that strong and ViaForm growth with terminated very We're a is seeing -- been to capital ViaForm double-digit than business in. traction the with year deployment. that outstanding So distribution we The business growth paid we're customers, great year-over-year. toolmakers. pipeline last that an terminate EBITDA agreement more year-over-year That's has for the

And good. and playing so is very the timing that out thesis was

about very better is just well as going at different indeed, well. a transaction. we that is the helping in with drive the supply So stage. important it relationships It's good chain. Kuprion decision-makers feel And

to commercial a capability So capability that is customers and manufacturing Kuprion this quarters and And in samples. pull the ago and there. focused development for hear product is you're at of what from to pilot outstanding, want high going couple the say. volume. customers we said good on our building getting site, we're progress our us supporting The chain, applications We're making right, supply their just I about we're high-value run of it at more closer scaling would and

year. I capabilities we'll of the have product so playing our also this the this is around And first qualification expect thesis technology out.

that proposition offers its will ESI And be it and deliver that. the And shareholders our in owning to very is to the to and so revenue confidence will value high. our attached customers very, that returns

David Silver

areas your Okay. -- to And adjusted category where for to track capital-intensive. from not a, your on targets? of resourcing outlook business your would you kind that CAGR key resource X- to of hitting But quite What see, kind here. mean, multiyear often I the mean I your company need don't mid-double like the keep the growth targets. from I'm earnings for growth are of With X-year the know, X-year EPS locales, would And like I guessing all be question and I'll kind talent forward? And going R&D mentioned the your that. just in then in this throw more that out laid national inherently that next be opportunities digits. you would your but multiyear R&D, champions company will targets for wondering is has out I'm growth, is become certainly, might competing inherently just that business low some things you've in of to intensive with

just So company additional multiyear need might your to thought growth the on targets. resources where hit a

Benjamin Gliklich

in it our adding little We prepared scale We're Thanks. remarks, about talked a bit Yes. manufacturing. right?

for Argomax So we're adding new a production. line

the road area building customers lab people We're are we're highlight an in our our Thailand. customer. But an applications lab manufacturing. we're building capability, in is that's in close biggest an customers the Vietnam. applications applications are, perspective, And moving, We're right? where and labs Kuprion are example, So map As applications probably building we've building margins this XX% that long-term and quickly, important, building where and the we being a for incremental and synchronizes on is locally several the problems Customer target customer we're XX% with And very to to research business center have India. in in support and expect proximity, years. It's resources long-term range. able fits earnings the been that and from a obviously articulated. capacity We're equipped. that's solve we investing long-term I'd well to

Operator

for questions conference I further turn over no There's Gliklich back will this remarks. the Ben? time. Ben at closing to now

Benjamin Gliklich

we're speaking Great. with you weeks Thank joining, and Thanks, to the very everybody, much. come. looking Thank very in you and of to for you many much. seeing forward days and

Operator

call. Ladies for and all today's gentlemen, you Thank that concludes joining.

may You now disconnect.

Element Solutions (ESI) 29 Oct 242024 Q3 Earnings call transcript