Element Solutions Inc (ESI) 2022 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Element Solutions Fourth Quarter and Full Year 2022 Financial Results Conference Call. (Operator Instructions)

女士們先生們，早上好，歡迎參加 Element Solutions 第四季度和 2022 年全年財務業績電話會議。 （操作員說明）

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

我現在將把電話轉給戰略與財務高級總監 Varun Gokarn。請繼續。

Good morning, and thank you for participating in our fourth quarter and full year 2022 earnings conference call. Joining me are our CEO, Ben Gliklich; our CFO, Carey Dorman; and our Executive Chairman, Sir Martin Franklin. In accordance with Regulation FD, we are webcasting this conference call. A replay will be made available in the Investors section of the company's website shortly after completion of the call.

早上好，感謝您參加我們的第四季度和 2022 年全年收益電話會議。加入我的是我們的首席執行官 Ben Gliklich；我們的首席財務官 Carey Dorman；以及我們的執行主席馬丁·富蘭克林爵士。根據 FD 法規，我們將通過網絡直播本次電話會議。電話會議結束後不久，將在公司網站的“投資者”部分提供重播。

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

在今天的電話會議上，我們將做出某些前瞻性陳述，以反映我們目前對公司未來業績和財務業績的看法。這些陳述基於對未來事件的假設和預期，這些事件受到風險和不確定性的影響。請參閱我們的收益發布、補充幻燈片和最近提交給美國證券交易委員會的文件，以討論可能導致實際結果與我們預期不同的重大風險因素。

These materials can be found on the company's website in the Investors section under News and Events. Today's materials also include financial information that has not been prepared in accordance with U.S. GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce our Executive Chairman, Sir Martin Franklin.

這些材料可以在公司網站的“新聞和事件”下的“投資者”部分找到。今天的材料還包括尚未按照美國公認會計原則編制的財務信息。請參閱收益發布和補充幻燈片，了解這些非 GAAP 指標與可比 GAAP 財務指標的定義和調節。現在我很高興介紹我們的執行主席馬丁·富蘭克林爵士。

Thank you, Varun, and good morning, everyone. We have now completed our fourth year as Element Solutions. The business has evolved exactly as we had hoped. The strategy of driving organic growth along with accretive bolt-on acquisitions has led to another year of record sales and earnings per share, all in the face of a challenging macro environment. The management organization has evolved into a growth-oriented team that has created a working cadence and culture that is better than ever before.

謝謝你，Varun，大家早上好。我們現在已經完成了作為 Element Solutions 的第四個年頭。業務發展完全符合我們的預期。面對充滿挑戰的宏觀環境，推動有機增長以及增加補強收購的戰略導致又一年的銷售額和每股收益創歷史新高。管理組織已經發展成為一個以成長為導向的團隊，創造了比以往任何時候都更好的工作節奏和文化。

There are macro headwinds, but the business is outperforming its end markets and growing share. There was a general consensus that at some point, the demand cycle will pick up steam and Element Solutions is perfectly positioned to benefit from growth in its core and adjacent markets. I've always believed in focusing on markets that have long-term secular growth with defensible moats that earn strong margins. Element Solutions personifies these criteria and continues to be at the cutting edge of customer development programs that create demand for many years to come.

存在宏觀逆風，但該業務的表現優於其終端市場並且份額不斷增長。人們普遍認為，在某個時候，需求週期將加速發展，Element Solutions 完全有能力從其核心和鄰近市場的增長中獲益。我一直相信專注於具有長期長期增長且具有可賺取高利潤的防禦性護城河的市場。 Element Solutions 體現了這些標準，並繼續處於客戶開發計劃的前沿，這些計劃在未來許多年創造了需求。

With best-in-class free cash flow characteristics and a balance sheet that continues to delever all while returning significant cash to shareholders, there is much to be excited about in the company's future. None of this would be achievable were it not for the entire employee base of the company. And I'd like to recognize and say thank you for the true dedication and excellence of the people we are fortunate enough to employ at Element Solutions.

憑藉一流的自由現金流特徵和不斷去槓桿化的資產負債表，同時向股東返還大量現金，公司的未來令人興奮不已。如果不是公司的全體員工，這一切都不可能實現。我想對我們有幸在 Element Solutions 僱用的員工的真正奉獻精神和卓越表現表示感謝。

With that, I'll hand over to Ben.

有了這個，我會交給本。

Thank you, Martin, and good morning, everyone. Thank you for joining. Element Solutions delivered record revenue, adjusted EBITDA and adjusted earnings per share in 2022. Despite a challenging backdrop, we grew earnings. Our commitments on day 1 has been to drive above-market profitable growth, and we did that once again. The automotive sector continued to suffer from a disjointed global supply chain and consumer electronics markets suffered from Asian economic malaise and an overstock following COVID-related order patterns.

謝謝 Martin，大家早上好。感謝您的加入。 Element Solutions 在 2022 年實現了創紀錄的收入、調整後的 EBITDA 和調整後的每股收益。儘管背景充滿挑戰，但我們的收益有所增長。我們在第一天的承諾是推動高於市場的盈利增長，我們又一次做到了。汽車行業繼續受到全球供應鏈脫節的影響，而消費電子市場則受到亞洲經濟低迷和與 COVID 相關的訂單模式造成的庫存積壓的影響。

Nonetheless, we grew organic net sales by 5% for the full year in both of our operating segments. In the face of raw material inflation and elevated logistics costs, adjusted EBITDA grew in absolute terms and 8% in constant currency. We grew adjusted EPS to $1.41 or 2% despite a nearly 8% FX headwind from the strong U.S. dollar. One of the hallmarks of our business has been steady cash flow across a variety of operating environments. And this year, we generated free cash flow of $253 million.

儘管如此，我們兩個運營部門的全年有機淨銷售額增長了 5%。面對原材料價格上漲和物流成本上升，調整後的 EBITDA 絕對值增長 8%，按固定匯率計算。儘管強勢美元帶來近 8% 的外匯逆風，但我們將調整後的每股收益增長至 1.41 美元或 2%。我們業務的標誌之一是在各種運營環境中保持穩定的現金流。今年，我們產生了 2.53 億美元的自由現金流。

Our formula for value creation is a combination of operational excellence to drive above-market profitable growth and prudent capital plan. In 2022, most of our cash flow returned to shareholders in dividends and share repurchases, but we also continue to improve the returns on prior year M&A. We over-delivered our original synergy targets for the acquisitions of Coventya and HSO generating more than $10 million of incremental savings in 2022. The position we built as a global leader in industrial metal finishing with enhanced scale and technical capabilities should continue to deliver for both our customers and our shareholders.

我們的價值創造公式是將卓越運營與審慎的資本計劃相結合，以推動高於市場的盈利增長。 2022 年，我們的大部分現金流以股息和股票回購的形式返還給股東，但我們也繼續提高前一年併購的回報。我們超額完成了收購 Coventya 和 HSO 的最初協同目標，在 2022 年產生了超過 1000 萬美元的增量節省。我們作為工業金屬表面處理領域的全球領導者建立的規模和技術能力得到提升，應該會繼續為這兩個目標帶來好處我們的客戶和股東。

The first half and second half of 2022 were very different. The electronics momentum from 2021 continued for the first 6 months of the year, but quickly and sharply ran out of steam in the second half. This was partially offset by a recovery in automotive. Overall, volumes and demand softened while inflation persisted. We believe this is a dynamic that cannot last. Either demand will come back or inflation will subside. In fact, there are reasons to believe both may happen simultaneously, either [pass along] would translate to better outcomes than we saw in the second half of '22.

2022 年上半年和下半年截然不同。 2021 年的電子產品勢頭在今年前 6 個月持續，但在下半年迅速而急劇地失去動力。這部分被汽車行業的複蘇所抵消。總體而言，在通貨膨脹持續存在的同時，銷量和需求疲軟。我們認為這是一種無法持久的動力。要么需求回升，要么通脹消退。事實上，有理由相信這兩種情況可能同時發生，要么 [pass along] 會轉化為比我們在 22 世紀下半年看到的更好的結果。

Electronics markets are expected to inflect and our industrial business has started the year strong outside of China. This underpins our full year guidance, which we will cover shortly.

預計電子市場將發生變化，我們的工業業務今年在中國以外的地區開局強勁。這支撐了我們的全年指導，我們將很快介紹。

First, Carey will take you through the financials in more detail. Carey?

首先，Carey 將帶您更詳細地了解財務狀況。凱里？

Thanks, Ben. On Slide 4, you can see a summary of our fourth quarter results. Net sales grew 3% organically, primarily driven by pricing actions and new business wins that offset a softer volume environment in most of our verticals. Demand across the electronics ecosystem deteriorated further from Q3 to Q4. So we believe we meaningfully outperformed our end markets with flat organic sales. Global smartphone shipments declined by over 18% in Q4 '22, with even the larger Western OEMs seeing mid-teen year-on-year reduction. Against that market backdrop, our circuitry and semiconductor vertical saw organic sales decline 12% in the quarter.

謝謝，本。在幻燈片 4 上，您可以看到我們第四季度業績的摘要。淨銷售額有機增長 3%，這主要是受到定價行動和新業務的推動，這抵消了我們大多數垂直行業疲軟的銷量環境。從第三季度到第四季度，整個電子生態系統的需求進一步惡化。因此，我們相信我們以持平的有機銷售額顯著優於我們的終端市場。 22 年第四季度，全球智能手機出貨量下降了 18% 以上，即使是較大的西方 OEM 也出現了 15% 的同比下降。在這種市場背景下，我們的電路和半導體垂直行業的有機銷售額在本季度下降了 12%。

This was offset by 11% organic growth in our assembly business, where we continue to benefit from strong power electronics demand and resilience in circuit board assembly products that primarily serve industrial and automotive customers. In constant currency, adjusted EBITDA for the Electronics segment declined 11% year-over-year with margins roughly flat. In our IMS segment, we continue to benefit from our proactive pricing actions in Industrial Solutions and saw modest growth with automotive customers as channel inventories began to normalize.

這被我們組裝業務 11% 的有機增長所抵消，我們繼續受益於強勁的電力電子需求和主要服務於工業和汽車客戶的電路板組裝產品的彈性。按固定匯率計算，電子業務的調整後 EBITDA 同比下降 11%，利潤率大致持平。在我們的 IMS 部門，我們繼續受益於我們在工業解決方案方面的積極定價行動，並且隨著渠道庫存開始正常化，我們看到汽車客戶的適度增長。

Our industrial vertical grew 7% organically in the quarter, broadly in line with estimates of fourth quarter automotive unit production growth. Energy grew 31% organically on a back of increase in offshore drilling and graphics grew 1% organically. Across the business, we experienced a moderation in material and logistics cost inflation that should continue into 2023. Constant currency adjusted EBITDA in the I&S segment grew 16%, with a roughly 100 basis point improvement in margins versus the first quarter of 2021.

我們的垂直工業在本季度有機增長 7%，與第四季度汽車單位產量增長的估計基本一致。由於近海鑽井的增加，能源有機增長 31%，圖形有機增長 1%。在整個業務中，我們經歷了材料和物流成本通脹的緩和，這種情況應該會持續到 2023 年。I&S 部門經固定匯率調整後的 EBITDA 增長了 16%，與 2021 年第一季度相比，利潤率提高了約 100 個基點。

Adjusted EBITDA in Q4 declined 2% in constant currency terms, a function of negative mix from higher margin, high-end electronics and nonmetal cost inflation across the business. This weighed on gross margin but was offset by OpEx discipline. Once again, we demonstrated our ability to preserve overall profitability in a challenged demand environment. Reported results reflect a $14 million headwind from the translation impact of a stronger U.S. dollar.

按固定匯率計算，第四季度調整後的 EBITDA 下降了 2%，這是整個企業利潤率較高、高端電子產品和非金屬成本上漲的負面影響。這對毛利率造成壓力，但被運營支出紀律所抵消。我們再次展示了在充滿挑戰的需求環境中保持整體盈利能力的能力。報告的結果反映了美元走強帶來的 1400 萬美元的逆風。

On Slide 5, we summarize our full year financial results. We grew the top line 5% organically. A significant portion of that organic growth was driven by both surcharge base and negotiated price increases instituted in the first half of the year. On a constant currency basis, adjusted EBITDA grew 8% year-on-year. Reported results reflect FX fluctuations, which drove a roughly $40 million year-over-year headwind. Constant currency adjusted EBITDA margins declined 110 basis points in the face of raw material and logistics inflation as well as mix headwinds within our high-end electronics portfolio.

在幻燈片 5 中，我們總結了全年的財務業績。我們的收入有機增長了 5%。有機增長的很大一部分是由附加費基礎和今年上半年制定的協商價格上漲推動的。按固定匯率計算，調整後的 EBITDA 同比增長 8%。報告的結果反映了外匯波動，這導致了大約 4000 萬美元的同比逆風。面對原材料和物流通脹以及我們高端電子產品組合中的混合逆風，固定匯率調整後的 EBITDA 利潤率下降了 110 個基點。

Excluding the impact of $428 million of pass-through metal sales in our Assembly Solutions business, our adjusted EBITDA margin would have been 25% for the year. Adjusted EPS grew 2% on a reported basis despite a negative 8% impact from FX.

剔除裝配解決方案業務中 4.28 億美元的直通金屬銷售額的影響，我們調整後的 EBITDA 利潤率本年度為 25%。儘管外匯帶來 8% 的負面影響，但調整後的每股收益在報告基礎上增長了 2%。

Next, on Slide 6, we share additional detail on full year organic results for each of our businesses. Organic growth for electronics was 5% year-over-year in 2022, which, as Ben said, was a story of [2 halves]. Our circuitry and semiconductor vertical saw double-digit growth in the first half of '22, driven by strength in semiconductor plating, memory disk demand for data centers and raw material surcharge pricing actions.

接下來，在幻燈片 6 上，我們分享了我們每項業務的全年有機業績的更多詳細信息。到 2022 年，電子產品的有機增長率為 5%，正如 Ben 所說，這是一個 [2 halves] 的故事。在半導體電鍍、數據中心的存儲磁盤需求和原材料附加費定價行動的推動下，我們的電路和半導體垂直領域在 22 年上半年實現了兩位數的增長。

These same trends are first in the second half. Smartphone unit volumes declined, data center investment slowed, leading an overbuilt downstream memory diff channel and precious metal prices stabilized or decline. This all translated to 4% annual organic net sales growth for circuitry solutions, but this figure includes a 12% organic decline in the fourth quarter as high-end electronics market softened due to COVID-related impacts in Asia and memory disk destocking.

這些相同的趨勢首先出現在下半年。智能手機出貨量下降，數據中心投資放緩，導致下游內存差分通道過度建設，貴金屬價格企穩或下跌。這一切都轉化為電路解決方案每年 4% 的有機淨銷售額增長，但這一數字包括第四季度 12% 的有機下降，這是由於亞洲 COVID 相關影響和存儲磁盤去庫存導致高端電子市場疲軟。

Semiconductor Solutions grew 3% organically for the full year with a similar 12% decline in Q4. Our Assembly Solutions business, which has more significant exposure to industrial and automotive end markets saw more positive trends with acceleration through the course of the year. This business grew 7% organically for the full year and 11% in the fourth quarter. Demand for our power electronics technologies remained strong throughout the year, driven by expanding electric vehicle production while demand for circuit board assembly products in our non-consumer electronics applications also remain strong into year-end.

半導體解決方案全年有機增長 3%，第四季度下降 12%。我們的裝配解決方案業務對工業和汽車終端市場的影響更大，在這一年中出現了加速增長的更積極趨勢。該業務全年有機增長 7%，第四季度增長 11%。在電動汽車產量擴大的推動下，全年對我們的電力電子技術的需求依然強勁，而我們的非消費電子應用中對電路板組裝產品的需求也一直保持強勁到年底。

Organic net sales in the Industrial and Specialty segment also increased 5% year-over-year. Industrial Solutions, which constitutes almost 80% of segment revenue, grew 5% organically driven by pricing actions and surcharges. Sales into auto, which is roughly 40% of the business, grew mid-single digits for the year, but grew double digits in the fourth quarter. While supply chains for many OEMs appear to be stabilizing, we are still planning for more muted growth in automotive in the first quarter of 2023.

工業和專業領域的有機淨銷售額也同比增長 5%。佔分部收入近 80% 的工業解決方案在定價行動和附加費的推動下有機增長了 5%。約佔業務 40% 的汽車銷售額全年增長了中個位數，但在第四季度增長了兩位數。雖然許多原始設備製造商的供應鏈似乎趨於穩定，但我們仍計劃在 2023 年第一季度汽車行業實現更溫和的增長。

Geopolitical uncertainty in Europe drove sequential softening in Europe construction and industrial end markets that have been resilient in the first half of the year. Graphic Solutions sales were flat organically in 2022 despite new business that contributed to sales growth and the impact of additional pricing actions, a slowdown in new packaging designs in Europe and North America drove a decline in industry volumes. We are making progress on multiple initiatives designed to accelerate sales and improved margin in this business in 2023.

歐洲的地緣政治不確定性導致今年上半年表現強勁的歐洲建築和工業終端市場連續走軟。 2022 年圖形解決方案銷售額有機持平，儘管新業務促進了銷售額增長和額外定價行動的影響，但歐洲和北美新包裝設計的放緩導致行業銷量下降。我們正在多項計劃中取得進展，這些計劃旨在在 2023 年加速銷售並提高該業務的利潤率。

Energy Solutions top line grew 12% organically with an acceleration in the fourth quarter. We have momentum in the drilling side of the business, which should lead over time to increase production related revenues as well. We expect this high-margin business to continue its growth in 2023.

Energy Solutions 營收有機增長 12%，第四季度加速增長。我們在業務的鑽井方面有發展勢頭，隨著時間的推移，這也應該會導致與生產相關的收入增加。我們預計這項高利潤業務將在 2023 年繼續增長。

Moving to Slide 7, we generated $253 million of free cash flow in the year, of which $87 million was in Q4. The quarterly cadence reflects a release of approximately $70 million of working capital in the second half. This was driven by a sequential sales decline, modest raw material deflation and a reduction in safety cost. Our other uses of cash in the fourth quarter, including cash taxes, CapEx and interest, all came in better than our expectations. We expected CapEx in 2022 of approximately $60 million, dedicated on several key investment projects in power electronics, R&D lab expansions and additional manufacturing capacity for Graphic. Several of these projects have been delayed due to key equipment availability, which drove lower CapEx deployment than our original forecast.

轉到幻燈片 7，我們在這一年產生了 2.53 億美元的自由現金流，其中 8700 萬美元出現在第四季度。季度節奏反映出下半年釋放了大約 7000 萬美元的營運資金。這是由於銷售額連續下降、原材料適度通貨緊縮和安全成本下降所致。我們在第四季度的其他現金用途，包括現金稅、資本支出和利息，都好於我們的預期。我們預計 2022 年的資本支出約為 6000 萬美元，用於電力電子、研發實驗室擴建和 Graphic 的額外製造能力等幾個關鍵投資項目。由於關鍵設備的可用性，其中幾個項目已被推遲，這導致資本支出部署低於我們最初的預測。

This then will roll over into 2023. We also invested capital beyond integration efforts and customer equipment to enhance long-term relationships, primarily in circuitry and industrial. These are high-returning investments that are supporting near-term profitable growth. In 2023, we expect cash interest of approximately $50 million and cash taxes about roughly $80 million. We should continue to model a 20% adjusted tax rate for EPS purposes this year.

然後這將延續到 2023 年。我們還在集成工作和客戶設備之外投資了資本，以加強長期關係，主要是在電路和工業領域。這些是支持近期盈利增長的高回報投資。到 2023 年，我們預計現金利息約為 5000 萬美元，現金稅約為 8000 萬美元。今年，我們應該繼續為每股收益建模 20% 的調整後稅率。

We returned over $230 million to shareholders this year, including over 150 opportunistic share repurchases or roughly 8 million shares at an average price of $18.76. Net leverage at year-end was roughly flat year-over-year at 3.1x, despite this capital return and modest strategic investments. All our floating rate debt remains [swap the fifth euro] obligation for early 2024. Our balance sheet and liquidity position are strong.

我們今年向股東返還了超過 2.3 億美元，包括超過 150 次機會性股票回購或大約 800 萬股股票，平均價格為 18.76 美元。儘管有這種資本回報和適度的戰略投資，但年末的淨槓桿率與去年同期大致持平，為 3.1 倍。我們所有的浮動利率債務在 2024 年初仍然是 [交換第五歐元] 義務。我們的資產負債表和流動性狀況良好。

And with that, I will turn the call back to Ben to discuss our financial guidance for 2023.

有了這個，我會把電話轉回給本，討論我們 2023 年的財務指導。

Thank you, Carey. The outlook for our end markets entering this year is cloudy, not unlike the overall macroeconomic outlook. As certain risks have receded, others are emerging. The warmer winter in Europe mitigated the potential worst-case energy inflation impact to industrial activity while certain metal input prices have begun to rise again. The medium-term impact of China reopening is hard to predict and its influence on industrial and consumer demand and second derivative effect on raw material pricing and logistics costs will be important drivers of 2023 results.

謝謝你，凱里。我們進入今年的終端市場前景陰雲密布，與整體宏觀經濟前景不同。隨著某些風險消退，其他風險正在出現。歐洲溫暖的冬天減輕了最壞情況下能源通脹對工業活動的潛在影響，同時某些金屬投入品價格已開始再次上漲。中國重新開放的中期影響難以預測，其對工業和消費者需求的影響以及對原材料定價和物流成本的二次衍生效應將成為 2023 年業績的重要驅動因素。

In this context, we're guiding to roughly flat adjusted EBITDA in 2023 on a constant currency basis. At today's rates, that implies a range of $510 million to $530 million. We expect adjusted EPS of between $1.40 and $1.43. And free cash flow of approximately $275 million. The first half of 2023 will be a challenge as we enter the year on an electronic downturn compared to the momentum that carried from 2021 to the first half of 2022. Typically, electronics activity in the first half is determined by the prior (inaudible) and we see no exception in 2023.

在這種情況下，我們指導 2023 年在固定貨幣基礎上大致持平調整後的 EBITDA。按照今天的匯率，這意味著 5.1 億至 5.3 億美元的範圍。我們預計調整後的每股收益在 1.40 美元至 1.43 美元之間。自由現金流約為 2.75 億美元。 2023 年上半年將是一個挑戰，因為與 2021 年到 2022 年上半年的勢頭相比，我們在電子產品低迷的情況下進入了這一年。通常，上半年的電子產品活動取決於之前的（聽不清）和我們認為 2023 年也不例外。

Customers have reduced production significantly and utilization levels at circuit board and semiconductor fabs have declined, reflecting the current softness in high-end electronics and uncertainty around China reopening impact to industrial activity, we expect Q1 2023 adjusted EBITDA to increase only modestly versus Q4 2022. While adjusted EBITDA in the second half is typically higher than in the first half.

客戶大幅減產，電路板和半導體工廠的利用率水平下降，反映出當前高端電子產品的疲軟以及中國重新開放對工業活動影響的不確定性，我們預計 2023 年第一季度調整後的 EBITDA 僅比 2022 年第四季度小幅增長。而下半年調整後的 EBITDA 通常高於上半年。

This year, we expect that dynamic will be more exaggerated. We have reasons for optimism in 2023 as we look towards the second half, particularly in our electronics business. We anticipate the impact of inventory destocking in electronics end markets will ease by many years. General industry expectations are for demand to inflect positively in the second half. Given that third-party estimates expect flattish smartphone sales for the year, the first half will almost certainly show a year-over-year decline, implying a return to growth in the second half.

今年，我們預計這種動態會更加誇張。展望下半年，我們有理由對 2023 年感到樂觀，尤其是在我們的電子業務方面。我們預計電子終端市場庫存去庫存的影響將在多年後緩解。行業普遍預期下半年需求將出現積極變化。鑑於第三方估計今年智能手機銷量將持平，上半年幾乎肯定會出現同比下降，這意味著下半年將恢復增長。

We are already seeing relative resilience in automotive electronics and telecom infrastructure and expect there will be pockets of relative strength for the broader electronics manufacturing supply chain. These are applications where we have a strong presence. As we've noted in the past, secular growth is not linear growth, and we have conviction that the current volatility will not impact the long-term positive trends driving our electronics business.

我們已經看到汽車電子和電信基礎設施的相對彈性，並預計更廣泛的電子製造供應鏈將有相對優勢。這些是我們有強大影響力的應用程序。正如我們過去指出的那樣，長期增長不是線性增長，我們堅信當前的波動不會影響推動我們電子業務的長期積極趨勢。

The growth opportunities we see in power electronics, 5G-enabled devices and networks, electric and autonomous vehicles, high-performance computing and sustainable chemistry remains substantial over time. In the Industrial & Specialty segment, weak industrial activity in China will weigh on first quarter results. However, overall, we expect the supply constraints that have hampered global automotive production will ease through the year.

隨著時間的推移，我們在電力電子、支持 5G 的設備和網絡、電動和自動駕駛汽車、高性能計算和可持續化學領域看到的增長機會仍然很大。在工業和專業領域，中國疲軟的工業活動將對第一季度業績造成壓力。然而，總體而言，我們預計阻礙全球汽車生產的供應限制將在今年有所緩解。

Our European construction and industrial customers are outperforming their forecast coming off a warmer winter. Anecdotally, when we surveyed our largest European surface treatment customers in the fall, nearly half expected to go to short work over the winter due to cost inflation and gas ration, [none have it]. Together with the momentum we have in our offshore business, the IMS segment has some wind in its sales and during 2023. While the consumable nature of our products and our highly variable cost structure help insulate our businesses from macro volatility, we are not immune.

我們的歐洲建築和工業客戶在溫暖的冬天過後的表現超出了他們的預期。有趣的是，當我們在秋季調查我們最大的歐洲表面處理客戶時，將近一半的客戶預計由於成本上漲和汽油配給而在冬季進行短期工作，[沒有]。加上我們在離岸業務方面的勢頭，IMS 部門在 2023 年的銷售中也有一些風向。雖然我們產品的消耗品性質和我們高度可變的成本結構有助於使我們的業務免受宏觀波動的影響，但我們也不能倖免。

We have a prudent operating plan that accounts for the heightened level of macroeconomic uncertainty this year without sacrificing long-term profitable growth. We're proud of our efforts to protect profits and position the business to capitalize on the inevitable end market recovery. And there are significant opportunities for us in this operating [environment]. Our scale, liquidity and strategic horizon should allow us the stability to weather and capitalize on these markets. Our customers are actively engaged with our new technology platforms and our commercial and technical teams are focused on high-impact growth opportunities.

我們有一個審慎的經營計劃，可以在不犧牲長期盈利增長的情況下解決今年宏觀經濟不確定性加劇的問題。我們為保護利潤和定位業務以利用不可避免的終端市場復甦所做的努力感到自豪。在這個運營[環境]中，我們有很多機會。我們的規模、流動性和戰略眼光應該使我們能夠穩定地應對和利用這些市場。我們的客戶積極參與我們的新技術平台，我們的商業和技術團隊專注於高影響力的增長機會。

This is a reflection of the longer-term momentum in our markets and the persistent iterative innovation we provide to our customers' products. Let me conclude with my gratitude to all of our stakeholders for their continued support of Element Solutions and in particular, my deep appreciation to our talented and dedicated people around the world, responsible for another year of growth.

這反映了我們市場的長期發展勢頭以及我們為客戶產品提供的持續迭代創新。最後，我要感謝我們所有的利益相關者對 Element Solutions 的持續支持，尤其是我對我們在世界各地才華橫溢、敬業奉獻的員工的深切感謝，他們負責又一年的增長。

Our success in the future will be a product of their tenacity and commitment that I'm grateful for it. Operator, please open the line for questions.

我們未來的成功將是他們堅韌不拔和承諾的產物，對此我深表感謝。接線員，請打開問題線路。

Thank you. (Operator Instructions) We will take our first question from Josh Spector with UBS.

謝謝。 （操作員說明）我們將從瑞銀的 Josh Spector 那裡回答我們的第一個問題。

Just first, a couple on the EBITDA guide. So first, wondering if you could walk through your expectations on the cadence through the year, I guess, particularly 1Q to 2Q, does that step up much? What drives that?

首先，EBITDA 指南上有一對夫婦。所以首先，想知道你是否可以通過你對全年節奏的期望，我想，特別是 1Q 到 2Q，這會增加很多嗎？是什麼驅使它？

And then second, assuming most of the unknown in your range is in the second half, what are the main drivers there we should be thinking about and watching in terms of high versus low end?

其次，假設您範圍內的大部分未知因素都在下半場，那麼我們應該考慮和關注高端與低端的主要驅動因素是什麼？

Sure thing, Josh. Thanks for the question. So our expectations for the year are for it to look like the reverse of 2022, right? So in 2022, we had a strong first half and a weaker second half, and we'll have the reverse in 2023. The first half of '23 will look like the second half of 2022. So expect around $240-or-so million of EBITDA in the first half, which does have a step-up from 1Q to 2Q. We won't have the Chinese New Year impact in 2Q, which accounts for some of that.

當然可以，喬希。謝謝你的問題。所以我們對今年的預期是它看起來像 2022 年的逆轉，對嗎？因此，在 2022 年，我們上半年表現強勁，下半年表現疲軟，而 2023 年則相反。23 年上半年看起來像 2022 年下半年。因此預計約為 240 億美元上半年的 EBITDA，從 1Q 到 2Q 確實有所上升。我們不會在第二季度受到農曆新年的影響，這是其中的一部分。

And then as you think about the range for the full year. The bigger variable is the second half, obviously. And that guidance range is predicated clearly on an electronics market recovery in the second half. And the strength of that recovery, the slope of that recovery is the largest variable of how our results will fall within that range, right? So the low end of the range implies call it, 10% to 11% EBITDA increase in 2 -- in the second half versus the first half and the high end implies about a 20% increase in the second half versus the first half.

然後當你考慮全年的範圍時。顯然，更大的變數是下半場。該指導範圍顯然基於下半年電子市場的複蘇。復甦的強度，復甦的斜率是我們的結果如何落在該範圍內的最大變量，對吧？因此，該範圍的低端意味著 2 中 10% 至 11% 的 EBITDA 增長 - 在下半年與上半年相比，高端意味著下半年與上半年相比增長約 20%。

There is reason to believe that we'll see that ramp. There's typical seasonality in the business, but then there are other indicators that suggest that give us confidence in electronics recovery in the second half, right? Smartphone units are forecast to be roughly flat this year and they'll be down significantly in the first half, which implies a real ramp in the second half. If the recovery comes later in the second half, it bodes very well for momentum into 2024.

有理由相信我們會看到那個斜坡。該行業存在典型的季節性，但還有其他指標表明我們對下半年電子行業的複蘇充滿信心，對吧？預計今年智能手機出貨量將基本持平，上半年將大幅下降，這意味著下半年將出現真正的增長。如果復蘇在下半年晚些時候出現，則預示著進入 2024 年的勢頭非常好。

And to the extent that we don't see that recovery we have cost levers at our disposal to preserve profits. So that's sort of how we think about the range.

就我們看不到復甦的程度而言，我們可以使用成本槓桿來保持利潤。這就是我們對范圍的看法。

No, that's helpful. I'm just wondering, I mean, how do cost fit into all this? I mean if you look at logistics, raws, those things, I mean how much have you absorbed and not recovered over the past year or so? And I mean you made a comment earlier, potential post-demand returns and inflation abates, like what would that scenario look like?

不，那很有幫助。我只是想知道，我的意思是，成本如何適應所有這些？我的意思是，如果你看看物流、原料和那些東西，我的意思是你在過去一年左右的時間裡吸收了多少但沒有恢復？我的意思是你早些時候發表評論，潛在的需求後回報和通脹減弱，就像那種情況會是什麼樣子？

Yes. That's the best scenario, right, where you see a recovery in electronics demand and you see moderation in input costs. We've seen our input costs stabilize in Q4, but we haven't seen them starting to come down yet. Logistics is a $25 million headwind year-over-year in 2022. Overall other raw material inflation takes total inflation in our cost of goods to about $100 million. And we've taken a lot of price, but we haven't gotten all of it. So there is a margin opportunity from potential deflation that would also help us get towards the higher end of our guidance range.

是的。這是最好的情況，對吧，你會看到電子產品需求的複蘇，而且你會看到投入成本的下降。我們已經看到我們的投入成本在第四季度穩定下來，但我們還沒有看到它們開始下降。物流在 2022 年同比增長 2500 萬美元。總體而言，其他原材料通脹使我們的商品成本總通脹達到約 1 億美元。我們付出了很多代價，但我們並沒有得到全部。因此，潛在的通貨緊縮帶來了利潤機會，這也將幫助我們達到指導範圍的高端。

We have continued to be opportunistic around price. And so there may be an opportunity associated with that as well in 2023.

我們繼續在價格方面投機取巧。因此，2023 年也可能會有與之相關的機會。

We will take our next question from John Roberts with Credit Suisse.

我們將接受瑞士信貸約翰羅伯茨的下一個問題。

Since we have Martin Franklin on the call, I thought I'd ask a question. Martin, how does the Board think about the portfolio? Do you need to be broader in the electronics, some of your competitors have a lot more breadth or maybe more semiconductor exposure? And do you see electronics just continuing to get larger relative to industrial because it grows faster? Or do you think at some point, you do an adjacency in industrial to get more balance between the portfolio?

既然我們有 Martin Franklin 接聽電話，我想我會問一個問題。 Martin，董事會如何看待投資組合？您是否需要在電子領域擴大業務範圍，您的一些競爭對手的業務範圍要廣得多，或者可能有更多的半導體業務？你是否看到電子產品相對於工業產品的規模越來越大，因為它增長得更快？或者你認為在某個時候，你在工業領域做鄰接以獲得投資組合之間的更多平衡？

Interesting question. I mean I will tell you, I've always believed in scale. What we've done successfully so far is bolt-on acquisitions. As you know, we're not afraid to be acquirers. Obviously, semiconductors parts of the market have better growth characteristics and come at a higher price. We've picked our spots where I think we've made a very good return on the investments that we've made.

有趣的問題。我的意思是我會告訴你，我一直相信規模。到目前為止，我們成功完成的是補強收購。如您所知，我們不怕成為收購者。顯然，市場的半導體部分具有更好的增長特徵並且價格更高。我們選擇了我認為我們已經從我們所做的投資中獲得了很好回報的地方。

But this company generates a lot of cash. We want to continue finding areas and pockets where we can grow for the things that I think the public has seen, there have been a number of things that we've looked at that the public haven't seen because we're very disciplined. And I think that both Ben and I, we're very much on the same page as to where we think opportunities exist. But we do compete very ably with some of the larger players out there. It takes time to take share. But I think the company has been very well positioned to move forward and frankly, grow faster than its end markets.

但是這家公司產生了大量現金。我們希望繼續尋找我們可以為我認為公眾已經看到的東西成長的領域和口袋，我們已經看到了很多公眾沒有看到的東西，因為我們非常有紀律。而且我認為 Ben 和我，我們在我們認為存在機會的地方非常一致。但我們確實可以與一些較大的參與者進行非常有能力的競爭。分享需要時間。但我認為該公司已經做好了向前發展的準備，坦率地說，增長速度快於其終端市場。

So yes, scale is always better. But I think I'm very happy with where the portfolio is today. And obviously, if we can expand it into adjacencies, we will.

所以是的，規模總是更好。但我認為我對今天的投資組合感到非常滿意。顯然，如果我們可以將其擴展到相鄰區域，我們就會這樣做。

And then a short-term question. SG&A was down a lot in the fourth quarter. Some of that would have been currency, but compensation is also a big part of how you variabilize your cost structure, so was there a reversal in the fourth quarter from over accruing earlier in the year given the year ended much weaker probably than re-budgeted?

然後是一個短期問題。 SG&A 在第四季度下降了很多。其中一些可能是貨幣，但薪酬也是你如何改變成本結構的重要組成部分，所以第四季度是否出現了今年早些時候超額累積的逆轉，因為今年結束時可能比重新預算的要弱得多？

Yes. So it's a pay-for-performance culture and this year, we had a strong year. We're proud of our results, but we didn't deliver the level of growth we would have expected coming into the year. And so there were some compensation accrual reversals that impacted the second half.

是的。所以這是一種按績效付費的文化，今年，我們表現強勁。我們為我們的業績感到自豪，但我們並沒有實現今年預期的增長水平。因此，一些薪酬應計逆轉影響了下半年。

And we will take our next question from Kieran De Brun with Mizuho.

我們將與 Mizuho 一起接受 Kieran De Brun 的下一個問題。

Good morning. I was just wondering if you could parse out a little bit more. I think you -- you mentioned you strengthened assembly and semis seem to be a little and circuit or a little bit weaker kind of ending the year. When we think about the cadence, I guess, throughout 2023. It seems like Assembly is still poised to be relatively strong throughout the course of the year with the (inaudible) recovery in circuitry semi.

早上好。我只是想知道您是否可以解析更多內容。我想你 - 你提到你加強了組裝和半決賽似乎有點和巡迴賽或有點弱的年底。當我們考慮節奏時，我想，整個 2023 年。隨著電路半（聽不清）的複蘇，似乎 Assembly 在整個一年中仍將保持相對強勁。

Is there any color you can give us there on how you're seeing that or how you that to progress throughout the year, that would be helpful.

您是否可以就您的看法或全年的進展情況向我們提供任何顏色，這會有所幫助。

Yes. Thanks for the question, Kieran. Yes, the assembly business had a strong -- certainly a relatively strong Q4 versus the circuitry and semiconductor businesses. The explanation for that is that the assembly business has a broader electronics exposure and more into call it, industrial end markets.

是的。謝謝你的問題，基蘭。是的，與電路和半導體業務相比，組裝業務有一個強勁的 - 當然是第四季度相對強勁。對此的解釋是，組裝業務擁有更廣泛的電子業務，更確切地說，是工業終端市場。

We've got a big piece of that business that goes into power electronics for electric vehicles, and we've seen significant production ramps there. And so that resilience should persist over the -- over 2023. Again, we expect the dynamics in the second half to carry over into the first half and the assembly business should be -- should not be exempt from that.

我們在電動汽車的電力電子領域擁有很大一部分業務，而且我們已經看到那裡的生產量大幅增加。因此，這種彈性應該會持續到 2023 年以上。同樣，我們預計下半年的動態將延續到上半年，而裝配業務應該 - 不應免除這一點。

Great. And then I think you just mentioned quickly, and you already touched on this a little bit, but cost levers to preserve profits if we end up in a more challenging environment throughout the course of '23. So if you can just touch a little bit more on that, that would be helpful.

偉大的。然後我認為你剛剛提到的很快，你已經稍微談到了這一點，但是如果我們在整個 23 年的過程中最終處於更具挑戰性的環境中，那麼成本槓桿可以保持利潤。所以，如果你能多談一點，那會很有幫助。

Yes. We didn't throw all the levers at our disposal in 2022. And so as we look to 2023, we've got a significant cost opportunity at our disposal if we feel the need or the demand environment does not justify the level of spend that we have in our plan. Travel has increased somewhat significantly from 2021 into 2022. Incentive compensation is still -- accruals will be there.

是的。我們並沒有在 2022 年動用所有的槓桿。因此，展望 2023 年，如果我們覺得有必要或需求環境不能證明支出水平是合理的，我們就有了一個可以支配的重大成本機會我們有我們的計劃。從 2021 年到 2022 年，旅行有所增加。激勵性薪酬仍然存在——應計費用將會存在。

And then other, we'll call it, discretionary spend that we can very quickly moderate without sacrificing long-term growth, right? And so that's how we think about these things when we go after cost, it's not innovation spend. It's not large groups of people -- these are the people our customers rely on and will deliver the long-term growth we expect from these businesses, but there's still a substantial opportunity in cost when the demand environment isn't there.

然後是其他的，我們稱之為可自由支配的支出，我們可以在不犧牲長期增長的情況下快速節制，對吧？這就是我們在追求成本時考慮這些事情的方式，這不是創新支出。這不是一大群人——這些是我們的客戶所依賴的人，他們將帶來我們期望從這些業務中獲得的長期增長，但當需求環境不存在時，成本方面仍有很大的機會。

We will take our next question from Chris Kapsch with Loop Capital Markets.

我們將接受來自 Loop Capital Markets 的 Chris Kapsch 的下一個問題。

So you mentioned a couple of times in your formal remarks about the outperformance relative to the market, at least in the electronics space. I'm just curious about getting a little bit more granular on the dynamics there? Was this sort of a function of inventory management or likely more a function of your over the last 12 to 18 months, you've kind of had a disproportionate number of wins and getting specked into new PCB lines.

所以你在正式評論中多次提到相對於市場的表現，至少在電子領域。我只是想更詳細地了解那裡的動態？在過去的 12 到 18 個月裡，這種庫存管理功能或者更可能是您的功能，您已經獲得了不成比例的勝利並被選中進入新的 PCB 生產線。

I'm wondering if that's contributing or is it over-indexed relative to some end markets versus others? Just a little bit more explanation there would be helpful. And then as you see the electronics end market inflect later this year, is that outperformance expected to persist, will become more pronounced or diminished? Any color on those dynamics?

我想知道這是否有貢獻，或者相對於某些終端市場與其他終端市場相比，它的指數是否過高？多一點解釋會有幫助。然後，正如您所看到的電子終端市場在今年晚些時候發生的變化，這種出色的表現預計會持續下去，會變得更加明顯還是減弱？這些動態有什麼顏色嗎？

Sure thing, Chris. And we tried to call that out in the slide deck where we look at our biggest end markets and show our relative performance. We look at the electronics market and smartphone is the biggest end market for us there. Smartphone units were down 11% in 2022. They were down 18% in Q4. We grew our electronics business organically on the top line in 2022.

當然可以，克里斯。我們試圖在我們查看我們最大的終端市場並展示我們的相對錶現的幻燈片中指出這一點。我們看看電子市場，智能手機是我們最大的終端市場。智能手機出貨量在 2022 年下降了 11%。第四季度下降了 18%。到 2022 年，我們的電子業務有機地增長到了頂線。

And then our higher end electronics portfolio in circuitry and semiconductor was down in Q4, but not nearly to the extent that the smartphone market was down. It's hard to calculate market share intra-period, but we've clearly outperformed units in the biggest end markets that we have exposure to in electronics. And similarly, in industrial, we did lag automotive production in the third quarter, which we were concerned by, but it was really driven by inventory in the channel clearing, and we reaccelerated in Q4 and see significant big new wins contributing to our industrial portfolio in 2023 that gives us a high level of confidence in share. And then when we think about what we're doing in Power Electronics, for example, where we're in a leading position, we're clearly outperforming that broader electronics market because of our share there and the relative growth there.

然後，我們在電路和半導體領域的高端電子產品組合在第四季度出現下滑，但還沒有達到智能手機市場下滑的程度。很難計算期間內的市場份額，但我們在電子產品領域所涉足的最大終端市場中的表現明顯優於單位。同樣，在工業領域，我們在第三季度確實落後於我們所關注的汽車生產，但這實際上是由渠道清理中的庫存推動的，我們在第四季度重新加速，並看到重大的新勝利為我們的工業產品組合做出了貢獻2023 年，這讓我們對份額充滿信心。然後，當我們考慮我們在電力電子領域所做的事情時，例如，我們處於領先地位，由於我們在那裡的份額和那裡的相對增長，我們的表現顯然優於更廣泛的電子市場。

So overall, we do see this business as outperforming its end markets. We do see significant share opportunities coming our way, and we feel very good about our relative performance.

因此，總的來說，我們確實認為這項業務的表現優於其終端市場。我們確實看到了重要的分享機會，我們對我們的相對錶現感到非常滿意。

So just to follow-up on that. So it's really primarily a function of the success you've had in proactively getting landing effectively new business and new PCB production lines over the course of the last year?

所以只是為了跟進。所以這真的主要是你在過去一年中積極有效地獲得新業務和新 PCB 生產線的成功的函數嗎？

So I think it's new wins in mix. Our exposure to faster-growing end markets and concentration in those faster-growing end markets is growing our share of the overall pie.

所以我認為這是混合的新勝利。我們對增長更快的終端市場的接觸以及對那些增長更快的終端市場的集中正在增加我們在整體市場中的份額。

Okay. Got it. And then one follow-up on the -- just to try to reconcile your EBITDA guidance and your free cash flow and you've given the interest expense, cash taxes, CapEx assumption. So the plug there is working capital. Just wondering if that's just a function of sales recovering, it looks like the -- your assumption working capital source of cash and anything else going on there we should be aware of?

好的。知道了。然後是一個後續行動——只是試圖協調你的 EBITDA 指導和你的自由現金流，你已經給出了利息支出、現金稅、資本支出假設。所以插頭有營運資金。只是想知道這是否只是銷售恢復的一個功能，它看起來像 - 你假設的現金營運資金來源以及我們應該知道的其他任何事情？

Yes. So working capital is the plug and there's sort of multiple ways for us to get to our free cash flow number. If we come in towards the higher end of EBITDA. We're going to be investing in working capital because the business will be accelerating in the second half. And if we don't see that trend, working capital will be a smaller use of cash. The business does require an investment in working capital as it grows but we feel comfortable that different EBITDA outcomes we get to a comparable cash flow number.

是的。所以營運資金是插頭，我們有多種方法可以獲得我們的自由現金流量。如果我們進入 EBITDA 的高端。我們將投資營運資金，因為業務將在下半年加速發展。如果我們看不到這種趨勢，營運資金將是現金的較少使用。隨著業務的增長，該業務確實需要對營運資金進行投資，但我們對不同的 EBITDA 結果獲得可比較的現金流量數字感到滿意。

And just the relative inflation or deflation in metals, how does that play out in the working capital number.

僅金屬的相對通貨膨脹或通貨緊縮，這在營運資金數量中如何發揮作用。

So it's Carey. No, the reality is the lower metal prices that we have today versus the average of 2022, should all else equal, reduce our need for inventory, dollars investment in inventory. I don't think you're going to see a significant impact there based on current prices of things like (inaudible) which are actually not that far below the 2022 average price. But certainly, if those come down, the dollars that we require to invest will come down, but also our reported sales will come down commensurately. And so as we look at this from an inventory days perspective, it's not really an impact.

所以是凱里。不，現實是我們今天的金屬價格低於 2022 年的平均價格，如果其他條件相同，減少我們對庫存的需求，減少對庫存的美元投資。根據（聽不清）之類的當前價格，我認為您不會在那裡看到重大影響，這些價格實際上並不遠低於 2022 年的平均價格。但可以肯定的是，如果這些下降，我們需要投資的美元就會下降，而且我們報告的銷售額也會相應下降。因此，當我們從庫存天數的角度來看這個問題時，它並不是真正的影響。

(Operator Instructions) And we will take our next question from Jon Tanwanteng with CJS Securities.

（操作員說明）我們將在 CJS 證券公司接受 Jon Tanwanteng 的下一個問題。

I was just wondering how confident are you in the guidance range and then the second half pickup that you're being out there. Are your customers specifically telling you to get ready for better demand? And are there specific new projects and programs that are ramping within the electronics business? Or is it more of a top-down implication where smartphone and other electronics inventories has troughed over markets just simply have to pick up to get back to the flat industry forecast?

我只是想知道你在指導範圍內有多自信，然後是你在那裡的下半場皮卡。您的客戶是否特別告訴您為更好的需求做好準備？電子業務中是否有特定的新項目和計劃正在興起？或者它更像是一種自上而下的暗示，即智能手機和其他電子產品庫存已經在市場低谷，只需簡單地回升才能回到持平的行業預測？

The general consensus is for an electronics recovery in the second half of the year. And broader industry participants are indicating that it's supported by third-party research around the recovery -- around flat smartphone units year-over-year. Now historically, what we've seen is after a bad smartphone year, you see a good one which would suggest an even greater ramp in the second half than what's implied in our guidance.

普遍的共識是電子產品將在下半年復蘇。更廣泛的行業參與者表示，它得到了圍繞復甦的第三方研究的支持——圍繞平板智能手機同比增長。現在從歷史上看，我們看到的是在智能手機表現不佳的一年之後，你會看到一個好的智能手機年，這表明下半年的增長速度比我們的指導中所暗示的還要大。

But this is not an industry where there are 9-month lead times. And so it is very -- it is plausible that, that recovery doesn't occur. And the way we think about our guidance is that there are multiple ways to win. We have that cost lever at our disposal. As I mentioned in the prepared remarks, we have wind in our sales in the Industrial and Specialty business, and we've got more conviction around that because we see it and it doesn't have the same level of ramp. But again, we can get to our guidance range in multiple ways. That's the hallmark of this business is a variable operating cost nature, the ability to preserve profits when demand doesn't materialize.

但這不是一個有 9 個月交貨時間的行業。因此，很可能，復甦不會發生。我們對我們的指導的看法是，有多種方法可以取勝。我們擁有可以支配的成本槓桿。正如我在準備好的評論中提到的那樣，我們在工業和專業業務的銷售中有風，我們對此更有信心，因為我們看到了它並且它沒有相同水平的斜坡。但同樣，我們可以通過多種方式達到我們的指導範圍。該業務的特點是可變的運營成本性質，即在需求沒有實現時保持利潤的能力。

Understood. And then just a question on the EPS guidance for the year. Is there a specific amount of shares underlying that, whether you're repurchasing or not?

明白了。然後只是關於今年 EPS 指南的問題。無論您是否回購，是否有特定數量的股票作為基礎？

So if you take that range from EBITDA down to EPS, you need a little bit of capital allocation to get to the low end of EPS compared to low end of EBITDA. And then on the high end, there's really no capital allocation assumed in some of the other levers like tax, et cetera, all the other way. So I would think about some capital allocation on the low end but not significant.

因此，如果您將這個範圍從 EBITDA 降低到 EPS，與 EBITDA 的低端相比，您需要一點資本配置才能達到 EPS 的低端。然後在高端，在其他一些槓桿（如稅收等）中確實沒有假定資本配置。所以我會考慮在低端進行一些資本配置，但並不重要。

Understood. Just one more, if I could. As you head into Q1, I was just wondering about the sequential expectations for mix between industrial electronics and electronics and maybe within the kind of the subsegments if you're seeing anything unusual just on a sequential basis?

明白了。再來一個，如果可以的話。當你進入第一季度時，我只是想知道對工業電子產品和電子產品之間混合的連續預期，如果你在連續的基礎上看到任何不尋常的東西，也許在子細分市場中？

Sequentially, I'd characterize electronics as being a little softer because the Lunar New Year impact just means fewer production days in Asia, which is where the bulk of that electronics business is and the balance of that being covered by the Industrial and Specialty business. And between those 2 things, you get to what we talked about a couple of percentage sequential EBITDA growth.

因此，我將電子產品描述為稍微軟一點，因為農曆新年的影響僅意味著亞洲的生產天數減少，而亞洲是大部分電子業務所在的地方，而工業和專業業務則涵蓋了其餘部分。在這兩件事之間，你得到了我們談到的幾個百分比連續 EBITDA 增長。

We will take our next question from Steve Byrne with Bank of America.

我們將接受來自美國銀行的 Steve Byrne 的下一個問題。

This is Rock Hoffman on for Steve Byrne. You guys already mentioned automotive and telecom infrastructure, I was wondering if you're seeing any other green shoots in the electronics market, particularly in the high-end tech market that give confidence in a strong TH recovery? And what does this guidance numerically assume for end market growth, particularly for autos and handsets in 2023?

這是 Rock Hoffman 代替 Steve Byrne。你們已經提到了汽車和電信基礎設施，我想知道您是否在電子市場看到任何其他萌芽，特別是在高端技術市場，這讓人們對 TH 的強勁復甦充滿信心？對於 2023 年的終端市場增長，尤其是汽車和手機，該指南在數字上假設了什麼？

So it's hard to speak about green shoots and electronics right now at the high end. I think that generally across the industry, folks are expecting trough in Q1, Q2 and that is what is implied by our guidance. And that is what we are seeing. We're seeing a particularly weak electronics market here and now today.

因此，現在很難談論高端產品的萌芽和電子產品。我認為，一般來說，整個行業的人們都在期待第一季度和第二季度的低谷，這就是我們的指導所暗示的。這就是我們所看到的。我們現在看到電子市場特別疲軟。

Our guidance implies roughly flat units in smartphones, right? We talked about that. But there's a phasing to that. The first half is going to be down. Remember, in 2022, the first half was very strong in electronics. And then the second half necessarily will be much stronger than the second half of 2022, which underpins that inflection. We're talking about the electronics business. With regard to automotive, we're modeling roughly flat automotive units, a modest pickup, which is roughly in line with third-party estimates.

我們的指導暗示智能手機的單位大致持平，對嗎？我們談過那個。但這是一個階段性的。上半年會下降。請記住，在 2022 年上半年，電子產品非常強勁。然後下半年必然會比 2022 年下半年強得多，這支撐了這種拐點。我們正在談論電子業務。關於汽車，我們正在模擬大致平坦的汽車單元，適度的皮卡，大致符合第三方估計。

Understood. My second question, just are weaker volumes prohibiting any realization of lower raw material costs? Or are you seeing those flow through into current results. If the former, should we -- or should margin opportunity accelerate with the volumes? Just what's your general outlook for 2023 deflation or inflation more broadly.

明白了。我的第二個問題，銷量下降是否會阻礙降低原材料成本？或者您是否看到這些流向了當前的結果。如果是前者，我們是否應該——或者利潤機會應該隨著交易量的增加而加速？您對 2023 年通貨緊縮或更廣泛的通貨膨脹的總體前景是什麼？

So we don't have significant deflation in our guide. As we said in the fourth quarter, we saw input prices stabilizing. And so we've extrapolated that for 2023. So there is an opportunity from deflation. There's also a risk of inflation depending on how the economy in China develops over the course of 2023 post the COVID reopening. Of course, if demand improves because of that, that's an opportunity for us on the top line that likely offset any potential inflation.

所以我們的指南中沒有明顯的通貨緊縮。正如我們在第四季度所說，我們看到投入品價格趨於穩定。所以我們推斷到 2023 年。所以通貨緊縮是一個機會。還存在通貨膨脹的風險，這取決於 COVID 重新開放後中國經濟在 2023 年的發展情況。當然，如果需求因此而改善，這對我們來說是一個機會，可以抵消任何潛在的通貨膨脹。

And we will take our next question from David Silver with Seal King.

我們將與 Seal King 一起接受 David Silver 的下一個問題。

Ben you added some color, I think, on electronics and on smartphones. I was going to ask you, maybe if you could add a little detail to your comments about global automotive end markets. So in your prepared remarks, I mean in the press release, you talked about the market slowly normalizing in your supply chain clearing. But I was just wondering if you could maybe extend those comments a little bit.

本，我認為你在電子產品和智能手機上添加了一些色彩。我想問你，也許你可以在你對全球汽車終端市場的評論中添加一些細節。所以在你準備好的發言中，我的意思是在新聞稿中，你談到市場在你的供應鏈清算中慢慢正常化。但我只是想知道你是否可以稍微擴展一下這些評論。

I mean, is this a comment about semiconductor availability or other parts becoming available? Is it more directed towards global auto builds in general, improving? Or is this more related to the transition or the pace of the transition to EVs where your -- I consider your company very well positioned to benefit from that trend. So just a little color about what you're seeing in the automotive end markets.

我的意思是，這是關於半導體可用性或其他部件可用的評論嗎？總體而言，它是否更針對全球汽車製造、改進？或者這是否與向電動汽車的過渡或過渡的步伐更相關——我認為貴公司非常有能力從這一趨勢中受益。因此，關於您在汽車終端市場上看到的情況，請稍作了解。

Yes, absolutely. Thanks for the question. So the automotive production lagged expectations through the first half of 2022 and then accelerated in the back half, we lagged that acceleration in Q3 because there was inventory in the channel, not of our products but of our customers' products.

是的，一點沒錯。謝謝你的問題。因此，汽車生產在 2022 年上半年落後於預期，然後在下半年加速，我們在第三季度落後於加速，因為渠道中有庫存，不是我們的產品，而是我們客戶的產品。

And then we saw that normalize and we saw that inventory clear in Q4 where we outperformed units. And as we think about 2023, we see some growth from lapping that channel inventory and the share gains that we've had, some of the big wins we've had in the industrial and specialty in the Industrial Solutions business. So our comments about roughly flat auto and that supply chain being more constructive really relate to that, and that's primarily on the Industrial Solutions side.

然後我們看到正常化，我們看到第四季度庫存清空，我們的表現優於單位。當我們考慮到 2023 年時，我們會看到渠道庫存的增長和我們所擁有的份額收益，以及我們在工業解決方案業務的工業和專業方面取得的一些重大勝利。因此，我們對大致持平的汽車和更具建設性的供應鏈的評論確實與此相關，而且主要是在工業解決方案方面。

However, the power electronics and the proliferation of electric vehicle impact is in the electronics side of the business. And we had a question earlier about the relative outperformance of our assembly business within electronics, and that's really being driven by EVs where we do have a very strong position and anticipate continued profitable growth from the proliferation of electric vehicles. And that's not just a 2023 story. That's year story where we're still in the early innings.

然而，電力電子和電動汽車的普及對業務的電子方面產生了影響。早些時候我們有一個關於電子產品組裝業務相對優異表現的問題，這實際上是由電動汽車推動的，我們確實擁有非常強大的地位，並預計電動汽車的普及將帶來持續的盈利增長。這不僅僅是 2023 年的故事。那是一年的故事，我們仍處於早期階段。

I'd like to ask just a question now about general trends in working capital. So second half of the year, you cited a $70 million sourcing, I guess, or release of working capital. But if I look back in your results over the past couple of years. I mean it seems the buildup in working capital has been greater than the $70 million. Just in general, what are your expectations for working capital use or release during 2023? And how much of that factors into your $275 million free cash flow estimate?

我現在只想問一個關於營運資金總體趨勢的問題。所以今年下半年，我猜你引用了 7000 萬美元的採購或營運資金的釋放。但如果我回顧過去幾年的結果。我的意思是，營運資金的積累似乎已經超過了 7000 萬美元。總的來說，您對 2023 年營運資金的使用或釋放有何期望？你的 2.75 億美元自由現金流估算中有多少因素？

It's Carey. So I'll start with the 2023-point and then go back to the question over the last couple of years. So for 2023 we are assuming in the base case a use of work -- use of cash and working capital. Again, as we said earlier, it's really the plug to sort of get to that 2.75 and there's depending on the phasing of growth and the magnitude of growth, particularly in the second half of the year that number can vary pretty significantly in terms of the investment we'll make.

是凱莉。所以我將從 2023 點開始，然後回到過去幾年的問題。因此，對於 2023 年，我們假設在基本情況下使用工作——使用現金和營運資金。再次，正如我們之前所說，它確實是達到 2.75 的塞子，這取決於增長的階段和增長的幅度，特別是在今年下半年，這個數字在我們將進行的投資。

I think if you were to just do the walk from EBITDA down to the $275 million, it's roughly the same size investment that we made in 2022. And I would expect, again, that you would see the similar phasing that we see in most years where, sorry, that you would see (inaudible) that of growth where you'll see a pickup in those dollars invested as the year goes on. If you go back to 2020, 2021, the working capital as a percent of sales ticked up but has trended back down throughout 2022. And there's really 2 reasons that I think we've seen that grow a little faster than sales over that period.

我認為，如果你只是從 EBITDA 下降到 2.75 億美元，這與我們在 2022 年進行的投資規模大致相同。我再次預計，你會看到我們在大多數年份看到的類似階段對不起，你會看到（聽不清）增長，隨著時間的推移，你會看到投資的美元有所增加。如果你回到 2020 年、2021 年，營運資本佔銷售額的百分比有所上升，但在整個 2022 年呈回落趨勢。我認為我們確實看到了兩個原因，即我們看到那個時期的增長速度比銷售額快一點。

One is inflation in the input prices that we haven't fully offset in selling price, as we mentioned. And the other is the safety stock that we've had to build because of the supply chain disruptions that we've all seen. So I think there's opportunity over time. I don't think 2023 is setting up to be the year where all that safety stockholder release, but it's an opportunity over the longer term.

一個是投入價格的通貨膨脹，正如我們提到的，我們沒有在銷售價格中完全抵消。另一個是我們必須建立的安全庫存，因為我們都看到了供應鏈中斷。所以我認為隨著時間的推移會有機會。我認為 2023 年不會成為所有安全股東釋放的一年，但從長遠來看，這是一個機會。

(Operator Instructions) And we will take our next question from Angel Castillo with Morgan Stanley.

（操作員說明）我們將與摩根士丹利一起接受 Angel Castillo 的下一個問題。

I was hoping you could give us a little bit more color on, just on a regional basis, what you're seeing. Obviously, a lot of that overlaps with electronics and OEMs, but maybe in particular, some color on the industrial side of things, what you're seeing in Europe and North America. And as you think about kind of the improvements in industrial markets or Asia, what you're kind of seeing in those markets as well from a regional basis?

我希望你能給我們更多的顏色，只是在區域基礎上，你所看到的。顯然，其中很多與電子產品和原始設備製造商重疊，但也許特別是工業方面的一些顏色，就像你在歐洲和北美看到的那樣。當您考慮工業市場或亞洲的某種改善時，您在這些市場以及區域基礎上看到了什麼？

Yes. So I'll start with Europe, which is the best story. We were pretty cautious about Europe in the fall and early part of the winter with the risk of gas rationing and the impact of gas price inflation on our customers, right? We did that survey I mentioned in the prepared remarks. One of our largest customers in Europe and half of them expected to go to short work over the winter, and none of them did. And so the dynamics in Europe are much more constructive than we expected entering the year, though that is considered in our guidance.

是的。所以我將從歐洲開始，這是最好的故事。考慮到天然氣配給的風險以及天然氣價格上漲對我們客戶的影響，我們在秋季和初冬對歐洲非常謹慎，對吧？我們做了我在準備好的評論中提到的那個調查。我們在歐洲最大的客戶之一，其中一半希望在冬季進行短期工作，但沒有人這樣做。因此，歐洲的動態比我們進入今年的預期更具建設性，儘管我們的指導意見中考慮到了這一點。

In Asia, it's hard to get a good read on Asia before, call it, March because you have the Lunar New Year impact. Where there's some channel loading before the holiday and then the holiday can be a week or 2 weeks, but it's been slow, right? It's been slow partially because of the proliferation and because of the COVID impact on the workforce and recovering from the COVID lockdowns that we saw, we don't have a great sense today for the slope of recovery from COVID in China. That's a big variable for us. And then in North America, things have been pretty steady going back several quarters, and that's been a reasonably healthy market for us on the industrial side of the business.

在亞洲，之前很難很好地了解亞洲，稱之為三月，因為你有農曆新年的影響。假期前有一些頻道加載，然後假期可能是一周或 2 週，但速度很慢，對嗎？它之所以緩慢，部分原因是擴散以及 COVID 對勞動力的影響以及從我們看到的 COVID 封鎖中恢復，我們今天對中國從 COVID 中恢復的斜率沒有很好的認識。這對我們來說是一個很大的變數。然後在北美，幾個季度以來情況一直相當穩定，這對我們的工業業務來說是一個相當健康的市場。

All of those comments relate to industrial. But no big surprises, I would say, other than a positive surprise from Europe at this point in the year.

所有這些評論都與工業有關。但我想說，除了今年這個時候來自歐洲的積極驚喜之外，沒有什麼大的驚喜。

Got it. That's very helpful. And then just curious on your comments around Asia, I think one of -- another electronics company talked about PCB plans potentially restarting in the next few months. And also semi-fabs utilization rates starting to pick up and get back to maybe more normal after some destocking here.

知道了。這很有幫助。然後只是對你在亞洲的評論感到好奇，我認為其中一個 - 另一家電子公司談到 PCB 計劃可能會在未來幾個月內重啟。半晶圓廠的利用率也開始回升，並在此處進行一些去庫存後恢復到更正常的水平。

Are you hearing anything from your customers that seems to suggest a similar kind of cadence as we get maybe beyond first quarter? I recognize there's visibility more than a month up. But just anything you're hearing that maybe kind of reinforces that as well?

您是否從您的客戶那裡聽到任何似乎表明我們可能在第一季度之後出現類似節奏的消息？我知道有一個多月的能見度。但是，您聽到的任何事情也可能會加強這一點嗎？

Yes. We're not hearing anything inconsistent with that is what I would say. I think that overall, the industry believes that the second half will see a material recovery from a slow first half, and I think that we're all aligned in that regard.

是的。我們沒有聽到任何與我要說的不一致的事情。我認為，總體而言，業界認為下半年將從緩慢的上半年中看到實質性複蘇，而且我認為我們在這方面都是一致的。

And there are no further questions at this time. I will turn the call back to Ben Gliklich for any additional and closing remarks.

目前沒有其他問題。我會將電話轉回給 Ben Gliklich，以徵求任何補充和結束語。

Thank you, Abby. And thanks everybody for joining. We look forward to seeing you in the coming weeks. Have a good day.

謝謝你，艾比。感謝大家的加入。我們期待在接下來的幾週內見到您。祝你有美好的一天。

And ladies and gentlemen, this concludes today's conference call, and we thank you for your participation. You may now disconnect.

女士們，先生們，今天的電話會議到此結束，我們感謝您的參與。您現在可以斷開連接。