Element Solutions Inc (ESI) 2025 Q1 法說會逐字稿

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 which are subject to risks and uncertainties.

在今天的電話會議中，我們將做出一些前瞻性陳述，反映我們對公司未來業績和財務結果的當前看法。這些聲明是基於對未來事件的假設和預期，而這些假設和預期受風險和不確定性的影響。

Please refer to the earnings release supplemental slides and most recent SEC filings on our website for a discussion of material risk factors that could cause actual results to differ from our expectations and predictions.

請參閱我們網站上的收益發布補充幻燈片和最新的 SEC 文件，以了解可能導致實際結果與我們的預期和預測不同的重大風險因素。

Today's materials also include financial information that has not been prepared in accordance with US GAAP.

今天的材料還包括未按照美國公認會計準則編制的財務資訊。

Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-gap measures to comparable GAAP financial measures. It is now my pleasure to introduce our CEO Ben Glickl.

請參閱收益報告和補充投影片，以了解這些非差距指標與可比較 GAAP 財務指標的定義和對帳。現在我很高興介紹我們的執行長 Ben Glickl。

Thank you, Arun. Good morning, everybody. Thank you for joining. Element Solutions started in 2025 strong. We grew profits and continue to see contributions from progress executing on our breakthrough growth strategies. The trends that drove our performance in 2024 continued to propel us forward. There's been no pause in demand from fast growing AI, advanced packaging, and data center markets, and we also benefited from an improvement in consumer electronics markets in Asia.

謝謝你，阿倫。大家早安。感謝您的加入。Element Solutions 於 2025 年開始強勁發展。我們的利潤有所成長，並且持續看到突破性成長策略實施過程中的進步所帶來的貢獻。推動我們 2024 年業績的趨勢將繼續推動我們前進。快速成長的人工智慧、先進封裝和資料中心市場的需求從未停止，我們也受益於亞洲消費性電子市場的改善。

We grew mid single digits organically, despite ongoing softness in Western automotive and general industrial supply chains, and a mediocre market backdrop for Western smartphones.

儘管西方汽車和一般工業供應鏈持續疲軟，且西方智慧型手機市場表現平平，但我們的有機成長率仍達到中等個位數。

Our overall electronics business grew 10% organically on the back of our ongoing strong execution and consistent investment to improve our value proposition in the leading edge semiconductor and power electronics technologies.

由於我們持續強勁的執行力和持續的投資，我們的整體電子業務有機增長了 10%，以提升我們在前沿半導體和電力電子技術方面的價值主張。

Sales from our wafer level packaging products grew more than 20% as programs on leading edge nodes continue to ramp, including a significant pickup from high bandwidth memory applications.

隨著前沿節點專案的持續發展，包括高頻寬記憶體應用的顯著回升，我們的晶圓級封裝產品的銷售額成長了 20% 以上。

Order patterns from these customers remain strong. Similarly, despite well-documented weakness from a major domestic electric vehicle OEM, our power electronics business grew nicely in the quarter from new winds that have broadened our customer base. Several years ago we had a collection of electronics businesses with good capabilities in select niches.

這些客戶的訂單模式依然強勁。同樣，儘管國內主要電動車原始設備製造商表現疲軟，但得益於擴大客戶群的新風，我們的電力電子業務在本季度實現了良好成長。幾年前，我們擁有一群在特定領域具有良好實力的電子企業。

Today, we have a single unified electronics business that is leading in important emerging categories, collaborating across its different product areas to provide system-level solutions to OEMs and building a pipeline of breakthrough innovation that should support future growth.

如今，我們擁有一個統一的電子業務部門，該部門在重要的新興領域處於領先地位，在不同的產品領域開展協作，為原始設備製造商 (OEM) 提供系統級解決方案，並建立了支持未來成長的突破性創新管道。

This has been a deliberate transformation, and we're only just beginning to see the results. Electronics is also supporting our business at a time of cyclical weakness in our industrial and specialty segment. In addition to a weak overall backdrop in industrial markets, the segments suffered from timing-related delays in certain offshore projects. The offshore market remains healthy, and we expect to recover those volumes in the second half of 2025.

這是經過深思熟慮的轉變，我們才剛開始看到成果。在我們的工業和專業領域出現週期性疲軟的時候，電子產品也為我們的業務提供了支援。除了工業市場整體疲軟之外，各部門也遭遇某些海上工程因時間因素而出現的延誤。海上市場依然健康，我們預計 2025 年下半年海上市場交易量將恢復。

Despite these dynamics, profitability in the INS segment was relatively steady year on year due to modest raw material deflation and the proven price and cost discipline that we've demonstrated for the past several quarters. Our results in the first quarter are not reflective of the level of macroeconomic volatility of the current moment.

儘管存在這些動態，但由於原材料價格適度下降以及我們在過去幾個季度中表現出的行之有效的價格和成本紀律，INS 部門的盈利能力同比相對穩定。我們第一季的業績並不能反映當前宏觀經濟波動的水平。

On the other hand, we have a demonstrated ability to be nimble in periods of uncertainty and a clear track record of navigating through these periods by focusing on our customers while also managing costs as necessary to preserve profits.

另一方面，我們已證明有能力在不確定時期保持靈活，並且透過專注於客戶同時在必要時管理成本以保持利潤，有清晰的記錄來度過這些時期。

We remain steadfast in pursuing thoughtful long-term investment to develop strategic capabilities that support the technologies that we expect to drive our markets. The recent periods of electronics contraction and recovery, we've maintained and selectively grown sales and technical resources needed to support those markets.

我們始終堅定不移地進行深思熟慮的長期投資，以發展支持我們期望推動市場發展的技術的策略能力。在最近電子產品萎縮和復甦的時期，我們維持並選擇性地增加了支持這些市場所需的銷售和技術資源。

You should not expect that investment posture to change with renewed market volatility. With our graphics sale completed in Q1, we're fortunate to have the strongest balance sheet in our history as ESI.

您不應期望投資態勢會隨著市場再次波動而改變。隨著我們在第一季完成圖形銷售，我們很幸運擁有 ESI 歷史上最強勁的資產負債表。

We have substantial capacity to deploy capital to drive long-term shareholder value and expect the current market to create attractive opportunities.

我們擁有充足的資本部署能力，可以推動長期股東價值，並預期當前市場將創造出極具吸引力的機會。

Carey will now take you through our first quarter business results in more detail. K.

凱裡現在將向您更詳細地介紹我們第一季的業務成果。K.

Thanks, Ben. Good morning, everyone. On slide 3, you can see a summary of our first quarter financial results. Organic sales and constant currency adjusted EBITDA both grew 5% year over year. Adjusted EBITDA of $128 million was above our guidance target for the quarter.

謝謝，本。大家早安。在投影片 3 上，您可以看到我們第一季財務表現的摘要。有機銷售額和固定匯率調整後的 EBITDA 均較去年同期成長 5%。調整後的 EBITDA 為 1.28 億美元，高於我們本季的指導目標。

Electronics' organic growth of 10% was broad-based across historically higher margin, higher valued categories in circuitry and semiconductor, as well as relatively lower margin assembly materials for consumer electronics.

電子產品的有機成長達到 10%，這主要得益於歷史上利潤率較高、價值較高的電路和半導體產品類別，以及利潤率相對較低的消費性電子產品組裝材料。

This translated into constant currency adjusted EA growth of 9% in electronics. ESI's adjusted EBITDA margin decline roughly 30 basis points year over year in constant currency terms. These margins were negatively impacted by higher pass through metal prices, which drove a 70 basis point headwind relative to the same quarter last year.

這意味著，以固定匯率調整後的電子產業 EA 成長率為 9%。以固定匯率計算，ESI 調整後的 EBITDA 利潤率年減約 30 個基點。這些利潤率受到金屬價格上漲的負面影響，與去年同期相比，利潤率下降了 70 個基點。

Excluding the impact of roughly $100 million to pass through metal sales and assembly solutions, our adjusted EBITDA margin would have been 26%, corresponding to a 50 basis point improvement versus last year.

不計入透過金屬銷售和組裝解決方案產生的約 1 億美元的影響，我們的調整後 EBITDA 利潤率將達到 26%，比去年同期提高了 50 個基點。

While FX rates have improved for us recently, currency negatively impacted total company net sales in the first quarter by roughly 3%, and with a roughly $5 million a year over year headwind to adjusted EBITDA.

雖然外匯匯率最近對我們有利，但貨幣對第一季公司總淨銷售額產生了約 3% 的負面影響，對調整後的 EBITDA 造成了約 500 萬美元的年比不利影響。

We expect this to reverse in Q2 and become a tailwind based on current exchange rates. On slide 4, we share additional detail on the drivers of organic net sales growth in our 2 segments. In electronics, we saw double digit growth with strong performance across all three business units. In assembly, stronger consumer electronics demand in Asia and the Americas, more than offset continued industrial weakness, primarily in Western Europe.

我們預計這種情況將在第二季度發生逆轉，並根據當前匯率成為順風。在第 4 張投影片上，我們分享了更多有關我們兩個部門的有機淨銷售額成長驅動因素的細節。在電子領域，我們實現了兩位數的成長，三個業務部門均表現強勁。在組裝方面，亞洲和美洲對消費性電子產品的需求增強，足以抵消工業（主要是西歐）持續的疲軟。

Advanced specialty spa volumes for various computing applications grew meaningfully, and we saw strong growth of technically challenging engineered assembly solutions used in server and data center applications.

用於各種運算應用的高級專業 SPA 數量顯著增長，我們看到用於伺服器和資料中心應用的技術挑戰性工程組裝解決方案的強勁增長。

Circuitry solutions sales improved 8% organically, with growth continuing to come from data center applications, memory disk markets, and specialty finishes for circuit boards in the Asian EV market. Our business mix continues to shift towards B2B markets as applications for servers, data centers, and high performance computing grow rapidly. This transition should dampen both quarterly seasonality and general cyclicality over time.

電路解決方案銷售額有機成長 8%，成長繼續來自資料中心應用、儲存磁碟市場以及亞洲電動車市場的電路板專用塗層。隨著伺服器、資料中心和高效能運算應用的快速成長，我們的業務組合繼續轉向 B2B 市場。這種轉變應該會抑制季度季節性和整體週期性。

Semiconductor Solutions' organic net sales grew 17% from continued robust demand in wafer level packaging for semi-fab and OSA customers in Asia. Our vehicle copper damaging product line grew north of 20% this quarter.

由於亞洲半晶圓廠和 OSA 客戶對晶圓級封裝的持續強勁需求，半導體解決方案的有機淨銷售額增長了 17%。本季度，我們的車輛銅損產品線成長了 20% 以上。

The customer proximity we gained in 2023 by terminating our distribution agreement and going direct to our customers, continues to yield great results.

2023 年，我們透過終止分銷協議並直接面向客戶，與客戶建立了密切聯繫，並繼續帶來豐碩的成果。

We expect to commercialize two new leading edge products that further support advanced packaging applications later this year. Our power electronics products also continue to grow well in the first quarter. We've made substantial progress broadening the Argomaxined silver technology customer base to electric vehicle manufacturers in Asia and in Europe.

我們預計今年稍後將實現兩款新型尖端產品的商業化，以進一步支援先進的封裝應用。我們的電力電子產品在第一季也持續保持良好的成長。我們在將 Argomaxined 銀技術客戶群擴展到亞洲和歐洲的電動車製造商方面取得了實質進展。

These new customer wind signal growing commercial traction and validates our leading technology position in a rapidly growing end market. Industrial and specialty organic net sales decline in 2% year over year. The 1% decline in the core industrial business was largely volume-driven and concentrated in Europe.

這些新客戶風向標誌著商業吸引力的不斷增長，並證明了我們在快速成長的終端市場中的領先技術地位。工業和特種有機產品淨銷售額較去年同期下降 2%。核心工業業務下降 ​​1% 主要是因為銷售量下降，且集中在歐洲。

We have not yet seen a pick up. Recent policy changes in Europe towards infrastructure and defense investment may drive an increase in industrial activity that should benefit our business. Offshore year over year sales decline in the quarter was a result of timing for a few large orders that fell into the latter part of the year. We continue to expect healthy growth for that business this year on the back of pricing and new wins.

我們尚未看到好轉。歐洲最近在基礎設施和國防投資方面的政策變化可能會推動工業活動的成長，這將有利於我們的業務。本季海外銷售額年減是由於一些大訂單的時間安排在了下半年。我們繼續預計，在定價和新勝利的推動下，該業務今年將實現健康成長。

Slide 5 addresses cash flow and the balance sheet. We generated $30 million of adjusted free cash flow in Q1. The adjustment takes into consideration the sale of our graphics business and certain non-recurring expenses and tax items. The first quarter is always our slowest from a cash flow standpoint, given the semiannual interest payment on our bonds and annual incentive payments. We invested $12 million into the working capital, which primarily reflects a seasonal inventory bill and higher accounts receivable due to increased.

投影片 5 討論現金流和資產負債表。我們在第一季產生了 3000 萬美元的調整後自由現金流。該調整考慮了我們圖形業務的出售以及某些非經常性費用和稅項。從現金流的角度來看，第一季始終是我們最慢的季度，因為我們需要每半年支付一次債券利息和年度獎勵金。我們向營運資金投資了 1,200 萬美元，這主要反映了季節性庫存費用和因增加而產生的更高應收帳款。

Caps in the quarter was $11 million somewhat below our guided run rate. We still plan to invest roughly $65 million over the course of the year to support strategic growth initiatives. Now turning to the balance sheet, Our net leverage ratio at the end of the quarter was 2.1 times, which is the lowest level in our history of ESI. Our capital structure remains fully fixed at an effective rate of 4%, and we have no debt maturities until 2028.

本季的上限為 1100 萬美元，略低於我們的指導運行率。我們仍計劃在今年投資約 6,500 萬美元來支持策略性成長計劃。現在轉向資產負債表，我們本季末的淨槓桿率為 2.1 倍，這是我們 ESI 歷史上的最低水準。我們的資本結構仍然完全固定在 4% 的有效利率，並且我們的債務到期日直到 2028 年。

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

說完這些，我就把電話轉回給本。本。

Thank you, Carey.Our business fared well through the first quarter despite the specter of trade actions impacting business and consumer sentiment. But we're a short cycle business, and any economic assumption for the balance of the year comes with macro uncertainties.

謝謝你，凱裡。儘管貿易行動影響了商業和消費者情緒，但我們的業務在第一季表現良好。但我們是一個短週期產業，對今年餘下時間的任何經濟假設都伴隨著宏觀不確定性。

Given our global footprint, the recently announced trade actions have added complexity to our business ecosystem. In this uncertain moment, there are immutable aspects of our business that merit. Reiterating. We operate locally in most of our markets with sourcing, manufacturing, and technical support resources close to our customers. A diversified and regionalized manufacturing footprint allows us to be nimble to accommodate dynamic trade flows. Our products represent a tiny fraction of the cost of high-value goods, but are integral to their performance.

鑑於我們的全球影響力，最近宣布的貿易行動增加了我們商業生態系統的複雜性。在這個不確定的時刻，我們的業務中有一些不可改變的方面是值得的。重申。我們在大多數市場進行在地化運營，並向客戶提供靠近採購、製造和技術支援的資源。多元化和區域化的製造足跡使我們能夠靈活地適應動態的貿易流。我們的產品僅佔高價值商品成本的一小部分，但對其性能至關重要。

Thanks to those attributes, we believe we can mitigate most of the direct impact from ongoing and potential future tariffs on our cost structure. Additionally, we're in the midst of initiatives to further localized sourcing and remain in regular communication with suppliers and customers around ways to mitigate cost issues that arise as a result of the ongoing tariff situation.

由於這些特點，我們相信我們可以減輕當前和未來潛在的關稅對我們的成本結構的大部分直接影響。此外，我們正在採取措施進一步實現在地化採購，並與供應商和客戶保持定期溝通，探討如何緩解因持續關稅情況而產生的成本問題。

There may also prove to be opportunities where competition may not have the same luxuries of flexibility and geographic breadth that we enjoy.

也可能存在這樣的機會，即競爭對手可能不具備我們所享有的彈性和地理廣度。

In the absence of additional clarity around tariff implementation and its impact on demand, without any emergent signs of a slowdown in our core markets and with some cushion provided by the weaker US dollar and outperformance in Q1, we're maintaining our initial full year guidance of adjusted EBITDA between $520 and $540 million as our current best estimate of earnings potential this year.

由於缺乏有關關稅實施及其對需求影響的更多明確信息，且我們的核心市場沒有出現任何放緩跡象，並且美元走弱和第一季度的優​​異表現提供了一些緩衝，我們維持調整後 EBITDA 在 5.2 億美元至 5.4 億美元的全年初始指引，作為我們目前對今年盈利潛力的最佳估計。

For the second quarter of 2025, we expect a similar demand picture to Q1 and therefore expect adjust the EBITDA in the range of $120 million to $125 million which is roughly flat sequentially when removing the $4 million dollar contribution from our graphics business in Q1.

對於 2025 年第二季度，我們預計需求情況與第一季類似，因此預計調整 EBITDA 在 1.2 億美元至 1.25 億美元之間，如果扣除第一季圖形業務的 400 萬美元貢獻，這一數字將與上一季基本持平。

This assumes that tariffs do not have a sequential demand impact. Which is the best assumption that we can make today, especially based on April trading, which has been solid thus far. As we've demonstrated repeatedly in recent periods of uncertainty, whether during prior tariff escalations in 2019, COVID in 2020, or the inflationary impacts that followed, we're prepared to react quickly to shifts in demand and cost.

這假設關稅不會對需求產生連續影響。這是我們今天可以做出的最佳假設，尤其是基於四月迄今一直表現穩健的交易情況。正如我們在最近的不確定時期反覆證明的那樣，無論是在 2019 年的關稅上調期間、2020 年的新冠疫情期間，還是隨後的通膨影響期間，我們都準備好對需求和成本的變化做出快速反應。

We have a highly variable OpEx structure and local teams that can rapidly respond to customer needs. We are prepared to navigate the dynamic environment that has emerged.

我們擁有高度變動的營運支出結構和可以快速回應客戶需求的本地團隊。我們已做好準備應對已經出現的動態環境。

It was a good start to 2025. Commercially, we built a high quality, high probability pipeline of large leading edge electronics opportunities and margin enhancing industrial projects. We think these are unlikely to be derailed by current circumstances.

這是2025年的一個好開始。在商業方面，我們建立了高品質、高機率的大型前沿電子機會和提高利潤率的工業項目管道。我們認為這些不太可能因當前情況而脫軌。

Operationally, we're increasing manufacturing capacity for future growth areas such as nano copper and power electronics, streamlining our legacy manufacturing footprint, and we're building research and applications development and high leverage geography.

在營運方面，我們正在提高奈米銅和電力電子等未來成長領域的製造能力，精簡我們傳統的製造足跡，並且我們正在建立研究和應用開發以及高槓桿地理位置。

We continue to execute other functional process improvement programs to add efficiency across the organization. Our company is executing well, with long-term growth prospects as good if not better, than in the past. That is a tribute to our teams who are responsible for another good quarter of both results and progress.

我們將繼續執行其他功能流程改善計劃，以提高整個組織的效率。我們公司經營狀況良好，長期成長前景與過去一樣好，甚至更好。這是對我們團隊的讚揚，他們為本季度的另一個良好業績和進步做出了貢獻。

So let me close by thanking all of our stakeholders for their continued support of development solutions and in particular our talented and dedicated people around the world working productively and collaboratively and quite creatively, I would add, to support our customers and drive long-term value for our shareholders.

最後，我要感謝所有利害關係人對開發解決方案的持續支持，特別是感謝我們在世界各地的才華橫溢、敬業的員工，他們富有成效、協作且富有創造力地工作，為我們的客戶提供支持，並為我們的股東創造長期價值。

With that operator, please open the line for questions.

請與該接線員聯繫，以便我們解答疑問。

Thank you. (Operator Instructions)

謝謝。（操作員指示）

Josh Spector with UBS.

瑞銀的 Josh Spector。

Hey. Guys. This is James Cannon not for Josh. Congrats on a solid quarter. I just wanted to poke on. I just wanted to poke on the guidance range and particularly since you're not including any significant impact from tariffs, as we think about the low end of the range, can you just remind us what some of the macro indicators that are underlying that assumption are?

嘿。夥計們。這是詹姆斯‧坎農 (James Cannon)，不是喬許 (Josh)。恭喜本季業績穩健。我只是想繼續探究一下。我只是想對指導範圍進行一些說明，特別是由於您沒有包括關稅的任何重大影響，當我們考慮範圍的低端時，您能否提醒我們該假設背後的一些宏觀指標是什麼？

Sure. Maybe just the big picture thoughts on the guidance range as just articulated in in in our prepared remarks. . We finished Q1 had a plan. We see a modest. Impact from tariffs from a cost perspective, we're largely able to mitigate most of the impact from tariffs to cost. We've got an FX tailwind.

當然。也許只是對指導範圍的宏觀思考，正如我們在準備好的評論中所闡明的那樣。。我們在第一季結束時制定了一個計劃。我們看到的是謙虛。從成本角度來看關稅的影響，我們基本上能夠減輕關稅對成本的大部分影響。我們得到了外匯順風。

And our April trading, right, demand remains strong. So we haven't seen any signal of demand destruction year-to-date from tariffs. And so it's on that basis that we're maintaining our full year guide. There's nothing that's indicated demand destruction, and so the demand assumptions we had entering the year are the best we have. There's a bit of, I'd call it more uncertainty around that range, but We haven't seen anything of anything, April's ahead of plan.

我們四月份的交易需求依然強勁。因此，今年迄今為止，我們還沒有看到任何關稅造成需求破壞的訊號。因此，我們在此基礎上維持全年指導。沒有任何跡象表明需求遭到破壞，因此我們今年做出的需求假設是最好的。有一點，我稱之為該範圍內的更多不確定性，但我們還沒有看到任何事情，四月已經提前於計劃了。

So how do you get to the high end and the low end? It's really electronic strength and industrial weakness. Those are the two key variables, the electronics business is outperforming our baseline expectations and during the year, the industrial market is modestly weaker, I would say, and if that persists, depends which one sort of overtakes the other to get to the the various bookends of that range, and obviously it doesn't include any demand destruction from tariffs. Given the uncertainty around what tariffs will be implemented and when and what that will do to the consumer.

那麼要如何達到高端和低端呢？這確實是電子領域的優勢和工業領域的劣勢。這是兩個關鍵變量，電子業務的表現超出了我們的基本預期，而我想說，在這一年中，工業市場略微疲軟，如果這種情況持續下去，就取決於哪一種情況超過另一種情況，以達到該範圍的各個書擋，顯然這不包括關稅對需求的破壞。鑑於對於實施何種關稅、何時實施以及對消費者產生何種影響存在不確定性。

Got it, thanks and just a a separate note, I just wanted to poke on you called out data center strength in both assembly and circuitry. I was wondering if you could frame.

明白了，謝謝，只是另外說明一下，我只是想戳一下你在組裝和電路方面提到的數據中心強度。我想知道你是否可以裝框。

Like just size Of the exposure.

就像曝光的大小一樣。

Yeah, so. As we think about our data center exposure in the circuitry business, we're selling circuit board process chemistry that go into the large server boards, and that's a business that wasn't that big for us just a couple of years ago, but it's been growing really rapidly, double digits year on year now for several years, and on the assembly business, we talked about.

是的，是這樣。當我們考慮資料中心在電路業務中的風險時，我們正在銷售用於大型伺服器主機板的電路板製程化學品，而這項業務在幾年前對我們來說並不是那麼大，但它一直在快速增長，幾年來一直保持兩位數的年增長率，在組裝業務方面，我們談到了這一點。

High performance specialty alloys, solder paste, and then engineered products that are used in server board assembly as well. Altogether, this is, north of $100 million in both of those businesses. If you add in our memory disk business and circuitry, you're bumping up against $200 million of exposure in that market.

高性能特種合金、焊膏以及用於伺服器主機板組裝的工程產品。總計起來，這兩項的利潤都超過了 1 億美元。如果加上我們的儲存磁碟業務和電路，那麼該市場的風險敞口將達到 2 億美元。

Bavesh Bodaya with BMO Capital Markets.

BMO 資本市場的 Bavesh Bodaya。

Hi, good morning, Ben. Ben, on one more follow up on the guidance, assuming we do see a slower and market demand in the second half, and given how important the third quarter is for ESI, can you talk about some of the potential actions that you envision you can take to defend your end?

嗨，早上好，本。本，再問一次關於指導的後續問題，假設我們確實看到下半年市場需求放緩，並且考慮到第三季度對 ESI 的重要性，您能否談談您設想可以採取的一些潛在行動來捍衛自己的目標？

Yeah, so, element has the benefit of a highly variable cost structure. It's something we've highlighted in the past and been able to demonstrate in the past.

是的，因此，Element 具有高度變動的成本結構優勢。這是我們過去強調過並且能夠證明的事情。

We can almost automatically take dramatic costs out of the business from incentive compensation, quickly tighten our belt around travel and other discretionary expense line items without damaging the long-term growth trajectory of the business, and we flex that down if you go back to. Q2 of 2020 where, we took SGNA down 15%-20% in a quarter. And so if we need to do that, we know how to do that, we can do that without difficulty.

我們幾乎可以自動地從激勵薪酬中剔除業務中的巨額成本，在不損害業務長期增長軌蹟的情況下，迅速縮減差旅費和其他可自由支配的開支項目，如果你回頭來看，我們就會降低這一成本。2020 年第二季度，我們的 SGNA 在一個季度內下降了 15%-20%。所以，如果我們需要這樣做，我們就知道如何做，我們可以毫不費力地做到這一點。

That's not contemplated in our guide right now. We're running with, let's call it full OpEx out of Q1 and into Q2, and so those levers remain at our disposal.

目前我們的指南尚未考慮到這一點。我們正在運行，讓我們稱之為從第一季到第二季的全部營運支出，因此這些槓桿仍然可以由我們支配。

Got it. And so a follow up, maybe a question for Martin. Martin, you've been a large shareholder and obviously a big part of Element Solutions story so far. As we look ahead from here, where do you see yourself as part of the elements, the story, and in terms of ownership and involvement in study study directions going ahead from.

知道了。因此接下來，也許可以問馬丁一個問題。馬丁，到目前為止，您一直是 Element Solutions 的大股東，並且顯然在公司發展歷程中扮演著重要角色。當我們展望未來時，您認為自己是元素、故事的一部分，並且在所有權和參與方面將如何發展。

I didn't hear the question clearly.

我沒聽清楚問題。

Where do you see your involvement and put that in the context of recent.

您如何看待自己的參與並將其放在最近的背景下。

So I think you're probably asking me why for the first time in 12 years, I sold some shares, and that's simply for liquidity reasons. And as a matter of principle, I wouldn't want to sell shares at a time when the business was.

所以我想你可能會問我，為什麼 12 年來我第一次賣一些股票，這只是出於流動性的原因。原則上，我不想在業務困難的時候出售股票。

Obviously not inhibited in any way from my transacting or in a very healthy state. And of course, as you can see, the business is in a very healthy state. It really doesn't change anything to do with my long term vision for the company, my long term involvement with the company. That was simply for liquidity purposes. .

顯然，我的交易沒有受到任何阻礙，而且我的狀態非常健康。當然，如您所見，業務狀況非常健康。這實際上並沒有改變我對公司的長期願景以及我對公司的長期參與。這只是為了流動性的目的。。

We, it's taken, it's a long journey for me, as from founding platform to today. And I feel that, if you like persevering and working to put this business in the right position, has been a journey that's, appropriately Being rewarded in the equity markets, not obviously with all this current disruption, but overall.

我們，從創始平台到今天，對我來說，這是一段漫長的旅程。我覺得，如果你願意堅持不懈地努力將這項業務置於正確的位置，那麼這將是一段旅程，你會在股票市場上獲得適當的回報，顯然不是因為目前的所有混亂，而是總體而言。

So I don't think anything change and taken a long time to really understand this business. And by the time I get to the point where you really understand it, no point in stopping now. So there we go.

所以我認為不會發生任何改變，而且需要很長時間才能真正了解這個行業。當我讓你真正理解這一點時，就沒有必要停下來了。就這樣吧。

Appreciate the talk.

感謝你的談話。

Thank you.

謝謝。

Mike Harrison with Seaport Research Partners.

海港研究合作夥伴的邁克哈里森 (Mike Harrison)。

Hi, good morning. Noted within the semiconductor business, strong growth in wafer level packaging, and you mentioned high bandwidth memory as a driver there. Can you give us a little more color on the key applications that you're serving in high bandwidth memory and maybe comment on how you see the opportunity unfolding there.

嗨，早安。您注意到，在半導體業務中，晶圓級封裝成長強勁，並且您提到高頻寬記憶體是推動其發展的因素之一。您能否向我們詳細介紹一下您在高頻寬記憶體中服務的關鍵應用程序，並評論一下您如何看待那裡的機會。

Yeah, our wafer level packaging business continues to grow really nicely. The primary product in there is damaging copper, and you'll recall in 2023 we terminated a long-term distribution agreement there, gave us more customer proximity, better access to technology roadmaps. We talked about having a couple new product launches coming in the back part of this year associated with. A wafer level packaging business and really directly attributable to that. So there's been very strong growth within high bandwidth memory. Those are Korean customers that are ramping their production significantly.

是的，我們的晶圓級封裝業務持續保持良好的成長動能。那裡的主要產品是有害銅，你會記得，2023 年我們終止了那裡的長期分銷協議，讓我們更加貼近客戶，更好地了解技術路線圖。我們談到了今年下半年將推出的幾款新產品。晶圓級封裝業務確實直接歸因於此。因此高頻寬記憶體的成長非常強勁。這些都是韓國客戶，正在大幅提高產量。

Again, this is data center and high performance computing driven and we see a lot of growth opportunities there and our product has incumbency has established, I would say incumbency in that market, going forward.

再次強調，這是由資料中心和高效能運算驅動的，我們看到那裡有很多成長機會，而且我們的產品已經確立了市場地位，我想說，未來我們將在該市場佔據主導地位。

Alright, and then, also was just wondering within the electronics business, you've been targeting 2% to 4% outperformance of the underlying market over time, in the current environment where there is some additional uncertainty or we might expect some potential slowing of the underlying market, how confident are you that you can still deliver on that outperformance of 2% to 4%?

好的，然後，我還想知道，在電子業務方面，您一直的目標是隨著時間的推移，基礎市場表現優於其他市場 2% 到 4%，在當前存在一些額外不確定性或我們可能預期基礎市場可能放緩的環境下，您對於仍能實現 2% 到 4% 的優異表現有多大信心？

Appreciate that question, Mike. It's not as though we're coming off a period of really robust growth in the broader electronic supply chain. You go back to 2024, you had soft MSI. You did have a strong PCB market, which we, nicely outperformed, and if you look at this quarter, our semi-business growing in the teens is, I would say vastly outperforming the underlying semi-market, and our assembly and circuitry business is both growing in double digits organically, I think it's also healthy outperformance relative to those markets.

非常感謝你提出這個問題，麥克。這並不意味著我們剛剛經歷了更廣泛的電子供應鏈的真正強勁增長時期。回到 2024 年，那時你有軟 MSI。你們確實有一個強大的 PCB 市場，我們表現得非常好，如果你看一下這個季度，我們的半成品業務以十幾歲的速度增長，我想說這大大超過了基礎半成品市場，我們的組裝和電路業務都以兩位數的有機速度增長，我認為相對於這些市場來說這也是健康的優異表現。

The reason for that is our penetration of fast growing emerging growth vectors. We refer to them also as these B2B sales, about data centers and low orbit satellites that that are dislocated from the consumer electronic cycles that, used to be primary drivers of our electronics business.

原因在於我們對快速成長的新興成長載體的滲透。我們也稱它們為 B2B 銷售，涉及資料中心和低軌道衛星，它們脫離了曾經是我們電子業務主要驅動力的消費電子週期。

We see those B2B markets as continuing to grow and have seen no slowdown in demand, if anything, acceleration. In demand there and so we are confident in our ability to continue to outperform.

我們看到這些 B2B 市場正在持續成長，需求並未放緩，甚至加速。那裡的需求很大，所以我們有信心我們有能力繼續表現出色。

All right, thanks very much.

好的，非常感謝。

Steve Byrne with Bank of America.

美國銀行的史蒂夫伯恩。

Hi, this is Rock Hall on the line for Steve Byrne. Just given the recent, focus on rejiggering manufacturing locations the tariffs, as well as preparing for the potential of a consumer or an industrial demand pullback, is there any risk to the timelines of rollouts for Blockbuster products such as Argomax, Cupreon, and Shadow Plus, as well as any other medium term, projects getting, pushed out further?

大家好，我是搖滾名人堂 (Rock Hall) 的史蒂夫伯恩 (Steve Byrne)。鑑於最近重點關注重新調整製造地點的關稅，以及為消費者或工業需求可能回落做準備，Argomax、Cupreon 和 Shadow Plus 等 Blockbuster 產品的推出時間表以及任何其他中期項目的推出是否存在風險，是否會進一步推遲？

Yeah, it's a fair question, Rock. So there are two dynamics here, right? The first is, to protect ourselves and our customers from the impact of tariff price increases. We're localizing certain parts of our supply chain, moving production from one site to another. That's a discrete tactical activity. We'd like to believe that we have fungibility across our sites, from a production perspective, and so, that's something that's ongoing by our local teams. On the other side, as you mentioned, we do have some big products. A coming down the pipeline that require discrete manufacturing and the people working on those are different people, right?

是的，這是一個公平的問題，Rock。所以這裡有兩種動態，對嗎？第一，保護我們自己和我們的客戶免受關稅價格上漲的影響。我們正在對供應鏈的某些部分進行本地化，將生產從一個地點轉移到另一個地點。這是一種獨立的戰術活動。從生產角度來看，我們願意相信我們的站點之間具有可替代性，因此，這是我們當地團隊正在進行的事情。另一方面，正如您所說，我們確實有一些大產品。需要離散製造的流水線和從事這些工作的人員是不同的人，對嗎？

So we are nearly finished with doubling our Argomax capacity at our site that produces that, and we've made real strides forward on active copper manufacturing and trying to scale that up and we're expecting to have A new plant ready, mid-scale plant ready to produce that in the second half of this year. So there's a lot of activity in the supply chain, but we're adequately staffed and resourced to support it.

因此，我們幾乎完成了將生產基地的 Argomax 產能翻倍的工作，我們在活性銅製造方面取得了真正的進步，並試圖擴大規模，我們預計今年下半年將有一座新工廠、一座中型工廠準備好生產該產品。供應鏈中有很多活動，但我們有足夠的人員和資源來支持它。

Understood. And just as a follow up, could you go a bit more into, how the industrial, businesses performing geographically and key market drivers that enabled, only 1% organic sales drop this quarter.

明白了。作為後續問題，您能否進一步說明一下，工業、業務在地理上的表現以及關鍵市場驅動因素如何導致本季度有機銷售額僅下降 1%。

Yeah, it's a good observation. The industrial surface treatment business, which sits within our industrial and specialty segment, had revenue and volume down about 1%. That was weakness in Europe.

是的，這是一個很好的觀察。工業表面處理業務屬於我們的工業和專業部門，其收入和銷售量下降了約 1%。這就是歐洲的弱點。

A relatively stable, slightly down market in the Americas and some strong growth coming out of Asia. And so our Asian, industrial business is winning share, is participating in the, growth in the automotive sector in China, and benefiting from that.

美洲市場相對穩定，略為下滑，亞洲市場則出現強勁成長。因此，我們的亞洲工業業務正在贏得份額，參與中國汽車產業的成長，並從中受益。

Chris Parkinson with Wolf Research.

沃爾夫研究公司的克里斯·帕金森。

Great, thank you so much, for taking my question. Then it's very clear that premiumization of the portfolios, obviously already been paying off, perhaps paying off even more, despite some uncertainty. Can you just get on some of the things, getting away from tariffs for just a second, but just what makes you. The most enthusiastic across both assembly and circuitry and how you see your product product offerings, kind of evolving throughout '25, '26, what you're from the marketplace and perhaps if you could sneak in a comment on print in there as well, it'd be greatly.

太好了，非常感謝您回答我的問題。那麼很明顯，儘管存在一些不確定性，但投資組合的優質化顯然已經獲得了回報，甚至可能帶來更多回報。您能否先暫時拋開關稅不談一些事情，但您又是如何做的呢？對組裝和電路最感興趣的是，您如何看待自己的產品，以及產品供應在 25、26 年的發展情況，您從市場上得到了什麼，如果您能偷偷地對印刷品發表一些評論，那就太好了。

Appreciated.

非常感謝。

Yeah, absolutely. So you asked about circuitry and assembly specifically and so I'll address those too. I think the general observation that we're seeing a shift towards high value B2B sales, in both of those businesses, is very exciting, and will change some of the cyclicality. That you might have seen in our assembly business and our circuitry business in the past.

是的，絕對是如此。所以您具體詢問了電路和組裝，所以我也會解決這些問題。我認為，我們看到這兩個行業都在向高價值 B2B 銷售轉變，這是非常令人興奮的，並且會改變一些週期性。您可能在過去的組裝業務和電路業務中看到過這一點。

So, our technologies for these very high performing server boards are different than the GPUs themselves, but the boards that the GPUs sit on inside of those data centers are very sick, very difficult to metalize and we've got, the flagship products and techno process technology for that application. And so we've been winning significant share there. We've made real strides penetrating the IC substrate market, which has been a softer market within the circuit board or within the circuitry industry, but has long term very high performance or.

因此，我們針對這些高效能伺服器主機板的技術與 GPU 本身不同，但這些資料中心內部 GPU 所處的主機板非常糟糕，很難金屬化，而我們擁有針對該應用的旗艦產品和技術製程技術。因此我們在那裡贏得了相當大的份額。我們在滲透 IC 基板市場方面取得了真正的進展，該市場在電路板或電路行業中一直較為疲軟，但長期以來具有非常高的性能。

Has very high growth opportunities associated with it. We've won real business with final step metalization or what it's called solder preparation for electric vehicles where there's an immersion 10 product that's been growing really nicely in the Asian electric vehicle market.

具有非常高的成長機會。我們憑藉最終步驟金屬化或所謂的電動車焊料準備贏得了真正的業務，其中浸沒式 10 產品在亞洲電動車市場上成長非常良好。

So all across the circuitry business, we're seeing new demand vectors where our technologies are preferred processes. In the assembly business, we've been skewing that business towards higher tech applications through innovation and alloys, some engineered products that have really interesting applications and data centers, and then active copper isn't contributing yet, and that's Creon.

因此，在整個電路業務中，我們看到了新的需求向量，其中我們的技術是首選製程。在組裝業務中，我們一直透過創新和合金將業務偏向高科技應用，一些工程產品具有非常有趣的應用和資料中心，而活性銅尚未做出貢獻，這就是 Creon。

Indeed, the number of applications and the po from the customer base is incredibly robust. The engagement with OEMs, OSATs, specifiers and applicators remains really high, and so our conviction and the, earnings potential of that technology is rock solid, and just an added level layer of growth from here forward.

事實上，來自客戶群的申請數量和採購訂單數量非常強勁。與 OEM、OSAT、指定者和應用者的合作仍然非常密切，因此我們的信念和該技術的盈利潛力堅如磐石，並且從現在開始只會增加一個增長水平。

It's great color and just as a quick follow up, I think that the balance sheet is in a pretty good spot, especially after, the graphics sale. Can you to hit on you can you give us some insights on how you're thinking about, some of the talking M&A you've discussed before, buybacks, and just your comfort level, going forward for the balance of '25.

它的色彩很棒，作為快速的後續行動，我認為資產負債表處於相當不錯的位置，特別是在圖形銷售之後。您能否向我們提供一些見解，說明您對之前討論過的一些併購、回購以及您對 25 年剩餘時間的舒適度有何看法。

Thank you so much.

太感謝了。

Yeah, absolutely. Thanks for the question, Chris. So, leverage is as low as it's ever been in our history. 6 year history is Element Solutions. Balance sheet is in really good shape.

是的，絕對是如此。謝謝你的提問，克里斯。因此，槓桿率處於歷史上最低。 Element Solutions 已有 6 年歷史。資產負債表狀況非常好。

We pay down some debt and still have $500 million of cash to deploy, and there's a lot of volatility right now, and the volatility should create interesting opportunities to deploy that capital, and we're very well positioned to take advantage of them. With regard to M&A versus buybacks, I think the simple observation I'd make is that the hurdle for M&A is higher with our equity where it is, and that doesn't mean that, there can't be any very compelling M&A created by this opportunity, but, the buyback option looks pretty interesting too.

我們已經償還了部分債務，並且仍有 5 億美元現金可供使用，目前市場波動很大，這種波動應該會為使用這筆資本創造有趣的機會，而我們完全有能力利用這些機會。關於併購與回購，我認為我可以簡單觀察一下，就我們的股權而言，併購的門檻更高，但這並不意味著這個機會不會帶來任何非常引人注目的併購，而是回購選項看起來也很有趣。

Thank you so much.

太感謝了。

Pete Operland with Truist Securities.

Truist Securities 的 Pete Operland。

Hey, good morning. Thanks for taking the questions. I wanted to start by following up on the impact that tariff uncertainty might be having on customer conversations and order patterns. I guess, specifically, have you seen any signs of tariff-related pre-buying across your core markets either in the first quarter or in April?

嘿，早安。感謝您回答這些問題。首先我想了解關稅不確定性對客戶對話和訂單模式可能產生的影響。我想，具體來說，您是否在第一季或四月看到核心市場出現與關稅相關的預購跡象？

That's a good question, Pete, and that's something we've been looking for evidence of, we see the sort of headlines of folks buying new phones in anticipation of tariffs, but from where we sit in our supply chain, we're not seeing that as a direct pull on consumption of our chemistries, and so we really don't see any clear evidence of this being a pre-build. That's not to say that some of the demand isn't, but again, if you think about where the growth is coming from, these are B2B sales, and you can see the CapEx that's driving it, whether that's in data centers or in the electric vehicle market or, in the low Earth orbit satellite markets. And so we don't think that this is driven by pre-build or pre-buying, but some of it could be, in fairness.

這是個好問題，皮特，這也是我們一直在尋找證據的事情，我們看到一些頭條新聞說人們預期關稅而購買新手機，但從我們的供應鏈來看，我們並沒有看到這直接拉動我們的化學品消費，所以我們真的沒有看到任何明確的證據表明這是預先構建的。這並不是說部分需求不存在，但是，如果你想想成長來自哪裡，這些都是 B2B 銷售，你可以看到推動成長的資本支出，無論是在資料中心、電動車市場還是低地球軌道衛星市場。因此，我們不認為這是由預建或預購推動的，但公平地說，其中一些可能是由預建或預購推動的。

That's a very helpful color.

這是一種非常有用的顏色。

As a follow up, I just wanted to ask about the margin performance within INS. You had a nice expansion there in the first quarter, despite organic growth being down. So I guess just looking to the rest of the year, as the energy business comes back, would you expect to drive segment margins higher from here, or were there any benefits to call out from mix or costs that were limited to the first quarter?

作為後續問題，我只是想詢問 INS 內的利潤表現。儘管有機成長率有所下降，但第一季你們的擴張仍然表現良好。因此，我想展望今年剩餘時間，隨著能源業務的復甦，您是否預計從現在開始推動分部利潤率上升，或者從僅限於第一季的組合或成本中可以獲得什麼好處？

Yeah, it's it's a good observation, right? That that offshore business is a high margin business for us and it was down year over year. We talked about that in the prepared remarks with the drivers of that are, and we do expect it to get better in the second half, which will drive margin expansion, all else equal. The reason that margins improved is, the standard cost price discipline we've we've exercised and we've seen some ongoing raw material deflation, which we expected entering the year. And so, there is a reason to see that industrial and specialty segment margin improve. . Going forward, I don't care if there's anything.

是的，這是一個很好的觀察，對吧？離岸業務對我們來說是一項高利潤業務，但其利潤卻逐年下降。我們在準備好的發言中討論了這一問題的驅動因素，我們確實預計下半年情況會好轉，這將推動利潤率擴大，其他條件相同。利潤率提高的原因是，我們實施了標準成本價格紀律，並且我們看到原材料持續通貨緊縮，這是我們預計今年會出現的情況。因此，有理由看到工業和專業領域的利潤率提高。。展望未來，我不在乎是否還有什麼。

I just, I think the other point to make is that volumes in the core industrial lists are still no meaningfully from their peak, and while we are highly variable cost model, getting more volume of those plants does have some operating leverage. So we're not anticipating a lot of that in 2025, but that's still upside to margin if you think about the the long term opportunity there.

我只是，我認為另一點是核心工業清單中的產量與高峰相比仍無顯著差異，雖然我們採用高度可變的成本模型，但增加這些工廠的產量確實具有一定的經營槓桿作用。因此，我們預計 2025 年不會出現太多這樣的情況，但如果考慮到長期機會，這仍然具有上升空間。

All right, very helpful. Thank.

好的，非常有幫助。感謝。

John Roberts with Mizuho.

瑞穗的約翰‧羅伯茲 (John Roberts)。

Thank you, and nice quarter in guidance. I assume your March quarter results and your June quarter guidance has a bonus accrual consistent with your full year, previous earnings targets, or if not, could you tell us, what you're assuming there?

謝謝，本季的指導非常好。我假設您的 3 月份季度業績和 6 月份季度指引中的獎金累積與您的全年、之前的盈利目標一致，如果不一致，您能告訴我們您對此的假設是什麼嗎？

Yeah, look, as we answered a question earlier, we're running with full OpEx right now, so we haven't been, reducing bonus accruals on the basis of demand destruction that we haven't seen any of yet. So we have that full lever at our disclosure.

是的，看，正如我們之前回答的一個問題，我們目前正在運行全部營運支出，所以我們還沒有根據我們尚未看到的需求破壞來減少獎金累積。因此，我們在資訊揭露方面擁有充分的槓桿。

And any seasonal, differences you're expecting here in the next, second, third and fourth quarter versus what you had in 2024?

與 2024 年相比，您預計下一季、第二季、第三季和第四季會出現哪些季節性差異？

Yeah, that's a great question, John, and it speaks to the Q2 guide.

是的，約翰，這是一個很好的問題，它涉及 Q2 指南。

It's hard to say what a normal year is, but if you go back several years, Typically, the second half was 52% 53% of IEA and the first half was was the balance. The past several years I've had a lot of different lumps associated with Supply chain disruptions and all the things we've lived through.

很難說正常的年份是怎麼樣的，但如果回顧幾年，通常下半年是 IEA 的 52% 53%，而上半年則是平衡的。過去幾年，我遇到過很多與供應鏈中斷以及我們所經歷的所有事情相關的問題。

Last year, Interestingly enough, the second quarter was quite strong in electronics, benefiting from the pre-builds of smartphones that typically fall into Q3 and other consumer electronics device launches. So we had a stronger Q2 than typical and we didn't have the same level of Q3 uplift that we normally would have. So when we look at Q2 this year, we're assuming a more, I'll call it normal seasonal pattern on the basis of consistent demand from Q1 into Q2.

有趣的是，去年第二季電子產品表現相當強勁，受益於通常在第三季推出的智慧型手機預製以及其他消費性電子設備的推出。因此，我們第二季的表現比往常更強勁，而第三季的成長水準不如往常。因此，當我們展望今年第二季時，我們假設這是一個更正常的季節性模式，基於從第一季到第二季的穩定需求。

Thank you.

謝謝。

John Tenant with CJS Securities.

CJS 證券公司的 John Tenant。

Hi, thanks for taking my questions and next quarter. The first one is just expanding a little bit more on the stronger demand in April, I guess the stable demand. Are you seeing any pockets of weakness or strength in there, or is it a straight line continuation of what you call1 by end market number one, and I'll follow on after that.

你好，感謝您回答我的問題，下個季度也是如此。第一個是在四月需求更強勁的基礎上稍微擴大一點，我猜是穩定的需求。您是否看到其中存在任何弱點或優勢，或者它是您所說的終端市場第一號的直線延續，之後我會繼續關注。

Yeah, it, it's really consistent with Q1, in some areas of modest acceleration around semi is what I would say.

是的，它確實與 Q1 一致，我想說的是，在半自動車的一些領域，加速程度適中。

Okay, great. And then for the year, I just wanted to be clear, are you assuming zero demand destruction from the current tariff environment, say a base level of 10%, and with the potential for more depending on the countries and where negotiations go? Is that what I'm hearing? .

好的，太好了。然後對於今年，我只想明確一點，您是否假設在當前關稅環境下，需求破壞為零，例如基準水準為 10%，並且根據國家和談判的進展情況，可能會有更大的破壞？這就是我所聽到的嗎？。

In terms of what the underlying function is at this point?

就這一點而言，底層功能是什麼？

Yeah, we're assuming the same. On in aggregate, the same demand environment that we, expect eventually leave.

是的，我們假設相同。整體而言，我們預期相同的需求環境最終將消失。

Okay, great. And that's, if you see, for example, the continuation of a of a 145% for China through the rest of the year, that's not going to meaningful impact what your expectations are for men.

好的，太好了。也就是說，如果你看到，例如，今年剩餘時間內中國女性的銷售額繼續保持 145% 的成長，這不會對你對男性的預期產生重大影響。

It's hard to say to put parameters around that because, take, for example, the latest tariff in in the tariff argument, exempting a whole series of products that we are a part of the manufacturing process. So, the devil's going to be in the details.

很難說要對此設定參數，因為，例如，在關稅論證中最新的關稅豁免了我們參與製造過程的一系列產品。所以，魔鬼藏在細節裡。

I wouldn't, I think trying to micro pick at that doesn't really work because you're dealing with an environment that's so volatile. So this is on the assumption that the world is continuing as normal.

我不會，我認為試圖微觀挑選這一點並不真正起作用，因為你所面對的環境是如此不穩定。所以這是基於世界繼續正常運作的假設。

And importantly, it's taking into consideration the cost impacts of that, right? And so what we're saying with this is, we can mitigate the impact of tariffs on our cost structure. And maintain our guidance range on that basis. Yeah we can go through those those levers of, what we're doing to offset cost in the different buckets if that's a follow up that folks want to go into.

重要的是，它考慮到了成本影響，對嗎？因此，我們這樣說的意思是，我們可以減輕關稅對我們成本結構的影響。並在此基礎上維持我們的指導範圍。是的，如果大家願意參與後續活動，我們可以透過這些槓桿來抵銷不同方面的成本。

That makes sense. Thank you.

這很有道理。謝謝。

Alexei Yefremov with Keybank Capital Markets.

Keybank Capital Markets 的 Alexei Yefremov。

Thanks and good morning. This is Ryan on for Alexi. Ben, I guess I'll take the low-hanging fruit here and just ask you, what exactly are you guys doing to kind of mitigate the costs that are coming in the supply chain from tariffs at this point.

謝謝，早安。這是 Ryan 為 Alexi 表演的。本，我想我會選擇最容易實現的問題，我只想問你，你們目前到底在做什麼來減輕關稅給供應鏈帶來的成本。

And I set myself up from that, for that one. So there are, there are really 3 buckets of cost increases that we're seeing from li tariffs. The first is raw materials that are imported from China to the United States, and we don't do much of that ourselves. We do have suppliers that are sourcing from China, and so we've spent a bunch of time trying to find alternative sources and understanding what those cost impacts would be to us. And that's a pricing lever that we've had to throw and we've been very clear and we've done this in the past when we've seen inflation of specific commodities where we pass that on to customers.

我從那時起就為那件事做好了準備。因此，我們看到鋰關稅實際上帶來了三個方面的成本增加。首先是從中國進口到美國的原料，我們自己也不做太多這樣的事。我們確實有一些供應商從中國採購，因此我們花了大量時間嘗試尋找替代來源並了解這些成本對我們的影響。這是我們必須使用的定價槓桿，我們對此非常清楚，過去當我們看到特定商品價格上漲時，我們就會這樣做，並將其轉嫁給客戶。

Directly, the second bucket are finished goods, or rather, other things that we're importing into the US from places other than China. And so one example is Mexico. We've got quite a bit of cross-border trade with Mexico. And fortunately, we qualify for the USMCA exemptions there. And so figuring out what products are going back and forth and making sure that they do qualify for those exemptions has been a a big piece of work and we've got confidence that that 10% tariff on imports in the United States isn't going to be meaningful for us.

直接地說，第二類是成品，或者更確切地說，是我們從中國以外的地方進口到美國的其他東西。墨西哥就是一個例子。我們與墨西哥有相當多的跨境貿易。幸運的是，我們符合 USMCA 的豁免資格。因此，弄清楚哪些產品正在來回流通，並確保它們確實符合這些豁免條件，是一項艱鉅的工作，我們相信，美國對進口產品徵收 10% 的關稅對我們來說不會有什麼影響。

The third bucket are things that we're shipping from the United States to China. And we do have some finished goods and raws that we're shipping into China. And what we've done to mitigate that impact is localization. Right. And so moving our sourcing and moving our manufacturing from the United States to, jurisdictions in Asia, maybe not directly into China, and shipping through and shipping to China from there. And that should be able to offset most of that impact, and net net, we don't view it as a headwind to our guidance.

第三類是我們從美國運往中國的貨物。我們確實有一些成品和原料正在運往中國。為了減輕這種影響，我們採取了在地化措施。正確的。因此，我們將採購和製造從美國轉移到亞洲的司法管轄區，也許不是直接轉移到中國，然後透過中國運送到中國。這應該能夠抵消大部分影響，並且總體而言，我們並不認為這會對我們的指導造成阻礙。

Understood, that's helpful. I guess just sticking on this topic. I mean, you talked about kind of China to the US and US to China. Can you maybe just size and on a dollar basis or a percentage basis of goods just kind of like what your actual exposure there is?

明白了，這很有幫助。我想只是堅持這個話題。我的意思是，您談到了中國對美國以及美國對中國的關係。您能否僅根據美元或百分比來衡量商品的大小，就像您實際面臨的風險一樣？

Thanks.

謝謝。

US to China is in and around $10 million. China to US direct is negligible. Again, that's through our suppliers, and then the finished goods into the US from other countries is sizable, but again, we've been able to offset that through exemptions and and also some level of localization.

美國對中國的出口額約為 1000 萬美元。中國與美國的直航微乎其微。再次，這是透過我們的供應商，然後從其他國家進入美國的成品數量相當可觀，但再次，我們已經能夠透過豁免和一定程度的本地化來抵消這一點。

Great, thank you.

太好了，謝謝。

David Silver with CL King.

David Silver 和 CL King。

Thank you. I had a question, I guess, about maybe some of your the behavior of some of your major customers, and I'd like to maybe focus on your R&D activities and your product development activities in particular where you're collaborating closely with customers, but has the current, uncertain environment that everyone's asking about, has that.

謝謝。我想我有一個問題，可能是關於你們一些主要客戶的行為，我想重點談談你們的研發活動和產品開發活動，特別是你們與客戶密切合作的地方，但是在當前大家都在問的不確定的環境下，有這些。

Had a notable impact on the company in terms of the pace or the resourcing, behavior of your customers. In other words, for longer term projects where you're collaborating, what has been the behavior, has there been any change, from your major customers, given the the current uncertain environment.

在速度、資源、客戶行為方面對公司產生了顯著影響。換句話說，對於您正在合作的長期項目，鑑於當前不確定的環境，您的主要客戶的行為如何，是否有任何變化。

The short answer, David, is no. We're working on long-term projects with breakthrough associated with breakthrough technologies and, the industry, the market, the consumer is pulling those technologies, and so we continue to see very active level of engagement.

大衛，簡短的回答是「不」。我們正在進行與突破性技術相關的長期項目，並且行業、市場和消費者正在推動這些技術，因此我們繼續看到非常活躍的參與度。

Between our R&D functions, our direct customers, specifiers, OEMs, the business is very local and so our innovation is not just, on the breakthroughs but it's on new applications, technologies, it's on sustainable applications, and we've seen no pause in momentum whatsoever. You heard us talk about two new product introductions we're expecting, in our most advanced front end, area at the end of this year, and those are continuing.

在我們的研發部門、直接客戶、指定商、原始設備製造商之間，業務非常在地化，因此我們的創新不僅在於突破，還在於新應用、新技術、永續應用，而且我們的發展勢頭絲毫沒有停止。您聽到我們談到我們預計將在今年年底在最先進的前端領域推出兩款新產品，而且這些產品仍在繼續推出。

At pace.

按照節奏。

Okay, thank you and then just one last one, but if I caught your comments correctly, I think regarding consumer electronics you've indicated maybe a slow down or softness in the western, I think smartphone market, but then you also talked about a pick up.

好的，謝謝，然後最後一個問題，但是如果我沒有理解錯的話，我認為關於消費電子產品，您指出西方智慧型手機市場可能出現放緩或疲軟，但您也談到了回升。

In that category in Asia, and I'm just wondering if you could maybe just flush that out a little bit. Is that company specific? Is there a big shift going on that you see and why wouldn't the softness in the Western, why wouldn't the Western consumer electronics market start to look a little bit more like the the growthhier performance in Asia going forward?

在亞洲的這個類別中，我只是想知道您是否可以稍微闡明這一點。具體是那家公司？您是否看到了重大轉變？為什麼西方的疲軟態勢不會像亞洲未來的成長態勢那麼明顯？

Yeah, you call out an interesting note, which is we talked about strength in consumer electronics in the Americas, but softness and smartphones in in in the West. That consumer electronics strength in the Americas as PCs and other consumer electronics, ex smartphones.

是的，您提到了一個有趣的點，那就是我們談論的是美洲消費電子產品的實力，但西方的疲軟和智慧型手機。美洲的消費性電子產品實力雄厚，包括個人電腦和其他消費性電子產品，例如智慧型手機。

There was strength in the Local Chinese smartphone market in the quarter, right? We've seen some, government subsidy to drive consumer activity in China. And so we did see a strength in that local market. It's not for export, and also strength in non-smartphone consumer electronics in the Americas. That's the distinction that I would call that you've picked up, and that we saw in the first quarter.

本季中國本土智慧型手機市場表現強勁，對嗎？我們看到，政府透過一些補貼來推動中國的消費活動。因此我們確實看到了當地市場的優勢。不以出口為主，在美洲非智慧型手機消費性電子產品方面也有優勢。這就是我所說的你們已經發現的差別，也是我們在第一季看到的差別。

Okay, great.

好的，太好了。

Thank you very much.

非常感謝。

(Operator Instructions)

（操作員指示）

Since there are no more questions from the queue, I will now turn the call back over to Ben Gliklich for closing remarks.

由於隊列中沒有其他問題，我現在將電話轉回給 Ben Gliklich 作結束語。

Thank you. Thank you, everybody for joining. We look forward to seeing many of you in the weeks and months to come. Have a great day. Take care.

謝謝。謝謝大家的參與。我們期待在未來的幾週和幾個月裡見到你們。祝你有美好的一天。小心。

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

謝謝。女士們、先生們，今天的電話會議到此結束。

Thank you all for joining. You may now disconnect.

感謝大家的加入。您現在可以斷開連線。