Element Solutions Inc (ESI) 2025 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Element Solutions Q2 2025 financial results conference call. (Operator Instructions) As a reminder, today's call is being recorded.

女士們、先生們，早安，歡迎參加 Element Solutions 2025 年第二季財務業績電話會議。（操作員指示）提醒一下，今天的通話正在被錄音。

I will now turn the conference over to Varun Gokarn, Vice President of Strategy and Integration. Please go ahead.

現在，我將會議交給策略與整合副總裁 Varun Gokarn。請繼續。

Good morning, and thank you for participating in our second-quarter 2025 earnings conference call. Joining me today are our President and CEO, Ben Gliklich; and CFO, Carey Dorman.

早安，感謝您參加我們的 2025 年第二季財報電話會議。今天與我一起出席的還有我們的總裁兼執行長 Ben Gliklich 和財務長 Carey Dorman。

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.

根據公平揭露規則，我們將對本次電話會議進行網路直播。重播將在公司網站的投資者部分提供。

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. 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.

在今天的電話會議中，我們將做出一些前瞻性的陳述，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。請參閱我們網站上的收益報告、補充投影片和最新的 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 the US GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures.

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。請參閱收益報告和補充投影片，以了解這些非 GAAP 指標與可比較 GAAP 財務指標的定義和對帳。

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

現在我很高興介紹我們的執行長 Ben Gliklich。

Thanks, Varun. Good morning, everybody. Thank you for joining.

謝謝，瓦倫。大家早安。感謝您的加入。

Element Solutions had an outstanding second quarter. We continue to execute on our strategy of penetrating the fastest-growing areas within our addressable markets while driving productivity through our continuous improvement culture. Our Electronics business delivered a fifth consecutive quarter of high single-digit organic growth, consistent with the targets for the segment that we set early last year.

Element Solutions 的第二季度表現出色。我們繼續執行我們的策略，滲透到我們可尋址市場中成長最快的領域，同時透過我們的持續改進文化來提高生產力。我們的電子業務連續第五個季度實現高個位數有機成長，與我們去年年初為該部門設定的目標一致。

Ongoing hyperscaler investment in data centers and their associated infrastructure continues to drive demand for a wide range of material solutions that our portfolio is uniquely positioned to provide, from metallization chemistries for high-layer count-printed circuit boards to specialized thermal management materials used in assembly to advanced packaging chip-scale chemistries. Sales from our wafer-level packaging products grew more than 20% in the second quarter, as programs on leading-edge nodes continue to ramp. Order patterns from these customers remain strong throughout the first half of the year.

超大規模資料中心及其相關基礎設施的持續投資繼續推動對各種材料解決方案的需求，我們的產品組合具有獨特的優勢，可以提供從用於高層數印刷電路板的金屬化化學品到用於組裝的專用熱管理材料，再到先進的封裝晶片級化學品。隨著尖端節點專案的持續推進，我們的晶圓級封裝產品銷售額在第二季成長了 20% 以上。這些客戶的訂單模式在整個上半年保持強勁。

Our power electronics business also grew at a double-digit rate in the quarter, with demand strength from legacy EV customers and new wins that have broadened our customer base over the last 12 months. We've demonstrated our value proposition in leading-edge semiconductor and power electronics technologies and are continuing to establish our business as a leading innovation partner to the largest companies in electronics manufacturing.

我們的電力電子業務在本季度也實現了兩位數的成長，這得益於傳統電動車客戶的需求強勁以及過去 12 個月來我們不斷擴大的客戶群。我們已經展示了我們在尖端半導體和電力電子技術方面的價值主張，並將繼續致力於成為電子製造業最大公司的領先創新合作夥伴。

Over the past five years, we've driven a deliberate transformation from a high-quality but disparate portfolio of businesses in select niches into a unified organization that is leading an important emerging categories. Our commercial, technical, service, and R&D teams are collaborating across a breadth of product areas to provide system-level solutions to OEMs while building a pipeline of breakthrough innovation that should support further growth. Included in that pipeline are applications that improve thermal management on the top side of advanced high-performance computing chips and enable greater power density to reach these chips. Other applications in development allow for fast and low-cost deposition of copper interconnect on the finest layers of silicon wafers and next-generation active copper, or Kuprion, products designed to solve a range of unique thermal and power-related customer pain points. Our initial mid-scale active copper manufacturing site is under construction and expected to be commissioned at the end of this year.

在過去五年中，我們進行了精心的轉型，從專注於特定領域的高品質但分散的業務組合轉變為引領重要新興類別的統一組織。我們的商業、技術、服務和研發團隊正在廣泛的產品領域合作，為 OEM 提供系統級解決方案，同時建立支援進一步成長的突破性創新管道。此管道中包括改善先進高效能運算晶片頂部熱管理的應用，並使這些晶片具有更高的功率密度。其他正在開發的應用允許在最細的矽片層上快速且低成本地沉積銅互連，以及下一代活性銅或 Kuprion 產品，旨在解決一系列獨特的與熱和功率相關的客戶痛點。我們最初的中型活躍銅生產基地正在建設中，預計今年底投入使用。

In Industrial & Specialty, we saw meaningful margin improvement, and excluding the impact from our Graphics divestiture, the segment adjusted EBITDA growth would have been 10%. Our core industrial surface treatment business has demonstrated stable or growing adjusted EBITDA for several quarters even as volumes have been under pressure. Across our business, we've been investing in technology, people, and strategy deployment tools to help us improve performance regardless of the macro environment. This is most evident in our industrial results.

在工業和專業領域，我們的利潤率顯著提高，如果不考慮圖形業務剝離的影響，該部門調整後的 EBITDA 成長率將達到 10%。儘管銷售面臨壓力，我們的核心工業表面處理業務已連續幾季呈現穩定或成長的調整後 EBITDA。在我們的業務中，我們一直在投資技術、人才和策略部署工具，以幫助我們提高績效，而不管宏觀環境如何。這在我們的工業成果中表現得最為明顯。

Global trade dynamics remain volatile, and there's still a lack of clarity around tariff policy and its resulting impact on demand. However, as we've noted previously, we're fortunate to have a geographically broad yet localized sourcing, manufacturing, and technical footprint that has proven to be responsive to customers. We continue to execute on mitigation efforts to minimize the impact of tariffs on our cost structure.

全球貿易動態依然動盪，關稅政策及其對需求的影響仍不明確。然而，正如我們之前提到的，我們很幸運擁有地理範圍廣泛但本地化的採購、製造和技術足跡，事實證明，我們能夠回應客戶的需求。我們將繼續採取緩解措施，盡量減少關稅對我們成本結構的影響。

Given the breadth of our operations, our global presence in a hyper-local people-based business, we also believe we're well positioned to support customers as they navigate broader changes to and realignment of supply chains in coming years. This quarter, we opened a new world-class research center in Bangalore, India, to support basic formulation research globally and also applications development in electronics manufacturing locally. We're also building applications in customer support labs in Thailand and Vietnam designed to help customers scale operations in those countries. In short, while the near-term macroeconomic environment remains uncertain, we retain and continue to build structural advantages that should serve us well over the longer term.

鑑於我們業務的廣度以及我們在高度本地化、以人為本的業務中的全球影響力，我們也相信，我們有能力為客戶提供支持，幫助他們應對未來幾年更廣泛的供應鏈變化和重新調整。本季度，我們在印度班加羅爾開設了一個新的世界級研究中心，以支持全球基礎配方研究以及當地電子製造的應用開發。我們也在泰國和越南的客戶支援實驗室建立應用程序，旨在幫助客戶擴大這些國家的業務規模。簡而言之，儘管短期宏觀經濟環境仍然不確定，但我們保留並繼續建立結構性優勢，這將對我們長期有利。

Carey will now take you through our second-quarter business results in more detail. Carey?

凱裡現在將向您更詳細地介紹我們第二季的業務成果。凱莉？

Thanks, Ben. Good morning, everyone.

謝謝，本。大家早安。

On slide 3, you can see a summary of our second-quarter financial results. Organic sales grew 6% and adjusted EBITDA would have increased 7% when adjusting the Graphics business out of both the 2024 and 2025 periods to account for our recent divestiture. Adjusted EBITDA of $136 million exceeded our initial guidance for the quarter of $120 million to $125 million.

在投影片 3 上，您可以看到我們第二季的財務表現摘要。如果將圖形業務從 2024 年和 2025 年期間調整出來以反映我們最近的資產剝離，有機銷售額將增長 6%，調整後的 EBITDA 將增長 7%。調整後的 EBITDA 為 1.36 億美元，超過了我們最初預期的 1.2 億美元至 1.25 億美元的季度業績。

Electronics organic growth of 9% was broad-based across all three verticals. ESI's adjusted EBITDA margin declined roughly 40 basis points year over year in constant currency terms, largely impacted by higher pass-through metal prices relative to the same quarter last year. Excluding the impact of roughly $113 million pass-through metal sales and assembly solutions, our adjusted EBITDA margin would have been just under 27%, a 30-basis-point improvement year over year.

電子產品有機成長率達 9%，涵蓋所有三個垂直領域。以固定匯率計算，ESI 調整後的 EBITDA 利潤率年減約 40 個基點，主要受到與去年同期相比轉嫁金屬價格上漲的影響。不包括約 1.13 億美元的轉嫁金屬銷售和組裝解決方案的影響，我們的調整後 EBITDA 利潤率將略低於 27%，比去年同期提高了 30 個基點。

We have seen significant FX volatility in the past few months, but currency only had a modest impact to results this quarter. However, based on end of June rates, the impact in the second half should be more meaningful. We expect a year-over-year tailwind of over $5 million in the back half.

過去幾個月我們看到了明顯的外匯波動，但貨幣對本季的業績影響不大。然而，根據 6 月底的利率，下半年的影響應該會更為顯著。我們預計下半年的營收將年增 500 多萬美元。

On slide 4, we share additional detail on the drivers of organic net sales growth. Starting with Electronics, in assembly, the second quarter was driven by B2B customers serving the high-performance computing and telecommunications end markets. Advanced solder paste volumes for various computing applications grew meaningfully, and we saw strong customer pull on technically challenging engineered assembly solutions used in server and data center applications.

在投影片 4 上，我們分享了更多有關有機淨銷售額成長驅動因素的細節。從電子組裝開始，第二季由服務高效能運算和電信終端市場的 B2B 客戶推動。用於各種計算應用的先進焊膏量顯著增長，我們看到客戶對伺服器和資料中心應用中使用的具有技術挑戰性的工程組裝解決方案有著強烈的吸引力。

Circuitry solutions sales grew 5% organically, driven by data center applications and specialty finishes for circuit boards in the Asian EV market. You will recall in 2024, we had a very strong second quarter, driven by consumer electronics seasonality. This year, we did not see the same increase in Q2, but posted healthy growth nonetheless.

電路解決方案銷售額有機成長 5%，這主要得益於亞洲電動車市場的資料中心應用和電路板專用飾面。您會記得，2024 年，受消費性電子產品季節性的推動，我們第二季的業績非常強勁。今年，我們在第二季度沒有看到同樣的成長，但仍然實現了健康的成長。

Our business mix continues to shift towards B2B end markets, as applications for servers, data centers, and high-performance computing are driving demand, while the smartphone market has been mediocre on the back of extended replacement cycles. We are also benefiting from promising nascent sources of demand, such as low Earth orbit satellites. This transition away from traditional consumer electronics should continue to dampen quarterly seasonality.

我們的業務組合繼續向 B2B 終端市場轉變，因為伺服器、資料中心和高效能運算的應用正在推動需求，而智慧型手機市場因更換週期延長而表現平平。我們也受惠於有前景的新興需求源，例如低地球軌道衛星。這種脫離傳統消費性電子產品的轉變應該會繼續抑制季度季節性。

Semiconductor solutions organic net sales grew 20% from continued robust demand in wafer-level packaging for semifab and OSAT customers in Asia. Sales from our ViaForm product line again grew above 20% this quarter, continuing the upward trend in this product line since we took the business direct to end customers in the middle of 2023. We have exciting new product introductions in our pipeline that should deepen our reach into more advanced nodes with leading-edge solutions for advanced packaging applications.

由於亞洲半導體製造廠和 OSAT 客戶對晶圓級封裝的需求持續強勁，半導體解決方案有機淨銷售額成長了 20%。本季度，我們的 ViaForm 產品線的銷售額再次成長了 20% 以上，延續了自 2023 年中期我們將業務直接面向最終客戶以來該產品線的上升趨勢。我們即將推出令人興奮的新產品，這些產品將透過先進封裝應用的尖端解決方案，加深我們對更先進節點的影響力。

Our power electronics products showed robust growth in the second quarter, despite relatively weak initial forecasts from certain large customers. In the first half of 2025, we benefited from broadening our Argomax power electronics customer base to additional electric vehicle manufacturers in both Asia and Europe. This strategy has been effective, but we are cautious about the second half in this market, given headwinds in certain pockets of the EV ecosystem.

儘管某些大客戶的初步預測相對較弱，但我們的電力電子產品在第二季仍表現出強勁成長。2025 年上半年，我們受惠於將 Argomax 電力電子客戶群擴大到亞洲和歐洲的更多電動車製造商。這項策略是有效的，但考慮到電動車生態系統某些領域面臨的阻力，我們對該市場的下半年持謹慎態度。

Industrial & Specialty organic net sales were up 1% year over year. Volumes for the core industrial business were down slightly, with macro weakness in Europe and the Americas partially offset by automotive growth in Asia. We have not yet seen a recovery in Europe, but consider recent policy changes in the region towards infrastructure and defense investment as a potential catalyst for an increase in industrial activity, which should, in turn, benefit our business. This is not factored into our full-year outlook. We do, however, have new business wins that should drive our performance relative to our end markets in the second half.

工業和特種有機淨銷售額較去年同期成長 1%。核心工業業務的銷售量略有下降，歐洲和美洲的宏觀經濟疲軟被亞洲汽車業的成長部分抵消。我們尚未看到歐洲經濟復甦，但我們認為該地區近期在基礎設施和國防投資方面的政策變化是促進工業活動成長的潛在催化劑，這反過來又會使我們的業務受益。這並未計入我們的全年展望。然而，我們確實贏得了新的業務，這將推動我們下半年相對於終端市場的表現。

Offshore's year-over-year organic sales growth of 15% was the result of several large project completions that had been delayed from earlier in the year, as we called out in Q1. We continue to expect healthy growth for the business overall this year on the back of pricing and new wins.

Offshore 的有機銷售額年增 15%，這是由於今年稍早推遲的幾個大型專案的完成，正如我們在第一季所指出的那樣。我們繼續預計，在定價和新勝利的推動下，今年整體業務將實現健康成長。

Slide 5 discusses cash flow and the balance sheet. We generated $59 million of adjusted free cash flow in Q2. We invested $35 million into working capital, which primarily reflects increased accounts receivable on the back of sequential revenue growth in the business. We remain pleased with the progress we are making on inventory management, which we continue to optimize after several years of supply chain disruption.

投影片 5 討論了現金流和資產負債表。我們在第二季產生了 5,900 萬美元的調整後自由現金流。我們投資了 3,500 萬美元作為營運資金，這主要反映了業務收入連續成長導致應收帳款增加。我們對庫存管理的進展感到滿意，在經歷了幾年的供應鏈中斷之後，我們仍在繼續優化庫存管理。

CapEx in the quarter was $18 million, spending which is predominantly skewed towards the compelling growth investments that Ben mentioned earlier. We still plan to invest roughly $65 million over the course of the year to support strategic initiatives such as Kuprion, manufacturing, and scale-up.

本季的資本支出為 1800 萬美元，主要用於 Ben 之前提到的引人注目的成長投資。我們仍計劃在今年投資約 6,500 萬美元，以支持 Kuprion、製造和擴大規模等策略性舉措。

Turning to the balance sheet. Our net leverage ratio at the end of the quarter was 2.1 times. Our capital structure remains fully fixed at an effective rate of roughly 4%, and we have no debt maturities until 2028. We repurchased approximately 1 million shares at an average price of $20.45 early in the quarter. Our balance sheet provides significant capacity for further capital allocation within our targeted leverage framework.

轉向資產負債表。本季末我們的淨槓桿率為2.1倍。我們的資本結構仍然完全固定在約 4% 的有效利率，並且我們的債務在 2028 年之前沒有到期日。我們在本季初以平均 20.45 美元的價格回購了約 100 萬股。我們的資產負債表為我們在目標槓桿框架內進一步配置資本提供了巨大的能力。

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

說完這些，我就把電話轉回給本。

Thank you, Carey.

謝謝你，凱裡。

It was a great first half. With leading-edge Electronics growth and solid execution across our supply chain in yet another period of volatility, we're ahead of our original plan for the year. With the expected added benefit of favorable foreign exchange rates, we're comfortable increasing our adjusted EBITDA outlook for the full year to a new range of between $530 million and $550 million. For the third quarter of 2025, we expect adjusted EBITDA to be in the range of $140 million to $145 million, which represents a 5% sequential improvement over the second quarter.

上半場表現非常出色。憑藉領先的電子產品成長和整個供應鏈在另一個動盪時期的穩健執行，我們已提前完成了今年的原計劃。鑑於有利的外匯匯率帶來的預期額外好處，我們樂意將全年調整後的 EBITDA 預期提高至 5.3 億美元至 5.5 億美元的新範圍。對於 2025 年第三季度，我們預計調整後的 EBITDA 將在 1.4 億美元至 1.45 億美元之間，比第二季度環比增長 5%。

We expect leading-edge electronics driven by high-performance computing and data center to remain robust and industrial demand to remain similar to the first half. Consumer electronics and electric vehicle volumes have been harder to forecast and account for the risk and upside to the outlook.

我們預計由高效能運算和資料中心驅動的尖端電子產品將保持強勁，工業需求將與上半年保持相似。消費性電子產品和電動車的銷售更難預測，也更難解釋前景的風險和上行空間。

Our full-year adjusted EBITDA guidance range remains wider than typical at this point in the year, allowing for a prudent degree of potential demand variability in the second half. We're still uncertain about how tariffs may impact economic activity in our end markets. We've not seen any signal of demand weakness to date, but remain cautious. We're well capitalized to seize on opportunities that may materialize in such periods of volatility. And beyond the daily drive to maintain solid execution and operational excellence across the company, capital allocation remains front of mind.

我們全年調整後的 EBITDA 指引範圍仍然比今年這個時候的典型情況要寬，以便應對下半年潛在需求的謹慎變化。我們仍然不確定關稅將如何影響我們終端市場的經濟活動。到目前為止，我們還沒有看到任何需求疲軟的訊號，但仍保持謹慎。我們擁有充足的資本來抓住這種動盪時期可能出現的機會。除了每天努力保持整個公司的穩健執行和卓越營運之外，資本配置仍然是首要考慮的問題。

While our balance sheet capacity continues to grow, the principles that govern our capital allocation strategy remain unchanged. We deploy capital to accelerate shareholder value by investing behind our markets and businesses into high-quality businesses that enhance our customer value proposition. In the second quarter, the best opportunity that met this criterion was our own shares, and we have capacity to continue to repurchase while also pursuing attractive acquisitions should they appear.

雖然我們的資產負債表容量不斷成長，但支配我們資本配置策略的原則卻保持不變。我們透過投資市場和業務背後的高品質業務來部署資本，以提升我們的客戶價值主張，從而加速股東價值。在第二季度，符合這項標準的最佳機會是我們自己的股票，我們有能力繼續回購，同時也會在出現有吸引力的收購時進行收購。

Let me close by thanking all of our stakeholders for their continued support of Element Solutions and, in particular, our talented team around the world for their steadfast customer orientation and commitment to delivering for our company. Our combination of strong positioning, thoughtful strategy, and exceptional people continues to work.

最後，我要感謝所有利害關係人對 Element Solutions 的持續支持，特別是感謝我們遍布全球的優秀團隊堅定不移地以客戶為中心並致力於為公司提供服務。我們強大的定位、周到的策略和傑出的人才的結合將繼續發揮作用。

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

接線員，請打開熱線來回答問題。

(Operator Instructions) Mike Harrison, Seaport Research Partners.

（操作員指示）Mike Harrison，Seaport Research Partners。

Hi. Good morning. Congrats on a nice quarter. Ben, I was hoping you could talk a little bit about what you're hearing from customers. And in particular, are you getting any sense that some of the Q2 strengths might have been related to pull-forward of demand? And if so, is there any way to be able to quantify that?

你好。早安.恭喜本季取得良好業績。本，我希望你能談談你從客戶那裡聽到的情況。特別是，您是否覺得第二季的一些優勢可能與需求提早有關？如果是這樣，有什麼方法可以量化嗎？

Yeah, sure. Good question, Mike. So the short answer is that we don't see any pull forward in the second quarter. The pace of investment in data center capacity remains robust. Last year, in the second quarter, we did see some pull forward in the smartphone market and in certain other consumer electronics. That activity did not recur in the second quarter of 2025, and we've got reasonably good visibility to that.

是的，當然。問得好，麥克。所以簡而言之，我們在第二季度沒有看到任何拉動。資料中心容量的投資步伐依然強勁。去年第二季度，我們確實看到智慧型手機市場和某些其他消費性電子產品有所成長。該活動在 2025 年第二季沒有再次發生，我們對此有相當好的了解。

So we don't see any pull forward in the second quarter from the smartphone cycle. We expect to see some ramp in smartphone production here in Q3, which accounts for some of the sequential improvement. We, I would say, are starting to see that here in July, but it's still early. And the other vectors of demand strength in the second quarter don't have the same seasonal impact and have long, durable secular trends propelling them.

因此，我們認為第二季智慧型手機週期不會出現任何拉動。我們預計第三季智慧型手機產量將增加，這也是季增的部分原因。我想說，我們在七月就開始看到這種情況了，但現在還為時過早。第二季度其他需求強勁的因素不會受到同樣的季節性影響，而是受到長期、持久的長期趨勢的推動。

All right. Thanks for that. And then my other question is about power electronics. It sounds like that was, again, a bright spot this quarter. But I think you may have indicated that despite kind of broadening your customer base for Argomax, you're seeing maybe some headwinds in the EV ecosystem. Can you just elaborate on what your expectations are for power electronics in the second half?

好的。謝謝。我的另一個問題是關於電力電子的。聽起來這又是本季的一個亮點。但我想您可能已經表示，儘管 Argomax 的客戶群有所擴大，但您可能仍看到電動車生態系統中存在一些阻力。能否詳細談談對下半年電力電子的預期？

Sure thing. So power electronics had a very strong second quarter on a year-over-year basis. We were lapping a period where one of our major customers there in the second quarter of 2024 was doing some product changeovers, so demand was weaker. And so that accounted for some of that growth.

當然可以。因此，電力電子產業第二季的表現與去年同期相比非常強勁。我們當時正處於一個時期，2024 年第二季我們的一個主要客戶正在進行一些產品轉換，因此需求較弱。這解釋了部分成長的原因。

As we look out to the back half, we see some customers with production volume declines expected, offset by new customers ramping. So it should continue to be a growth vector for the business, but the rate of growth may slow a bit because of some customer-specific issues. Our penetration of that supply chain more broadly continues at pace. The pipeline is great. And so the longer-term outlook for that product and that capability remains very strong.

展望下半年，我們看到一些客戶的產量預計會下降，但新客戶的增加將抵消這一下降。因此，它應該繼續成為業務的成長載體，但由於一些特定於客戶的問題，成長率可能會放緩。我們對此供應鏈的滲透範圍正在不斷擴大。管道很棒。因此，該產品和該功能的長期前景仍然非常強勁。

Bhavesh Lodaya, BMO Capital Markets.

Bhavesh Lodaya，BMO 資本市場。

Hi. Good morning, Ben. Your Electronics sales are back to prior peak levels seen in early 2022. Can you look back and compare and contrast where business stands versus then? Are your volumes back to those earlier levels? And if there are any notable differences across the subsegments?

你好。早安，本。您的電子產品銷售額已恢復到 2022 年初的峰值。您能否回顧一下並比較一下當時的業務現況？您的交易量恢復到之前的水平了嗎？各個子部分之間是否有顯著差異？

Yeah. It's a good question, Bhavesh. Thank you.

是的。這是個好問題，Bhavesh。謝謝。

So Electronics revenue is at a new peak in the quarter. Volumes are not at prior peak. As we look across the business, the semiconductor business is at peak levels. The circuitry and assembly businesses are not. That is, to some extent, driven by where we are from a smartphone cycle perspective, with the circuitry business historically being more concentrated in the smartphone market. We've talked at length about how that business is transitioning more towards B2B sales, and a recovery in the smartphone market would drive significant outperformance, though we're not seeing that imminently.

因此，本季電子產品收入達到了新的高峰。交易量未達到先前的峰值。縱觀整個業務，半導體業務正處於巔峰水平。電路和組裝業務則不然。從某種程度上來說，這是由我們所處的智慧型手機週期角度所驅動的，從歷史上看，電路業務更加集中在智慧型手機市場。我們已經詳細討論了該業務如何向 B2B 銷售轉型，智慧型手機市場的復甦將推動業績大幅提升，儘管我們不會很快看到這種情況。

The assembly business is more industrially oriented. And of course, we're seeing some, I'll call it, malaise in industrial markets. And so it's not a surprise that that business isn't back to peak. There is a metal price impact in there as well. All of that is to say that there's significant opportunity for this business to continue to grow. The things that are delivering record value will continue to grow in terms of B2B markets and what we're seeing from high-performance computing. And then the more cyclical aspects that are soft, it's reasonable to expect we'll recover, though we're not counting on that in our back half. That's upside for years to come.

裝配業務更加以工業為導向。當然，我們看到工業市場出現了一些我稱之為的萎靡不振的現象。因此，該業務尚未恢復到巔峰也就不足為奇了。這其中也存在金屬價格的影響。所有這些都表明，該業務具有繼續成長的巨大機會。就 B2B 市場和高效能運算而言，創造創紀錄價值的事物將繼續增長。然後，對於週期性較弱的方面，我們有理由預期我們會復甦，儘管我們並不指望下半年會出現這種情況。這對於未來幾年來說都是有利的。

Got it. And then as we look at your power electronics platform or even your advanced packaging, ViaForm, have you seen any increased competition or perhaps new entrants coming in? There were some talks about investments in China -- Chinese domestic players. Any color or any visibility there?

知道了。然後，當我們看看您的電力電子平台，甚至是您的先進封裝 ViaForm 時，您是否看到競爭加劇或有新進入者進入？有一些關於在中國投資——中國本土企業——的討論。那裡有顏色或可見度嗎？

Yeah. So two different markets and capabilities and two different sets of dynamics. For what we're doing with our wafer-level packaging products, our ViaForm products and copper damascene, that's a well-established market with well-established competition. And we have been winning at the leading edge there and growing our share. We've not seen new entrants at all.

是的。因此，存在著兩個不同的市場和能力以及兩組不同的動態。對於我們的晶圓級封裝產品、ViaForm 產品和銅鑲嵌產品而言，這是一個成熟的市場，競爭也十分激烈。我們一直處於領先地位，並且我們的份額不斷擴大。我們根本沒有看到任何新進入者。

In power electronics, where we're dealing with new materials, that's a fast-growing market and we're starting to see competitors come to market. We've got an outstanding capability that's highly differentiated in terms of performance. We have IP around how that product is made and how that product is used and a position of incumbency with the leading participants in the market. And so we are growing faster than the EV market there, which I think demonstrates the quality of our offering and our customer value proposition.

在電力電子領域，我們正在處理新材料，這是一個快速成長的市場，我們開始看到競爭對手進入市場。我們擁有卓越的能力，其性能具有高度差異化。我們擁有有關該產品如何製造以及如何使用該產品的智慧財產權，並且在市場上處於領先地位。因此，我們的成長速度比那裡的電動車市場更快，我認為這證明了我們產品的品質和客戶價值主張。

Furthermore, we're continuing to innovate in that product area where it's not just about materials but we're innovating around applications. And that's widening the moat as we solve specific customer applications problems, which has been attributable for some of that outgrowth that we've seen recently.

此外，我們將繼續在產品領域進行創新，不僅涉及材料，還涉及應用方面的創新。當我們解決特定的客戶應用問題時，護城河就會擴大，這也是我們最近看到的一些結果。

Aleksey Yefremov, KeyBanc Capital Markets.

Aleksey Yefremov，KeyBanc 資本市場。

Thanks, and good morning, guys. You've got Ryan on for Aleksey. First question I just wanted to ask is going around Argomax. So I just think some recent policy changes in China talking about the end of the price cutting wars. I was wondering if that might be an even greater opportunity for you guys maybe as the shift to quality is greater here.

謝謝，大家早安。你讓 Ryan 代替 Aleksey。我想問的第一個問題是關於 Argomax 的問題。所以我認為中國最近的一些政策變化表明降價戰已經結束。我想知道這對你們來說是否是一個更大的機會，因為這裡對品質的轉變更大。

Yeah, it's a good observation. This capability skews towards high-performance vehicles. And so not all electric vehicles are created equally, and this is a capability that is really designed for and intended for the best of the best electric vehicles. And insofar as there is a shift towards higher quality, higher reliability, higher performance vehicles in the electric vehicle sector, that should help us.

是的，這是一個很好的觀察。這種能力偏向高性能車輛。因此，並非所有電動車都是一樣的，而這種功能實際上是為最好的電動車而設計的。只要電動車領域向更高品質、更高可靠性、更高性能的汽車轉變，這就會對我們有所幫助。

All that having been said, this isn't such an expensive portion of the cost of an EV. It's a tiny, tiny fraction. And so we don't see price pressure, for instance, when there are price cuts in that market. And I wouldn't view this as an opportunity for us to raise our prices should the value of EVs increase.

儘管如此，這並不是電動車成本中昂貴的一部分。這只是很小很小的一部分。因此，當該市場降價時，我們不會看到價格壓力。如果電動車的價值上漲，我不會將此視為我們提高價格的機會。

Understood. Okay. That's helpful. Thank you, Ben. And then, Carey, just for you in Electronics, it looks like EBITDA margins, excluding the pass-through of metal costs, it looks like they were down about 200 basis points year on year. So just can you help us get a better understanding of what kind of drove that and maybe what the expectation for that would be in the back half? Thanks.

明白了。好的。這很有幫助。謝謝你，本。然後，Carey，僅就電子產業而言，EBITDA 利潤率（不包括金屬成本的轉嫁）似乎比去年同期下降了約 200 個基點。那麼，您能否幫助我們更好地理解推動這一進程的因素以及後半部分的預期是什麼？謝謝。

Sure. Yeah, it's a good observation. I think the first point to make there is really that when we look at the product lines and the verticals inside the Electronics business, we're seeing pretty healthy, stable to growing margins, particularly when you exclude the impact of both the pass-through metals on the assembly business and some of the precious metals that we sell in the semiconductor business. So I think that's the key -- the first key point.

當然。是的，這是一個很好的觀察。我認為首先要指出的是，當我們審視電子業務中的產品線和垂直領域時，我們看到利潤率相當健康、穩定且不斷增長，特別是當你排除組裝業務中的轉嫁金屬和我們在半導體業務中銷售的一些貴金屬的影響時。所以我認為這是關鍵——第一個關鍵點。

When you actually bridge the sort of decrementals that you're seeing, the biggest driver, other than the pass-through metals, which we talked about in the repair remarks, is an impact of OpEx. So there's two things going on there: one is a shift in the corporate allocation between the two segments, now that we've sold the Graphics business and the way that's allocated, disproportionately now hits Electronics versus the prior split; and then some incremental OpEx that we're spending partly to fund Kuprion research and development and then just some other growth and expansion we're doing.

當你真正彌合你所看到的那種遞減時，除了我們在修復評論中談到的傳遞金屬之外，最大的驅動因素是營運支出的影響。因此，有兩件事正在發生：一是兩個部門之間的公司分配發生了變化，現在我們已經出售了圖形業務，並且分配方式與之前的劃分相比不成比例地影響了電子業務；其次是一些增量運營支出，我們花費其中一部分來資助 Kuprion 的研究和開發，然後是我們正在進行的一些其他增長和擴張。

When you take out those two impacts, you kind of get back to a normal margin story. I think when we go to the back half of the year, that should normalize sequentially. The corporate dynamic will continue to play out on a year-over-year basis.

當你消除這兩個影響時，你就會回到正常的利潤故事。我認為，當我們進入下半年時，這種情況應該會逐漸恢復正常。企業動態將持續逐年顯現。

Chris Parkinson, Wolfe Research.

克里斯帕金森，沃爾夫研究公司。

Thank you so much. Ben, you clearly have the portfolio pretty well positioned for an eventual upturn and you're already doing pretty solid. But in terms of the core growth drivers that you're the most excited about, '26 onwards, I'm thinking Kuprion and everything else. What's kind of the next leg of the stool in terms of how we should be thinking about your growth trajectory in the context of your Electronics end markets?

太感謝了。本，顯然，你的投資組合已經為最終的復甦做好了充分的準備，而且你已經做得相當穩健了。但就您最興奮的核心成長動力而言，『26』年以後，我想到的是 Kuprion 和其他一切。就我們應該如何看待您在電子終端市場中的成長軌跡而言，下一步該做什麼？

Yeah. It's a good question, Chris.

是的。這是個好問題，克里斯。

So we're outperforming the broader Electronics market as we see it today. We've talked about this bifurcation between the leading edge, which is growing really fast and lagging applications, legacy applications, which are not growing as quickly. We don't expect that to persist into perpetuity and we'll get some benefit when some of those legacy applications get some wind in their sails. So that's a cyclical dynamic.

因此，就我們目前所見，我們的表現優於更廣泛的電子市場。我們已經討論過前沿應用（成長速度非常快）和落後應用（成長速度不那麼快）之間的分歧。我們不希望這種情況永遠持續下去，當一些遺留應用程式獲得一些進展時，我們會獲得一些好處。這是一個週期性的動態。

The leading edge isn't going to slow in that situation. The things that are driving this business have very long legs and there's a cyclical upturn from those lagging applications. At the same time, we're continuing to innovate, bring new capabilities to market. And this isn't a company that is really driven by blockbuster products, but we do talk about active copper and Kuprion as a very compelling opportunity. We called it out in our prepared remarks. We're investing and should be opening our first mid-scale production site for that by the end of this year. And so that should be contributing to profit next year. And there are some new applications that we're developing for some of our technologies that have really good value propositions for hyperscalers and data centers that we also expect to pick up into 2026. So there's a cyclical tailwind when -- as and when that market recovers, there's some new product introductions that we're very excited about at high margins. And there's secular growth propelling the leading edge where we've been disproportionately participating and benefiting.

在這種情況下，領先優勢不會放緩。推動這項業務發展的因素具有很長的生命週期，而這些滯後的應用程式會出現週期性的改善。同時，我們不斷創新，將新的功能推向市場。這並不是一家真正由重磅產品驅動的公司，但我們確實認為活性銅和 Kuprion 是一個非常引人注目的機會。我們在準備好的發言中提到了這一點。我們正在投資，預計今年年底開設我們的第一個中型生產基地。因此這應該會對明年的利潤有所貢獻。我們正在為某些技術開發一些新的應用程序，這些應用程式對於超大規模企業和資料中心來說具有非常好的價值主張，我們預計這些應用程式將在 2026 年推廣。因此，當市場復甦時，就會出現週期性的順風，我們會推出一些令我們興奮的高利潤新產品。長期成長推動著我們處於領先地位，我們在這方面的參與度和受益度都很高。

Got it. And then in your prepared remarks, you mentioned your willingness to do buybacks. The term opportunistic was used and you said also you're thinking about M&A just given where the balance sheet leverage is. When you think about tuck-in, bolt-on M&A opportunities, Ben, are there something -- are there pieces of portfolio you feel the need to fill in in terms of the total well-rounded portfolio? Or would it be more ancillary opportunistic things that you've been assessing over the last several years? Thank you.

知道了。然後在您準備好的發言中，您提到了您願意回購。使用了機會主義這個術語，並且您還說，考慮到資產負債表槓桿率，您正在考慮併購。本，當您考慮補充性、附加性的併購機會時，您是否覺得需要在整個完善的投資組合中填補某些部分？或者說，這是否是您在過去幾年中一直在評估的更多輔助機會主義事物？謝謝。

Yeah. Thanks for the question, Chris.

是的。謝謝你的提問，克里斯。

We've said in the past and stand by the fact that there's nothing we need to own to fill a gap in our portfolio. What we have holds together very well in terms of our ability to sell a systems level solution to OEMs and specifiers in our supply chain. And there's nothing we're missing.

我們過去曾說過並且堅持這樣一個事實：我們不需要擁有任何東西來填補我們投資組合的缺口。就我們向供應鏈中的原始設備製造商 (OEM) 和指定商銷售系統級解決方案的能力而言，我們的實力非常雄厚。我們什麼也沒有錯過。

There are capabilities that could improve our customer value proposition. And there are businesses that we believe could be better inside of our portfolio by leveraging collaborative research and materials compatibility. And those are the types of things we're looking for. We're looking for things that are better inside of our business and make our business better that we deeply understand that are available at attractive returns to our shareholders.

有一些能力可以提高我們的客戶價值主張。我們相信，透過利用協作研究和材料相容性，我們的投資組合中的一些業務可以變得更好。這些正是我們正在尋找的東西。我們正在尋找能夠改善我們業務內部狀況的事物，並使我們的業務變得更好，我們深刻地理解，這些事物可以為我們的股東帶來有吸引力的回報。

And so that's where we're spending our time around M&A. And as we said, in the past quarter, the best opportunity was our own shares and we acted on that.

這就是我們在併購上所花費的時間。正如我們所說，在過去的一個季度，最好的機會就是我們自己的股票，我們也採取了行動。

John Roberts, Mizuho.

瑞穗的約翰羅伯茲。

Thank you. Industrial EBITDA organic growth was 10 percentage points higher than organic sales this quarter. Last quarter, it was 8% higher. How long can you maintain that EBITDA growth much higher than the organic sales? Is there a regional mix issue that's helping here or application mix, something that might reverse in the future?

謝謝。本季工業 EBITDA 有機成長比有機銷售額高出 10 個百分點。上個季度，這一數字上漲了 8%。EBITDA 成長遠高於有機銷售額的狀況您能維持多久？這裡是否存在區域混合問題或應用程式混合問題，未來可能會出現逆轉？

Sure thing. So Carey was talking about the corporate allocation shift on a year-over-year basis, and that attributes that -- you can attribute some of that outperformance to that, and then the Offshore business, which grew 15% year over year in the quarter and is a high-margin business. So there's a mix effect there as well. And you could expect that to continue as the Offshore business has been outgrowing the industrial business. And we expect that to continue in the second half. So we should be able to outpace the top line on the bottom line in industrial for the balance of the year.

當然可以。因此，凱裡談論的是公司配置的同比變化，這可以將部分優異表現歸因於此，然後是離岸業務，該業務本季度同比增長 15%，並且是高利潤業務。因此，那裡也存在混合效應。而且你可以預期這種情況將會持續下去，因為海上業務的成長速度已經超過了工業業務。我們預計下半年這種情況將會持續下去。因此，我們應該能夠在今年剩餘的時間裡，在工業領域實現營業收入超過利潤。

Okay. And then how are you thinking about leverage? [Cunity] just announced that I think they're going to be at 3.7 times net debt to EBITDA. Entegris is still running up, I think, just above 4. I think you used to target 3 as kind of your target, which you're well below.

好的。那麼您如何看待槓桿？[Cunity] 剛剛宣布，我認為他們的淨債務與 EBITDA 比率將達到 3.7 倍。我認為 Entegris 的股價仍在上漲，略高於 4。我認為您以前將 3 作為您的目標，但目前您遠低於這個目標。

Yeah. So we've articulated in the past that our target ceiling is 3.5 times. We didn't want to exceed 3.5 times. The business can support more than that. But from a cost of capital perspective, it was prudent to stay at or below that level.

是的。因此，我們過去曾明確表示，我們的目標上限是 3.5 倍。我們不想超過 3.5 倍。該業務可以支援的遠不止這些。但從資本成本的角度來看，保持在該水準或以下是謹慎的做法。

We did exceed it by about a tenth of a turn in the middle of 2023 when we had the opportunity to buy Kuprion and terminate the distribution agreement we had with Entegris. That was just really great timing and great opportunities. And we have confidence that we were at the bottom of the cycle there. So 3.5 is the ceiling.

2023 年中期，當我們有機會收購 Kuprion 並終止與 Entegris 的分銷協議時，我們確實超過了這一水平約十分之一。那真是一個絕佳的時機和絕佳的機會。我們有信心，我們正處於週期的底部。所以 3.5 是上限。

We like running the business with capacity. Our framework around capital allocation does not change, depending on our leverage ratio. And so that's how we think about it. And it's nice for a change to be the lowest one on the page that you just went through, John.

我們喜歡以產能來經營業務。我們的資本配置框架不會改變，這取決於我們的槓桿率。這就是我們的想法。約翰，很高興看到你剛剛瀏覽過的頁面上的變化處於最低位。

Matthew Dale, Bank of America.

馬修戴爾，美國銀行。

Good morning. Hakim Sanfo here for Matt Dale. I have a quick two questions. The first one being, you mentioned some room for deteriorating macro in your guidance range. So can you clarify the assumptions for the top and low end range and the primary risk achieving your upper half of new guidance?

早安.哈基姆·桑福 (Hakim Sanfo) 取代馬特·戴爾 (Matt Dale)。我有兩個問題。第一個是，您提到了指導範圍內宏觀惡化的一些空間。那麼，您能否澄清對最高和最低範圍的假設以及實現新指導上半部分的主要風險？

Yeah, sure thing. So our guidance range is -- gives us a bit of a wider berth than we normally would have at this juncture in the year that's driven by uncertainty around tariff impacts. That's not to say we've seen any impact. July remains strong. We see no signal of demand destruction, but we see volatility as a risk.

是的，當然可以。因此，我們的指導範圍比我們通常在今年這個時候擁有的更寬一些，這是由關稅影響的不確定性所驅動的。這並不是說我們已經看到了任何影響。七月份依然強勁。我們沒有看到需求破壞的訊號，但我們認為波動是一種風險。

The way we get to the high end is stronger EV, stronger smartphone activity, and continued benign macro environment. And the way we get to the middle or low end is with macro deterioration, a weaker-than-expected smartphone environment, weaker-than-expected FX tailwind. Those are the types of things I'd be looking at that would determine where we land.

我們達到高端的方法是更強勁的企業價值、更強勁的智慧型手機活動以及持續良性的宏觀環境。而我們達到中階或低階的方式是宏觀惡化、智慧型手機環境弱於預期、外匯順風弱於預期。這些都是我要考慮的因素，它們將決定我們的著陸地點。

Thank you so much. And then do you guys have any updates regarding production related bottlenecks for Kuprion? I know you mentioned plans for it to come on later this year. So just any updates regarding that. Thank you.

太感謝了。那麼，你們對 Kuprion 的生產相關瓶頸有什麼最新消息嗎？我知道您提到今年稍後推出的計劃。所以只是關於此事的任何更新。謝謝。

Yeah, it's a good question. So in the past, we've talked about the focus of our of our energy being around our own supply chain and our customer supply chains for active copper, which is scaling up our own manufacturing and helping our customers develop applications technology for how they'll use it in their high-volume manufacturing. And that remains our focus area.

是的，這是個好問題。因此，在過去，我們談到了我們的精力重點放在我們自己的供應鏈和客戶的活性銅供應鏈上，即擴大我們自己的生產規模，並幫助我們的客戶開發應用技術，以便他們能夠在大批量生產中使用它。這仍然是我們的重點領域。

We are in the process of commissioning our first production line, which we expect to be operating at the end of the year, which should relieve that first bottleneck. Based on the demand forecast we see, we will need another site within the next 18 months subsequent to that. And so we're working on that plan as well.

我們正在調試第一條生產線，預計今年年底投入運營，這將緩解第一個瓶頸。根據我們看到的需求預測，我們將在接下來的 18 個月內需要另一個站點。因此我們也在製定該計劃。

Josh Spector, UBS.

瑞銀的喬許·斯佩克特。

Yeah, hi. Good morning, guys. I'm just curious if you could talk a little bit about kind of the texture of your Electronics portfolio today. I mean, you've continued to talk about growth in B2B and high-end compute in that, reducing some of this cyclicality that you expect going forward.

是的，你好。大家早安。我只是好奇，您今天是否可以稍微談談您的電子產品投資組合的結構。我的意思是，您一直在談論 B2B 和高端運算的成長，從而減少了您預期的未來週期性。

So if you look at the 9%-ish organic you delivered in 2Q and what you've been delivering year to date, how would you describe the growth from the various parts of the businesses? Is roughly half the business growing 20% and kind of some of the more legacy exposure, industrial, auto, smartphones flat? Or would you describe it pretty differently? And just thinking about how we can apply that on a go-forward, if we do have help from maybe the more cyclical-ish parts of the portfolio versus more of the secular growth areas. Thanks.

因此，如果您看一下第二季度實現的 9% 左右的有機成長以及今年迄今為止實現的成長，您會如何描述各個業務部分的成長？大約有一半的業務成長了 20%，而一些較為傳統的業務、工業、汽車、智慧型手機業務則持平嗎？或者你會用非常不同的方式來描述它？並且思考我們如何在未來應用它，如果我們確實從投資組合中更具週期性的部分而不是更多的長期成長領域獲得幫助。謝謝。

Thanks for the question, Josh. It's not so simple to point to a specific end market for a specific product line. If you think about leading-edge foundries, those chips are going into multiple different end markets, but it's the highest-value chips in those end markets.

謝謝你的提問，喬希。針對特定產品線指向特定的終端市場並不是那麼簡單。如果你考慮一下領先的代工廠，這些晶片將進入多個不同的終端市場，但它是這些終端市場中價值最高的晶片。

If you look at our circuitry business, for example, which historically was concentrated in the smartphone market, the growth there is coming from high-performance computing going into data centers. The growth there is coming from the Chinese EV market where there are certain final finishes that lend themselves to those types of power applications. Our semi assembly growth is also coming from the EV market. Some of our circuitry growth is coming from the low Earth orbit satellite market.

例如，如果你看看我們的電路業務，它歷史上集中在智慧型手機市場，其成長來自進入資料中心的高效能運算。那裡的成長來自中國電動車市場，那裡的某些最終成品適合這類電力應用。我們的半組裝成長也來自電動車市場。我們的部分電路成長來自低地球軌道衛星市場。

So there are these emerging demand vectors that are responsible for the outgrowth. And when we say outgrowth, we're talking about high-teens, 20%, 30% growth in some areas off of the low bases. The sort of -- the base of the business is growing more modestly in the smartphone markets and those more industrial markets. And so what you end up with is an increase in concentration in fast-growing B2B markets like the ones I articulated, and the growth rates for those markets should continue to be higher, which blends the overall business growth rate higher.

因此，這些新興的需求向量是導致這種成長的原因。當我們說成長時，我們指的是某些地區在低基數的基礎上實現高十幾個百分點、20% 甚至 30% 的成長。在智慧型手機市場和工業市場中，業務基礎的成長較為溫和。因此，最終的結果就是，像我所闡述的那些快速成長的 B2B 市場的集中度會增加，而這些市場的成長率應該會繼續走高，從而帶動整體業務成長率更高。

Similarly, the advanced foundries are an increasing percentage of overall MSI. And our share in those markets is strong and the capacity additions are coming in those markets. So as we sort of -- to answer your question, as we look forward, what should the growth rate be from here for our Electronics business? There'll certainly be some volatility, but it's accelerating over the next several years, as we articulated it would last year.

同樣，先進的代工廠在整體 MSI 中所佔的比例也在增加。我們在這些市場的份額很大，而且這些市場的產能正在增加。因此，我們可以回答您的問題，並展望未來，我們的電子業務的成長率應該是多少？肯定會有一些波動，但正如我們去年所指出的那樣，未來幾年這種波動將會加速。

Thanks. That's helpful. If I could just follow up on the margin questions earlier. So understanding some of the moving parts in this quarter and this year, I guess as we look forward, do you have any different view on how we think about incremental margins? I guess mainly thinking about if you need to make more incremental investments in Kuprion or other areas as you see more emerging signs of growth there. Thanks.

謝謝。這很有幫助。我能否先跟進一下之前的保證金問題？因此，在了解本季和今年的一些變化因素後，我想當我們展望未來時，您對我們如何看待增量利潤有什麼不同的看法嗎？我想主要考慮的是，當你看到 Kuprion 或其他領域出現更多成長跡象時，是否需要在那裡進行更多增量投資。謝謝。

Yeah. So referring to Carey's answer, there's the gross margin point where there's some precious metal pass-throughs and mix was a bit of a headwind to margin. And then there's the OpEx point where the corporate allocation aspect, it's really a one-year effect.

是的。因此，參考 Carey 的回答，毛利率點存在一些貴金屬轉嫁和混合，這對利潤率造成了一些阻力。然後是營運支出點，其中企業分配方面，這實際上是一年的影響。

And the Kuprion investment is into a product line that's not generating substantial revenue today. And so that's also a one-year effect. So we view the incremental or decrementals -- rather the incrementals this quarter as transient and our historical expectation around incrementals for this business being 30% to 40%, frankly, as conservative as we roll this forward with the expected growth rates that we've just articulated.

Kuprion 投資的產品線目前尚未產生可觀的收入。這也是一年的影響。因此，我們認為本季的增量或減量是暫時的，我們對該業務增量的歷史預期是 30% 到 40%，坦白說，這是我們按照剛才闡明的預期成長率向前推進的保守估計。

Pete Osterland, Truist.

皮特‧奧斯特蘭 (Pete Osterland)，Truist。

Hey. Good morning, guys. Thanks for taking the questions. I just wanted to ask another one on margins. So in Industrial & Specialty, you called out price discipline and productivity helping margins there. I was just wondering if you could elaborate on the pricing dynamics you're seeing in industrial, particularly given the low-growth environment. And going forward, as macro conditions recover and you start to see some more positive organic growth there, is there meaningful margin upside in this business?

嘿。大家早安。感謝您回答這些問題。我只是想問另一個有關利潤的問題。因此，在工業和專業領域，您呼籲價格紀律和生產力有助於提高利潤率。我只是想知道您是否可以詳細說明您在工業領域看到的定價動態，特別是在低成長環境下。展望未來，隨著宏觀環境的復甦，您開始看到一些更積極的有機成長，這項業務的利潤率是否會顯著的上升？

Yeah. So in the industrial solutions business, we've been driving productivity and maintaining price. It's been a tough market. We have -- we took quite a bit of price over the past several years. So the observation here is we're not giving price in a more benign raw materials environment, and we're making our business more efficient across our site footprint, particularly in Europe. And so we're driving earnings growth in that business in a flattish volume environment -- flattish to slightly down.

是的。因此，在工業解決方案業務中，我們一直在提高生產力並維持價格。這是一個艱難的市場。我們已經——在過去幾年裡付出了相當多的代價。因此，這裡的觀察是，我們不會在更溫和的原材料環境中給出價格，而是在我們的整個站點（特別是在歐洲）提高業務效率。因此，我們在銷量持平（持平或略有下降）的環境下推動該業務的獲利成長。

The second part of your question is around where could the market in this business go. And over the past three years, we've seen volumes down in the high-teens across our industrial solutions footprint. And this is not a business with significant fixed assets. And so as a percentage of our cost of goods, fixed costs are not high, but absorption has been a headwind over the past several years in our sites. And so with any volume tailwind, the incremental should be above average in industrial solutions.

你的問題的第二部分是關於這個行業的市場走向。在過去三年中，我們的工業解決方案業務量下降了十幾個百分點。而且這不是一家擁有大量固定資產的企業。因此，作為我們商品成本的百分比，固定成本並不高，但在過去幾年中，我們的工廠的吸收一直是個阻力。因此，在任何產量順風的情況下，工業解決方案的增量應該高於平均值。

Very helpful. Thanks. And then I just also wanted to follow up on the comments on the offshore business. Even with the strong growth in second quarter, it looks like on a year-to-date basis, sales are still down year over year. So I was just wondering, are there still any project delays that you're expecting to catch up on during the second half? And could you see a similar growth rate year over year for sales in the second half, as you saw in the second quarter?

非常有幫助。謝謝。然後我也想跟進離岸業務的評論。儘管第二季成長強勁，但從年初至今的數據來看，銷售額比去年同期仍然下降。所以我只是想知道，是否還有什麼項目延遲需要您預計在下半年彌補？您是否認為下半年的銷售額年增率與第二季的成長率相似？

Yeah. So what we called out in the first quarter was project delays, and we are still seeing things shift to the right. I wouldn't expect the second-half growth rate in this business to be in the high-teens. This is a business that should be growing in the mid-single digits on the back of price and some volume over the course of the year. So we do have some more catching up to do, but it won't be to the order of magnitude that we saw in the second quarter.

是的。因此，我們在第一季指出的是專案延遲，但我們仍然看到情況正在朝著好的方向轉變。我預計該業務下半年的成長率不會達到百分之十幾。在價格和一定銷量的推動下，這項業務預計全年將實現中等個位數的成長。因此，我們確實還需要做一些追趕，但不會達到第二季的數量級。

Jon Tanwanteng, CJS Securities.

Jon Tanwanteng，CJS 證券。

Hi. This is Will on for John. Can you talk about how the TAM for Kuprion has grown since you acquired it and over the past year?

你好。這是威爾代替約翰。您能談談自收購 Kuprion 以來以及過去一年中其 TAM 是如何成長的嗎？

Yeah. So we've been working on, call it, commercializing qualifying active copper projects now for two years. And we have had to limit the number of customer engagements we have by virtue of our ability to make the product. We're making it in lab-scale batches, and there's only so many samples and trials qualifications we can do.

是的。因此，我們兩年來一直在致力於將合格的活躍銅專案商業化。而且，由於我們生產產品的能力有限，我們必須限制與客戶的接觸次數。我們正在以實驗室規模批量生產，我們能做的樣品和試驗資格是有限的。

The demand pull -- the customer pull for this product and the number of applications that customers would like to try this for has been growing very, very rapidly. So it's hard to quantify a TAM here because there's so much exploration. We're bringing a new material to market. But put simply, the earnout we have here is tied to achieving a hundred some million of revenue by 2030. And we certainly see that as a very likely path to achieve that goal in front of us, if not -- if not do better.

需求拉動——客戶對該產品的拉動以及客戶想要嘗試該產品的應用程式數量一直在非常非常迅速地增長。因此，由於探索工作太多，因此很難量化 TAM。我們正在將一種新材料推向市場。但簡單地說，我們這裡的獲利與 2030 年實現一億多美元的收入有關。我們當然認為這是實現我們面前目標的一條非常有可能的道路，如果不能做得更好。

Thank you. And then just to follow up, can you talk about how much capacity the Kuprion facility can serve from a revenue perspective and the margins in that business relative to the Electronics segment in general? Thank you.

謝謝。然後，為了跟進，您能否從收入角度談談 Kuprion 工廠可以提供多少產能，以及該業務相對於整個電子行業的利潤率？謝謝。

Sure thing. So it's early to talk about capacity and revenue attached to this. I would say that it's an above-average margin product because we're bringing new material to market that's solving substantial, significant customer pain points. And as I said, we're going to need to bring more capacity online to support this in the next two years. So this one site isn't going to get us to our target, that's for sure.

當然可以。因此現在談論與此相關的產能和收入還為時過早。我想說這是一款利潤高於平均水平的產品，因為我們向市場推出了新材料，解決了客戶的重大痛點。正如我所說，我們需要在未來兩年內提供更多的線上容量來支援這一點。因此，這個網站肯定無法幫助我們實現目標。

This concludes the Q&A session of today's call. I will now hand the call back over to Ben Gliklich for closing remarks.

今天電話會議的問答環節到此結束。現在我會把電話轉回給 Ben Gliklich 作結束語。

Wonderful. Thank you, Tamika. Thank you, everybody, for joining. We're looking forward to speaking with many of you in the days and weeks to come. Have a good day.

精彩的。謝謝你，塔米卡。謝謝大家的參與。我們期待在未來的幾天和幾週內與你們中的許多人交談。祝你有美好的一天。

This concludes today's call. Thank you for joining. You may now disconnect your lines.

今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路了。