GCP Applied Technologies Inc (GCP) 2021 Q3 法說會逐字稿

Greetings and welcome to the GCP Applied Technologies Third Quarter 2021 Conference Call. As a reminder, today's call is being recorded. (Operator Instructions)

歡迎參加 GCP 應用技術 2021 年第三季電話會議。提醒一下，今天的通話正在錄音。 （操作員說明）

I will now turn the conference over to our host, William Kent, Vice President of Investor Relations. You may begin, sir.

現在我將會議交給東道主投資者關係副總裁威廉·肯特 (William Kent)。您可以開始了，先生。

Thank you. Hello, everyone, and thank you for joining us on today's call. With us on the call are Simon Bates, President and Chief Executive Officer; and Craig Merrill, Chief Financial Officer. If you've not done so already, please go to our website, gcpat.com, and click on the Investors tab to obtain copies of our earnings release, which contains tables with our financial results, along with a slide presentation with supporting materials.

謝謝。大家好，感謝您參加今天的電話會議。與我們一起參加電話會議的是總裁兼執行長西蒙貝茨 (Simon Bates)；克雷格·梅里爾（Craig Merrill），財務長。如果您還沒有這樣做，請訪問我們的網站gcpat.com，然後單擊“投資者”選項卡以獲取我們的收益發布副本，其中包含我們的財務業績表格以及帶有支持材料的幻燈片演示文稿。

Some of our comments today will include forward-looking statements under the U.S. federal securities laws. Actual results may differ materially from those projected or implied due to a variety of factors, including, but not limited to, the impacts of COVID-19. We refer everyone to our more robust forward-looking statement disclaimer and discussion of these risk factors facing our business in our earnings release and SEC filings.

我們今天的一些評論將包括美國聯邦證券法規定的前瞻性陳述。由於多種因素，包括但不限於 COVID-19 的影響，實際結果可能與預測或暗示的結果有重大差異。我們請大家參考我們在收益發布和 SEC 文件中更強有力的前瞻性聲明免責聲明以及對我們業務面臨的這些風險因素的討論。

We will discuss certain non-GAAP financial measures, which are described in more detail in our earnings release and on our website. Our comments on forward-looking statements and non-GAAP financial measures apply both to the prepared remarks and to the Q&A. References to EBITDA refer to adjusted EBITDA. References to EBIT refer to adjusted EBIT. And references to margin refer to adjusted gross margin, adjusted EBITDA margin and adjusted EBIT margin as defined in our press release. All revenue and associated growth rates in this discussion are stated on a comparable constant currency basis, which adjusts for the impact of foreign currency.

我們將討論某些非公認會計原則財務指標，這些指標在我們的收益發布和我們的網站上有更詳細的描述。我們對前瞻性陳述和非公認會計原則財務指標的評論適用於準備好的評論和問答。提及 EBITDA 時指的是調整後的 EBITDA。提及息稅前利潤是指調整後的息稅前利潤。提及的利潤率是指我們新聞稿中定義的調整後毛利率、調整後 EBITDA 利潤率和調整後 EBIT 利潤率。本討論中的所有收入和相關增長率均按可比較的固定匯率計算，並根據外幣的影響進行調整。

I'll now turn the call over to Simon.

我現在將電話轉給西蒙。

Thanks, Will. Good morning and thank you for joining today's call. Our financial performance in the third quarter was within the expectations, which we laid out in early August. What is notable is that we delivered these results despite cost inflation being significantly higher than we had forecast in the quarter both for raw materials and transportation.

謝謝，威爾。早安，感謝您參加今天的電話會議。我們第三季的財務表現符合我們八月初制定的預期。值得注意的是，儘管原物料和運輸成本通膨明顯高於我們在本季的預測，但我們還是實現了這些業績。

Notably, SG&A was down by more than 8.5% year-over-year in the quarter, a direct result of our efforts to rightsize the business. I am confident we are building a leaner and more agile business and setting GCP up for future success. This will become more evident once macro conditions have normalized.

值得注意的是，本季的 SG&A 年比下降了 8.5% 以上，這是我們努力調整業務規模的直接結果。我相信我們正在建立一個更精簡、更敏捷的業務，並為 GCP 未來的成功做好準備。一旦宏觀條件正常化，這一點將變得更加明顯。

Now I'd like to give a little bit more insight about our segment results. Given the market dynamics, I am very pleased with the performance of the SBM business. For 2021, we forecast both revenue and operating income growth year-over-year. Our employees have done an outstanding job in improving service and driving better results in this segment.

現在我想對我們的細分市場結果提供更多見解。鑑於市場動態，我對 SBM 業務的表現非常滿意。對於 2021 年，我們預測收入和營業收入將年增。我們的員工在改善服務和推動該領域取得更好成果方面做得非常出色。

For the SCC business, the supply chain disruptions and year-over-year cost inflation started earlier and have been more severe when compared to the SBM segment. Unfortunately, the cost inflation impact in the SCC segment has accelerated, and price recovery is lagging. We are clear on the actions we need to take to improve profitability in the SCC business.

對於 SCC 業務來說，與 SBM 業務相比，供應鏈中斷和年比成本上漲開始得更早，而且更為嚴重。不幸的是，SCC 領域的成本通膨影響加速，且價格復甦滯後。我們清楚需要採取哪些行動來提高 SCC 業務的獲利能力。

The addition of David Campos as our new President of the SCC Americas business is already bringing tangible change. We are working closely with David on developing a revenue and profit improvement plan for this business, and I look forward to sharing more on this in future calls.

David Campos 擔任 SCC 美洲業務新任總裁已經帶來了切實的變化。我們正在與 David 密切合作，為該業務制定收入和利潤改善計劃，我期待在未來的電話會議中分享更多相關資訊。

Since I joined GCP a little over 13 months ago, we have focused on improving the competitiveness of the business so that we can drive revenue and margin improvement. When we last spoke in August, I shared that this was one of the tougher working environments that I have experienced. This remains a very dynamic and challenging period.

自從我 13 個多月前加入 GCP 以來，我們一直專注於提高業務競爭力，以便推動收入和利潤率的提高。當我們八月上次交談時，我分享說這是我經歷過的最艱難的工作環境之一。這仍然是一個非常充滿活力和挑戰的時期。

Our revenue and margins have been negatively impacted by raw material shortages, cost inflation, transportation bottlenecks and tight labor markets. The GCP team is working diligently to address the challenges. We evaluate every opportunity to streamline production processes, find substitute raw materials where possible, and we continue to prioritize the customer. I want to make sure we recognize our employees for their continued focus on meeting our customers' needs despite the unprecedented challenges. They have done and continue to do a truly remarkable job.

我們的收入和利潤受到原材料短缺、成本上漲、運輸瓶頸和勞動市場緊張的負面影響。 GCP 團隊正在努力應對挑戰。我們評估每一個簡化生產流程的機會，盡可能尋找替代原料，並繼續優先考慮客戶。我想確保我們認可我們的員工，儘管面臨前所未有的挑戰，但他們仍然致力於滿足客戶的需求。他們已經並將繼續做一項真正出色的工作。

Looking into 2022, we will continue to focus on the things that we can control and on repositioning the business for growth. We will accomplish this through the combination of building out our organizational capability and improved focus on the customer. Given our strong balance sheet, we can accelerate our strategic plan through the right M&A.

展望 2022 年，我們將繼續專注於我們可以控制的事情，並重新定位業務以實現成長。我們將透過增強組織能力和提高對客戶的關注相結合來實現這一目標。鑑於我們強大的資產負債表，我們可以透過正確的併購來加速我們的策略計畫。

I'd now like to turn the call over to Craig. Craig?

我現在想把電話轉給克雷格。克雷格？

Thank you, Simon. Good morning, everyone, and thank you for joining us today. As a reminder, all sales and associated growth rates in my comments are on a constant currency basis. I will discuss GCP's third quarter results, including comments on each of our business segments. Lastly, I will provide commentary on the remainder of 2021.

謝謝你，西蒙。大家早安，感謝您今天加入我們。提醒一下，我評論中的所有銷售額和相關成長率都是以固定匯率計算的。我將討論 GCP 第三季業績，包括對我們每個業務部門的評論。最後，我將對 2021 年剩餘時間進行評論。

GCP's constant currency sales of $246.1 million were 0.9% lower than prior year but generally in line with our expectations. We had forecasted stable demand year-over-year with respect to revenues but with a slight impact from material and logistic constraints globally, which we started to see in the late quarter 2.

GCP 的以固定匯率計算的銷售額為 2.461 億美元，比上年下降 0.9%，但總體符合我們的預期。我們預計收入方面的需求將同比穩定，但全球材料和物流限制將產生輕微影響，我們在第二季末開始看到這一點。

Price for the quarter improved 1.3% compared with third quarter 2020 as price continued to come through from pricing actions implemented earlier in the year. GCP's gross margin decreased 710 basis points to 33.9% as higher raw material and logistic costs impacted margins at a higher rate versus our Q3 forecast, with a significant impact on the SCC segment. Selling, general and administrative costs of $59.2 million decreased 8.5% during the quarter, partially offsetting the gross margin compression and stronger than our forecast due to lower employee costs. GCP's income from continuing operations attributable to GCP shareholders totaled $7.8 million compared with $100 million for the third quarter 2020. Of course, the prior year period included $82.5 million in gains from the sale of the Cambridge corporate office.

與 2020 年第三季相比，本季的價格上漲了 1.3%，因為價格繼續受到今年稍早實施的定價行動的影響。 GCP 的毛利率下降 710 個基點至 33.9%，原因是原材料和物流成本上漲對利潤率的影響高於我們第三季的預測，對 SCC 業務產生了重大影響。本季銷售、一般和管理成本為 5,920 萬美元，下降 8.5%，部分抵消了毛利率壓縮，並且由於員工成本降低而強於我們的預測。 GCP 歸屬於 GCP 股東的持續經營收入總計 780 萬美元，而 2020 年第三季為 1 億美元。當然，去年同期包括出售劍橋公司辦公室帶來的 8,250 萬美元收益。

GCP's adjusted EBIT totaled $24.5 million compared with $36 million in prior year quarter, down approximately 32%. Adjusted EBIT margin decreased 470 basis points to 9.8% due to higher raw material and logistics costs. Adjusted EBITDA margin was 14.3% for the current quarter or 500 basis points lower versus the same period in 2020.

GCP 調整後息稅前利潤總計 2,450 萬美元，較去年同期的 3,600 萬美元下降約 32%。由於原物料和物流成本上升，調整後息稅前利潤率下降 470 個基點至 9.8%。本季調整後 EBITDA 利潤率為 14.3%，比 2020 年同期下降 500 個基點。

Our capital spending year-to-date is $23.9 million versus $28 million prior year-to-date, reflecting improved discipline of capital deployment. To better service our customers, we continue to hold higher inventories as we work through significant supply chain disruptions. Therefore, for the first 9 months of 2021, net cash provided by operating activities from continuing operations equals $25.8 million versus $59.3 million compared to prior year.

我們今年迄今的資本支出為 2,390 萬美元，而去年同期為 2,800 萬美元，反映出資本部署紀律的改善。為了更好地服務我們的客戶，我們在應對供應鏈嚴重中斷的情況下繼續持有更高的庫存。因此，2021 年前 9 個月，持續經營業務提供的經營活動提供的現金淨額為 2,580 萬美元，而去年同期為 5,930 萬美元。

Now looking at the specific performance of our 2 segments for the third quarter. SCC's constant currency sales were up 1.3% to $140.1 million due to favorable impact of price increases. We saw year-over-year growth specifically around global cement additives and geographically in both in Latin America and Europe. The SCC volume offset was generally in Asia where we saw intermittent government restrictions due to COVID-19, impacting demand.

現在來看看我們第三季兩個細分市場的具體表現。由於價格上漲的有利影響，SCC 的固定匯率計算的銷售額成長了 1.3%，達到 1.401 億美元。我們看到了全球水泥添加劑以及拉丁美洲和歐洲地區的年增長。 SCC 銷售抵消主要發生在亞洲，我們看到由於 COVID-19，政府間歇性實施限制，影響了需求。

Gross margins in the SCC segment declined year-over-year by 900 basis points to 31% in the third quarter due to high raw material costs and logistics costs, which accelerated in the quarter. SCC gross margins will be unfavorably impacted for the remainder of the year in comparison to 2020, mainly due to the inflation headwinds, including shipping and freight costs.

由於原物料成本和物流成本上漲，第三季 SCC 業務的毛利率年減 900 個基點至 31%，且本季成長速度加快。與 2020 年相比，SCC 的毛利率將在今年剩餘時間內受到不利影響，這主要是由於通貨膨脹的不利因素，包括運輸和貨運成本。

SCC segment operating income was $7.7 million, with segment operating margin of 5.4%, a decrease of 820 basis points compared with the prior year quarter, primarily due to higher raw material costs. Historically, third quarter has been our strongest margin quarter for SCC. And unfortunately, the severity of the inflation will have a significant impact on our SCC full year results in 2021.

SCC 部門營業收入為 770 萬美元，部門營業利潤率為 5.4%，與去年同期相比下降 820 個基點，主要是由於原物料成本上漲。從歷史上看，第三季是 SCC 利潤率最高的季度。不幸的是，嚴重的通貨膨脹將對我們的 SCC 2021 年全年業績產生重大影響。

Turning to the SBM segment for the quarter. SBM sales, constant currency, totaled $106 million during the third quarter, a 3.7% decrease versus the third quarter 2020 due to lower sales volumes. The volumes were slightly lower than we expected as we reduced shipments to certain property developers in China to reduce credit risk. We did see solid volume growth in certain product lines such as our Stirling Lloyd business and our specialty construction products group, which includes the fireproofing, injections and flooring products. Although SBM's gross margin decreased 460 basis points to 37.9% compared with the third quarter of 2020 due to higher raw material costs, it was in line with our expectations.

轉向本季的 SBM 部門。以固定匯率計算，第三季 SBM 銷售額總計 1.06 億美元，由於銷量下降，較 2020 年第三季下降 3.7%。由於我們減少了對中國某些房地產開發商的發貨量以降低信用風險，因此銷售量略低於我們的預期。我們確實看到某些產品線的銷售量穩定成長，例如史特林勞埃德業務和特種建築產品集團，其中包括防火、注射和地板產品。儘管由於原物料成本上漲，SBM的毛利率較2020年第三季下降460個基點至37.9%，但符合我們的預期。

SBM segment operating income totaled $20.9 million, with operating margins at 19.4%, a 390 basis point decrease versus prior year. However, year-to-date, SBM's operating margins continue to outpace 2020 margins due to volume growth, productivity, good mix and cost leverage to date.

SBM 部門營業收入總計 2,090 萬美元，營業利潤率為 19.4%，比上年下降 390 個基點。然而，今年迄今為止，由於迄今為止的銷售成長、生產力、良好的組合和成本槓桿，SBM 的營業利潤率繼續超過 2020 年的利潤率。

Now looking to quarter 4. It is clear that inflation and logistics cost increases will continue to impact our financial results on a year-to-year comparable basis, particularly in the SCC segment. We continue to take actions we believe are needed to offset these costs. However, we do not believe the actions will be sufficient to substantially lift margins sequentially moving into the fourth quarter for SCC. We are using our balance sheet in order to better service our customers and would continue to do so in order to ensure we have product to supply into 2022 without disruption. As a result, we expect to have on hand more physical inventory volume versus our historical trend at year-end.

現在展望第四季。很明顯，通貨膨脹和物流成本增加將繼續影響我們的年比財務業績，特別是在 SCC 領域。我們將繼續採取我們認為必要的行動來抵消這些成本。然而，我們認為這些行動不足以大幅提高 SCC 進入第四季的利潤率。我們正在利用我們的資產負債表來更好地服務我們的客戶，並將繼續這樣做，以確保我們的產品供應到 2022 年不會中斷。因此，我們預計年底手頭上的實體庫存量將高於歷史趨勢。

Certainly, the second half of 2021 has been an extremely challenging time to operate with material shortages, global supply chain disruptions and the changing labor dynamics. The global teams have done a great job working together to manage through the day-to-day disruptions to meet order commitments and keep construction projects on track.

當然，由於材料短缺、全球供應鏈中斷和勞動力動態變化，2021 年下半年是一個極具挑戰性的時期。全球團隊在應對日常乾擾方面做得非常出色，以履行訂單承諾並保持建設項目正常進行。

We do expect our gross margins to remain compressed for the short term. Price increases continue to be implemented. However, we believe it will take a couple more quarters for price to overcome inflation and stabilize margins. The impacts on gross margin are expected to be more unfavorable on the SCC segment versus the SBM segment as approximately 2/3 of our inflation is impacting our SCC segment.

我們確實預計短期內我們的毛利率將繼續壓縮。繼續實施漲價措施。然而，我們認為價格還需要幾個季度才能克服通膨並穩定利潤率。與 SBM 細分市場相比，預計 SCC 細分市場對毛利率的影響更為不利，因為大約 2/3 的通貨膨脹正在影響我們的 SCC 細分市場。

We forecast SG&A expenses for the full year to be down approximately $8 million year-over-year, and we expect a further favorable impact in 2022. And this will continue to partially offset the temporary margin compression. Our expense management and restructuring programs are ahead of schedule. We currently have approximately $482 million of cash and cash equivalents on hand at the end of the third quarter, slightly lower than forecast as we are holding higher inventory.

我們預計全年 SG&A 費用將年減約 800 萬美元，並預計 2022 年將產生進一步有利的影響。這將繼續部分抵消暫時的利潤率壓縮。我們的費用管理和重組計劃提前完成。截至第三季末，我們目前手頭上有約 4.82 億美元的現金和現金等價物，略低於預期，因為我們持有較高的庫存。

In closing, we are pleased with our progress. And although the environment is challenging on both the supply side and logistics, we expect quarter 4 revenues to be in line with our regular seasonality following our quarter 3 results with higher price capture in Q4 versus Q3.

最後，我們對我們的進展感到滿意。儘管供應方和物流方面的環境都充滿挑戰，但我們預計第四季度的收入將與第三季業績後的常規季節性相符，第四季的價格捕獲高於第三季。

Our strong balance sheet continues to provide significant flexibility and opportunity to deliver shareholder value, whether it be return of capital to shareholders, M&A or a combination. During the year, we have accelerated our efforts to identify and broaden the scope of potential M&A opportunities, which will provide increased capability, scale and leverage for our organization.

我們強大的資產負債表繼續提供顯著的靈活性和機會來實現股東價值，無論是向股東返還資本、併購或組合。今年，我們加快了識別和擴大潛在併購機會範圍的力度，這將為我們的組織提供更大的能力、規模和影響力。

I will now turn it back over to Simon. Simon?

我現在將其轉回給西蒙。西蒙？

Thanks, Craig. 2021 has been a truly dynamic year. Our operating plan assumes both cost inflation and productivity improvements. I am very pleased to say that between productivity and SG&A reductions, we will realize more than $20 million of improvement in our operating expense and efficiency by the end of the year. Consequently, had cost inflation been in line with our budget or historical norms, our results would have been well in excess of our operating plan. Unfortunately, in the short term, these unprecedented increases in costs have negatively impacted our consolidated results. Although we feel very good about the progress we are seeing in the underlying business, we have naturally switched our focus to address margin through price and to drive further productivity improvements.

謝謝，克雷格。 2021 年是真正充滿活力的一年。我們的營運計劃假設成本上漲和生產力提高。我很高興地說，在生產力和 SG&A 削減之間，到今年年底，我們的營運費用和效率將實現超過 2000 萬美元的改善。因此，如果成本通膨符合我們的預算或歷史標準，我們的業績將遠遠超出我們的營運計畫。不幸的是，在短期內，這些前所未有的成本增加對我們的綜合業績產生了負面影響。儘管我們對基礎業務所取得的進展感到非常滿意，但我們自然地將重點轉向透過價格解決利潤問題並推動生產力的進一步提高。

I also want to note that we are ahead of schedule on the exit from our Cambridge facility, and we have stood up our new head office in Alpharetta, Georgia. Our new state-of-the-art R&D facility in Wilmington, Mass is under construction and will be ready for occupancy in Q1 2022. The execution of our strategic priorities to date has improved the business. And coupled with the use of our strong balance sheet, we are committed to deliver shareholder value.

我還想指出的是，我們提前退出了劍橋工廠，我們已經在喬治亞州阿爾法利塔設立了新的總部。我們位於馬薩諸塞州威爾明頓的最先進的新研發設施正在建設中，將於 2022 年第一季投入使用。迄今為止，我們戰略重點的執行已經改善了業務。結合我們強大的資產負債表，我們致力於創造股東價值。

Thank you for joining our call, and we look forward to taking any questions.

感謝您加入我們的通話，我們期待回答任何問題。

(Operator Instructions) Today's first question comes from Mike Harrison with Seaport Research Partners.

（操作員說明）今天的第一個問題來自 Seaport Research Partners 的 Mike Harrison。

I was wondering if you could talk first about the volume impact that you saw related to supply chain disruption, raw material availability and maybe even labor shortages or labor availability and maybe kind of parse that out between the SCC segment and SBM. I guess the question is, how much higher could volumes have been, if not for these disruption impacts?

我想知道您是否可以先談談您所看到的與供應鏈中斷、原材料可用性甚至勞動力短缺或勞動力可用性相關的數量影響，也許可以在 SCC 部門和 SBM 之間解析這一點。我想問題是，如果沒有這些破壞性影響，交易量還能高多少？

Mike, I think it's a good question. It's not something we formally capture or calculate. But I can tell you, be it from a production standpoint with the inability to get raw materials or having to switch to alternate raw materials, with the challenges of getting labor in some of our facilities, the inability at times to source materials in a timely manner that is coming across an ocean. We've also seen, as we've tried to ship product, a lack of trucks that are available. And so I would tell you, Mike, those supply chain disruptions have impacted our volumes in every geography that we operate. These aren't limited or different, honestly, by geography and has equally impacted both the SBM and the SCC segment.

麥克，我認為這是一個很好的問題。這不是我們正式捕獲或計算的東西。但我可以告訴你，從生產的角度來看，無論是無法獲得原材料還是不得不轉向替代原材料，在我們的一些工廠中面臨著獲得勞動力的挑戰，有時無法及時採購材料跨越海洋的方式。當我們嘗試運送產品時，我們也發現缺乏可用的卡車。所以我想告訴你，麥克，這些供應鏈中斷影響了我們在每個經營地區的銷售。老實說，這些並不受地理位置的限製或不同，也同樣影響了 SBM 和 SCC 領域。

All right. And then on the price versus cost front, maybe just talk about how you see that trending over the next few quarters. Any thoughts on do we expect to see peak margin headwinds and when we might expect to see some margin recovery?

好的。然後在價格與成本方面，也許只是談談您如何看待未來幾季的趨勢。對於我們是否預計會看到利潤率峰值逆風以及何時預計會看到利潤率有所回升，有什麼想法嗎？

Yes. Michael, it's Craig. I'm going to give you a little bit more detail here just on the numbers. So we generally had about $25 million worth of freight raw material inflation in the quarter. We mitigated about half of that through price productivity and our SG&A efforts. And you'll see that in the margin basically. If you just use those numbers, that's the margin drop. Unfortunately, we expect that to continue into Q4. So really sequentially, I think the margins are going to be about the same. The inflation is going to be about the same.

是的。麥可，我是克雷格。我將在這裡向您提供有關數字的更多詳細資訊。因此，本季貨運原物料通膨總體約為 2,500 萬美元。我們透過價格生產力和 SG&A 努力減輕了大約一半的影響。基本上你會在邊緣看到這一點。如果你只使用這些數字，那就是利潤下降。不幸的是，我們預計這種情況將持續到第四季度。因此，實際上，我認為利潤率將大致相同。通貨膨脹率也將大致相同。

We are going to get a little bit more price. So we're working to do a little more favorable into Q4. Honestly, most of it is around SCC. That's where we've got the challenges. On SCC, normally, in history, we've been able to formulate around and use different materials. One material goes up, another one is neutralized. We change it out, and we formulate. Unfortunately, with the tsunami of price increases and supply chain disruptions, you can't get the product that you want to switch into properly or the freight has gone up or the cost has gone up. So that's where we've been challenged on SCC.

我們將得到更多的價格。因此，我們正在努力在第四季做出更多有利的事情。老實說，大部分都是圍繞著SCC的。這就是我們面臨挑戰的地方。在 SCC 上，通常，在歷史上，我們已經能夠制定並使用不同的材料。一種材料上升，另一種材料被中和。我們改變它，然後製定。不幸的是，隨著價格上漲和供應鏈中斷的海嘯，您無法正確獲得想要轉換的產品，或運費上漲或成本上漲。這就是我們在 SCC 上面臨的挑戰。

That's a temporary issue. Our business model is really strong in formulation. And where we've been hampered there, that's why the SCC margins have come down more than we would like them to, obviously, and more than historical even when we've had inflation like this. So we're working through that. And once the supply chain disruptions ease a little bit and stabilize over the next -- probably by the end of the year, we're hoping, into next year, we'll start to grab back those margins in SCC.

這是一個暫時的問題。我們的商業模式在製定上確實很強大。我們在那裡受到阻礙，這就是為什麼 SCC 利潤率的下降幅度明顯超過了我們的預期，甚至在我們經歷了這樣的通貨膨脹的情況下也超過了歷史水平。所以我們正在解決這個問題。一旦供應鏈中斷稍微緩解並在未來穩定下來——可能到今年年底，我們希望到明年，我們將開始奪回 SCC 的利潤。

And just talk a little bit about our SBM segment. Clearly, for our waterproofing, building envelope business and our fireproofing business, these are job-driven, contract-driven. And consequently, your pricing is specific to a job. And generally, and our peers would be in the same situation, you're looking at a 3- to 4-month drag on the ability to move price specific to the next job. Having said all of that, we did announce global price increases at the beginning of October for our SBM business, and we will be doing the same again in January.

簡單談談我們的 SBM 細分市場。顯然，對於我們的防水、圍護結構業務和防火業務來說，這些都是由工作驅動、合約驅動的。因此，您的定價是特定於工作的。一般來說，我們的同行也會遇到同樣的情況，您會看到針對下一份工作調整價格的能力會受到 3 到 4 個月的拖累。話雖如此，我們確實在 10 月初宣布了 SBM 業務的全球漲價，並且我們將在 1 月再次這樣做。

All right. And then as it relates to the SG&A line, those costs appear to be down quite a bit sequentially. You mentioned the restructuring actions that you've taken, but I think also you mentioned in the press release some changes in incentive accruals. So I wanted to get a sense of how much of that SG&A reduction is sustainable. And what portion of it might be related to some true-up of accruals?

好的。然後，由於與 SG&A 線相關，這些成本似乎連續下降了很多。您提到了已採取的重組行動，但我認為您在新聞稿中也提到了應計激勵措施的一些變化。因此，我想了解 SG&A 削減中有多少是可持續的。其中哪一部分可能與應計費用的調整有關？

Yes. Some is definitely a true-up of some incentive accruals. Listen, it's sustainable. We accelerated some of our moves on our operating expense reduction. So it is sustainable. I think you won't get any further lift, I think, in Q4, honestly, because we are starting to -- we've got the Atlanta office that we're now in, that's where we're speaking from right now, honestly. So I think we're probably flat in Q4 with any -- with no further uplift. But we will roll over.

是的。有些絕對是某些應計獎勵的真實結果。聽著，這是可持續的。我們加快了削減營運費用的一些措施。所以它是可持續的。老實說，我認為你不會在第四季度獲得任何進一步的提升，因為我們開始 - 我們現在所在的亞特蘭大辦事處，這就是我們現在正在講話的地方，誠實地。因此，我認為第四季度我們可能持平，沒有進一步的提升。但我們會翻身的。

We haven't even got fully, Michael, the benefit of all of the Cambridge rent. For next year, we'll get that benefit because that's certainly more expensive than the Atlanta rent, including the R&D facility in Wilmington. We'll get the benefit of a number of actions we've taken in the second half here with reduction in headcount.

邁克爾，我們甚至還沒有完全享受劍橋全部租金的好處。明年，我們將獲得這項好處，因為這肯定比亞特蘭大的租金貴，包括威爾明頓的研發設施。我們將受益於下半年採取的一系列裁員行動。

During the year, by the time we end up at the end of the year, we'll be down in G&A 100 headcounts approximately, which will roll over and help us next year, even if we have to put back some incentive next year as we roll through the year. So we'll be net positive, and we're looking good on those programs.

在這一年中，到年底時，我們的 G&A 員工人數將減少約 100 人，這將在明年滾動並為我們提供幫助，即使我們明年必須收回一些激勵措施，因為我們度過了這一年。所以我們將是淨積極的，而且我們在這些計劃上看起來不錯。

All right. And then my last question for now has to do with a comment that you made about reducing sales into China to limit your credit risk. Can you give us a little bit more detail on, I guess, how you're viewing risk within that environment given some of the issues that have been in the headlines recently?

好的。我現在的最後一個問題與您關於減少對中國的銷售以限制信用風險的評論有關。我想，考慮到最近出現在頭條新聞中的一些問題，您能否給我們更多詳細信息，說明您如何看待該環境中的風險？

Yes. So payment terms in China, for -- most of those on the phone probably know it, it's almost between half a year to a year, depending on what customer you're working with. We're just kind of in the middle of that. So I won't get into the details. So we're kind of split right down the middle of that terms. So we thought it more prudent with all the issues going on. We have some developers we sell to. There's one that's fairly into the situation that you read about. And so we've restricted any more volumes to that developer until we get some payment. And so we lost about $3 million to $3.5 million worth of revenue in Q3, and we'll probably lose a little bit more in Q4. It could be $5 million in Q4 on a year-over-year wrap, but we think that's the prudent thing to do.

是的。因此，中國的付款條件——大多數打電話的人可能都知道，幾乎是半年到一年，這取決於與您合作的客戶。我們正處於其中。所以我不會詳細介紹。所以我們在這些條款的中間有點分裂。所以我們認為對於所有正在發生的問題更加謹慎。我們向一些開發商出售產品。有一個相當適合您所讀到的情況。因此，在我們收到付款之前，我們限制了該開發商的更多數量。因此，我們在第三季損失了約 300 萬至 350 萬美元的收入，第四季我們可能會損失更多一點。如果按年計算，第四季的營收可能會達到 500 萬美元，但我們認為這是明智之舉。

We're not nervous we're not going to get paid. We've got some other customers that are paying us very well, and we're selling to them. And in fact, Stirling Lloyd product has been -- being sold there, and we've really increased those sales in China. But that particular developer, we're just holding back and giving up some volume until we get payment. So we can give you a further update on the next call once we work through it. Does that answer your question, Michael?

我們並不擔心拿不到報酬。我們還有一些其他客戶給我們很高的報酬，我們正在向他們銷售產品。事實上，斯特林勞埃德的產品一直在那裡銷售，我們確實增加了在中國的銷售量。但對於那個特定的開發商，我們只是保留並放棄一些數量，直到我們收到付款。因此，一旦我們解決了這個問題，我們就可以在下次通話中向您提供進一步的更新資訊。這能回答你的問題嗎，麥可？

Yes, it does. Go ahead.

是的，它確實。前進。

Maybe I give a bit more color from my perspective, Mike. There's 3 revenue streams in China, our Stirling Lloyd business, our fireproofing business and our waterproofing business. We're seeing year-over-year growth in our fireproofing and our Stirling Lloyd business. This particular issue impacts our building envelope, our waterproofing business. And I think we've taken a strong stance in terms of protecting our credit risk, and there is a short-term impact to our revenues, but I emphasize the short term.

也許我從我的角度給了更多的色彩，麥克。在中國有3個收入來源，我們的斯特林勞埃德業務、我們的防火業務和我們的防水業務。我們看到防火材料和斯特林勞埃德業務逐年成長。這個特殊問題影響了我們的建築圍護結構和防水業務。我認為我們在保護信用風險方面採取了強硬立場，這對我們的收入產生了短期影響，但我強調短期。

No. Just one more layer of challenges that you have to deal with.

不。只是您必須應對另一層挑戰。

Our next question comes from Rosemarie Morbelli with Gabelli & Company.

我們的下一個問題來自 Gabelli & Company 的 Rosemarie Morbelli。

Simon and Craig, I was wondering if you could talk about the specific end markets, the trends you are seeing and which ones are being affected by -- well, obviously, all of them are being affected by the shortages, are being affected by the logistics and so on. But in terms of demand for the industry overall, have you seen a slowdown? Do you have pent-up demand? Can you give us a feel for what is going on out there in the marketplace?

西蒙和克雷格，我想知道你們能否談談具體的終端市場、你們看到的趨勢以及哪些市場受到了影響——嗯，顯然，所有這些市場都受到了短缺的影響，都受到了短缺的影響。物流等。但就整個行業的需求而言，您是否看到了放緩？您有被壓抑的需求嗎？您能為我們介紹一下市場上正在發生的事情嗎？

In a succinct manner, Rosemarie, it's probably going to be a challenge when we speak about the segment and geography. But I would say, broadly, we sell into infrastructure, and we sell into commercial new construction, and we sell into residential repair and remodel. I would say we are positively -- have been positively surprised by the commercial new construction market this year, in particular in North America, and that's resulted in some good results for our waterproofing and fireproofing businesses.

羅斯瑪麗，簡而言之，當我們談論細分市場和地理時，這可能會是一個挑戰。但我想說，從廣義上講，我們銷售基礎設施，我們銷售商業新建建築，我們銷售住宅維修和改造。我想說，我們對今年的商業新建市場感到非常驚訝，特別是在北美，這為我們的防水和防火業務帶來了一些良好的業績。

On the residential repair and remodel, we've seen nice growth year-over-year. I think as we've pointed out before, our exposure, particularly in North America, to residential new construction is quite limited. And that would have been the strongest segment in North America this year. And then that's really talking specifically about our SBM business. For our SCC business, because our customers are essentially cement producers and ready-mix concrete producers, we get full exposure across all the different segments in terms of residential, commercial and infrastructure.

在住宅維修和改造方面，我們看到了同比的良好成長。我認為，正如我們之前指出的，我們對住宅新建項目的接觸，特別是在北美，是相當有限的。這將是今年北美最強勁的部分。這實際上是在專門討論我們的 SBM 業務。對於我們的SCC業務，由於我們的客戶主要是水泥生產商和預拌混凝土生產商，因此我們在住宅、商業和基礎設施方面的所有不同領域都有充分的業務。

I think where we've seen nice growth this year, and it's been global growth, that could have been better had we had access to more raw materials has been our infrastructure business. And that's a segment that we enjoy and like and is likely to be more robust over the next 3 years than residential or commercial.

我認為今年我們看到了良好的成長，而且是全球成長，如果我們能夠獲得更多原材料，那麼我們的基礎設施業務可能會更好。這是我們喜歡和喜歡的細分市場，並且在未來三年內可能比住宅或商業市場更強勁。

So looking at the infrastructure, how much do you think you have lost -- revenues delayed because of the shortage?

那麼看看基礎設施，您認為您損失了多少——收入因短缺而延遲？

Well, Rosemarie, let me -- I use math a little bit more than probably I should. But we said at the beginning -- if you remember at the beginning of Q3, we said we thought we'd be up about 6% to 8%, right, in revenue for the full year. I think now we're looking at around 5% approximately -- between 4% and 5% as reported, right? I'm going to say as reported. So if you think about that, you could argue that I would think the global construction market has probably lost a point or 2 for the full year versus what expected -- they expected to so -- quite a bit. But we are seeing -- what happens, Rosemarie, in any -- especially infrastructure projects, in any one of those projects, if they're missing one product or they're missing one item to finish the sequence of the job, they cannot continue the job, and they're having a problem switching out to other items, alternative items because they can't get it either. So that's slowing down the bigger jobs.

好吧，羅斯瑪麗，讓我——我使用數學的次數比我應該使用的要多一些。但我們一開始就說過——如果你還記得第三季初，我們說過我們認為全年營收將成長約 6% 到 8%，對吧。我認為現在我們正在考慮大約 5%——據報道，在 4% 到 5% 之間，對吧？我要照報道說的。因此，如果你考慮這一點，你可能會說，我認為全球建築市場全年可能會比預期（他們預期如此）下降一兩點。但我們看到，羅斯瑪麗，在任何項目中，尤其是基礎設施項目，在任何一個項目中，如果他們缺少一種產品或缺少一項來完成工作序列，他們就無法繼續工作，但他們正在轉向其他項目、替代項目時遇到問題，因為他們也無法得到它。所以這會減緩更大的工作。

One of the reasons why, and we're not in new construction residential, unfortunately, the folks who are in new construction residential or light commercial, they can switch out and they can move to another job and come back to a certain job. They have much more flexibility. On the high-end commercial and the infrastructure and where we play, the jobs just can't switch out products. So that's delayed it. Now the good news about that, we'll get that in 2022 because the jobs -- what we're seeing in our pipeline is the jobs are not going away. Money is cheap. People are still continuing to invest and still completing those jobs. It's just they'll move into 2022. And this is when we talk about supply chain disruption. It's not on the -- just on the inbound. It's also on the outbound on the demand and people delaying some need for our products because their projects are delayed. So hopefully, that's helpful.

不幸的是，我們不在新建住宅的原因之一是，那些在新建住宅或輕型商業中的人們可以轉出，他們可以搬到另一份工作，然後再回到某個工作。他們有更多的靈活性。在高端商業和基礎設施以及我們玩耍的地方，工作無法更換產品。所以就耽誤了。現在好消息是，我們將在 2022 年得到這個消息，因為我們在管道中看到的工作不會消失。錢很便宜。人們仍在繼續投資並仍在完成這些工作。只是他們將進入 2022 年。這就是我們談論供應鏈中斷的時候。它不在——只是在入境處。這也與需求的外向性有關，人們因為他們的項目被推遲而推遲了對我們產品的一些需求。希望這會有所幫助。

Yes. That is very helpful. And so this actually brings my -- brings up my next question, which is regarding M&A. Is it safe to assume that it is going to open the residential construction market to you in a much larger fashion? And is that -- do you have something that could eventually close by year-end?

是的。這非常有幫助。因此，這實際上帶來了我的下一個問題，即有關併購的問題。可以肯定地說，它將以更大的方式向您開放住宅建築市場嗎？那是——你有什麼最終可以在年底前完成的事情嗎？

The -- we are very -- we have put a lot of time and effort, Rosemarie, into M&A. And we're very thoughtful and specific about where we would invest our shareholders' funds. And we are clear on the geographies where we want to play, and we are clear on the segments where we think an investment is prudent.

羅斯瑪麗，我們非常——我們在併購方面投入了大量的時間和精力。我們對於股東資金的投資方向非常深思熟慮且具體。我們很清楚我們想要涉足的地區，也很清楚我們認為投資應該謹慎的細分市場。

And we've talked about infrastructure as an example. I think the global construction trends or information, for example, from IHS would suggest that global construction should grow at about 2% to 3% the next 3 years. But the infrastructure spend is likely to grow at more [like] 6%. And so we think infrastructure would be a prudent investment. And we also -- of course, when we think about North America, residential new construction, given the pent-up demand that is a decade in the making, we think, although growth may be limited, that will remain a strong and robust segment over the next 2 or 3 years. And we think that would be a prudent investment, too.

我們已經以基礎設施為例進行了討論。我認為，例如，來自 IHS 的全球建築趨勢或資訊表明，未來 3 年全球建築業應成長 2% 至 3% 左右。但基礎設施支出可能會以 6% 左右的速度成長。因此，我們認為基礎設施將是一項謹慎的投資。當然，當我們考慮北美的住宅新建時，考慮到十年來被壓抑的需求，我們認為，儘管增長可能有限，但這仍將是一個強勁而強勁的領域未來2年或3年。我們認為這也是一項謹慎的投資。

And one last question, if I may. So you are lagging price increases. I understand that there is -- it is difficult to raise price in some particular areas. Are you considering surcharges in order to offset at least the higher cost of logistics?

如果可以的話，還有最後一個問題。所以你滯後價格上漲。據我了解，在某些特定領域很難提高價格。您是否正在考慮收取附加費，以至少抵消較高的物流成本？

It's a daily conversation, Rosemarie, honestly. And every option is on the table, and every option has been discussed and is part of our execution plan.

老實說，這是日常對話。每個選項都擺在桌面上，每個選項都經過討論，並且是我們執行計劃的一部分。

Yes. And maybe, Rosemarie, I'll weigh in on that. They -- we expect more price in Q4. We actually have committed price from customers that we haven't received price in their current jobs or projects because we don't have the ability to get it on those projects, but they've committed to give it to us on the next projects, which are now being shipped in Q4, and that will roll through Q4 and Q1.

是的。羅斯瑪麗，也許我會對此發表意見。我們預計第四季價格會更高。實際上，我們已經從客戶那裡承諾了價格，但我們在他們當前的工作或項目中還沒有收到價格，因為我們沒有能力在這些項目上獲得價格，但他們承諾在下一個項目中將其提供給我們，目前已在第四季度發貨，並將持續到第四季度和第一季。

And in SBM, honestly, we're doing well between price and productivity, and this will be our low margin mark for SBM. And it'll pick up through a little bit of Q4, and then it'll come more normalized into next year.

老實說，在 SBM，我們在價格和生產力之間做得很好，這將是我們對 SBM 的低利潤率標記。它會在第四季有所回升，然後到明年就會更加正常化。

SCC is where we're focused, to your point. We have inbound freight and outbound freight on SCC, and it is challenging. And we're attempting to do surcharge and then working with our vendors on some of the extra freight costs overseas and inbound overseas because it's a global supply chain for SCC versus SBM, which is a little more local, and it's easier to handle.

正如您所說，SCC 是我們關注的重點。我們在SCC上有進港貨運和出港貨運，這是一個挑戰。我們正在嘗試收取附加費，然後與我們的供應商合作解決海外和海外入境的一些額外運費，因為與 SBM 相比，SCC 是一個全球供應鏈，SBM 更加本地化，​​而且更容易處理。

The next question comes from Laurence Alexander with Jefferies.

下一個問題來自勞倫斯·亞歷山大和傑弗里斯。

It's Dan Rizzo on for Laurence. Just one quick question, is there a way to shorten or change your supply chain? I mean, obviously, not right now because you're just dealing with issues (inaudible) just so you can kind of change things so this doesn't happen again, I mean. I guess it's kind of closing the barn door after the horse is out, but I'm just wondering if you're looking at that.

丹·里佐 (Dan Rizzo) 替補勞倫斯 (Laurence)。只是一個簡單的問題，有沒有辦法縮短或改變您的供應鏈？我的意思是，顯然，不是現在，因為你只是在處理問題（聽不清楚），這樣你就可以改變事情，這樣這種情況就不會再發生了，我的意思是。我想這有點像馬出去後關上穀倉門，但我只是想知道你是否在看這個。

Dan, I truly believe every company that is impacted by the supply chain challenges is asking the very same question. And again, it's a daily conversation. And decisions that you would like to make, as Craig said, in terms of switching to an alternate material, it's just not feasible right now. But I think it does beg the question, how do you more fundamentally secure yourself against the prospect of this happening? And it is a current and continuous conversation and will be part of our strategic planning going forward. But to your point, Dan, the horse has already bolted. And it's now thinking about what we can do over the next 12, 24 months rather than what we can do right now, unfortunately.

丹，我堅信每家受到供應鏈挑戰影響的公司都在問同樣的問題。再說一遍，這是日常對話。正如克雷格所說，就改用替代材料而言，您想要做出的決定目前還不可行。但我認為這確實引出了一個問題：如何從根本上確保自己免受這種情況發生的影響？這是一個當前且持續的對話，並將成為我們未來策略規劃的一部分。但就你的觀點而言，丹，馬已經逃跑了。不幸的是，它現在考慮的是我們在未來 12、24 個月內可以做什麼，而不是現在可以做什麼。

Yes. And Dan, I'll just -- sorry, Dan. I'll just reemphasize that, that's predominantly a challenge on the SCC part, I'd say. And we've actually got the benefit from that global supply chain for years. And unfortunately, with the increasing freight, the blackouts in China now on production on areas and even across Asia, that's challenging getting product, let alone the cost increase is going up. So to your -- your point is very valid, and we need to have some sort of balance in that.

是的。丹，我只是──對不起，丹。我想再次強調一下，我想說，這主要是 SCC 方面的挑戰。事實上，我們多年來一直從全球供應鏈中受益。不幸的是，隨著貨運量的增加，中國一些地區甚至整個亞洲的生產都出現停電，這對獲得產品來說是一個挑戰，更不用說成本增加了。所以對你來說，你的觀點非常有效，我們需要在這方面保持某種平衡。

It sounds like that a lot of the issues or at least the volume issues in SCC, because of the shortages, are just pent-up demand. So just to make sure I'm thinking about this right, that would suggest that once this is over, be it 3 months, 6 months, 9 months from now, you should see a pretty large restock cycle as people basically catch up, particularly given the infrastructure demand that are growing worldwide.

聽起來很多問題，或至少 SCC 的數量問題，因為短缺，只是被壓抑的需求。因此，為了確保我的想法是正確的，這表明一旦這一切結束，無論是3 個月、6 個月還是9 個月，您應該會看到一個相當大的補貨週期，因為人們基本上會趕上，特別是鑑於全球基礎設施需求不斷增長。

Yes. On SBM, certainly, because we have Stirling Lloyd -- we actually have back orders on Stirling Lloyd right now right through the quarter on some of the BE. SCC tends to restock fairly quickly, but I think our customers are not moving the product out to those projects. So you are right. I think it's -- it will extend the cycle, I think. I don't know if there'll be a big bang in Q1 or 2, but it will extend the cycle on the replenishment of inventory.

是的。當然，在 SBM 上，因為我們有 Stirling Lloyd，實際上我們現在整個季度都有一些 BE 的延期訂單。 SCC 往往會很快補充庫存，但我認為我們的客戶不會將產品轉移到這些項目中。所以你是對的。我認為這會延長週期。我不知道第一季或第二季是否會出現大爆炸，但是會延長庫存補貨的週期。

And Dan, to your question -- it's Simon. I'll give a little bit more color. Specific actions that we had taken that actually were going to drive some very nice productivity improvements for us year-over-year have been negated by the inability to get the product that we planned to replace the raw or the cost of that raw has increased so much that it negates the productivity improvement.

丹，對於你的問題──我是西蒙。我會多一點顏色。我們所採取的具體行動實際上將推動我們逐年提高生產力，但由於無法獲得我們計劃取代原材料的產品或原材料的成本增加而被否定，因此它否定了生產率的提高。

The second thing because -- what you asked, what can you do? Clearly, we have taken the decision to increase our physical inventory and quite substantially. And I think surprisingly, that meant for some customers in some segments, we've actually been able to drive an improvement in our on-time and in full on certain projects for certain customers. And I think that's a testament to our supply chain group that we've been able to do that in these challenging times.

第二件事是因為──你問什麼，你能做什麼？顯然，我們已決定大幅增加我們的實體庫存。我認為令人驚訝的是，這意味著對於某些細分市場的某些客戶來說，我們實際上已經能夠推動某些客戶的某些專案的按時和全面改進。我認為這證明了我們的供應鏈團隊能夠在這個充滿挑戰的時期做到這一點。

Our next question comes from Chris Shaw with Monness, Crespi.

我們的下一個問題來自克里斯·肖和蒙尼斯·克雷斯皮。

If I could follow up on Rosemarie's question about M&A. You've lined up the strategy and the target sort of areas and geographies. And I think you've -- seems like you've had that sort of set for a while now, I guess. What's just sort of the -- what's the sticking point right now? Is it just -- are there no targets? Are they not selling? Or is the multiples too high? Have you lost out on some targets? Or is -- are you guys -- is it COVID? Or are you guys just been distracted with supply chain issues? I mean what's really sort of the sticking point in getting this done?

我能否跟進羅斯瑪麗有關併購的問題。您已經制定了策略以及目標區域和地理位置。我想你已經——看起來你已經擁有這樣的一套有一段時間了，我猜。現在的癥結是什麼？難道只是──沒有目標嗎？他們不賣嗎？還是倍數太高？你是否失去了一些目標？或者是──你們是──是新冠病毒嗎？還是你們只是因為供應鏈問題而分心？我的意思是，完成這件事的真正癥結是什麼？

No. We've actually dedicated a lot of time and effort to M&A. In some cases, we have lost out. In some cases, we've decided the price is too high. In some cases, we've decided there isn't enough good fit and synergies. And so we want to be thoughtful. We want to be discerning. We actually have a very good pipeline and feel good about some of the targets that we are pursuing.

不，我們實際上在併購上投入了大量的時間和精力。在某些情況下，我們已經失敗了。在某些情況下，我們認為價格太高。在某些情況下，我們認為沒有足夠的契合度和協同效應。所以我們要深思熟慮。我們想要有洞察力。事實上，我們有一個非常好的管道，並且對我們正在追求的一些目標感到滿意。

Okay. So it's a lot of reasons, I guess.

好的。所以我想這有很多原因。

Yes.

是的。

And then if I could ask, historically -- I can't remember. In both your businesses, when you've had to raise prices a decent amount, is there any impact to demand? Or is there some sort of elasticity? Or is there any switching out to more commodity-like product or anything like that? I forget the sort of historical when that has happened in the past.

如果我可以問的話，從歷史上看——我不記得了。在你們的兩家企業中，當你們必須大幅提高價格時，會對需求產生影響嗎？或是是否存在某種彈性？或是否會轉向更多類似商品的產品或類似產品？我忘記了過去發生的那種歷史事件。

Yes. Generally, I mean, we're managing the balance between price and volume. And generally, there's not switching out as long as we are sensible, we communicate effectively and we're clear to the customer on exactly why they're getting the price. And the challenge is the timing. I mean, certainly, if we're going to jam the customer and put him in a very difficult position with his pricing to his customer or his -- their project or her project, that's an issue. So hence, the reason why the delay a little bit on our part because we don't want to lose volume. We haven't lost volume that we know of as we're tracking. Where we had, I think, about 2 or 3 years ago, we did move price and we lost volume. And you can see in 2019, it came back to haunt us on the SBM side. So we're very thoughtful on this price approach.

是的。一般來說，我的意思是，我們正在管理價格和數量之間的平衡。一般來說，只要我們明智，我們有效溝通，我們清楚地向客戶解釋他們為什麼要得到這個價格，就不會改變。挑戰在於時機。我的意思是，當然，如果我們要幹擾客戶並讓他處於非常困難的境地，因為他向他的客戶或他的——他們的專案或她的專案定價，那就是一個問題。因此，我們之所以會延遲一點，是因為我們不想損失銷售量。據我們所知，我們追蹤的交易量並沒有減少。我認為，大約兩、三年前，我們確實調整了價格，但數量卻減少了。你可以看到，2019 年，它再次困擾著 SBM 方面的我們。因此，我們對這種價格方式非常深思熟慮。

Of course, we've got the wind in our back with the inflation. So we're going to get the price. We are driving productivity to offset it, too. And I think at the end of this, we'll be more competitive, and we'll be able to grow the business on the backs of that versus just working on price and margin, honestly.

當然，通貨膨脹也給我們帶來了麻煩。所以我們要得到價格。我們也在提高生產力來抵消它。我認為最終，我們將更具競爭力，並且我們將能夠在此基礎上發展業務，而不是僅僅致力於價格和利潤，老實說。

(Operator Instructions) Our next question is a follow-up from Mike Harrison with Seaport Research Partners.

（操作員說明）我們的下一個問題是來自 Seaport Research Partners 的 Mike Harrison 的後續問題。

Just one last one for you around free cash flow. Looking even at the adjusted number, you're quite a bit behind where you were last year. I know you mentioned the higher inventory levels. But maybe just as we're starting to think about free cash flow for next year, maybe walk us through some of the puts and takes there. Presumably, working capital becomes less of a headwind. Expect to see some earnings growth in there. But also how do we think about the cash for restructuring and repositioning into next year as well as CapEx next year versus this year?

只是為您提供有關自由現金流的最後一項。即使看看調整後的數字，你也比去年落後了很多。我知道你提到了更高的庫存水準。但也許就在我們開始考慮明年的自由現金流時，也許可以帶我們去了解一些看跌期權和看跌期權。據推測，營運資金不再是阻力。預計那裡的盈利會有所增長。但我們如何看待明年重組和重新定位的現金以及明年與今年的資本支出？

I mean I'll give you a general comment, Mike, and then Craig will probably follow up with more specific data. But very deliberate decision on Craig and my part early this year as we saw challenges on raw material pricing and the indications of shortages that we bought early. And we bought a lot. We're very deliberate. So I'd say the majority of the change in the free cash flow comes from increasing physical inventory.

我的意思是，麥克，我會給你一個一般性評論，然後克雷格可能會提供更具體的數據。但今年早些時候，克雷格和我做出了非常深思熟慮的決定，因為我們看到了原材料定價方面的挑戰以及我們早期購買的短缺跡象。而且我們買了很多。我們是非常刻意的。所以我想說自由現金流的大部分變化來自於實體庫存的增加。

What I am pleased to say is that throughout the course of this year, we've made some changes within our supply chain group, and I think we have a very talented group. And I think that's part of the reason why we've been able to improve service levels to some customers even in these challenging times. But we will definitely be targeting that group with a reduction in physical inventory once the supply chain disruptions have abated and driving that improvement in free cash flow next year. Craig?

我很高興地說，今年以來，我們的供應鏈團隊內部做出了一些改變，我認為我們擁有一個非常有才華的團隊。我認為這就是為什麼即使在這個充滿挑戰的時期我們也能夠提高對某些客戶的服務水準的部分原因。但一旦供應鏈中斷減弱，我們肯定會針對該群體減少實體庫存，並推動明年自由現金流的改善。克雷格？

Yes. So Michael, I'll play in on Chris' question a little bit on this, too. So we decided to carry this extra inventory. One of the reasons was to support number. I'm from the -- I have a commercial background to support the commercial teams on pricing. The last thing you want to do with customers is give them a price increase and then tell them you can't service them with the product. So we're supporting our commercial teams and our customers on that.

是的。邁克爾，我也會稍微回答一下克里斯的問題。所以我們決定保留這些額外的庫存。原因之一是支持數字。我來自——我有商業背景，可以在定價方面為商業團隊提供支援。您最不想對客戶做的事情就是提高價格，然後告訴他們您無法為他們提供產品服務。因此，我們正在為此支持我們的商業團隊和客戶。

We have about 15% to 20% more cost in our inventory this year than we did last year. About half of that is inflation, and the other half is the decision Simon and I made to carry extra volume to make sure we can service the customers. So we'll reap the benefit of that next year, not at the end of this year because the supply chain disruptions are keeping on. But next year, we'll reap the benefit of that because we expect to bring that down slightly next year.

今年我們的庫存成本比去年增加了約 15% 到 20%。其中大約一半是通貨膨脹，另一半是西蒙和我決定攜帶額外的貨量，以確保我們能夠為客戶提供服務。因此，我們將在明年而不是今年年底受益，因為供應鏈中斷仍在繼續。但明年，我們將受益於此，因為我們預計明年會略有下降。

But just to give you some numbers, we do expect to spend probably about $5 million to $8 million more CapEx next year than this year. That would be on the projects. We've identified some nice productivity projects in mostly North America on the SBM side. So that's where the number will be at. We'll be at $45 million, give or take, on CapEx.

但只給您一些數字，我們確實預計明年的資本支出可能比今年多花費 500 萬至 800 萬美元。那將是在項目上。我們在 SBM 方面在北美大部分地區確定了一些不錯的生產力項目。這就是數字所在的位置。無論如何，我們的資本支出將達到 4500 萬美元。

Interest expense will stay the same next year right at this moment, unless we do M&A and when we can get a target closed, which would change it. Restructuring. We're trying to accelerate the restructuring not just for the savings, but we want to get over it so we can operate the business effectively just from an operating point of view. So you're going to see less cost on dollars and restructuring next year. So that's probably going to give us a bump of $10 million or $15 million. So you're going to see probably -- our anticipation, our best cash conversion year will be 2022 once we get past this current restructuring.

明年此時此刻，利息支出將保持不變，除非我們進行併購，並且當我們能夠完成目標時，這會改變它。重組。我們正在努力加速重組，不僅是為了節省開支，而且我們希望克服這一困難，以便我們能夠從營運的角度有效地經營業務。因此，明年您將看到美元和重組成本降低。因此，這可能會為我們帶來 1000 萬或 1500 萬美元的成長。所以你可能會看到——我們的預期，一旦我們完成目前的重組，我們最好的現金轉換年將是 2022 年。

At this time, we are showing no further questions in the queue, and this concludes both our question-and-answer session as well as today's conference. Thank you for attending today's presentation, and you may now disconnect.

目前，我們在隊列中沒有顯示任何其他問題，我們的問答環節以及今天的會議就此結束。感謝您參加今天的演示，您現在可以斷開連接了。