Kennametal Inc (KMT) 2023 Q2 法說會逐字稿

Good morning. I would like to welcome everyone to Kennametal's Second Quarter Fiscal 2023 Earnings Conference Call. (Operator Instructions) Please note that this event is being recorded.

早上好。歡迎大家參加 Kennametal 2023 財年第二季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Kelly Boyer, Vice President of Investor Relations.

我現在想將會議轉交給投資者關係副總裁 Kelly Boyer。

Thank you, operator. Welcome, everyone, and thank you for joining us to review Kennametal's second quarter fiscal 2023 results. Yesterday evening, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that slide deck throughout today's call.

謝謝你，運營商。歡迎大家，並感謝您與我們一起回顧 Kennametal 2023 財年第二季度的業績。昨天晚上，我們發布了收益新聞稿，並在我們的網站上發布了演示幻燈片。在今天的電話會議中，我們將參考該幻燈片。

I'm Kelly Boyer, Vice President of Investor Relations. Joining me on the call today are Chris Rossi, President and Chief Executive Officer; and Pat Watson, Vice President and Chief Financial Officer. After Chris and Pat's prepared remarks, we will open the line for questions.

我是投資者關係副總裁 Kelly Boyer。今天和我一起參加電話會議的是總裁兼首席執行官克里斯·羅西 (Chris Rossi)；副總裁兼首席財務官 Pat Watson。在 Chris 和 Pat 準備好的發言之後，我們將打開提問熱線。

At this time, I would like to direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements, and as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings.

此時，我想請您注意我們的前瞻性披露聲明。今天的討論包含構成前瞻性陳述的評論，因此涉及許多假設、風險和不確定性，這些假設、風險和不確定性可能導致公司的實際結果、業績或成就與此類陳述中表達或暗示的結果、業績或成就存在重大差異。這些風險因素和不確定性在 Kennametal 提交給 SEC 的文件中有詳細說明。

In addition, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found at the back of the slide deck and on our Form 8-K on our website.

此外，我們將在今天的電話會議上討論非 GAAP 財務指標。我們認為最直接可比的 GAAP 財務指標的對賬可以在幻燈片的背面和我們網站上的 8-K 表格中找到。

And with that, I'll now turn the call over to Chris.

有了這個，我現在將電話轉給克里斯。

Thanks, Kelly. Good morning, and thank you for joining us. I'll start the call today with a review of the quarter and some recent strategic wins as well as an example of the game-changing innovation we are bringing to our customers. Pat will then go over the quarterly financial results and the outlook. And finally, I'll make some summary comments before opening the call for questions.

謝謝，凱利。早上好，感謝您加入我們。我將在今天開始電話會議，回顧本季度和最近的一些戰略勝利，以及我們為客戶帶來的改變遊戲規則的創新示例。然後，帕特將回顧季度財務業績和前景。最後，在開始提問之前，我將做一些總結性評論。

Beginning on Slide 2 of the presentation, we posted strong year-over-year organic sales growth in the quarter and continued the successful execution of our strategic initiatives despite ongoing macroeconomic headwinds, such as high inflation, foreign exchange and COVID-related disruptions in China. Sales increased double digits year-over-year at 11% organically, offset by negative foreign exchange of 8% and business days of 1%. As expected, price continues to be a significant part of the sales increase.

從演示文稿的幻燈片 2 開始，我們公佈了本季度強勁的同比有機銷售增長，並繼續成功執行我們的戰略計劃，儘管宏觀經濟逆風持續，例如中國的高通脹、外彙和與 COVID 相關的中斷.銷售額同比增長兩位數，有機增長 11%，被 8% 的負外彙和 1% 的營業日所抵消。正如預期的那樣，價格仍然是銷售額增長的重要組成部分。

On a constant currency basis, all regions and end markets grew year-over-year, the Americas and EMEA both posted double-digit growth. It's worth noting that the EMEA growth rate includes the negative effect of approximately 300 basis points due to our exit from Russia in Q3 of last year. The growth rate in Asia Pacific was 2% in the quarter and was negatively affected by approximately 550 basis points from COVID disruptions in China. The growth rates, however, in all other Asia Pacific countries remained strong.

按固定匯率計算，所有地區和終端市場均實現同比增長，美洲和歐洲、中東和非洲均實現兩位數增長。值得注意的是，由於我們在去年第三季度退出俄羅斯，歐洲、中東和非洲地區的增長率包括了大約 300 個基點的負面影響。本季度亞太地區的增長率為 2%，受到中國 COVID 中斷約 550 個基點的負面影響。然而，所有其他亞太國家的增長率仍然強勁。

By end market, aerospace, transportation and earthworks, all reported double-digit growth, while energy and general engineering grew mid- to high-single digits. So overall, our end markets continued to demonstrate resiliency despite the unpredictable macroeconomic environment, and we expect this to continue through fiscal year '23. Of course, we recognize there are still risks in the global economy. However, as I said last quarter, we believe we are well positioned in all our end markets despite short-term uncertainties and challenges.

按終端市場劃分，航空航天、交通運輸和土方工程均實現兩位數增長，而能源和通用工程則實現中高個位數增長。因此，總體而言，儘管宏觀經濟環境不可預測，但我們的終端市場繼續表現出彈性，我們預計這種情況將持續到 23 財年。當然，我們也承認全球經濟仍然存在風險。然而，正如我上個季度所說，儘管存在短期不確定性和挑戰，但我們相信我們在所有終端市場都處於有利地位。

Our strength in aerospace was evident again this quarter, and we expect to continue to take share as aircraft build rates improve. It was nice to see transportation at double digits this quarter, and we believe the end market will strengthen as supply chain disruptions continue to improve. We already have a strong position in traditional transportation and will benefit from the leadership position we are establishing and tooling for hybrid and electric vehicles. Earthworks continues to benefit from the immediate demand for coal. We also see it benefiting from the conversion to green energy and from increased government spending on infrastructure projects, including trenching for Internet and electric grid expansion and for road and bridge rehabilitation and construction.

本季度我們在航空航天領域的優勢再次顯現，隨著飛機製造率的提高，我們預計將繼續佔據市場份額。很高興看到本季度的運輸量達到兩位數，我們相信隨著供應鏈中斷的持續改善，終端市場將會走強。我們已經在傳統交通領域佔據強勢地位，並將受益於我們正在建立的領導地位和混合動力和電動汽車的工具。土方工程繼續受益於對煤炭的直接需求。我們還看到它受益於向綠色能源的轉變以及政府在基礎設施項目上的支出增加，包括為互聯網和電網擴建挖溝以及道路和橋樑的修復和建設。

We expect general engineering to remain steady despite some moderation in industrial production as we reach new customers with our fit-for-purpose tooling portfolio and with the significantly improved functionality of our digital customer experience platform. And finally, in energy, while the growth trajectory slowed slightly this quarter as our customers managed inventory levels for their fiscal year-end, we are optimistic that a long-term growth trend is underway based on customer feedback. Our products and solutions serve both renewables and traditional energy markets, which positions us well to benefit from increased demand in both.

我們預計通用工程將保持穩定，儘管工業生產有所放緩，因為我們通過適合用途的工具組合和數字客戶體驗平台的顯著改進功能吸引了新客戶。最後，在能源方面，雖然本季度增長軌跡略有放緩，因為我們的客戶在其財年末管理庫存水平，但我們樂觀地認為，根據客戶反饋，長期增長趨勢正在形成。我們的產品和解決方案服務於可再生能源和傳統能源市場，這使我們能夠從這兩個領域不斷增長的需求中受益。

So while there are still some uncertainties in the current macro environment, we are working to ensure that we perform well in all scenarios. And right now, we feel quite good about the underlying long-term growth drivers in our end markets and believe we are well positioned in each.

因此，儘管當前宏觀環境仍存在一些不確定性，但我們正在努力確保我們在所有場景中都表現出色。現在，我們對終端市場潛在的長期增長動力感到非常滿意，並相信我們在每個市場都處於有利地位。

Turning now to profitability in the quarter. As I mentioned earlier, price was a significant portion of the year-over-year sales increase and the pricing actions taken in both business segments substantially covered all forms of inflation on a dollar basis. Metal cuttings volume came through at the expected operating leverage. The effect on this leverage, however, was masked by the FX headwind and operating margins remained flat year-over-year. Pat will go into more detail on metal cutting margins in his section.

現在轉向本季度的盈利能力。正如我之前提到的，價格是同比銷售額增長的很大一部分，兩個業務部門採取的定價行動基本上涵蓋了以美元為基礎的所有形式的通貨膨脹。金屬切削量以預期的經營槓桿來實現。然而，對這一槓桿的影響被外匯逆風所掩蓋，營業利潤率同比持平。 Pat 將在他的部分中詳細介紹金屬切削餘量。

The Infrastructure segment, as expected, accounts for the decline in company operating margin year-over-year. The principal driver of the decline was our intentional action to extend the planned shutdowns of our powder production operations in December, and we carried those extensions over into January. Remember, these powder operations provide the raw material feedstock for many of our plants. So it was essential following the pandemic to carry sufficient safety stock to cover the extended and uncertain supply of raw materials and other inputs to production. The good news is that delivery lead times and reliability of supply are improving such that we are comfortable taking action to reduce safety stocks. This action drove a large absorption variance year-over-year, as during Q2 of last year, we were building safety stocks. We expect the effect of under-absorption to abate in Q3 and infrastructure margins to significantly improve by year-end, and Pat will go into more detail on the infrastructure margins in his section.

正如預期的那樣，基礎設施部門導致公司營業利潤率同比下降。下降的主要驅動因素是我們有意採取行動，延長 12 月份粉末生產業務的計劃停工時間，並將這些延期延續到 1 月份。請記住，這些粉末操作為我們的許多工廠提供原材料。因此，在大流行之後，必須攜帶足夠的安全庫存，以應對原材料和其他生產投入的長期和不確定供應。好消息是交貨時間和供應可靠性正在改善，因此我們可以放心地採取行動減少安全庫存。由於去年第二季度，我們正在建立安全庫存，因此這一行動導致了較大的吸收差異。我們預計吸收不足的影響將在第三季度減弱，基礎設施利潤率將在年底前顯著改善，帕特將在他的部分詳細介紹基礎設施利潤率。

Operating expense as a percentage of sales decreased to 21.3% this quarter. Customers continue to ease COVID restrictions for supplier partner visits. And this is good news for our commercial and engineering teams as it affords them the opportunity to demonstrate our latest product innovations across our entire brand portfolio. While obviously, an increased expense year-over-year, we see these costs as an investment in growth and gaining share. And I'll discuss on a later slide some examples of the returns we're getting on this investment.

本季度營業費用佔銷售額的百分比下降至 21.3%。客戶繼續放寬對供應商合作夥伴訪問的 COVID 限制。這對我們的商業和工程團隊來說是個好消息，因為這讓他們有機會展示我們在整個品牌組合中的最新產品創新。雖然很明顯，費用逐年增加，但我們將這些成本視為對增長和獲得份額的投資。我將在稍後的幻燈片中討論我們從這項投資中獲得回報的一些例子。

Adjusted EPS declined to $0.27 compared to $0.35 in the prior year quarter with the decline largely driven by the factors I discussed and a favorable tax rate. Free cash flow this quarter increased significantly to $44 million from $22 million in the prior year quarter despite a year-over-year increase in primary working capital, driven mainly by higher raw material costs and safety stock.

調整後的每股收益從去年同期的 0.35 美元下降至 0.27 美元，下降的主要原因是我討論的因素和優惠的稅率。本季度的自由現金流從上一季度的 2200 萬美元大幅增加至 4400 萬美元，儘管主要營運資金同比增加，這主要是由於原材料成本和安全庫存增加所致。

And finally, we continue the share repurchase program this quarter with $11 million of shares bought back, bringing the total amount repurchased since the beginning of the program to $115 million. Our share repurchase program reflects the confidence we have in our ability to execute our strategic initiatives for long-term value creation despite quarterly macroeconomic headwinds and uncertainties.

最後，我們在本季度繼續實施股票回購計劃，回購了 1100 萬美元的股票，使自該計劃開始以來的回購總額達到 1.15 億美元。我們的股票回購計劃反映了儘管季度宏觀經濟逆風和不確定性，但我們對執行長期價值創造戰略計劃的能力充滿信心。

Now let's turn to Slide 3 for a summary of our growth road map. You've seen this slide before, so I'm not going to cover it in detail. However, at a summary level, I'd like to highlight that megatrends such as hybrid and electric vehicles, digitalization and ESG align well with our technical expertise and market exposure. In addition, we have a significant opportunity to increase share of wallet with existing customers and add new customers as we reach into underserved markets, geographies and application spaces.

現在讓我們轉到幻燈片 3，了解我們的增長路線圖的摘要。您之前已經看過這張幻燈片，所以我不打算詳細介紹它。然而，總而言之，我想強調混合動力和電動汽車、數字化和 ESG 等大趨勢與我們的技術專長和市場曝光度非常吻合。此外，隨著我們進入服務不足的市場、地區和應用程序空間，我們有一個重要的機會來增加現有客戶的錢包份額並增加新客戶。

Now let's turn to Slide 4 to review some recent commercial wins that resulted from successful execution of our growth road map. On this slide, we show a great win with a global structural pipe manufacturer in the fit-for-purpose application space. We delivered a solution that increased the customer's tool life by up to 5x. And by outperforming in this application, we secured additional WIDIA business in a new facility. We also had a major win with a manufacturer that produces parts for aerospace, power generation, petrochemical and general engineering. We secured this win by delivering a 50% benefit to the customer, and we expect to secure a large share of this customer's business in the future.

現在讓我們轉到幻燈片 4，回顧一下最近因成功執行我們的增長路線圖而取得的一些商業勝利。在這張幻燈片上，我們展示了在專用應用領域與一家全球結構管道製造商的巨大勝利。我們提供的解決方案可將客戶的刀具壽命延長多達 5 倍。通過在此應用程序中表現出色，我們在新設施中獲得了額外的 WIDIA 業務。我們還與一家為航空航天、發電、石化和通用工程生產零件的製造商取得了重大勝利。我們通過為客戶提供 50% 的收益來贏得這場胜利，我們希望在未來獲得該客戶業務的很大份額。

A great example of our ability to secure and sustain business is the renewal of our sole-source supplier status for corrosion-resistant mixer paddles with a large U.S.-based global chemical company. In the food packaging materials industry, we furthered our leading market position with a win at a leader in flexible food packaging. We won the business by outperforming the entrenched competitor, reducing the customer's defects by 10% and energy consumption by 8%.

我們有能力確保和維持業務的一個很好的例子是，我們與一家總部位於美國的大型全球化學公司續簽了我們耐腐蝕攪拌槳的獨家供應商地位。在食品包裝材料行業，我們憑藉在食品軟包裝領域的領先地位進一步鞏固了市場領先地位。我們通過超越根深蒂固的競爭對手贏得了業務，將客戶的缺陷減少了 10%，能源消耗減少了 8%。

And finally, we furthered our leadership position in the rapidly growing hybrid electric vehicle space. We secured preferred tooling supplier status with a U.S.-based leading global auto manufacturer by partnering with the customer on the manufacturing of an aluminum transactional battery housing platform, and we expect this win will position us for further growth in this fast-growing application space.

最後，我們進一步鞏固了我們在快速發展的混合動力電動汽車領域的領導地位。通過與客戶合作製造鋁製交易電池外殼平台，我們獲得了一家總部位於美國的全球領先汽車製造商的首選模具供應商地位，我們預計這一勝利將使我們在這個快速增長的應用領域進一步發展。

These are just some examples of wins that demonstrate our ability to gain a larger share of existing customers' business as well as our new customers.

這些只是一些勝利的例子，證明我們有能力在現有客戶和新客戶的業務中獲得更大份額。

Now on Slide 5, I'd like to highlight an example of a game-changing innovation we're bringing to our hybrid electric vehicle customers. This slide shows our tooling solution for a typical housing used on hybrid electric vehicles. In this case, the customer is looking for a solution with exceptional productivity that can hold tight tolerances and be used on existing and standard machine tools to minimize capital investment. Each tool uses several Kennametal proprietary consumable inserts and achieves the lightweight and rigidity needed to machine the housing in a single pass by leveraging our proprietary additive manufacturing techniques. The net result for the customer is a 50% improvement in productivity and a 45% reduction in tool weight, which enables the part to run on a standard machine tool and yield a 40% reduction in energy usage. It's these types of examples that give us confidence that the investments we are making in commercial excellence and innovation are paying off.

現在在幻燈片 5 上，我想強調一個我們為混合動力電動汽車客戶帶來的改變遊戲規則的創新示例。這張幻燈片展示了我們用於混合動力電動汽車的典型外殼的工具解決方案。在這種情況下，客戶正在尋找一種具有卓越生產力的解決方案，該解決方案可以保持嚴格的公差並用於現有和標準機床以最大限度地減少資本投資。每個工具都使用多個 Kennametal 專有易損件刀片，並通過利用我們專有的增材製造技術實現單道加工外殼所需的輕質和剛性。為客戶帶來的最終結果是生產率提高了 50%，工具重量減輕了 45%，這使得零件能夠在標準機床上運行，能源使用量減少了 40%。正是這些類型的例子讓我們相信，我們在商業卓越和創新方面的投資正在取得回報。

Now let me turn the call over to Pat, who will review the second quarter financial performance and the outlook.

現在讓我把電話轉給帕特，他將審查第二季度的財務業績和前景。

Thank you, Chris, and good morning, everyone.

謝謝克里斯，大家早上好。

I will begin on Slide 6 with a review of the second quarter operating results. Before I begin, please note that like last quarter, we did not record any non-GAAP adjustments this quarter. Therefore, adjusted numbers are not presented for the current quarter and for today's discussion, year-over-year comparisons will be against the prior year's adjusted results.

我將從幻燈片 6 開始，回顧第二季度的經營業績。在我開始之前，請注意，與上一季度一樣，我們本季度沒有記錄任何非 GAAP 調整。因此，本季度未提供調整後的數字，在今天的討論中，將與上一年的調整後結果進行同比比較。

The quarter's results show that we continue to execute our initiatives in the face of significant headwinds from inflation, foreign exchange and the effects of COVID in China. Sales increased by 2% year-over-year with 11% organic growth, offset by headwinds due to foreign currency and workdays of 8% and 1%, respectively. As Chris pointed out, price remains a large portion of the sales numbers. On a sequential basis from Q1, sales were approximately in line with our normal Q1 to Q2 seasonal pattern of 1% to 2%.

本季度的業績表明，面對通貨膨脹、外彙和 COVID 在中國的影響帶來的巨大阻力，我們繼續執行我們的舉措。銷售額同比增長 2%，有機增長 11%，抵消了外幣和工作日分別減少 8% 和 1% 帶來的不利影響。正如克里斯指出的那樣，價格仍然是銷售數字的很大一部分。從第一季度開始，銷售額大致符合我們正常的第一季度至第二季度 1% 至 2% 的季節性模式。

Operating expense as a percentage of sales decreased 60 basis points year-over-year to 21.3%. EBITDA and operating margins were 13.7% and 7.1%, respectively, versus 16.2% and 9.2% in the prior year quarter. The year-over-year decrease in operating margin was mainly due to the following factors: First, as discussed last quarter, we were aggressively raising prices in the prior year ahead of experiencing the full effect of higher tungsten prices. In Q2, for the Infrastructure segment, however, the favorability of price over material cost is now negligible as raw material costs reflecting the current market cost is flowing through the P&L. We expect raw material costs to be relatively steady for the balance of the fiscal year.

營業費用佔銷售額的百分比同比下降 60 個基點至 21.3%。 EBITDA 和營業利潤率分別為 13.7% 和 7.1%，而去年同期為 16.2% 和 9.2%。營業利潤率同比下降主要是由於以下因素：首先，正如上個季度所討論的那樣，我們在經歷鎢價上漲的全部影響之前積極提高了上一年的價格。然而，在第二季度，對於基礎設施部門，價格對材料成本的優勢現在可以忽略不計，因為反映當前市場成本的原材料成本正在通過損益表流動。我們預計本財年的原材料成本將相對穩定。

Versus total cost inflation, overall higher pricing substantially offset higher raw material costs, wage and general inflation in the quarter. Further, there was a higher-than-anticipated mandated inflation bonus in Germany for all workers in the metal and electrical industries of approximately $2 million, which primarily affected the metal cutting segment. As Chris mentioned, we decided to extend the planned shutdowns of our powder production operations in December. Since our powder operations provide raw material feedstock for many of our plants, it has been essential to carry sufficient safety stock to cover the extended and uncertain supply of materials and other inputs to production post pandemic. As the reliability of these supply chains has improved, it has enabled us to more aggressively manage our safety stocks in the quarter, resulting in approximately $5 million of unfavorable absorption in the Infrastructure segment.

與總成本通脹相比，整體較高的定價大大抵消了本季度較高的原材料成本、工資和總體通脹。此外，德國為金屬和電氣行業的所有工人提供了高於預期的強制性通貨膨脹獎金，約為 200 萬美元，這主要影響了金屬切削部門。正如 Chris 提到的，我們決定延長 12 月份粉末生產業務的停產計劃。由於我們的粉末業務為我們的許多工廠提供原材料，因此必須攜帶足夠的安全庫存，以應對大流行後延長和不確定的材料供應和其他生產投入。隨著這些供應鏈可靠性的提高，我們能夠在本季度更積極地管理我們的安全庫存，從而在基礎設施部門產生約 500 萬美元的不利吸收。

As an added benefit, our decision to extend planned shutdowns helped us minimize the financial effect of the temporary supply chain challenges we faced last quarter, including those from the force majeure, which remains in effect at a key supplier. We expect this under-absorption to abate by the fourth quarter.

作為一個額外的好處，我們延長計劃停工的決定幫助我們最大限度地減少了上個季度我們面臨的臨時供應鏈挑戰的財務影響，包括來自不可抗力的挑戰，這些挑戰在關鍵供應商中仍然有效。我們預計這種吸收不足的情況將在第四季度得到緩解。

Lastly, foreign exchange headwinds from the strong U.S. dollar were $6 million. The effective tax rate decreased year-over-year to 17.8%, primarily due to a final Swiss tax reform ruling this quarter and regional mix. The full-year effective tax rate is still expected to be in the mid-20s. Earnings per share were $0.27 in the quarter versus adjusted EPS of $0.35 in the prior year period. The main drivers of our EPS performance are highlighted on the bridge on Slide 7.

最後，強勢美元帶來的外匯逆風為 600 萬美元。有效稅率同比下降至 17.8%，這主要是由於本季度瑞士稅收改革的最終裁決和區域組合。全年有效稅率預計仍將在 20 多歲左右。本季度每股收益為 0.27 美元，而去年同期調整後的每股收益為 0.35 美元。我們 EPS 性能的主要驅動因素在幻燈片 7 的橋上突出顯示。

The year-over-year effect of operations this quarter was negative $0.03 due to the factors that I just discussed. You can also clearly see the effects of the tax rate, foreign exchange and the reduction in pension income on EPS with taxes contributing positive $0.04 in currency and reduced pension income contributing negative $0.05 and $0.03, respectively. Please note that our U.S. pension plan remains overfunded and the change in pension income is noncash and is driven by market factors. This change in assumptions is affecting each quarter this fiscal year. Foreign exchange is expected to remain a year-over-year headwind throughout this fiscal year, although based on recent spot rates, the year-over-year headwind is expected to decline each quarter.

由於我剛才討論的因素，本季度運營的同比影響為負 0.03 美元。您還可以清楚地看到稅率、外彙和養老金收入減少對 EPS 的影響，稅收貢獻正值 0.04 美元貨幣，減少的養老金收入分別貢獻負值 0.05 美元和 0.03 美元。請注意，我們的美國養老金計劃仍然資金過剩，養老金收入的變化是非現金的，受市場因素驅動。這種假設的變化正在影響本財年的每個季度。外匯預計在本財年仍將是一個同比逆風，儘管根據最近的即期匯率，預計每個季度的同比逆風都會下降。

Slides 8 and 9 detail the performance of our segments this quarter. Reported metal cutting sales were flat compared to the second quarter of fiscal '22 with a strong 11% organic growth, offset by a foreign currency headwind of 10% and business days of 1%. We achieved growth in all regions and end markets on a constant currency basis. By region, the Americas led at 12%, followed by EMEA at 9% and Asia Pacific at 2%. EMEA's year-over-year growth this quarter was particularly impressive when you consider that it was negatively affected by approximately 380 basis points from our decision to exit Russia in the third quarter last year. Asia Pacific's growth, as Chris noted, was negatively affected by COVID in China. We achieved strong growth in other countries in Asia Pacific.

幻燈片 8 和 9 詳細介紹了本季度我們部門的表現。報告的金屬切割銷售額與 22 財年第二季度持平，有機增長強勁 11%，被 10% 的外匯逆風和 1% 的營業日所抵消。我們在所有地區和終端市場均以固定匯率計算實現增長。按地區劃分，美洲以 12% 居首，其次是 EMEA 9% 和亞太地區 2%。當您考慮到我們去年第三季度退出俄羅斯的決定對它產生了大約 380 個基點的負面影響時，本季度 EMEA 的同比增長尤其令人印象深刻。正如克里斯指出的那樣，亞太地區的增長受到了中國 COVID 的負面影響。我們在亞太地區其他國家取得了強勁增長。

Looking at sales by end market, aerospace led again with strong growth at 19% year-over-year as we continue to win new business. Transportation grew 13% year-over-year, benefiting from improving customer supply chains and hybrid EV business in EMEA. General engineering grew 6% year-over-year. Energy sales this quarter were relatively flat as customers focused on inventory at their fiscal year-end. Adjusted operating margin remained constant at 8.8% on flat sales despite a 120 basis point headwind from the strong U.S. dollar. Pricing and productivity offset cost increases such that margins were held constant despite the higher-than-anticipated wage inflation from the required inflationary bonus in Germany. Operating income in the quarter also includes an expense from the decision to scrap certain assets this quarter that was mostly offset by a gain on the sale of property.

從終端市場的銷售額來看，隨著我們繼續贏得新業務，航空航天再次以 19% 的同比強勁增長領先。交通運輸同比增長 13%，受益於 EMEA 客戶供應鍊和混合動力電動汽車業務的改善。通用工程同比增長 6%。本季度的能源銷售相對平穩，因為客戶在財年末關注庫存。儘管美元走強帶來 120 個基點的逆風，但調整後的營業利潤率仍保持在 8.8%，銷售額持平。定價和生產力抵消了成本的增加，因此儘管德國所需的通脹獎金導致工資通脹高於預期，但利潤率仍保持不變。本季度的營業收入還包括本季度報廢某些資產的決定產生的費用，該費用大部分被出售財產的收益所抵消。

Turning to Slide 9 for infrastructure. Organic sales increased by 12% year-over-year, offset by foreign exchange headwinds of 6% and business days of 1%. All regions grew year-over-year with EMEA leading at 23%, followed by Americas at 11% and Asia Pacific at 2%. We achieved double-digit sales growth in all end markets, with energy and earthworks growing 11% and general engineering at 10%. The strength in energy was driven mainly by improvement in the U.S. oil and gas market as seen in the continued increase in the U.S. land-only rig count. As Chris mentioned, despite the strength, we did see some customers managing inventory levels heading into their fiscal year-end. But based on customer feedback, we are optimistic that a long-term positive growth trend is underway. Earthworks was strong in all regions driven by underground mining. In general engineering was driven mainly by strength in EMEA were components.

轉到幻燈片 9 了解基礎設施。有機銷售額同比增長 12%，被 6% 的外匯逆風和 1% 的營業日所抵消。所有地區均實現同比增長，其中 EMEA 以 23% 領先，其次是美洲 11% 和亞太地區 2%。我們在所有終端市場實現了兩位數的銷售額增長，其中能源和土方工程增長 11%，通用工程增長 10%。能源的強勢主要是由美國石油和天然氣市場的改善所推動的，這從美國陸地鑽井平台數量的持續增加中可以看出。正如克里斯所提到的，儘管實力強勁，但我們確實看到一些客戶在進入財年末時管理庫存水平。但根據客戶反饋，我們樂觀地認為長期的正增長趨勢正在進行中。在地下採礦驅動的所有地區，土方工程都很強勁。一般工程主要由 EMEA 中的組件驅動。

Operating margin declined year-over-year to 5.1%, primarily due to 2 factors. First, as discussed earlier in the call, the favorability of price over material costs we have been experiencing is negligible as raw material costs reflecting the current market costs are now flowing through the P&L. Again, we expect raw material costs to be relatively steady for the balance of the fiscal year. The second significant factor affecting the margin this quarter was the previously discussed under-absorption from actively managing safety stock levels as supply chain reliability improves. We expect under-absorption to improve through the second half, such that the operating margin will return to the Q1 fiscal '23 level by Q4.

營業利潤率同比下降至 5.1%，主要原因有兩個。首先，正如電話會議早些時候所討論的那樣，我們一直在經歷的價格對材料成本的優惠可以忽略不計，因為反映當前市場成本的原材料成本現在正在通過損益表流動。同樣，我們預計本財年的原材料成本將相對穩定。影響本季度利潤率的第二個重要因素是之前討論的隨著供應鏈可靠性提高而積極管理安全庫存水平的吸收不足。我們預計吸收不足將在下半年得到改善，這樣營業利潤率將在第四季度恢復到第一季度的 23 財年水平。

Now turning to Slide 10 to review our free operating cash flow and balance sheet. Our second quarter free operating cash flow increased to $44 million from $22 million in the prior year quarter despite an increase in our primary working capital. On a dollar basis, year-over-year primary working capital increased to $690 million, reflecting mainly higher raw material costs and year-over-year higher safety stock associated with extended supply chains. On a percentage of sales basis, primary working capital increased to 32.3%. We expect inventory levels to decrease in the second half as we manage inventory levels down now that our supply chain is beginning to improve.

現在轉到幻燈片 10 來查看我們的自由經營現金流和資產負債表。儘管我們的主要營運資金有所增加，但我們第二季度的自由經營現金流從去年同期的 2200 萬美元增加到 4400 萬美元。按美元計算，主要營運資金同比增加至 6.9 億美元，主要反映原材料成本上漲以及與擴展供應鏈相關的安全庫存同比增加。按銷售額百分比計算，主要營運資金增加至 32.3%。由於我們的供應鏈開始改善，我們預計下半年庫存水平會下降，因為我們會降低庫存水平。

Net capital expenditures were $19 million, approximately the same as the prior year. In total, we returned $27 million to shareholders through our share repurchase and dividend programs. We repurchased $11 million of shares in Q2 for a total of $115 million or 4 million shares, representing approximately 5% of outstanding shares since the inception of the program. And as we have every quarter since becoming a public company over 50 years ago, we paid a dividend to our shareholders.

淨資本支出為 1900 萬美元，與上年大致持平。通過我們的股票回購和股息計劃，我們總共向股東返還了 2700 萬美元。我們在第二季度回購了 1100 萬美元的股票，總計 1.15 億美元或 400 萬股，約佔該計劃啟動以來已發行股票的 5%。自 50 多年前成為上市公司以來，我們每個季度都向股東派息。

Our commitment to returning cash to shareholders reflects confidence in our ability to execute our strategy to drive growth and margin improvement. We continue to maintain a healthy balance sheet and debt maturity profile. At quarter end, we had combined cash and revolver availability of approximately $700 million, and we're well within our financial covenants. The full balance sheet can be found on Slide 16 in the appendix.

我們向股東返還現金的承諾反映了我們對執行推動增長和提高利潤率戰略的能力的信心。我們繼續保持健康的資產負債表和債務到期狀況。在本季度末，我們的現金和可動用手槍合計約為 7 億美元，並且完全符合我們的財務契約。完整的資產負債表可以在附錄的幻燈片 16 中找到。

Now let's turn to Slides 11 and 12 to review the outlook. Starting with the outlook for the third quarter. We expect sales to be between USD520 million to USD540 million, which on a sequential basis and after considering the effect of a slightly weaker U.S. dollar is in line with our normal seasonality of 3% to 4% increase. On a year-over-year basis, the sales range assumes a $20 million currency headwind and pricing actions of approximately 7%.

現在讓我們轉到幻燈片 11 和 12 來回顧一下前景。從第三季度的展望開始。我們預計銷售額將在 5.2 億美元至 5.4 億美元之間，按順序計算並考慮美元略微走弱的影響後符合我們 3% 至 4% 的正常季節性增長。與去年同期相比，銷售範圍假設 2000 萬美元的貨幣逆風和大約 7% 的定價行動。

Our forecast for sales assumes that underlying demand strength in all of our end markets continues. Regionally, in Q3, we have assumed that the COVID-related disruptions in China begin to improve. And like the second quarter that the European manufacturing economy remains relatively unaffected by energy. We believe customers will continue to remain cautious in this environment and do not expect meaningful restocking or destocking at this time.

我們對銷售的預測假設我們所有終端市場的潛在需求強勁。在區域方面，在第三季度，我們假設中國與 COVID 相關的中斷開始改善。和第二季度一樣，歐洲製造業經濟仍然相對不受能源的影響。我們認為，客戶將在這種環境下繼續保持謹慎，預計此時不會進行有意義的補貨或去庫存。

Adjusted operating income is expected to be a minimum of $40 million, which reflects continuing inflation headwinds against our strong pricing actions and continued under-absorption in infrastructure due to extending the powder production shutdowns into January. Sequentially, from the second quarter, raw material costs are expected to be flat, but year-over headwinds remain at approximately $23 million. Pricing actions continue as we work to cover not only this raw material cost headwind, but also higher wages and general inflation. Lastly, lower year-over-year pension income continues in Q3.

調整後的營業收入預計至少為 4000 萬美元，這反映了持續的通貨膨脹逆風對我們強有力的定價行動的影響，以及由於粉末生產停工期延長至 1 月而導致的基礎設施持續吸收不足。從第二季度開始，原材料成本預計將持平，但同比逆風仍約為 2300 萬美元。定價行動仍在繼續，因為我們不僅要努力應對原材料成本的不利因素，還要應對更高的工資和普遍的通貨膨脹。最後，第三季度養老金收入同比繼續下降。

Turning to Slide 12 regarding the full year. We expect fiscal '23 sales to be between USD2.05 billion and USD2.1 billion, with volume flat to up 2%, price realization of approximately 7% and a headwind from foreign exchange of approximately $100 million. This sales outlook assumes that demand in China improves throughout the second half as the COVID effect abates and that there will be no significant energy disruptions in EMEA.

轉到有關全年的幻燈片 12。我們預計 23 財年的銷售額將在 20.5 億美元至 21 億美元之間，銷量持平至增長 2%，價格實現率約為 7%，外匯逆風約為 1 億美元。該銷售前景假設中國的需求在整個下半年隨著 COVID 影響的減弱而改善，並且 EMEA 不會出現重大的能源中斷。

On a full year basis, we expect to offset raw material, wage and general cost increases on a dollar basis. The $100 million foreign exchange sales headwind is expected to translate into approximately $20 million on an operating income basis. Lower pension income will be a headwind each quarter for a total of $14 million for the year. Depreciation and amortization is expected to be approximately $135 million, and our outlook for EPS remains unchanged at USD1.30 to USD1.70. On the cash side, the full year outlook for capital expenditures remains unchanged at USD100 million to USD120 million, and the outlook for primary working capital is unchanged at 31% to 33%. Taken together, we continue to expect free operating cash flow at approximately 100% of adjusted net income, in line with our long-term target.

在全年基礎上，我們預計以美元為基礎抵消原材料、工資和一般成本的增長。預計 1 億美元的外匯銷售逆風將轉化為約 2000 萬美元的營業收入。較低的養老金收入將成為每個季度的不利因素，全年總計 1400 萬美元。折舊和攤銷預計約為 1.35 億美元，我們對每股收益的展望保持在 1.30 美元至 1.70 美元不變。現金方面，資本支出的全年前景保持在 1 億美元至 1.2 億美元不變，基本營運資本的前景保持在 31% 至 33% 不變。總而言之，我們繼續預計自由經營現金流約為調整後淨收入的 100%，這符合我們的長期目標。

And with that, I'll turn it back over to Chris.

有了這個，我會把它轉回給克里斯。

Thanks, Pat.

謝謝，帕特。

Turning to Slide 13. Let me take a few minutes to summarize. Overall, we're pleased with the strong organic growth and free operating cash flow in the quarter. Although the operating environment remains challenging, we're encouraged by the continued resiliency of our end markets and the improvements that we are seeing in the supply of materials, which allows us to draw down safety stocks. And we look forward to margin improvement in the second half as we move past the inventory reduction actions we took in the quarter. Looking beyond fiscal year '23, we're encouraged by our strong market position. We're poised to benefit from the megatrends affecting our end markets and the opportunity we have to extract even greater operational efficiency from our modernization investments, and we're confident in our ability to continue to return cash to shareholders while investing in our strategic initiatives for growth and profitability improvement.

轉到幻燈片 13。讓我花幾分鐘時間總結一下。總體而言，我們對本季度強勁的有機增長和自由經營現金流感到滿意。儘管經營環境仍然充滿挑戰，但我們對終端市場的持續彈性以及我們在材料供應方面看到的改善感到鼓舞，這使我們能夠減少安全庫存。隨著我們在本季度採取的庫存減少行動結束，我們期待下半年利潤率有所提高。展望 23 財年之後，我們對強大的市場地位感到鼓舞。我們準備好從影響我們終端市場的大趨勢中獲益，並有機會從我們的現代化投資中獲得更高的運營效率，我們有信心在投資於我們的戰略計劃的同時繼續向股東返還現金以提高增長和盈利能力。

And with that, operator, please open the line for questions.

那麼，接線員，請打開問題熱線。

(Operator Instructions) Our first question comes from Stephen Volkmann from Jefferies.

（操作員說明）我們的第一個問題來自 Jefferies 的 Stephen Volkmann。

Maybe just on the guidance here. Maybe start maybe big picture. The range that you guys have for the year is pretty broad, and I might have thought you might have narrowed that a little bit as we get into the second half. But maybe just talk about what your view is of sort of the book ends there. What has to go right to get to the top end and what would have to happen to get to the bottom end, just so we can think about how to level set there.

也許只是在這裡的指導。也許開始也許大局。你們今年的範圍非常廣泛，我可能認為隨著我們進入下半年，你們可能會縮小一點。但也許只是談談您對本書到此為止的看法。什麼必須正確才能到達頂端，什麼必鬚髮生才能到達底端，這樣我們就可以考慮如何在那裡進行水平設置。

Sure, Steve. I would say at the high end, what we would need is a very strong recovery in China. We're expecting some kind of recovery more at our midpoint. So we'd have to have a stronger recovery in China. And we'd also have to sort of be operating at kind of the high end of our normal sequentials. And then, of course, we sort of need FX to stay about where it is. I'd say on the low end, it's one of our risk areas, and we just don't know. There's a lot of uncertainty just given the sheer number of absenteeisms. And now with the Chinese New Year, even greater absenteeisms, it is possible that there could be a weaker China recovery. I don't think anybody knows for sure. We've tried to pick sort of a middle-of-the-road view of that, but it could certainly be weaker. And then we could also be just naturally at the low end of our sequentials. So that's how I would look at it.

當然，史蒂夫。我想說的是，在高端，我們需要的是中國非常強勁的複蘇。我們預計在我們的中點會有更多的複蘇。因此，我們必須在中國實現更強勁的複蘇。而且我們還必須在我們正常序列的高端進行操作。然後，當然，我們有點需要 FX 保持原樣。我會說在低端，這是我們的風險領域之一，我們只是不知道。僅考慮到缺勤人數之多，就存在很多不確定性。而現在隨著農曆新年的到來，缺勤率更高，中國的複蘇可能會更弱。我認為沒有人確切知道。我們試圖選擇一種中間的觀點，但它肯定會更弱。然後我們也可能自然而然地處於序列的低端。這就是我的看法。

Okay. And maybe I think you talked about the interest margins getting back to kind of where we started by the fourth quarter. How should we think about metal cutting margins kind of sequentially?

好的。也許我認為你談到了息差回到我們在第四季度開始時的水平。我們應該如何按順序考慮金屬切削餘量？

I think, Steve, when you think about metal cutting, coming off of Q2, moving into Q3, you're going to see some positive volume pickup there. currency should be a help quarter-over-quarter. And obviously, metal cutting has most of our foreign currency exposure. And also, we'll just see some stabilization in the cost structure. So overall, quarter-to-quarter, should be up slightly.

我認為，史蒂夫，當你考慮金屬切割時，從第二季度開始，進入第三季度，你會看到一些積極的交易量回升。貨幣應該對季度有所幫助。顯然，金屬切削是我們大部分的外匯敞口。而且，我們只會看到成本結構有所穩定。因此，總體而言，季度環比應該略有上升。

Our next question comes from Julian Mitchell from Barclays.

我們的下一個問題來自巴克萊銀行的 Julian Mitchell。

This is [Kieran] on for Julian. I just wanted to ask on the guide for Q3 and the fiscal year. It looks like there's a step-up in terms of margins in Q4 versus Q3. And I get there's a step-up with infrastructure there. Are there any other swinging items that we should be aware of improving Q4 versus Q3?

這是朱利安的[基蘭]。我只想問問第三季度和財政年度的指南。與第三季度相比，第四季度的利潤率似乎有所提高。我知道那裡的基礎設施正在升級。是否有任何其他我們應該注意的擺動項目來改進 Q4 與 Q3？

Yes. A couple of things to think about there. Number one, absolutely, the absorption will go away in terms of that drag in the fourth quarter. And then I would say, normally, when you think about infrastructure margins, Q3 to Q4, that's generally a better, more profitable mix quarter for us going into Q4.

是的。有幾件事需要考慮。第一，絕對地，吸收將在第四季度的拖累中消失。然後我會說，通常情況下，當你考慮第三季度到第四季度的基礎設施利潤率時，對於我們進入第四季度來說，這通常是一個更好、更有利可圖的混合季度。

Got it. That's helpful. And then just one follow-up for me. I know you said price realization was a large portion of organic sales in the quarter. Do you have the breakdown of price versus volume in Q2, just so we can kind of see what's embedded for volume for the back half.

知道了。這很有幫助。然後對我來說只有一個後續行動。我知道你說過價格實現是本季度有機銷售額的很大一部分。您是否有第二季度價格與數量的明細關係，這樣我們就可以看到後半部分的數量嵌入了什麼。

That was a Q2 -- Q3 question?

那是 Q2 - Q3 問題？

I think it was Q2

我以為是Q2

Q2, we're on our expectations in terms of where the price came in, in Q2 versus our outlook.

第二季度，我們對第二季度的價格與我們的前景的預期是一致的。

Our next question comes from Tami Zakaria from JPMorgan.

我們的下一個問題來自摩根大通的 Tami Zakaria。

So I wanted to understand the EBIT guidance for the quarter a little bit better. So sequentially, your sales are going up, call it, USD30 million to USD35 million-ish. But then for your EBIT, you're guiding to at least 40 and up. So can you sort of help me understand why EBIT would only go up by about $5 million? Like what's sort of the bridge from 2Q to 3Q for the EBIT guide?

所以我想更好地了解本季度的息稅前利潤指導。因此，您的銷售額依次上升，可以稱之為 3000 萬美元到 3500 萬美元左右。但是對於您的息稅前利潤，您至少要達到 40 或更高。那麼你能幫我理解為什麼息稅前利潤只會增加大約 500 萬美元嗎？就像 EBIT 指南從 2Q 到 3Q 的橋樑是什麼？

Yes. So if we work from Q2 to Q3, a couple of things to think about there. Number one is we will have an uptick in volume. We have some favorability in FX coming in from Q2 to Q3. You could think of that number probably in the $15 million range. Part of that will be, some additional price realization, of course, the cost structure will go up just a little bit as well. So those are your main bridging elements between Q2 to Q3.

是的。因此，如果我們從第二季度到第三季度工作，需要考慮一些事情。第一，我們的銷量將會增加。從第二季度到第三季度，我們對外匯有一定的好感。你可以想到這個數字可能在 1500 萬美元的範圍內。其中一部分將是一些額外的價格實現，當然，成本結構也會上升一點點。所以這些是您在 Q2 和 Q3 之間的主要橋樑元素。

Got it. Okay. Okay. Understood. And then just following up on the previous question, does the low end of your guide for the year assume China seeing negative year-over-year? Or do you still expect growth in China but could be at a slower pace than what you are currently expecting?

知道了。好的。好的。明白了。然後就上一個問題進行跟進，您今年指南的低端是否假設中國同比出現負增長？或者您是否仍然期待中國的增長，但速度可能低於您目前的預期？

Yes. The low end of the guide from a China perspective would assume that China in the back half is down year-over-year. And if you think about the total growth number that where our guidance from a year from a volume perspective and for the quarter, that's a significant chunk of that low end in terms of what the negative is there for the negative to positive, too.

是的。從中國的角度來看，指南的低端假設中國在後半段同比下降。而且，如果您從數量的角度和本季度考慮我們一年的指導的總增長數字，那麼從負面到正面的負面影響來看，這也是低端的很大一部分。

Our next question comes from Mike Feniger from Bank of America.

我們的下一個問題來自美國銀行的 Mike Feniger。

Just can you help us understand, you made some comments about customer inventory adjustments at year-end. I think it was energy comment. I don't know if it was more broad-based with other verticals, but hoping you kind of flesh that out what you're kind of seeing there on the inventory adjustment.

只是你能幫我們理解一下嗎，你在年底對客戶庫存調整做了一些評論。我認為這是能量評論。我不知道它是否與其他垂直行業的基礎更廣泛，但希望你能夠充實你在庫存調整中看到的內容。

Yes. I think just sort of broadly, in general, we're not seeing much restocking or destocking. But what we talked about in our opening remarks was really related to oil and gas services company. And it's their fiscal year-end and they were, I think, managing their inventories down. They still believe and we talk to their leadership as part of our S&OP process. They still believe that the long-term trends are there, and they want us to continue to support them. But they did pull back on inventory a little bit, and since we are doing these planned shutdowns anyway, it gave us the opportunity to extend those and try to draw safety stocks down, which we were planning on doing anyway, but this gave us certainly impetus to do it in the quarter.

是的。我認為，從廣義上講，總的來說，我們沒有看到太多的補貨或去庫存。但我們在開場白中談到的確實與石油和天然氣服務公司有關。這是他們的財政年度結束，我認為他們正在管理他們的庫存。他們仍然相信，作為我們 S&OP 流程的一部分，我們與他們的領導層進行了交談。他們仍然相信長期趨勢是存在的，他們希望我們繼續支持他們。但他們確實減少了一點庫存，而且由於我們無論如何都在進行這些計劃中的停工，這讓我們有機會延長停產時間並嘗試降低安全庫存，我們本來打算這樣做，但這肯定給了我們有動力在本季度這樣做。

And how do you feel about your inventory levels with distributors on the distribution side and at the company level today? Are you going to be producing in line with demand? Are you producing lower maybe than demand to try to draw down some of your own inventories? I'm just curious about how Kennametal feels currently with its own position there?

您如何看待今天在分銷方面和公司層面與分銷商的庫存水平？您要按需生產嗎？您是否生產低於需求的產品以試圖減少您自己的一些庫存？我只是想知道 Kennametal 目前對自己的位置有何看法？

Yes. I think from a customer inventory perspective, they've been distributors, in particular, I think they've been cautious to not get out over their skis. So that's why we don't think there's going to be a significant destocking or increase in stocking. For us, we believe we can largely based on our outlook produce in line with demand. And beyond that, normally in metal cutting, for example, we did carry a little bit more safety stock just because of supply chain disruptions. But that's the kind of thing that based on the current outlook, we feel we can bleed down, and we're not expecting to see a kind of a major absorption hit like we just did in infrastructure because we literally shut down processing plants.

是的。我認為從客戶庫存的角度來看，他們一直是分銷商，特別是我認為他們一直很謹慎，以免超出他們的滑雪板。所以這就是為什麼我們認為不會出現顯著的去庫存或增加庫存的原因。對我們來說，我們相信我們可以在很大程度上根據我們的前景生產符合需求的產品。除此之外，通常在金屬切割方面，例如，我們確實因為供應鏈中斷而攜帶了更多的安全庫存。但這是基於當前前景的事情，我們覺得我們可以流血，我們不希望看到像我們剛剛在基礎設施方面所做的那樣的重大吸收打擊，因為我們確實關閉了加工廠。

The next question comes from Steve Barger from KeyBanc Capital Markets.

下一個問題來自 KeyBanc Capital Markets 的 Steve Barger。

I want to start with volume growth guidance of basically flat for the year versus the 2Q recap, which says you're winning share of wallet with existing customers, securing new ones and driving share in underserved geographies. My question is, if all that's happening, but volume is flattish, does it mean other customers are rolling off? Or why isn't unit volume up more than 0% to 2% for the year?

我想從今年基本持平的銷量增長指導開始，而不是第二季度的回顧，這表明你正在贏得現有客戶的錢包份額，確保新客戶並推動服務不足地區的份額。我的問題是，如果這一切都發生了，但銷量持平，是否意味著其他客戶正在流失？或者為什麼今年的單位銷量增長不超過 0% 到 2%？

I think, Steve, just to talk about, again, some more on Russia and China. If we think about those 2 drags, those 2 drags alone for the full fiscal year are probably 200 basis points of growth based on where we think our current outlook is. So you kind of got to think about that because those 2 things are relatively idiosyncratic. Chris, you have anything to add?

史蒂夫，我想再次談談俄羅斯和中國。如果我們考慮這兩個拖累，根據我們認為當前的前景，僅這兩個拖累整個財政年度就可能增長 200 個基點。所以你必須考慮一下，因為這兩件事相對特殊。克里斯，你有什麼要補充的嗎？

Yes. And I would also say that as I think Steve pointed out on the first question, we do have quite a large range there. There is a lot of uncertainty. And so we may be a little bit conservative on the low end of the sales range there. We do have moderating [Gen N's] demand in the Americas and EMEA. So there could be some conservative at the low end, Steve, just to cover ourselves for things that we can't really control, and there is still some uncertainty around those things.

是的。我還要說的是，正如我認為史蒂夫在第一個問題上指出的那樣，我們的範圍確實很大。有很多不確定性。因此，我們可能對那裡銷售範圍的低端有點保守。我們在美洲和 EMEA 確實有緩和 [Gen N's] 需求。所以在低端可能會有一些保守，史蒂夫，只是為了掩蓋我們無法真正控制的事情，而這些事情仍然存在一些不確定性。

Got it. So for the parts of the business where you are having success in new customers and wallet share, can you compare unit volume changes through direct sales versus distribution or digital if that's become more meaningful? I'm just trying to understand where you are growing units and what's happening there that's different versus other channels where there's less unit growth?

知道了。因此，對於您在新客戶和錢包份額方面取得成功的業務部分，如果這變得更有意義，您能否比較通過直銷與分銷或數字銷售的單位數量變化？我只是想了解您在哪裡增長單位以及那裡發生的事情與其他單位增長較少的渠道不同？

Yes. I think the unit growth for sort of the direct sales force, these project bids, that continues to be strong, especially in transportation, EV and also aerospace, which is no surprise because that's where we have a targeted initiative to focus on there. And the distribution channels, that is driving some volume. We are seeing increase in volume there. So I think it's kind of coming from both, but there are 2 different animals. The project stuff is definitely a focused effort, mostly in transportation and aerospace. And then I think also even in the infrastructure business, we've been in business a long time as Kennametal, but there's still many regions and even customers that have more of a global presence that we have a good share of in the U.S. But for example, oilfield service customers, a lot of activity is happening now in Saudi Arabia, and we're leveraging our relationships with those oilfield service companies in the U.S. to start to gain traction to share in that part of the world.

是的。我認為直銷隊伍的單位增長，這些項目投標，繼續強勁，特別是在運輸、電動汽車和航空航天領域，這並不奇怪，因為這是我們有針對性的舉措要關注的領域。分銷渠道推動了一些銷量。我們看到那裡的交易量在增加。所以我認為它有點來自兩者，但有兩種不同的動物。項目的東西絕對是一個集中的努力，主要是在運輸和航空航天領域。然後我認為即使在基礎設施業務中，我們作為 Kennametal 開展業務已經很長時間了，但仍有許多地區甚至客戶在全球範圍內擁有更多的業務，而我們在美國擁有很大的份額。但是對於例如，油田服務客戶，沙特阿拉伯現在正在開展很多活動，我們正在利用與美國那些油田服務公司的關係，開始獲得在世界該地區分享的牽引力。

I guess if I can get a quick follow-up. I think part of your transformation process was scaling up the sales team for lack of a better word, maybe helping them understand areas to target or where you have it maximize the opportunity. Where are you in that process?

我想我是否可以快速跟進。我認為您的轉型過程的一部分是因為找不到更好的詞來擴大銷售團隊，也許可以幫助他們了解目標領域或您擁有的領域最大化機會。你在那個過程中在哪裡？

Yes. I think that was definitely part of the simplification effort. And so for example, we've done a much deeper dive in segmentation of, let's say, general engineering. And what we found is that over half of that business is small machine shops, companies with less than 50 to 75 people. And we weren't necessarily reaching those folks, Steve, with distribution and certainly not direct sales. But that was the impetus to start to make our investments in our digital customer platform. And we're still improving that platform, and we've done a lot of investment over the last few years, and we're starting to see the fruits of that. I think also, we've done a lot of sales training and a lot of detailed strategic marketing analysis on where to target growth and to focus those resources where we got the best opportunity for profitable growth. And as I always tell my presidents of both metal cutting and infrastructure, the sales force is an investment just because it's an expense each quarter, we look at it like a capital investment, and it needs to generate a proper return. So that's the way we're running that business. And so I think in terms of our journey, I'm now in my sixth year here. I think if I could use a baseball analogy, we're in the sort of late innings in terms of that. And I look forward to that sort of revved up sales organization and processes generating more growth in the future.

是的。我認為這絕對是簡化工作的一部分。因此，例如，我們對通用工程的細分進行了更深入的研究。我們發現，超過一半的業務是小型機械車間，即員工人數少於 50 至 75 人的公司。史蒂夫，我們不一定通過分銷和直銷來接觸那些人。但這是我們開始投資數字客戶平台的動力。我們仍在改進這個平台，在過去幾年裡我們做了很多投資，我們開始看到它的成果。我還認為，我們已經進行了大量的銷售培訓和大量詳細的戰略營銷分析，以了解目標增長以及將這些資源集中在我們獲得盈利增長最佳機會的地方。正如我經常告訴我的金屬切割和基礎設施總裁一樣，銷售人員是一項投資，因為它每個季度都是一項支出，我們將其視為一項資本投資，它需要產生適當的回報。這就是我們經營該業務的方式。所以我認為就我們的旅程而言，我現在已經是第六年了。我想如果我可以使用棒球類比，那麼就此而言，我們處於那種晚局。我期待著那種加速的銷售組織和流程在未來產生更多的增長。

Our next question comes from John Joyner from BMO.

我們的下一個問題來自 BMO 的 John Joyner。

All right. So just following up on Steve's question. Chris, you talked a lot about share gains and definitely gave nice detailed examples. I guess what do these wins mean for Kennametal's top line and margin potential longer term? I mean maybe I can't wrap it around my head. But I mean, I guess, how has your addressable market expanded since embarking on your modernization journey and these kind of commercial excellent initiatives? Any color there would be helpful.

好的。所以只是跟進史蒂夫的問題。克里斯，你談到了很多關於股票收益的問題，並且給出了很好的詳細例子。我想這些勝利對 Kennametal 的長期收入和利潤潛力意味著什麼？我的意思是也許我不能把它包裹在我的頭上。但我的意思是，我想，自從您開始現代化之旅和這些商業卓越計劃以來，您的潛在市場是如何擴大的？那裡的任何顏色都會有所幫助。

Yes. I think we're very cautious about taking business just for the sake of growth. And I think there was a little bit of that in the old Kennametal, where, for example, in transportation, we were picking up share, but I remember when I came into the company, I'm not sure that some of that business we were making much money at. So we're very careful about the business that we are taking that's got the right profitability. Just to comment on some of these EV projects, customers are not in full production yet. So a lot of these projects are the initial sort of setup and prove out. So they'll generate more revenue maybe a year from now as they start to ramp up their production lines. And then certainly, they generate a consumable tooling spend after that. So aerospace is a little more immediate effect. As we win more share and greater machining percentage on these large projects, it means that as the Boeings of the world and Airbuses ramp up their production and their supply chain constraints start to abate, we look forward to more growth coming from those opportunities. So it's like we're kind of setting the stage with some of these major wins. And then as the customers' volumes pick up, that's going to certainly be a benefit for us.

是的。我認為我們對於僅僅為了增長而開展業務非常謹慎。而且我認為在舊的 Kennametal 中有一點這樣的東西，例如，在運輸方面，我們正在獲得份額，但我記得當我進入公司時，我不確定我們是否有一些業務在賺了很多錢。因此，我們對我們所從事的業務非常謹慎，因為它具有適當的盈利能力。只是評論其中一些電動汽車項目，客戶尚未全面生產。所以很多這些項目都是最初的設置和證明。因此，隨著他們開始擴大生產線，他們可能會在一年後產生更多收入。然後當然，他們在那之後產生了消耗性工具支出。所以航空航天的效果更直接一些。隨著我們在這些大型項目中贏得更多份額和更高的機加工百分比，這意味著隨著世界波音公司和空中客車公司提高產量並且他們的供應鏈限制開始減弱，我們期待從這些機會中獲得更多增長。所以這就像我們在為這些重大勝利中的一些奠定基礎。然後隨著客戶數量的增加，這肯定會對我們有利。

This concludes our question-and-answer session. I would like to turn the conference back over to Chris Rossi for closing remarks.

我們的問答環節到此結束。我想將會議轉回給 Chris Rossi 作閉幕詞。

Thanks, operator, and thanks, everyone, for joining us on the call today. I think this quarter is another data point that demonstrates our ability to advance the strategic initiatives and definitely position ourselves for future growth and secure that market-leading position. And I am confident in the full year outlook. There still is uncertainty out there. But as we talked about on the phone, I think we've got the proper ranges out there, and we feel good that we're going to be able to execute to that outlook. So with that, if you have any questions, please follow up with Kelly, and have a great day.

謝謝接線員，也謝謝大家今天加入我們的電話會議。我認為本季度是另一個數據點，它表明我們有能力推進戰略計劃，並為未來的增長明確定位自己並確保市場領先地位。我對全年前景充滿信心。那裡仍然存在不確定性。但正如我們在電話中談到的那樣，我認為我們已經有了合適的範圍，我們很高興能夠實現這一前景。因此，如果您有任何問題，請跟進 Kelly，祝您有美好的一天。

A replay of this event will be available approximately one after its conclusion. To access the replay, you may dial toll-free within the United States (877) 344-7529. Outside of the United States, you may dial (412) 317-0088. You will be prompted to enter the conference ID 35-666-70, then the pound or hash symbol. You will be asked to record your name and company. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

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