Kennametal Inc (KMT) 2024 Q4 法說會逐字稿

Good morning. I would like to welcome everyone to Kennametal's fourth-quarter and fiscal 2024 earnings conference call. (Operator Instructions) Please note that today's event is being recorded.

早安.我謹歡迎大家參加肯納金屬第四季和 2024 財年財報電話會議。 （操作員說明）請注意，今天的活動正在錄製中。

I would now like to turn the conference over to Michael Pici, Vice President of Investor Relations. Please go ahead, sir.

現在我想將會議交給投資者關係副總裁 Michael Pici。請繼續，先生。

Thank you, operator. Welcome, everyone, and thank you for joining us to review Kennametal's fourth quarter and fiscal 2024 results. This morning we issued our earnings press release and posted our presentation slides on our website.

謝謝你，接線生。歡迎大家，感謝您與我們一起回顧肯納金屬第四季和 2024 財年的業績。今天早上，我們發布了收益新聞稿，並在我們的網站上發布了簡報幻燈片。

We will be referring to that slide deck throughout today's call. I'm Michael Pici, Vice President of Investor Relations. Joining me on the call today are Sanjay Chowbey, President and Chief Executive Officer; Pat Watson, Vice President and Chief Financial Officer; and Franklin Cardenas, Vice President and President of Infrastructure. After Sanjay and Pat's prepared remarks, we will open the line for questions.

我們將在今天的電話會議中提到該幻燈片。我是麥可‧皮奇 (Michael Pici)，投資者關係副總裁。今天和我一起參加電話會議的是總裁兼執行長桑傑‧喬貝 (Sanjay Chowbey)；帕特‧沃森，副總裁兼財務長；副總裁兼基礎設施總裁富蘭克林卡德納斯 (Franklin Cardenas)。在桑杰和帕特準備好發言後，我們將開通提問熱線。

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揭露聲明。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、業績或成就有重大差異。這些風險因素和不確定性在肯納金屬向 SEC 提交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 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公認會計準則財務指標。我們認為最直接可比較的 GAAP 財務指標的調整表可以在表格後面和我們網站上的 8-K 表格中找到。

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

然後，我會將電話轉給 Sanjay。

Thank you, Mike. Good morning and thank you for joining us today. It is an honor and privilege to lead this company and to work with our team members around the world. Before I get into the main portion of my remarks, let me say that it has been a very busy two months, since I took on the CEO role.

謝謝你，麥克。早安，感謝您今天加入我們。領導這家公司並與我們世界各地的團隊成員合作是一種榮幸。在進入我的主要發言部分之前，我想說的是，自從我擔任執行長以來，這兩個月是非常忙碌的。

During that time, I visited numerous facilities around the world, talking to our team members, investors, customers, and other stakeholders. So much of what I'm hearing from them, aligns with and reinforces what we are focused on by way of our value creation pillars. And I'll be speaking more about those in a minute.

在那段時間裡，我參觀了世界各地的許多工廠，與我們的團隊成員、投資者、客戶和其他利害關係人交談。我從他們那裡聽到的很多內容都與我們透過價值創造支柱所關注的重點一致並得到強化。稍後我將詳細討論這些內容。

Earlier this week, we announced the hiring of our Metal Cutting President, Dave Bersaglini. He's a strong business leader with a growth mindset and results orientation. I'm very pleased to have Dave on our team. I've also established a team to implement value creation business systems and tools that will help us drive above market growth, operating margin expansion, and free operating cash flow.

本週早些時候，我們宣布聘請金屬切削總裁 Dave Bersaglini。他是一位強大的商業領袖，具有成長心態和結果導向。我很高興戴夫加入我們的團隊。我還建立了一個團隊來實施價值創造業務系統和工具，這將幫助我們推動高於市場的成長、營業利潤率擴張和自由經營現金流。

In the spirit of true lean, we are making this investment primarily through existing resources and some new talent, almost all of it funded by reallocation of funds. During these first couple of months, we also dealt with the aftermath of a tornado at our Rogers, Arkansas plant.

本著真正的精實精神，我們主要透過現有資源和一些新人才進行這項投資，幾乎所有資金都是透過資金重新分配來資助的。在最初的幾個月裡，我們還在阿肯色州羅傑斯工廠處理了龍捲風的後果。

The safe, speedy and successful restart of that facility was made possible by our local Rogers team and experts from across our organization who came in to help. Those teams worked non-stop to safely resume operations and meet customers' expectations. And I just want to take this opportunity to say thank you to them.

我們當地的羅傑斯團隊和來自整個組織的專家前來提供協助，使該設施能夠安全、快速且成功地重新啟動。這些團隊不間斷地工作，以安全恢復營運並滿足客戶的期望。我只是想藉此機會向他們表示感謝。

Now let's turn to some of the details on the quarter on slide 3. Overall, I'm very pleased with how we performed in the quarter. Despite market softness and other challenges, sales were at the upper end of our expectations, with organic sales declining 1%.

現在讓我們來看看幻燈片 3 上有關本季的一些細節。儘管市場疲軟和其他挑戰，銷售額仍處於我們預期的上限，有機銷售額下降了 1%。

During the quarter, infrastructure's organic sales declined 2% and metal cuttings organic sales were flat. It is worth noting that metal cutting has consistently outperformed our public peers over the last two years. End market conditions were mixed.

本季度，基礎設施的有機銷售額下降了 2%，金屬切削品的有機銷售額持平。值得注意的是，金屬切削在過去兩年中一直優於我們的公共同行。終端市場狀況好壞參半。

We continued to see strength in aerospace and defense, with sales increasing by 23% from the prior year. This was driven by market growth, execution of our strategic initiatives, and project timing. General engineering sales were flat with favorable project and order timing in the Americas offset by lower economic activity in EMEA.

我們繼續看到航空航太和國防領域的強勁勢頭，銷售額比上年增長 23%。這是由市場成長、策略計畫的執行和專案時機所推動的。一般工程銷售持平，美洲的項目和訂單時機有利，但歐洲、中東和非洲經濟活動較低，抵消了這種影響。

Transportation sales were down 1% year over year, mainly from project timing and lower volume in Americas. Energy was down 6% due to the continued year-over-year declines in US land-based rig count and wind energy project delays in Asia. Competitive market pressures, especially in road construction continue to impact our earthworks business, which declined 6%.

運輸銷售年減 1%，主要是由於專案進度和美洲銷量下降。由於美國陸上鑽機數量持續年減以及亞洲風能工程的延誤，能源價格下跌 6%。市場競爭壓力，尤其是道路建設領域的競爭壓力，繼續影響我們的土方工程業務，該業務下降了 6%。

Moving beyond end markets now, our adjusted EBITDA margin increased 100 basis points from last year, despite lower sales volume and approximately $4 million charge from the tornado. Additionally, as we expected, margins normalized in the infrastructure business, improving 490 basis points from the third quarter on an adjusted basis.

現在超越終端市場，儘管銷量下降且龍捲風造成約 400 萬美元的損失，但我們調整後的 EBITDA 利潤率比去年增加了 100 個基點。此外，正如我們預期的那樣，基礎設施業務的利潤率正常化，調整後較第三季提高了 490 個基點。

During the quarter, we bought back $22 million worth of stock, completing our original $200 million authorization. Overall, let me say that I'm quite pleased with how the business performed in the quarter.

本季度，我們回購了價值 2,200 萬美元的股票，完成了最初的 2 億美元授權。總的來說，我對本季業務的表現非常滿意。

Now let's turn to slide 4 to briefly talk about the full year performance. Fiscal '24 presented us with persistently soft market conditions, foreign exchange headwinds and the impact of the tornado that I previously mentioned. But even in a year with lower sales volume, we were able to move the business forward.

現在讓我們轉向投影片 4 來簡單談談全年的表現。 24 財年，我們面臨著持續疲軟的市場狀況、外匯逆風以及我之前提到的龍捲風的影響。但即使在銷售較低的一年，我們也能夠推動業務向前發展。

Adjusted EBITDA margin was essentially flat despite lower volumes, price raw material timing effect in infrastructure, the tornado, and the foreign exchange headwinds. We also delivered the highest free operating cash flow since fiscal '15, and the cash flow from operations as percent of sales was the highest in over 25 years. This performance enabled us to return $129 million worth of cash to our shareholders through our dividend and share repurchase program.

儘管銷售下降、基礎設施中的原物料價格定時效應、龍捲風和外匯逆風，調整後的 EBITDA 利潤率基本上持平。我們也實現了自 15 財年以來最高的自由營運現金流，並且營運現金流佔銷售額的百分比是 25 年來最高的。這項業績使我們能夠透過股利和股票回購計畫向股東返還價值 1.29 億美元的現金。

End market results for the year were similar to the fourth quarter with a few differences in the transportation and general engineering end markets. Aerospace and defense grew 13%, driven by strategic initiatives and market growth.

今年的終端市場結果與第四季相似，但運輸和通用工程終端市場存在一些差異。在戰略措施和市場成長的推動下，航空航太和國防成長了 13%。

Transportation increased 1% for the year, driven by project orders in EMEA, which were offset by lower production in the Americas and lower Asia Pacific volume. General engineering declined 1% for the year due to lower production in EMEA and the Americas. The market conditions that impacted earthworks which declined 4%, and energy which declined 9% was consistent throughout the year.

在歐洲、中東和非洲地區項目訂單的推動下，今年運輸量增加了 1%，但美洲產量下降和亞太地區產量下降抵消了這一增長。由於歐洲、中東和非洲和美洲的產量下降，通用工程今年下降了 1%。影響土方工程下降 4% 和能源下降 9% 的市場狀況全年保持一致。

In summary, we feel good about delivering a solid year and quarter. We managed through many challenges, drove performance improvement and continue to advance our strategic initiatives. That said, there is more work to do to deliver sustained performance on growth and profitability, and we are committed to continuing that work in fiscal '25.

總而言之，我們對今年和季度的業績表現感到滿意。我們克服了許多挑戰，推動績效改進，並繼續推動我們的策略舉措。也就是說，要實現持續成長和獲利能力，還有更多工作要做，我們致力於在 25 財年繼續這項工作。

Turning to slide 5 for the value creation pillars I mentioned a few minutes ago. I'm pleased to share with you our three value creation pillars. These pillars are built on a strong foundation and will be guiding us in fiscal '25 and beyond. First is delivering growth. This is exactly as it sounds. We are focused on growing above market, and we'll do that through innovative solutions and application support, best-in-class customer service and commercial excellence.

轉向投影片 5，了解我幾分鐘前提到的價值創造支柱。我很高興與您分享我們的三大價值創造支柱。這些支柱建立在堅實的基礎上，並將在 25 財年及以後指導我們。首先是實現成長。這正如聽起來的那樣。我們專注於超越市場的成長，我們將透過創新的解決方案和應用支援、一流的客戶服務和卓越的商業來實現這一目標。

As a brief sidenote, many of you will remember that we talked about several strategic pillars last fall at the Investor Day in New York, innovation advantage, commercial excellence, and operational excellence. Both concepts have also been embedded as part of these value creation pillars. You can see innovation and commercial excellence in pillar one and operational excellence in pillar two.

作為一個簡短的旁注，你們中的許多人都會記得，我們​​去年秋天在紐約投資者日討論了幾個戰略支柱：創新優勢、卓越商業和卓越運營。這兩個概念也已成​​為這些價值創造支柱的一部分。您可以在第一支柱中看到創新和卓越的商業，在第二支柱中看到卓越的營運。

Now to our second pillar, continuous improvement. This will be all about doing things better and includes a relentless focus on applying lean principles to everything we do, increasing value-add work and removing waste from our processes.

現在我們的第二個支柱是持續改善。這一切都是為了更好地做事，包括不懈地致力於將精實原則應用到我們所做的一切中，增加增值工作並消除流程中的浪費。

This is not just for our manufacturing plants, but also applies to all parts of our business. The value creation systems team will build out capabilities and drive adoption of continuous improvement tools with the full engagement of the broader team.

這不僅適用於我們的製造工廠，也適用於我們業務的所有部分。價值創造系統團隊將在更廣泛團隊的充分參與下增強能力並推動持續改進工具的採用。

Now moving to the third pillar, portfolio optimization. This pillar is how we will systematically review and optimize our product and business portfolio to generate value for all our stakeholders. This is a critical ongoing process to ensure that we are generating attractive returns from our current mix of invested capital and resource allocation.

現在轉向第三個支柱，投資組合優化。這支柱是我們如何有系統地審查和優化我們的產品和業務組合，為所有利害關係人創造價值。這是一個關鍵的持續過程，以確保我們從當前的投資資本和資源分配組合中獲得有吸引力的回報。

In addition, we'll work towards improving our sales mix, emphasizing markets and applications with a higher growth and margin profile as well as businesses that are less cyclical than our traditional mix. While I'm on this topic, let me say this, buying a third leg of stool is not a part of our strategy.

此外，我們將努力改善我們的銷售組合，重點關注具有更高成長和利潤率的市場和應用，以及比我們傳統組合週期性更小的業務。當我談論這個話題時，請允許我這麼說，購買第三張凳子並不是我們策略的一部分。

Our primary focus is driving above market growth, margin expansion and cash flow improvement through organic actions, but we will consider bolt-on acquisitions to fill product or coverage gaps for attractive applications and markets aligned with our strategic focus.

我們的主要重點是透過有機行動推動市場成長、利潤擴張和現金流改善，但我們將考慮進行補強收購，以填補與我們的策略重點一致的有吸引力的應用和市場的產品或覆蓋範圍空白。

For example, medical, ceramics and aerospace and defense, as we had mentioned during the Investor Day also. Finally, these pillars are supported by a strong foundation of engaged employees, our core values and a winning culture.

例如，正如我們在投資者日期間提到的那樣，醫療、陶瓷、航空航天和國防。最後，這些支柱得到了敬業的員工、我們的核心價值和致勝文化的堅實基礎的支持。

Now there is more to come on these value creation pillars in the future, but for now, let me say this. We are focused on serving our customers, providing a great place to work for our team, and delivering above market growth, operating margin expansion, and improved return on invested capital.

現在，未來這些價值創造支柱還會有更多的事情發生，但現在，讓我這樣說。我們專注於為客戶提供服務，為我們的團隊提供良好的工作場所，並實現高於市場的成長、營業利潤率的擴大和投資資本回報率的提高。

The growth and continuous improvement pillars will be our primary focus on this journey, especially in the near term, while making systematic progress on portfolio performance over time.

成長和持續改善支柱將是我們這趟旅程的主要關注點，尤其是在短期內，同時隨著時間的推移，在投資組合績效方面取得系統性進展。

Now let's turn to slide 6. Here I'll provide a quick overview of market trends. The top section of this slide provides directional context on end-market sales performance reflected in our fiscal '25 assumptions at the midpoint. The lower section includes the key macroeconomic factors reflected in our outlook.

現在讓我們轉向投影片 6。本投影片的頂部部分提供了終端市場銷售業績的方向性背景，反映在我們對 25 財年中點的假設中。下半部包括我們的展望中反映的關鍵宏觀經濟因素。

Given the short cycle nature of our business, backlog is not a meaningful component of our business model and has minimal impact on our outlook. As such to set our outlook range, we rely on external market indicators and customer inputs, plus the expected impact of our strategic initiatives.

鑑於我們業務的短週期性質，積壓訂單並不是我們業務模式的重要組成部分，對我們的前景影響很小。因此，為了設定我們的展望範圍，我們依賴外部市場指標和客戶的意見，以及我們策略性舉措的預期影響。

You can see the data points on the slide, so let me provide you with a little bit more color beyond the numbers. Overall, fiscal '25 is expected to be a continuation of mixed market conditions, softer markets in the near term and a modest improvement in the second half of our fiscal year.

您可以在幻燈片上看到數據點，所以讓我為您提供數字以外的更多顏色。整體而言，預計 25 財年市場狀況將持續複雜，短期內市場疲軟，而本財年下半年將出現適度改善。

In aerospace and defense, we expect continued growth, but at a slightly lower rate as the major OEMs have revised the build rate for rest of calendar year '24 and then improving in calendar year '25. The aircraft z rates are still 35% below pre-pandemic levels.

在航空航太和國防領域，我們預計將持續成長，但成長速度會略低，因為主要 OEM 已修改了 24 日曆年剩餘時間的建造率，然後在 25 日曆年有所改善。飛機 z 速率仍比大流行前水準低 35%。

But with our strategic initiatives, we are well positioned to win market share and capitalize on market growth as quality and supply chain constraints ease over time. Defense related orders are expected to stay strong for the year. This market tends to have significant quarterly fluctuations due to the lumpy nature of customer buying patterns.

但憑藉我們的策略性舉措，隨著品質和供應鏈限制隨著時間的推移而緩解，我們有能力贏得市場份額並利用市場成長。預計今年國防相關訂單將維持強勁。由於客戶購買模式的不穩定，該市場往往會出現顯著的季度波動。

Transportation is expected to experience slight growth in production for the current IHS light vehicle forecast, but most of the improvements are projected for calendar year '25. In the near term, we see indications of a softer transportation market, especially in EMEA. In fiscal '24, we continue to be successful in winning projects on battery and hybrid programs, a strategic focus area for us at a higher rate versus our traditional rate in transportation.

根據目前的 IHS 輕型汽車預測，交通運輸業的產量預計將略有增長，但大部分改進預計在 25 日曆年實現。短期內，我們看到運輸市場疲軟的跡象，尤其是在歐洲、中東和非洲地區。在 24 財年，我們繼續成功贏得電池和混合動力項目的項目，這是我們的戰略重點領域，與我們在交通領域的傳統利率相比，利率更高。

As you may have seen, several manufacturers have commented about the pace of new battery platform investments in production which are slowing. As a result in the near term, this slowdown could provide for some tougher comparisons for us, especially in EMEA.

正如您可能已經看到的，一些製造商評論說新電池平台的生產投資步伐正在放緩。因此，在短期內，這種放緩可能會為我們帶來一些更艱難的比較，特別是在歐洲、中東和非洲地區。

In any case, we are very well positioned to grow with all engine types for the long term. General engineering is expected to be flat. IPI in the US continues to remain flat near term with a slight improvement in the first half of calendar year '25. Eurozone remains consistent with slight improvement in the first half of calendar year '25. We anticipate China to be flat as for market indicators.

無論如何，我們都處於有利地位，可以與所有引擎類型一起實現長期發展。一般工程預計持平。美國 IPI 近期持續保持平穩，25 曆年上半年略有改善。歐元區在 25 年上半年仍維持小幅改善。我們預計中國的市場指標將持平。

In energy, rig counts are projected to increase moderately with the growth anticipated to occur in the first half of calendar year '25. Customer feedback also indicate a cautious outlook for the second half of calendar year '24 and rig output productivity remains a key focus.

在能源領域，鑽機數量預計將適度增加，預計成長將在 25 日曆年上半年出現。客戶回饋還表明，對 '24 日曆年下半年的前景持謹慎態度，鑽機產量生產力仍然是關鍵焦點。

Considering these factors, we anticipate this end-market to remain down slightly, especially in the near term. Finally, earthworks, including mining and road construction, is expected to be soft in the near term and also experience competitive pricing pressures.

考慮到這些因素，我們預期終端市場將繼續小幅下滑，尤其是在短期內。最後，包括採礦和道路建設在內的土方工程預計短期內將疲軟，也將面臨競爭性的定價壓力。

Now let me turn the call over to Pat, who will review the fourth quarter financial performance and fiscal '25 outlook.

現在讓我把電話轉給帕特，他將回顧第四季的財務表現和 25 財年展望。

Thank you, Sanjay, and good morning, everyone. I will begin on slide 7 with a review of the fourth quarter operating results. The quarter's results show that we continue to execute our initiatives in the face of continued headwinds from inflation, foreign exchange, and some market softness.

謝謝桑傑，大家早安。我將從投影片 7 開始回顧第四季的營運表現。本季的業績表明，面對通膨、外匯和部分市場疲軟帶來的持續阻力，我們繼續執行我們的舉措。

Sales decreased by 1% year over year with a 1% organic decline and headwinds from foreign exchange of 2%, partially offset by favorable work days of 2%. Operating expense as a percentage of sales decreased 50 basis points year over year to 19.5% on an adjusted basis.

銷售額年減 1%，其中有機下降 1%，外匯阻力為 2%，部分被 2% 的有利工作日所抵銷。調整後營運費用佔銷售額的百分比年減 50 個基點至 19.5%。

Adjusted EBITDA and operating margins were 17.7% and 11.5% respectively, versus 16.7% and 11.4% in the prior year quarter. During the quarter, we realized approximately $7 million in savings from the previously announced restructuring program.

調整後 EBITDA 和營業利潤率分別為 17.7% 和 11.5%，去年同期為 16.7% 和 11.4%。本季度，我們透過先前宣布的重組計劃節省了約 700 萬美元。

Time and delays caused a slight shift with some actions moving into July, and we continue to expect to achieve $35 million of run rate savings. As a result, in FY25, we expect approximately $14 million in rollover savings.

時間和延誤導致一些行動發生了輕微的變化，一些行動進入了 7 月份，我們仍然期望實現 3500 萬美元的運行率節省。因此，我們預計 2025 財年可節省約 1,400 萬美元的展期費用。

Lastly, foreign exchange headwinds from the strong US dollar were approximately 2% this quarter. The adjusted effective tax rate increased year over year to 29.3%, primarily driven by unfavorable geographical mix and prior year adjustments related to valuation allowances against deferred tax assets that did not repeat in the current quarter.

最後，本季強勢美元帶來的外匯阻力約為 2%。調整後的有效稅率年增至29.3%，主要是由於不利的地域組合以及上一年與遞延所得稅資產估值備抵相關的調整（本季度未重複）所致。

Adjusted earnings per share were $0.49 in the quarter versus $0.51 in the prior year period. As Sanjay mentioned, we also delivered the highest free operating cash flow since FY15 and cash flow from operations as a percent of sales was the highest in over 25 years.

本季調整後每股收益為 0.49 美元，去年同期為 0.51 美元。正如 Sanjay 所提到的，我們也實現了自 2015 財年以來最高的自由營運現金流，並且營運現金流佔銷售額的百分比達到了 25 年來的最高水準。

The main drivers of our EPS performance are highlighted on the bridge on slide 8. The positive year-over-year effect of operation reflects restructuring savings, timing of raw material costs, price, and operational excellence initiatives, partially offset by lower sales and production volumes and higher wage and general inflation.

我們每股收益表現的主要驅動因素在幻燈片8 的橋上得到了強調。抵消數量、更高的工資和整體通貨膨脹。

Our results this quarter also include an approximate $0.04 hit from the Rogers tornado on our results. You can also see the effects of a tax rate and currency on EPS, with taxes of negative $0.07 and currency negative $0.02, that reflects lower share count and interest expense, which contributed $0.03.

我們本季的業績還包括羅傑斯龍捲風對我們業績造成的約 0.04 美元的損失。您還可以看到稅率和貨幣對 EPS 的影響，稅收為負 0.07 美元，貨幣為負 0.02 美元，這反映了股份數量和利息支出的減少（貢獻了 0.03 美元）。

Slides 9 and 10 detail the performance of our segments this quarter. Reported metal cutting sales were down 1% compared to the prior year quarter, with flat organic growth and a foreign currency headwind of 2%, partially offset by favorable business days of 1%.

投影片 9 和 10 詳細介紹了本季我們各部門的業績。報告的金屬切割銷售額與去年同期相比下降了 1%，有機成長持平，外匯不利因素為 2%，部分被 1% 的有利營業日所抵銷。

By region, on a constant currency basis, the Americas led at 7%, Asia Pacific was down 2%, and EMEA declined 3%. Americas year over year growth this quarter was driven by order timing in the indirect channel within general engineering and market and continued market growth and the execution of our growth initiatives in aerospace and defense, partially offset by a decline in transportation.

按地區劃分，以固定匯率計算，美洲地區領先 7%，亞太地區下降 2%，歐洲、中東和非洲地區下降 3%。本季度美洲的同比增長是由通用工程和市場內的間接渠道的訂單時間、持續的市場增長以及我們在航空航天和國防領域的增長計劃的執行推動的，但部分被運輸的下降所抵消。

Globally, the indirect channel represents about 60% of metal cuttings annual FY24 sales. The decline in Asia Pacific sales was primarily the result of weakness in general engineering and wind energy projects. And EMEA's year over year performance reflects soft market conditions within general engineering, partially offset by market strength and share gain initiatives driving growth in aerospace and defense.

在全球範圍內，間接通路約佔 2024 財年金屬切削件年度銷售額的 60%。亞太地區銷售額下降的主要原因是通用工程和風能專案疲軟。歐洲、中東和非洲地區的年比表現反映了通用工程領域疲軟的市場狀況，但部分被市場實力和推動航空航太和國防領域成長的份額增長舉措所抵消。

Now looking at sales by end market, Aerospace and defense grew 11% year over year as our strategic initiatives continued to drive results in this end market. General engineering grew 1% year over year with the timing noted earlier, driving the growth in Americas, partially offset by declining sales in EMEA and softness in China.

現在看看終端市場的銷售額，航空航太和國防年增 11%，因為我們的策略性舉措繼續推動該終端市場的表現。通用工程業務年增 1%（如前所述），推動了美洲地區的成長，但部分被歐洲、中東和非洲地區銷售額下降和中國市場疲軟所抵消。

Transportation declined 1% year over year, mainly from project timing and lower volume in the Americas. And lastly, energy declined 1% this quarter. Metal Cutting adjusted operating margin of 13.4% increased 80 basis points year over year, driven by price and restructuring benefits, partially offset by lower sales and production volumes, higher wages, and general inflation, and foreign exchange.

運輸量年減 1%，主要是由於工程時間安排和美洲運輸量下降。最後，能源本季下降了 1%。受價格和重組效益的推動，金屬切割調整後營業利潤率為 13.4%，年增 80 個基點，但部分被銷售和產量下降、薪資上漲、整體通膨和外匯所抵銷。

Turn to slide 10 for infrastructure. Organic sales decreased by 2% year over year with foreign exchange headwinds of 1%, partially offset by favorable business days of 1%. Regionally, EMEA grew 3%, followed by Asia Pacific at 1%, and Americas sales declined by 3%.

請參閱投影片 10 以了解基礎架構。有機銷售額年減 2%，外匯不利因素為 1%，但被 1% 的有利營業日部分抵銷。從地區來看，歐洲、中東和非洲地區的銷售額成長了 3%，其次是亞太地區，成長了 1%，美洲地區的銷售額下降了 3%。

Looking at the sales by end market, aerospace and defense grew 58% due to order timing when compared to the prior year. And general engineering declined 2% with lower demand in the Americas, partially offset by modest growth in Asia Pacific.

從終端市場來看，由於訂單時機的原因，航空航太和國防領域的銷售額與前一年相比成長了 58%。由於美洲需求下降，通用工程下降了 2%，但部分被亞太地區的溫和成長所抵消。

Fourth quarter sales declined 6% due to competitive market conditions, resulting in lower construction volumes and lower specialty product sales in the Americas. And lastly, energy declined 9%, mainly in the Americas due to lower US land rig counts and less drilling activity.

由於市場競爭激烈，第四季銷售額下降了 6%，導緻美洲地區的建築量下降和特種產品銷售下降。最後，能源下降了 9%，主要是在美洲，由於美國陸地鑽機數量減少和鑽探活動減少。

As we had expected, adjusted operating margin increased sequentially from 3.8% in the third quarter to 8.7% in the fourth quarter, since the timing of price raw material effects that impact margin in the second and third quarter are now behind us.

正如我們預期的那樣，調整後的營業利潤率從第三季度的 3.8% 連續增長至第四季度的 8.7%，因為影響第二和第三季度利潤率的原材料價格影響的時機現已成為過去。

Compared to the prior year, adjusted operating margin declined 90 basis points. Operating margin this quarter included an approximate $4 million charge from the tornado, representing approximately 190 basis points of margin.

與前一年相比，調整後營業利益率下降了 90 個基點。本季的營業利潤包括龍捲風帶來的約 400 萬美元費用，相當於約 190 個基點的利潤。

Additionally, we saw lower sales and production volumes, partially offset by favorable price raw material timing, restructuring savings and an advanced manufacturing production credit for FY24 under the Inflation Reduction Act.

此外，我們看到銷售量和產量下降，但部分被有利的原材料價格時機、重組節省以及《通貨膨脹削減法案》下的 2024 財年先進製造業生產信貸所抵消。

Now turning to slide 11 to review our free operating cash flow and balance sheet. Net cash flow provided by operating activities in fiscal '24 was $277 million compared to $258 million in the prior year. This is the highest as a percentage of sales in over 25 years. Our free operating cash flow was $175 million compared to $169 million in the prior year.

現在轉向投影片 11，回顧我們的自由營運現金流和資產負債表。 24 財年營運活動提供的淨現金流量為 2.77 億美元，而前一年為 2.58 億美元。這是 25 年來最高的銷售額百分比。我們的自由經營現金流為 1.75 億美元，而前一年為 1.69 億美元。

We are very pleased with the team's effort to drive improvements in our inventory efficiency, which was the primary driver of our improved working capital. On a dollar basis year over year, primary working capital decreased to $626 million. On a percentage of sales basis, primary working capital decreased to 32%. Net capital expenditures were $102 million compared to$ 89 million in the prior year.

我們對團隊為推動庫存效率改善所做的努力感到非常滿意，這是我們改善營運資金的主要驅動力。以美元計算，主要營運資金年減至 6.26 億美元。以銷售額百分比計算，主要營運資金下降至 32%。淨資本支出為 1.02 億美元，上一年為 8,900 萬美元。

In total, we returned approximately $129 million to shareholders through our share repurchase and dividend programs. We repurchased $22 million of shares in Q4 for a total of $200 million or 7.4 million shares since the inception of the program, representing approximately 9% of outstanding shares.

透過股票回購和股利計劃，我們總共向股東返還了約 1.29 億美元。自該計劃啟動以來，我們在第四季度回購了 2,200 萬美元的股票，回購總額為 2 億美元，即 740 萬股，約佔已發行股票的 9%。

We also paid a dividend to our shareholders, something we have done every quarter since becoming a public company over 50 years ago. Our commitment to returning cash to shareholders reflects our 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 with no near term funding requirements.

我們也向股東支付股息，自 50 多年前成為上市公司以來，我們每季都會這樣做。我們向股東返還現金的承諾反映了我們對執行策略、推動成長和利潤率提高的能力的信心。我們繼續保持健康的資產負債表和債務到期狀況，沒有短期融資需求。

At quarter end, we had combined cash and revolver availability of approximately $828 million and were well within our financial covenants. The full balance sheet can be found on slide 21 in the appendix.

截至季末，我們的現金和左輪手槍可用資金合計約為 8.28 億美元，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投影片 21 找到。

Turning to slide 12, regarding our outlook. We are providing an outlook for both the full year and the first quarter, beginning with the full year. We expect FY25 sales to be between $2 billion to $2.1 billion, with volume ranging from negative 3% to positive 2%, price realization of approximately 2% and a 1% negative effect from foreign exchange.

轉向幻燈片 12，關於我們的前景。我們從全年開始提供全年和第一季的展望。我們預計 2025 財年銷售額將在 20 億至 21 億美元之間，成交量從負 3% 到正 2%，價格實現約為 2%，外匯負面影響為 1%。

From a seasonality perspective, we expect sales to be slightly more second half weighted than our recent trends. Some year-over-year assumptions in our end market sales at the midpoint are as follows. Aerospace and defense having moderate growth, general engineering and energy are flat, transportation increasing slightly and a slight decline in earthworks.

從季節性角度來看，我們預計下半年銷售的比重將略高於我們最近的趨勢。我們對終端市場銷售中點的一些同比假設如下。航空航太和國防溫和成長，一般工程和能源持平，交通運輸小幅成長，土方工程小幅下降。

The current inflationary environment persists into FY25, but is assumed to continue to moderate. We expect to offset raw material, wage, and general cost increases on a dollar basis. Foreign exchange and non-cash pension costs are expected to be headwinds of $4 million each on a pre-tax basis.

目前的通膨環境持續到 2025 財年，但預計將繼續放緩。我們預計以美元為基礎抵銷原材料、工資和一般成本的增加。以稅前計算，外匯和非現金退休金成本預計將分別面臨 400 萬美元的阻力。

As I mentioned earlier, approximately $14 million of rollover savings from our previously announced restructuring initiative have been included. We expect these savings to be realized more in the first half of the year.

正如我之前提到的，我們先前宣布的重組計畫節省了約 1,400 萬美元的展期費用。我們預計這些節省將在今年上半年實現更多。

Depreciation and amortization is expected to be approximately $135 million, and we expect interest expense of approximately $27 million and an effective tax rate of approximately 27.5%. We expect adjusted EPS to be in a range of $1.30 to $1.70.

折舊和攤銷預計約為 1.35 億美元，我們預計利息支出約為 2,700 萬美元，有效稅率約為 27.5%。我們預計調整後每股收益將在 1.30 美元至 1.70 美元之間。

On the cash side, the full year outlook for capital expenditures is approximately $110 million and the outlook for primary working capital is approximately 30% by fiscal year end, which represents solid progress toward our goal set at Investor Day of driving primary working capital below 30% by FY27. Taken together, we continue to expect free operating cash flow to be greater than 125% of adjusted net income.

在現金方面，全年資本支出前景約為1.1 億美元，到財年結束時主要營運資本前景約為30%，這表明我們在實現投資者日設定的將主要營運資本降至30 以下的目標方面取得了堅實的進展。總而言之，我們繼續預期自由經營現金流將高於調整後淨利的 125%。

The bridge on slide 13 highlights the main drivers impacting EPS at the midpoint of our outlook. The year over year effect of operations is positive. This reflects higher price, no headwind from the timing of price raw material costs, restructuring savings, and productivity, partially offset by lower sales and higher wage and general inflation.

幻燈片 13 上的橋樑強調了影響我們展望中期每股盈餘的主要驅動因素。營運的同比效果是正面的。這反映了價格上漲，原材料成本上漲、重組儲蓄和生產力沒有受到影響，但部分被銷售額下降、薪資上漲和整體通膨所抵消。

Additionally, we expect to invest approximately $5 million in third party expertise to help us execute on some initiatives related to the $100 million cost-out plan we outlined last fall. Our results also include approximately $0.04 tailwind from the impact of the Rogers tornado that occurred in FY24.

此外，我們預計將投資約 500 萬美元的第三方專業知識，以幫助我們執行與我們去年秋天概述的 1 億美元成本計劃相關的一些舉措。我們的結果還包括 2024 財年發生的羅傑斯龍捲風影響帶來的約 0.04 美元的順風。

We are continuing to work with our insurance providers to finalize a claim for insurance recoveries related to the tornado. You could also see the effects of the tax rate and currency on EPS with taxes of negative $0.13 and currency negative $0.04. Non-cash pension is also negative $0.04. At the midpoint, this implies an EBITDA margin improvement of about 100 basis points.

我們正在繼續與保險提供者合作，以完成與龍捲風相關的保險賠償索賠。您還可以看到稅率和貨幣對 EPS 的影響，稅收為負 0.13 美元，貨幣為負 0.04 美元。非現金退休金也為負 0.04 美元。在中點，這意味著 EBITDA 利潤率提高約 100 個基點。

Turning to slide 14, regarding our first quarter outlook. We expect Q1 sales to be between $480 million to $500 million, with volume ranging from negative 4% to positive 1%, price realization of approximately 2% and 1% negative effect from foreign exchange.

轉向幻燈片 14，關於我們第一季的展望。我們預計第一季銷售額將在 4.8 億至 5 億美元之間，成交量從負 4% 到正 1% 不等，價格實現約 2%，外匯負面影響為 1%。

Let me share some details on the sales assumptions and trends in the Q1 outlook. Overall, at the midpoint, this reflects a decline of approximately 10%, slightly outside our recent historical norms due to persistent market softness.

讓我分享一些關於第一季前景的銷售假設和趨勢的細節。總體而言，中間值反映了約 10% 的下降，由於市場持續疲軟，略高於我們近期的歷史正常水平。

We expect moderate growth to continue in aerospace and defense, and transportation have slight growth. However, general engineering is a slight decline, in energy and earthworks declined slightly. Foreign exchange and non-cash pension expense is expected to have a negative impact of approximately $1 million each on a pretax basis.

我們預計航空航太和國防領域將繼續溫和成長，交通運輸領域將小幅成長。然而，一般工程略有下降，其中能源和土方工程略有下降。外匯和非現金退休金支出預計將產生約 100 萬美元的稅前負面影響。

Interest expense is assumed to be approximately $7 million, and the effective tax rate is approximately 27.5%. Lastly, we expect adjusted EPS in the range of $0.2 to $0.3.

假設利息費用約為 700 萬美元，有效稅率約為 27.5%。最後，我們預計調整後每股收益將在 0.2 美元至 0.3 美元之間。

Let me provide some commentary about the EPS range. When compared to the prior year, at the midpoint, our adjusted EPS outlook reflects lower volume plus the pension, tax, and currency items, I previously discussed. We also expect some additional expense in the quarter from tradeshows that did not occur last year, plus some expense timing.

讓我對 EPS 範圍進行一些評論。與前一年相比，在中點，我們調整後的每股盈餘前景反映了較低的交易量加上退休金、稅收和貨幣項目，我之前討論過。我們也預計本季貿易展覽會產生一些去年未發生的額外費用，以及一些費用時間表。

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

這樣，我會將其轉回給 Sanjay。

Thank you, Pat. Turning to slide 15, let me take a few minutes to summarize. Overall, we are pleased with our performance in fiscal '24. Looking forward to fiscal '25, market conditions are expected to be mixed, as you heard earlier.

謝謝你，帕特。轉到投影片 15，讓我花幾分鐘進行總結。整體而言，我們對 24 財年的業績感到滿意。展望 25 財年，市場狀況預計將好壞參半，正如您之前所聽到的。

We are focused on what we can control and will work to improve our operating performance, while monitoring and managing external factors. We'll build upon the momentum on growth and continuous improvement pillars to drive above market growth, margin expansion, and continued progress on cash flow.

我們專注於我們可以控制的事情，並將努力提高我們的營運績效，同時監控和管理外部因素。我們將利用成長動能和持續改善支柱，推動高於市場的成長、利潤率擴張和現金流的持續進步。

In parallel, we'll take a systematic approach to improve portfolio performance over time. In summary, with the steady performance, cash generation capabilities, sustainable competitive advantages and a focused approach to value creation, Kennametal offers a compelling investment opportunity.

同時，我們將採取系統化的方法來隨著時間的推移提高投資組合的績效。總之，憑藉著穩定的績效、現金產生能力、可持續的競爭優勢和專注的價值創造方法，肯納金屬提供了令人信服的投資機會。

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

那麼，接線員，請開通提問線路。

(Operator Instructions) Angel Castillo, Morgan Stanley.

（操作員指示）Angel Castillo，摩根士丹利。

Hi, this is Grace Song for Angel. Thank you for the question. So you had a solid quarter in aerospace and defense and further indicated that you expect fiscal '24 -- '25 to be up moderately. So can you elaborate on how much of the improvement you see in fiscal '25 is driven by market share gains or project wins versus underlying industry growth? And I know it can be lumpy, so any color on that, you know, what might expect from a quarterly cadence on that? Thank you.

大家好，我是 Angel 的 Grace Song。謝謝你的提問。因此，航空航太和國防領域的季度業績表現強勁，並進一步表明您預計 24-25 財年將適度成長。那麼，您能否詳細說明您在 25 財年看到的改善有多少是由市場份額增長或項目獲勝與基礎行業增長推動的？我知道它可能是凹凸不平的，所以任何顏色，你知道，每季的節奏會帶來什麼？謝謝。

Yeah. Good morning, Grace. First of all, let me just comment on what we had in fiscal '24. We had continued strategic wins and also market helped us. Along with that, we saw that the OEMs have been adjusting their bill rates.

是的。早安，格蕾絲。首先，讓我簡單評論一下我們 24 財年的情況。我們取得了持續的策略勝利，市場也幫助了我們。同時，我們看到原始設備製造商一直在調整他們的帳單費率。

Most likely you have noticed that Airbus took it down from 800 to 770. And Boeing's bill rate has been a little bit uncertain. So we looked at that and that's how we projected what we expect in fiscal '25. It will include all three components.

您很可能已經注意到，空中巴士公司將其從 800 降到了 770。因此，我們對此進行了研究，這就是我們對 25 財年預期的預測方式。它將包括所有三個組成部分。

It will have market which we expect to continue to grow, but slightly at a lower rate. It will have strategic wins, which we have talked about in the Investor Day that we have gone beyond the engine, which used to be our main focus, we've gone in components and structures.

我們預計該市場將繼續成長，但成長速度略有下降。它將取得戰略勝利，我們在投資者日談到了這一點，我們已經超越了曾經是我們主要關注點的發動機，我們已經進入了組件和結構領域。

And also new customers at the tiered level we have gotten. So finally, there will be, of course, a little bit of price component to it. So combination of those three, that's how we are looking at aerospace next year.

還有我們獲得的各級新客戶。所以最後，當然會有一點價格因素。這三者的結合，就是我們明年對航空航太的看法。

Got it. That's very helpful. And can you also talk about the implied reacceleration in growth throughout the remainder of the year based on lower 1Q base? And what gives you confidence in 1Q marking the bottom? Thank you.

知道了。這非常有幫助。您能否談談基於較低的第一季基數，今年剩餘時間隱含的成長重新加速？是什麼讓您對第一季觸底充滿信心？謝謝。

Yeah, thanks, Grace. So if we just think about the sales cadence, I'll say throughout the year, we're actually anticipating a pretty normal year after we get through Q1. If we think about the normal cadence, certainly Q1 is down, perhaps down a little bit harder this year as we just got some more seasonality coming out of that, anticipating flat to up slightly in Q2 and then the normal acceleration we would have in the back of the year. So overall, from a sales cadence perspective, a pretty normal year, I would describe it as.

是的，謝謝，格蕾絲。因此，如果我們只考慮銷售節奏，我會說全年，我們實際上預計第一季結束後將是相當正常的一年。如果我們考慮正常的節奏，第一季肯定會下降，今年可能會下降得更厲害一些，因為我們剛剛從中得到了更多的季節性，預計第二季度將持平到略有上升，然後我們將在第第二季實現正常加速今年稍早。總的來說，從銷售節奏的角度來看，這是非常正常的一年，我將其描述為。

Thank you.

謝謝。

Joe Ritchie, Goldman Sachs.

喬·里奇，高盛。

Hey, good morning, everyone.

嘿，大家早安。

Hey.

嘿。

Morning Joe.

早安，喬。

So Sanjay, pretty cool to see like fairly early in your tenure, talking about the value creation pillars. And I want you to maybe double-click a little bit on this portfolio optimization piece. Maybe just give us a little bit more color what you're thinking around that piece and then the ability to potentially continue to right size the portfolio.

桑傑（Sanjay），在您任職初期就談論價值創造支柱，真是太酷了。我希望您雙擊這個投資組合優化部分。也許只是讓我們對你對這件作品的想法有更多的了解，然後有能力繼續調整投資組合的規模。

Good morning, Joe, again. Yeah. So as I talked about the three value creation pillars, these will work in unison. Of course, we will do a lot of things to grow from an organic perspective. We have laid out some of the key work streams in that area, continuous improvement where we will continue to apply lean principles across all parts of the business, that will help us with the margin expansion and also continue our momentum on inventory and working capital improvements.

早安，喬，再次。是的。因此，當我談到三個價值創造支柱時，它們將協同工作。當然，我們會做很多事情來從有機的角度成長。我們已經制定了該領域的一些關鍵工作流程，持續改進，我們將繼續在業務的各個部分應用精益原則，這將有助於我們擴大利潤率，並繼續我們在庫存和營運資本改善方面的勢頭。

Now moving to third pillar, portfolio. Like you said, this generally takes time and we are as I mentioned earlier, this is going to be something that over time we'll work on it while primary focus will be on organic growth and continuous improvement. Even the portfolio piece, the way I look at it, there are three steps to it.

現在轉向第三個支柱，投資組合。就像你說的，這通常需要時間，正如我之前提到的，隨著時間的推移，我們將致力於解決這個問題，而主要重點將放在有機成長和持續改進上。即使是作品集，在我看來，也分為三個步驟。

First step is just putting a process in place so that we do proper assessment, and the assessment will include how much money we are investing in our business, what is the resource allocation, what is the working capital allocation, what kind of return we are getting of that.

第一步就是建立一個流程，以便我們進行適當的評估，評估將包括我們在業務上投資了多少錢，資源配置是什麼，營運資金配置是什麼，我們的回報是多少得到那個。

And even if, let's say we find that our businesses which are not performing to desired level, the first step of that -- the next step of that is not immediately talk about divestment or any kind of inorganic action. The first step will be still organic actions.

即使我們發現我們的業務沒有達到預期的水平，第一步 - 下一步也不會立即談論撤資或任何形式的無機行動。第一步仍然是有機行動。

We are going to go look at what we need to do to improve that business from all perspective, growth, working capital, new CapEx, and also organizational capability perspective. If suppose we do get to a conclusion that there are parts of business that will be served better with a bigger scale with some other party then we would look at that.

我們將從各個角度、成長、營運資本、新的資本支出以及組織能力的角度來看看我們需要做什麼來改善業務。如果假設我們確實得出這樣的結論：某些業務可以透過與其他方更大的規模來獲得更好的服務，那麼我們就會考慮這一點。

But that is not our number one focus. In parallel, of course, I've talked about inorganic growth helping us. From a growth perspective, we will continue to look at ideas for bolt-on acquisitions to support our strategic areas like medical, ceramics, aerospace and defense, where we believe that we can bring more growth synergy and also generate better return for investors.

但這不是我們的首要關注。當然，同時，我也談到了無機成長對我們的幫助。從成長的角度來看，我們將繼續尋找補強收購的想法，以支持我們的醫療、陶瓷、航空航太和國防等戰略領域，我們相信我們可以在這些領域帶來更多的成長協同效應，並為投資者帶來更好的回報。

Thanks guys. That's great color. Appreciate that. And then just a couple of quick ones. Pat, just on the -- this particular quarter, what do you see from -- what was the impact? I know it was price cost was a positive impact and that's embedded in that $0.08.

謝謝你們。那顏色真棒。很欣賞這一點。然後只是幾個快速的。帕特，就這個特定季度而言，您從中看到了什麼影響？我知道價格成本帶來了積極影響，這已包含在 0.08 美元中。

I'm just curious what was the impact specifically this quarter for those two items? And then as you think about the first quarter guidance that you gave, what's embedded in that 1Q number?

我只是好奇本季對這兩項的具體影響是什麼？然後，當您思考您給出的第一季指導時，第一季的數字中包含了什麼？

Yeah, in terms of price cost, the big driver, Joe, you're going to see for that in Q4, obviously, in infrastructure, which is the big driver of margin improvement as that price raw material timing of that is now passed us, which was in Q2 and Q3. As we think about, I'll say, Q1, I'll just set some framework in terms of the full year, and we'll place Q1 inside that framework.

是的，就價格成本而言，喬，您將在第四季度看到這一點，顯然是在基礎設施方面，這是利潤率改善的主要驅動力，因為原材料價格的時機現在已經過去了，這是在第二季和第三季。當我們思考時，我會說，第一季度，我將根據全年設定一些框架，然後我們將第一季放在該框架內。

From a full year perspective, overall, when we talk about EBITDA margins at the midpoint, we talked about that being up 100 basis points, and that's really a function of improved operations, the lack of the price drop headwinds we had last year, the restructuring benefits we've had, the productivity we've got in place.

從全年的角度來看，總體而言，當我們談論中點的 EBITDA 利潤率時，我們談到了增長 100 個基點，這實際上是營運改善的結果，沒有去年價格下跌的阻力，重組我們所擁有的效益，我們現有的生產力。

Now on top of that, we've got a couple of items in terms of some unfavorable FX based on where rates sit today. Obviously, it's a relatively minor amount, but it could move around on us throughout the year. We've got some non-cash pension costs coming through about $0.04 there. And then the tax rate is a little bit higher than where we would have it on a long run basis. So we're at 27.5% this year versus 25% in the long run.

現在最重要的是，根據今天的匯率，我們有一些不利的外匯項目。顯然，這是一個相對較小的數額，但它可能會全年影響我們。我們有一些非現金退休金費用約為 0.04 美元。然後稅率比我們長期的稅率要高一些。因此，今年的成長率為 27.5%，而長期成長率為 25%。

Now taking that annual framework and then thinking about Q1, Q1 you've got all the same things going on there. And then from a Q1 profitability perspective, a couple of just discrete things going on. Number one, we've got some trade shows. So we've not been at, for example, IMTS, which is our principal metal cutting show here since pre-COVID, that will be occurring this quarter, so that's natural in expense this quarter.

現在採用年度框架，然後考慮第一季度，第一季您會發現所有相同的事情正在發生。然後從第一季獲利能力的角度來看，發生了一些離散的事情。第一，我們有一些貿易展覽。例如，我們沒有參加過 IMTS，這是自新冠疫情爆發以來我們在這裡舉辦的主要金屬切削展，該展會將於本季度舉行，因此本季的費用自然會增加。

Sanjay talked about reallocation of resources, we'll see some of that move around, but we think that's an important opportunity for us to get in front of our customers. I'd say the last component of that is we've really got as well just a little bit of compensation moving around throughout the year. You're going to see a little bit of that hitting Q2 -- excuse me, Q1.

桑傑談到了資源的重新分配，我們將看到其中一些資源的轉移，但我們認為這是我們站在客戶面前的重要機會。我想說的最後一個組成部分是，我們確實在全年中也確實獲得了一點補償。你會看到第二季的一些影響——對不起，第一季。

And then as we just think about, I'll say the earnings cadence now throughout the year, I think you're going to see earnings step up in a pretty normal fashion. So Q1 to Q2 come up along with the volume and then accelerate in the back half.

然後，正如我們所想，我會說全年的獲利節奏，我認為你會看到獲利以一種非常正常的方式成長。所以Q1到Q2隨著成交量的增加而上升，然後在後半段加速。

If we look at the last couple of years, Joe, in terms of, I'll say the front half, back half split and last year was a little lumpy because of the tax benefits we received in the first half. But if you kind of levelized tax, you're going to get to around 38%, 40% of earnings in the front half of the year and about 60%, you know, 62% in the back half. And so I think that's pretty normal for the businesses right now, and that's about what we would expect this year too.

如果我們看看過去幾年，喬，我會說前半部分、後半部分分裂，去年有點不穩定，因為我們在上半年獲得了稅收優惠。但如果你實施平準化稅收，你將在上半年獲得約 38%、40% 的收入，在下半年獲得約 60%、62%。所以我認為這對現在的企業來說是很正常的，這也是我們今年的預期。

Yeah, Pat, I'll just add that we also prepared remarks that we have third party assistance in helping us from a productivity and other improvements. So some of that expense will also hit Q1, but we'll see bigger part of the benefits of that as the year progresses.

是的，帕特，我只想補充一點，我們也準備了評論，我們有第三方援助來幫助我們提高生產力和其他改進。因此，其中一些費用也將影響第一季度，但隨著時間的推移，我們將看到其中更大的收益。

Okay. Thank you. Appreciate all the color.

好的。謝謝。欣賞所有的顏色。

Thank you.

謝謝。

Julian Mitchell, Barclays.

朱利安米切爾，巴克萊銀行。

Hi, good morning. Maybe just wanted to start on the kind of demand cadence. Because I suppose, what we've heard from some other companies in the industrial world, even just this morning is destocking in a bunch of markets, particularly sort of general engineering, discrete automation, and so forth, of highway.

嗨，早安。也許只是想從這種需求節奏開始。因為我想，即使是今天早上，我們也從工業界的其他一些公司那裡聽到了許多市場的庫存減少情況，特別是高速公路的通用工程、離散自動化等。

And that's continued in the last month or two, consistent with sort of 6, 12 months ago. And then maybe what you're seeing is kind of more pressure on the CapEx or project side of things. And so it sounded from the prepared remarks that the demand environment from your standpoint, there has been very steady in recent months and kind of in line with what you'd thought.

這種情況在過去一兩個月一直在持續，與 6、12 個月前的情況一致。然後，也許您會看到資本支出或專案面臨更大的壓力。因此，從準備好的發言來看，從您的角度來看，需求環境近幾個月非常穩定，有點符合您的想法。

I just wondered if that was a fair characterization or maybe help us understand, have you seen the demand environment trending just last kind of couple of months? What's moving around?

我只是想知道這是否是一個公平的描述，或者也許可以幫助我們理解，您是否看到了過去幾個月的需求環境趨勢？什麼東西在動？

Julian, first of all, we have seen market being soft. And also, as we talked about the projection in the first half of fiscal '25, we see continued softness and then some recovery in the second half of our fiscal year, which will be calendar year '25.

朱利安，首先，我們看到市場疲軟。而且，正如我們談到 25 財年上半年的預測時，我們看到持續的疲軟，然後在我們財年的下半年（即 25 日曆年）出現一些復甦。

If you look at the recent quarter, as we talked about even in metal cutting, we did perform slightly better than market, which we have been in for the last several quarters. So I do believe that plays into role.

如果你看看最近一個季度，正如我們所討論的，即使在金屬切削方面，我們的表現也確實比市場表現稍好，而我們在過去幾個季度中一直處於市場狀態。所以我確實相信這會發揮作用。

With respect to what we are seeing with our channel partners and customers, we are not seeing any major shift in stocking or destocking. I think for all practical purposes, our energy customers, they were very cautious some time ago. They made the adjustments from, I think even more than a year ago.

就我們在通路合作夥伴和客戶中看到的情況而言，我們沒有看到庫存或去庫存發生任何重大變化。我認為出於所有實際目的，我們的能源客戶前段時間非常謹慎。我認為他們從一年多前就做出了調整。

And from industrial perspective, we are also not seeing any major stocking or destocking. Our overall delivery performance has improved. Lead time has improved in some areas. And as a result, we also think that our channel partners have adjusted inventory, so we are not going to see any major destocking in coming months.

從產業角度來看，我們也沒有看到任何大規模的庫存或去庫存。我們的整體交付績效有所改善。某些領域的交貨時間有所改善。因此，我們也認為我們的通路合作夥伴已經調整了庫存，因此未來幾個月我們不會看到任何大規模的去庫存。

That's clear. Thanks, Sanjay. And just maybe one for you more strategically. So say slide number 5 is sort of a good starting point. I guess a couple of things. One would be versus the Investor Day late last year. Kind of there any points of increased emphasis, let's say, from your viewpoint or areas of nuance perhaps for you personally as CEO versus that framework late last year.

很清楚。謝謝，桑傑。也許這對你來說更具戰略意義。所以說第 5 號投影片是一個很好的起點。我想有幾件事。其中之一是去年年底的投資者日。比方說，從你個人的觀點或細微差別的領域來看，與去年年底的框架相比，對於身為執行長的你個人來說，有一些更強調的點。

And then on the sort of outgrowth or trying to rejuvenate Kennametal's organic sales growth, can you do that while increasing margins? Or do you think we need some period of sort of higher reinvestment, the margins suffer for a bit, but you get the fruits of that on sales and margins kind of down the line.

然後，在那種副產品成長或試圖重振肯納金屬的有機銷售成長方面，您能在增加利潤的同時做到這一點嗎？或者您是否認為我們需要一段時間進行更高的再投資，利潤率會受到一些影響，但您會在銷售和利潤率方面獲得成果。

Yeah. On the Investor Day targets, Julian, we -- as I said earlier, that the things we control, we feel very confident about those things, like the above market growth we talked about, 1% to 2%. Price, we believe that we'll be able to price for inflation and also price for value. Market obviously stays unknown. But at the same time, we believe in the fundamentals of the industries we serve for the long term.

是的。關於投資者日目標，朱利安，正如我之前所說，我們控制的事情，我們對這些事情非常有信心，就像我們談到的上述市場成長，1% 到 2%。價格，我們相信我們將能夠根據通貨膨脹定價，也能夠根據價值定價。市場顯然仍然未知。但同時，我們相信我們長期服務的行業的基本面。

I think we have several mega trends that will continue to help us, but there could be some shift in the market assumptions as we all know. Now, with respect to the $100 million cost out that we also talked about at the Investor Day, we are on track, as you heard from Pat, that we are going to exit the year at the $33 million run rate a from fiscal '24 perspective. And then we'll exit fiscal '25 at $35 million from the restructuring type of benefits. And then on top of that, we have $50 million worth of improvement roughly on cost of sales.

我認為我們有幾個大趨勢將繼續幫助我們，但眾所周知，市場假設可能會發生一些轉變。現在，關於我們在投資者日上也談到的1 億美元成本支出，正如您從帕特那裡聽到的那樣，我們正走在正軌上，我們將以24 財年3300 萬美元的運行率退出今年。然後我們將在 25 財年從重組類型的福利中退出 3500 萬美元。除此之外，我們在銷售成本方面還有價值 5,000 萬美元的改進。

So by the end of fiscal '25, we'll be hitting the halfway mark of what we mentioned about the $100 million and with the additional focus on continuous improvement, which we need to make sure that we deliver on $100 million. So we do feel very comfortable with overall those targets.

因此，到 25 財年結束時，我們將達到我們提到的 1 億美元目標的一半，並進一步專注於持續改進，我們需要確保實現 1 億美元目標。因此，我們確實對整體目標感到非常滿意。

Now coming to your question, if we do have to do some bolt-on acquisitions and take any other inorganic investment, will that affect margin. At this point in time, our goal is that we will do things from an inorganic perspective only when we see attractive ROIC potential and where we see growth synergies and margin synergies. So I don't expect that to be a negative factor in our decision.

現在回答你的問題，如果我們確實必須進行一些補強收購並進行任何其他無機投資，這是否會影響利潤率。目前，我們的目標是，只有當我們看到有吸引力的投資回報率潛力以及成長協同效應和利潤協同效應時，我們才會從無機角度做事。所以我不認為這會成為我們決定的負面因素。

Great. Thank you.

偉大的。謝謝。

Tami Zakaria, JPMorgan.

塔米·扎卡里亞，摩根大通。

Hey, good morning. Thank you so much. So could you comment on the down 3% to up 2% volume expectation for the year by segment? Should we expect this range to hold for both the segments or there's some differences there.

嘿，早安。太感謝了。那麼您能否對今年各細分市場銷售預期下降 3% 至成長 2% 發表評論？我們是否應該預期這個範圍適用於兩個細分市場，或存在一些差異。

I don't -- there's not a market difference in terms of the segments side, in terms of the volume for the year.

我不認為——就細分市場而言，就今年的銷售而言，市場沒有差異。

Got it. So as we think about the down 3% and plus 2%, can you sort of give us some color what end markets we should be looking at or focus on to get to the down 3% or to get to that up 2% for the year? I'm trying to ask which end markets do you think will be the decider of whether it goes to the low end or the high end?

知道了。因此，當我們考慮下降 3% 和上升 2% 時，您能否告訴我們我們應該關注或關注哪些終端市場，以實現下降 3% 或上升 2%？我想問您認為哪個終端市場會決定它走向低端還是高端？

Yeah. So Tami to start with, I will say, general engineering because again, about half of our revenue comes from that. So what happens in general with industrial production, IPI. In general, when you look at even the PMI sentiment, besides India, all the other major markets, are either flat type of sentiment or negative sentiment. So if that improves, we will see definitely moving us to the higher side of our range.

是的。我想說，塔米首先是通用工程，因為我們大約一半的收入來自於此。那麼工業生產 IPI 會發生什麼事？總的來說，當你看著 PMI 情緒時，除了印度之外，所有其他主要市場的情緒要么持平，要么情緒消極。因此，如果情況有所改善，我們肯定會看到我們的範圍上升到更高的一邊。

And then the other piece I would say in terms of like EMEA, transportation industry is quite better down. And I think we expect that even couple of next quarters will be like that. And as the transition from hybrid and electric and all that continues to work through where we did win more projects the last couple of years than our traditional grid that we have in the transportation. As that transition is happening, if that moves a little faster, that will also help us.

然後我要說的另一件事是，就歐洲、中東和非洲而言，運輸業的情況要好得多。我認為我們預計接下來的幾季也會是這樣。隨著混合動力和電動的過渡以及所有這些的繼續進行，過去幾年我們贏得的項目比我們在交通領域的傳統電網還要多。隨著這種轉變的發生，如果進展得更快一點，也會對我們有所幫助。

And then finally on aerospace, one of the OEM, which is having quality issues and other things, and if that production improves, that will also help us. But overall in our outlook, we did consider where we can win market share and that's how we have adjusted, so that initiative will continue. So at this point, that's how we are looking at the range.

最後是在航空航太領域，其中一家 OEM 有品質問題和其他問題，如​​果生產有所改善，這也將對我們有所幫助。但總的來說，在我們的展望中，我們確實考慮了在哪裡可以贏得市場份額，這就是我們進行調整的方式，因此這項舉措將繼續下去。所以在這一點上，這就是我們看待這個範圍的方式。

Understood. Thank you.

明白了。謝謝。

Steven Fisher, UBS.

史蒂文費雪，瑞銀。

Thanks. Good morning. So thanks for all the color that you've provided on the Q1 comparison so far. But I guess depending on how big that conference spending is, it seems like it's still the handful of items you mentioned maybe accounts for a handful of cents.

謝謝。早安.感謝您迄今為止在第一季比較中提供的所有顏色。但我想，根據會議支出有多大，似乎仍然是你提到的少數幾項可能只佔幾美分。

But it seems like there's still maybe another $0.05, $0.1 that we need to account for. So I am just wondering if there's anything else you can help quantify in EPS terms in the bridge items for Q1 and maybe included in that, a little help on what you're thinking about the margins for each of the segments in Q1.

但似乎我們還需要考慮另外 0.05 美元、0.1 美元。因此，我只是想知道您是否可以幫助量化第一季過渡專案中的每股收益，並且可能包含在其中，對您對第一季每個細分市場的利潤的思考有一點幫助。

Yeah, certainly. So from an overall EPS perspective, we just talked about some of the items that we go through. Obviously, tax is going to be a fairly large drag there because you're talking about moving from I think, a 21% tax rate to the 27.5%. We've guided in the quarter at the midpoint, you're looking at $0.04 or $0.05 there. And then you can prorate the pension item FX as well, you're going to get a couple of cents from that.

是的，當然。因此，從整體每股收益的角度來看，我們只是討論了我們經歷的一些項目。顯然，稅收將成為一個相當大的拖累，因為我認為你正在談論從 21% 的稅率轉向 27.5% 的稅率。我們在本季的中點進行了指導，您在那裡看到的是 0.04 美元或 0.05 美元。然後你也可以按比例分配退休金項目外匯，你將從中獲得幾美分。

From an overall perspective as well, you're going to have a volume decrement in there that drives that down as well. And you're talking $0.05, $0.06 from an overall volume perspective. Again, at the midpoint, on top of that, you're going to layer in some favorability in terms of kind of few cents from restructuring coming in year over year. And then yeah, you're layering in some of these cost timing elements that we talked about as well. That's pretty much the full picture there in terms of what's driving differential.

從整體角度來看，成交量也會減少，導致銷售下降。從整體成交量的角度來看，您所說的是 0.05 美元、0.06 美元。同樣，在中間點，最重要的是，你將透過逐年重組獲得幾美分的優惠。然後，是的，您也將我們討論過的一些成本時間元素分層。這幾乎是驅動差速器的全貌。

Okay. That's helpful. And then just to follow up on Julian's question about the going back to the Investor Day kind of framework. Just trying to think about the fiscal '25 guidance in that context, where you have your 2% price that's consistent.

好的。這很有幫助。然後跟進朱利安關於回到投資者日類型框架的問題。只是想在這種背景下考慮 25 財年的指導，其中 2% 的價格是一致的。

And Sanjay, it sounds like the 1% to 2% market share gains you feel good about. Is that 1% to 2% market share gain embedded in your volume work for the year, meaning which basically it's a couple of percentage points lower than that because it's got a positive 1% to 2% of share gain embedded in there.

Sanjay，聽起來您對 1% 到 2% 的市佔率成長感到滿意。 1% 到 2% 的市佔率增益是否包含在您今年的銷售工作中，這意味著基本上比這低了幾個百分點，因為它嵌入了 1% 到 2% 的正份額增益。

Yeah, so first of all, let me just clarify that 1% to 2%. We are not implying we gain 1% to 2% market share. What we're saying is 1% to 2% growth will come through market share, that is embedded in the model. Of course, you know, the bigger factor obviously right now is market, in terms of percentage move that we have seen.

是的，首先讓我澄清一下 1% 到 2%。我們並不是暗示我們會獲得 1% 到 2% 的市佔率。我們所說的是 1% 到 2% 的成長將透過模型中嵌入的市場份額來實現。當然，你知道，就我們所看到的百分比變動而言，目前更重要的因素顯然是市場。

There are several markets which are down in mid-single digit or high single digits. So that's where despite the fact that we are performing better than market, net numbers are definitely affecting our fiscal '25.

有幾個市場的跌幅為中個位數或高個位數。因此，儘管我們的表現優於市場，但淨數字肯定會影響我們的 25 財年。

But like I said earlier, the things we are doing today and have been doing for last couple of years in terms of driving growth initiatives, driving productivity, driving quality, inventory reduction, things we're doing, will continue to help us in the business.

但正如我之前所說，我們今天正在做的事情以及過去幾年在推動成長計劃、提高生產力、提高品質、減少庫存等方面所做的事情將繼續幫助我們商業。

And one of these days, we'll see the market also turn a little bit positive. So we are very well positioned to capitalize on what we can do even now and also when the markets improve.

總有一天，我們會看到市場也變得有點正面。因此，即使現在以及市場好轉時，我們也能充分利用我們能做的事情。

And if I may add to that, and Sanjay, you mentioned this earlier, in terms of kind of where we're going to be at on the $100 million cost takeout program as well. So expecting to be about $50 million when we exit this year. So we're halfway through the program, halfway through the cost takeout, as well as the progress we've made on working capital. And as we think about where we're at in FY25 here from an outlook perspective, driving that primary working capital as a percent of sales to 30%.

如果我可以補充一下，Sanjay，您之前提到過這一點，就我們將在 1 億美元成本外賣計劃中所處的位置而言。因此，預計今年退出時的收入約為 5000 萬美元。因此，我們的計劃已經進行了一半，成本削減以及我們在營運資本方面取得的進展也已經進行了一半。當我們從展望的角度思考 25 財年我們所處的位置時，將主要營運資本佔銷售額的百分比提高到 30%。

And that is consistent with what our objective was, you know, in terms of '27 from a primary working capital perspective as well. So we're driving on all fronts here towards achieving our goals in terms of growing the business, what we can do, as well as improving the profitability.

從主要營運資金的角度來看，這也與我們 27 年的目標是一致的。因此，我們正在各方面努力，實現我們在發展業務、我們能做的事情以及提高盈利能力方面的目標。

Very helpful. Thanks a lot.

非常有幫助。多謝。

Steve Barger, KeyBanc Capital Markets.

Steve Barger，KeyBanc 資本市場。

Thanks. Good morning.

謝謝。早安.

Good morning.

早安.

Good morning.

早安.

Sanjay, for the portfolio optimization, I hear you about wanting to put a process in place to better understand what's happening. But you, Pat and the team have been there quite a while, so there shouldn't be too many surprises.

Sanjay，對於投資組合優化，我聽說您想要製定一個流程以更好地了解正在發生的事情。但你、帕特和團隊已經在那裡待了很長一段時間了，所以不應該有太多的驚喜。

So first, can you tell us what percentage of revenue is generating margin that you consider unacceptable? And second, if there are parts of the business that have been a persistent drag on margin, why not exited?

首先，您能告訴我們您認為不可接受的利潤佔收入的比例是多少嗎？其次，如果某些業務持續拖累利潤率，為什麼不退出呢？

Yeah, okay. Morning, again, Steve. First of all, yes, we do have experience in running the business for a few years, and we do have our ideas. But look, first, like I said, our focus is not to immediately jump to conclusion that divestment may be the answer.

是啊，好吧。又是早上好，史蒂夫。首先，是的，我們確實有幾年經營業務的經驗，我們也確實有我們的想法。但首先，正如我所說，我們的重點不是立即得出撤資可能是答案的結論。

I think the first area that we are going to continue to work on is what we need to do in terms of growing and also continuous improvement in working capital allocation, resource allocation, that's where we are. And I will share more information as time goes and we take some actions.

我認為我們要繼續努力的第一個領域是我們需要在營運資本配置、資源配置方面不斷成長和持續改進，這就是我們現在的情況。隨著時間的推移，我將分享更多信息，並採取一些行動。

But at this point, it's too early for me to give you a prognosis on this from action perspective. And for all different reasons, some of those will be shared only when that happens. But at this point, my main message here is that we are going to improve overall performance of our portfolio, one way or the other, either through organic actions or if we have to take inorganic actions, we are also ready to go that.

但目前，我從行動的角度對此做出預測還為時過早。由於各種不同的原因，其中一些只有在這種情況發生時才會被共享。但在這一點上，我的主要訊息是，我們將透過某種方式提高我們投資組合的整體業績，無論是透過有機行動，還是如果我們必須採取無機行動，我們也準備好這樣做。

Can you tell us what percentage of revenue is generating a margin that you consider unacceptable?

您能告訴我們多少百分比的收入產生了您認為不可接受的利潤嗎？

Yeah that detail, Steve, we are not going to be able to share at this point.

是的，史蒂夫，這個細節我們目前無法分享。

Okay. And then, Pat, on slide 13, the outlook walk, you show higher price, favorable timing of price versus raw material and then restructuring. Are those listed in order of magnitude or are they more equally weighted in terms of their benefit they'll drive?

好的。然後，帕特，在第 13 張幻燈片《展望》中，您展示了更高的價格、價格相對於原材料的有利時機，然後是重組。這些是按大小順序列出的，還是在它們將帶來的利益方面權重更均等？

I would say they're bit more equally weighted, Steve.

我想說的是，它們的權重更加相等，史蒂夫。

How much confidence do you have in what raw material prices will do in the back half of the fiscal year? Because it seems like that can that often kind of sneaks up and affect quarters.

您對本財年下半年原物料價格的走勢有多少信心？因為這似乎經常會悄悄發生並影響季度。

Yeah. As we've said previously, we generally have visibility about two quarters out at any point in time. So I'd say, as we think about the first half, we have very good visibility. As time progresses here, we'll start moving into having visibility in Q3.

是的。正如我們之前所說，我們通常可以在任何時間點獲得大約兩個季度的可見度。所以我想說，當我們考慮上半場時，我們有非常好的能見度。隨著時間的推移，我們將在第三季開始獲得可見性。

Overall, if we think about where tungsten prices have been, they were flat for a period of time. We did see them ramp up, spring into, I'll say, early summer and then trail off here back to their prior level, more or less. So in general, I think we're in decent shape again at this point in time for the first half.

總體而言，如果我們考慮鎢價的走勢，就會發現它們在一段時間內持平。我們確實看到它們開始上升，進入初夏，然後或多或少地回落到之前的水平。所以總的來說，我認為我們在上半場的這個時間點再次處於良好的狀態。

Got it. So that would be the swing factor that you can control in the back half of the three?

知道了。那麼這就是你在三人後半區可以控制的揮桿因素嗎？

Yeah, you're right, as you get to the back half, that's something we'll have to take time to see.

是的，你是對的，當你進入後半部分時，我們需要花時間才能看到這一點。

Got it. Thank you.

知道了。謝謝。

Mike Feniger, Bank of America.

麥克費尼格，美國銀行。

Hey guys. Thanks for taking my questions. Just on the pricing guidance, the plus [2] for Q1 and a plus [2] for the full year, obviously, there's some signs now of price deflation kind of playing out even across industrials. I'm just curious how you think about that plus [2] in Q1? Clearly you have visibility for that. And how you go out and keep that plus [2] kind of stable for the full year?

嘿夥計們。感謝您回答我的問題。就定價指導而言，第一季的加號 [2] 和全年的加號 [2] ，顯然，現在有一些跡象表明，即使在整個工業領域，價格通縮也在上演。我只是好奇你如何看待第一季中的加[2]？顯然你對此有可見性。你如何出去並保持全年的加[2]穩定？

Yeah, I think, if you think about the pricing action, so our pricing framework, we've taken some pricing actions here recently. So they're out there in the marketplace now. We'll always -- we'll have some continued, I'll say, pricing that we'll achieve this year on a year-over-year basis for other actions we've implemented.

是的，我想，如果你考慮定價行為，那麼我們的定價框架，我們最近在這裡採取了一些定價行為。所以它們現在就在市場上。我會說，我們將始終——我們將繼續為我們已實施的其他行動今年實現的定價。

And the last piece I would just say is, you know, we continue to look at pricing across the portfolio based on value throughout the year, and make adjustments where we can. And so we feel pretty good about where the prices are and what the plan is for pricing over the course of the year.

我想說的最後一點是，我們將繼續根據全年的價值來審視整個投資組合的定價，並盡可能進行調整。因此，我們對價格的現狀以及全年的定價計劃感到非常滿意。

Again, an underlying assumption in the conversation we just had with Steve, it was really around tungsten and the index pricing. Our assumption at this point in time is tungsten is relatively flat and therefore, the index pricing is flat. But that's a fact that could swing us as we move through time.

同樣，我們剛剛與史蒂夫交談時的一個基本假設是，它實際上是圍繞鎢和指數定價的。我們目前的假設是鎢相對持平，因此指數定價持平。但隨著時間的推移，這個事實可能會影響我們。

And also, Mike, I'll just add, there are pockets where we are going to experience excess capacity like in wind energy, we've talked about that. So there will be places where we will be very close to the market and be competitive. So if we have to take some price reduction to maintain business or win new business, we will be definitely engaged in that.

另外，麥克，我想補充一點，我們將在某些領域遇到產能過剩的情況，例如風能領域，我們已經討論過這一點。因此，在某些地方，我們將非常貼近市場並具有競爭力。因此，如果我們必須採取一些降價措施來維持業務或贏得新業務，我們肯定會這樣做。

Helpful. And you guys gave great color on the end markets and kind of think about top line for Q1 and the full year first half, second half, those ranges are really helpful. Just anything we should think about in terms of the operating margin range in Q1 and for your full year guide, any differences as you should think about those decrementals on the volume side in Q1 versus how that means plays out through the second half?

有幫助。你們對終端市場給了很好的描述，並考慮了第一季和全年上半年、下半年的營收，這些範圍確實很有幫助。我們應該考慮第一季的營業利潤範圍和全年指南，您應該考慮第一季銷售的減少與下半年的情況有何差異？

Yeah. Obviously, as you think about the EBITDA margin at the midpoint, we've talked about being up 100 basis points up for the full year. As we think about decrementals, particularly here, I'd say in Q1, we would normally think about long term incremental decrementals being in the mid-40s, I think given where we're sitting from a volume perspective and capacity today, that's going to probably be a little bit higher from a decremental perspective.

是的。顯然，當你考慮中點的 EBITDA 利潤率時，我們已經討論過全年成長 100 個基點。當我們考慮遞減時，特別是在這裡，我會在第一季說，我們通常會考慮40 年代中期的長期增量遞減，我認為考慮到我們今天從數量和容量的角度來看，這將會發生從遞減的角度來看，可能會更高一點。

And you know, again, that mid-40s is a better long term number than what we would experience from quarter to quarter. And again, I go back to just from an earnings cadence perspective, as we've talked about a little earlier on the call, a pretty normal earnings cadence here as well.

你也知道，從長期來看，40 多歲是一個比我們每季都會經歷的更好的數字。再次，我從盈利節奏的角度回到這一點，正如我們之前在電話會議上討論過的那樣，這裡的盈利節奏也是相當正常的。

Really helpful. And just lastly, guys, the cash flow conversion stepping up in 2025 that grew 125%. Is that -- I'm just curious if you kind of flesh that out -- is that inventory reduction for -- I know we talked about inventory to the customers. Just curious about at the Kennametal level, is that the tailwind to cash flow conversion in 2025? Just hoping kind of unpack that a little bit. Thanks everyone.

真的很有幫助。最後，夥計們，現金流轉換將在 2025 年加速成長 125%。我只是好奇你是否能具體說明這一點——庫存減少是為了——我知道我們向客戶討論了庫存問題。只是好奇在肯納金屬層面，這是 2025 年現金流轉換的順風車嗎？只是希望能稍微解開一下。謝謝大家。

Mike, first of all, let me just -- as Pat said earlier, majority of that was driven by inventory improvements. And I just want to give you a little bit more color than beyond the numbers. We started to add some new processes, brought some new talent, and also met some internal appointments with respect to talent.

麥克，首先，讓我——正如帕特之前所說，其中大部分是由庫存改善推動的。我只想給你們比數字更多的色彩。我們開始增加一些新的流程，引進一些新的人才，也遇到了一些關於人才的內部任命。

Through that, we have really made quite a bit of process improvement and how we do our sales production, inventory management planning. We did overall global network of where we produce, what we produce now, how many times we ship through the week, and how much inventory we keep in the warehouses.

透過這個過程，我們確實對流程以及銷售生產、庫存管理規劃的方式進行了相當多的改進。我們建立了整個全球網絡，包括我們生產的地點、現在生產的產品、每週發貨的次數以及倉庫中保留的庫存量。

We have been continuing to optimize that. And that's one of the things that's showing up in the numbers, and good thing is those are sustainable. So that's why what you see that we are building on what we did in '23 and '24, and then on top of that now '25, so we feel pretty comfortable that we'll be able to deliver the next level of improvement in fiscal '25.

我們一直在持續優化這一點。這是數字中顯示的事情之一，好的方面是這些是可持續的。這就是為什麼你看到我們正在 23 和 24 年所做的基礎上進行構建，然後在 25 年的基礎上進行構建，所以我們感到非常放心，我們將能夠在財政'25。

Pat, anything else to add?

帕特，還有什麼要補充的嗎？

Yes, so that's -- you really pointed on the answer to your question. So that's one of the things that's driving that cash flow conversion in the year.

是的，所以——你確實指出了你問題的答案。因此，這是推動今年現金流轉換的因素之一。

At this time, we are showing no further questioners in the queue, and this does conclude our question and answer session. I would now like to turn the conference back over to Sanjay Chowbey for any closing remarks.

目前，我們在隊列中沒有顯示更多提問者，這確實結束了我們的問答環節。現在我想將會議轉回桑傑喬貝 (Sanjay Chowbey) 發表閉幕詞。

Thank you, operator, and thank you, everyone, for joining the call today. And as always, we appreciate your interest and support. Please don't hesitate to reach out to us if you have any questions. Have a great day.

謝謝接線員，也謝謝大家今天加入通話。一如既往，我們感謝您的關注與支持。如果您有任何疑問，請隨時與我們聯繫。祝你有美好的一天。

Thank you. As a reminder, a replay of this event will be available approximately one hour after its conclusion. To access the replay, you may dial toll-free within the United States at 8773447529, outside of the United States, you may dial 4123170088. You will be prompted to enter the conference ID, which is 8005991, then the pound or hash symbol, you will then be asked to record your name and company.

謝謝。謹此提醒，活動將在結束後約一小時內重播。若要觀看重播，您可以在美國境內撥打免費電話 8773447529，在美國境外，您可以撥打 4123170088。姓名和公司。

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.

會議現已結束。感謝您參加今天的演示，您現在可以掛斷電話了。