Orion SA (OEC) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Orion SA Q2 2024 earnings conference call. (Operator Instructions)

您好，歡迎參加 Orion SA 2024 年第二季財報電話會議。（操作員說明）

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Kapsch, Vice President of Investor Relations. Thank you. You may begin.

提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係副總裁 Chris Kapsch。謝謝。你可以開始了。

Thank you, Sachi. Good morning, everyone, and welcome to Orion's conference call to discuss both second quarter 2024 results and to provide a midyear update on some strategic context, which we believe will be helpful for the investment community to consider.

謝謝你，佐知。大家早安，歡迎參加 Orion 的電話會議，討論 2024 年第二季的業績，並提供一些戰略背景的年中最新情況，我們相信這將有助於投資界考慮。

This is Chris Kapsch, new to leading Orion Investor Relations efforts. I know many of you from prior roles and look forward to working with you in this new capacity. Joining our call today are Corning Painter, Orion's Chief Executive Officer; and Jeff Glajch, our Chief Financial Officer.

我是 Chris Kapsch，新來領導 Orion 投資者關係工作。我在之前的職位上認識了你們中的許多人，並期待以新的身份與你們合作。今天加入我們電話會議的還有 Orion 執行長 Corning Painter；和我們的財務長 Jeff Glajch。

We issued our 2Q earnings after the close yesterday. We have posted a slide presentation to the Investor Relations portion of our website. We will be referencing this deck during the call. Before we begin, I am obligated to remind you that some of the comments made on today's call are forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's filings with the Securities and Exchange Commission, and our actual results may differ from those described during this call.

我們在昨天收盤後發布了第二季度收益。我們已在網站的投資者關係部分發布了幻燈片演示。我們將在電話會議期間參考這套牌。在我們開始之前，我有義務提醒您，今天電話會議中發表的一些評論屬於前瞻性陳述。這些陳述受到公司向美國證券交易委員會提交的文件中所述的風險和不確定性的影響，我們的實際結果可能與本次電話會議中所述的結果不同。

In addition, all forward-looking statements are made as of today, August 2. The company is not obligated to update any forward-looking statements based on any new circumstances or revised expectations. All non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the tables attached to our press release.

此外，所有前瞻性陳述均截至今天 8 月 2 日。該公司沒有義務根據任何新情況或修改後的預期來更新任何前瞻性陳述。本次電話會議中討論的所有非公認會計原則財務指標均與我們新聞稿所附表格中最直接可比較的公認會計原則指標進行了調整。

And with that, I will turn the call over to Corning Painter.

接下來，我會將電話轉給康寧畫家。

Thank you, Chris. Before walking through the detailed deck, let's get to slide 4 and go right to the heat. Why our Q2 EBITDA was below expectations? And what is our path forward? You will see our revised 2024 guidance midpoint is now $25 million to $30 million below the expectations we set at the beginning of the year. Lower-than-expected rubber segment volumes and adverse cogeneration are the major factors. Our specialty business is performing well.

謝謝你，克里斯。在詳細介紹甲板之前，讓我們先轉到投影片 4，然後直接進入熱區。為什麼我們第二季的 EBITDA 低於預期？我們的前進道路是什麼？您將看到我們修訂後的 2024 年指導中點現在比我們年初設定的預期低 2500 萬至 3000 萬美元。低於預期的橡膠業務量和不利的熱電聯產是主要因素。我們的專業業務表現良好。

Volume was up again in Q2, and I'm not concerned about the decline in GP per ton compared with last year. This was mainly due to prior year timing effects and one-offs, lower cogeneration and higher maintenance. Most of these factors show as higher costs in our EBITDA bridge for this segment later in the deck.

第二季成交量再次上升，我並不擔心噸毛利率會比去年下降。這主要是由於前一年的時間效應和一次性、熱電聯產減少和維護費用增加。這些因素中的大多數都顯示出我們稍後在該部分的 EBITDA 橋中的成本較高。

This business is improving with strengthening polymer and coatings markets, which netted to a slightly negative mix in the quarter, but that's fine. We respond to customer demand. The GP per ton level is within our expected range.

隨著聚合物和塗料市場的走強，該業務正在改善，本季的業績略有下降，但沒關係。我們響應客戶的需求。噸 GP 水準在我們的預期範圍內。

Let's focus then on the rubber business. First and importantly, pricing is up year on year, and we expect to gain in 2025 as well. Volume is nearly flat, but the underlying story is not as positive. rubber carbon black demand is soft in our key markets with three drivers. First, as consumers adjust to higher inflation, they are currently trading down to lower value brands, which ultimately hurts us.

接下來讓我們專注於橡膠業務。首先也是重要的是，定價逐年上漲，我們預期 2025 年也會上漲。成交量幾乎持平，但潛在的情況卻不那麼積極。我們的主要市場橡膠炭黑需求疲軟，主要由三個因素驅動。首先，隨著消費者適應更高的通膨，他們目前正在轉向較低價值的品牌，最終會傷害我們。

Second, but related to the first item, higher imports have been up sharply in North America and Europe. I have more to say about that in a little bit. Third, trucking activity follows manufacturing. And while this is perhaps bottomed, the recovery is gradual at best. This impacts truck replacement tire and OEM demand.

其次，與第一項相關的是，北美和歐洲的進口量大幅增加。稍後我還有更多話要說。第三，卡車運輸活動緊接著製造業。雖然這可能已經觸底，但復甦充其量是漸進的。這會影響卡車更換輪胎和原始設備製造商的需求。

Regionally, rubber volumes are down in North America and Asia for us and up in Europe, but only due to the European volume gains in last year's negotiations. To be clear, Europe and our other key markets are below expectations for the reasons I listed.

從地區來看，北美和亞洲的橡膠銷量有所下降，而歐洲的橡膠銷量則有所上升，但這只是由於去年談判中歐洲銷量的成長。需要明確的是，由於我列出的原因，歐洲和我們其他主要市場的表現低於預期。

Our cost performance in rubber is a mix between cogeneration, prior year one-offs, timing and higher costs, including inflation. We'll discuss costs later in more detail, but some of this is tied to maintenance spending. All considered, lower rubber volumes account for more than $20 million of the reduction to our initial 2024 guidance.

我們在橡膠方面的成本績效是熱電聯產、前一年一次性、時機和更高成本（包括通貨膨脹）之間的混合。我們稍後將更詳細地討論成本，但其中一些與維護支出有關。綜合考慮，橡膠產量下降導致我們 2024 年最初指引減少了 2000 萬美元以上。

Looking forward to the second half of this year, specialty should continue to improve. We expect only a modest improvement in rubber volumes, and we will likely execute an inventory build to prepare for 2025, which will help absorption.

展望今年下半年，專業應該會持續提升。我們預計橡膠產量只會小幅改善，我們可能會增加庫存，為 2025 年做準備，這將有助於吸收。

Cogen is an additional challenge. Our utility partner at our Louisiana plant was down intermittently in Q2 and is expected to be down for much of Q3. Further, European power prices have been below expectations.

Cogen 是另一個挑戰。我們路易斯安那州工廠的公用事業合作夥伴在第二季間歇性停機，預計第三季大部分時間都會停機。此外，歐洲電價一直低於預期。

Looking to 2025, there are many reasons to believe rubber volumes will improve, and we continue to expect a favorable pricing cycle, reflecting the restructuring of this industry. Personally, I think broadly apply higher tariffs are likely in our key markets, which will support demand and the value of local supply security. Pricing remains a key priority, and I'll have more to say about that.

展望 2025 年，有許多理由相信橡膠產量將會改善，我們繼續預期有利的定價週期，反映出該產業的重組。就我個人而言，我認為我們的主要市場可能會廣泛實施更高的關稅，這將支持需求和當地供應安全的價值。定價仍然是關鍵優先事項，對此我將有更多話要說。

Looking forward, we have two new facilities to load, Huaibei, and then La Porte in the second half of next year. These are top priorities for us. We expect significantly lower CapEx spending until we do that.

展望未來，我們有兩個新工廠要裝載，首先是淮北，然後是明年下半年的拉波特。這些都是我們的首要任務。在此之前，我們預期資本支出將大幅降低。

As you can see on slide 5. We will continue to debottleneck and expand capacity for our most differentiated specialty grades, but these efforts typically require minimal capital. In rubber, we remain excited about bringing sustainable grades to the market, and we'll have more to say about that in future calls. But again, we expect modest capital requirements associated with this effort.

正如您在幻燈片 5 中看到的那樣。我們將繼續消除瓶頸並擴大我們最具差異化的專業等級的產能，但這些努力通常需要最少的資本。在橡膠方面，我們仍然對將永續等級引入市場感到興奮，我們將在未來的電話會議中對此進行更多討論。但我們再次預計，與這項努力相關的資本要求將會適度。

Considering lower anticipated capital spending, our recovery and specialty business, the fundamental restructuring in rubber and feedback from our shareholders, we have decided to opportunistically resume share repurchase activity at a modest pace. Depending upon working capital, our excess free cash flow may well be slightly negative this year, but on balance, we see this as the right move.

考慮到較低的預期資本支出、我們的復甦和特種業務、橡膠的基本重組以及股東的回饋，我們決定適時適度恢復股票回購活動。根據營運資金的情況，我們今年的超額自由現金流很可能會略有負值，但總的來說，我們認為這是正確的舉措。

On slide 6 of the deck, we referenced being back on track for another year of solid EBITDA. While the results are disappointing to us, we will likely achieve underlying EBITDA growth, excluding timing and other onetime benefits. Note this would be despite a demand environment that is not anything close to mid-cycle conditions, such as we saw in 2018.

在投影片 6 上，我們提到又一年重回正軌，實現穩健的 EBITDA。雖然結果令我們失望，但排除時機和其他一次性收益，我們可能會實現基本的 EBITDA 成長。請注意，儘管需求環境並不接近週期中期，例如我們在 2018 年看到的情況，但情況仍然如此。

Compared with those levels, we have about 150 Kt or conservatively $60 million to $75 million of EBITDA upside in rubber volume alone. Our rubber segment profit margins have held up well in spite of weak volumes. Replacement tire sell-through to consumers has been okay, but worsened during the quarter, and local tire builds have lagged end market unit sales.

與這些水準相比，僅橡膠產量就有約 150 Kt 或保守的 6,000 萬至 7,500 萬美元的 EBITDA 上升空間。儘管銷售疲軟，我們的橡膠部門利潤率仍保持良好。消費者的替換輪胎銷量一直不錯，但本季情況惡化，而且本地輪胎製造落後於終端市場銷售。

Absolute tire build numbers in Western markets are still substantially below pre-pandemic levels. This is partly due to the surge of low-value imports and is fueled by the consumer trade down because of inflation.

西方市場的絕對輪胎生產數量仍遠低於疫情前的水平。部分原因是低值進口激增，以及通膨導致的消費貿易下降。

Clearly, tire imports are impacting North American and European tire manufacturing. Just yesterday, a tire manufacturer spoke about this in their earnings release. We do not believe this is structural. We believe the onshore capacity into North America and into Western Europe will continue. We have seen blips like this in our volumes before. A separate or a second tire company attributed the recent surge in imports to fear of a pending tariff increase.

顯然，輪胎進口正在影響北美和歐洲的輪胎製造。就在昨天，一家輪胎製造商在財報中談到了這一點。我們不認為這是結構性的。我們相信進入北美和西歐的陸上運力將持續下去。我們以前在我們的捲中見過這樣的現象。另一家或另一家輪胎公司將近期進口激增歸因於對即將到來的關稅上調的擔憂。

And I'll tell you, I do not see the United States or the EU surrendering their automotive markets. For Orion, these end market headwinds have been amplified by the lower-than-expected cogen contribution, but also costs largely tied to planned and unplanned maintenance turnarounds and inflation. A portion of the turnaround activity was associated with the ongoing upgrading of some of our manufacturing assets.

我告訴你，我不認為美國或歐盟放棄他們的汽車市場。對 Orion 來說，低於預期的熱電聯產貢獻加劇了這些終端市場阻力，而且成本在很大程度上與計畫內和計畫外的維護週轉和通貨膨脹有關。部分週轉活動與我們一些製造資產的持續升級有關。

These upgrades will reduce maintenance costs, enable greater reliability and higher planned throughput over time. For example, in Q2, we replaced a very old filtering system in one of our lines in Belpre, Ohio, which contributed to a month of downtime. Given the more challenging backdrop this year, we will be leaning more into efficiency initiatives that will trim costs and help us to achieve our revised guidance.

隨著時間的推移，這些升級將降低維護成本，以實現更高的可靠性和更高的計畫吞吐量。例如，在第二季度，我們更換了俄亥俄州貝爾普雷的一條生產線中非常舊的過濾系統，這導致了一個月的停機。鑑於今年更具挑戰性的背景，我們將更傾向於提高效率的舉措，以削減成本並幫助我們實現修訂後的指導方針。

On slide 7, this midyear report is an appropriate time to frame expectations regarding our prospects for 2025, as the industry's annual tire maker supply contract negotiations have historically begun during the late summer months. We mentioned during our Q2 earnings call that some discussions had already commenced, but then we didn't need to rush into any deals.

在幻燈片 7 中，這份年中報告是我們對 2025 年前景做出預期的適當時機，因為該行業的年度輪胎製造商供應合約談判歷來是在夏末幾個月開始的。我們在第二季財報電話會議上提到，一些討論已經開始，但我們不需要急於達成任何交易。

And we're going to be reluctant to hold volume commitments during lengthy negotiation. Those initial negotiations indeed timed out without conclusion, reflecting our intent to more strictly enforce time-bound offers. We're now in formal negotiations with a few major customers, but I would caution investors on expecting an early close. Some negotiations may be prolonged as we are determined to earn a return on capital for all our ongoing investments. We're anticipating a positive outcome for this year's negotiation cycle for several reasons.

在漫長的談判過程中，我們將不願意做出大量承諾。這些最初的談判確實超時了，沒有得出結論，這反映出我們打算更嚴格地執行有時限的報價。我們現在正在與一些主要客戶進行正式談判，但我會提醒投資者不要期待提前結束。由於我們決心為所有正在進行的投資賺取資本回報，因此某些談判可能會延長。基於多種原因，我們預計今年的談判週期將取得正面成果。

First is the ongoing industry restructuring, with tire capacity expanding in our key markets contrasted with limited carbon black capacity additions. Second, I remind you, we're negotiating for 2025. This is not about 2024.

首先是正在進行的產業重組，我們的主要市場的輪胎產能不斷擴大，而炭黑產能的增加卻有限。其次，我提醒大家，我們正在就 2025 年進行談判。這與 2024 年無關。

Third, there are multiple positive indicators. Miles-driven data remains strong. The freight market is stabilizing. The Russian ban is now fully in place, and just recently, Belarus has been added to the ban. And with specialty recovery, some carbon black industry capacity will shift from rubber back to specialty grades. Fourth, the industry's recent EPA investments effectively reduced domestic industry's capacity by a few percentage points. These emission control systems have outages. And when they go down, they usually take the entire plant with them.

三是積極指標較多。里程驅動的數據依然強勁。貨運市場趨於穩定。俄羅斯的禁令現已全面生效，就在最近，白俄羅斯也被納入禁令。隨著特種炭黑的恢復，一些炭黑產業產能將從橡膠轉向特種炭黑。第四，該產業最近的環保署投資有效降低了國內產業產能幾個百分點。這些排放控制系統故障。當它們倒下時，通常會帶走整個植物。

Fifth, as you know, shipping is now more expensive and less reliable. And finally, the potential for increased tariffs on imported tires in North America and Europe would boost localized demand. I think this is looking pretty likely. All of these considerations make us confident about the rubber segment heading into 2025. Given this, we intend to build back inventories in the second half. This should improve our profit metrics, thanks to a confluence of operating leverage and better unit costs.

第五，如您所知，運輸現在更昂貴且更不可靠。最後，北美和歐洲進口輪胎關稅上調的可能性將提振當地需求。我認為這看起來很有可能。所有這些考慮因素都讓我們對進入 2025 年的橡膠行業充滿信心。有鑑於此，我們打算在下半年恢復庫存。由於營運槓桿和更好的單位成本的結合，這應該會改善我們的利潤指標。

Now while our rubber segment has done the heavy lifting in terms of our step change in EBITDA in recent years, we expect the specialty segment to continue to recover. Here, a broader end market recovery should enhance overall segment mix. When coupled with innovation-led growth, the specialty segment will be an important driver of Orion's medium-term growth trajectory.

現在，雖然近年來我們的橡膠業務在 EBITDA 的階躍變化方面做出了重大貢獻，但我們預計特種業務將繼續復甦。在這裡，更廣泛的終端市場復甦應該會增強整體細分市場的組合。與創新驅動的成長相結合，專業領域將成為 Orion 中期成長軌蹟的重要驅動力。

And without the need for meaningful additional growth capital beyond the ongoing La Porte investment. Shifting gears, I want to discuss sustainability, where we believe we are misunderstood by the broader investment community. Despite perceptions about industries like ours, we have made substantial progress on sustainability.

除了正在進行的 La Porte 投資之外，不需要任何有意義的額外成長資本。換個話題，我想討論永續發展，我們認為更廣泛的投資界誤解了我們。儘管人們對我們這樣的行業有不同的看法，但我們在永續發展方面已經取得了實質進展。

From our perspective, we see opportunity here, especially as our downstream customers increasingly strive for or have even made public commitments to circularity. In addition to considering the platinum rating we earn from EcoVadis, which places us in the 99th percentile, all companies having their sustainability programs evaluated.

從我們的角度來看，我們在這裡看到了機會，特別是當我們的下游客戶越來越多地追求甚至公開承諾循環時。除了考慮我們從 EcoVadis 獲得的白金評級（這使我們處於第 99 個百分點）之外，所有公司都對其可持續發展計劃進行了評估。

We hope you will take time to digest our latest sustainability report published last week. A few noteworthy points here. We completed upgrades at all four of our US plants well ahead of others completing their third plants.

我們希望您能花時間消化我們上週發布的最新永續發展報告。這裡有幾個值得注意的點。我們在美國的所有四家工廠完成了升級，遠遠領先其他公司完成第三家工廠。

We were the first major industry player to produce carbon black from purely biocircular feedstocks. During Q2, we may have a small investment in a European tire recycling company focused on scaling up production of tire pyrolysis oil, which will be dedicated to Orion and help commercial -- help enable commercial scale volumes of circular grades of carbon black.

我們是第一個利用純生物循環原料生產炭黑的主要產業參與者。在第二季度，我們可能會對一家歐洲輪胎回收公司進行小額投資，專注於擴大輪胎熱解油的生產規模，該公司將致力於Orion 並幫助商業化——幫助實現商業規模的圓形級炭黑產量。

In South Africa, before it became a crisis, we proactively invested in a state-of-the-art technology to process treated effluent water from a local wastewater treatment facility to repurpose that water for industrial use. This will help this water stress community by reducing our use of potable water, improve our reliability and reduce costs.

在南非，在危機爆發之前，我們積極投資了最先進的技術，對當地廢水處理設施處理後的廢水進行處理，將其重新用於工業用途。這將透過減少飲用水的使用、提高可靠性並降低成本來幫助這個缺水社區。

And finally, the construction of our low emissions conductive carbons plant in La Porte, Texas is on track to start serving the battery and other growth markets in 2025. All of these efforts place Orion as the industry leader is driving commercially viable sustainable products. All considered, we feel confident in our foundation and our journey towards unlocking much greater inherent earnings power at Orion.

最後，我們在德州拉波特建造的低排放導電碳工廠預計將在 2025 年開始為電池和其他成長市場提供服務。所有這些努力使 Orion 成為行業領導者，正在推動商業上可行的永續產品。綜合考慮，我們對我們的基礎和釋放 Orion 更大的內在盈利能力的旅程充滿信心。

With that, I'll turn the call over to Jeff.

這樣，我就把電話轉給傑夫。

Thank you, Corning, and good morning, everyone. slide 8 covers the company's financial results for the second quarter. Overall volumes improved 3% compared to last year. This was driven by a 17% recovery in specialty volumes, which more than offset a small decline in rubber volumes.

謝謝康寧，大家早安。投影片 8 介紹了該公司第二季的財務表現。與去年相比，整體銷量成長了 3%。這是由特種產品銷量恢復 17% 推動的，這足以抵消橡膠銷量的小幅下降。

The overall EBITDA performance compared to the prior year was negatively impacted by softer-than-expected rubber volumes, a lower cogeneration contribution, one-off benefits last year, timing issues and negative absorption, namely that we did not build inventory as we had planned during the quarter. To provide a little more transparency on the second quarter, we had a strong April, but both May and June fell well short of expectations.

與前一年相比，整體 EBITDA 表現受到以下因素的負面影響：橡膠產量低於預期、熱電聯產貢獻較低、去年的一次性效益、時機問題和負吸收（即我們沒有按照計劃建立庫存）本季期間。為了讓第二季更加透明，我們在 4 月表現強勁，但 5 月和 6 月的表現都遠低於預期。

On to slide 9, is the company's year-over-year EBITDA bridge. As I noted during our Q1 call, a more normalized earnings level for last year's second quarter was $80 million after adjusting for onetime items and the forward sale of power at elevated prices. You can see that both volume and price mix contributed positively overall.

第 9 張幻燈片是該公司的年比 EBITDA 橋樑。正如我在第一季電話會議中指出的那樣，在對一次性項目和高價電力遠期銷售進行調整後，去年第二季度更加正常化的盈利水平為 8000 萬美元。您可以看到，銷售量和價格組合總體上都做出了積極貢獻。

Timing issues, primarily related to pass-through formulas and differentials, higher maintenance costs, a portion of which are intended to improve our operating leverage over time and cogeneration with the other primary factors.

時間問題，主要與傳遞公式和差異、更高的維護成本有關，其中一部分旨在隨著時間的推移提高我們的營運槓桿以及與其他主要因素的熱電聯產。

Slide 10 shows our rubber segment's 2% year-over-year decline in volumes and an 8% sequential decline. As Corning referenced, the inflation-driven consumer trade down in the passenger car tire market was a key contributor to the softer volumes as well as weaker tire demand in a softer Chinese economy. The consumer trade down to lower tiered brands and the related importation of lower quality tires from Southeast Asia represents a negative impact for Orion's customer mix in both North America and Europe.

幻燈片 10 顯示我們的橡膠部門銷量年減 2%，較上季下降 8%。正如康寧所提到的，乘用車輪胎市場受通膨驅動的消費貿易下降是中國經濟疲軟導致銷售疲軟以及輪胎需求疲軟的關鍵因素。消費者轉向較低級別的品牌以及相關的從東南亞進口較低品質的輪胎對 Orion 在北美和歐洲的客戶群產生了負面影響。

Gross profit moderated just slightly, owing to the lower cogen, but was supported by the sturdiness of our supply agreements, which included higher year-over-year pricing. We continue to expect full-year gross profit per ton to exceed the 2023 level of $409.

由於電耗較低，毛利潤略有下降，但受到我們穩健的供應協議的支持，其中包括較高的同比定價。我們繼續預計全年每噸毛利將超過 2023 年 409 美元的水平。

Slide 11 shows the EBITDA bridge for the rubber business, which begins from a year ago level that excludes onetime items and the benefit of the forward power sale. For this segment, you will see that volume, despite being lower, contributed slightly positively to EBITDA as a result of favorable geographic mix. Pricing was a more positive contributor year-over-year, reflecting the annual -- the improved annual contracts. The negative Cogen contribution in this year's second quarter was a big factor in the rubber segment EBITDA bridge.

幻燈片 11 顯示了橡膠業務的 EBITDA 橋樑，該橋樑從一年前的水平開始，不包括一次性項目和遠期電力銷售的收益。對於該細分市場，您會發現，儘管銷售量較低，但由於有利的地理組合，其對 EBITDA 的貢獻略有積極。定價同比做出了更積極的貢獻，反映了年度合約的改善。今年第二季熱電聯產的負貢獻是影響橡膠業務 EBITDA 的重要因素。

Other costs include timing, higher maintenance and inflation. Switching to slide 12. The volume strength in our specialty business, up 17% compared to last year's second quarter, reflected a broad-based demand recovery across essentially all geographic markets.

其他成本包括時間安排、更高的維護費用和通貨膨脹。切換到投影片 12。與去年第二季相比，我們的特種業務銷量成長了 17%，反映出幾乎所有地區市場的廣泛需求復甦。

Lower profitability metrics were a function of non-repeating benefits in last year's second quarter as well as a lower cogen contribution and higher fixed costs. Reduced cogen, along with adverse absorption, contributed to the slight sequential decline in gross profit.

較低的獲利指標是去年第二季的非重複性效益以及較低的熱電聯產貢獻和較高的固定成本的結果。熱電聯產減少以及吸收不利導致毛利季比略有下降。

Slide 13 shows the specialty segment's year-over-year EBITDA bridge, again, from a more normalized year ago level before onetime benefits. The big contributor here was a broad-based volume recovery, slightly skewed towards the lower value markets. Higher costs this quarter were primarily adverse timing effects in contrast to last year's favorable timing effects.

幻燈片 13 顯示了專業細分市場的同比 EBITDA 橋，同樣是從一年前一次性收益之前更正常的水平得出的。這裡的主要貢獻者是廣泛的銷售復甦，略微偏向較低價值市場。與去年有利的時機效應相比，本季成本上升主要是不利的時機效應。

On to slide 14, we look at the year-to-date cash -- year-to-date free cash flow, which was negative in the first half. This was partly due to normal seasonal volume-driven working capital increase as well as higher cash taxes. Because of the negative year-to-date free cash flow, our net leverage ratio is just above our targeted range. However, we are very comfortable with the absolute net debt level.

在幻燈片 14 上，我們查看了年初至今的現金——年初至今的自由現金流，上半年為負值。這部分是由於正常的季節性數量驅動的營運資本增加以及現金稅的增加。由於年初至今自由現金流為負，我們的淨槓桿率略高於我們的目標範圍。然而，我們對絕對淨債務水準感到非常滿意。

With that, I will turn the call back over to Corning.

這樣，我會將電話轉回康寧。

Thanks, Jeff. As conveyed previously and as shown on slide 15, we are reducing our full-year guidance to reflect Q2 results and are generally subdued full-year expectations for our rubber segment, partially offset by better than previously projected specialty results. Our revised adjusted EBITDA guidance range is $315 million to $330 million, and our revised EPS guidance range is adjusted commensurately. Our effective tax rate assumption is marginally higher, a function of the jurisdictional mix of our earnings this year.

謝謝，傑夫。如同先前所傳達的和幻燈片15 所示，我們正在降低全年指導，以反映第二季度的業績，並且對我們橡膠部門的全年預期普遍較低，但部分被好於先前預測的特種業績所抵消。我們修訂後的調整後 EBITDA 指引範圍為 3.15 億美元至 3.3 億美元，我們修訂後的 EPS 指引範圍也進行了相應調整。我們的有效稅率假設略高，這是我們今年收入的司法管轄區組合的函數。

We still expect capital expenditures of about $200 million this year, including the increase in maintenance capital that we've talked about, a continued progress on the greenfield investment in conductive carbons in La Porte, Texas. At a high level, our revised guidance range reflects expectations that rubber demand improves modestly from Q2 levels, based on some encouraging market indicators and signals from certain customers.

我們仍然預計今年的資本支出約為 2 億美元，包括我們談到的維護資本的增加，以及德州拉波特導電碳綠地投資的持續進展。在較高層面上，我們修訂後的指導範圍反映了基於​​一些令人鼓舞的市場指標和某些客戶的訊號，橡膠需求較第二季水準略有改善的預期。

The rubber segment's profitability should exhibit resilience with fixed cost absorption improving. We do not provide quarterly guidance but note that our rubber segment should not exhibit as much Q4 seasonality, has appeared to be the case, in each of the last three years when EPA project tie-ins weighed heavily on those results in those periods.

隨著固定成本吸收的改善，橡膠產業的獲利能力應表現出彈性。我們不提供季度指導，但請注意，我們的橡膠部門不應表現出如此多的第四季度季節性，在過去三年中，EPA 項目搭配對這些時期的業績產生了重大影響，情況似乎如此。

The specialty segment is expected to see continued year-over-year profit growth, thanks to end market demand recovery, the absence of downstream destocking in certain end markets and relatively easy year-ago comparisons.

由於終端市場需求復甦、部分終端市場下游未去庫存以及與去年同期相比相對輕鬆，預計特種業務利潤同比將持續增長。

We anticipate some sequential profit per ton improvement, driven by favorable mix, as demand for higher-value products should recover disproportionately and thanks to the commercial ramp of newly qualified specialty products.

我們預計，在有利的組合推動下，每噸利潤將出現一些連續改善，因為對高價值產品的需求應該會不成比例地恢復，並且得益於新合格特種產品的商業增長。

Looking forward, our mid-cycle EBITDA -- adjusted EBITDA capacity goal of $500 million is on track. At mid-cycle conditions, we would expect about 150 kt of higher rubber and 20 to 30 kt of higher specialty volumes, contributing $60 million to $75 million and $20 million to $30 million incremental dollars, respectively.

展望未來，我們的中期 EBITDA（調整後 EBITDA 產能目標 5 億美元）正步入正軌。在週期中期情況下，我們預計橡膠產量將增加約 150 噸，特種橡膠產量將增加 20 至 30 噸，分別貢獻 6,000 萬至 7,500 萬美元和 2,000 萬至 3,000 萬美元的增量。

Beyond that, we expect $20 million to $30 million of further mix and productivity. We believe there is $20 million of upside from Huaibei as we work through the issues there. The addition of $40 million to $45 million of EBITDA potential from La Porte gets us there.

除此之外，我們預計進一步的組合和生產力將達到 2,000 萬至 3,000 萬美元。我們相信，當我們解決淮北的問題時，該地區將有 2000 萬美元的收益。La Porte 帶來的 4000 萬至 4500 萬美元的 EBITDA 潛力使我們能夠實現這一目標。

On slide 16, and before factoring in the resumption of buyback activity, we continue to see free cash flow being positive in 2024, although the absolute level of free cash flow will be lower than our previous expectations because of the reduced EBITDA level as well as the slightly higher working capital draw and cash taxes.

在幻燈片 16 中，在考慮回購活動恢復之前，我們繼續認為 2024 年自由現金流為正，儘管由於 EBITDA 水平下降以及營運資金提取和現金稅略高。

As mentioned earlier, slide 5 offered some directional expectations for CapEx over the next couple of years. We have no intent to allocate capital to greenfield rubber or brownfield expansion projects. As we mentioned, we will likely want to ramp La Porte before considering another significant greenfield investment in specialty.

如前所述，投影片 5 為未來幾年的資本支出提供了一些方向性預期。我們無意將資金分配給新建橡膠或棕地擴建工程。正如我們所提到的，在考慮對專業領域進行另一項重大綠地投資之前，我們可能會希望擴大 La Porte 的規模。

Other growth opportunities we envision over the next couple of years are capital light. Therefore, we expect to have significant free cash flow over that period. Our maintenance CapEx will be targeted on pieces of equipment or unit operations that are problematic and, or have exceeded their useful life. This spending should lower maintenance costs going forward, improve plant reliability and better throughput.

我們預計未來幾年的其他成長機會是輕資本。因此，我們預計在此期間將有大量的自由現金流。我們的維護資本支出將針對有問題和/或已超過其使用壽命的設備或單元操作。這筆支出應該會降低未來的維護成本，提高工廠的可靠性並提高產量。

Our effective capacity has declined over the years because of the business' legacy having been deprived of maintenance capital. This is one of the reasons why improving pricing is fair and something to be built upon.

多年來，由於企業的遺產被剝奪了維護資本，我們的有效產能不斷下降。這就是為什麼提高定價是公平的並且值得建立的原因之一。

Based on reasonable EBITDA growth expectations over a multiyear horizon, a stable maintenance capital spend and with declining growth and discretionary CapEx in each of the next two years, we expect a significant improvement in our free cash flow, which should be much stronger in '25 and then still higher in 2026.

基於多年內合理的 EBITDA 成長預期、穩定的維護資本支出以及未來兩年每年增長和可自由支配資本支出的下降，我們預計我們的自由現金流將顯著改善，在 25 年應該會更加強勁然後到2026 年還會更高。

Considering our share price, we continue to see our stock is undervalued. Given the confidence in the carbon black industry's fundamentals, our competitive position, prospects for '25 as well as our overall strategy moving forward, we see share repurchases at current valuations as a prudent use of capital.

考慮到我們的股價，我們仍然認為我們的股票被低估。鑑於對炭黑產業基本面、我們的競爭地位、25 年的前景以及我們前進的整體策略的信心，我們認為以當前估值回購股票是對資本的謹慎使用。

With that, we'll turn it back over to Sachi for Q&A. Thank you.

這樣，我們會將其轉回 Sachi 進行問答。謝謝。

(Operator Instructions) Josh Spector, UBS.

（操作員說明）Josh Spector，UBS。

It's Chris Perrella on for Josh. A question, I guess, on the volume cadence in the second half of the year. With things being softer, do you see volumes down in the fourth quarter for both specialty and rubber? And how should we think about that?

克里斯佩雷拉 (Chris Perrella) 替補喬許 (Josh)。我想，這是關於下半年銷售節奏的問題。隨著情況走軟，您認為第四季特種化學品和橡膠的產量是否會下降？我們該如何思考這個問題？

So looking forward, first thing I'd say is July was on track for us and a bit of a recovery, especially I'd say, rubber, it's only one month, but it was an improvement. We would expect some seasonality still in Q4, but just not as much as we've seen in the past, given the absence of a big EPA style high in at that time period. Does that answer your question, Chris?

因此，展望未來，我要說的第一件事是，7 月對我們來說已經步入正軌，並且有所復甦，尤其是橡膠，雖然只有一個月，但這是一個進步。我們預計第四季仍存在一些季節性，但不會像我們過去看到的那麼嚴重，因為當時沒有出現 EPA 風格的大高點。這能回答你的問題嗎，克里斯？

Yes, yes. And then I just had a follow-up on the cash flow and the buybacks. Given the inventory build and sort of the absence of working capital, how do you opportunistically balance the buybacks? And would you guys increase leverage a little bit to do some of those opportunistically in the second half?

是的，是的。然後我對現金流和回購進行了跟進。考慮到庫存增加和營運資金缺乏，您如何機會性地平衡回購？你們會在下半年增加一點槓桿來伺機做一些事情嗎？

Chris, this is Jeff. Yes, we would be willing to have a slight increase in leverage if we needed to do that. But it's not that meaningful impact both on an absolute and on a leverage ratio basis.

克里斯，這是傑夫。是的，如果需要的話，我們願意稍微增加槓桿。但無論是從絕對比率還是從槓桿率的角度來看，這都沒有那麼有意義的影響。

Okay. And then I guess one more. I guess what were the maintenance costs in the second quarter that -- and do you -- will that subside in the third and fourth quarter? Kind of what were those one-off maintenance upgrades that you guys talked about?

好的。然後我猜還有一個。我猜第二季的維護成本是多少，您認為會在第三和第四季減少嗎？你們談論的一次性維護升級是什麼？

Yes. We had simply planned more maintenance in the first and second quarter. Of course, that was in our guidance. But we also had some unplanned maintenance in the second quarter. We have less planned maintenance going forward. We expect less unplanned maintenance going forward. So things like in Ohio, the change out of that filtering system, we did a lot of other maintenance at the same time, why we had the downtime. That's the kind of thing that can make one quarter higher than another.

是的。我們只是計劃在第一季和第二季進行更多維護。當然，這是在我們的指導下的。但我們在第二季也進行了一些計畫外的維護。我們未來的計劃維護較少。我們預計未來計劃外維護將減少。因此，像在俄亥俄州那樣，更換過濾系統，我們同時進行了許多其他維護，這就是我們停機的原因。這就是那種可以讓四分之一高於另一個的事情。

Is there a way to quantify kind of the unplanned maintenance impact?

有沒有辦法量化計劃外維護的影響？

I'd say we're in the, let's say, $2 million to $3 million in the quarter.

我想說，我們本季的營收在 200 萬至 300 萬美元之間。

Laurence Alexander, Jefferies.

勞倫斯·亞歷山大，杰弗里斯。

This is Dan Rizzo on for Laurence. Just in terms of the strength -- the relative strength in Specialty, is there any end markets that are kind of doing better than others? Anything that's outperforming, anything that's underperforming by end product?

我是勞倫斯的丹·里佐。就實力而言－專業領域的相對實力，是否有任何終端市場比其他市場做得更好？最終產品有什麼表現出色或表現不佳的嗎？

Yes. So the coatings area has been relatively strong. That's more than just automotive, but I'd say, in general, coatings as well. We speak of polymers, but polymers is a really broad market. So let me say, some of the lower-value areas in that area, masterbatch going into those applications, was strong for us.

是的。所以塗料領域一直比較強勢。這不僅僅是汽車領域，我想說的是，總的來說，塗料也是。我們談論聚合物，但聚合物是一個非常廣泛的市場。所以我想說，該領域的一些低價值領域，即進入這些應用的母料，對我們來說很強大。

On a relative basis, actually, in was a little bit stronger than usual. So those were a couple of areas that looked good in that quarter. I just caution people, there's some movement quarter to quarter where we see that buying activity.

相對而言，實際上，in比平常強一些。因此，這些是該季度看起來不錯的幾個領域。我只是提醒人們，我們看到購買活動在每個季度都有一些變化。

Okay. And then do you -- I mean do you publish or release what your capacity utilization is in rubber black for you guys and what do you think it is for the industry?

好的。然後你們——我的意思是你們是否發布或發布了你們的產能利用率以及你們認為這對整個行業意味著什麼？

We don't speak for the industry. There is some third-party data you could go for, but we were in, let's say, mid-70s. So that's relatively low compared to where we would see mid-cycle for sure. But with the current conditions, that's where we were.

我們不代表行業說話。您可以獲得一些第三方數據，但我們當時處於 70 年代中期。因此，與我們在周期中期肯定會看到的情況相比，這個數字相對較低。但就目前的情況而言，這就是我們所處的情況。

Would you consider mid-cycle like mid-80s or higher? I mean I think we've seen up to like mid-90s in the past, if memory serves. I mean going back a couple of years?

您會考慮 80 年代中期或更晚的中期週期嗎？我的意思是，如果沒記錯的話，我認為我們過去大約在 90 年代中期就看到過這種情況。我的意思是回到幾年前？

Yes. No, I think mid-90s, if you talk compared to nameplate would be really hard for this industry, maybe as contact for others. No, I would expect to get it in the high upper 80s kind of area. So say [85% to 90%] in that range. And to be clear, we were like a little bit below exactly midpoint in the 70s. So there's substantial leverage for us there.

是的。不，我認為 90 年代中期，如果你與銘牌進行比較，對於這個行業來說真的很難，也許作為其他人的聯繫。不，我希望能在 80 年代上層地區得到它。所以說 [85% 到 90%] 在這個範圍內。需要明確的是，我們的水平略低於 70 年代的中點。所以我們在那裡有很大的影響力。

John Tanwanteng, CJS Securities.

約翰·譚萬騰，CJS 證券。

I was wondering if you could give us a little more color or maybe a snapshot of the economics of tire imports versus domestic production. How that changes as higher shipping costs maybe flow through supply chains and inventories? And if you think that's going to change consumer minds at all? Or if that's not going to matter just given maybe importers may try to push through more volume ahead of what might be tariffs on that kind of stuff?

我想知道您是否能為我們提供更多信息，或者簡單介紹一下輪胎進口與國內生產的經濟情況。隨著更高的運輸成本可能流經供應鏈和庫存，這種情況會發生什麼變化？如果您認為這會徹底改變消費者的想法？或者，如果這並不重要，進口商可能會嘗試在對此類商品徵收關稅之前增加銷售？

Sure. Maybe just an anecdotal story, there's a young person in our life, not a direct child of ours, but early '20s getting started in life. And a lot of issues with their vehicle, and they went to get it inspected, which means they had to then go get some new tires. And they were counted how the tire sales person said, I'll tell you the same tire if you really, really want it. But if you would spend like $10 or $15 more, you could get a way better tire.

當然。也許只是一個軼事故事，我們生活中有一個年輕人，不是我們的直系孩子，而是20歲出頭的年輕人。他們的車輛出現了很多問題，他們去檢查了，這意味著他們必須去買一些新輪胎。輪胎銷售人員說，如果你真的非常想要它，我會告訴你同樣的輪胎。但如果你多花 10 美元或 15 美元，你就可以獲得更好的輪胎。

And I mean I think that conversation is playing out, and that ultimately gets people to a value proposition that's a little bit more of a long term as people get used to the inflation and wage growth improves and so forth relative to that as we see inflation coming down.

我的意思是，我認為對話正在展開，最終讓人們得出一個更長期的價值主張，因為人們習慣了通貨膨脹，工資增長改善等等，相對於我們看到的通貨膨脹下來了。

In general, I think what you see is really low-value import tires coming through as we see tariffs coming in, it means to hit the same competitiveness point. We have to go to even cheaper, lower value, less reliable tires or I think what we're going to see is just consumer sentiments moving back towards the higher value, really lower cost of ownership product.

總的來說，我認為你看到的是真正的低價值進口輪胎，因為我們看到關稅進來，這意味著達到相同的競爭力點。我們必須轉向更便宜、價值更低、可靠性更低的輪胎，否則我認為我們將看到的只是消費者情緒重新轉向價值更高、擁有成本真正更低的產品。

Got it. And to be clear, are you expecting on the trucking and manufacturing side improvement through '24 and '25, just given some uncertainty in the macro here that's appearing to crop up?

知道了。需要明確的是，考慮到宏觀經濟中似乎突然出現的一些不確定性，您是否期望卡車運輸和製造業在 24 和 25 年期間有所改善？

Yes. If you look at the freight wage data, it certainly suggests that we bottomed and we're coming up. We're beyond even the second derivative. The first derivative is improved, but like there's a long way to go. So we see that coming I think the data speaks for itself in that right now, that's a gradual improvement, but it does look to be improving.

是的。如果你看一下貨運工資數據，它肯定表明我們已經觸底並且正在上漲。我們甚至超越了二階導數。一階導數得到了改進，但似乎還有很長的路要走。所以我們看到即將到來的，我認為數據現在就說明了一切，這是一個逐步的改善，但它看起來確實在改善。

Okay. And then finally, just in terms of capacity and how you're positioning it, are you more likely to be switching rubber reactors to specialty as that trajectory continues to improve? Or is there a change in the expectation there?

好的。最後，就產能以及如何定位而言，隨著這條軌蹟的不斷改善，您是否更有可能將橡膠反應器切換為特殊反應器？或是那裡的期望有改變嗎？

Well, we'll see as this plays out during the course of the year, and we'll put effectively rubber and specialty business and competition for our reactor hours. And we'll see how that goes. But my point would be if there is softness ongoing in rubber, I don't think there will be for all the things I said, that would certainly give you a place to move it.

好吧，我們將看到這一情況在今年內展開，我們將有效地投入橡膠和特種業務以及我們的反應器時間的競爭。我們將看看情況如何。但我的觀點是，如果橡膠持續疲軟，我認為我所說的所有事情肯定不會給你一個移動它的地方。

But also beyond that, just simply rubber even improving, specialty improving at the same time as we're seeing, it means just natural some of that capital or that capacity is going to be reallocated and tighten up the rubber market as well.

但除此之外，正如我們所看到的那樣，橡膠甚至在同時改善，專業改善，這自然意味著一些資本或產能將被重新分配並收緊橡膠市場。

John Roberts, Mizuho.

約翰·羅伯茨，瑞穗。

John Roberts on for John Roberts. I'm looking at the chart on slide 12. So it sounds like gross profit per ton for specialties has bottomed. I think you said it's going to be up sequentially, but it sounded like mixed not really price brought spread improving. We're a long way from where we were a little more than a year ago. So what's -- how do we get the margin to go back up materially? Or do you have a lot of price increases going on? Or we're just going to slowly grind up with mix?

約翰·羅伯茨替補約翰·羅伯茨。我正在查看投影片 12 上的圖表。因此，聽起來特種產品的每噸毛利已經觸底。我想你說過它會依次上漲，但聽起來好壞參半，而不是真正的價格帶來了利差改善。與一年多前相比，我們還有很長的路要走。那麼，我們該如何讓利潤率大幅回升呢？或者你們的價格是否有大幅上漲？或者我們只是要慢慢混合研磨？

John, Jeff, a couple of things. If you're looking at the trailing 12 months number, first off, you've got a pretty rough Q4 2023 in there which is kind of dragging it down. That's the first thing. Second thing is the last two quarters, this past quarter has been above that. That's -- actually last two quarters have been above that the [$609 million] number. So we would expect that will turn up in Q3.

約翰、傑夫，有幾件事。如果你查看過去 12 個月的數據，首先你會發現 2023 年第四季的情況相當糟糕，這有點拖累了它。這是第一件事。第二件事是過去兩個季度，過去一個季度的表現已經高於這個水準。事實上，過去兩個季度的數字已經超過了 [6.09 億美元]。因此，我們預計這將在第三季出現。

And certainly by Q4, we should see a meaningful turn up. I think we talked last call about our expectation for the GP per ton for specialty to be somewhere in the $650 million to $700 million range, which we would be and if it wasn't for that one really rough quarter in Q4, which was under $500 million. So you should absolutely be seeing that turning up as we go through the rest of the year.

當然，到第四季度，我們應該會看到有意義的轉變。我想我們在上次電話會議中談到了我們對每噸特種產品的 GP 的預期在 6.5 億至 7 億美元之間，如果不是第四季度那個非常艱難的季度，我們本來會達到這一水平。 5億美元。所以你絕對應該在今年剩下的時間裡看到這種情況的出現。

And we need a much stronger volume recovery to get back towards a 900-ish number?

我們需要更強勁的銷售恢復才能回到 900 左右的數字嗎？

That has -- I don't think we view the 900 number as a kind of a normal number. That had a pretty significant positive impact from cogen if you look back at 2022 and the first part of 2023. So I don't think we would expect to see that. And I think also if you go back a year or so, when we saw our volumes dip in '22 and early '23, what we saw dipping was some of the lower-end specialty products.

我不認為我們將 900 號碼視為一個普通號碼。回顧 2022 年和 2023 年上半年，cogen 產生了相當顯著的正面影響。所以我認為我們不會期望看到這種情況。我認為，如果你回顧一年左右，當我們看到我們的銷量在 22 年和 23 年初下降時，我們看到下降的是一些低端特色產品。

And as Corning mentioned a few minutes ago, where we've seen a pickup, which is good, has been in some of the lower -- in the polymer area, some of the lower-value masterbatch. And even the coatings pickup that we have seen has been a little bit on the lower end of coating.

正如康寧幾分鐘前提到的那樣，我們在一些較低的聚合物領域、一些價值較低的母料中看到了良好的成長。甚至我們所看到的塗層上升也有點處於塗層的低端。

So I don't think the that $900 million number is kind of a sustainable number. Not that we wouldn't strive for, but I think realistically, this year, we're thinking $650 million to $700 million, perhaps there's some upside to that as we look forward, but probably not in that $900 million level.

所以我認為 9 億美元的數字不是一個可持續的數字。並不是說我們不會努力爭取，但我認為現實地，今年我們考慮的是 6.5 億至 7 億美元，也許在我們展望時會有一些好處，但可能不會達到 9 億美元的水平。

Maybe I'll just build on that. So we don't see an upper limit on what can be as we drive innovation and upgrade reactors and so forth, we can still move that on. It wasn't really obvious at the time where European electricity prices were going to land. They've come down significantly.

也許我會以此為基礎。因此，當我們推動創新和升級反應器等時，我們看不到上限，我們仍然可以繼續前進。當時歐洲電價的下降趨勢並不明顯。他們已經大幅下降。

And so that part of the cogeneration story has been difficult there. And just keep in mind, because of the relatively small volume of specialty where compared to rubber, a movement in power prices, there's a much bigger impact on the GP per ton for specialty than in rubber.

因此，熱電聯產故事的這一部分在那裡一直很困難。請記住，由於與橡膠相比，特殊產品的產量相對較小，電力價格的變動對特殊產品每噸毛利的影響比橡膠大得多。

Jon Tanwanteng, CJS Securities.

Jon Tanwanteng，CJS 證券。

I was just wondering if you could discuss conditions on the ground in China right now? And what your expectations are in the guidance that you've provided?

我只是想知道你是否可以討論一下中國目前的情況？您對所提供的指導有何期望？

So if we talk about China macro, I'd say China is still an area of greatly reduced economic confidence, people holding off to make investments, people worried about trade barriers and where they're going to export to. You start to see the government now trying to spur some domestic demand, which would ultimately, I think, be very good for China. That's the bigger picture there. For us, the picture is really about Huaibei. We've had startup issues with that plan.

因此，如果我們談論中國宏觀，我想說中國仍然是一個經濟信心大幅下降的地區，人們推遲投資，人們擔心貿易壁壘以及他們將出口到哪裡。你開始看到政府現在試圖刺激一些內需，我認為這最終對中國非常有利。這就是更大的圖景。對我們來說，這張照片確實是關於淮北的。我們在該計劃中遇到了啟動問題。

I've talked about that before, getting it really to the higher-grade value materials that we're aiming for. We've made progress in that. We'll have one more outage coming up, where we advance that further. But -- so for us, the opportunity there is a little bit more to getting Huaibei back on track. I'd say the overall China macro, not so great. OEM build is probably an area of some strength as they continue to export cars. There's something recently out about their impact in the market in Thailand. But I think in general, it's a tough market.

我之前已經討論過這一點，真正實現我們目標的更高等級的價值材料。我們在這方面已經取得了進展。我們將再次發生停電，我們將進一步推進這項工作。但是——所以對我們來說，讓淮北重回正軌的機會還有更多。我想說的是，中國整體宏觀情勢並不是那麼好。隨著 OEM 繼續出口汽車，OEM 製造可能是他們的優勢領域。最近有一些關於它們對泰國市場的影響的報導。但我認為總的來說，這是一個艱難的市場。

Okay. Great. And maybe just a little bit more on what the mix is there in OE versus tire. And how do you expect that to trend?

好的。偉大的。也許只是多了解一下原廠配件與輪胎的混合情況。您預計這種趨勢會如何？

So generally speaking, the amount people drive a car in China is relatively lower than, let's say, in the United States and Europe. So the impact of OE is higher. We talk about here, you buy a car, you probably change the tires 3 or 4 times. I would say it's more like 2 or 3 times in Asia typically or in China, in particular.

所以整體來說，中國的汽車保有量相對低於美國和歐洲。所以OE的影響更大。我們這裡講一下，你買一輛車，你大概換了3、4次輪胎。我想說，在亞洲，尤其是在中國，這個數字更像是 2 到 3 倍。

So the replacement market has always been a little bit weaker. And we see overall tire for local tire companies which is where we are in the qualification process that that's tough going right now.

所以置換市場一直都比較疲軟。我們看到當地輪胎公司的整體輪胎，這就是我們目前處於艱難的資格認證過程中的情況。

There are no further questions at this time. I would like to turn the call back over to Corning Painter for any closing remarks.

目前沒有其他問題。我想將電話轉回給康寧畫家，請其發表結束語。

Well, first of all, I appreciate everyone's time and joining our call today and your very good questions. It was a challenging quarter. But when you have a quarter like that, it's important that we get the questions out. We'd address them. We think the underlying business is very strong. And the more we can talk to that transparently, the better this is going to be.

首先，我感謝大家抽出時間參加我們今天的電話會議，並提出非常好的問題。這是一個充滿挑戰的季度。但當你遇到這樣的季度時，我們必須弄清楚這些問題。我們會向他們講話。我們認為基礎業務非常強勁。我們越能透明地討論這一點，情況就會越好。

We value our shareholder views and we look forward to speaking to you over the next couple of days and have some upcoming corporate access events, including Mizuho's Conference in New York on August 14, the UBS Global Materials and Jefferies Industrial Conferences in New York on September 4 and 5, as well as some regional MDRs that we have in the pipeline in coming months. Thank you again.

我們重視股東的觀點，期待在未來幾天與您交談，並舉辦一些即將舉行的企業訪問活動，包括8 月14 日在紐約舉行的瑞穗會議、9 月在紐約舉行的瑞銀全球材料和傑富瑞工業會議4 和 5 以及我們未來幾個月正在醞釀的一些區域 MDR。再次感謝您。

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您有個愉快的一天。