Timken Co (TKR) 2024 Q3 法說會逐字稿

Good morning. My name is Emily, and I'll be your conference operator today. At this time, I would like to welcome everyone to Timken's third-quarter earnings release conference call. (Operator Instructions)

早安.我叫艾米麗，今天我將擔任你們的會議操作員。此時此刻，我謹歡迎大家參加鐵姆肯公司第三季財報發布電話會議。（操作員說明）

Thank you. Mr. Frohnapple, you may begin your conference.

謝謝。Frohnapple 先生，您可以開始會議了。

Thanks, Emily. And welcome, everyone to our third-quarter 2024 earnings conference call. This is Neil Frohnapple, Vice President of Investor Relations for the Timken Company. We appreciate you joining us today.

謝謝，艾米麗。歡迎大家參加我們的 2024 年第三季財報電話會議。我是鐵姆肯公司投資人關係副總裁 Neil Frohnapple。我們感謝您今天加入我們。

Before we begin our remarks this morning, I want to point out that we have posted presentation materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access this material through the download feature on the earnings call webcast link. With me today are The Timken Company's President and CEO, Tarak Mehta; and Phil Fracassa, our Chief Financial Officer. We will have opening comments this morning from both Taral and Phil before we open up the call for your questions.

在我們今天早上開始發言之前，我想指出，我們已經在公司網站上發布了演示材料，我們將在今天的季度業績審查中引用這些材料。您也可以透過財報電話會議網路廣播連結上的下載功能存取此資料。今天與我在一起的有鐵姆肯公司總裁兼執行長 Tarak Mehta；和我們的財務長 Phil Fracassa。今天早上，在我們開始詢問你們的問題之前，我們將聽取塔拉爾和菲爾的開場評論。

During the Q&A, I would ask that you please limit your questions to one question and one follow-up at a time to allow everyone a chance to participate.

在問答過程中，我想請大家將問題限制在一個問題和一個後續問題上，以便讓每個人都有機會參與。

During today's call, you may hear forward-looking statements related to our future financial results, plans and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and in our reports filed with the SEC, which are available on the timken.com website. We have included reconciliations between non-GAAP financial information and its GAAP equivalent in the press release and presentation materials.

在今天的電話會議中，您可能會聽到與我們未來財務表現、計劃和業務運營相關的前瞻性聲明。由於多種因素，我們的實際結果可能與預測或暗示的結果有重大差異，我們在今天的新聞稿和向SEC 提交的報告中對此進行了更詳細的描述，這些報告可在timken.com 網站上獲取。我們在新聞稿和簡報資料中納入了非 GAAP 財務資訊與其 GAAP 同等財務資訊之間的調整表。

Today's call is copyrighted by The Timken Company. And without express written consent, we prohibit any use, recording or transmission of any portion of the call. With that, I would like to thank you for your interest in The Timken Company, and I will now turn the call over to Tarak.

今天的電話會議版權歸鐵姆肯公司所有。未經明確書面同意，我們禁止使用、錄製或傳輸通話的任何部分。在此，我要感謝您對鐵姆肯公司的興趣，現在我將把電話轉給 Tarak。

Thanks, Dale. And good morning, everyone. Today is my first earnings call as a member of The Timken Company, and I thank you for joining us. I will begin by discussing our results and then we'll share some personal observations from my first 60 days at Timken.

謝謝，戴爾。大家早安。今天是我作為鐵姆肯公司成員的第一次財報電話會議，感謝您參加我們的會議。我將首先討論我們的結果，然後我們將分享我在鐵姆肯公司前 60 天的一些個人觀察。

Let's start with a look at the quarter and the outlook. Industrial markets remained soft during third quarter, and we saw mixed performance across different sectors and geographies. Organically, revenue was down 3% from last year. And geographically in Europe, we saw strong demand for most of the portfolio. And in China, revenue was down mainly due to wind. On the positive side, we were up slightly in the Americas and saw continued strength in India. Our order backlog was stable with the second quarter.

讓我們先來看看本季和前景。第三季工業市場依然疲軟，不同產業和地區的表現參差不齊。從有機角度來看，收入比去年下降了 3%。在歐洲，我們看到對大部分產品組合的強勁需求。在中國，收入下降主要是由於風能。從積極的一面來看，我們在美洲的業績略有上升，並在印度看到了持續的強勢。我們的訂單積壓與第二季保持穩定。

At 16.9%, the adjusted EBITDA margin was down 200 basis points and our earnings per share came in at $1.23 compared to $1.55 last year. Both earnings per share and margins fell short of our expectations. Lower volutumes, combined with the higher logistics costs and other headwinds in the quarter were the main reason for the shortfall. Phil will go through these items in more detail a little bit later on.

調整後的 EBITDA 利潤率為 16.9%，下降了 200 個基點，每股收益為 1.23 美元，而去年為 1.55 美元。每股盈餘和利潤率均低於我們的預期。銷售下降、物流成本上升以及本季的其他不利因素是造成供應短缺的主要原因。菲爾稍後將更詳細地討論這些項目。

Pricing remain slightly higher in the quarter. On a positive note, we saw continued strong and margin equity performance from our acquisitions that we have made recently, Des-Case Luggage and CGI. During the third quarter, we also closed on CGI, which will add presence in high-growth medical robotics and automation space. CGI also gives us a good position in Precision Drive Systems and will be accretive to the industrial motion business going forward.

本季定價仍略高。從積極的方面來看，我們最近收購的 Des-Case Luggage 和 CGI​​ 看到了持續強勁的股本表現和利潤率。在第三季度，我們也關閉了 CGI，這將增加在高成長的醫療機器人和自動化領域的影響力。CGI 也為我們在精密驅動系統領域奠定了良好的地位，並將促進工業運動業務的發展。

This quarter, India is a market. And aero, defense and marine as sectors also showed both good growth and good performance.

本季度，印度是一個市場。航空、國防和船舶等產業也呈現出良好的成長和良好的績效。

Second half of this year is proving to be more challenging than expected across several sectors and geographies. Our updated 2024 outlook reflects the third quarter performance as well as softer than normal fourth quarter.

事實證明，今年下半年在多個行業和地區都比預期更具挑戰性。我們更新的 2024 年展望反映了第三季的業績以及比正常情況疲軟的第四季。

We want to align cost and capacity with the market demand, both improved margins, and also respond to our customers. We will provide more details in early February on early on specific actions and that impact on 2025.

我們希望使成本和產能與市場需求保持一致，既提高利潤，也響應客戶需求。我們將在 2 月初提供有關具體行動及其對 2025 年影響的更多詳細資訊。

On a personal note, it's an honor to lead Timken at this exciting time in its history. I have long admired Timken for its strong brands, its reputation for quality, innovation and excellence.

就我個人而言，我很榮幸能夠在鐵姆肯公司歷史上這個令人興奮的時刻領導鐵姆肯公司。我長期以來一直欽佩鐵姆肯公司的強大品牌以及其在品質、創新和卓越方面的聲譽。

During my first 60 days, in order to get an external perspective on Timken, I met with Animas, some of our key investors and spend time with the greater than 60 channel partners and customers. I also visited colleagues in 18 production facilities in United States, Europe and China. All of which gives me a good start in understanding the business.

在我任職的前 60 天裡，為了從外部角度了解鐵姆肯公司，我會見了我們的一些主要投資者 Animas，並與 60 多個通路合作夥伴和客戶進行了交流。我還拜訪了美國、歐洲和中國 18 個生產工廠的同事。所有這些都為我了解業務提供了良好的開端。

Our team strength in the market segments that we operated. During the visit, I also saw how we are developing innovative products to address some of the most challenging applications for our customers. I was impressed with the talents and the organization, as well as the critical roles our products play in improving the reliability and efficiency of our customers' applications.

我們在所經營的細分市場中的團隊實力。在訪問期間，我還看到了我們如何開發創新產品來解決客戶面臨的一些最具挑戰性的應用。我們的人才和組織以及我們的產品在提高客戶應用程式的可靠性和效率方面所發揮的關鍵作用給我留下了深刻的印象。

It's still early, but here are a few weeks high-level examples of what we are doing to strengthen the company for 2025 and beyond. First, we're aligning our capacity and costs to the market demand by implementing cost reductions at a product line level, which will improve margins. Second, we will take a look at our entire portfolio of product lines with an eye towards allocating capital and resources for higher organic growth and better returns. We already see some good examples to build on. Third we'll maintain our disciplined and deliberate approach to capital allocation.

現在還為時過早，但以下是我們在 2025 年及以後為增強公司實力而採取的幾週的高級示例。首先，我們透過在產品線層面降低成本來調整我們的產能和成本，以適應市場需求，這將提高利潤率。其次，我們將審視我們的整個產品線組合，並專注於分配資本和資源，以實現更高的有機成長和更好的回報。我們已經看到了一些可以參考的好例子。第三，我們將維持紀律嚴明、審慎的資本配置方式。

We expect the M&A to help us further diverse by the portfolio, an increase of our presence in attractive growth markets. For example of that is the CGI acquisition we made this quarter. In addition, we will work to reduce our net working capital, which will improve our free cash flow and returns on invested capital. This will require changes in the process, and will take a bit of time to implement, but we expect our cash performance to improve over time. Again, it's early and today, we only share some additional reflections that we will have more to say at a later date.

我們預計併購將有助於我們的產品組合進一步多元化，增加我們在有吸引力的成長市場中的影響力。例如，我們本季收購了 CGI。此外，我們將努力減少淨營運資本，這將改善我們的自由現金流和投資資本回報率。這將需要改變流程，並且需要一些時間來實施，但我們預計我們的現金績效將隨著時間的推移而改善。再說一次，現在還為時過早，今天我們只分享一些額外的想法，我們稍後將有更多的想法。

Today, I also want to highlight that 2024 is the 125th anniversary of Timken. It has really been the said team's commitment to customers, innovation and excellence, that is both reflected in the product quality and the service level over the last 125 years. That has resulted in a strong brand of Timken in the industry. Timken has built a strong foundation and achieved significant improvements in performance over the last several years. As a team, we will build on this foundation for profitable growth future that delivers better cash flow, higher earnings per share and better returns on invested capital. And with that, let me turn the call over to Phil for a more detailed review of the numbers and outlook.

今天，我也想強調，2024 年是鐵姆肯公司成立 125 週年。這確實是該團隊對客戶、創新和卓越的承諾，這體現在過去 125 年的產品品質和服務水準中。這使得鐵姆肯公司在業界形成了強大的品牌。鐵姆肯公司在過去幾年中奠定了堅實的基礎，並在性能方面取得了顯著的進步。作為一個團隊，我們將在此基礎上實現未來的獲利成長，提供更好的現金流、更高的每股盈餘和更好的投資資本回報。接下來，讓我把電話轉給菲爾，讓他對數字和前景進行更詳細的審查。

Okay. Thanks, Tarak, and good morning, everyone. For the financial review, I'm going to start on slide 12 of the presentation materials with a summary of our third quarter results.

好的。謝謝，塔拉克，大家早安。對於財務審查，我將從簡報資料的第 12 投影片開始，概述我們第三季的業績。

Revenue for the quarter came in at $1.13 billion, down 1.4% from last year. Adjusted EBITDA margins were 16.9% and adjusted earnings per share came in at $1.23.

該季度營收為 11.3 億美元，比去年下降 1.4%。調整後 EBITDA 利潤率為 16.9%，調整後每股收益為 1.23 美元。

Turning to slide 13, let's take a closer look at our third quarter sales performance. Organically, sales were down 2.9%, as volume was lower while pricing remained positive. Looking at the rest of the revenue walk, you can see that recent acquisitions, net of one divestiture, contributed 1.8% of growth in the quarter. While foreign currency translation was a slight headwind to the top line.

轉向投影片 13，讓我們仔細看看我們第三季的銷售業績。整體而言，銷售額下降了 2.9%，原因是銷售下降，而定價仍然樂觀。看看其餘的收入走勢，您可以看到最近的收購（扣除一項資產剝離）為本季的成長貢獻了 1.8%。而外幣換算對營收來說是一個輕微的阻力。

On the right-hand side of this slide, you can see organic growth by region, this excludes both currency and net acquisition impact. Let me comment briefly on each region.

在這張投影片的右側，您可以看到按地區劃分的自然成長，這不包括貨幣和淨收購的影響。讓我簡要評論一下每個地區。

In the Americas, our largest region, we were up about 2% from last year. We saw solid growth across several sectors, including marine, distribution, and aerospace. While the off highway in general and heavy industrial sectors were lower as we expected.

在我們最大的地區美洲，我們比去年增長了約 2%。我們在多個領域看到了穩健的成長，包括船舶、分銷和航空航太。而一般和重工業部門的非高速公路則低於我們的預期。

In Asia Pacific, we were down 3%. as China was down, while India and the rest of the region were up. In China, the sales decline was driven mainly by lower wind energy demand. An in India, we saw double digit growth in the quarter, driven primarily by higher revenue in the rail and distribution sectors. And finally, we were down 13% in EMEA as we saw continued broad industrial weakness in Western Europe. Most sectors were lower, including renewable energy, automation, general and heavy industrial, and off-highway. \

在亞太地區，我們下降了 3%。中國下跌，而印度和該地區其他國家則上漲。在中國，銷量下降的主要原因是風能需求下降。在印度，本季我們看到了兩位數的成長，這主要是由鐵路和分銷行業收入增加所推動的。最後，由於西歐工業持續普遍疲軟，歐洲、中東和非洲地區的股價下跌了 13%。大多數產業走低，包括再生能源、自動化、通用和重工業以及非公路產業。\

Turning to Slide 14. Adjusted EBITDA in the third quarter was 190 million or 16.9% of sales compared to $216 million or 18.9% of sales last year. Our adjusted EBITDA margin of 16.9% was below company expectations, but the vast majority of the shortfall was due to some unanticipated cost headwinds in the quarter, including logistics, currency and the discrete customer accrual. Collectively, these headwinds negatively impacted margins by around 100 basis points. I'll talk about these items and the actions we are taking to improve margins moving forward a little later in the call.

轉到投影片 14。第三季調整後 EBITDA 為 1.9 億美元，佔銷售額的 16.9%，去年為 2.16 億美元，佔銷售額的 18.9%。我們調整後的 EBITDA 利潤率為 16.9%，低於公司預期，但缺口的主要原因是本季一些意外的成本阻力，包括物流、貨幣和離散客戶應計費用。總的來說，這些不利因素對利潤率產生了約 100 個基點的負面影響。我將在稍後的電話會議中討論這些項目以及我們為提高利潤率而採取的行動。

Looking more closely at the change in adjusted EBITDA dollars, you can see that the decrease was driven mainly by the impact of lower sales volume was relatively neutral price cost in the quarter. Let me comment a little further on the individual items in the block.

更仔細地觀察調整後 EBITDA 美元的變化，您可以發現下降的主要原因是銷售下降以及本季相對中性的價格成本的影響。讓我對塊中的各個項目進一步評論。

With respect to price mix, net pricing was positive once again this quarter in both segments as pricing continues to hold up well as we expected. Mix was also a slight positive, driven largely by industrial distribution, which generally outperformed OE sectors again in the third quarter.

就價格組合而言，本季這兩個細分市場的淨定價再次呈現正值，因為定價持續保持良好狀態，符合我們的預期。混合也略有積極，主要是由工業分佈推動的，第三季工業分佈整體表現再次優於原始設備產業。

On the material and logistics line, we saw a significant spike in logistics costs in the quarter. Reflecting higher international freight costs, including some lag effect from the second quarter is partially offset by modestly lower material costs.

在材料和物流方面，我們看到本季物流成本大幅上漲。反映出國際貨運成本上升，包括第二季的一些滯後效應，但被材料成本小幅下降部分抵銷。

On the manufacturing line, performance was slightly negative in the quarter as cost reduction initiatives and efficiency gains in our plants were slightly more than offset by the continued year-over-year impact of inflation and costs associated with new footprint investments.

在生產線上，本季業績略有下降，因為我們工廠的成本削減措施和效率提升被通膨和新足跡投資相關成本的持續同比影響略微抵消。

Looking at the SG&A other line, costs were up slightly from last year. But in the quarter, we had an unfavorable SG&A expense impact from a discrete customer accrual. Excluding this impact, structural SG&A would have been down slightly from last year as cost control measures and lower incentive compensation expense more than offset the impact of continued wage inflation.

從 SG&A 其他項目來看，成本比去年略有上升。但在本季度，我們因離散客戶應計專案而對 SG&A 費用產生了不利的影響。排除此影響，結構性銷售、一般管理費用將比去年略有下降，因為成本控制措施和較低的激勵補償費用足以抵消持續工資上漲的影響。

Currency was slightly negative in the quarter compared to last year and compared to the revenue impact. This was driven mainly by the revaluation of cash and other balances outside the United States. As these balances get revalued into the local currency, it produces a P&L impact. We posted a large negative impact in the quarter of just over $5 million related to this revaluation. This is included in unallocated corporate, not in the segments.

與去年相比以及與收入影響相比，本季的貨幣匯率略有下降。這主要是由美國境外現金和其他餘額的重估推動的。當這些餘額重新估價為當地貨幣時，就會產生損益影響。我們在本季度公佈了與此次重估相關的巨大負面影響，剛剛超過 500 萬美元。這包括在未分配的公司中，而不是在分部中。

And finally, acquisitions net of divestitures contributed $6 million of adjusted EBITDA in the quarter, which was accretive to overall company margins. Our recent acquisitions continue to perform well and CGI is off to a strong start.

最後，扣除資產剝離後的收購為該季度調整後 EBITDA 貢獻了 600 萬美元，這增加了公司的整體利潤率。我們最近的收購繼續表現良好，CGI 有了一個良好的開始。

On slide 15, you can see that we posted net income of $82 million or $1.16 per diluted share for the third quarter on a GAAP basis. The current period included $0.07 of net expense from special items, including acquisition amortization and other special charges, offset partially by again on the sale of our recently closed Gaffney bearing complex in South Carolina.

在投影片 15 上，您可以看到我們公佈的第三季淨利為 8,200 萬美元，以 GAAP 計算，稀釋後每股收益為 1.16 美元。本期包括 0.07 美元的特殊項目淨支出，包括收購攤銷和其他特殊費用，部分抵消了我們最近關閉的南卡羅來納州加夫尼軸承廠的出售。

On an adjusted basis, we earned $1.23 per share, down 21% from last year and below our expectations because of the margin shortfall. With respect to some below-the-line items, interest expense in the third quarter was about $2 million higher year over year, while diluted shares were down slightly.

調整後的每股收益為 1.23 美元，比去年下降 21%，並且由於利潤率下降而低於我們的預期。對於一些線下項目，第三季的利息支出較去年同期增加約200萬美元，而稀釋後的股票略有下降。

Our adjusted tax rate for the quarter came in at 20%, in line with our expectations, but up from last year due mainly to our geographic mix of earnings.

本季調整後的稅率為 20%，符合我們的預期，但高於去年，這主要是由於我們的收入地理結構所致。

And finally, non-controlling interest was up around $3 million from last year. While Depreciation expense was up slightly in the quarter.

最後，非控制權益比去年增加了約 300 萬美元。雖然折舊費用在本季略有上升。

Now let's move to our business segment results, starting with engineered bearings on slide 16. In the third quarter, engineered bearings sales were $741 million, down 4.5% from last year. Organically, sales were down 3.6%, driven by lower end market demand in Europe and China. Among market sectors, renewable energy saw the most significant decline in the quarter driven by continued weakness in China. In addition, the off-highway auto truck and general and heavy industrial sectors were down from last year.

現在讓我們看看我們的業務部門結果，從幻燈片 16 上的工程軸承開始。第三季度，工程軸承銷售額為 7.41 億美元，比去年下降 4.5%。受歐洲和中國低端市場需求的推動，銷售額有機下降 3.6%。在市場領域中，由於中國持續疲軟，再生能源本季跌幅最為顯著。此外，非公路汽車卡車以及一般和重工業產業也較去年下降。

On the positive side, revenue in the distribution, aerospace and rail sectors were all up versus the year-ago period. Currency was a headwind to revenue of less than 1%, while the net impact of acquisitions and divestitures was slightly unfavorable. Engineered bearings' adjusted EBITDA in the quarter was $138 million or 18.7% of sales compared to $157 million or 20.2% of sales last year. Our margins in the quarter reflect the impact of lower volume, along with higher logistics and manufacturing costs, partially offset by favorable price mix.

從積極的一面來看，分銷、航空航天和鐵路行業的收入均較去年同期有所增長。貨幣對收入的不利影響不到 1%，而收購和剝離的淨影響則略有不利。本季工程軸承調整後 EBITDA 為 1.38 億美元，佔銷售額的 18.7%，去年為 1.57 億美元，佔銷售額的 20.2%。我們本季的利潤率反映了銷售下降以及物流和製造成本上升的影響，但部分被有利的價格組合所抵消。

Now let's turn to industrial motion on slide 17. In the third quarter, industrial motion sales were $386 million, up 5.2% from last year. Acquisitions contributed just over 6% to the top line, while currency was slightly positive as well. Organically, sales declined 1.4% as lower demand was partially offset by higher pricing.

現在讓我們轉向投影片 17 上的工業動態。第三季度，工業傳動銷售額為3.86億美元，較去年成長5.2%。收購對營收的貢獻略高於 6%，而匯率也略有上漲。整體而言，銷售額下降了 1.4%，因為需求下降被定價上漲部分抵消。

With respect to performance by platform, automatic lubrication systems posted the largest decline while drive systems was notably up in the quarter. Our medical lubrication was impacted by broad weakness in Western Europe and the off-highway sector. While drive systems benefited from significantly higher military marine revenue. Belt and chain was also down modestly on lower ad demand, while other platforms are relatively flat compared to last year.

就平台效能而言，自動潤滑系統下降幅度最大，而驅動系統則在本季顯著上升。我們的醫療潤滑受到西歐和非公路業普遍疲軟的影響。而驅動系統則受惠於軍用海事收入的顯著增加。由於廣告需求下降，Belt and Chain 也小幅下滑，而其他平台則與去年相比相對持平。

Industrial motion adjusted EBITDA for the quarter was $74 million or 19.2% of sales compared to 75 million or 20.5% of sales last year. Our margins in the quarter were impacted by lower organic volume and higher operating costs, including the customer accrual I mentioned earlier, partially offset by strong contribution from our recent acquisitions. Manufacturing performance was relatively flat in the quarter with favorable cost performance offsetting ramp costs related to our new capacity investment for belts in Mexico.

該季度工業運動調整後 EBITDA 為 7,400 萬美元，佔銷售額的 19.2%，而去年為 7,500 萬美元，佔銷售額的 20.5%。我們本季的利潤率受到有機銷售下降和營運成本上升的影響，包括我之前提到的客戶成長，但部分被我們最近收購的強勁貢獻所抵消。本季的製造業表現相對平穩，良好的成本績效抵銷了與我們在墨西哥的皮帶新產能投資相關的斜坡成本。

Turning to slide 18, you can see that we generated operating cash flow of $123 million in the third quarter. And after CapEx of $35 million, free cash flow was &88 million. We expect stronger cash flow in the fourth quarter, driven by improved working capital performance.

翻到投影片 18，您可以看到我們第三季的營運現金流為 1.23 億美元。扣除 3,500 萬美元的資本支出後，自由現金流為 8,800 萬英鎊。我們預計，在營運資本績效改善的推動下，第四季現金流將更加強勁。

From a capital allocation standpoint, we deployed nearly $200 million in total during the quarter for the CGI acquisition and the payment of our 409th consecutive quarterly dividend. And looking at the balance sheet, we ended the third quarter with net debt to adjusted EBITDA at 2.1 times right near the middle of our targeted range. And we have no significant debt maturities until 2027.

從資本配置的角度來看，我們在本季度總共部署了近 2 億美元用於 CGI 收購和連續第 409 個季度股息的支付。從資產負債表來看，第三季末我們的淨負債與調整後 EBITDA 比率為 2.1 倍，接近我們目標範圍的中間值。而我們在 2027 年之前沒有重大債務到期。

Now let's turn to our updated outlook for full year 2024, with a summary on slide 19. Overall, we reduced our outlook to reflect our third quarter performance and a more cautious view on the rest of the year. So let's go through it, starting with the sales outlook.

現在讓我們來看看更新後的 2024 年全年展望，幻燈片 19 上有總結。總體而言，我們下調了預期，以反映我們第三季的業績，並對今年剩餘時間持更加謹慎的看法。讓我們從銷售前景開始看一下。

We're now planning for full year revenue to be down around 4% in total versus 2023. Organically, we now expect sales to be down around 6% at the midpoint, one percentage point lower than our prior guidance. Note that the outlook for renewable energy is relatively unchanged. This sector alone accounts for more than half of our expected organic sales decline for the full year. And to reiterate, our updated sales outlook assumes a slightly greater than normal seasonal decline in the fourth quarter as we're planning for more pronounced customer slowdowns in December. With respect to currency, we're now expecting a headwind of around 25 basis points for the full year, based on quarter-end exchange rates.

我們現在計劃全年收入總額比 2023 年下降 4% 左右。從有機角度來看，我們現在預計銷售額中位數將下降 6% 左右，比我們先前的指導低 1 個百分點。請注意，再生能源的前景相對沒有變化。光是這個產業就占我們全年預期有機銷售額下降的一半以上。重申一下，我們更新的銷售前景假設第四季度的季節性下降略大於正常的季節性下降，因為我們計劃在 12 月出現更明顯的客戶放緩。就貨幣而言，根據季末匯率，我們目前預計全年將面臨約 25 個基點的逆風。

And finally, we expect M&A to contribute 225 basis points to the top line for the year, this excludes the recent CGI acquisition. On the bottom line, we now expect adjusted earnings per share in the range of $5.55 to $5.65. This reflects our third quarter performance and a more cautious outlook for the fourth quarter, offset partially by modest accretion from CGI.

最後，我們預計併購將為今年的營收貢獻 225 個基點，不包括最近的 CGI 收購。總而言之，我們現在預計調整後每股收益將在 5.55 美元至 5.65 美元之間。這反映了我們第三季的業績以及對第四季更謹慎的前景，但部分被 CGI 的適度成長所抵消。

Our revised outlook implies that our full year 2024 consolidated adjusted EBITDA margin will be in the low 18s percent range at the midpoint. For the fourth quarter, our guidance implies an adjusted EBITDA margins and earnings per share will be down sequentially and year over year on lower production volume and expectations for higher costs heading into the end of the year.

我們修訂後的展望意味著我們 2024 年全年綜合調整後 EBITDA 利潤率將處於 18% 的中點區間。對於第四季度，我們的指導意味著調整後的 EBITDA 利潤率和每股收益將環比和同比下降，原因是產量下降以及年底成本上升的預期。

As Tarak highlighted, we are not satisfied with our second-half margins, and we are stepping up our efforts around cost actions to improve margins for 2025 and beyond. As we have talked about on prior calls, we've been working to reduce costs all year, including facility rationalizations like the closure and sale of our Gaffney plant, reducing operative head count by over 12% since the beginning of 2023, and controlling salary, hiring and nonessential spending. While this has had a positive effect, it has not been enough to fully protect margins at current demand levels so we intend to get more aggressive.

正如 Tarak 所強調的那樣，我們對下半年的利潤率並不滿意，我們正在加大成本行動力度，以提高 2025 年及以後的利潤率。正如我們在之前的電話中談到的那樣，我們全年一直在努力降低成本，包括設施合理化，例如關閉和出售我們的加夫尼工廠，自2023 年初以來將運營人員數量減少12% 以上，以及控制工資、僱用和非必要支出。雖然這產生了正面的影響，但還不足以充分保護當前需求水準的利潤，因此我們打算採取更積極的行動。

Our objective is to bring cost more in line with demand levels and to improve margins and profitability in line with our long-term targets. We will not get into specific details today, we will outline the actions and expected savings in early February as we finalize our business plan and provide initial guidance for 2025.

我們的目標是使成本更符合需求水平，並提高利潤率和獲利能力以符合我們的長期目標。今天我們不會透露具體細節，我們將在 2 月初概述我們的行動和預期節省，同時敲定我們的業務計劃並提供 2025 年的初步指導。

Moving to free cash flow, we've updated our 2024 outlook to approximately $300 million, which is down from our prior guide, mostly to reflect the impact of lower expected earnings. We expect to generate over $100 million of free cash flow in the fourth quarter, which is a step up both sequentially and year over year.

談到自由現金流，我們將 2024 年的展望更新為約 3 億美元，這比我們先前的指導有所下降，主要是為了反映預期收益較低的影響。我們預計第四季將產生超過 1 億美元的自由現金流，無論是環比還是同比都有所提高。

To summarize, our third quarter performance was below expectations, especially on the bottom line. And we are moving aggressively to reduce costs on advancing our strategic initiatives to strengthen the company for 2025 and beyond. This concludes our formal remarks. And we'll now open the line for questions. Operator?

總而言之，我們第三季的業績低於預期，尤其是在獲利方面。我們正積極採取行動，降低推進策略措施的成本，以在 2025 年及以後增強公司實力。我們的正式發言到此結束。現在我們將開通提問熱線。操作員？

Thank you. (Operator Instructions) Stephen Volkmann, Jefferies.

謝謝。（操作員說明）Stephen Volkmann，Jefferies。

Great. Good morning and thank you, guys. And welcome, Tarak.

偉大的。早安，謝謝你們，夥伴們。歡迎，塔拉克。

I want to maybe just start with the with renewable goals. It seems like a business where you should have maybe a little bit better visibility. I'm curious if you think your -- if there's any share shifts happening in that business and if you think there's any chance that actually starts to recover in 2025?

我想也許從可再生目標開始。這似乎是一個你應該有更好的知名度的企業。我很好奇您是否認為該業務中是否發生了任何份額變化，以及您是否認為有機會在 2025 年真正開始復甦？

So let me take that. And of course, feel free to add comment, Tarak.

那麼就讓我接受吧。當然，塔拉克，請隨意添加評論。

So as you have seen now in our wind has come down quite a bit from a renewables perspective. Sonar remains quite strong overall for us, and we don't see a big change in the sonar market. But rather we see from renewable view following renewables site as segment more a wind being impacted up.

正如您現在所看到的，從再生能源的角度來看，我們的風力已經下降了很多。聲納對我們來說總體上仍然相當強大，我們沒有看到聲納市場發生重大變化。相反，我們從再生能源的角度來看，隨著再生能源領域的發展，風能受到了更大的影響。

The volumes have come down in line with the orders that we saw from '23 up to '24. Over the last few months, we've seen a stabilization of our order intake rate at a low level compared to the past, quite a bit lower than we have seen in the past. So we expect them based on the discussions we've had with our customers and partners, we expect that low level to continue for quite some time.

銷量下降與我們從 23 年到 24 年看到的訂單一致。在過去的幾個月裡，我們的訂單接收率與過去相比穩定在較低水平，比過去低得多。因此，根據我們與客戶和合作夥伴的討論，我們預計這種低水準將持續相當長的一段時間。

And there have been pockets in the wind business where the pricing has not been what we consider to be an acceptable level. And as we've discussed in the past, we have decided not to participate in the very, very low price levels. But all in all, our wind business on the order intake rate has been stable. And we are in -- it's not the great profitables of the past, but we are still happy with where we see our wind business from a returns perspective. Are we at this point, we don't see a pickup of the wind business as I can see it from the different visits and the inputs of the department.

在風電產業中，有些地方的定價並未達到我們認為可接受的水平。正如我們過去討論過的，我們決定不參與非常非常低的價格水平。但總而言之，我們的風電業務的接單率一直保持穩定。我們現在的利潤不再像過去那麼豐厚，但從回報的角度來看，我們仍然對風電業務感到滿意。就目前而言，我們還沒有看到風電業務有所回升，正如我從不同的訪問和部門的投入中看到的那樣。

And I think if you ask me, but I think the key here is in the market has stabilized, fell below. We were certainly down again, sizably in the quarter. The rate of decline has gone down as we've accounts have gotten easier demand into sort of stabilized. As Tarak mentioned, the order intake rates are sort of in line. So we feel like at this point, it's not getting worse. And then it's just a question of at what point does it reflect the growth? And at this point, I would not expect that in 2025.

我想如果你問我，但我認為這裡的關鍵是市場已經穩定，跌破了。我們肯定再次下滑，而且在本季大幅下滑。隨著我們的帳戶需求變得更容易趨於穩定，下降率已經下降。正如塔拉克所提到的，訂單接收率在某種程度上是一致的。所以我們覺得目前情況並沒有變得更糟。那麼問題就在於它在什麼時候反映了成長？就目前而言，我預計 2025 年會出現這種情況。

And then Tarak, since you've been doing sort of your initial assessment and tour here, I'm curious if there's a chance that we may see any type of a shift. And I'm thinking maybe there's some businesses that kind of appear noncore to you that might not be current. It could be divested, I guess or maybe on capital allocation, one of the questions I always get is why you guys don't buy back more stock relative to your M&A. And I'm just curious if any of that has bubbled up as potentially something you might want to shift a little bit.

然後塔拉克，由於您一直在這裡進行初步評估和遊覽，我很好奇我們是否有機會看到任何類型的轉變。我想也許有些業務對你來說似乎是非核心業務，但可能不是目前的業務。我猜它可能會被剝離，或者可能會在資本配置上，我經常遇到的問題之一是為什麼你們不回購更多與併購相關的股票。我只是好奇其中是否有任何一個可能成為您可能想要稍微改變的東西。

Thanks, Stephen.

謝謝，史蒂芬。

Okay. As I said, we are looking at the entire portfolio value very much with the perspective that you just described. It's too early to come back with any conclusions or even first indications, 60 days in learning about the business and looking at the portfolio is kind of where we are. At the appropriate time, we'll come back with what we think about the evolution of Timken might look like, but that will be at a later date.

好的。正如我所說，我們正在從您剛才描述的角度來看待整個投資組合的價值。現在得出任何結論甚至初步跡象還為時過早，60 天的時間了解業務並查看投資組合就是我們現在的情況。在適當的時候，我們會回來提出我們對鐵姆肯公司發展的看法，但這將是稍後的事情。

When it comes to share buybacks, as we have said, our bias remains disciplined, allocation with a bias towards M&A and we have done quite a few deals in the last 18 months. We are actively executing and integrating those deals if something comes along that looks very interesting. On the smaller side, yes; on the medium-sized, we'll take our look, but that's our frame of mind right now when it comes to both on M&A. But also if nothing comes along, we will continue. as we've always said, with the share buyback. And that's our bias.

在股票回購方面，正如我們所說，我們的偏見仍然是有紀律的，配置偏向於併購，我們在過去 18 個月完成了相當多的交易。如果出現看起來非常有趣的事情，我們就會積極執行和整合這些交易。從較小的方面來看，是的；對於中型企業，我們會進行觀察，但這就是我們目前在併購方面的心態。但如果沒有任何進展，我們也會繼續。正如我們一直所說的，透過股票回購。這就是我們的偏見。

If I could just add, Steve, obviously, we bought a lot of shares back over the last 10 years, but we have also done quite a bit of M&A. And we do -- we become pretty firm believers in what the M&A can do for us in terms of diversifying the portfolio, making Timken better, being accretive to growth, being accretive to margins, improving the overall package, et cetera.

如果我可以補充一下，史蒂夫，顯然，我們在過去 10 年裡回購了很多股票，但我們也進行了大量併購。我們確實如此——我們非常堅信併購可以為我們帶來什麼，包括多元化投資組合、讓鐵姆肯公司變得更好、促進成長、增加利潤、改善整體方案等等。

So I think you'll continue to see a mix of both, obviously, this year with EBITDA, this should be in flat or actually down from an EBITDA standpoint. We're managing the balance sheet carefully as well, but I think you'll continue to see both, but with the continued bias for the M&A.

因此，我認為您將繼續看到兩者的混合，顯然，今年的 EBITDA 應該持平或實際上從 EBITDA 的角度來看是下降的。我們也在仔細管理資產負債表，但我認為您將繼續看到兩者，但對併購的持續偏見。

Thank you.

謝謝。

Thanks, Stephen.

謝謝，史蒂芬。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

Thank you. Morning, everyone.

謝謝。早安，大家。

We know the organic revenue trends for the quarter and you just spoke to order rates in terms of wins, maybe touch on those other other large end markets, how are sales through Q3 into Q4? And you mentioned the anticipation of production rates being pulled back a bit further late in the quarter that been factored into your guide. Any additional detail or color you can offer on that front would be helpful.

我們知道本季的有機收入趨勢，您剛剛談到了訂單率的勝利，也許還涉及其他大型終端市場，從第三季到第四季的銷售情況如何？您提到了對本季末生產力進一步回落的預期，這一點已納入您的指南中。您可以在前面提供的任何其他細節或顏色都會有所幫助。

Thanks, Brian.

謝謝，布萊恩。

And I mean, as we've said, we've seen a bit more softness in the general industrial area than you had indicated earlier. So that's the more lighter side of the portfolio from products and solutions that we offer to the market. So that's the way we've seen a bit of softness.

我的意思是，正如我們所說，我們在一般工業領域看到的疲軟程度比您之前指出的要軟一些。因此，這是我們向市場提供的產品和解決方案組合中更輕鬆的一面。這就是我們看到的一點柔軟的方式。

And the comment on net working capital and inventory is precisely the area where we are going to focus. So we are running a bit ahead with our production compared to the demand that we are now tracking down the capacity, as you mentioned. Based on what we see as incoming order intake rates plus being a bit more cautious when it comes to the fourth quarter, as you know, sequentially with all of its down on the fourth quarter compared to third quarter. And that's the same piece that we see every every year.

而對淨營運資本和庫存的評論正是我們要關注的領域。因此，正如您所提到的，與我們現在正在追蹤產能的需求相比，我們的生產有點超前。根據我們所看到的傳入訂單接收率，加上在第四季度時更加謹慎，如您所知，與第三季度相比，第四季度的訂單量依次下降。這就是我們每年都會看到的同一件作品。

From the inorganic side, I would say our acquisitions have performed quite well and have been supporting us this quarter. I'm not sure I'm answering your question precisely, but that's what I assume you're asking. So we're quite happy with both the growth and the performance and profit contributions, including the accretion that our recent acquisitions, specifically Des-Case Luggage, but then CGI. already in the month of September since we're closed, we almost had the whole month. Those have contributed quite positively to our performance, and we expect them to continue based on what we see in the end markets.

從無機方面來看，我想說我們的收購表現相當不錯，並在本季度為我們提供了支持。我不確定我是否準確回答了您的問題，但這就是我認為您要問的問題。因此，我們對成長、業績和利潤貢獻感到非常滿意，包括我們最近收購的成長，特別是 Des-Case Luggage，然後是 CGI。自從我們關門以來已經是九月了，我們幾乎已經度過了整個月。這些對我們的業績做出了相當積極的貢獻，我們預計它們將根據我們在終端市場看到的情況繼續下去。

And maybe if I could just add, Brian. So certainly when we look at revenue trends through the quarter, did get a little bit better in September off of July and August. But as Tarak mentioned, I've just given what we're seeing, hearing from our customers are planning for that more pronounced slowdown in December, which was primarily the basis for the lower top line guide certainly for the rest of the year.

也許我可以補充一下，布萊恩。因此，當我們觀察整個季度的收入趨勢時，可以肯定的是，與 7 月和 8 月相比，9 月確實有所改善。但正如塔拉克所提到的，我剛剛給出了我們所看到的情況，我們的客戶正在計劃 12 月出現更明顯的放緩，這主要是今年剩餘時間收入指南較低的基礎。

And then relative to the quarter, I would tell you that the some of the the one-off costs I talk about really kind of popped up late in the quarter when you think about the currency and the customer accrual certainly were things that popped late in the quarter. But overall, that was sort of the sales trends.

然後，相對於本季度，我會告訴你，當你考慮貨幣和客戶應計費用時，我談到的一些一次性成本確實是在本季度末突然出現的，這肯定是在本季度末突然出現的。但總體而言，這就是銷售趨勢。

And then from an order book standpoint, I'd say broadly, the backlog is or order book is in line flattish sequentially from the second quarter, still down a little bit year over year, kind of call it mid single digits, which was kind of what we were last quarter as well. So the order book stable and and I would say certainly supportive of the rest of the year guide.

然後從訂單簿的角度來看，我想說的是，從第二季度開始，積壓訂單或訂單簿連續持平，但同比仍略有下降，可以稱之為中個位數，這很好我們上個季度的情況也是如此。因此訂單穩定，我想說肯定會支持今年剩餘時間的指導。

Understand and appreciate the detail.

理解並欣賞細節。

And specific to industrial motion. You know, belts and chain, interfacing headwinds to the year. Are you willing to speak to on a year-on-year basis, how much the EBITDA compression in that platform will impact the segment? And then as we look to 2025, with Mexico capacity being added fully ramped at that point, how much of a reset or a good guide that may be an outlook?

以及特定於工業運動。你知道，皮帶和鏈條，連結今年的逆風。您是否願意談談該平台的 EBITDA 壓縮將對該細分市場產生多大影響？然後，當我們展望 2025 年時，隨著墨西哥產能的增加，到那時，有多少重置或一個好的指南可能是一個前景？

Yes. Certainly. I mean, when you think about them, industrial motion for the full year and margins will be primarily impacted by some certainly the lower organic volume and belts and change certainly be a part of that, as well as the expectation for for higher cost -- higher manufacturing costs year over year, the new plant ramp is part of that as well. And then we would have some positive pricing offset in that. So fast forward to next year, that new plant ramp, as we've talked about before, it can be a headwind of a couple of million, of course. You have two plants operating in trying to shift production from one to the other, but we get to the end of the year, into the early part of next year, the US plant should come down and production will shift fully to Mexico.

是的。當然。我的意思是，當你想到它們時，全年的工業運動和利潤率將主要受到一些因素的影響，當然，有機產量和輸送帶的下降和變化肯定是其中的一部分，以及對更高成本的預期－製造成本逐年上升，新廠的擴建也是其中的一部分。然後我們就會有一些正面的定價抵銷。快進到明年，新工廠的擴建，正如我們之前討論過的，當然，這可能會帶來數百萬美元的逆風。有兩家工廠正在運營，試圖將生產從一個工廠轉移到另一個工廠，但到今年年底、明年初，美國工廠應該會關閉，生產將完全轉移到墨西哥。

It will continue to ramp up and from a productivity standpoint, as you move to call it the first half of next year, and then that should be a nice improvement for us from a margin standpoint at the cost of operating that Mexico facility will be significantly lower than operating similar capacity.

從生產力的角度來看，它將繼續提高，正如你將其稱為明年上半年一樣，然後從利潤的角度來看，這對我們來說應該是一個很好的改進，因為墨西哥工廠的營運成本將顯著增加低於同類營運能力。

Right now, we have the (inaudible) factor. Unfortunately, we have lower volumes from the market and we have three plants running for their full overheads versus the two that we expect in the future. So when you combine that and a slightly lower ramp up on the Mexico, as we've said before. That facility is not ramping up as fast as we'd like up and all of those combined results in the headwinds for the industrial motion business. When it comes to belts, specifically, the chain part has been doing a bit better, but I can recall what I can add. Thanks.

現在，我們有（聽不清楚）因素。不幸的是，我們的市場銷售量較低，而且我們有三個工廠以全額管理費用運行，而我們預計未來只有兩個工廠。因此，當你將其與墨西哥稍低的坡道結合時，正如我們之前所說。該設施的建設速度沒有我們希望的那麼快，所有這些都綜合起來給工業運動業務帶來了阻力。具體來說，當談到皮帶時，鏈條部分做得更好一些，但我記得我可以添加什麼。謝謝。

Okay, understood. Appreciate the details.

好的，明白了。欣賞細節。

Thanks, Bryan.

謝謝，布萊恩。

Thanks, Bryan.

謝謝，布萊恩。

David Raso, Evercore ISI.

大衛·拉索，Evercore ISI。

Hi. Thank you for the time. I know around the election and so forth. Hopefully, some of the customers' softness for year-end is, hopefully, more of a pause and they're waiting for a little more clarity. But seeing the organic growth in the fourth quarter implied down a little bit more than we saw in the third quarter. Even though side of the wind business stabilizing as a little surprising.

你好。謝謝你的時間。我知道選舉等等。希望一些客戶對年底的疲軟態度更多的是暫停，他們正在等待更加清晰的情況。但第四季的有機成長意味著比第三季的下降幅度要大一些。儘管風電業務的穩定有點讓人意外。

You made a comment about the orders. I think more importantly, if I heard correctly about the company. When we think of organic growth trying to swing back positive, can you give us any sense of what you're hearing from your customers to start '25, some of their commentary around December slowdown, but what it can mean for next year?

您對訂單發表了評論。我認為更重要的是，如果我正確地了解了這家公司。當我們想到有機成長試圖恢復正值時，您能否告訴我們您從 25 世紀開始從客戶那裡聽到的消息，他們對 12 月經濟放緩的一些評論，但這對明年意味著什麼？

I think I read out that there's a lot of work you're going to do on getting costs and really rethinking the company to some degree on the portfolio, whatever may be. But obviously, it's a lot easier when you get the top line working back in your favor. Not looking for exact guidance here, but is there anything you're hearing from your customers that we could see positive organic at some point in the first half of next year? Or should we assume it's down and it's more of a cost story for right now? And then I have a quick follow up on, I think.

我想我讀到，你需要做很多工作來獲取成本，並在某種程度上真正重新考慮公司的投資組合，無論是什麼。但顯然，當你的收入恢復對你有利時，事情就會變得容易得多。在這裡不是尋找確切的指導，但是您從客戶那裡聽到了什麼，我們可以在明年上半年的某個時候看到積極的自然結果嗎？或者我們應該假設它已經下降並且現在更多的是一個成本故事？我想，然後我會快速跟進。

I think, as you know, David, that from Q4 to Q1, we always see an increase in business because of the nature of Timken's portfolio and our customers' ordering patterns and revenue patterns of PCs or we expect that to also be the case this year? I mean, depends, I know we've had in the fourth quarter, that's one of the starting point. But we expect Q4 to Q1 to be a healthy increase, as always as every year, the last many, many years, so that is expected to continue.

我認為，大衛，正如你所知，從第四季度到第一季度，由於鐵姆肯公司產品組合的性質以及我們客戶的PC 訂購模式和收入模式，我們總是看到業務成長，或者我們預計也會出現這種情況年？我的意思是，視情況而定，我知道我們在第四節已經做到了，這是起點之一。但我們預計第四季度到第一季將實現健康成長，就像過去很多年以來每年一樣，因此預計這種情況將持續下去。

When it comes to forecasting 2025. one of the reasons we have -- the outlook we have is because we are at this point focused primarily on 2024, and we get quite a bit of mixed signals on 2025 this point. As we said, some of our businesses have been doing quite well. I think the only business that looks strong, expected to be strong. But places where we are weak, we haven't seen the signs that provide us with any degree of confidence on 2025 at this point. So I would say from our our team's point of view, it's difficult to call it 2025, even if it we'd love to call it. But even the Q1 looks something that we are not going to do at this point. And would you wait until a bit later and then go back with the numbers on 2025.

當談到預測 2025 年時，我們的展望的原因之一是因為我們目前主要關注 2024 年，而我們在這一點上得到了相當多關於 2025 年的混合信號。正如我們所說，我們的一些業務表現相當不錯。我認為唯一看起來強勁、預期也會強勁的業務。但在我們薄弱的地方，我們目前還沒有看到任何跡象可以讓我們對 2025 年充滿信心。所以我想說，從我們團隊的角度來看，很難稱之為 2025 年，即使我們很樂意稱之為 2025 年。但即使是 Q1 看起來也是我們目前不打算做的事情。你會等到稍後再回到 2025 年的數字嗎？

David, if I could just add. I mean certainly, I think Tarak said it well, we're not going to comment on '25 today. I will tell you one thing from an OEM customer standpoint, our assumptions for the fourth quarter would be that they -- our inventory destock should be largely complete with OEMs by that time. So that would be certainly one positive factor, but too early to talk about 2025 from a growth standpoint.

大衛，如果我能補充一下的話。我的意思是，當然，我認為塔拉克說得很好，我們今天不會對 25 發表評論。我將從 OEM 客戶的角度告訴您一件事，我們對第四季度的假設是，到那時，我們的庫存去庫存基本上應該由 OEM 完成。因此，這肯定是一個積極因素，但從成長的角度談論 2025 年還為時過早。

And then to your question about the fourth quarter implied organic, you're exactly right. It does imply that it would be slightly worse year over year. Then the third quarter and you're right, renewable, as we said, was stable. We do have a couple of other markets that we're planning for lower year over year or worsening year-over-year performance in the third quarter. One would be aerospace would be after several quarters of running really strong. Rail, again, after seven quarters, run a really strong.

然後對於你關於第四季隱含有機的問題，你是完全正確的。這確實意味著情況會逐年惡化。然後第三季度，你是對的，正如我們所說，再生能源是穩定的。我們確實有幾個其他市場，我們計劃在第三季同比下降或同比惡化。其中之一是航空航天業，經過幾個季度的運行後將變得非常強勁。鐵路在七個季度之後再次表現強勁。

And then our services business are hitting some tougher comps. So that would be the -- those would be the main drivers for the delta, if you will, between the third quarter year over year, organic and the implied fourth quarter one.

然後我們的服務業務面臨一些更嚴峻的挑戰。所以，如果你願意的話，這將是第三季同比、有機成長和隱含的第四季成長之間三角洲的主要驅動因素。

The one thing I can add to what Bill just said is we do see many of our customers. We probably adjusted their inventories down from a level that you're comfortable. So with rare exception, we don't see it further destocking on part of the customer that, of course, some segments like with it continues to be up a bit of a challenge even for our customers. But for the most part, we see that with reduce, plus we have also reduced our lead times quite a bit in the course of this year, given the shortfalls that we see in the buses improvement. So we are sitting there with short lead times and we believe the customers are for the most part at the levels of inventory if you're comfortable with their demand. That would be a conclusion or let's say an observation if that helps.

對於比爾剛才所說的，我可以補充的一件事是我們確實看到了許多客戶。我們可能將他們的庫存從您滿意的水平下調了。因此，除了極少數例外，我們認為部分客戶不會進一步減少庫存，當然，即使對我們的客戶來說，某些細分市場仍面臨一些挑戰。但在大多數情況下，我們看到隨著減少，加上我們在今年的過程中也大大縮短了交貨時間，因為我們看到公車改進方面存在不足。因此，我們的交貨時間很短，我們相信，如果您對客戶的需求感到滿意，那麼他們大部分都處於庫存水平。如果有幫助的話，這將是一個結論，或者說是一個觀察。

That's very helpful. And just so I understand on the micro tends to follow up is that for the quarter, did I hear correctly that there was about 100 basis points of one-time costs? I noticed that the discrete costs you mentioned. But in total, did you feel there was almost 100 basis points of one time? Because I'm just trying to figure out if that is the case. (inaudible) 0.9 for the quarter, but then the fourth quarter implying like 15.4 to 15.9, somewhere in that range.

這非常有幫助。正如我所理解的，微觀上傾向於跟進的是，對於本季度，我是否正確地聽到了大約 100 個基點的一次性成本？我注意到你提到的離散成本。但總的來說，你覺得一次有差不多100個基點嗎？因為我只是想弄清楚是否是這樣。 （聽不清楚）本季為 0.9，但第四季則意味著 15.4 到 15.9，在該範圍內的某個位置。

And I'm just trying to make sure I know the step down and maybe price cost gap was negative again in the fourth quarter. There's a lot in there, but trying to figure out that delta sequentially again.

我只是想確保我知道降級幅度，也許第四季度價格成本差距再次為負值。裡面有很多東西，但嘗試再次按順序找出增量。

No, it's a great question, David. So I would tell you we would say it was about 100 bps of negative margin relative to our expectations and I wouldn't call them the other. It was sort of a little bit one-offs in the quarter. In particular, we had the big spike in logistics cost. And I will tell you we're not expecting that to recede in the fourth quarter. So we did kind of play that one a little bit conservatively into the fourth quarter, not assuming that's going to come down.

不，這是一個很好的問題，大衛。所以我想告訴你，我們會說，相對於我們的預期，負保證金約為 100 個基點，我不會稱之為另一個。這在本季有點一次性。特別是物流成本大幅上漲。我會告訴你，我們預計這種情況不會在第四季消退。所以我們在第四節打得有點保守，沒有假設情況會下降。

But the other two, the currency was really -- it was a revamp of cash outside the US and other balances would not expect that to recur. And then the customer accrual was typically an unusual thing. A knowledge we took against one of our customer accounts that would that would not be expected to recur still. So yes, relative to expectations, it was 100 bps a fast-forward to the fourth quarter onwards, behind the margins there. It really is a combination of the lower organic revenue relative to the prior guide in the step down, both sequentially and year on year.

但另外兩種貨幣實際上是美國以外的現金的改造，其他餘額不會期望這種情況會再次發生。然後，客戶成長通常是一件不尋常的事情。我們從一個客戶帳戶中獲取的資訊預計不會再次發生。所以，是的，相對於預期，從第四季度開始快進了 100 個基點，落後於那裡的利潤率。這實際上是相對於之前的下調指引的有機收入較低的組合，無論是連續還是同比。

And then the other half would be just our continued expectations for higher costs heading into the end of the year just because when customer slow down and we're trying to take inventory out, we do find ourselves often in the past, we find ourselves with a higher cost coming through. As a result, we decided to be a little cautious on the fourth quarter cost outlook heading into the end of the year.

然後另一半只是我們對進入年底的更高成本的持續預期，因為當客戶放緩並且我們試圖清除庫存時，我們確實發現自己經常在過去，我們發現自己與更高的成本隨之而來。因此，我們決定對年底前的第四季成本前景持謹慎態度。

Very helpful.

非常有幫助。

Maybe an addition to what Phil just said. As you know, we have some structural cost adjustments and investments in Mexico and in India. So those would start to kick in more into 2025 and later into 2025. So we are carrying a significant amount of costs in terms of duplication and factory ramp ups in the fourth quarter where the volumes will not be there, but the investments in getting those facilities are quite significant. And those are expected to come online in terms of volume contributions and profitability contributions only into some part in '25.

也許是對菲爾剛才所說的話的補充。如您所知，我們在墨西哥和印度進行了一些結構性成本調整和投資。因此，這些措施將在 2025 年以及更晚的 2025 年開始生效。因此，我們在第四季度的複製和工廠擴建方面承擔了大量成本，而產量不會達到那裡，但獲得這些設施的投資相當大。就銷售貢獻和獲利貢獻而言，這些預計僅在 25 年的部分時間內上線。

For the belts investment, probably early '25. Sizable investments we made in India for the structural cost adjustments more like second half of next year. So that's also in addition, the reason why we are a bit cautious on fourth quarter.

對於皮帶投資，可能是 25 年初。我們在印度進行了大量投資，以進行結構性成本調整，更像是明年下半年。這也是我們對第四季持謹慎態度的原因。

Helpful.

有幫助。

Thanks, David.

謝謝，大衛。

Mike Shlisky. DA Davidson.

麥克·什利斯基.DA戴維森。

Yes ,hi, good morning. Thanks for taking my questions.

是的，嗨，早安。感謝您回答我的問題。

Maybe to follow-up on your left answers there. If we can maybe strip out a lot of those one-time discrete costs still in the quarter. I'm just trying to appeal, you aren't going to give details about the cost reductions you've got specifically until February, but perhaps maybe a two-part question. I know we don't get the actual update until February, but you're saying that's not making those cost reductions this month or for the next few months that maybe -- are you targeting any kind of specific incremental or decremental margin range that's different than the past. Just some broad shows us that what you're looking to do with these cost reduction?

也許是為了跟進你左邊的答案。如果我們能夠在本季剔除大量一次性離散成本的話。我只是想呼籲，您不會提供有關二月份之前具體的成本削減的詳細信息，但也許可能是一個由兩部分組成的問題。我知道我們要到二月才能得到實際的更新，但你說這並沒有在本月或接下來的幾個月內實現成本削減——你的目標是否是不同的特定增量或遞減利潤範圍比過去。只是一些廣泛的資訊向我們展示了您希望如何降低成本？

Yes, yes. Thanks, Mike. Maybe I'll start and then ask Tarak to chime in as well. So you know, well relative to the costs, we've been working on taking costs out all year, as I mentioned, that will continue. We will target the incremental actions at areas within the business that I've seen, the kind of the most pronounced declines, if you will, from a demand standpoint, and then obviously on functions supporting those areas.

是的，是的。謝謝，麥克。也許我會開始，然後請塔拉克也插話。所以你知道，相對於成本，我們一整年都在努力削減成本，正如我所提到的，這將繼續下去。我們將針對我所看到的業務領域的漸進行動，如果你願意的話，從需求的角度來看，最明顯的下降，然後顯然是支持這些領域的職能。

The objective would be to get the cost down more in line with current demand levels. And then obviously, if we inflect, we hope, will benefit from that. And then obviously also bring our margins in line with our long-range targets, which we put out a couple of years ago at our Investor Day. And we're still working towards towards (inaudible). So from a cost standpoint, I wouldn't expect incremental stuff maybe going a little bit of a benefit in fourth quarter, probably more targeted towards 2025.

目標是進一步降低成本，以滿足當前的需求水準。顯然，如果我們改變，我們希望能夠從中受益。然後顯然還要使我們的利潤率與我們幾年前在投資者日提出的長期目標保持一致。我們仍在努力實現（聽不清楚）。因此，從成本的角度來看，我不認為增量內容可能會在第四季度帶來一點好處，可能更有針對性地到 2025 年。

I would add that in certain product lines, we had a bit too big in terms of our jack-up size, issue size, you would call it, and there we are trimming. But it's a more very specific two product lines where we see the gap between demand and our own capacity. And please remember in the fourth quarter, we had also slowing down our operations, I mentioned we have too much inventory. So obviously, when we slow down the operations in order to drive cash flow, that will have a bit of a negative impact because of the under-absorption in those facilities that idling. So we've got a bit ahead on on our production this year and now we are stepping back and that is also a contributing factor in in the fourth quarter of performance that you see from us in terms of the outlook.

我想補充一點，在某些產品線中，我們的自升式尺寸、發行尺寸（你可以這麼稱呼它）有點太大了，我們正在調整。但這是更具體的兩條產品線，我們看到需求與我們自己的產能之間存在差距。請記住，在第四季度，我們也放慢了營運速度，我提到我們的庫存太多了。顯然，當我們放慢營運速度以推動現金流時，這將會產生一些負面影響，因為那些閒置設施的吸收不足。因此，我們今年的生產取得了一些進展，現在我們正在後退，這也是您從我們的前景中看到的第四季度業績的一個影響因素。

And as Phil said, we are being a bit cautious. And given the market environment that we see in terms of the forecast for 2024. We all hope that after six quarters or more at all with seven quarters of a decline in the market demand, we do see some upside going into 2025. But it's difficult at this point for us to see that the end of call.

正如菲爾所說，我們有點謹慎。考慮到我們對 2024 年的預測所看到的市場環境。我們都希望，在市場需求連續七個季度下降、六個季度或更長時間之後，我們確實能看到 2025 年出現一些上行空間。但目前我們很難看到通話結束。

And then maybe one more comment, Mike, on decrementals, because I know you referenced decremental. Certainly the the implied guide would have decrementals at higher than what we would typically run. I think the implied guide would be somewhere in the mid 40s to organic for the year. But keep in mind, price cost is -- can be lumpy as you move through periods like this. And in 2023, we ran very strong decrementals in 2023 incrementals and decrementals as we move through the year. And if you can stack the two years together, the net organic decremental over that two-year period is sub 20. So I think we have been pulling the levers and executing well across that timeframe. It's just as we said, we sort of got stuck this quarter with lower volume, kind of neutral price cost. And some of these one-offs that I talked about earlier, which combined really put us in a difficult spot from a margin standpoint for the quarter.

麥克，也許還有一個關於減量的評論，因為我知道你提到了減量。當然，隱含的指南的減量會高於我們通常運行的值。我認為今年有機食品的隱含指南將在 40 多歲左右。但請記住，當您經歷這樣的時期時，價格成本可能會很不穩定。2023 年，我們在 2023 年增量和減量中進行了非常強勁的減量。如果你可以將這兩年疊在一起，那麼這兩年期間的淨有機減少量將低於 20。所以我認為我們在這段時間內一直在拉動槓桿並執行得很好。正如我們所說，本季我們陷入了銷量較低、價格成本中立的困境。我之前談到的一些一次性事件，從本季利潤率的角度來看，這些事件加起來確實讓我們陷入了困境。

Okay. Okay, great. And just to follow-up on the on the margin story going forward. So I heard that you mentioned you're looking to maybe pursue a growth more aggressively, certainly makes a lot of sense. I'm just wondering if you've got cost reduction taking place in '25 targeted or broader.

好的。好的，太好了。只是為了跟進未來的邊緣故事。所以我聽說你提到你希望更積極地追求成長，這當然很有意義。我只是想知道你們是否有在 25 年或更廣泛的目標範圍內降低成本。

But you've also got maybe some investments to make in your R&D or engineering. I want to make sure that we are setting 2025 to be a year of net reductions the cost structure and not mostly offset by increased investments elsewhere. I just want make sure that the cost structure is kind of permanently staying lower than it was '25, though, than it was '24. Any comments there would be appreciated.

但您可能還需要在研發或工程方面進行一些投資。我想確保我們將 2025 年定為成本結構淨削減的一年，而不是被其他地方投資的增加所抵消。我只是想確保成本結構永遠低於 25 年，但低於 24 年。如有任何意見，我們將不勝感激。

I think maybe I'll take this. And then Phil, can you please add?

我想也許我會接受這個。然後菲爾，你能補充一下嗎？

A lot of what we're doing is to adjust to capacity and demand. And within your question, the assumption is that as the demand that's equal to this year then probably yes, we were quite low cash costs that are lower than this year, given both the investments that we have made in the new factories, as well as what we see in terms of the demand better.

我們正在做的很多事情都是為了適應產能和需求。在你的問題中，假設是，由於需求與今年相同，那麼考慮到我們在新工廠的投資以及我們在需求方面看到的更好。

However, that the big dip is the demand continues to be around the same levels in '25 as '24. So what we're trying to do now is to ensure that we adjust our costs in line with demand, and that's going to be the main driver. And yes, we are going to take a look and see which product lines and portfolio where we see profitable growth opportunities and we're going to invest in them. But in order to do that, we would have to make some investments in that portfolio.

然而，最大的下降是 25 年的需求與 24 年的水準大致相同。因此，我們現在要做的就是確保根據需求調整成本，這將是主要驅動力。是的，我們將看看哪些產品線和投資組合可以帶來獲利成長機會，並且我們將對其進行投資。但為了做到這一點，我們必須對該投資組合進行一些投資。

So net, it's difficult for us to talk about 2025 because we don't have a view on what the top line looks like. But our going in thinking, as a team, we need to address costs where we see the challenges. And we need to think about growth where we see the opportunities. And right now, that's not where we'd like it to be in terms of the bottom line performance. But this is something we're working on now collectively and specifically on the product lines where we see challenges in terms of performance.

所以說，我們很難談 2025 年，因為我們不知道營收會是什麼樣子。但作為一個團隊，我們需要在遇到挑戰時解決成本問題。我們需要在看到機會的地方考慮成長。目前，就底線性能而言，這並不是我們所希望的。但這是我們現在正在共同努力的事情，特別是在我們看到性能方面面臨挑戰的產品線上。

Right, if I could just add, Mike. As we invest, obviously, we've got targets out there for growth, margins, et cetera. As we invest, we always look for those investments to be funded in within the confines of the commitments we make around margins, the commitments we make around cash flow, et cetera. So I think over the years, we've done a very good job of making investments in the business to grow and improve margins and improve competitiveness, M&A, et cetera, all within the confines of the of the targets we've set and the commitments we made around them, around margin, et cetera. I think that would continue.

好的，如果我可以補充一下，麥克。顯然，當我們投資時，我們有成長、利潤率等目標。當我們投資時，我們總是在我們圍繞利潤、現金流量等方面所做的承諾的範圍內尋找這些投資的資金來源。因此，我認為多年來，我們在業務投資方面做得非常好，以增長和提高利潤率並提高競爭力，併購等，所有這些都在我們設定的目標和目標的範圍內。圍繞利潤等做出的承諾。我認為這種情況會持續下去。

Fair enough. Thanks for the time.

很公平。謝謝你的時間。

Thanks, Mike.

謝謝，麥克。

Thank you, Mike.

謝謝你，麥克。

Steve Barger, KeyBanc Capital Markets.

Steve Barger，KeyBanc 資本市場。

Thanks. Good morning. Tarek, you said there were some wind business where pricing is so bad you don't want to participate. Is there one main competitor or multiple competitors out there willing to take business at margins you consider unacceptable? And are you seeing competitive pressures like that in any of your other end markets?

謝謝。早安.塔里克，你說有些風電業務的定價太糟糕了，你不想參與。是否有一個或多個主要競爭對手願意以您認為不可接受的利潤來獲取業務？您是否在其他終端市場中看到了類似的競爭壓力？

Thanks, Steve.

謝謝，史蒂夫。

Now having been to China and got to spend time with -- this is exactly where we see the biggest price pressure is in China. A few competitors, not many, but there's a few competitors where we don't see those price levels as long term sustainable. They are more capacity based concepts rather than a more sustained profitability based thinking. So there, we do see and we have walked away from business.

現在已經去過中國並花時間了——這正是我們看到中國最大的價格壓力的地方。有一些競爭對手，但數量不多，但有一些競爭對手，我們認為這些價格水平無法長期持續。它們更多是基於能力的概念，而不是基於更持續的獲利能力的思維。所以，我們確實看到了，我們已經放棄了業務。

But in the meantime, Andreas and the team are working on ensuring that our cost structure is in line with both expectations from a performance point of view and also from a customer point of view. So everybody is looking to reduce. We're developing new products and new processes to meet the specific requirements of wind in order to make sure we can still participate in the market.

但同時，Andreas 和團隊正在努力確保我們的成本結構既符合效能角度的期望，也符合客戶角度的期望。所以大家都在尋求減少。我們正在開發新產品和新工藝來滿足風能的特定要求，以確保我們仍然能夠參與市場。

But it is a difficult market in a very low volume scenario compared to where it was a couple of years ago. So we do see competitive pressures, but I will not say in the segments that we participate in we see many. But we do see a few local competitors who are a bit more aggressive and willing to take business at the levels that we don't find particularly interesting or acceptable at this point. Until our own product costs are a bit more in line with our own gross margin requirements. So that is a kind of a continuous process of that. Andreas and the team are working to make sure we stay both competitive and participate in the market.

但與幾年前相比，在銷量非常低的情況下，這是一個困難的市場。所以我們確實看到了競爭壓力，但我不會說在我們參與的細分市場中我們看到了很多。但我們確實看到一些本地競爭對手更具侵略性，並且願意以我們目前認為特別有趣或不可接受的水平開展業務。直到我們自己的產品成本更符合我們自己的毛利率要求。所以這是一個連續的過程。安德烈亞斯和團隊正在努力確保我們保持競爭力並參與市場。

Yes, I would say, Steve, that's really isolated to wind from U.S. and China, in particular. I mean, we don't see if anything, we feel like we're gaining share where we're targeting versus the opposite. And in China, I mean, Tarak summarized it extremely well.

是的，我想說，史蒂夫，這確實與美國和中國的風隔絕了。我的意思是，我們沒有看到任何東西，我們覺得我們正在獲得目標市場份額，而不是相反。我的意思是，在中國，塔拉克總結得非常好。

But I would tell you it's not unlike what you would see in any market that's down as significantly as China wind is down, where customers are looking for price concessions and willing to move business to get at it, at least in or at least in the near term. So it's not totally unique, obviously, the China dynamic adds a little bit to it.

但我想告訴你，這與你在任何市場中看到的情況並沒有什麼不同，這些市場的下滑程度與中國風電衰退一樣嚴重，客戶正在尋求價格優惠，並願意透過轉移業務來獲得這種優惠，至少在中國或至少在中國。所以這並不是完全獨特的，顯然，中國的動態增加了一點。

But overall, Tarak summarized it well. That would be the only spot. And again, it was by choice as much as anything else.

但總的來說，塔拉克總結得很好。那將是唯一的地方。再說一次，這和其他事情一樣都是出於選擇。

And to continue on your other question. Do we see it in other segments or we're down quite a bit in many other segments, but we don't see the same, let's say, both behavior. Plus also, we don't see the same need for us to walk away, quote unquote, from some business. So I mean, you've seen that from Phil and then we've talked about it over the course of last year. We don't see the same behavior in other segments.

並繼續你的另一個問題。我們是否在其他細分市場中看到了這種情況，或者我們在許多其他細分市場中下降了很多，但我們沒有看到相同的行為，比如說，這兩種行為。另外，我們認為我們沒有必要放棄某些業務。所以我的意思是，你已經從菲爾那裡看到了這一點，然後我們在去年就討論了這一點。我們在其他細分市場中沒有看到相同的行為。

Yes, that's good to hear.

是的，很高興聽到這個消息。

That's why prices don't (multiple speakers)

這就是為什麼價格不（多個發言者）

Sorry, go ahead.

抱歉，請繼續。

Go ahead, please.

請繼續。

Sure. Sure. Yes, I understand that you don't want to take a view to 2025, but we are ultimately at the end of this year, will be six quarters in the negative growth. EPS will be down around 20% year over year per your guidance. My question is when you think about destocking in inventory trends, the cost actions that you expect to take and your capital deployment options, do you have enough in your control to drive double digit EPS growth next year? Or is it even too early to say that based on how you're thinking about the broader environment?

當然。當然。是的，我理解你不想展望 2025 年，但我們最終到今年年底，將出現六個季度的負增長。根據您的指導，每股收益將年減 20% 左右。我的問題是，當您考慮庫存趨勢中的去庫存、您期望採取的成本行動以及您的資本部署選項時，您是否有足夠的控制能力來推動明年每股收益兩位數的成長？或者根據您對更廣泛環境的看法，現在說這個還為時過早嗎？

I would say it's a bit too early based on how you see the broader environment. Certainly, our balance sheet says we could do it. But we want to, as we said, we want to make sure from a share purchase perspective, you want to make sure that we have the adequate funds available for investing in the business. So at this point, we are at least being more cautious about 2025. And that's what I would say, just being a bit more cautious about 2025 at this point.

我想說，根據你對更廣泛環境的看法，現在還為時過早。當然，我們的資產負債表顯示我們可以做到。但正如我們所說，我們希望從股票購買的角度確保我們有足夠的資金可用於投資該業務。所以目前來看，我們至少對2025年更加謹慎。這就是我想說的，只是現在對 2025 年要更加謹慎。

Yes, I agree. I mean, I think we really need to see how the market situation develops as we move into '25, with a better view of that in February because that will really drive that, really, the answer to your question. But to your point, we're taking actions on the cost side, including the incremental actions we talked about today. Customers, the customer inventories are at a good level, should remain at a good level head into the end of the year. So as you get to the end of the year, I think we'll be in a good position. But until we really see how the markets develop, too soon to say.

是的，我同意。我的意思是，我認為我們確實需要了解進入 25 年後市場狀況如何發展，並在 2 月對此有更好的看法，因為這將真正推動您問題的答案。但就您而言，我們正在成本方面採取行動，包括我們今天討論的增量行動。客戶，客戶庫存處於良好水平，到年底應該會保持在良好水平。因此，到今年年底，我認為我們將處於有利位置。但在我們真正了解市場如何發展之前，現在下結論還為時過早。

Understood. Thank you.

明白了。謝謝。

Thanks, Steve.

謝謝，史蒂夫。

Joe Ritchie, Goldman Sachs.

喬·里奇，高盛。

Thank you and welcome, Tarek.

謝謝你，歡迎你，塔里克。

Maybe my first question just on that discrete customer grow that you mentioned. Was there was that sensibly like bad debt expense? I just wanted to get some clarification around that item.

也許我的第一個問題是關於您提到的離散客戶成長。是否有像壞帳費用這樣合理的事情？我只是想就該項目進行一些澄清。

Yes, that's exactly, it was a it was a collectability accruals or reserve that we set up for one specific customer in the quarter in the renewable energy sector. If you look at our history around collectibility, it's quite strong. I mean, I would stack up against anybody, but occasionally, we will have a situation like this where we got to set up a reserve. It's typically very few and far between and we're watching it closely, obviously, but collections have generally been stable and consistent with prior years. This was sort of an outlier that we ended and do we set up a reserve for.

是的，正是如此，這是我們在本季度為再生能源領域的一個特定客戶設立的可收集應計費用或儲備。如果你看看我們的收藏歷史，你會發現它相當強大。我的意思是，我會與任何人對抗，但偶爾，我們會遇到這樣的情況，我們必須建立一個儲備。顯然，它的數量通常非常少，而且間隔很遠，我們正在密切關注，但收藏品總體上是穩定的，並且與前幾年保持一致。這是我們結束的一個異常值，我們是否為此設立了儲備。

Okay. Again, I get it happens, I guess on the logistics side of things you guys are referencing that -- it seemed like that was a pretty big impact this quarter to margin. Seems like it's going to impact the fourth quarter. I guess, you know, Tarak, as you're thinking about improving structural costs, is there anything that you guys can do with the way you're set up on the logistics side to maybe a kind of offset at times when you feel a big spike in logistics costs?

好的。再次，我明白這種情況發生了，我想在你們所提到的物流方面——這似乎對本季的利潤率產生了相當大的影響。看來這將影響第四季。我想，塔拉克，當您考慮改善結構成本時，您是否可以透過在物流方面的設置方式做一些事情，以便有時當您感到物流成本大幅上漲？

Yes. I mean, one of the -- logistics is something that has been quite volatile in the last four years. It has not necessarily follow the normal economic pattern. So I would say the Red Sea and our challenges are perhaps the main reason why we see the bigger logistics costs. And you combine that with the structural changes we are making in terms of our supply locations, two of our demand locations, it's an area that we will take a look at as we look at the evolution of Timken in terms of how we serve the different markets and from what geographies. So I would say at this point, I have an answer or we have an answer, but it's an area where we will examine how we meet the different geographies, whether it's Americas, Europe, Middle East, Africa and Asia. How do we design our supply chains, we are not as dependent on the logistics at least said that in the regional level.

是的。我的意思是，物流在過去四年中一直非常不穩定。它不一定遵循正常的經濟模式。所以我想說，紅海和我們面臨的挑戰也許是我們看到物流成本更高的主要原因。將其與我們在供應地點、兩個需求地點所做的結構性變革相結合，當我們審視鐵姆肯公司在如何服務不同客戶方面的演變時，我們將關注這一領域。地區。所以我想說，在這一點上，我有一個答案，或者我們有一個答案，但在這個領域，我們將研究如何滿足不同地區的需求，無論是美洲、歐洲、中東、非洲還是亞洲。我們如何設計我們的供應鏈，我們不那麼依賴物流，至少在區域層面上是如此。

But at this point it's a long-term discussion and decision. And at this point, we're not ready to say we're going to change the way we operate based on logistics. But it's something to consider as we look into the future, as far as the supply demand, the alignment.

但目前這是一個長期的討論和決定。目前，我們還沒有準備好說我們將改變基於物流的營運方式。但當我們展望未來時，就供應需求和協調而言，這是需要考慮的事情。

Yes. You know, certainly, Joe, we've lengthened our supply chains over the last ten years. And some of that's been trying to get to a lower cost suppliers, very competitive suppliers appeal across the globe, frankly. And that always comes with lower cost. You've got the extra logistics, but net, it's been a benefit to the company and logistics has always been very manageable. We've had the last few years worth of spend a little bit choppy and spiky, including this quarter, it sort of spike on us and we didn't expect it, we didn't see it coming. We did expect it to be a little bit higher, but not as much as it came through. So it will normalize as we as we move forward. We're not we're not planning on it for the fourth quarter. It will normalize. And but net, the logistics has kind of come with lower cost and the material side. And those two kind of go hand-in-hand.

是的。你當然知道，喬，在過去十年我們已經延長了我們的供應鏈。其中一些一直在努力尋找成本更低的供應商，坦白說，極具競爭力的供應商在全球範圍內都具有吸引力。而這總是伴隨著更低的成本。你有額外的物流，但淨而言，這對公司來說是有好處的，而且物流一直非常容易管理。過去幾年我們的支出有點波動和尖峰，包括本季度，它對我們來說有點尖峰，我們沒有預料到，我們沒有看到它的到來。我們確實預計它會高一點，但沒有達到那麼高。因此，隨著我們的前進，它將會正常化。我們沒有計劃在第四季這樣做。它將正常化。但總的來說，物流的成本和材料方面都較低。這兩者是齊頭並進的。

Got it. Okay, great. Thanks, guys. Appreciate it.

知道了。好的，太好了。謝謝，夥計們。欣賞它。

Thank you, Joe.

謝謝你，喬。

Michael Feniger, Bank of America.

麥可費尼格，美國銀行。

Great. Thank you, guys, for just squeezing me in.

偉大的。謝謝你們，夥伴們，你們把我擠了進去。

Just builds on the spreads a little bit on inventory builds in the quarter on relative to your sales. It seems like that's going to be working that down to get for free cash flow in the fourth quarter. Do you feel like of where you think demand finish as the year? Do you feel like your inventories are going to be in line with that demand or if demand stays where it is at the end of Q4 into 2025? Is there still some work to do there?

只是建立在本季度庫存相對於您的銷售額的一點利差之上。看起來這將在第四季度獲得自由現金流。您認為今年的需求結束情況如何？您認為您的庫存是否會與需求保持一致，或者需求是否會保持在 2025 年第四季末的水平？那裡還有工作要做嗎？

I would say in general, our net working capital is, I mean, if you look over historical net working capital volume, we are on the high side compared to the past, so we have a homework to do in terms of reducing our net working capital as a percentage of revenue in general. It's high today and we will have to make process changes. And Mike, in terms of how we run our supply chains to serve the customers to drive dropped it down. And we will work on that together over the course of the next quarters to redesign and ensure that our net working capital for a certain level of inventory at this level of fill rates and performance while our distribution and our customers lower going into the future than it has been in the past. So that's something we're working on.

我想說，總的來說，我們的淨營運資本是，我的意思是，如果你查看歷史淨營運資本量，我們與過去相比處於較高水平，因此我們在減少淨營運資本方面需要做功課資本佔總收入的百分比。今天的溫度很高，我們將不得不改變流程。麥克，就我們如何運作供應鏈來為客戶提供服務以推動其下降而言。我們將在接下來的幾個季度中共同努力，重新設計並確保我們的淨營運資本在一定水平的庫存中處於這種填充率和績效水平，而我們的分銷和我們的客戶在未來的發展要低於它已經成為過去。這就是我們正在努力的事情。

Yes. Hey, Mike, just for clarification. I think in the quarter, we had acquisitions and currency. And when you look at the balance sheet organically, we would say inventory came down by close to $10 million, you see that. And if you look at the cash flow statement, we'd expect more to come out in the fourth quarter. And as Tarak mentioned, even after that, there's still opportunity move an ad for Timken to get more efficient in managing them, both inventory and working capital more broadly.

是的。嘿，麥克，只是為了澄清一下。我認為在本季度，我們進行了收購和貨幣交易。當您有機地查看資產負債表時，我們會說庫存減少了近 1000 萬美元，您會看到這一點。如果你看一下現金流量表，我們預期第四季會出現更多數據。正如塔拉克所提到的，即使在那之後，鐵姆肯公司仍然有機會移動廣告，以更有效地管理庫存和營運資金。

Okay. That's helpful.

好的。這很有幫助。

I didn't think about the -- you're right about the acquisition. And guys, just curious, just thinking about some moving pieces talking about price versus cost. And Timken has done a great job in pricing even in this year. It's been positive for starting to see an industrial channel pricing really starting to flatten out when we look at some somewhat and our thinking for Q4 and going forward. I'm curious, just big picture, how you're thinking 2025, is it price cost neutral. Could it be positive price risk costs? And if that is positive pressure, is that you guys leaning more on the cost measures on that cost bucket to drive that? Just any big picture? Thoughts on that would be helpful. Thanks, everyone.

我沒有考慮過——你關於收購的看法是對的。夥計們，只是好奇，只是想一些關於價格與成本的感人片段。即使在今年，鐵姆肯公司在定價方面也做得非常出色。當我們審視一些情況以及我們對第四季和未來的想法時，開始看到工業通路定價真正開始趨於平緩，這是正面的。我很好奇，從大局來看，您對 2025 年的看法是，價格成本是否中性。它可能是正的價格風險成本嗎？如果這是積極的壓力，那麼你們是否更依賴該成本桶上的成本措施來推動這一目標？只要有大圖嗎？對此的思考將會有所幫助。謝謝大家。

Yes, I think a big picture level, we don't expect pricing to be anything other than flattish in 2025. And as you can imagine, it won't be like it was in 2023, but we expect to continue to see flattish pricing in 2025 from a midstream perspective.

是的，我認為從大局來看，我們預計 2025 年定價將持平。正如您可以想像的那樣，情況不會像 2023 年那樣，但從中游角度來看，我們預計 2025 年定價將繼續持平。

And then obviously, distribution will be a bit better and some areas might not be. But overall we expect to see flat pricing based on what we see and based on what the -- because costs have gone up, not down. And usually the downturn when prices have gone down have been primarily driven by the input cost going down, as you can see from third quarter and also the expectations on fourth quarter busted labor inflation. So there isn't a natural driver for the price to go down in the overall market, other than trying to fill factories of investment that we will do. So that isn't there an investment discipline and a market like we've seen this year I think, at least we think pricing will hold up. Let's see what actually happens in 2025, but that's how we see it. We don't see any intrinsic driver of lower significant lower input costs to really drive the price down overall.

顯然，分佈會好一點，而某些地區可能不會。但總體而言，我們期望看到基於我們所看到的和基於的情況的統一定價 - 因為成本已經上升，而不是下降。通常，價格下跌時的經濟低迷主要是由投入成本下降所推動的，正如您從第三季度看到的那樣，以及對第四季度勞動力通膨破滅的預期。因此，除了我們將進行的投資工廠的填補之外，整個市場的價格下跌並沒有自然的驅動因素。因此，我認為，不存在像我們今年看到的那樣的投資紀律和市場，至少我們認為定價會保持不變。讓我們看看 2025 年實際上會發生什麼，但這就是我們的看法。我們沒有看到任何明顯降低投入成本的內在驅動因素能夠真正推動整體價格下降。

Thanks, everyone.

謝謝大家。

Thanks, Mike.

謝謝，麥克。

Tim Thein, Raymond James.

提姆泰恩，雷蒙詹姆斯。

All right. Thank you.

好的。謝謝。

Just a quick one. A lot of discussion here in terms of matching supply and demand. And I saw one of your peers in Europe announced it pretty sizable restructuring plan this morning, and maybe it is more Europe specifically. You can broaden it just in terms of -- given the challenges in the in the auto industry, combined with industrial production in Germany that's been down by three years in a row. I think about the overall kind of supply demand balance. And what historically there are some fluctuation when the auto industry softens up, you see some of that capacity kind of move around. Maybe just can you speak to that -- what you're seeing now just in terms of Europe more generally. Thank you.

只是快一點。這裡有很多關於供需配對的討論。我今天早上看到歐洲的一位同行宣布了相當大的重組計劃，也許更具體地說是歐洲。考慮到汽車產業面臨的挑戰，再加上德國工業生產連續三年下降，你可以將其擴大。我考慮的是整體的供需平衡。從歷史上看，當汽車產業疲軟時，會出現一些波動，你會看到一些產能發生了變化。也許您可以談談您現在所看到的歐洲更普遍的情況。謝謝。

Thanks, Tim. Yes, it has been soft, as Phil mentioned, as we've discussed for quite some time. And I think you've said almost a year of it almost looks like year three in Europe, in terms of the soft demand. Overall, we are making couple of capacity adjustments based on the portfolio, based on what we see mid to long term as as the needs of the business. And those are being managed by Chris, when we're talking about industrial, automation and motion, and then obviously the same thing addressed by Andreas. So those are not necessarily short-term discussion -- decisions, they are more mid to long-term.

謝謝，蒂姆。是的，正如菲爾所提到的，正如我們已經討論了相當長一段時間的那樣，它一直很軟。我想你已經說過，從需求疲軟的角度來看，歐洲將近一年幾乎就像第三年。總體而言，我們正在根據我們認為的中長期業務需求，根據產品組合進行一些產能調整。當我們談論工業、自動化和運動時，這些都是由 Chris 管理的，顯然 Andreas 也談到了同樣的事情。因此，這些不一定是短期討論 - 決定，它們更具中長期性。

So those actions are being taken and short-term actions to adjust capacity, whether it's our furloughs or small adjustments in individual factories. And those are also being managed at the individual plant level and not everything is down. As we said, we have quite a few of our product lines doing well, and that's why we need to make it more targeted, more specific and more product line rather than even a location specific discussions and decisions. But this is something we've been doing for quite some time and we'll continue to do it. There's something sizable, we'll announce it as we are expected to. But that's a homework that the team is engaged on now, pretty regularly, and now a bit more given the softness that we see.

因此，我們正在採取這些行動，並且是調整產能的短期行動，無論是我們的休假還是個別工廠的小幅調整。這些也在單一工廠層級進行管理，並不是一切都停止了。正如我們所說，我們有相當多的產品線做得很好，這就是為什麼我們需要使其更有針對性、更具體、更多的產品線，而不是特定地點的討論和決策。但這是我們已經做了相當長一段時間的事情，我們將繼續這樣做。有重大事件，我們將按預期宣布。但這是團隊現在經常做的一項作業，考慮到我們看到的疲軟情況，現在做得更多了。

Okay. Let me leave it there. Thank you.

好的。讓我把它留在那裡。謝謝。

Thanks, Tim.

謝謝，蒂姆。

There are no remaining questions at this time. Sir, do you have any final comments or remarks?

目前沒有剩餘問題。先生，您最後還有什麼意見或評論嗎？

Yes. Thanks, Emily. And thank you, everyone, for joining us today. And if you have any further questions after today's call, please contact me. Thank you. And this concludes our call.

是的。謝謝，艾米麗。感謝大家今天加入我們。如果您在今天的通話後還有任何疑問，請與我聯絡。謝謝。我們的通話到此結束。

Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.

謝謝大家今天加入我們。我們的通話到此結束，您現在可以斷開線路了。