AD HOC ANNOUNCEMENT PURSUANT TO ART. 53 LR SECOND QUARTER/FIRST HALF YEAR | 2025 "We delivered strong profitability in the second quarter of 2025, demonstrating resilience amidst a challenging environment for our sector. Notably, Catalysts returned to growth, with volumes increasing by 5 % compared to the previous year. This strong performance in Catalysts, along with Adsorbents & Additives, was the main driver of the 200-basis point improvement in our EBITDA margin before exceptional items, which was furth ...

Financial Data and Key Metrics Changes - Adjusted EBITDA was $113 million, down 19% year over year, or 10% excluding portfolio actions, driven by lower organic sales and production volume [7][15] - Sales for Q3 were $463 million, down 15% year over year, including a $53 million impact from portfolio optimization [14] - Adjusted EPS, excluding acquisition amortization, was $1.04, down 30% from the prior year [16] - Adjusted EBITDA margin was 24.4%, down 120 basis points [15] Business Line Data and Key Metrics Changes - Life Sciences sales were $162 million, down 17% year over year, primarily due to portfolio optimization initiatives [19] - Personal Care sales were $147 million, down 16% year over year, driven by portfolio optimization actions [25] - Specialty Additives sales declined 13% to $131 million, with organic sales and volumes both down 11% [30] - Intermediates generated $33 million in sales, down from $36 million in the same period last year [22] Market Data and Key Metrics Changes - Demand patterns remain mixed across the portfolio, with pharma steady and recovering, while personal care shows encouraging signs [42] - Specialty additives and intermediates are still facing headwinds, particularly in China [43] - Approximately 85% of the portfolio is tied to consumer end markets, many of which are non-cyclical and more resilient [11] Company Strategy and Development Direction - The company has completed its portfolio optimization and restructuring program, which remains ahead of schedule [12] - Focus on cost savings and operational discipline to support strong margins [6] - The company aims to drive differentiation and margin-accretive growth through innovation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term opportunities despite current mixed demand [42] - The company is monitoring regulatory developments and does not anticipate a material direct impact on fiscal year results from tariff-related uncertainties [44] - Management highlighted the importance of maintaining a disciplined capital allocation strategy while focusing on productivity and innovation [49] Other Important Information - The company generated nearly 100% free cash flow conversion in the quarter, demonstrating the strength of its underlying business [8] - Liquidity at quarter end was over $800 million, providing flexibility for strategic investments [17] Q&A Session Summary Question: Insights on fiscal year 2026 and market recovery - Management discussed the cleaner portfolio and stable demand expected in personal care and pharma, with potential upside in specialty additives depending on market conditions [54][56] Question: Clarification on cost savings and restructuring - Management confirmed that restructuring and network optimization actions are complete, with expected savings flowing through to the P&L [78][80] Question: Stability in personal care markets - Management noted stability in mass brands, while the prestige segment has shown variability, particularly in biofunctional actives [70][72] Question: Near-term sales guidance and segment performance - Management indicated expectations for a sales increase in Q4 driven by specific portfolio activities, particularly in personal care and pharma [95][98]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **Lithium market** within the **China Specialty Chemicals** industry, particularly regarding lepidolite mining and its implications for lithium supply and pricing. Core Insights and Arguments 1. **Lepidolite Mine Closures**: - Market sentiment is shifting towards the expectation of lepidolite mine closures in China due to regulatory changes. The Yichun government has requested local miners to re-submit mining documentation by September 30, 2025, which may lead to a need for new permits from the Central government under the new Mineral Resources Law effective July 1, 2024 [1] 2. **Impact on Lithium Supply**: - Lepidolite contributed 154,000 tons (kt) and 98kt of carbonate in 2024 and the first half of 2025, respectively, accounting for approximately 23% of the domestic carbonate market. If closures occur, the lithium market is expected to rebalance, potentially driving prices for lithium and spodumene upward [1] 3. **Lithium Pricing Trends**: - As of July 25, 2025, the average selling prices (ASP) for lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) increased to Rmb72,900 per ton and Rmb63,100 per ton, respectively, compared to Rmb63,700 per ton and Rmb57,400 per ton on July 10, 2025. This indicates a significant price increase over a two-week period [2] 4. **Production and Inventory Changes**: - Lithium carbonate production in China decreased by 3% week-over-week to 18,630 tons. Specifically, production from lepidolite fell by 13%, while brine and recycled lithium saw minor declines. Total inventory of Li2CO3 remained stable at 143,170 tons, with downstream players' inventories increasing by 4% [2] Additional Important Information - **Regulatory Environment**: The new Mineral Resources Law may impose stricter regulations on mining operations, which could affect the supply chain and pricing dynamics in the lithium market [1] - **Market Dynamics**: The anticipated mine closures and regulatory changes could lead to a tighter supply of lithium, which is critical for battery production and electric vehicle manufacturing, thereby influencing broader market trends [1][2] This summary encapsulates the critical insights from the conference call regarding the lithium market, particularly focusing on the implications of regulatory changes and market dynamics in China.

Company Performance - RPM International reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.60 per share, and up from $1.56 per share a year ago, representing an earnings surprise of +7.50% [1] - The company posted revenues of $2.08 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 3.21%, compared to $2.01 billion in the same quarter last year [2] - Over the last four quarters, RPM International has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Outlook - RPM International shares have declined approximately 8.2% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The current consensus EPS estimate for the upcoming quarter is $1.91 on revenues of $2.06 billion, and for the current fiscal year, it is $5.66 on revenues of $7.62 billion [7] - The company's earnings outlook and management commentary will be crucial for understanding future stock movements [4][6] Industry Context - The Chemical - Specialty industry, to which RPM International belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable position [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact RPM's stock performance [5]

Core Viewpoint - Major specialty chemicals companies are committed to climate goals despite geopolitical tensions and economic uncertainties, viewing sustainable development as a strategic priority and essential for growth [2][3]. Group 1: Investment in Sustainable Solutions - Companies are investing in greener solutions driven by customer demand and regulatory pressures, seeing these investments as key to mutual development with clients [2]. - Arkema plans to integrate sustainability into its core strategy, emphasizing that sustainable development is not a fleeting trend but a strategic priority [2]. - Evonik aims to invest over €3 billion in "next-generation solutions" from 2021 to 2030, targeting over 50% of sales from these products by 2030 [3]. Group 2: Emphasis on Carbon Neutrality - Clariant has doubled its targets for direct and indirect greenhouse gas emissions reductions, highlighting the urgency of addressing climate-related risks and opportunities [3]. - Lanxess remains committed to achieving carbon neutrality in production by 2040 and across the entire value chain by 2050 [3]. - Wacker Chemie links sustainable development directly to financial growth, planning investments in renewable energy and digitalization to transition to net-zero emissions [4]. Group 3: Market Dynamics and Challenges - The market for sustainable chemicals faces short-term challenges due to trade barriers and cost premiums associated with sustainable alternatives [2]. - The production costs of green chemicals are currently higher than fossil-based products, necessitating policy support to facilitate the transition [5]. - Companies recognize that sustainable development is not merely a charitable endeavor but a means to reduce investment risks for clients [4]. Group 4: Regional Insights and Future Outlook - The European market is leading in sustainable development, but opportunities exist globally, with varying paths depending on regional contexts [5]. - There is a need for a balance between growth and environmental concerns in Asia, while the U.S. shows a recent slowdown in sustainable momentum despite ongoing client demand [5]. - Companies remain optimistic about the future, anticipating a resurgence in support for sustainable development as customer focus on product sustainability improves [5].

Core Viewpoint - The article discusses the significant role of Kroma sil® in the pharmaceutical industry, emphasizing its advanced chromatography solutions that enhance drug purification efficiency and stability, particularly in the context of rising demand for GLP-1 receptor agonists and other innovative therapies [2][11]. Group 1: Industry Trends - The global pharmaceutical market is undergoing rapid transformation, driven by increasing prevalence of lifestyle diseases such as type 2 diabetes and obesity, which in turn boosts the demand for targeted therapeutic drugs [2][11]. - Local pharmaceutical companies are shifting from generic drug production to innovative drug development as patent expirations approach, creating a competitive landscape for advanced purification solutions [2][11]. Group 2: Company Overview - Nouryon is a global specialty chemicals company operating in over 80 countries, with a workforce of more than 8,200 employees, serving various sectors including personal care, pharmaceuticals, and agriculture [3]. - Kroma sil® has been dedicated to the development and production of high-purity silica gel chromatography media since 1988, leveraging over 30 years of technological expertise to address modern drug purification challenges [2][5]. Group 3: Product and Technology - Kroma sil® products are designed to reduce drug purification costs significantly, with the ability to lower costs by over 70% in insulin production processes due to their longer lifespan and higher sample loading capacity [5][7]. - The product line includes various pore sizes (60Å, 100Å, 300Å) and particle sizes (1.8 to 13 microns), catering to a wide range of purification needs from small molecules to large biomolecules [7]. Group 4: Customer Needs and Solutions - Key customer requirements in the pharmaceutical sector include stability and scalability of chromatography media, which Kroma sil® addresses through its robust mechanical strength and chemical stability [8][9]. - The company employs a "same factory, same process" strategy to ensure consistency in chromatography media across different production scales, facilitating seamless scale-up from laboratory to industrial production [9][10]. Group 5: Market Strategy and Growth - Kroma sil® is focusing on expanding its capacity and technological innovation to meet the growing demand for GLP-1 receptor agonists, with plans to double production capacity by early 2027 [11][12]. - The company is committed to deepening its presence in the Chinese market, collaborating with local enterprises to develop customized purification solutions that align with domestic policies and market needs [13]. Group 6: Competitive Advantage - Kroma sil®'s competitive edge lies in its technological leadership and extensive experience, having accumulated nearly 40 years of collaboration with major pharmaceutical companies, which provides valuable insights for local firms [10][13]. - The company remains optimistic about the long-term growth prospects in the pharmaceutical sector, viewing it as one of the most attractive growth areas despite short-term market fluctuations [13].

Overview - The special chemicals industry in China is experiencing rapid growth due to the development of the semiconductor and electronics manufacturing sectors, with a projected market size of 913.05 billion yuan in 2024, reflecting a year-on-year growth of 12.25% [1][7]. Development Background - Recent government policies have encouraged the development of high-end special chemicals through financial support and tax incentives, leading to technological upgrades and optimization of the industry structure [3]. - Strict environmental regulations have prompted companies to invest in cleaner production technologies, which, while increasing short-term costs, are beneficial for sustainable development in the long run [3]. - Companies are increasing R&D investments and collaborating with academic institutions to enhance innovation capabilities and improve technology levels [3]. Industry Chain - The upstream of the special chemicals industry includes petroleum, natural gas, and coal chemical industries, providing essential raw materials [5]. - The downstream applications span various sectors, including agriculture, pharmaceuticals, electronics, automotive, and daily chemicals, with specific uses in pesticide production, drug development, semiconductor manufacturing, and personal care products [5]. Current Development - The demand for electronic chemicals, crucial for high-end manufacturing like semiconductors and display panels, is increasing alongside the growth of the automotive sector, particularly electric vehicles [7]. Competitive Landscape - The industry features a diverse range of companies, including international giants like BASF, Dow, and Bayer, as well as domestic leaders such as Sinopec and Wanhua Chemical, with varying scales and technological capabilities [9]. - Sinopec is recognized as one of the largest integrated energy and chemical companies in China, with projected revenues of 3.08 trillion yuan and a gross profit margin of 20.33% in 2024 [11]. - Wanhua Chemical, a global chemical new materials company, anticipates revenues of 182.1 billion yuan in 2024, with a significant portion coming from its polyurethane and petrochemical segments [13]. Development Trends - Future trends indicate that special chemicals companies will increase R&D investments to develop new materials and technologies, such as bio-based chemicals and smart materials, to meet emerging market demands [15].

Company Performance - H. B. Fuller reported quarterly earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.1 per share, and showing an increase from $1.12 per share a year ago, resulting in an earnings surprise of +7.27% [1] - The company posted revenues of $898.1 million for the quarter ended May 2025, slightly surpassing the Zacks Consensus Estimate by 0.01%, but down from $917.11 million year-over-year [2] - Over the last four quarters, H. B. Fuller has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - H. B. Fuller shares have declined approximately 15.7% since the beginning of the year, contrasting with the S&P 500's gain of 3.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.22 on revenues of $894.11 million, and for the current fiscal year, it is $4.13 on revenues of $3.5 billion [7] Industry Context - The Chemical - Specialty industry, to which H. B. Fuller belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Group 1: Company Overview - Syensqo, a specialty chemicals company, was established in December 2023 after spinning off from Solvay Group, with a focus on various sectors including home, food, automotive, and healthcare [1][6] - The company employs over 13,000 people globally, with approximately 1,800 employees in China, and operates 62 production sites worldwide, including 6 in China [1][6] - Syensqo has invested 4 billion yuan in its Shanghai research and innovation center since 2005, which is one of the largest of its kind globally [1] Group 2: Market Outlook - The specialty chemicals industry is currently facing volatility and uncertainty due to tariffs and international conflicts, but these challenges are viewed as temporary [2][7] - China is seen as a crucial market for Syensqo, with the potential for business revenue to double, as the country demands more complex and sustainable products [6][9] - The company anticipates that the Asian market will grow faster than other regions, with current revenue from China accounting for about 15% of total earnings [6][9] Group 3: Innovation and Technology - Syensqo emphasizes the importance of innovation, with 20% of annual sales coming from products launched in the last five years, indicating a commitment to continuous product renewal [11][12] - The company has integrated generative AI into its operations, enhancing innovation processes and sales channels [5][12] - Collaborations with local universities and research institutions are prioritized to foster talent and drive innovation in the specialty chemicals sector [12][13] Group 4: Strategic Initiatives - Syensqo is focused on localizing its operations, implementing a strategy of "local for local" to enhance resilience and cost-effectiveness in its supply chains [7][10] - The company is actively investing in expanding its production capabilities in China, including recent expansions at its Changshu facility [8][9] - Syensqo aims to support Chinese automotive companies in establishing a presence in Europe, leveraging its understanding of local regulations and market dynamics [10]

Group 1: Industry Overview - The U.S. specialty chemicals sector is facing increased uncertainty due to trade tensions complicating supply chains and weak demand in many end markets [1] - Despite the challenges, most major producers maintain their annual operating forecasts, indicating that localized production will become the norm in many regions of the industry [1] Group 2: Sherwin-Williams Company - Sherwin-Williams reported a net profit of $503.9 million for the first quarter, remaining stable compared to the same period last year, while net sales decreased by 1.1% to $5.31 billion [1] - Adjusted earnings per share were $2.25, exceeding analysts' expectations of $2.16 [1] - The CEO noted that approximately 80% of sales revenue comes from the U.S., minimizing the impact of tariffs, and most raw materials are sourced locally [1] Group 3: Ecolab Inc. - Ecolab's adjusted earnings per share were $1.50, a 12% increase year-over-year, aligning with analysts' expectations [1] - The CEO highlighted the unpredictable operating environment, weak end-market demand, and rapidly changing international trade policies, yet the company maintains its profit outlook for 2025 [1] Group 4: PPG Industries - PPG Industries reported adjusted earnings per share of $1.72, surpassing analysts' expectations of $1.62 [2] - Sales volume increased by 1%, with a slight rise in sales prices [2] - The CEO mentioned collaboration with suppliers and customers to adapt to global product flows and mitigate cost impacts [2]