Element Solutions (NYSE:ESI) 2025 Conference December 04, 2025 09:20 AM ET Company ParticipantsBen Gliklich - CEOConference Call ParticipantsNone - AnalystNoneOkay. So we'll go ahead and get started. We're very thankful to have Element Solutions, Ben Gliklich, the CEO for the company here to chat with us today. Fascinating story of the company. Again, we've been around this a long time. It started off as something called Platform Holdings, you know, years ago. Had a troubled area, and, you know, Ben and his ...

Core Viewpoint - The company reported a revenue of 1.229 billion yuan for the first half of 2025, marking a year-on-year growth of 9.48%, and a net profit attributable to shareholders of 208 million yuan, up 16.30% year-on-year [3][4]. Group 1: Financial Performance - In Q2 2025, the company achieved a revenue of 602 million yuan, a decrease of 1.91% year-on-year and a 4.12% decline quarter-on-quarter [3]. - The company's net profit for Q2 2025 was 112 million yuan, reflecting a year-on-year increase of 16.23% and a quarter-on-quarter growth of 17.47% [3]. - For H1 2025, the company’s core net profit after deducting non-recurring items was 162 million yuan, representing an 18.39% year-on-year increase [3]. Group 2: Business Segments - The precursor materials segment generated a revenue of 342 million yuan in H1 2025, with a year-on-year growth of 24.86% and a sales volume of 215.6 tons, up 31.4% year-on-year [4]. - The gross margin for the precursor materials business reached 50.4%, an increase of 1.9 percentage points year-on-year [4]. - The specialty gases segment achieved a revenue of 749 million yuan in H1 2025, growing 4.59% year-on-year, with a sales volume of 5,854 tons, up 13.5% year-on-year [4]. - The gross margin for the specialty gases business decreased by 11.2 percentage points to 35.3% due to price reductions in related products [4]. Group 3: Strategic Developments - The company plans to distribute a cash dividend of 1.8 yuan per 10 shares, amounting to approximately 124 million yuan, resulting in a cash dividend ratio of 59.9% [5]. - The company has diversified its product offerings from a single product (MO source) in a single field (LED) to multiple products (precursors, specialty gases, photoresists) across various industries (IC, LCD, LED, new energy) [5]. - The photoresist business saw a doubling of revenue in H1 2025, supported by stable supply of ArF photoresist products and accelerated expansion of supporting dilution products [5].

Core Viewpoint - The company has shown significant growth in revenue and profit for the year 2024, indicating a strong performance in its core business areas [2][3]. Financial Performance - In 2024, the company achieved revenue of 2.352 billion yuan, a year-on-year increase of 38.08% - The net profit attributable to shareholders reached 271 million yuan, up 28.15% year-on-year - The net profit after deducting non-recurring items was 193 million yuan, reflecting a growth of 53.19% year-on-year - In Q4 2024, the company reported a single-quarter revenue of 588 million yuan, a year-on-year increase of 39.12% but a quarter-on-quarter decrease of 8.30% - The net profit for Q4 2024 was 5.37 million yuan, marking a return to profitability compared to the previous year, but a significant quarter-on-quarter decline of 93.82% [2]. Business Segment Performance - The precursor business (including MO source) generated revenue of 578 million yuan in 2024, a substantial year-on-year growth of 70.3%, with a corresponding gross margin increase of 8.7 percentage points to 48.6% - The precursor sales volume reached 383 tons, representing an 83.4% increase year-on-year - The specialty gas business achieved revenue of 1.506 billion yuan, a year-on-year increase of 22.3%, but the gross margin decreased by 6.2 percentage points to 39.9% - Specialty gas sales volume was 11,800 tons, up 25.1% year-on-year - The company recorded an asset impairment loss of 127 million yuan for the year, with Q4 2024 accounting for 103 million yuan of this loss, impacting the quarterly performance [3]. Strategic Development - The company has evolved from a single product (MO source) and single sector (LED) to a comprehensive electronic materials supplier with multiple products (precursors, specialty gases, photoresists) and industries (IC, LCD, LED, new energy) - In 2024, revenue from the IC sector exceeded 30% of total revenue, growing by 106% year-on-year - The company is accelerating the application of phosphine mixtures in the new energy sector and has gained a first-mover advantage in the domestic IC application of ARC products - The company is actively exploring high-end applications in compound semiconductors and optical coatings, alongside achieving over 10 million yuan in revenue from ArF photoresists in 2024 [4].