Element Solutions Inc Q2 FY2025 earnings call

• Electronics business: Driven by hyperscaler investment in data centers, wafer-level packaging growth over 20%, and power electronics double-digit growth. - Transformation: Shifted from disparate portfolio to unified organization leading in emerging categories. - R&D and facilities: Opened new research center in Bangalore, India; building labs in Thailand and Vietnam; Kuprion mid-scale manufacturing site under construction, expected to commission end of 2025.

Electronics: Delivered fifth consecutive quarter of high single-digit organic growth. Semiconductor Solutions' wafer-level packaging products saw sales grow over 20% in Q2. Power electronics grew double-digit. Industrial & Specialty: Saw meaningful margin improvement; excluding graphics divestiture impact, segment adjusted EBITDA growth would have been 10%. Core industrial surface treatment had stable or growing adjusted EBITDA despite volume pressure. Absolute terms: Electronics organic growth, Semiconductor Solutions sales growth, Power electronics double-digit growth, Industrial & Specialty margin improvement. Revenue contribution: Electronics is a key growth driver, Industrial & Specialty shows margin improvement while navigating volume pressures.

• Increased full-year adjusted EBITDA outlook to $530 million to $550 million. - Third quarter 2025 adjusted EBITDA expected in range of $140 million to $145 million, a 5% sequential improvement. - Cautious on tariffs and EV market headwinds, but well-positioned to seize opportunities in volatility.

• Volatile global trade dynamics and unclear tariff policy impact on demand. - Uncertain macroeconomic environment affecting near-term performance.

Q: Ben, any sense of Q2 strength related to pull forward of demand?

A: No pull forward seen; pace of data center investment robust, smartphone cycle not recurring.

Q: Electronics sales at new peak, volumes not back to prior peak?

A: Electronics revenue at new peak, volumes not; semiconductor business at peak, circuitry and assembly not due to smartphone cycle and industrial market malaise.

Q: Power electronics back half expectations?

A: Should continue growth but rate may slow due to some customer-specific issues, but long-term outlook strong.

Q: Industrial EBITDA growth higher than organic sales?

A: Attributable to corporate allocation shift and offshore business growth, expected to continue in second half.

Q: Kuprion production updates?

A: First mid-scale active copper manufacturing site under construction, expected to commission end of 2025; need for another site in next 18 months.