Quaker Chemical Corporation Q2 FY2025 earnings call

• Delivered organic volume growth of 2% Y/Y, led by Asia/Pacific. - Sales up 4% Y/Y with 2% organic volume growth, Dipsol acquisition performing in line. - Gross margins 36%, within target range; adjusted EBITDA $75.5M with 15.6% margin. - Actions to reduce complexity and improve cost structure; focus on customer-centric approach. - Invested in manufacturing, R&D, and sustainability; strong share gains across portfolio.

Asia/Pacific segment generated 3% organic sales growth in Q2 with 20% Y/Y sales increase due to acquisitions; organic sales/volumes up ~7% sequentially, but segment earnings declined ~$2M Y/Y yet increased sequentially. EMEA segment net sales grew Y/Y and Q/Q, organic volumes up 4% sequentially, with segment earnings improving sequentially. Americas segment net sales declined 1% Y/Y, volumes down 2%, but organic volumes up 2% sequentially; segment earnings declined $5M Y/Y.

• Forecast end market softness to persist in H2 2025. - Expect above-market growth in 2025 in line with 2%–4% long-term target. - Dipsol's performance to offset some market softness. - Forecast revenue and earnings to be in range of 2024 based on current visibility and cost actions.

• Uncertainty from tariffs impacting demand and geographic/product mix. - Macroeconomic challenges. - Raw material and manufacturing cost pressures. - Geopolitical events affecting EMEA segment.

Q: The 5% above market growth, color on share gains and sustainability A: Share gains broad-based across regions, Asia/Pac strong; product mix includes advanced solutions; sustainability via pipeline of product trials Q: Asia/Pacific margins, recovery in H2 A: Some raw material impact, mix changes, Dipsol acquisition noise; expected stability and modest improvement in H2 Q: EBITDA cadence, Q3/Q4 A: Second half stronger than first, Q3 stronger, Q4 better than last year Q: New $20M cost savings program, cash cost, OpEx vs COGS A: ~$9M restructuring in Q2, mix includes G&A and network, focus on reducing complexity Q: Margin growth, regions, customers on tariffs A: Margin target via cost actions, customers cautious, tariffs uncertain impact Q: Commercial strategy changes A: Org structure changes, focus on product line management, strategic capital deployment