Element Solutions Announces 2Q 2024 Financial Results

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Element Solutions Inc, a global and diversified specialty chemicals company, announced its financial results for the three and six months ended June 30, 2024.

Executive Commentary

President and Chief Executive Officer Benjamin Gliklich commented, “Element Solutions delivered an exceptional second quarter. Earnings growth accelerated despite an only modest recovery in consumer electronics and subdued global industrial markets. Our business was propelled by strong demand for high-performance computing applications, data centers and semiconductor fabrication. These high-value end-markets drove favorable mix which, combined with year-over-year raw material price declines, drove substantial margin expansion. The rapid evolution in the electronics industry is creating new sources of high-value demand, and we are capitalizing on those opportunities. Our addressable markets are growing substantially, and we have positioned ourselves to benefit disproportionately from that growth. This quarter is the output from several years of solid execution in terms of strategy and margin recapture.”

Mr. Gliklich continued, “We recently increased our adjusted EBITDA guidance range to $530 million to $545 million, which translates to approximately 15% constant currency growth at the midpoint. While improving, overall electronics markets are closer to trough than the long-term trend. Should the broader electronics market recovery continue and, in particular, should mobile phone demand accelerate, we believe we will deliver full-year adjusted EBITDA above the midpoint of that range. Looking ahead, a multi-year recovery in electronics seems likely. Given that outlook and the foundation laid by several years of strong strategic execution, we have growing confidence for several years of record earnings ahead.”

Second Quarter 2024 Highlights (compared with second quarter 2023)

- Net sales on a reported basis for the second quarter of 2024 were $613 million, an increase of 5% over the second quarter of 2023. Organic net sales increased 4%.

• Electronics: Net sales increased 10% to $392 million. Organic net sales increased 7%.
• Industrial & Specialty: Net sales decreased 4% to $221 million. Organic net sales decreased 1%.

- Second quarter of 2024 earnings per share (EPS) performance:

• GAAP diluted EPS was $0.38, as compared to $0.11 for the same period last year.
• Adjusted EPS was $0.36, as compared to $0.31 for the same period last year.

- Reported net income for the second quarter of 2024 was $93 million, as compared to $30 million for the second quarter of 2023, an increase of 213%.

• Net income margin increased by 1,010 basis points to 15.2%.

- Adjusted EBITDA for the second quarter of 2024 was $135 million, as compared to $116 million for the second quarter of 2023, an increase of 16%. On a constant currency basis, adjusted EBITDA increased 21%.

• Electronics: Adjusted EBITDA was $92 million, an increase of 21%. On a constant currency basis, adjusted EBITDA increased 26%.
• Industrial & Specialty: Adjusted EBITDA was $43 million, an increase of 7%. On a constant currency basis, adjusted EBITDA increased 12%.
• Adjusted EBITDA margin increased by 230 basis points to 22.1%. On a constant currency basis, adjusted EBITDA margin increased by 250 basis points.