Thank you for standing by and welcome to the ESAB Second Quarter 2025 Earnings Release and Conference Call. All lines have been placed on mute to prevent any background noise. After the Speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press the star one. Thank you. I would now like to turn the call over to Mark Barbalato, Vice President of Investor Relations. You may begin Thanks, operator. Welcome to ESAB's second quarter 2025 earnings call. This morning I'm joined by our President and CEO Shyam Kambeyanda and CFO Kevin Johnson. Please keep in mind that some of the statements we are making are forward looking and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ and we do not assume any obligation or intend to update these forward looking statements, except as required by law, with respect to any non-GAAP financial measures mentioned during the call today. The accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation. With that, I'd like to turn the call over to our President and CEO Shyam Kambeyanda. Thank you, Mark, and good morning, everyone. Thank you for joining us today. Before we begin, I want to express my appreciation to our teams around the world for their unwavering commitment to our customers, to EBX, to the disciplined execution of our long-term strategy. Despite operating in a challenging market environment, we delivered another quarter of strong results with record margins, a clear reflection of the resilience of our model and the dedication of our teams. During the quarter, I had the opportunity to go to Gemba and visit several of our recent acquisitions. I'm excited about the capabilities and competencies that these businesses bring to ESAB. I also visited teams in Gothenburg and Shanghai. It's always energizing to meet with our teams in the field, to listen, learn, and witness firsthand the passion and execution that drive our success. Amid this dynamic environment, our teams remain laser-focused on the fundamentals: disciplined cost control, elevating the customer experience, and sharpening our go-to-market differentiation. These priorities are paying off, and it's clear that ESAB continues to stand out as a world-class franchise positioned to benefit from long-term structural tailwinds, particularly across Asia and Europe. In EMEA and APAC, the performance this quarter was strong. This momentum is a direct result of our team's ability to execute the EBX growth playbook with precision, driving organic growth and capturing broad-based share gains across our markets. Turning to the Americas, a few dynamics are worth calling out. Tariff-related uncertainty introduced unexpected volume headwinds, particularly impacting our local customers in Mexico, and we saw some automation orders delayed, with demand now expected to shift into the second half of the year. That said, the underlying health of the business remains strong, our pipeline of opportunities is robust, and our teams are focused on delivering. Encouragingly, we began to see signs of improved market conditions in North America in July, an early but positive indicator as we move deeper into the second half. Despite these short-term headwinds, our teams delivered total sales growth of 2% and achieved record adjusted EBITDA margins of 20.4%. This performance speaks to the resiliency and strength of our operating model and the consistent focus and execution by our teams, even under pressure. In parallel, we continue to make meaningful strides on our compounder journey. Since our last update, we have successfully completed two gas control acquisitions, Delta P and Active, and signed EWM, which accelerates our heavy industrial product roadmap and expands our equipment capabilities. Given our confidence in the strength of our equipment portfolio, the momentum in our gas control business, improving market conditions in North America, and the continued resilience in our high growth markets, all underpinned by EBX, we have raised our full year guidance. Moving to Slide 4, before we go into detail about our performance and recent acquisitions, let me share another initiative that highlights our passion for our industry. At ESAB, we believe that investing in talent is a strategic priority to ensure the long term success of our business and the future of the fabrication technology industry. The Flame Internship Program, originally launched in Brazil, represents a global initiative designed to give college students immersive hands-on experience working within industrial companies like ours. This initiative spans across every functional area, from engineering operations to marketing, finance, supply chain, and now digital innovation. The program is energizing not only for our interns, who gain vital exposure to real world challenges and sharpen their skills, but also for our local teams who benefit from fresh perspectives and enthusiasm that these young professionals bring. It has become a catalyst for learning, collaboration, and mentorship across our organization. Beyond its near term impact, the Flame Internship Program is an intentional investment in building a robust talent pipeline for the fabrication technology sector. By accelerating professional growth and fostering leadership potential, we're shaping the next generation of leaders for our industry. Turning to Slide 5 to talk about the quarter and give you more color around our performance by geography. As this slide illustrates, ESAB continues to benefit significantly from our unmatched global footprint. Our balanced presence across the Americas, EMEA, and APAC not only provides resilience in the face of regional volatility, but it also positions us to capitalize on growth opportunities wherever they may arise. Our business outside North America continues to build on its strength. Europe remains steady, and we're well positioned to benefit from EU stimulus measures already in motion. The Bavaria SchweißTechnik GmbH acquisition is off to a strong start, further strengthening our regional capabilities. In the Middle East, we delivered double-digit growth, a clear evidence of their diversification strategy and investment. India also remains a standout, growing at high single digits. With our leadership position and strong local presence, we're confident in our capability to capture an outsized share of both public infrastructure investment and private sector growth over the next decade. In China and Southeast Asia, the business grew mid single digits, supported by increased capital expenditure and ongoing LNG investments in China. Meanwhile, Australia and New Zealand delivered solid performance in the quarter, and we remain optimistic about the outlook for the rest of 2025. This sustained EMEA and APAC performance is no coincidence. It is a product of our well-matched geographic footprint, a world-class team, a differentiated product portfolio, and disciplined and consistent execution. In both EMEA and APAC, our teams continue to exemplify the EBX business system playbook, driving strong organic growth and robust margin expansion, shifting our focus to the Americas. As mentioned earlier, we face near-term headwinds primarily due to tariff-related headwinds. This particularly impacted our local customers in Mexico, where we saw unexpected softness. Additionally, customer orders and automation solutions were delayed into the second half of the year. Despite these challenges, our automation solutions funnel continues to be robust and gives us confidence in the second half as South America continued to perform well and our recent acquisitions, SUMIG and Sager, are performing as expected. In summary, we're executing from a position of global strength. ESAB Corporation remains a globally balanced and agile franchise, one that is built to perform, adapt, and grow through all phases of the economic cycle. Moving to Slide 6 to discuss how we're leveraging EBX business system and AI to accelerate our long-term growth, during the fourth quarter, we laid out a roadmap leveraging EBX business system and AI to reduce structural costs and accelerate growth. Today, I'm pleased to share that we're not only delivering on that plan, but exceeding it. We're taking this opportunity to go even further, driving more cost out of the system while investing decisively in our future. These initiatives are not just reducing complexity, they're enhancing how we serve our customers. As a result, we've raised our full-year productivity savings target to approximately $13 million. Our up from our original $10 million estimate. In parallel, our back office optimization work has gained momentum and we now expect to deliver $17 million in savings, reflecting stronger than anticipated execution. At the same time, we remain firmly committed to investing in the future. In 2025, we're deploying approximately $20 million in strategic growth, investment funding, university research partnerships, expanding commercial excellence initiatives and advancing our AI capabilities. Looking ahead, we plan to bring our EBX business system and AI initiatives together, creating a more integrated engine for operational excellence and innovation. These capabilities are increasingly converging, enabling smarter, faster decision making and more adaptive systems. It's still early, but the progress is real and we're confident this combined approach will have a lasting impact on both productivity and customer experience. Turning to Slide 7 to discuss how EWM strengthens our equipment and robotics portfolio, earlier this year we announced that we entered into an agreement to acquire EWM. EWM is a leading provider of premier arc welding and robotic technology solutions. With a leadership position in the Germanic region, this business brings advanced technology, a highly respected global brand and a strong team. Our businesses are highly complementary in terms of customer bases and channel partnership, making for a unique strategic fit. This EUR 120 million revenue business is expected to be accretive in year one and expected to close in the fourth quarter. We could not be more excited to have the EWM team join ESAB as EWM accelerates our global equipment growth strategy. Moving to Slide 8 to discuss how ESAB and EWM together create a premier workflow solution. Together, the combination of ESAB and EWM accelerates our product roadmap. EWM strengthens our heavy industrial portfolio with advanced welding technologies, while our innovative light industrial lineup fills key product gaps within EWM. It's a natural fit, one that creates a truly differentiated offering. Now what makes this partnership even more exciting is EWM React technology, a true breakthrough in the welding space. The holy grail of welding has always been the ability to deposit metal faster at a lower heat in order to reduce distortion and improve precision and enhance overall productivity. With React technology, we're achieving exactly that. In some applications we're seeing up to 100% faster weld speeds, twice the deposition rate, all while operating at 35% less heat input compared to traditional short arc welding processes. This doesn't just improve performance, it delivers real world customer benefits, less fume, zero splatter, and significantly improved safety and environmental conditions on the shop floor. With EWM in our portfolio, we have expanded our best-in-class workflow solution for advanced applications including additive manufacturing and thin metal precision welding, especially for materials like aluminum and stainless steel. When paired with our proprietary consumables, torches, and indosuite digital overlay, we are delivering a fully customizable end-to-end ecosystem and we see substantial global selling opportunities ahead. This is more than an acquisition, it's a strategic leap forward in how we serve industrial automation and advanced manufacturing customers around the world. Moving to Slide 9 to discuss our newly acquired medical and gas control businesses. During the second quarter, we acquired Delta P and closed on Active in early July, which propels us further on our compounded journey. Let me first start with Delta P, a European-based medical gas system manufacturer. This business further strengthens our medical gas control position in Europe and is highly complementary with our existing business. This business generates annual sales of approximately $10 million and has gross margins greater than 40%. We see significant opportunities to accelerate growth as we insert Delta P products into our global distribution. I'm also excited about the addition of Active, an India-based business with local manufacturing. This business has annualized sales of approximately $5 million and gross margins north of 40%. We're excited with the opportunities this brings for global product expansion. Together, these acquisitions accelerate our medical gas equipment strategy, providing ESAB with complementary products and an entry into the fast-growing India market. Turning to Slide 10 to discuss how Delta P and Active extend our medical gas portfolio. As you can see on the slide, these two acquisitions significantly expand our portfolio by providing advanced integrated solutions across the full spectrum of hospital gas systems. The product offerings from Delta P and Active cover critical components found throughout the healthcare facilities, including in mission critical environments like the ICU, emergency room, surgical suites, and general wards. As shown on the slide, our solution now spans the entire supply and distribution chain, delivering, controlling, and monitoring medical gases safely and reliably throughout a hospital. Together, these acquisitions expand our total available market by $200 million and position ESAB as a truly world-class provider of medical gas control products, one that is aligned with our compounder strategy and built for scalable, profitable growth. On that note, let me hand it over to Kevin. Thanks Shyam and good morning. Let's turn to slide number 11. During the quarter, ESAB benefited from strong market demand in our high growth markets, offsetting tariff impacts in North America and supporting balanced organic growth. Total sales rose 200 basis points year-over-year, driven by acquisitions and more favorable currency trends. The team's execution this quarter reflects their adaptability and commitment to excellence, which has been instrumental in achieving the highest adjusted EBITDA margin in the company's history. Turning to slide number 12, organic sales in the Americas declined due to delays in automation orders caused by tariff uncertainty and a weaker Mexican market as new customers from last year delayed investments. However, strong pricing helped balance this. The SUMIG acquisition added 300 basis points of growth, partially countering the negative effects of a stronger U.S. dollar. ESAB remains focused on long term growth using the EBX business system to enhance pricing, productivity, and efficiency. A strong operational performance eased the impact of tariffs in the quarter, and adjusted EBITDA reached 20.1%, highlighting our team's resilience. Moving now to slide number 13, EMEA and APAC maintained strong growth, especially in the Middle East, India, and Asia, with robust sales funnels and increased optimism. Heading into the second half of 2025, total sales rose 11% while EBITDA margins hit a record 20.6%. Volume grew by 600 basis points, led by high growth markets, and Europe showed positive momentum benefiting from new stimulus measures. The Bavaria SchweißTechnik GmbH and Bangladesh acquisitions contributed an additional 400 basis points of growth and are performing well. Favorable FX, particularly a stronger euro versus the U.S. dollar, supported results. Our teams in EMEA and APAC delivered an outstanding quarter, surpassing expectations and establishing a strong momentum for continued success throughout the remainder of the year. Moving on to slide number 14 to discuss our cash flow. In the quarter, we generated $46 million in free cash flow. This cash flow reflects some increased pre-buys related to tariffs and increased working capital in the main APAC to meet higher growth. Looking ahead, we expect an improvement in cash flow during the second half of 2025, primarily due to a reduction in tariff-related inventory as well as normal seasonal trends, which historically drives stronger cash flow in the second half of the year. Maintaining net leverage within our two times target range has been a key focus, and this disciplined approach enhances our ability to invest flexibly in growth opportunities aligned with our compounder strategy. This strong financial position ensures that we can adapt to changing market conditions, pursue strategic acquisitions, and continue generating shareholder value over time. Moving now to slide number 15 and our 2025 outlook. Revenue assumptions have been increased around 0.25% due to the Delta P and Active acquisitions, which together provide approximately $7 million. The remainder is attributed to changes in FX rates. The current guidance does not include the EWM acquisition expected to close in Q4, which presents some additional upside. Guidance for organic growth remains unchanged. In the second half of 2025, we expect low single digit organic growth for ESAB. EMEA and APAC are expected to achieve mid single digit growth, offset by a low single digit decline in the Americas. Adjusted EBITDA guidance has been increased to a range of $525 million- $535 million. DOL cash flow conversion guidance is unchanged. The company continues to prioritize cash flow performance and maintains a strong balance sheet to support our growth plans. With that, let me hand back to Shyam on slide 16 to wrap up. Thank you, Kevin. We delivered another strong quarter driven by outperformance in our EMEA and APAC segments, and we expect this momentum to continue. Our high growth markets are thriving, and we remain confident that our automation business in North America and the activity in Mexico will rebound in the second half of the year as customers adapt to evolving market dynamics and trade conditions stabilize. This year we're on track to complete four acquisitions: Bavaria SchweißTechnik GmbH, Delta P, Active, and EWM. These moves further accelerate our compounder journey, strengthening our portfolio, expanding our reach, and enhancing our technology offering. Our balance sheet remains strong, and we continue to drive EBX to deliver strong margin performance. We have started Q3 with good momentum and are confident in our execution. As a result, we have raised our 2025 guidance. Looking ahead, we are executing with discipline backed by the power of EBX, the potential of AI, and the passionate global team. ESAB is built to lead, built to grow, and built to win across cycles and around the world. With that, operator, let's open the line for questions. At this time I would like to remind everyone, in order to ask a question please press Star then the number one on your telephone keypad. We will pause for just a moment to compile the Q and A roster. Your first question comes from the line of Tami Zakaria with J.P. Morgan. You may go ahead. Hey, thank you so much. Good morning everyone. My first question is on tariffs. By the way, great results in outside the Americas, but I think you mentioned tariffs were a 500 basis point of volume headwind and I just wanted a little more color. Is that headwind tied to a few customers or was it broad based? Is it more of a timing shift and you expect to recover in the back half? I heard you mention Mexico, but any more color you can give regarding what gives you confidence that you know things can get better in the back half? Hi, good morning Tami. Always good to hear from you. Thank you for that question. First, I do want to reiterate that we were very proud of our performance in the rest of the world, especially EMEA and APAC. Really strong volume performance, and as you know, the business continues to build from a momentum that we had started really a few years back. Really strong performance and proud of the team in EMEA and APAC. On the North America side, you're spot on. What we did see is once the tariffs hit in April, our local customers in Mexico, which is a combination of both the channel and some transportation customers that we had won a year earlier, delayed ordering and went into a wait and see mode, which was unexpected on our part as we went into the quarter. We expect that to abate as we get into the third quarter and the fourth quarter, but it's still a wait and see piece. On the automation side, we are actually very confident. We do have the orders on hand. We do have a schedule that now shapes to a better position in the second half and a lot more confident about that recovery, not only in the robustness of our funnel, but also the orders that we have to ship in the second half. Got it. That's super helpful. I think I saw in one of the slides you quantified $30 million savings. Can you just remind us what those savings were in 2024 or 2023? Just trying to understand if the savings are accelerating or remaining stable. Yeah. Over the last three years we've been increasing the number of savings that we've been able to generate. We've been doing a lot of footprint rationalization over the last few years. Now, as you can see with what Shyam discussed on the call, we started to move a lot more into back office automation. We're doing a lot more EBX initiatives around our facilities to actually improve the productivity. There has been certainly a ramp up in terms of the savings we've generated over the last three years. Understood, thank you. Your next question comes from the line of Bryan Blair with Oppenheimer. You may go ahead. Thank you. Morning, guys. Hi, Bryan. I guess sort of a follow up to Tami's question. It looks like America's Q2 core growth would have been essentially flat. You know, excluding the tariff impact that you outlined, maybe offer a little more color on. The underlying order trends through the quarter, you mentioned some improvement in July. If there are any finer points, you. Can offer there that would be helpful. Touch on or quantify preferably. How we should think about the catch. Up and automation demand in Mexico orders, the impact to Q3, Q4 revenue. Yeah. If you remember, Bryan, the way that we had talked about the Americas, even as we went into the quarter, we talked about volume sort of being down mid single digits. Obviously, when you see the print today, it's a bit worse than that. We sort of talk specifically about the two items that you mentioned, which were Mexico and automation sort of creating that additional down drag. We see automation coming back nicely, and so that no longer, in our view, is an issue in the second half. Mexico, on the other hand, has shown some life, but I think it takes a bit longer. As you know, we still don't have a complete trade agreement with both Canada and Mexico at this current time. We think whenever that sort of gets figured out and settles, we'll see Mexico come back to normal. The second aspect of it is something that we've always felt as we guided our numbers for the year, which is that the second half comparables also for ESAB get better. If you remember, we did have a really solid post last year in the second quarter in the Americas, and all of that sort of plays into how we're guiding the second half of the year. To the comment that you had on orders, we did see stability in the orders and a slight improvement in the Americas. That is the other encouraging piece for us, I think, as we sort of exit July, surely feel a lot better about how we're guiding the rest of the year. That's helpful color and encouraging. It'd be great to hear a bit more about EWM. Your commentary was, I would say, uniquely. Enthusiastic on the deal. To quickly cover just the basic financials. How should we think about growth rates and margin at the outset, and where your team believes profitability can climb over time? More importantly, with the deal being somewhat of a proxy for R& D, any other detail you can. Offer on how it influences the refresh. Of your heavy industrial portfolio and related opportunities. Thank you. Yeah. Let me start with the piece about enthusiastic. I appreciate that. Obviously it's a sizable deal for us and took a significant effort from our team. The other piece that we loved about the process was that it was proprietary, that we were able to sort of execute on the deal working with the team at EWM. Really kudos to our entire team in Europe and our corporate team here on executing that transaction. There is enthusiasm partially because what I mentioned on my call, which is this EWM React technology that they have. As you know, Bryan, I think we've been working our way into industries that we don't currently participate in. This technology and process gives us access to that. When it comes to additive manufacturing, when it comes to thin metal, when it comes to larger OEMs that need this technology today, there's maybe one other player that sort of has something similar. We really feel good about the acquisition, the technology that it brings, and how it fills out our portfolio. From a sales perspective, as we mentioned, it is a EUR 120 million business. We expect it to benefit from the stimulus that's coming up in Europe. It has a position of strength in the Germanic region where we had very little exposure. We think the Germanic region is at the bottom and it moves up from here. The question really is around timing as to when the German market improves, whether it's in the third or the fourth quarter. We expect to close the deal in the fourth quarter. We're hoping the timing sort of fits perfectly on top of each other, but no different than our expectations for our equipment business. We think over the long term it has mid single digit growth potential. The gross margins in this business are north of 40%, and yes, there is some opportunity to sort of save on the R&D spend side where we no longer have to invest in building out that technology at ESAB and we can now focus our business along with EWM towards growth. Anything I missed, Kevin, on EPS? The Delta P brands are highly synergistic, as Shyam mentioned. There are significant overlaps with ESAB globally, and we're looking forward to partnering together. The ROIC on this deal looks a little bit more like a bolt-on than a strategic asset, which is what it is. Our expectation would be carrying a 10% ROIC threshold within a three to four year time period. This is a real excellent return on this investment. All good to hear. Thank you again. Your next question comes from the line of Nathan Jones with Stifel. You may go ahead. Yeah, good morning, this is Adam Michael Farley on for Nathan Jones. Hi Adam. Good morning. Maybe first on China and Southeast Asia. A positive outlook for the year. You know, what industries are driving the improvement, what industries are still struggling, and what gives you confidence for a continued positive outlook. You know, on that particular front, if you've sort of seen as we've been actually quite positive on China partially because of where we play on the top tier of the market, we never really saw a down drag in China. If you remember even on the calls in the past where people were seeing sort of a significant headwind in China, we've actually held our business stable. In fact, in my recent visit to our team in Shanghai, we sort of go through an operating plan as to what we set as goals five years ago and where the team has come, our business has doubled and our EBITDA margins have expanded over 700 basis points in that time period. An extraordinary effort by our team in China where we see the strength is again on the energy sector. We participate also in the rail, high speed rail and a little bit on high end infrastructure buildouts where we see China continue to work on its energy independence. We do see them continuing to invest and maintain their high speed lines, rail lines. As a result, ESAB continues to benefit from that tailwind in China. The Southeast Asian market was a bit down and has shown signs of recovery. Part of it is manufacturing and infrastructure improvements that are moving into the region, a region that's benefiting ESAB. We also saw life and positivity out of Australia and New Zealand. That whole geography for us, at least on the bottom side of China, Southeast Asia and Australia, were a bit down but are showing signs of recovery. I can't say enough. I think the number that we posted in the rest of the world, EMEA and APAC, almost a 6% volume growth. Based on everything that we're seeing out there in the market and how people are talking about those MAS markets, I think we have an exceptional enterprise and something to be very proud of. Yeah, that's great, thanks. Thanks for the color. Maybe on price costs, what was the impact of price costs on the quarter to margins? Is ESAB covering tariffs with price? As we've done in the past, Adam, the business has done a great job of getting price to cover tariffs. We were price cost neutral against tariffs in the quarter. It did create a little bit. is compression on the gross profit margin. We are covering all of our tariff costs with price. Okay, thank you for taking my questions. Your next question comes from the line of Neal Burk with UBS. You may go ahead. Good morning. Hi Neil. Incrementals were pretty solid in the quarter, up 37% for the company. I guess like the guy for the. Back half, if my math is correct. Implies a step down in incrementals. I guess number one, is that right. What kind of leads to that step down in incrementals? Given it seems like the volume declines were worse in 2Q? Yeah, I think there's a couple of pieces to it. The first one is obviously you saw we guided to a better FX range, and FX doesn't drop at the same incrementals. I'll let Kevin talk through the rest of it. Yeah. On the FX side, which was really the majority of the rears we put through, as you know, we have a lot of our costs in the geographies where we operate. When we go up or down on FX, we typically get incrementals or decrementals somewhere in the 10% type range. Therefore, that does create a little bit of compression in terms of the year-over-year incrementals or decrementals for us as FX moves. Underlying that, of course, we're working hard on all the initiatives which one discussed, and we'll continue obviously to work hard on savings and see if we can find opportunities to continue to improve that number. That's the main reason why you're seeing that year-over-year, I think. Just to sort of add to Kevin Johnson's comment, we are expecting to see better volume, organic volume in the second half than the first half, and then obviously some better FX tailwind as well in the second half. Those would be the two aspects. All right, thanks. That's clear. On new product, I know this gets sort of complicated with all. The tariff noise in the Americas and North America in the quarter, can you give us an update on new product introductions and any contribution to sales? Yeah, you know, we continue to maintain, we do measure it. It's part of our key KPIs. It's something that's core to ESAB. Measuring our vitality and new product introductions. I think we had talked about earlier on that we plan to maintain our momentum in new products. This year, again, in terms of how we look at our product introductions, we're going to be very close to 100 new products introduced. Our vitality rate on a five year basis will still be closer to 23%- 24%, a little lower than where we were last year just based on some of this tariff-related noise that has come in. All in all, we continue to feel very good about our vitality metric. We feel good about the new products that are being introduced. Now with EWM, Delta P, and Active, we get to introduce really a new array of portfolio products that I think our customers will really like. More importantly, it allows ESAB to sell an entire workflow both in our gas control side of the business and in our fabtech side of the business. Great, thanks. Your next question comes from the line of Mirc Dobre with Baird. You may go ahead. Thank you. Good morning. Question to slide six, if I may. Can you talk a little. bit more on this productivity improvement and the back office optimization? I'm looking at this chart and I'm trying to make sure that I'm clear in terms of what this chart is telling us. Are these savings that you're generating relative to 2024, this introduced directly to EBITDA, is that the way to interpret this chart? That's right, yes, Mirc. These are additional savings that were generated in the year. As we entered into the year, we were targeting around $25 million of savings. As we've progressed through the first few quarters, we've actually increased the target that we're aiming for. I see, so you eventually and your savings by $5 million. It sounds like FX is contributing $5 million to EBITDA. You've only raised your guidance by half of what FX and savings are contributing. Is the implication here that volume compression that you've experienced and the headwind that you've experienced in the Americas, in Mexico and automation, there's essentially no catch up whatsoever that's embedded in the back half and you raising by only $5 million rather than $10+ million? Yeah. What the slide's trying to project is the fact that we have been working hard on driving additional savings mix, but what we're also doing is protecting investments back within the business. As you can also see on the slide, we're actually putting back into the business $20 million incremental on last. Year. In terms of additional investments that we're making, what we're trying to do is look for opportunities always to see how we can further deploy investments back into our commercial excellence program, back into work that we're doing around AI to accelerate long term growth and improve the overall business in the future. I think on that front, Mirc, I can tell you that some of the stuff that we've been working on both with universities and with AI, it's extremely exciting in my view, transformational in many ways. Our view today is that early investment in those things will reap a far more benefit to ESAB and the right thing to do. We're saving, we're sort of protecting our margins in the business, but we're putting money back that we think will benefit ESAB in 2026 and beyond. My follow up is on Mexico specifically. It's a little bit hard to gauge what's going on from my feet at least. Can you maybe help understand how large Mexico is as part of this segment in terms of the disruption to demand that you're seeing over there? Is there a particular industry that is driving that? I don't know if it's auto or heavy manufacturing, or is there something else. Going on with your distributors? The reason why I'm asking is because I'm trying to figure out exactly what we have to watch for in order to determine if something is different other than obviously, let's trade headlines over there. Yeah, I think that's a fair question, Mirc. I think we had mentioned before in one of our calls that we were on par with our peers in Mexico. You can assume that our portion of Mexico is a little higher than our sort of peer set. The second piece is that we have not given out specific Mexico numbers, but what I can tell you is about 25% of our business, 20%-2 5%, sits between Mexico and automation. We saw that business sort of take the down drag of that 500 basis point that we spoke about, and you could probably split the two kind of down the middle the way that we see it. To your additional question, we did have a really good strategy and benefited from it. One of the things that we've often talked about is how we intend to kind of go out and play in our space. We did win several distributors and several new customers in Mexico last year. This year, when the tariffs came at them in April, they slowed down significantly. If you were to gauge the Mexican market, you'd see that the volumes are down quite hard on that particular front in terms of the industries that we have exposure to, transportation being one, and then general industry and really in the channel as well. Both saw that down drag. The industry saw maybe a little harder down drag versus the channel, but both saw sort of a stalling, is the best way that I could put it. We do see a recovery coming at us, probably a little slower than where we see North America and the U.S. market in particular, but we're off to a good start. As I mentioned, Mirc, Mexico is still slow, but the U.S. market is doing okay. The last piece, as I mentioned, the automation was really an issue in the quarter that got pushed out. We see that coming back at us in Q3 and Q4, and we're very confident about that piece. If semiconductor investment kicks in and some of the other stuff kicks in, then we've got additional upside. All right, thank you for the call. Your next question comes from the line of David Michael Raso with Evercore. You may go ahead. Thank you for the time. I'm most interested in Europe just given it's your largest geography and you made the comment EU stimulus measures already in motion. You mentioned the business is steady there. I'm just curious, what are you expecting from Europe in the second half of the year into early 2026? Are those stimulus measures already showing up in the order book? Can you remind us the margins in Europe versus the rest of EMEA and APAC? I'll take a few pieces here. I'll let Kevin jump in as well. I think we talked about Europe being stable. We're not seeing Europe sort of drop, which is the best way to think about it when I talk about the stimulus measures in motion. We've seen energy independence, we've seen some spending associated with defense kick in, but not at the rate and the conversations that you've seen in the newspaper. There are comments around almost $2 trillion going into play in Europe over the next decade that we have not seen come in. We've seen commentary around the two things that I just spoke about come into play. Activity and optimism exist. The view for us, for Europe, is that it continues to be stable and not a business where we've seen volumes decline or sequential declines in the business. To answer your question, the margins for us in Europe are very strong, almost equivalent to, or slightly probably even ahead of, our Americas business. Our margins are very strong in Europe. Helpful. Oh, sorry, go ahead. Just on the outlook for growth. David, our assumption at the moment is that Europe will be flattish growth, and a lot of the growth in EMEA and APAC in the second half is coming from our high growth markets That's helpful. DWM, nice chunky acquisition. The technology obviously you're excited about. I'm curious though in gas control and the comment you're still positioned to have a strong pipeline of M&A. Anything chunkier in gas control? I know Delta P, Active, but something that EWM type size, is that something we can look for or are the gas control deals going to stay, call that sub $50 million kind of size? I think there's a couple of things. The short answer is yes, there are chunky deals in that space. Where we like to be is when we have a proprietary process in play and can match what we would, what we think the asset is valuable to us rather than get into a sort of a regular auction process. We feel that the ROIC to our investors is better when we can create a proprietary process. We've been working really hard. The funnel is actually very strong. We have a chance to have a few bites at the apple here. Hopefully in 2026 or 2025 we'll see some things come into play. The short answer is there's plenty of assets, plenty of assets that allow us to expand our presence in gas control and achieve our 2028 goals of getting to $4 billion in sales. Thank you. One last. I'm sorry. In the queue I noticed the equipment revs were flat. Consumables up about 2%, but those are all in numbers. Could you indulge me with the organic equipment consumables? Was it equipment down as that was maybe hurt more by the Americas issues? That's right. The automation side of the business did sort of create a bit of a down drag on the equipment side of our business in the quarter, which we think reverses itself as we get into the third and fourth quarter. Thank you. Your final question comes from the line of Christopher M. Dankert with Loop Capital Markets. You may go ahead. Hey, morning. Thanks for taking the questions. I guess just on that automation piece, can you kind of indulge us as. To just how steep the drop in automation was? I mean, just my back of the. Envelope says, and we're talking about a pretty substantial cut here. We're talking 40% lower on a year-over-year basis. Just any kind of sense you can give us around just how, like, quantifying. How big that automation component was. Are. You sort of looking at it in the Americas or globally? Global automation sales? Yeah, the view that we have globally, not that severe. I mean, maybe in the 20s, high 20s probably is where we would look at it now. We obviously stack up a whole bunch of small ones rather than some big deals. Yes, that would kind of be the number. Okay, that's helpful. As far as the Mexico component, you gave some code there. Appreciate that. I guess as far as how that's. Trended in July and August to date, has there been any thaw there? Are we still kind of in a holding pattern? No, some thawing. I think the view for us, a couple of things came at us in Q2. As I mentioned, we acquired a whole set of new customers last year. We sort of had great momentum and share momentum in the market. In Q2, we were coming up against those wins that we had, and those customers fundamentally going into a pause mode. They've since come off the pause mode, but not at the rates that they were at in Q2. We see a slow recovery back into Mexico. We think once the trade deals get done, Mexico begins to really move in the right direction. That being said, USMCA is fine. We're specifically talking about Mexico business for FAPDEC. 100%. Thanks so much for the call. This concludes our question-and-answer session. I would now like to turn the call over to Mark Barbalato for closing remarks. You may go ahead. Thank you for joining us today, and we look forward to speaking to you next quarter. This concludes today's conference call. You may disconnect.