Good morning, ladies and gentlemen, and welcome to the Element Solutions Q2 2022 financial results conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star one on your touch tone phone. You may withdraw yourself from the queue by pressing star two. Please note that this call may be recorded, and I will be standing by should you need any assistance. I will now turn the call over to Varun Gokarn, Senior Director of Strategy and Finance. Please go ahead. Good morning, and thank you for participating in our Q2 2022 earnings conference call. Joining me are our CEO, Ben Gliklich, and CFO, Carey Dorman. In accordance with Regulation FD, fair disclosure, we are webcasting this conference call. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Element Solutions is strictly prohibited. During today's call, we will make certain forward-looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events that are subject to risks and uncertainties. Please refer to our earnings release, supplemental slides, and most recent SEC filings for a discussion of material risk factors that could cause actual results to differ from our expectations and predictions. These materials can be found on the company's website at www.elementsolutionsinc.com in the Investor section under News & Events. Today's materials also include financial information that has not been prepared in accordance with the US GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce Ben Gliklich, CEO of Element Solutions. Thank you, Varun, and good morning, everybody. Thank you for joining. Element Solutions had another quarter of solid earnings growth in a complicated macro environment. Supply chains remain challenged. The lockdowns in major commercial hubs in China persisted longer than expected. Auto markets have not yet recovered, and currencies moved significantly against us. Nonetheless, we delivered on our commitments in the quarter. Organic net sales grew in every vertical, and we met our adjusted EBITDA guidance. We believe this once again demonstrates the stability of our businesses and the ongoing execution of our strategy by our talented team. Demand across the electronics segment generally remained healthy, driven by continued EV and 5G penetration. We grew modestly across our industrial verticals despite continued weak production in the automotive market and the overhang from geopolitical volatility in Europe. The ongoing integration of our recent acquisitions is going well, generating better than expected synergies, and we've started to capitalize on new long-term growth opportunities around sustainable chemistry. Overall, our sales growth was driven more by pricing actions and raw material surcharges than underlying unit growth. In certain of our markets, demand was resilient, while in others, such as China and automotive, it was weaker. We grew constant currency adjusted EBITDA by 13 over a difficult Q2 2021 comparable, which was before supply chain disruptions and inflation took hold. The biggest headwind to our financial results in the Q2 was the strengthening U.S. dollar, which weighed on sales by 7% in the quarter and presents additional headwinds into the second half of the year based on current FX rates. While macroeconomic sentiment has worsened, many of our end markets remain resilient. We expect the electronics business to grow sequentially and year-over-year in the second half from new smartphone platform launches and ongoing demand from mobile infrastructure and EV markets. Softness in other consumer electronics sectors, such as white goods and personal computers, has less of an impact on our portfolio and has been in line with our expectations coming into the year. We also expect a modest recovery in the automotive market, where underlying structural demand still remains higher than the industry's production levels. As we've demonstrated multiple times over the last several years, we can and will continue to keep a long-term strategic focus while also actively managing the business to navigate near-term volatility and deliver on our targets. On slide 3, you can see a summary of our Q2 financial results. We grew the top line 6% organically, similar to our Q1 performance. This first half growth comes against a difficult comparison as the first half of 2021 benefited from a strong COVID recovery. On a constant currency basis, adjusted EBITDA grew 13% year-over-year. Adjusted EBITDA margin declined 170 basis points, with higher metal prices driving 100 basis points of margin headwind on a year-over-year basis. Though the dollar value of pass-through metals in our assembly business declined sequentially as metal prices fell. Excluding the impact of $123 million of pass-through metal sales in our Assembly Solutions business, our adjusted EBITDA margin would have been 25% in the quarter. Our adjusted EPS in the quarter grew a healthy 9% on a reported basis, despite a negative 7% impact from FX translation from the stronger US dollar. Carey will now take you through our Q2 business results in more detail. Carey? Thanks, Ben. Good morning. On slide 4, we share additional detail on the drivers for organic net sales growth in our two segments. Organic growth for electronics was 8% year-over-year in the Q2. Demand for high-end electronics applications remained steady. Our Circuitry Solutions vertical grew 14% organically, driven by strong demand and pricing from the data storage market. This strength helped offset the impact of supply chain constraints and COVID-related shutdowns in China. Semiconductor Solutions grew 13% organically, seeing continued end market demand for our wafer plating, advanced packaging, and advanced assembly products. Both Circuitry and Semiconductor benefited from higher surcharge revenue, driven by increases in raw material costs, which account for roughly half of the 8% organic growth in the overall electronics segment. In our Assembly business, we saw sustained growth across most of our core product categories, despite its greater exposure to automotive. This business benefits from ongoing growth in electric vehicle production through its power electronics products. However, it also has a greater exposure to both ICE Automotive and China, which explains the relatively slower growth. On a year-over-year basis, adjusted EBITDA margins in our electronics segment declined 60 basis points. However, excluding the impact of pass-through metals, margins in the segment expanded 100 basis points approximately. One note to make here is that in this quarter, we transitioned operational responsibility of our films business, which generates roughly $50 million of sales annually from our Industrial & Specialty segment to the Circuitry Solutions business within our Electronics segment. The change reflects the increasing commercial activity and opportunities we anticipate in printed and in-mold electronics. This market represents a significant opportunity for the company in the next 3 to 5 years. The impact of this change is reflected in both current and prior periods in our earnings release and the other financial information provided today. Organic net sales in Industrial & Specialty increased 2% year-over-year. All 3 of our I&S verticals posted growth in the quarter. Industrial Solutions grew 1% organically, which was driven primarily by pricing actions and surcharges associated with commodity inflation. As we enter the second half of the year, we remain cautiously optimistic about improving auto production, especially in the Q4. Graphics Solutions grew 2% organically year-over-year. However, profitability in this segment declined as pricing lagged cost inflation. We have one business that we expect will drive a stronger back half, and pricing actions should drive adjusted EBITDA growth in the second half and into next year. Energy Solutions also grew 2% organically, continuing the rebound that began late last year as high oil prices drove some rigs back online. The recovery in this business has been slower than in prior periods of rising energy prices, but we are beginning to see increasing levels of activity in the sector, which bodes well for 2023. Industrial & Specialty grew adjusted EBITDA 13% on a constant-currency basis, including the contribution of Coventya and synergies. Margins declined roughly 3 percentage points. The combination of increased logistics and freight costs, negative mix from the weak auto market, sales growth from surcharges, and raw material inflation, especially in our smaller I&S businesses, all contributed to this margin decline. As auto recovers and the overall supply chain disruption improves, margins should increase in this segment. Slide 5 addresses cash flow in the balance sheet. We generated $66 million of free cash flow in the quarter, reflecting a strong sequential improvement despite a continued investment in working capital of $37 million, primarily into inventory. This sequential build of inventory was largely in Europe and Southeast Asia, given ongoing supply chain disruptions in those regions. Our other uses of cash in the quarter, including cash taxes, CapEx investment, and interest, all came in slightly better than our expectations. We have modestly decreased our full year estimates for these metrics. Year to date, we've invested over $90 million of cash into working capital, a majority of which was driven by sales growth and safety stock building. We are revising our cash flow guidance to $270 million for the year to reflect our revised EBITDA guidance and uncertainty around the timing of working capital release. We meaningfully accelerated our share repurchase activity in the quarter, buying back approximately $43 million of stock or roughly 2.2 million shares, almost 1% of shares outstanding. We remain opportunistic and expect to be active in the market when we believe our stock is trading at a significant discount to its intrinsic value. Our remaining stock buyback authorization was $670 million as of June 30. Our net leverage ratio remains steady at 3.2 times, despite returning over $60 million to investors in the quarter. All of our term loan floating rate borrowings have been swapped to fixed, so rising interest rates are not meaningfully impacting our cash interest expense. These term loans are also swapped to euros, and that cross-currency swap was $86 million in the money at quarter end, effectively reducing our leverage ratio to 3 times adjusted EBITDA. Note, as the dollar has subsequently strengthened, the value of that swap has increased along with it. With that, I will turn the call back to Ben. Our Q2 results demonstrate the durability of many of our end markets and strong execution in other more challenging markets on the top line and converting that sales growth efficiently into profits. No headwind from the strengthening U.S. dollar in months. Based on mid-July FX rates, we now expect a greater than $35 million to 2022 adjusted EBITDA due to FX $15 million higher than what we guided. Consequently, we are revising our adjusted EBITDA guidance range to $565 million-$575 million. Range implies modestly greater constant currency adjusted EBITDA growth over our prior growth guidance by the full impact of currency. Sustained strength in electronics. A modest recovery in automotive production in the second half of the year. These end market dynamics are still weaker than our expectation entering the year. However, we've been over-delivering on synergies and managing other costs to reflect a shift in macros. Should those end market conditions be worse than expected, we have further cost levers at our disposal. We've historically demonstrated an ability to preserve profits in challenging macro environments and in the second half. EPS guidance to a range of $1.52-$1.55. Guidance to approximately $270 million, largely reflecting the lower EBITDA and taking into account higher FX. This guidance implies substantial year-over-year growth in the second half in absolute dollars and more than 20% growth on a constant currency basis. For the Q3 of 2022, we expect adjusted EBITDA to be approximately $100. Improved margins from lower metal pass-through impacts and a sequentially higher level of revenue in constant currency. These results represent a strong approximately 20% over. We've always said that secular growth is not linear. There will be air pockets along the way where the macros may be less favorable in the short term. We believe Element Solutions is well-positioned to continue to deliver profit growth. We've won more business year-to-date than we did in all of full year 2019 or 2020, a reflection of the longer-term momentum in our markets and our ability to convert those opportunities. This gives us more conviction in our belief that the trends propelling our business are more entrenched today than they were entering this year. Quickly, internet infrastructure, data storage, and next-generation mobile. We're playing a critical role solving complex technical challenges for the electronics hardware industry as circuit boards and semiconductors converge. These secular growth drivers are just getting started, and Element Solutions should continue to benefit disproportionately from them. At the same time, this has been an off year for the smartphone. One of our industrial business is operating activity. We don't believe the shortfall in automotive production relative to demand is sustainable over the long term. A recovery is inevitable, making these markets a coiled spring, which we think will ultimately drive substantial earnings growth when supply chains improve. To wrap up, I'd like to thank all of our stakeholders for their continued support and express my appreciation for people around the world responsible for another quarter of growth. With that, operator, please open the line for questions. Thank you. At this time, if you would like to ask a question, please press. You may remove yourself from the queue at any time by pressing star two. Again, that is star one to ask a question. We will pause for a moment to allow questions to queue. Thank you. Our first question will come from Steve Byrne with Bank of America. Your line is now open. Morning, Steve. Ron, for Steve Byrne. My first question is, how did your volumes for auto manufacturers in 2Q compare to industry build rates? If different, is it due to share gains or increased content? Yeah, I appreciate the question, Ron. 14%, our volumes outperformed that. Our auto business was up 1% on sales. Most of that was driven by price, but we clearly outperformed the market. You know, it's hard to disaggregate between share gain versus content gain. The team has been executing very, very well and winning big pieces of business. Just a quick follow-up. So how flexible are the PCB and semiconductor fabs that you supply in shifting between various products for handsets over to other markets? How would you shift your pricing volumes? Fabs have some level of variability to supply, and PCB fabs in general have been running very close to full capacity, and we're seeing capacity added in many markets. Similar dynamic to what we've seen in the semiconductor market. Great. Thank you. Thanks, Ron. From Joshua Spector with UBS, your line is now open. Yeah. Hey, guys. Thanks for taking my question. Just curious if you could kind of parse out the organic performance in the quarter and your outlook. Kind of just trying to think about the buckets between volume, structural pricing, and surcharges and, you know, in your second half. Are you still projecting volume growth as part of the mix? Thanks. Yeah, absolutely. In the Q2, as we said, price was more of a driver than volume, but we did see volume growth in certain of our end markets, particularly if you look in the circuitry business, for example, in data storage, we had a strong quarter in the American market, in the Korean market. The semiconductor business grew volumes nicely. The assembly business and power electronics grew nicely. The I&S business was more of a price story than a volume story. As we look out to the second half, a couple of observations. First, on a year-over-year basis, easier comps, and so we should grow organically year-over-year in the second half. Obviously the Q3 is our biggest quarter. You see a ramp in the electronics business associated with new smartphone platform launches. That's normally a 6%-10% bump on a sequential basis. We're really only underwriting to a couple of percentage points of growth sequentially in that business. Then in the Q4, we're expecting an auto market recovery, and so we should see some volume growth in Q4 driven by autos. Thanks. That's helpful. I'd just be curious. I don't know if you're willing to quantify this, but clearly, auto OEM production remains a headwind for your mix, and you've since acquired Coventya. EVs are a bit of a tailwind. How much would you say you're under-earning at this point versus where you would be if production normalized to some level similar to 2019, plus or minus? Yeah, it's a tricky one. We've been operating at, call it $80 million in 2017. 2018, it was north of $90 million, right? There's a very significant unit deficit years. Over those years, we've been investing. The sustainable chemistry we've introduced is driving share gains. We have made this a focus market for us. I think our share is better today than it was back then. Earnings opportunity. Supply chain. I'd add to that, you know, this is an off year for the smartphone market as well, and we've got the secular growth that's driving that market, that's growing in the automotive market and the general industrial economy. The longer term growth prospects for this business, the base will be growing off as we exit 2022, will be lower than it would normally. There's a lot of pent-up earnings in the outlook for the company. Quick take just with that is, if we look at On Poynt, that's a pretty, you know, quarter to a third or so of your business. Would those above your normal incremental, or should we think about that more similar? They would come back above the normal incrementals in the I&S segment. Okay, thank you. Thank you. Our next question comes from Chris Kapsch with Loop Capital. Yeah, good morning. How about performance relative to auto builds? Just curious if you see that there's been inventory that you feed into that might have contributed that. Just wondering if it hasn't been a contributor to your outperformance addressing that market. Yeah, we've been looking for that, Chris. We've been looking for evidence of that and anywhere in the automotive supply chain, particularly concerned about. Okay, got it. In your formal release, you mentioned a record sales pipeline and record new business wins. I'm just, you know, some of these turnkey systems into the printed circuit board ecosystem. Hoping it's some harbinger for what, you know, the- Yeah, appreciate that question, Chris. It's from our perspective, it's something we look at in real detail. We won more business in value in the first half than we did in all of 2019 or 2020. At the same time, the ramp of that business was slower than it is in normal years, which isn't surprising given the global economic conditions we've been experiencing. That is a new line. What that indicates to us is the momentum over the medium term in our end markets, and the innovation that our customers are driving and that it builds our conviction in our market and our ability to benefit from it disproportionately. Yeah, Chris, this is Carey. I would just add it's spread across all of our verticals. Not just the electronics business, but all of the verticals are seeing that expansion in new ones. That sounds good. One last follow-up just on the semiconductor business. Just looking at that industry, there's a little bit of a bifurcation right now where you know, memory units are a bit weaker. There's overhang, overcapacity, some negative comments coming out of the big memory guys, whereas big logic foundry is still doing pretty well, particularly at the leading edge. Now, just curious about your exposure to those different chip makers. Because your plating chemistry is pretty good, so just wondering if there's outsized exposure to one bucket of chip makers versus the other. Thank you. Sure. Thanks for that question, Chris. A couple reactions. First, our business is driven by volume, not price, and volumes semiconductor market. The second is that our business is disproportionately in the logic side of the semiconductor market, and so the noise in the memory market is not impacting us to the same extent as it is the overall market. Appreciate that. Thanks. Thank you. Once again, if you would like to ask a question, please press star one on your touch tone phone. We also ask that you please limit yourself to one question and one follow-up in the interest of time. Our next question will come from Kieran De Brun with Mizuho. Your line is now open. G ood morning. Morning, Kieran. I'm just wondering, you know, touching again on kind of the pricing side. When we think about the prices that you've pushed throughout the last, call it, 12 months or so, and what you're gonna be pushing in the second half, how much of that pricing are you gonna be able to kind of keep, let's say, when costs subside, and how we should think about that, I guess, as we go into 2023 and some of these headwinds start, you know, subsiding a little bit? Yeah. Good question, Kieran. So we break pricing into three buckets. There's the metal pass-through, then there's commodity surcharges, and then there's negotiated price. The first two of those buckets are really driven by the price of metal and where those commodities are. Those do go away when those prices decline as they've begun to in some instances. The other negotiated prices, historically, we've been able to keep. We haven't seen a period where we've had to go back for price this frequently in such a short window. In the past, we've been able to retain that price. The other driver of margin opportunity is mix, and we're growing faster in high with the exception of our auto than the blended average of the I&S segment. Mix should continue to be a tailwind in terms of organic growth and the cyclical recovery in auto that we expect. Great. Just a quick follow-up on China. You know, the lockdowns in 2Q obviously impact, you know, whether that was in the assembly part of the business or other parts of the business. You know, when we think about 3Q and maybe even just the second half in general, are you seeing any pent-up demand and kind of, demand pickup from what you didn't see in 2Q for the year and maybe how we should think about that, you know, driving your results? Thank you. Yeah. The electronics business see the same impact from the lockdowns as the automotive business, for example, in our Chinese exposure. The electronics business, we don't expect to have a substantial ramp as we lap. The auto market was slower to pick back up after those lockdowns. You know, the consensus is for a stronger China. We do have that in our plan. Great. Thank you so much. Thank you. Our next question will come from Jon Tanwanteng with CJS Securities. Your line is now open. Hi. Good morning. Thanks for taking my question. My first one is just maybe high level for 2023. I was wondering if you could give your view on, you know, how easy it would be or hard it would be to grow in the event of an actual recession. It sounds like you have a lot of irons in the fire with, you know, smartphones having a, I guess, a stronger auto. How sensitive you guys are to a, you know, consumer or a wider recession at this point? Yeah. It's a good question. Look, our business has proven an ability to grow in mixed markets. I think we're demonstrating that this year. You know, one of the big assumptions we'd have to make is around what happens to the auto market in unit deficit between supply and demand. If production continues at these levels, if it ramps up, if supply chains improve, that'll be a big driver of demand for our business. The secular trends propelling this business were very durable during economic weakness during COVID, right? On the need for 5G infrastructure for data storage has not slowed despite an economic slowdown that we've seen in it the period year to date. Clearly, you know, it's a weak year. There are reasons to believe this business could continue to grow in an economic slowdown. We've proven when demand does, you know, slacken. Got it. Okay. Then just a more short-term question. How confident are you in your smartphone customers' orders, you know, for the rest of the year if demand does continue to fall? I mean, obviously, we've seen it in China, and like you said, the wide room in the guidance you provided. Yeah. As noted earlier, you know, our baseline expectation is for a softer smartphone ramp in the Q3 because of weakness in the smartphone market. That is taken into consideration in our guide. The other thing, you know, that we've demonstrated, and again, going back to the answer to your first, our guidance, if the demand isn't there, we know how to control and manage costs to ensure that, you know, the bottom-line number is what we committed to. Got it. Thank you, guys. Thank you. Our next question will come from Angel Castillo with Morgan Stanley. Your line is now open. Hi. Good morning, and thanks for taking my question. Maybe just to follow up on that last discussion around a recession. I think, you know, as you mentioned, you have a lot of cost levers, and a number of your end markets are maybe closer to trough. Maybe could you just maybe frame for us, you know, if we do go into a recession, what's the kind of downside in terms of EBITDA, you know, that you would anticipate with the portfolio that you have today, given that you've done a number of positions and, you know, maybe the past is not as applicable? Yeah. You need to make an assumption around top line performance. A minute ago, we talked about the reasons why the top line could in a time of a recession. You know, what we've proven is an ability to preserve profit, as we said before. If you look at COVID, EBITDA was down, top line was down, which is the most, you know, since 2008, since they exist in their current configuration. Top line was down, you know, 12%, just a little bit more, maybe 15%, the GFC. You know, we have a highly variable there, cost comes out. We have reason to believe demand should be resilient in a period of economic weakness because of the secular growth trends that are propelling the business and the dislocation between supply and demand in the auto market that we've lived through over the past couple of years. That's very helpful. Thank you. You know, as you look, whether it's palladium, nickel, which I think you kind of highlighted in your prepared remarks that some of this is maybe part of the second half. Could you just quantify some of these things coming out in terms of maybe the margin and how we should think about, you know, just the flow through? For the most part, these are, these are not drivers of profit dollars. They're just drivers of percentage margin, right? Goes up a dollar, we sell one more dollar. They, they sort of negate one another on the profit line, but it has an optical impact on percentage margin. There shouldn't be an incremental end on a sequential basis. There should be a tailwind to margin percentage, but the magnitude of that tailwind will depend on where metal prices settle, over the next several months. Thank you. This concludes today's Q&A. I'll now turn the program back over to Ben for any additional or closing remarks. Thanks very much for joining, everybody. We are looking forward to your future. Have a great day. Thanks, everyone. You may now disconnect.