Kennametal (KMT) 6 Nov 242025 Q1 Earnings call transcript

Good morning. I would like to welcome everyone to Kennametal's First Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Michael Pici, Vice President of Investor Relations.

Thank you, Operator. Welcome, everyone, and thank you for joining us to review Kennametal's First Quarter Fiscal 2025 results. This morning, we issued our earnings press release and posted our presentation slides on our website.

to President deck of referring Michael today's be Vice Pici, Investor will that throughout slide call. I'm We Relations.

our as President comments such, or and Joining could materially a are me the prepared direct Kennametal's or that assumptions, questions. At constitute Watson, risk remarks, filings. Officer; and contains line open and company's like to this expressed performance implied Sanjay today and, Today's risks Financial to statements Vice Pat discussion for statements. in Chowbey, President we These of SEC involve your factors forward-looking results, After in on and forward-looking from such those Chief Pat's the Sanjay differ statement. and Chief number call time, uncertainties disclosure uncertainties the would and cause Officer. detailed by will achievements Executive attention that to actual are I

non-GAAP call GAAP believe call be deck the that, financial turn and the will on we slide directly most Sanjay. on the are measures addition, financial found back comparable can of the Form website. And on discussing with In to our at measures I'll X-K be to over that our Reconciliations today. we

market. of us. examples Good the thank Mike. the 'XX by industry-leading Pat outlook. followed the morning, as Fiscal some solutions cover Thank Then you, well end commentary, will financial and results the you innovative I'll are for and call joining start market with the of to as bringing today a quarter quarterly we review

questions. summary then call some the and for Finally, make comments I'll open

started we pretty perspective, that the from of saw Fiscal Fiscal uneven, by similar start me 'XX industry an saying what Let and Slide at 'XX. end to X macroeconomic out has on

impacting fiscal first end of our several is EMEA, worsened our that in quarter, markets. During and further conditions market

industrial soft. in U.S. be has to addition, continued In the production

on production, impacting the X one was saw which We in major and one control. industry, market quickly, shipping can industry challenges, these that recently. Despite also second broader was remain we resolved aircraft and which things focused disputes, resolved labor the we

to demonstrating elaborate continue solutions a our drive to on initiatives industry will moment. I these growth, launches and and product at in We on including several events. make more innovative key progress products above-market

remain In capital, free delivered cash the we focused on addition, shown this by working that as primary flow strong quarter. we

Now let's turn the results. to

year-over-year. For constant At a Metal sales Infrastructure X% the X% level, Pacific X%. Asia the currency increased sales quarter, organically, was segment decreased increased down X%. basis, Cutting while On

and declined EMEA However, X% the declined Americas X%.

Aerospace X%. & XX%. grew to our grew Defense end Energy markets. Moving

markets other declined declined moment reflect Transportation X%; down on a last outlined declines: to results quarter. Engineering was we Our the experienced General X%; X%. I versus Earthworks our expectations for and want

the conditions Engineering were due Transportation and end the General lower EMEA regions Americas was at in Our challenging in of expectations. results This mostly market Metal to our within and Cutting.

Germany. participation shows every results $XXX initiatives the in AMB Free as cost period. include and Now $X.XX, of the to our investment compared year-to-date the U.S. turning of including quarter. Reflected activities noted negative the million worth up operating from third-party place cash our repurchase continued operating take was in was the year. And to the year. Adjusted Cash related Adjusted also other from significantly portion in expertise our year execute some the call back million year, million in that share with during plan. The a trade to was compared decreased million the EBITDA year $XX program, million, million, bought shares quarter. in was compared prior of prior $XX $XX prior $XX IMTS prior year-to-date we to to improvement in quarter. in our in $X.XX XX.X%, EPS XX.X% to last EPS profitability the and margin for to EPS flow $X in

We are shows. encouraged those the of during interest level by

have were booths events. from generation lead very both we a strong active, and Our

generating we Finally, cash and on to improve focused overall our remain flow initiatives strong implementing performance. operational

want benchmarking at provide Investor to that an on X. Now last turning year growth introduced the update we to Day. Slide I

a As our peers relative you may Metal data certain recall, traded by we comparison trade growth and publicly groups in provided to of Cutting provided industry countries.

First, again, performance, currency on matched quarter Metal traded on once negative the left, set. Cutting peer constant basis, this while publicly the a

our and couple as of you years, win. have ability the see demonstrating last compete we can here, Over been to

the countries is of X% special listed, right, below and Transportation. these see you well to by the countries. growth. we Aerospace projects we that very In market. market U.S., performed can outpace the or in match growth, driven delivered This in & continue mostly have relatively On the we overall modestly key timing In the Defense

For there example, Germany, the in broader significantly, growth. declined achieved flat while market we

sales. Also Our initiatives. growth outperformance large was by due note, impacted have been to in of export peer our group part lower broader may the

application me best-in-class support and excellence service, say us let position growth. our engineering to above-market innovative solutions, for that customer Finally, continue commercial

highlight to like our product innovation speaking innovative I our customers. to offerings examples deliver and Slides X enhanced of Now as competitive solutions, a how to of X, on would advantage continues

ideal applications. This and customers identified made to medical innovative that turning in First, our and operators executing example solution who solutions progress products has the steel Slide which these reliability conditions have on surface growth. with most great on also abrasive quarter. mining longer needs for is ultra-sharp Metal launch PrimePoint We is These for unique strategy edges It operating titanium and and from is and help life this micro is we mining are Slide the other machining harshest launched we our machining salt in of example environments. On tools longer. of product this markets. X X and support Cutting serving use the Day polycrystalline for Investor finishes have in of Infrastructure a specifically our aerospace focus solution tool TopSwiss portfolio. mining to coal, applications. This mineral during challenging X and enables great X, soft provides equipped this longwall tip, a suite This micro Notably, our pick run from pick fuel new is of we high-precision in above-market medical, customers applications, a discussed cutting aerospace, stainless last year. the us superior And is portfolio. the diamond transportation

financial let to the the who quarter Pat, Now turn call me outlook. first and over will the review performance

in Transportation the than our of with Thank execute market down General were currency results of will morning, conditions. we those anticipated we results. The and continue in and the you, X challenging a of had our on X%, the & markets. begin experienced quarter's bit and I by offset unfavorable good review exceptions respectively, project and Pacific and the and at XX.X% most Americas Sanjay, of the provide segment an market quarter moment. Adjusted EMEA, partially markets show end and and Energy due more last face the were end operating and that headwinds operating the volume. Year-over-year, market a in EBITDA with Defense we experienced stronger of end Asia X.X% of X.X%, Sales X%. Sales in Earthworks color favorable to performance we year expectations a in Slide prior workdays we in versus to reviewing region. will were quarter. slower most Engineering, QX organic regions, initiatives quarter. with Aerospace markets X% exchange expectations, to when Energy was conditions, X% year-over-year, the notably I margins decline Relative provided this of and end XX.X% everyone. lower

has we successfully the During million pretax savings quarter, announced realized savings annualized in This delivered rate run previously from $XX of approximately program. approximately the action million. $X restructuring

of on Lastly, partially effective driven the $X offset These volumes, rate highlighted wage in versus the of year-over-year tax The prior foreign general the the reflecting timing by maintenance per on in within partially and process benefit impact were from by the approximately prior EPS and earnings Slide quarter this $X.XX the discrete segment and $X.XX negative, XX.X%, items primarily benefits. by were India. Adjusted resolution share dollar to headwinds bridge improvements in of shutdowns. X. The period. of million were unfavorable shutdowns routine higher this raw U.S. was quarter. The quarter, favorable inflation material dispute exchange of were restructuring year in and a main for year-over-year and strong plant from the costs EPS mix, offset are year quarter lower Infrastructure sales of effect a production temporary drivers adjusted our geographical of increased the operations favorable recognized tax and incremental performance X% and

net quarter received from a of the Rogers of facility benefit to that our 'XX. We related tornado insurance proceeds $X.XX in the fourth damaged FY also

and down this sales the pension share year X%, Americas compared partially declined starting offset Metal currency contributed of and the by Metal effect sales constant the see rate the XX Asia X%. By and on unfavorable $X.XX. Other pension with EPS, X% a and quarter, taxes declined region, EMEA X Pacific also on quarter, X%. a reflects can count, tax Reported workdays effects X% and You organic of the favorable of with Cutting. Cutting X% decline performance were negative of prior to foreign which our basis, segments $X.XX. Slides currency detail grew with an of X%, lower costs

markets, and Aerospace was reflects Transportation and General in General modest improvement was end year-over-year EMEA's the end India. Transportation Engineering growth strength of and by this notably Engineering year-over-year initiatives our driven reflects conditions markets, quarter Pacific's & in weakness in by Americas' Defense. offset growth Transportation the in to due in slower execution the Asia performance and Germany. decline partially primarily market China end in most continued

were project experience and $X by delays. adjusted General modest year grew results. OEM Asia our market. offset lastly, year-over-year million, EV points market And in decreased and flat, $X and partially by of year-over-year, prior by general of Looking million in the wins activity margin lower growth lower project orders. Energy operating an due partially to foreign production EMEA price. sales EMEA and X% to the Americas, end due in These partially sales in a order lower project we production region, initiatives Pacific work in costs, continue as offset Americas. Metal Engineering by declined exchange X% slower was at raw and challenges. EMEA basis Asia year-over-year the with hybrid Transportation of with Defense from the by declined to Cutting strategic wages timing Asia strength slowdown offset and year-over-year, initiatives in to Pacific offset savings overall continue as volumes, restructuring higher Pacific X% by offset and production and and material & inflation XXX X.X% project drive Aerospace

Defense of days XX and partially primarily were timing growth business The sales project Aerospace which strength increased decline Americas currency driven General Infrastructure Infrastructure. Slide sales order X%. Regionally, order to Engineering. impacted offset of in Americas Engineering, growth Asia Asia a General organic and X% due in Growth for constant Engineering, activity lower Reported & on demand X% EMEA partially by was XX%, X%. in Earthworks. with in slower General EMEA offset Pacific the Earthworks declined sales by by by in Turning China, growth. in Pacific by reflects mining timing sales offset was basis, to increased year-over-year, and Defense flat by unfavorable

mining by offset the due a by X% by the EMEA restructuring to partially in land-based increased due mentioned due Defense favorable Engineering process focus improvements, initiatives mine and X.X%, for from lastly, previously Looking growth material and Americas, Earthworks volume. prior Americas Pacific partially on declined in in order And to the Energy Asia. and factors: driven was These proceeds higher of plant million, by project inflation. price factors to EMEA timing, and currency in XXX savings activity constant shutdowns U.S. consolidation wages count. & Asia margin offset timing to timing, the plant maintenance general raw $X and flat declined sales offset by orders. Adjusted points shutdowns higher year basis XX%, on the Americas, temporary following were net operating the market, Aerospace Americas. and continued and lower insurance at X%, sales customer General year-over-year our rig end mainly lower increased and basis, in primarily

period. income operating in sheet. working driven and compared Now $XX period. from flow Net compared million, our to free XX resolution the cash the change year the operating to net review cash changes activities capital million net flow of flow in prior activities $XX tax operating to India, partially offset balance Slide turning was prior cash $X and year dispute the was received The from primarily favorable lower a million in by by from to

inventory to this our our new as from ago, decreased public million quarter. In we $XX cash prior year. Primary $XX in over down XX quarter XXX,XXX flow working to million prior prior year increased working We expenditures $XXX on from $XX $XX and we share continues in repurchase basis, million the levels capital primary to programs. million to for dividend primary $XXX XX.X%. Net year. dollar company paid through and capital. optimizing was the And $XX million of million, since sales returned compared years and remains shareholders. million, million; have in becoming focused to authorization. operating repurchased working the QX on total, capital under a capital shareholders we free to year-over-year, our dividend basis, decreased The shares focus every a working to negative percentage $X Our driving on decreased capital quarter On to improved company a a

returning Our our to our improvement. to growth cash in our to commitment confidence to reflects and shareholders execute strategy drive ability margin

sheet We be continue a maintain in found no XX healthy on balance full requirements. the balance maturity can profile, and near-term appendix. with debt sheet refunding The Slide to

quarter Slide second XX to our outlook. regarding Turning

expect with realization price sales and $XXX to exchange. QX neutral million approximately million, X%, of a between be foreign X% $XXX to X% ranging negative from We to from effect negative volume

QX share assumptions impacting me on Let detail the sales some the outlook.

flat. Noncash to moderately, Defense Transportation due to of million North range And American the approximately mainly Our is norms. effective General strike to impact second growth continues, year-over-year EMEA. to Earthworks $X albeit generally expense be production project is in declined is expected QX expected assumed & impact reflects have pension Aerospace midpoint levels. be with a pretax to to negative anticipated is at prior line anticipated approximately flat. to our of an is the quarter. disrupted million, as and growth expense volumes wins OEM year Interest lower on in a but rate by historical QX a decline approximately basis. basis, $X the similar is tax Energy will On Engineering that XX.X%. be slightly, and

$X.XX EPS in range range year-over-year to headwind the $X.XX at the QX EPS. Lastly, the EPS midpoint we a expect rate, adjusted reflects approximately The tax change of which to $X.XX. the in is

regarding XX, our outlook. Now year on Slide full

billion, be ranging and X% positive $X FY volume to We net from year-over-year headwind between of negative approximately 'XX to continue expect realization exchange. foreign sales X%, X% we to $X.X price billion and with approximate X%, anticipate from an

$X.XX flow remains outlook and $X.XX, of operating EPS greater free Our net adjusted income. at to remains cash XXX% than

embedded outlook other our also assumptions remain in The unchanged.

aircraft the to above we seasonality. in industrial sales From strike rebound Aerospace namely, remarks, a placed EMEA. end over noted in some get sales U.S., last top would turnaround in would and developments us to of need pressure require midpoint reflects have give Sanjay additional outlook the with strike in resume. These some as outlook from his would just-resolved the events EMEA. our have of the quick production been perspective in As our macro in prepared sequential challenges quarter end a markets; in that averages. our a The & growth historical our on the macro Defense there of seasonality To our production line a growth well bit types recent as

back Transportation Energy & to expect to it Sanjay. decline flat As have I'll with such, Earthworks year-over-year increase to we slightly. And Engineering that, and Defense be moderate over Aerospace to to General growth, slightly, turn and

Thank you, Pat.

Turning XX. to Slide

although the remain market short Overall, growth over that intact. conditions megatrends long the the macro term remain summarize. me term, Let drive in challenging global

and our market cases, for And to improvement in continuous Operator, value-creation long-term with of line growth the shareholder conditions. driving strengthening guided managing all questions. we deliver so will with in costs committed that and optimization, line portfolio As always, open we by we that, our be remain pillars foundation can please value. And growth, while

from comes question first Fisher, Our UBS. with Instructions] [Operator Steven

proceeds. if first benefit have help sequentially second the the assumptions frame compared you margin quarter, the you for Wondering quarter the the excluding just from insurance can to us

just key should assumptions. there be typically, they what embedding And lower, your but just think, of could bridge kind items for us. seasonally of in maybe I in the you're you I'm kind curious

Yes, certainly.

bit QX to less in So the more margin going QX, well. say of things think from from a couple of we think away. go to little some we've plant I had about, because, as there proceeds but about. perspective. QX. got the benefits or will in bit we going resolution A QX, a we certainly the to pull little a that obviously see talked as out of would tax of of -- flattish insurance nonoperating Indian A that There's from those We'll benefit dispute from pickup shutdowns, QX item,

away around And had we some some trade the as shows expense of goes well.

side basis the as modest normally lot compensation of annual other up us goes here receive employees their when global a a tick-up On our of X. on That's a for that, adjustments. salary generally October see on we'll in compensation,

are kind But takes. margins. those puts major So overall, and of flat the

confidence range? be guidance any helpful. at the you end Okay. organic point, this imply Or have nice the very Could kind bias in that towards And in That's the perhaps most just about does other of second the you absent the of is a information, recovery half. that the where gearing then talk recovery? growth should lower we in

Steve, Sanjay here.

to recovery in all, the XXX. year we second you oil calendar as and counts. And that rig seen, rig last of in of right count 'XX also the the oil said is might the the as also, in now quarter have assumed slight First down we half production industrial

and also outlook resolve. But that. In around this look XXX. And were they like that improvement the it's there right start XXX, at much we for to assumption at that in year. that's especially when the the on now, slight It depends how we improvement at Long in Defense, then much obviously, China. term, some sorry, you improvement Defense. production supply Earthworks. of U.S. looking the to the of start this the better also. at to some move you stabilize that oil slight auto know point, pressure As globally, production, includes stable gas that outlook into Aerospace & and half a our assumes is going see on sales. And Relatively auto the auto EMEA, then we -- in way continue Slight are and Spears can Aerospace point, improvement, second & slight issues, constraints in it. to

the next Julian And comes Mitchell, from question Barclays. with

Maybe just suppose, I is a demand versus, first construction, little question, industrial news on on elaborate a where broader more bit and, you the negative. mix if China China in things could say, uniformly

us So you're the the revenue balance year China kind maybe assuming or of help please. understand what of terms trends, for AsiaPac of in

me start let Julian, with first China. of all,

to As you and construction pressure. said, be mining continue under

that and improving, been Beyond improving stable but not continues that, say. other it only improving; I slightly markets strong, to serve. India seen major and be we have has should in we stable end markets

despite way here, the improving. on will it's construction APAC, stable overall, I pressure So going we to describe and and slightly mining, think be

first I look increase And similar, a to That's in total suppose, this margins, back. you have half Pretty I in versus about company, in. half I year suppose we'll half we then think circle half-on-half, seems dialed helpful. When to that, second be back the normally. the typical fairly operating just but wanted

that, about quarter? we weighting flattish mind as sense? kind that of provide the margins in I quarter think, fourth could third are And think of versus to you maybe bear margin kind in color second ramp, understanding sequentially. Anything that of any So

of step-up, base, points and know of think. that back then have we you couple I kind of half So a

margin margin second primary the uptick of of reflect a What I'd on. is seasonal a what's the the from That just lot things of couple going volumes. in drives A half performance in that is driver on perspective.

year stuff layer is think on margins. The productivity and on again we you continue higher-margin lapping in terms more you'll in as on as and will the and a more things, would see of is of year-over-year, based restructuring going typically restructuring cadence the QX, then that you're half, of things, benefit a well. And that that throughout in in first excellence QX, is our just as come quarter, this come move but ramp again those to half normal as operational lastly, year-over-year thing we of what just to type than the see only work about So basis. I other on again second QX is

comes from question Capital KeyBanc Steve the And with Barger, next Markets.

now X, past pretty of Working with had are flat negative Can looks take of you growth that out? over you showed a volume need percentage that production you year. talk volumes. as potential the about you've demand? days continue few impact relative talked you Pat, relative sales the where are just years, half you for back to to Or positioning improvement over cap about? inventory last starting Sanjay lower Slide bridge, to Do production the to how the and negative

inventory, overall, do, out I'll the we're reflect particular I inventory in trying is Steve, trying general what mean, system. with of take just the to trajectory, on we're to

And I simply say over is, saw that inventory be implies up right? You long demand the production where slightly come that from below QX. run so would would

in $XX little million sequentially. FX about I a I think think there's bit there; of

adjustment normal that, QX. of inventory pull kind So terms after I seasonal would in pretty say in you of

as us, here of lower time our and a is, down volumes of again working require really year. our is down That sales the XX%, over constrain get and a end benefit capital part get outlook to here, the production strategy way objective fiscal by to on Our the kind inventories. percent to about will higher to of of as primary reasonable as long-run get of in that sales

Steve, one add that. to more just me on Let thing,

the continue. been in making overall sustainable basic the of in that that, operations network, we sales like supply making on a where of move have and improvements continuous from And part We we've the lot that. will improvement our as what progress chain been planning, and world in all

at we we very But closely we'll overall same improve working to time, capital. will that monitor continue point, expect Pat's markets. our the to So

that then when shutdowns lock and And improvement? and Understood. on temporary process can those closures improve? we some now is accelerate Meaning softer for product environment just maintenance do for see a you around structural the shutdowns right there markets cost to slide, an and move same plant use opportunity in lines the generally to that savings

Steve, the temporary that not very we long have relatively about shutdown, things overall there maintenance in process These we That's have here. mentioned plant terms at assets, improvements. major specific are targeted short, change footprint. the what done and preventive are these enough to make of

on But a bit appropriate the and working horizon our of the be that. said are separate at half-loaded back footprint those more will all as actions to we at initiative, of to are little that. we back as of Day, when a Investor have discuss we will line more We come of you time time ready

to Just Sanjay. to add that,

need to themselves again, to managing finely terms manner. to over from change able opportunities sales being in time, in when in a conditions we customers, we our think this, ago perspective think we the dial production I Steve, as and can planning market ability operations quarter, is more where and advantage I a December think to did they and be production present in and the X we what responsive do of, take of I thoughtful years as add about think,

And question Stanley. Castillo, with the comes Morgan Angel next from

kind trends, first the saw end the full kind nearer-term XQ, seeing what September, you of kind versus in of please. fiscal Just a maybe point just wanted kind trends are to you general markets, what of the across talk October on about of put finer

said, Where outlook, to construction our that I Pat is second right in or about then in continue will as the to But end and oil soft, as like mining Angel, in built opinion, stay globally, our range. have which now, stable Transportation see quarter. also mentioned in things is stable gas, market overall, our relatively and pressure in the continued more overall, earlier, industrial are production talked the view stay be industry And I outlook. flattish, QX already going Europe. these we we like

cost. switching maybe to price And over

then of seeing cost Just can both X% confidence kind degree and general around you broader kind be inflation of realization talk of in of thoughts kind and the would you're helpful. about just just cost price getting of and what kind tungsten terms your of

So just we'll start with tungsten.

So range it, of let's in a tungsten $X.XX. about, has been to call $X.XX

it's of been here over past quarters. the relatively So steady couple

about in visibility past, the out. X then get about quarters talked we've we generally As

pretty we've quarter. Overall, I think in being board. from general, But perspective by say, an inflation as about following would particular, So much price pockets this seen a significant the base. I Infrastructure not this on the price cost, time, cost inflation would segment, the is some pushed anticipate or trend there say, rates stability and the I of reasonable quarter additional again across point in remain would where at we in in I think there supply then in got out tailwind looking here. this headwind we've continued moderation price terms of

what comment looking pricing? you kind And want to so that's of anything on we're there. Sanjay, the do at

Cutting continue we and Infrastructure to -- did this at Metal we the strategic side. Pricing-wise, had some we price point, on in a July, pricing implement

for calendar come to the more labor didn't obviously QX will like the want inflation improvements 'XX. term, year offsetting is we some broader question make a just on us, expect on that. And which dispute you Angel, also Even goal In to near is change. to Defense. we back that talk give I the I would on your are & in Our about sure market. go Aerospace of think it. the though been don't little in we resolved, those has color bit major I

JPMorgan. from the Tami Zakaria, And with question next comes

X- demand historically, Fed are a pickup see in does thoughts how now first cuts question hearing impact Do you're my you rate that amongst is, of from down? What how cut you X-quarters So environment or on at a sense lag? a customers finally you? maybe to thinking hopefully customers? rate have started transitioning this So Is scenario? lower-rate come any about rates to there optimism a

overall, will I be constructive. rates lower think,

think quarters would Fed period -- the you policy, in term turning going historically, I it's always the near to several that not if right? take probably with variable, Obviously, starts on to monetary case going lag as really that I that. is so here around. is the action before think, look back And were

I think customer rate really sentiment as from being potential. we if PMI said, the cuts current balance against well growth U.S., in out That an from that's that there constructive that a overall a customer customer the turn yet. long-term like there's here period you perspective belief to seen haven't are indicators that

tell to impact And how can my the helpful. out? for the year, next other to of is, quarters? Anything Got -- model it. X the That's any you for us call question the for to business just next clarify, remainder days

there's QX, X.X-day a year-over-year. In about up basically

is think think QX I about be other about should down. direction And I the X.X QX, it day down. it's again in in X.X day

So it's wash most the for of a part. kind

the Dankert, Loop question And from Chris next Markets. with comes Capital

savings First I off, if and but did the apologies missed just the a quick you housekeeping in restructuring it, were delineate realized item, what quarter?

basis. million $X million rate inception annual its on it's Yes, run $XX the Since an quarter discretely program, in of the is year-over-year.

in So million if from it quarter think $XX you X. over the about it's baseline,

it's hefty at it's little Okay. down decremental. Cutting, Metal drill the And typical. bit It guess I like Perfect. Xx a Perfect. to I a seems more margin pretty guess, just on

margins of the mix? I there it going some under XX% help for on Kind Metal you despite terms what it volumes else us is hood on Cutting actions. Maybe think, just of of can here? in is typically, the decremental call understand, you cost

average will the decrementals higher so have average when business. Metal than Cutting, that, about first margin talk in of we being we to Metal the always mid-XXs the for Well, decrementals is Cutting and about north there said And tend of have right? incremental Cutting Metal off, think

As right? That's big the about and on performance was couple volume, quarter, basis a benefits that, segment the first through production the the we Obviously, as on through of you've reduction think of here got what got of in top quarter. restructuring in coming in you've the sales coming right? On things. other both a well, side the

like. margin a that, little trade we would side we this some costs went suppress other here of and see would the the as we the of well that about temporary on into However, the to bit some the going through shows on kind and flow quarter, of QX talked

And the case in what's cross-currents volume a Cutting going from so of on the but a perspective. is couple big almost story always Metal there,

I quarter. that laid top year think, onetime out of that, gain last one last on had of we event we

the And from question Ritchie, with comes Joe Sachs. Goldman next

kind you German I And in on maybe the helpful market Really of at market turn? that share gains, you you expect kind if to the market, have potential of of Metal recovery as to just gains as what question are starts on the maybe to indicators, Cutting these share the maybe do I give confidence focusing just looking that that hopefully were leading a end keep market, specifically. slide types think some recover? once and I then Europe guess, about is, in you could guess

trade driven the meantime, Joe, versus like we by gap our there. I fact available were, that OEMs, remarks, that other lower sales. parties, impacted mentioned the that by think, prepared the I group, near-term will in be earlier, think the the might be the based also from the data were earlier information also In export on it as IHS we publicly and they the said pressure

I we respect wins. here, project new things the what So wouldn't but see the be that to with to going see we pressure. And will any to from deviation under meantime, in of market major continue say is overall we do course,

is on happen little shift through going adjustment a to are change towards also in customers mix happening, As of where that a going terms vehicles, hybrid. is bit were going electric little bit more the they the strong

because those positioned to ICE or engines for very battery, or to So support going go support them. there that. But Whether of of to there's are we that we customers. are our issues comp hybrid we well believe be they some

do above-market So will to we overall, there. growth continue

Okay. Helpful. my And then, be question. Sanjay, you're going to election first

So have, either potentially thoughts, yesterday, your business? on for come, broad that are the potential thinking how tariffs does the your dynamics that on post you about Just outcome just yesterday. how abroad? potential with prospect the or competitive any Also from here of implications thoughts you change

add the do that how business. also affect be I some effect what our see And of will out. that that global lot overall affects, for much But this us cases, the I'll continents. effect watch to his of a biggest too is watch. to lot how we production at because has to we going let then think it, things material it going but We is come to it on overall making point. in on have on the to a early want And we the we direct tell industrial be months Pat where we overall have to that but sentiments, respect tariffs, business we policies one have might But business. With cost, -- all is to different we in how in we thing learn are to are know impact. opinion, see don't detail sell. There a coming we not to that more does expect

manufacturing where I we're that, sense with would to we locally from aim footprint that, global. Sanjay, in I just reiterate say would -- like, perspective, support production We the a customers can.

on said, to being on And tariffs effect industrial feedback loop some policy overall based a going confidence the or feedback therefore, of so the that consumer us, negative. loop have positive that the production on tends to big is government minimize business. That and, is affects any there of

would back remarks. like question-and-answer concludes Chowbey to conference Sanjay turn our I to This closing session. for the

Thank call and the you, joining thank you, for Operator, today. everyone,

you. day. out support. you As Thank interest questions. always, great Please Have if your we any appreciate hesitate a Mike to to and don't have reach

dial To States, be XXX-XXXX. the you A access may toll-free of after approximately replay within the hour United (XXX) its may dial States (XXX) of the conclusion. replay, this event XXX-XXXX. X will available United you Outside

enter prompted the XXXXXXX, be will key. conference then ID, # to the You

concluded. has record name attending You be to will now also asked today's company. The Thank and presentation. for you conference your

your may now You disconnect lines.