Quaker Chemical (KWR) 4 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to the Quaker Houghton Third Quarter 2022 Earnings Conference Call. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Jeffrey Schnell, Head of Investor Relations. Mr. begin. may you Schnell,

Good earnings Welcome conference Paul. third Quaker quarter XXXX call. morning, you, to everyone. Houghton's Thank

Joining us Hostetter, on Robert our President Chief the Chief Traub, call today Officer and President; are our and General and Officer; Shane Financial our Counsel. Vice Executive Senior and Andy Tometich,

the XXXX. comments Our after to markets U.S. financial the of relate yesterday, released information close November Xrd,

no contain these Both in financial updates during under measures contains non-GAAP slides potential release materials be operating which found events may website. provide to and to this company which statements investor are presentation These discussion and and also accompanying future these can financial uncertainties statements most and company obligation forward-looking company's GAAP the press of non-GAAP This effect provided directly the commentary may differ. on and to measures Our our website. financial prepared measures, the of Houghton's our has financial available presentation reflecting current risks, forward-looking the the certain call appendix actual on the cause is involve subsequent performance. on view statements. of to reconciliations The comparable Quaker their and results

For more the refer filings SEC. our with information, please to

Now, to Andy. it's to hand my pleasure the over call

everyone. Thank realization. price the you, double third and led good by strong In digit Jeff, morning quarter, growth we delivered

continued supply raw execute items translation. countering and on market within chain to continue conditions, challenges control, We foreign and our material currency significant softer

quarter, remain on growth includes in and to by pressures long while we our and highly inflationary and accelerate customers complex business This further prioritize environment. for support delivering making term on team taking to offsetting balancing a overall our progress focused the the Throughout are investments All, costs, addressing to continue while significant operating objectives. our value steps control margins initiatives. We optimize our our business. persistent the

quarter. market environment the was expected, uneven third in the As end we

earnings and volumes, underlying and quarter and of in The third the quarter. sequential sales strategic the our healthy in earnings on expect pricing material lower market performed foreign China growth the initiatives, of we but diluted mid were with initiatives $X.XX activity the underlying year-over-year environment, Russia complexities continued by on in to raw We and rates percentages performance the and those remain adjusted share. from the to record in our drove come. the are year-over-year increased our the price specialties to adjusted by segments during margins, partially value immune we as exchange and a activity cost quarters to combination. customers we and and Pricing Ukraine digit part per was sales in softer than single more leading XX% impact pricing our as the result which of quarter. line considering throughout our in in market declined both expiration softened While tolling demand in and gross war, basis, turn volumes we the Despite continue estimate environment. operating Whereas which not offset specifically a agreement market business the global underlying headwinds. our million our a line strong offset management the Americas improvement lower our in ongoing an $XX volumes, progress sales with markets, based In the third growth our of impacting in delivered driven short, EBITDA of inflation of Europe

pressures demonstrate ability value as to costs our the to quarter. continue the implement were products on inflation. offset we services, our and pricing challenge we our higher opportunities. products wins new Inflationary remain wins which in on the focused value be teams and business initiatives our also These of our focus offset value to a declined strategic business even Our to results included business we continued testament by new higher on of as to services, did customers a

inflation percentage the in we we As availability expected, gross supply below they the existing declined though continues the they have in year, increase. had our improvement to model second overall percentage of impact win our quarter to to to quarter, the material pace capture, further the leverage raw for our to approximately quarter, inflation. in more impact a but as all sequentially, were sequentially increased, actions than also as third Raw of effectively than primarily we XX% to of business and margins remain targeted implemented raw more increase slight third price This continuity points And driven costs. prior material the quarter was XXXX. customers. XXXX. and two of margins Gross the ongoing continues material points the also of ability as an EBITDA of third compared increase manage reflecting of increased compared our by margins, two slightly continued offset our prioritize

Americas our to once sales across our capture global year-over-year the the business, was prior strong segment, but to intensified increases Sequentially, Americas. a on Pacific. again, declined all Asia of segments in partially all sequential segments. Volumes the and quarter in segments, headwind in the both the and regional a declined volumes in was basis. price demand increased specialties softer and year EMEA Moving of currency offset in by our as but foreign compared Unfavorable also translation in

year-over-year segment we the year-over-year basis, our business actions taking however, due to complemented specialties efficiencies expect pre That to and in Importantly, the a and global the recovery below and are pressures. said, Pacific, trend Margins by to inflationary pandemic levels remain on improved organization. our sequential continued the pricing Asia drive be margins throughout continues. Americas, improvement global actions we continue will in

remain to our confidence have rates and challenging, to scale customers. This in capabilities more drive we for we the environment continue of be will even and investments targeted performance the value customers a world. to long pandemic materials priority. the labor. our So to generate model will leverage remains value differentiator value market term capabilities our ability continue both by growth above for while Quaker reinforced innovative costs, are pre with that and providing added Houghton, to proposition us the top is macroeconomic while, These making key will the margin anticipated be intimate other through around the adding a All customer value to recovering raw It profile including cost delivered our to solutions the levels elevated, remains in marketplace.

while to underlying and price these with growth actions, diligently dynamics potential implement further balancing customers future working are leaders commercial Our market in relationships. our critical

other pursuing productivity we improvement cost are avenues efficiencies, headcount Additionally, various operations, footprint including measures. for globally, and

Global our balancing growth, to together role efficiencies officer relationships who and considering be while the Managing contemporize term ensure Any leadership initiatives. within long to and deliver help decisions Xst, align will are requirements our To the Specialties the will organization more is capabilities, to our We investments growth. and economic our cost we Berquist, advance Commercial macro the the and Business taken align face assume also pressures addressed by with address customer our Director January of our achieve under our to team. we pursue, of structure term growth will strategic organization. our business will measures effective And enterprise improve a actions the streamlined our the Chief Joe better Strategy currently support our we Chief strategic on profitability, EVP, Officer. long the help will business

wallet Our helping approach, intimacy which will share our while standardize customers. revenue global commercial implemented processes to additional increased under and level streamline for leadership Joe's drive higher the and of through of will locally facilitate a use synergies through of tools,

implementing with future as value accountable productivity seasoned, power extensive with leaders organic who businesses, fuel Their which will help with for SVP improve segment efficiency currently that focus will will us organization as enterprise to driving advance our towards Strategy leadership us sourcing the will drive of multi-year Jeewat sustainable digitization, our and and and and continuously will customers. our business to our Our the journey drive on updated have have and meaningful ownership and experience engine enterprise. successful to more pricing and Jeewat we Additionally, improvements role is ownership digital harness more will generating growth innovation in growth. of us Bijlan, our of from of committed corporate our Working unlock improvement strategic our plan development, a focus, and the more in across opportunities global geographies, company globalization, transformation. global our Jeewat sustainability optimize and drive innovation all earning Director Officer. approach development, well will and as Joe enhance lead wide assume success Chief Managing and are the energy we Americas initiatives, and the and wide of seamlessly together, our

organic Turning outlook, will primary demand quarter. fourth inflationary expected costs subject to continue third and factors, in challenges, the which energy availability is COVID to quarter, our fourth continued is continued further to and beyond. demand, initiatives line execution to pricing growth, which we our policy. year-over-year customers China's to the typical seasonal remain ongoing challenging team The Ukraine, in China end fourth for environment during an exchange. expect higher input and war zero operations. by top Europe are the have and offset and in market the material pressures quarter, in to include external quarter foreign and the The by softened other slower patterns drive the Raw expected further Specific partially our impact

We a we cost maintain we third gross discipline did will as sequential quarter. margins. the our in continue improvement And to our controls expect in

control. our third quarter. to XXXX. as to to cash customer quarter, share of bright, our in for flow value execution those And executing the the our our outlook as results. wallet business second quarter, a increasing XXXX, I driven intimate result, as meaningful enhancements company our wins Through approach our productivity customers. that differentiated the pleased previously remain the the of drive half to exited We am in The add XXXX, second the with half in is we both I'm new in third and with of growth we we also well customer fourth we generate by outlook growth of confident committed have third drives expect and the compared on the net new As momentum EBITDA we communicated we're positive first delivering committed engine. within generating and quarter half for things

initiatives COVID continued our opportunities margin focused are profile, have reestablishing and relationships, with also our valued pricing balancing while on customers. and growth momentum the our to We pre commitments

expand innovation particularly through advanced use capabilities, our higher digital and drive we including the data, as will our We transformation. of

solutions. sustainable through are We initiatives advancing growth our

on with to relationships capitalize opportunity we drive the customers. As deeper our

We markets. are drive our continued progress capabilities strategy our and in work to leveraging existing

We into are identifying areas. and and added expanding new our value markets addressable total growth

processes, While to profitable we future footprint the also align order for in better company our productivity optimize growth. and

We will strategy, tools including and world, needed in drive people, continue M&A our to a culture, playbook. with maintain team liquidity we and our invest expertise, our diverse development and And healthy to providing talent will sheet results. our support around the our the to allocation meaningful our balance our capital

together these and model in differentiated combined with intimate growth Taken to enhancing profitability support expected earnings beyond. is and actions growth customer our XXXX

not term in other is will when The priorities opportunities. value inflationary especially near longer with pressures our balancing and But are evident, term wait. our eventually materials model we improve. raw our We

the committed And confident equip the people. We opportunity and results detail. demonstrating I'd environment more Shane for am better are we unlock is and continue our resiliency taking to our the potential the team's Shane? face. steps we With financial of strategy review right is like term leadership to our the I to has whatever our model to call customer to company long that, to ahead. pass much have our Houghton value. business deliver Quaker and business shareholder macroeconomic to in

Andy. Thanks, And good morning, everyone.

exchange. continued driven million, partially X%. the by the were by initiatives. into a quarter material all a prior volumes another in last maintained initiatives, we measured year strategic experienced was We've our third have recent company offset net compared in $XXX XX% quarters, net year. the strong prioritize an began with related XX% we directly total was Consistent to across to increase response of increases This sales X% for delivering in mix, which businesses a These which sales was in momentum, a increase pricing impact pricing on raw that unfavorable pricing realizing sequential year. increase our as X% this foreign significant of basis, sales these and quarter new pricing and this and was to another decline from The strong

their a as due with we Russia conflicts previous divested two the to X%, totally to Without combination. declined estimate our and as was our reduction volumes as While which ongoing on approximately markets, but X% year-over-year, the with of this declined part regional underlying related these includes well differences. between lower volumes Ukraine, volumes aligned impacts, largely volumes

a profitable X% business that productivity and their quarter, and services to focus a new New the our to [ph] to focus wins attribute on for turn, we continued team's customers, strong value business by which to continue estimate the higher approximately result be In This volumes increases the prior products year. profitability. driving was the wins and in driven compared company.

currently to anticipated focus we to on products as service lower higher work our company This broadly opportunities. and new mix X%. On with product value to in volumes business volumes profitable offset basis. compared we was currency X% in did offset compared prior on wins impacting foreign value a increase approximately we by the volumes, term our sales pressures the by our the serve. continue also are offerings outcome long based inflationary which were as basis, to regain and customers a Sequentially, and of will our Net line offset During actions that of business cost to the by our unfavorable business margins our work lower during sequential and underlying growth our impact quarter, sequential based wins of similarly quarter. prioritize volume to in were Further, X% initiatives softened resulted said, were markets, approximately new which net flat second the this and That quarter. we with offset value X% price driven pricing our quarter. pricing

value costs. impacts markets uneven by Asia basis, be COVID our profitable and considering pricing and were our restrictions have our It highlight the on mid that questioner markets, outperformed our order even single digit in to the of impact on underlying new impacted the its percentages operations This are to initiatives. patterns, wins, Pacific note the which Our continues due European And when direct including to the net to impact our year down make the on business based a to value progress, date new business war continues ability pricing it initiatives, to business. energy important impacted share wallet driving Ukraine, customers our region. to continue our ongoing our indirect earn as most. zero impacts of strategic increasing in and need Despite by for we volumes increased when they however, other also, is

margins. our Overall, our gross basis prior an in to see drive XX.X%, improvement compared margins gross quarter in to XXX basis begin second pricing initiatives Our improvement of were an the to the XX help points period and points third compared to am quarter. pleased the I

have margins we and expect inflationary commercial also, continue continue quarter. a to next will extremely worked increase Our sequential significant our our on business. pressures offset gross And teams hard show to

to Businesses challenges to are the compared to sales From facing. million X% events, increases of is result, were the $X Americas, $XX Looking These volumes increase prior geopolitical Specialty million EMEA delivered on economic prior had improvements compared approximately gross We year. increase significant and perspective, a accounts demand X% inflationary an as at we the slightly which and largely XX% This segment double of which increase and a sales and prior lower selling the remained the the was and and exclusive digit driven by end year. a EBITDA a offset year net margin, despite is growth to for our price million of headwinds market SG&A. $X which mix. lower and macro quarter. third compared an in the consistent. result over the an solid [ph]. year of quarter, reflects was percentage in or assets, Adjusted of of a increases and product impact year, second SG&A Global approximately sequentially, down year-over-year was This pressures compared

in uneven sales a the EMEA was to and Specialty. Volumes the quarter, continued than the And volumes to is compared order a declined Yen foreign Global well sectors declined verses compared last double EMEA our offset earnings the [ph], sector, year due increased of quarter margin segments. stronger was and and compared for markets softer all due as to lesser in except segment. pressures. currency FX meaningful behind Pacific was by in to and Asia more X% gross but earnings to Americas our the quarter. Global patterns were Sequentially, Pacific second year momentum another the our digit as a which prior conditions, headwind Asia Euro saw in Our to operating U.S. the prior second margins. impact as Operating Americas in headwinds, Specialty similar strength by all other and segments But in EMEA on offset flat to Businesses record gross were softer price volumes dollar end compared the X% positive

right in and the sequentially recurring improved sequential to against Importantly, year us current debt From our confidence on excluding at perspective, largely to for approximately segment higher basis, quarter. the basis our tax X.X% of which was increase our largely were line, rate core effective with a and period. items during quarter, are XX% costs consistent the margins non tax in approximately except both non expense Interest at globally. interest a segments operating and other third higher continue and the gives due cost year path though, year. borrowing we that costs, our Below to to on all the expense recovering prior EMEA margins slightly

expect domestic any continue foreign tax roughly to current legislation. remain line effective pending in We or with to this levels, to year's rate changes XXXX

earnings the per diluted improvement share in which up per share in were X% reflecting were liquidity. our GAAP Our year, the to $X.XX earnings. diluted compared our earnings $X.XX were overall to $X non-GAAP and XX, operating Switching prior

million flow Our date. or quarter million was for cash the outflow approximately to an $XX of operations from $XX year

due by increase. Our and working inventories to receivables our due impacted material continues initiatives, higher accounts costs raw to higher pricing capital be to

cash and flow capital We are taking steps our working our to and optimize conversion efficiency. improve

We expect quarter. flow improvement fourth positive translating the to show working a into cash in operating capital

our expect cash of X.X% to normalize quarter. $X million translates in as Having liquidity, conversion is productivity free expected year consecutive end low operating guidance $XX X.X% the for our capital for Outside date. we in to in to we Additionally, invest in our and year. XXth we our net sales, and flow the remain to improved. of third approximately dividends of sales prior to Also, approximately million certain increased in invested we quarter to next expenditures of approximately in X.X% year This $X XXXX paid profitability million the XXXX. at dividends of

of net end higher our the third flow to the EBIT. our expectations timing than generation. and net cash was adjusted of was $XXX million, the X.X at quarter was Our debt This times ratio leverage due

EBITDA, provides are sound. our us at basis, However, times ample facility. On a leverage net credit our ceiling on liquidity we four to of remains our which times room compared X.X bank adjusted

X.X environment our in remain until will target uncertain to our look predict. macroeconomic We on of no But have ahead, and XXXX. To the We we reducing control. as capital to June to we times we what balance the highly to and allocation difficult we very maturities and net summarize, can continue priorities will continue execute remains other leverage geopolitical material our stretch. also committed towards of

are with in continued expect pricing intended increases which expected to our exceed raw we material our Specifically, initiatives, momentum further costs.

solid term to confidence to the and XXXX and We growth are in deliver our to the compare remain as XXXX taking half the commitment a steps I earnings of XXXX. continue of EBITDA improve turn us us XXXX provide enter position our company, both deliver we the value our XXXX to margins foundation and and gives our to delivering to back This best second that, growth our our it potential which XXXX, in well will optimistic on over in on I'll we for half of of shareholders. flow in customers to the demonstrate our expect progress products services ability as second the and With to quarter, fourth beyond. of as on momentum it the Andy. of foundation and future business into cash first half the providing growth and generation long

Shane. you, Thank

address year company your our our we thank want reinforces executed your execute once may focused on and questions, who customers values, has that, face. environment and Their and ability Before With and I happy this commitment in underscores questions. stayed well for prepare core again address to team our to to any has our our our objectives. be to we we'd

Thank you.

and now will you. be answer a conducting Instructions] session. We question [Operator Thank

Please proceed question is with Research Partners. from first question. Harrison Our your Seaport with Mike

Hi, morning, a challenging congratulations in nice quarter and environment. the on good

Mike, thanks,

was the I could improvement a bit business about if saw margins the wondering Andy, the nice Americas talk there. and little in sequential you you

Or or getting toward the curious you drivers XXs level that helped were mid feel if one Just there just like time that any margin margin level? if that performance? sustainable

Mike. Thanks, Yes.

have sober thanks deepening It's a There customer First teams solutions. the introductions, recognizing been working relationships mix, we great job move on for the various add been really taking they're year. a product in that. of leadership as advantage new [ph] improving not innovation. the all, doing as we as through value of and The factor, well have single

Europe it's and that of again, to on that, a as segments well. in of a So take other our within some And myriad from we cue want build things. additionally,

heard most Asia production surprised over we in was they're we improving. see little last a when Definitely quarter And down at worse was then, auto have I impact. than to the XX%. severe to also expecting volumes, looking bit had were that Asia the And Pacific, lockdowns

Asia And as going color volumes little what just maybe for what's Pacific QX? into a on expectations might there? So get your in we on be more

result that thanks mean, the doing of come. zero an still like And for the signaled well, policy we downs COVID multiple Again, unevenness well in some thanks, that, with quarters I business feel the recovery there Mike. China what lock indirect we're impacts beyond and the we're the are business variation typically customer lockdown have that that, net well, have also then order in the think in the profitability quarter of policies. But plays like come and in of there's elasticity. well and our we fourth highlight seasonality. a using and Within be a will business patterns into pricing, I does as There as as great healthy is the as result strategic have we've We're still that improved. direct, doing of and might very some the it. does regions, I appear for also -- we're is with all unevenness experiencing. that been as the now we've shape there's positioned as we're there away testing we as And that. movement of from continue, mix the has not expecting to to be that,

add that. to just Yes. on Mike,

to it's a Honestly, mentioned and market. not high at see. bit I in the there. more indicators the were of publicized see we You markets of indicators weakness compared just think been little some what We digits. the single the the And estimate seeing see. some auto indicators did down We're were our auto What we KPIs. auto

Interesting.

for was did, Thank for I seeing But provide QX could The then math And they're there. quarter EBITDA the this in you're kind the looking last kind Thanks million about you. where million did further last you did you of like you I'm kind are. between on for outlook, $XX is of just for that revenue detail if question smack and level can and year comment that Okay. the guess where looks number feel that on any And at just it consensus $XX floor my of there? in how color and I the of $XX the that million consensus a terms is numbers suggest margin, now you wondering QX. you QX? as like

me our little some that some macro But I it we execute to possible. can as well our sure efficient as add the costs on challenges then we as we forward, let continue Mike, mean, to move reminder, new wins as I'll recovery of as very to I Shane, we we've working color. We're Sequentially, make also paths And to will Shane off. on control margin and help well that that a just color. the we And still we're additional forward. as we us a things move continuing demand ask and continue for uneven all, start year. on kick are control. look add based as of business that With first seasonality significant that, the pricing, And mentioned. all maybe hard there's continuing as we work to want and as you value done as

specific Andy just bit, overall Yes. uncertain. talked But I'm the as Thanks. Well, it get impacted to pretty going about, not environments into like numbers. a little

the QX, As to we had percent that think see decline about rolling from we you QX a continuing. on

probably However, we do declines in see some volume that seasonality due additional, to QX, impact. we seasonality normal

quarter. price bright material Another will control. will the operate where from indicated dollar our in we'll as raw on the positive script efficiencies, I we our like above then as as to cash with show cash again, are work investor will going in some in continue expansion side, well. we an flow perspective. to Andy compared the drive strong is And costs fourth what be we in quarter, should indicated And as EBITDA well then, the the version. about, percentage talked that and improving fourth unlock we margin working those my there, see But uptick gross capital U.S. and in third headwind this we another higher free quarter of from on should

very Thanks right. All much.

EBITDA. not I to as clarification, One I apologies. said, Mike, emphasize, just margin want EBITDA Yes. its

Understood. Right.

Thanks.

Thank you.

question. question next Please Deutsche is proceed your Begleiter Our with with Bank. from David

Hi. This seen year if you And expect [Indiscernible] did be first, that QX? in Dave. do end? impact so, destocking I down by you guess for to

question. Thanks Yes. for the

We to trends respect destocking. any significant seen with haven't

for So, to signals us no to that's suggest that be going changing.

relief QX. material just up versus raws And your price when raw, lag expect you then looks like still it do going guess, Okay. raw [ph]? current increases? And on any I What's in it's on

Yes.

have So that slowed and cost but materials basket that their inflation, all, surfactants but different in of we it's for additives We've a seen as first XX% And of in to the have levels, script, our beginning of raw raw are some everybody. pre journey still of COVID slightly continuing margins we materials, And in really, the enabling just we're are there. region, acids bases on continued total indicated XXXX. in still category, depending of recovery about reminder are up, material pricing have trends, raw and on rate continuing particular, upon and Overall, inflate. to since increasing. increase, chemistry our of our our

that over our like raw value what doing, materials based trend expecting implementing at to continue again, but inflationary recovering and And on regardless journey. also rate. maybe continue, a to basis. emphasize happened are that decelerated we'll we're that and So, I'd we what pricing value are above of

loss presses? And lastly, you incremental move seeing are volume I guess, employment any the as

also the margins. margins healthier our right for wins to that in to and in much we for over the time business like of on at had did key quarter, new I'd wins. recover continue wanted period strategic to to that a us But profitable to was we strategic volume is result business offset net where is then same And we both, the we have new we pricing it strategies the business. third And highlight us. elasticity our And the above Well, reduction test about talked long of that really markets. now, we expect however, X% pricing are portfolio serve order basis our underlying the as The on choices doing to with up. implemented one we're Yes. over is time, some to grow of

some with be of continue that and focus organization be will margin profitable manage balance growth, still recovery. we well while So value higher the to as be that that replacing focused as will on volume, things lower there could decline, on we remains we business, value as anticipate business the

you. Thank

Thank you.

Laurence Jefferies. your is Rizzo Q Laurence. Please Hi, for It's should materials like the on Dan everyone. taking XXXX? look from about Alexander with if Our Dan initial conditions would current say, cutting what -- look with Rizzo I If next terms in setup we and for in questions. proceed or you of think - my question raw question. pricing, -- cost Thank persist

the Dan, morning. thanks for Good question.

So this for it's give stage. us at to guidance premature

strategy - in markets, of margin capital XXXX. well? should carry adding is are we're earning next execute value over. efficiencies on But what about XXXX focused do. to Q from well some regardless intimate our focusing haven't imagine We answer more on as costs. finished Dan yet. we and balancing remain the We'll as too underlying term despite expect forth. think you CapEx positive And model on And to trends really Rizzo before, outperform and highlighted our Or the on be I've as you and challenges in things and it for customers and growth term wallet markets, and is maybe our control, them. could in we still that Long share our can so they executing season that includes our customer we're that So recovery we early as as And for how budgeting we the think short for can of working earnings year? pricing

and the Maybe within that way. that first all, and working you bit allocation more be intact, there. capital. talk and Shane working no our more innovation do we're on strategy we've to capital in remains off been be that previously, about organic But as CapEx same and change the bit maintain then then to spending. to there support customer want And levels little of kick intimate a with have our And indicated, at efficient time, our highlight clearly capital. Shane And going continuing in a to we'll prudent, to I growth, an maybe but our CapEx I'll little includes particular

Yes.

be we're the This had to And within year, year, before. Dan, X.X% we'd talked the into sales. we this to going range we this of about next at So years, about couple CapEx net said compared of X.X%. of X.X%

the twos. going we in into the probably in Next year be there, we'll think mid range

will just However, we about, talked with as Andy prudent, and upon where that. the associated be flexible depending and economy spending goes

to working working efficiency. as improving As capital, on that well be indicated my as we're we conversion, script, look capital in I working about going A,

cost COVID. as working take we can to levels. those to that Rizzo I And a back year. a normal more a love on last bit we on looked little unlock that without normalized conversion, to material sure safety we reducing our Q And to will in amount Okay, make of types, working come year, customers, Dan during to cash serve significant next - capital time a raw We're next ahead of realize question. on would then thanks. staff Specifically, period I did

like a just at auto markets line product hearing you And happening, in OEMs? new sheltered we're if declines legs? from what's and end the launches like with or steel, it you clarification, little volumes your So by what so are been and have look

X% right, that of you look a shows personal And within kind to And Ukraine, strategic say due would roughly fourth we had losses. with from quarter, decline. I X% around in volumes. down or We to investing of here. Within that -- products. get perspective the as the and we neutral fourth over X% and I then year Without previously total Russia as that, domestic the X% think Yes. bridge about down down at as were well down we then quarter. were for volumes year, right, offset that share volume the by total declined we the gains the were

X% of much. overall auto, is Dan which low our - a that markets. industrial as as is single think markets Rizzo down well Q with That where we we were mid obviously our believe steel So blend is very digits. line in Thank you

you. Thank

your question next CJS proceed Tanwanteng with with Our from Please question. is Securities. Jon

the John. And Stefanos think U.S.? Good morning. Good our strength sustainable? This taking in what's you talk that's for driving the is Thanks do for the about Could you morning. questions. Crist

Yes.

of the those, progress customers, we're mix some some to and greater seen just really our percentage perform forward. we we've with solutions, in really deepening of And a the that earlier wallet. providing innovations the continuing little we've above more continued as to improve a across referenced I their participating board. relationships The move think about under I over markets, of things underlying bit and

some extremely example, U.S. on well macro China for strategy. exist think of our And that I we're the in acute top as challenges So, and are not the Europe, on in of that, executing

come thanks. end And push about do gross Great, to can levels you your historic talk and price back pressure? can think margin your you And you do continuing on to confidence markets price? level just as then under get

Yes.

it's think I question a of it's really timing. a

business the previously, We continue that results focus excited to successful forward. value relatively us strategic as customers, our no an And the providing on with I our I lag as with margins pretty we And model our to of price control. in But a there's to increase. is don't volumes to the health that's our our about indicator a our think be want balance in approach we're and is under of and challenges our the improve value pricing talked continue having value our even very sticky, go about show with maintain minimize customers. that allowing and our customers. portfolio will discussions to and one's we've because

Great. Thank much. so you

you. Thank

Our next your with from Silva Please with is David question. question CLK. proceed

guess morning. good maybe Hi, and business your of new a you about Yes. philosophy selecting your question, target. I wish to areas I had wins, which

array new Is reliability? supply it of or can on tend offering of quarter, with -- is words, -- broad labor customers trend wondering, current parts in be in ago, when you services match impression mix the they Is proposition your you. of it So more your more you or a and trend successful clients? which compliance, chain And very current ESG with offer? In most value if in that convincing it a Could just of my are that signing array the to upgrade consider choose other business? two back quarter lot new and you So to savings? amongst securing point attractive outsource? or products to can is benefits I to attributes a Thanks. bring an they which to that look was any those is maybe you there awful

based of of we characteristics Thanks problems I upon how inherent the for and for add the question, can think intimate they a David. customer we model serve one solutions customer is what the I mean, have them.

we as more we number including and there. up So, an to not ability than and Where we to to if things, can need add it's build greater our number suggested of adjust. overall is provide the they share any adjust customers most tend us that of new business you wallet of value solutions where in to

full related a the deploying a years greater our more and portion more capabilities, customer the to it's with of and necessarily significant base. the with really So product, got two to combination the specific not about which much relationship of ago, customer course,

Yes.

that, on David. with add Just

the choice You and product. in right. around a end started get how with product to much it's serve, cost our so we not the really side the the to conversation pricing level, share It's losses

basis, on at So EDA we return value a the look add. things metric, economic ourselves from we pride

So individual return. looking both at a and transaction, to ensure level each appropriate customer level on the product

a a too. So it's not necessarily just decision, profitability it is product decision

it about opinion companies of that. can September. or than say August, your from mixed are Okay. your restore and question say, to the But reported, European tone operate a be from getting early that more more and strategic kind hunkering continue maybe normal for number down the downtime in Thanks operations? mostly for little outlook, vacations you But they is would maybe for customers there may negative in is Or a that, or stretch. traditional following term back the difficult customers, say more how of I'm let's then in let's my industrial somewhat me. coming a kind coming a about that major today, And signals excuse are, particular, of near just the back online, Europe,

And months? major are Europe how a six thinking three months so you. next in Thank of few customers the just or your about sense to

Thanks, David.

impacts cost all, and space. for of Price us, up a in balance, but bit and take particular currency for saw offset. translation, than their temporarily. to the ArcelorMittal and but a capacity indirect of actually behind the And know more just that some continue work of offline, steel least at yesterday are fact, then was situation, in we've the in Europe of offset we the a third direct to quarter, I all of about energy, foreign decision we some region and impacts done on the know is we're significantly in relatively made First the improve continuing, price in sure, Russia/Ukraine will and we by automotive

point that as So we want continue. with those on as fourth the I same and believe initiatives, time, looking costs significant in quarter, opportunities add the pricing you on if are for that. will to to no we're but margins At pressures well our reach to going in controlling an focused think We issues inflection that new space. Shane staying

Andy, extreme, mentioned talked margins, as in inflection pricing initiatives we margins point in the quarter to you Europe. Europe. an do can in reflects our around anything our responsibility And Yes. control. third, our see that the that than fourth outside add up really Only things Andy, going about operating of we

for third top but actually pretty the sharp. quarter, volumes, You as look know, our growth was positive the pricing offset important was it's line organic our to our FX

I Okay. color. Thank that. the you appreciate for

You're welcome.

Thank you.

question is Research with question. Seaport from your next Our proceed Please Harrison with Mike Partners.

Just more me. couple a for

some First that, mentioned material of limited still seeing all, you're raw you availability.

you customers. winning with customers the number out it some new You threw like your win was new that ability to it there. still X% that are impacting said you sounds But

raw you to needed? sales the And into your understand, look next more as I what you if How out much that So us issues maybe availability you be you normal? efforts could better? quarter, relative you look do business had materials like to but get the help not guess, expect XXXX? new Maybe winning,

in But geographies think products. that that, would with period certainly previous spot issues quarters. decreased not they're I the specific are in Thanks, have gone. compared the to say we highlight we're There acute chain I or specific Mike. experienced supply still to issues trying

We For we're X%. our to our in we by the new is about target about that, X% talked through X% be business most outperforming part, quarter. grew normal to and markets the underlying way third our managing

we would some characterize assume we it to that as been it want range. the to Had at material. had but think supply be I the of of not would safe don't have end issues, higher I chain

little a of forward? bit you in do expect And chain further improvement supply going issues

raw in base of oils seen hope certainly some and we've materials. where stabilize. seen think areas some mineral started to we've from have the of depends bundles I cases We upon some materials Again, particular animal so. it And region. of standpoint vegetable the oil But derivative and

anecdotally, signals, So improve. that continue think we're to seeing least I things will at

your Are there going leaders? structure of part individual of business matrix global greater Or give toward you referred is away like to And All a be you. global still little right, a structure? was the I regional moving you color shift from a roles. this could that Joe maybe into that and or Jeewat hoping also on to reorganization then, bit unit a more thank more

one be customers activities we sense. And to mean, customer exactly available important of and they But our that the that like not one customer Mike, I that the most way intimacy that's intimate to is that's value it's way have that fact, of and this. serving for the makes want we strategy. and served to efficient I do and Yes. the in feel really changed that the in all, first always of contemporized, our go the back service of

applications a us this as to digital And more that's as At of capabilities, doing that as taking that more look technologies we this some have process is leverage same be forth. think with allow be standpoint, customers to footprint so, time, get taking more to scale, from an we investments get well be and share, with be even opportunity to a we'll some our support here. places efficient advantage to cross sell in we'll going enablers, so able the targeted to at into we're productivity capabilities more and other more our of of deploy able wallet

comments So, we be with made respect implementing the the that will I commercial be globally, and locally.X still while organization script, regionally clearly to in the leading will Joe

Alright. Thanks very much.

welcome. You're Thanks.

Thank you.

from Please is question with with Viswanathan next your question. RBC. Our proceed Arun

Great, thanks. Good morning. Thanks for taking my questions.

questions. a So couple

some thinking there. the about Just and QX of dynamics

of volume if lap those but X% do to increases you So, look out. things think of And down kind you tougher the similarly, just in some maybe digit When side, X%, normalize Is were of you start double next that I do say said comps? if then the QX, it year? I QX. continue you at QX expect price to

quarters? we with expect can Maybe mid for help a single volume volume little next price just kind and of So declines us do you of bit? digit couple Thanks. the

the Thanks for questions. Sure.

price So I'll first. discuss

Looking they sequentially, up. underlying We up margin given asking explain material went increase. to and on our indicated at it as think that we are roughly But to it's price with raw X%, easier going on you're still some a raw year pace, decelerated sequentially, year, about I QX costs, from as well material gross of at QX. our what talked costs

of to tend I'll to continue of gross see one X%, margins. something price conference So a than From most little above we less a us, I be to that that, perspective, the questions to saw, that, in one we will volume for QX but than QX indicated range-ish. the what seasonality or QX less we gain likely in earlier, had from

see softness was that So which that QX, to X% seasonality. volume saw the to range, plus QX we roughly from we're going continued in

are you right, at, I our to or less share So, are control, can try grow declines. that gain you're the just as performance looking kind unpacking to overall as the continue markets as of at and digit single pricing well continue offset gross we there, And going to least there indicated just volume, we I volume percentages. the about to before, high think where underlying operate to margin think

get on say of that XX% back target or to Great, the XXXX the before margin basis, EBITDA QX so, inflation. to then maybe I XX%, an saw is thanks. And all you that point, know in last on that

inflation side? the what's is cost trajectory So mind? reduction the to of the mainly we FX kind there those should initiatives some the that to on think And maybe kick Thanks. keep we about side? in? moderation, relief and path take should on how some going the it to pricing path levels? margin and in back Are specific Or just any Or

here, point on I the a some we're So we'll was think a journey time. to we've and that about with take margin journey start talked being recovery us that going

depends little question inflationary the a bit what specific I this think answer environment. happens your with on

raw factors inflationary our back recede, quickly. start to levels Of to targeted and that more other help if to course, will get materials us

delivering possible to we're I going our unclear for to margins it's costs, be us to when addition able capturing price, happen. exactly and also in that's continuing model. for opportunities predict Presently, think recovering as control as efficient to our and to in to value to look be

going focus that continue we'll So forward.

lot. Thanks Great. a

Thank you.

are questions back closing you. There Thank no over further like I'd Tometich Andy time. this call the to to at any for turn comments.

we follow to I Yes. with the value please up committed in every Thank Houghton thank to Really, I is questions. for encourage are reach leave we and you priorities on executing are all out of our our for any Quaker stakeholders. and your generating and Houghton future for that. bright, to of with want you want you Jeff Quaker interest to to continued

lines for time. you participation. in this your today's disconnect at May concludes This your Thank conference