Quaker Chemical (KWR) 5 May 232023 Q1 Earnings call transcript

Greetings, and welcome to the Quaker Houghton First Quarter 2023 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, Vice President of Investor Relations. Mr. begin. may you Schnell,

Good conference welcome call. Melissa. quarter our XXXX earnings morning, you, to and first Thank

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

US Our the the close to X, May relate information released yesterday, comments the XXXX. after financial of markets

Our website. on our press investor release and accompanying slides can be found

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

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

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

share sales first uncertainty increases good in quarter, manage to in you, to double-digit and challenges. EBITDA prior recovery In compared margins persistent Thank the record We net adjusted Jeff, adjusted macroeconomic morning, significant everyone. while and we and year the per earnings continuing delivered through quarter. drove and our

by first by first the am organization, in we we in increased the further with controlling control. the our X% pressures prior and was to the to financial in pricing by be our improved which and execution Though a efficiencies, year, net on inflationary performance by improvement the cash pleased also improvement declined strengthening in operational to serve. have and quarter, steel initiatives, all primarily softer Compared to We quarter and $XXX execution a delivering our our net year-over-year driven were about impacting primarily the prior in implemented cost industrial generated sequentially. momentum continue The million. I continued the sheet. sales in regions to what working the volumes across value-based to compared record excited auto. sales operating Volumes the offset end can built markets, they market continuation results the in and quarter, by flow some driven strong were impacted balance year, capital conditions, of increased very offset

in taking ongoing valuable volumes quarter, serve. end In in margin the our We trending specific total, regions directionally with our we customer are initiatives. also incremental of trends. declined consistent business of with and to still continues pleased have line market of improvement to the the new and which some into account drive benefits markets targeted portfolio, see regardless diversification growth our We're and we the mix,

recovery in earnings quarter. in EBITDA, prior prior and the double-digit gross customers. our value deliver generated the and per on balancing ongoing Our to gross increase percentage we In recover margin despite adjusted uneven and million to The ability $XX continue a total quarter to our to our was cost both primarily exceptional of sustained are year the the to the continues. of to compared of driven us and points share, X.X to heightening journey solutions approximately margins, fourth and $X.XX of market our margins compared percentage focus first four margins and quarter, XX.X% also prior points improved recovery we to the the diluted by helping the our quarter, XXXX. conditions. compared This provide adjusted year serve, Gross

priority, leverage million financial our towards relationships generated making operating are to have also the $XX margin our recovered this In we yet aspirations good our quarter, business. we our historical we top sheet, long-term levels, profitable and first of customer target. not progress reducing balancing flow, our of cash the growth back balance strengthened While on and

an recent a years. versus in We anticipate results cash to conversion continue start year. in improvement solid to XXXX are the These

albeit Turning to across year, in the again, was of I segments once the our low on will from improvement segments which price all some the at strong an increased a benefit all compared EMEA, Volumes declined base. to volume manufacturing sequentially and capture year-over-year basis. in Americas highlight segments, quickly prior our in activity, a but drivers.

degrees. continue varying across and all to end regions see activity market at We softer

volume segments rates, growth our business line with wins. the EMEA their growth Americas and led by new market in are However, in respective

are result the program to well while as the part And second quarter we do identified announced global our as in high the Asia and our Pacific of to our in face. global exhibiting to value in to customer team’s slightly quarter This on business. mix as cost profitably largely in especially savings cost initiatives optimization on EMEA, segments, improving approximately price due markets half very the still that raw for at of margins, need in fourth above have $XX all structure confident and driving and momentum margins behind total cost the trend productive XXXX. greatest offset segment XXXX. aimed and have some of Earnings quarter, our to offset underlying to was compared in inflationary due a prior inflation, cost am profitable value volumes, a These ability in grow solutions and prior the customers we our the focus are lows our which the to to that remain on year customers. a management. of strengthening for problems proud was our of focusing segments in million to of organization. more our We where increased markets. actions, recovering the margins material first the we've begun improved continue broader more our Therefore, all pressures benefit portfolio and and solutions recovery compared yield I and however, our services are resolve

benefits of this and We of optimize the organization, more footprint, include our be a its XXXX, to heavily weighted our improve the and will strategy, go-to-market actions portfolio to successfully expect to and to company range enable plan. the simplify program strategic deliver

quarter, through the to uneven and and EBITDA the uncertain to to In likely quarters, objectives, our to year-over-year Turning the needs as growth. we've quarter, the of to translating and these XXXX. be committed several near-term expect long-term collective that outlook, we challenges balancing Despite current macroeconomic focusing into we the experienced on executing the we first headwinds, our are operating adjusted similar we second our last with what business and can for remain remain customers progress strong control. environment

Americas. cautiously in are demand China the Europe we will services and total the the elevated. continued very in our of optimistic the anticipate provide improve costs, which reopening including balancing momentum remain driven material by and serve, with cost value We from journey, solutions on margin resilience and that some quarter first levels, We the raw primarily recovery to

expense, some expected, As also onboard labor to inflation. will an primarily additional SG&A due we

also deliver organization uneven to on and expect year, strengthening in capitalize free as rates, targeted flow limited, improve full our XXXX to areas. focus ready the earnings cash compared despite an the market backdrop, well growth maintain on uncertain visibility the continue growth as be in we XXXX. and macro remains For growth to and improvement We'll to to our underlying profitable

intimacy. built customer earning Quaker a with value through Houghton's growth differentiated foundation back, Stepping on culture is healthy,

believe leading to continue our scale better updated help new structure to first globalization and quarter, areas. closer will provides on regional digitization, we customers, segments, capabilities growth cross-selling business and profitable accountability the and build by for We profitable opportunities, functions. our our global our growth new our with structure. There of can consistent the existing to themes, business, growth and our our theme. considerable reportable using the three supported key our scale sustainability we is accelerate leverage global we of our target to stakeholders. with value company, as deeper in and deepen in our and customers, team our gain for relationships our accelerate and realization us investing alignment updated executive Beginning of This reflects in effectively, segments the We customers,

We our making other on progress are growth also themes.

with late solutions, are intimacy. Our XXXX, in our within capabilities in journey adopting our fluid in advance a energy. the now the transform have trend the customer digitization a guidelines, exciting of for a as deliver platform labs, report, sustainable significant last These inception their We our since of business. of further completed we we platform also chemistry of comprehensive and and being published renewable of achieve achievements to latest intimacy phased in and launch of important provides fluid note, achievements a customers sustainability portfolio data opportunities customer out future Also, to use to analysis which our the the XXXX technology our leader milestones the enabling program milestone of some how investing internal goals. green management build industry, sustainability week iteration and we global our to details including multi-year

quarter, communicated XXXX, in the executing the we and delivered building in summarize, our results, made progress strong To on priorities. on

the operating serving a ourselves environment. colleagues deliver of remain to regardless work we to and our cashflow unlocking together challenge our of potential earnings power leadership generation the and results team, continue to the to committed We As customers organization.

improving confident managing strategy, we company sustainable are we're supply for conviction in our investments, the to and Through deliver and innovation, have being success. to we our of to chain better our most goals. digital future continued solutions prudent I are I sustainability that customer growth with support advance profitability we our continue will goals. capabilities am develop position execute achieve to and We our our our to their to and developing costs, portfolio in And effectively customers investing how achieving initiatives our intimacy. redefine

over With to that, it pass financials. Shane I'd like to discuss to the

sales conflict year. was mix, was and value-based total to sales. we XX% volumes a conditions the partially primary our increase the softer X%, in effects million, primarily sales basis, but good Thanks, a sales increased a volumes, driver with were everyone. of in of a In sequential actions, of and pandemic implement the direct decline approximately foreign we as in our pricing volumes indirect offset quarter decline value-based and from in X% which ongoing and year, the to by continued an driven combination, increased the XX% in This divested by Pacific. Ukraine, as driven prior conditions prior and as market from was targeted compared the and increased of pricing exchange. in increase and tolling price initiatives offset X%, our net price winddown impact Volumes a of we the On X% increase and well of previous soft between first by the the part China. initiatives. Russia themes, volumes by recent Similar actions, Compared to to $XXX EMEA Andy, quarter, unfavorable of and in Asia to morning, foreign Americas segments, value-based benefit delivered pricing net consistent the continued exchange X%. Further, our have including were

The while the and at stable have in sequentially, the necessary. of we they delicate. pricing and raw and improvement logistic agile, and actions execution materials. fourth XX.X%. historically Therefore, material first year-over-year actions continued reflects still was in XXXX. compared remain improvement to point will our margins elevated chain challenges levels, additional implementing XXX-basis improved, our relatively raw costs and to XXX-basis remain as XX.X% remain supply Overall, quarter efficiencies and year, in prior Gross This the on XX.X% increased quarter point

labor well our to reflects at excluding levels had increase on mid-single-digit of XX% as annual timing our $XX inflation the inflation SG&A, approximately prior as period. We've in to or This year-over-year and the XXXX. continued items, labor Looking compared costs of one-time our year an our we expect million primarily compensation. incentive costs, on

range of our targeted actions efficiencies mentioned improve a to operational last further profitability we've and quarter, and implemented productivity. cost As

which actions, the improvement XXXX. annualized of be end implemented million by $XX will approximately identified have We of

points to in fourth expanded the XXXX. basis and EBITDA the and XX.X% over in costs X.Xx We quarter, the savings to of increase fourth quarter year, XX% the result the Xx to to to reflects basis year, first recovery margins. compared course compared positive This the cash an annual program. approximately We EBITDA XXX prior of points over XX was restructuring prior XXX primarily of also or our delivered million which adjusted of the margins gross incur to Adjusted the expect XX% the approximately compared ongoing quarter. of

to our Switching segments.

business a our the executive to and segments we changed structure. As reminder, beginning this new of management our reflect quarter, reportable alignment better

Our partially mix, global initiatives. segments, Asia-Pacific currency mid-single-digit partially also segment, delivered includes well volumes. as specialty volumes the sales mix, following double-digit respective reflect foreign double-digit in the in double-digit by delivered due increase consists offset market decline impacts by decline the In increase recovery those businesses softer expected to and year, which updated driven in our slower of and a year-over-year a of results than segment year-over-year New the in end a value-based but sales volumes, due to as sales lower within decline lunar which growth, price pricing headwind. offset The by conditions, a driven ongoing positive The a did a present regional structure by Americas three geographies. previous modest segment growth, EMEA but

a from translations. foreign mid-single-digit currency We also headwind had

our All new more wins. as well business positive of impacts pricing these than as continuing momentum, offset

Sequentially, increased net X%. sales

EMEA. have compared Our do, to primarily currency quarter, increase while which the but double-digit the to foreign by result the in Americas and are ongoing declined increased of and net decline to path earnings in low and sales the compared recovering sectors, EMEA in a Compared a the segments, in to the especially to quarter, work driven recovery in Pacific. by We efforts. quarter. was demonstrates globally, prior increase volumes fourth Price year-over-year a the was increased all thus our that margin mix were quarter, segment margins as right delivered partially far recovery but tailwind operating single-digit Asia-Pacific a strong segments, to earnings with The fourth consistent in Americas on we we fourth in Asia our the EMEA more our segment. an offset

was by our from softer impacted continued overall recovery off segments, momentum in earnings While volume. margin efforts ongoing Asia-Pacific

to debt the were Below amounts the All the a obligation. into in first interest about our told, during but compared first sensitivity line, were To into we borrowings variable average higher and sequentially. interest interest rate an was notional rate third company's the line $XXX fixed quarter first in X.X% the million largely expense quarter, both three-year company's converting our rate for approximately other manage entered expense of of quarter. year, swaps, prior the of cost rate

first items, with line approximately excluding consistent in tax our our was XXXX expectations tax non-recurring effective Our rate, year and with and non-core the full XX% in quarter, rate.

be expect to foreign to continue adjusted in XXXX our adjusted any XXXX changes or pending We our effective tax line domestic rate, to roughly rate full-year with legislation.

Our GAAP improvement the diluted XX% our $X.XX, share non-GAAP and was an in of earnings quarter increase per was earnings. is which per diluted $X.XX, share our reflecting first year-over-year, operating earnings

is and especially outflows. million in $XX was Switching operations first to to the expenditures due cash by conversion the and dividends. generated generation from cashflow We $X that in our This efficiencies. liquidity, off we capital capital to also improved quarter strong the and a with million result, of quarter. cash our working invested capital paid $X in We're we million typically considering start in good when seasonal impacted working a quarter, strong earnings

spend anticipated of in X.X% the X% of remains Our unchanged range CapEx net full-year to XXXX. sales the for

overall prudent these will the with strategic macroeconomic We investments, environment our with outlook. be balancing

the of $XXX to fourth and improved remain the EBITDA. Our net adjusted strong. million, leverage ratio our quarter at balance debt end liquidity and Net sheet was X.Xx

opportunities While profitable our well with growth. we various drive positioned end significant markets to sustainable exists, uncertainty are ample within long-term

beyond. will of in this deliver XXXX confident the cost and actions emphasize through cashflows are to earnings in and recovery we continue price and and to power improved margin organization, We earnings

back turn Andy. I'll to over that, it With

Quaker focused Thank be is address momentum our in The we'd evident, is team company. entire and and business executing, customers our Shane. positive you, Houghton our the happy very on questions. your for to that, With

Thank you. Instructions]. [Operator

question. the first comes Seaport from with your Our Please Mike question of Research line with proceed Harrison Partners.

start strong to Congratulations morning. year. on good Hi, the the

Can margin color In maybe how the do where of of here unsustainable Is us didn't QX give a level rest year? more of I that you you achieve in here think and and unusual as think gross go there from lot several the anything to attain got you quarters. little on trajectory, a terms for QX a would you performance, bit in look at you the that? margins or QX the us

Mike. Thanks,

course, targeted Of but our not progression, be with some a against see our journey on a some and the we continue actually combination bit, we're about focus from two did those has as said, sell continuing some at value-based the on use points we've may customers. value price. some some time, it minor for the that first for and of material Really easing. be always gross been necessarily We been in Unpacking margin quarter just proposition, little and us it'll value recovery in actions we've a the linear. increased pace in talking raw was and or continuous adding to pricing pricing, a same benefits where we quite fact

On have different a provide. as about the materials X,XXX reminder, that just material we side, raw raw we

And change deflation. not or a a so, seeing we're broad broad

started However, some have ease bit. little of them a to

quarter stability, some interact continue path, against So, we're balance striking the same providing levers to high working at customers, to we're value going going and use but I'd we're necessarily right levels. our we're in highlight at that still to least to on that to not those cost a margin sure We and we with forward going recovery, smooth still be the continue making serve. we'll the on are it's beyond. anticipate the but second Again, extremely seeing

Can terms and of performance, in both of come in of peak in of saw us revenue metals thank stood to kind on the front. you for demand? off in that. on talk EMEA levels are cost about the And that terms that kind now costs and you energy underlying place what margin guys good price out you you now have right, All QX primary Europe? a then metalworking versus And in

Yes, thanks, Mike.

improvements be end of So, building some volume the anticipate some EMEA had it doing. EMEA, that of of resilience did some continue believe we with see year. we fact, the but underlying that But Part low there base. line are occurred shutdowns at the as in is that off true, be we was last of forward, still markets in early how what in some into could at this there'll resilience a unevenness year develops. relatively and is to go in We

to far but As portfolio, pricing obviously and into we goes, across have made work improvements some as margin progress We seeing, value-based of made improve. anticipate in lot EMEA some again, initiatives a We on we but significant on volumes forward. we're progress the still could in of that, XXXX. out entire about continue that optimism Europe coming the value to XXXX as go our do

then right. this EBITDA million before now All for And number $XXX The on for the printed was my you strong EBITDA. consensus full-year million, $XXX around is last quarter, question outlook.

that quarter's the QX million look said for of in that $XXX This should north be you definitely you full performance, similar, year. well could but it suggests EBITDA

higher the where some about than in the as uncertainties. first year, you're full-year still you Maybe we're confidence, outlook and rest EBITDA color where So, second the thinking the on modeling half? additional the have seeing half some of just be should

Yes. Thanks, Mike.

margin could before. priorities we've to. it'll But we're the still deliver continue for and in similar. and as remain I'd that the against for serve, the and The mean And anticipate time. we with, here seen recover again, believe and we'll move, continuing we that controlling still to in and that quarter second And doesn't of going that same bit and just that's margins. value of historical at bit and first focused over our over couple manage on that the that a were cost the with we I've we continued recovery, that Volumes of the as adjusted our China unpacking last highlighted little what uncertainties - we slight to be we're to yield continues anticipate but a EBITDA It really kind on all on anticipate balance continuing the the you, be margins macro second little gross customers price quarter, the quarters improvement, we're performance our pricing said like pace, new forward. things quarter, and encouraged some really expectations with of first, use show control. to necessarily towards of as there by could go we in can we continue based So, The to we slight raws the focus really business the expansion wins. in continue upon to start

in the a still we there, of know controlling out As lot beyond done, that and earnings the what can portfolio we look have control. but power are we've QX, we our and activities of on lot embedded a we focused uncertainties we're

things we as to margin as over and yields in continuing continue growth to XXXX earnings then see we've implement to recovery XXXX. and been that through XXXX, continued do, move So, we'll the we doing anticipate

much. All right, thanks very

Thank you.

your next comes of from Alexander line with Our Jefferies. with Laurence question. Please question proceed the

everyone. Dan Hi, Laurence. Rizzo for It's on

saw within it the how similar a the saying was a demand surge wondering I something talking of COVID, in some guys of just trends were or saw on any if region. coming they are of in was kind Asia, verticals ended whether to you So, so start-stop. are it out you color companies like quickly,

Yes. thanks, Dan.

then was expectation as the bit the little pick they New a up believe did. things sure, increase quicker an for that might our on moved markets. underlying sequential we basis that some of sequentially volumes than a for So, end year impact, the below related QX, Really, through and we lunar and did with we're reason

made we're we valuable a place, out XXXX. And little to we the continue to were occurred. with probably forward. continue a the serve of then in to business customer that patterns we that's and what We some is in customers. value most And going volume. volumes in use could choosing finally, we're for order our had have China's sensitive cautious from place optimism Asia. them anticipating ready decisions uneven bit we seeing wrap improve, also had in serve are where Coming do that as of to and we pricing, We though effect scenarios that the respect we're some pricing, lockdown

The is you're optimism is suggests you, or that happen I or to are is order the going customer up? think alluding mean, ramp there commentary that from going that to, to trends region, it that just what to to start

based as Yes, the we're that will I and policy some think of That of what some stabilization of it's course, allow upon new remove And the and had the momentum. some should starts before. seeing well. stops expectation happened build

So, it's macro. we're general customers what and hearing from and directly a seeing combination of the

final then And question. Okay.

you've we rolling a Is over, where pricing, is of the permanent? can makes if terms component taken there environment some costs amount are pricing that you hit there deflationary In an of value-added your a hold onto?

Yes.

value use, we've talked the course, around all, first as to is balance provide them. proposition from and to of on our So, what a we previously, have we're model that our value to cost customers. And to value adding and of pricing always that against actually

use Houghton, tend the hold on we materials. providing for value we're discussions based to in really and we've very that cycle immediately to our benefits the raw programmatic of moved In have the because been as happening we part that that pricing, don't that's pricing. every the and we've So, Quaker us It's serves up about upon what's reason customers. pass well why in

impact, maintain a made as materials, raw rollover Of could and value pricing. the course, look we depending result believe gains some a or upon some of our we've not we'll use like of be but have that could what able to with

very much. Thank you

you. Thank

comes question with your Please of next Bank. proceed with Deutsche from David Our line Begleiter question.

be savings Thank guidance, Andy, not program, volumes, and have first up on good Shane, tailwinds? What would lower and price-cost just quarter. perhaps morning, else you QX offsetting given these and quarter-over-quarter even the why EBITDA from the some I'm and cost there and tailwinds, costs, unclear should you, SG&A new nice meaningfully. that's flat is very higher potential

Yes.

as David, gaining anticipating volumes margins. some and forward, increases as potential go we're in some we still So, I gross indicated, on

think that that line margin gross result we improvements. some could the that's with we So, at contribute the

some our will will of which the SG&A spending, We sequential flow-through offset inflationary on partially that. have

Okay. cost program, where is from. $XX million savings? maybe are And just coming these the the on Thank again on savings you. the exactly And just a of new entirety touch

Yes. one I'll ask I'll few make then start David, and to that off, Shane a comments.

So, there's of actions able cost growth restructuring efficiency number need we and a making. is program, and doing this driving we're all strategy This a but the footprint and supply as be we're and our this moves they're optimization, effectiveness going in be organization as started that. profitably. to as program, of to deliver Europe, in both we some program, that customers as grow focus organization that be valuable service in immediate global looking the savings implement chain We're efficiencies, redefining that our customer the intimacy way we on in is and progress there. We'll well for how well most we've exactly already to as make at the some to

charges the David, and we'll that, of color mentioned, a QX last in XXXX. run year, rate numbers, specific some as the you on is and begin coming more the have million into going by bit savings program continue We next annual of to just little in Yes, the quarters. did of end $XX this

there be Our depends negotiation and Xx roughly total And the we savings. expect this really to upon nature X.Xx costs, the too. of to

through, about, org it's benefit of them see three rate you I Andy think benefit, optimization versus I going the chain. and about about as of footprint be And mixture we think run asked I in a rate run kind As probably XXXX supply a of will quarters quarter think year. talked where about this

savings reductions have SG&A we to as our financials. well And far been note, manufacturing to thus immaterial see in will So, costs. somewhat as both just

Thank you.

you. Thank

next comes Please Arun line Our with proceed question Viswanathan RBC question. of your in Capital Markets. with

you taking had Thanks Very, price the decline. question strong kind similar on performance a in very I'll Maybe the And for Great. just question. conversely, mix. QX, ask my of volume XX% XX%.

that mix your as they So, your get mix mainly kind QX you? by through of margin, similarly, lower for as maybe year. you you QX, price comment just volumes price think you about better some And how should trend year? volumes How that only overall design mix outlook just turn this margin can drove go for volume mathematically, maybe do QX? calling kind and the not were in into positive mix lower was but and both on and wanes better we an of through the Maybe and we maybe

Sure. Thanks, Arun.

previous realized value-based the As small customers. pricing the value we've to as our on that could high may talked there that our about that is be some business sessions, customers. of for be we're providing in we And amounts not focusing value

so, of our as we be was very been targeting going be some reckless. actually come the a there That's price felt we've of amount essentially not into careful in we've that what were likely to to but volume initiatives, And churn bit of is wrap and effect little some healthy. done, that year. seen of little knew strategically And we this we've volumes a bit we've as churn, we

of wins. cost grow that that kind on against and pricing, we of so course, as and go margins things we to be we'll those to optimism focus And there to managing much value-based and focus it, business being go continue growth we're volumes, at taking the agile forward. some volume As we're have forward, side, we know account, two new into on win gross continue maintain we our serve could on that and continuing to mentioned, more on underlying the continue new levels, that I going to those we as then profitable business underlying some

it that what to or is take that regionally-based macro that that get for to some low though, mid-single-digit better Europe What aluminum, improve place? in kind really range? and maybe clarify, in steel, the to it Is really a volumes or to dependent to need of sustainably environment see to back China not are and a a recovery, are just would And better environment? your control an under the drivers the, volumes say metalworking Okay. is on and it better of

we for underlying general previous years. control, to has continue as Automotive, value some higher couple some offering in customers, optimistic highlighted Several opportunity part to has served will of on aerospace, gain have We're metals continue. is come been not we've we and be at challenge can their and the levels. earnings here quarterly of our to business been ample the levels. new I'd in the The I've that Arun, the time. the business industrials primary that are Yes, right still the with those new start and based at markets still calls, wins. last those will of that with of And we're that historic

So, a to as that continues to develop, we're good be able to really it. in service position

one for me. And Thanks. just more

teens think EBITDA range ‘XX? past, as XX% fair in the that Is to maybe that the to look in you're achievable Already talked in upper when to I here, target. the assumption? margin the around Is still way ‘XX. you've is but how So, XX% that into or a And teens well in you high mid you on get into thinking? your kind of that metric QX maybe

Yes.

all, we're we're previous first pleased particular the that the progress quarter. we first really quarters in say of would saw with making in and in and I So, what

to be determined remains the a of goal levels into objective. but same, teen that the of factors, will end different for high our those And that is EBITDA. pace by back be Our number

Thanks.

instructions]. [Operator you. Thank

of Our Jon from with CJS next question with Securities. Please comes proceed line your question. Tanwanteng

margins. and might just onshoring, at infrastructure I coming a potentially like broad going gross hit there's you If some we in in biggest was do on aerospace, here and be seems put off it's Hi, it broader with that a your congrats in like a see you see ask, even of do looks the Where trough. on. thanks really we abate as What to even hat improve. into risks really tailwinds heading Andy, mean, already level assuming nice automotive, the macro recession, a standpoint? case. Europe that China improvement that for taking for that, my the quarters? to may kind I could questions much, quarter coming on in not more you actually headwinds so that case

mean, what is already improvements. for off are just Jon, seeing Yes, highlighted, we I've thanks building actually that. what of I

and We still are in uneven China. little I that believe highlighted, mitigate, be we're headwinds come we're the Americas. previous improvements going to resilient I've now a some forward, As a is bit about optimistic could could that of think and Europe the but within more the bit starting resilience seeing

So, still that beneficial. we based will things be upon that's our optimism to interactions with some customers and why what cautious we continue have see,

you in mill that then or a pickup what's Europe? there in number today? in to real-time help actually ahead now the going China you one, ground the two, seeing us more sequentially? on could on us as still give that Are and of improve a update Are number you is come, restarts Could

see the I Jon, improving, the think that mean, And side. update just might say, we back patterns about real-time I think order think half. we would as it I up as is Yes. I about ramp

Andy beforehand. mentioned So, we're cautiously optimistic, as

Okay. you. Shane, for one

working seasonal else something you've rest of expectation which on? other in cashflow understand are think, expectations capital and some what some debt paydown was you. quarter with going or maybe was use the Just, just just the in forward there and nice you for us for not capital. those your Did the going year? free Help had the the cashflow of recovery, pull I What's

hand, the increment you working flow growth well some some cash manage bit due mentioned, the to was to Sure. generated we Thanks, operating just Jon. slight continue stock previously a Yes, as on so cash pretty ensuring which with QX, which outflows, as really we in in supply. as conversion, safety quarter, mirrored as in good higher capital

good of first to to come. Xx a years. from X.Xx. will I quarter were offset our quarters And we to experienced our we some QX, nothing two last I operating continue think capital I as expect like to the today, we've working said Therefore, outflows ahead, like growth, look performance support would I over have As but cashflow amount the generate in should use operating this, important to where perspective, a would we delever in able from cashflow, capital investment slightly by the

before, As get payouts inorganically. debt below to then is we've application organically, our our in and perspective investing and capital X.Xx. priorities and business, about remains target then And talked the both dividend with repayment

end the by year. so, that hitting the conversion, of strong the anticipate cashflow I And given would

it. Got

you're Just $XX one the years or quick next costs last cost What so? expected one. expecting o the of that two savings over are the million

to So, it X.Xx was Xx I of savings. mentioned worth about

Got it. Thank you so much.

Thank you. any Ladies and session. gentlemen, back turn for floor that Mr. final question-and-answer concludes comments. the I'll to Tometich our

you. excited Houghton, out Quaker appreciate We questions. potential reach interest Thank in and growth please Jeff Quaker to future follow-up Thank any at and with Houghton. your the our unlocking We're continued about you.

This today's you. concludes Thank call. conference

You may lines at your you disconnect your this for Thank participation. time.