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Mar 31, 2023
Element Solutions Q1 2023 Earnings Report
Element Solutions' financial performance decreased due to weakness in end-markets, particularly in electronics and China, but delivered on financial commitments with sequential adjusted EBITDA growth.
Key Takeaways
Element Solutions reported a decrease in net sales by 16% to $574 million and a decrease in organic net sales by 7% compared to the first quarter of the previous year. GAAP diluted EPS decreased to $0.18, and adjusted EPS decreased to $0.30. The company's net income also decreased to $43 million. Despite these challenges, the company expects sequential earnings growth in the second quarter and anticipates a second-half recovery.
Net sales decreased by 16% to $574 million, with organic net sales down by 7%.
GAAP diluted EPS was $0.18, compared to $0.23 in the same period last year.
Net income decreased to $43 million, from $56 million in the first quarter of 2022.
Adjusted EPS was $0.30, compared to $0.38 in the same period last year.
Element Solutions
Element Solutions
Element Solutions Revenue by Segment
Revenue by Segment
Electronics Revenue
CapyFin.comIndustrial & Specialty Revenue
CapyFin.com Forward Guidance
The Company expects second quarter 2023 adjusted EBITDA of approximately $120 million. For the full-year 2023, the Company now expects adjusted EBITDA to be at the lower end of its prior guidance range of $510 million to $530 million. For 2023, the Company expects adjusted EPS of approximately $1.40 and free cash flow of approximately $275 million.
Positive Outlook
- Expects sequential earnings growth in the second quarter
- Guidance for adjusted EBITDA in the second quarter is approximately $120 million
- Benefit from more selling days
- Modest sequential gross profit margin expansion due to certain ongoing pricing activity
- Commercial execution and raw material deflation
Challenges Ahead
- Do not expect a material sequential improvement in our end-markets in the second quarter
- Full year 2023 adjusted EBITDA at the lower end of our prior guidance range
- Weakness in the smartphone and broader electronics supply chain
- Activity in China did not recover exiting lunar New Year
- Activity in China did not recover following COVID-related lockdowns as anticipated at the outset of 2023
Revenue & Expenses
Visualization of income flow from segment revenue to net income