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Jun 30, 2022
Element Solutions Q2 2022 Earnings Report
Element Solutions reported a 15% increase in net sales and adjusted EPS of $0.38.
Key Takeaways
Element Solutions Inc announced its Q2 2022 financial results, with net sales increasing by 15% to $677 million and adjusted EPS rising to $0.38. The company's performance was driven by durable growth in end-markets and solid execution against strategies, leading to above-market sales growth and double-digit constant currency adjusted EBITDA growth.
Net sales increased by 15% to $677 million, with organic net sales up by 6%.
GAAP diluted EPS was $0.25, while adjusted EPS reached $0.38.
Net income was reported at $64 million.
Adjusted EBITDA grew by 13% on a constant currency basis, reaching $140 million.
Element Solutions
Element Solutions
Element Solutions Revenue by Segment
Revenue by Segment
Electronics Revenue
CapyFin.comIndustrial & Specialty Revenue
CapyFin.com Forward Guidance
Element Solutions updated its full-year 2022 adjusted EBITDA guidance to a range of $565 million to $575 million to reflect translational foreign exchange headwind. Full year constant currency adjusted EBITDA growth expectations are modestly higher than prior quarter guidance. The Company now expects full-year 2022 adjusted EPS of $1.52 to $1.55 and free cash flow of approximately $270 million. For the third quarter of 2022, adjusted EBITDA is expected to be approximately $140 million.
Positive Outlook
- Full year constant currency adjusted EBITDA growth expectations are modestly higher than prior quarter guidance.
- The Company now expects full-year 2022 adjusted EPS of $1.52 to $1.55.
- The Company expects free cash flow of approximately $270 million.
- For the third quarter of 2022, adjusted EBITDA is expected to be approximately $140 million.
- The Company expects 12% reported dollar and greater than 20% constant currency adjusted EBITDA growth in the second half of 2022.
Challenges Ahead
- The Company updated its financial guidance for adjusted EBITDA to a range of $565 million to $575 million to reflect translational foreign exchange headwind.
- The rapid rise in the U.S. dollar over the last 3 months has created material foreign exchange translation headwinds.
- The company now expects a greater than $35 million year-over-year headwind to full year 2022 adjusted EBITDA due to FX translation, as opposed to the $20 million they had expected at the end of Q1 2022.
- Global macro conditions are deteriorating.
- The automotive business continued to suffer from supply chain disruptions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income