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Element Solutions
🇺🇸 NYSE:ESI
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Sep 30, 2020

Element Solutions Q3 2020 Earnings Report

Element Solutions reported a strong third quarter with robust recovery in automotive and industrially oriented businesses and continued momentum in the high-end electronics business.

Key Takeaways

Element Solutions Inc announced its Q3 2020 financial results, with net sales of $478 million, a 3% increase year-over-year. GAAP diluted income per share was $0.15, and adjusted EPS was $0.22. The company reported a net income of $36 million and adjusted EBITDA of $102 million.

Net sales increased by 3% compared to the third quarter of 2019, reaching $478 million.

GAAP diluted earnings per share was $0.15, compared to a loss per share of $0.02 in the same period last year; adjusted EPS was $0.22, compared to $0.26 in the same period last year.

Reported net income was $36 million, compared to a net loss of $6 million in the same period last year.

The company expects to pay a 5 cents per share dividend on a quarterly basis.

Total Revenue
$478M
Previous year: $465M
+2.8%
EPS
$0.22
Previous year: $0.26
-15.4%
Electronics Organic Growth
2%
Total Organic Sales Growth
-2%
Gross Profit
$204M
Previous year: $206M
-1.1%
Cash and Equivalents
$248M
Previous year: $200M
+24.0%
Free Cash Flow
$63M
Total Assets
$4.33B
Previous year: $4.27B
+1.3%

Element Solutions

Element Solutions

Element Solutions Revenue by Segment

Forward Guidance

The Company expects adjusted EBITDA to be between $90 million and $95 million for the fourth quarter of 2020 and increased its full year 2020 free cash flow outlook to approximately $215 million.

Positive Outlook

  • Adjusted EBITDA in the fourth quarter expected to be between $90 million and $95 million.
  • Free cash flow forecast increased to approximately $215 million for the full year 2020.
  • Megatrends driving end markets evidenced in the strength of electronics business year-to-date.
  • Ability to outperform markets through sound strategic execution.
  • Expect to pay a 5 cents per share dividend on a quarterly basis which equates to approximately 20% of expected annual free cash flow.

Challenges Ahead

  • Expected normal seasonal slowdown.
  • Impact of COVID-19 continues to make it difficult to forecast macroeconomic conditions or operating results.
  • Adjusted EBITDA of $102 million, a decrease of 11% from last year on a constant currency basis
  • Operating expenses exceed the baseline we expect entering 2021.
  • Adjusted EBITDA margin decreased 350 basis points to 21% on a reported basis.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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