Element Solutions (ESI) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 8% year-over-year to $645 million, with organic growth of 6% and net income of $40.4 million, reversing a net loss in Q3 2023.

• Adjusted EBITDA increased 6% to $143 million, with margin improvement and strong performance in the Electronics segment, which saw 9% organic growth and benefited from advanced packaging, semiconductor assembly, and EV power electronics.

• Announced divestiture of the Graphics Solutions business for $325 million, expected to close late 2024 or early 2025, enhancing focus and growth.

• Portfolio repositioning, investments in new technologies, and expansion in Asia reinforce competitive positioning for 2025.

Financial highlights

• Q3 2024 net sales: $645 million (+8% reported, +6% organic); adjusted EBITDA: $143 million (+6% reported, +8% constant currency); free cash flow: $86 million.

• GAAP diluted EPS was $0.17, compared to a loss of $0.13 in Q3 2023; adjusted EPS rose to $0.39.

• CapEx was $13 million in Q3, supporting strategic capacity expansion.

• Trailing 12-month net leverage ratio at quarter-end was 3.0x; pro forma net leverage ratio would be 2.5x after Graphics sale proceeds.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance narrowed to $535–$540 million, with free cash flow expected at $280–$300 million.

• Management anticipates record earnings for 2024 and strong positioning for 2025, supported by innovation and a robust balance sheet.

• FX headwind for FY24 expected to exceed $10 million; modest FX tailwind anticipated for 2025.