Element Solutions Inc (NYSE:ESI) Q1 2024 Earnings Call Transcript

The semiconductor business is 10-ish percent of our overall revenue. But given its divergent growth rate, it will increase as a percentage of the overall book of business and could conceivably be 20% of the business in the medium term. And we’re investing aggressively behind that, but only in places where it fits our operating model where the profit pools are deep and where we’ve got a right to win. So, we are being circumspect about where we invest and where we choose to play. But we’ve got great capabilities and a lot of customer pull for them, which is compelling and exciting for us.

Jonathan Tanwanteng: Great, thank you. And then just in terms of the guidance and the underlying assumptions, what’s the change in your expectations for China versus non-China handsets? And also ICE versus EV automotive, does that mix impact you as year progresses? Just help us understand your thoughts in those two areas.

Benjamin Gliklich: So our business in smartphones skews towards non-Chinese OEMs, right? So we’ve got more value and share on non-Chinese device makers than local Chinese device makers, but we still have plenty of value in local Chinese smartphones. And so in a quarter like this past quarter where units were up maybe 8%, despite non-Chinese OEMs or Apple devices being down, we still group, our smartphone business. And so that’s our baseline for the balance of the year. It doesn’t have any big assumption associated with the OEMs providing the smartphones. It’s just a smartphone growth driver. And with regard to ICE and EVs, that’s a difficult thing for us to parse out because there are plenty of supply chains that we sell into that are EV or powertrain agnostic. And so I can’t answer that question specifically, I would say that the general weakness relative to expectations in EV is something of a headwind but it hasn’t changed our outlook for the full year.

Operator: We don’t have any questions at the moment. I’d now like to hand back over to Ben for closing remarks.

Benjamin Gliklich: Great. Thank you very much. Thanks to everybody for joining, and we look forward to seeing many of you soon. Have a good day.

Operator: We would like to thank everyone for attending today’s conference call. We hope that you have a wonderful day. Thank you, and you may now disconnect with the session.