Next up, I'm thrilled to introduce Element Solutions, ticker ESI. Today we have the CEO, Ben Glicklich. I've had known the pleasure of knowing Ben for 12, 13 years now through a variety of roles. I've always had a tremendous amount of respect for him. It's our top pick. It's on Wolf's alpha list, as it has been. So, Ben, thank you for making me look a lot smarter than I actually am. I always appreciate that. There's a lot to go through, and I imagine, and the audience actually submitted a bunch of questions too, but Ben, you know, even the CEO since 2019, and there's been a huge shuffle in the portfolio and a lot of acquisitions, and my associate was kind enough to list all of them, but most recently, Micromax and EFC, divested graphic solutions, you know, in terms of just the overall portfolio, how do you interpret of where you stand today versus where you stood a year ago and where you want to be two, three years ago? go. Are you firmly on that path? Or is there anything else you have to really do?

Thanks for having me. And thanks for starting with an easy one. We launched Element Solutions in 2019 with the vision of being the best company in our markets in three clear areas. The first is the value we provide to our customers. The second is the opportunities we create for our people. The third is the value we create for our shareholders. And all of our activity has been oriented towards that goal. We quantify those goals, you know, value to customers as gross margins, opportunities for people, internal fill rate and employee satisfaction, and then value to shareholders based on TSR and compounding earnings per share. The North Star is compounding earnings per share. And our portfolio activity has not lost sight of value to customers and opportunities for people while being focused on compounding earnings per share. By that, I mean And we have been focusing on adding capabilities that make us a better supplier and partner to our supply chains, primarily the electronic supply chain. And so we divested the graphics business, as you highlighted, it didn't really fit. Someone came to us that wanted to own that business, we didn't put a for sale sign on it, and offered us a value that made it worth our while to go through the brain damage and the machinations to divest of that business. We reinvested that capital in EFC and Micromax, which are two great businesses that make our company better, that are better inside of our company. So they enhance our value proposition to our supply chains, and we can get synergies from owning them, and they create opportunities for our people to grow. That work is never done. So there is still more we can add to our portfolio that enhances our value proposition to our customers. It makes us a better partner, especially now, given the acceleration in our end markets, the need for shorter innovation iterations, and co-developed innovation with our supply chain. And so, we're not lacking anything today from a portfolio perspective. There's nothing where we say, hey, we've got a big gap here, so we don't need to do anything, but we're constantly looking for ways to enhance the value we provide to our supply chain. And when we do that, we do that with a lens towards keeping leverage appropriate and paying prices that allow for long-term value accretion.

We're going to get back to that in just a second. But one of the questions I asked in an earlier meeting was, you have a similar growth rate, actually a slightly better growth rate, 15% electronics growth in the first quarter. Obviously, there's a lot going on. There's a lot a geopolitical uncertainty, their concerns about pull forward, your purchasing activity amongst some of your customers, obviously the Iranian war. How sustainable do you believe the growth rate is for the balance of the year? And how should investors be thinking about even into like 27, 28, based on the latest updates you gave us at your CMD?

So we did an investor day a couple of weeks ago where we tried to articulate our long-term growth algorithm. What's implicit in it is a deceleration relative to the growth that we've seen year to date. And that's because we're talking about many years and we're using long-term forecasts from third-party research. The business has changed dramatically in the past several years from a mixed perspective, moving away from consumer electronics, which is a shorter cycle business, right, where your volumes are driven by consumer purchasing patterns towards a B2B enterprise sale driven by data center proliferation. So our business is now 20% data center driven. Our electronics business is 30% data center and data center infrastructure associated driven. That's a longer lead time business. That's a less seasonal business. And look, the comps get harder. If you're talking about 2026, the comps get harder every quarter because last year was really strong. But our visibility is better today than it would have been at this point in the year, four years ago, because the business is more concentrated in the enterprise. A rough rule of thumb is data center turns on, turns the lights on 18 to 24 months after the capital commitment has been made. And we're selling to that data center six or so months out. So what we're selling today is associated with a capital decision that was made a year to a year and a half ago. And if you just follow the rate of acceleration in capital commitments over the course of 2025, you can get confidence that we're going to continue to see volume growth over the balance of the year. And we're not seeing these data centers get canceled. Some of them are getting pushed out a little bit, but we're not seeing them get canceled. So there is real momentum in the business. We also, as we went back to last year, if you refer to how we sort of got comfortable with our growth rate last year, there's capacity addition in our supply chain. so the level of investment in footprint um and volume and volume from our customers has been ratcheting and ratcheting and ratcheting and so sitting here today can i extrapolate 15 for the balance of the year i'm not sure i would pound the table but the growth continued stable growth from here is something we're very comfortable underwriting to for the balance of 2026 and into 2027, given the dynamic around the timeframe from a capital commitment to the data center lights being turned on, and the fact that we haven't seen any diminution or any sort of walking back from those capital commitments.

If we just take a very quick step back in terms of you're now on the radar screen of a whole new investment community based on your appreciation, a larger market cap, et et cetera, et cetera. Taking a step back, could you just talk a little bit about how your portfolio fits into hyperscaler AI CapEx across, you know, you have the subsegments of circuitry, assembly, semiconductor, you know, what would be the kind of the primary highlights which you'd convey to the audience today?

So Elements Portfolio is the most cogent and complimentary set of electronics capabilities in the market, which isn't to say that it's the biggest or the broadest, but we sell a very cogent set of solutions that speak to everywhere an electron goes in electronics hardware. That means the interconnects through the silicon in a chip, the materials used to put that chip into a package, materials used to put that package, the black box if you think about it, that is that chip onto a printed circuit board and the materials that are used to create the circuit pathways in that printed circuit board. So everywhere an electron goes is a sale opportunity for us. It's a different set of customers, but it's the same specifier OEM qualifier. And so our solutions are enabling the breakthroughs in performance that are driving next generation electronics. Historically, all of the innovation or most of the innovation was concentrated on the silicon, right? And innovation in terms of breakthroughs in computing performance were delivered through density in the same space on a chip. Today, because Moore's Law is breaking down, that innovation is moving into packaging and printed circuit boards. And that's where we play. We play the interface of all of those materials. And so our relevance, our strategic relevance to the supply chain has dramatically increased over the past several years. We're a key partner to this supply chain. Even if we're not selling directly to hyperscalers, they care about what our products are capable of doing. They're specifying us, they're working with us to co-develop solutions, and they're driving our technology into their supply chains.

I just want to dissect something very quickly. You just said in terms of some of the higher layer account server boards, you've spoken consistently about how this is a tailwind. Obviously, it's incredibly, you know, putable in terms of, you know, what the invest community is addressing. In terms of your content and how those things evolve, is that content, I know you can't give us necessarily exact numbers because everything's different, but is that content appreciation, is that linear, is it exponential? Just how should we think about kind of the growth Thalgo as that continuously evolves?

The innovation and value proposition of our materials has been growing more than linearly historically, or in the recent past, as the number of vendors capable of solving the emerging pain points dwindles, right? So when you go from an eight-layer board to a 12-layer board, you don't really winnow the number of capable suppliers to that market. But when you get to 150-layer board, you really need cutting-edge technology. And there are only a small handful, if that, of companies that are able to solve that problem, to meet that requirement. And again, that's why your seat at the table, your ability to co-develop with the supply chain, your ability to deploy capital, right, fast behind customer opportunities is so critical to the supply chain right now. And, you know, we talk a lot about Kuprian. That's another example of new material to the world that is enabling performance that heretofore couldn't be delivered and driving share, not just a revenue opportunity from Coop around, but of our other products into the supply chain, into the market.

So as a corollary of that question, are you noticing that some of your circuitry, and I'll get to assembly in a second, customers are interacting with you a bit earlier and engaging you in terms of the technicalities of the issues they want to kind of, in some cases, potentially preemptively solve? Has that activity changed materially over the last 12, 24, 36 months?

Yeah. So what I would say is the value of our, that our seat at the table is greater than it's ever been because of the acquisitions we've made and the technology we've brought to bear and the criticality of what we do to breakthroughs in technology. Historically, the number of technology roadmap exchanges we'd have and the visibility into innovation from our supply chain was more limited than it is today. That changed when we canceled or basically bought out the distribution agreement we had for copper damascene for our Viaform product, which enabled us to get a seat at the table with the foundries that changed when we introduced Couprion, that's changed as server boards have become more of an enabling technology for high-performance compute and data centers.

A similar set of questions, but the same thing for assembly, and if you could just very quickly highlight on how the assembly business interacts in terms of the product portfolio, slightly different than the circuitry business, perhaps that would be helpful to some of the generals in the room.

Yes, so we've talked a lot about printed circuit boards, and our technologies are used in metalizing, creating the circuit pathways and printed circuit boards, we have a large assembly materials business, and it looks larger than it is because we sell a lot of metal on a pass-through basis in that business, but it's tin and silver alloys that are used to put chips onto boards. So if you ever did like a radio shack as a kid and you had a soldering unit and you took a wire and you melted it to put a transistor, that's the most rudimentary version of what our assembly business does. You think about that, you think it's low-tech, and its root was low-tech, but now as these circuit boards are getting more and more complex, and the feature sizes, meaning the size of the lines on the circuit boards are getting finer and finer, you can't have big globs of metal because you get signal loss, right? And they cross multiple circuits, and that doesn't work. That's a failure mode for electronics. So you need really fine, powdered metal. and we make that powder and we that's a solder paste is what it's called or you need new alloys as the chips are getting smaller in some instances or the circuit pathways are smaller and the designs are are more challenging you can't use solder and glue you just need a solder alloy that's higher reliability and so we're innovating that as well so our assembly business is a very high value business the margins look a little lighter because of all this pass-through metal but it's really a direct pass-through. So if you back out the pass-through metal, the margins in that business are actually better than in our circuitry business. It's a high-value, high-growth business. Historically, it was a bit more industrially oriented. And the observation we've made is that this uplift in the electronics market driven by AI and data centers, it's not concentrated just to server boards. Because all around the data center, between power and network switches and infrastructure, you're seeing volume uplift. And so, you know, it's not simply server board metalization that's driving this business. It's the whole ecosystem that's being lifted by the demand from these data center build-outs.

There's been, I assume you'll agree to this, but I'm not sure. But from my seat, I've seen a noticeable shift in investor perceptions in terms of PCB square meter growth relative to semi, you know, semi-MSI. It seems as though people were, in the past at least, were slightly less enthusiastic to go on the PCB side, more enthusiastic on the semi-side. It seems that this perception is not as if everybody's not bullish on the semi-side, but the PCB side seems to be getting better almost by the week or the month in terms of When you think about your growth alga over the next several years and you hit on this in your CMD, how has your own perception changed in that? Do you think it's an accurate characterization? Is it slightly different?

I can't speak to investor perception as well as you can, per se, but I actually think that the most misunderstood thing about our company is that historically, for good reasons, the semiconductor market was perceived as a premium market to the circuit board market. That's where the innovation took place. There was more growth there. The margins of the semiconductor consumables companies were higher than the printed circuit board companies. If you look at the last three years and you look at the forecast for the next five, the printed circuit board market is supposed to outgrow the semi-market. And there's a huge amount of innovation required to meet the needs of the industry from printed circuit board suppliers. So you've got a better growth rate. You've got margins that are accreting from the vendors in that space. You've got lower capital intensity in printed circuit board consumables than in semi-consumables. So I actually think that the printed circuit board market is competing, if not better than the semi-market today. And I don't think that that's well enough understood in the investor community. We'll get them there.

So when you think about the technological requirements, and we've hit on this several times, we just hit a little in circuitry, a little in assembly. I apologize preemptively for being blunt, but at your CMD, why only the 100 to 200 basis points of outperformance embedded? And it seems like you could do materially better than that? Is that something you're just waiting for the thematics to kind of fall in place? You have a good reputation about kind of laying out things you know you can do versus what you think you can do. Just how should investors interpret that algo?

So our growth algorithm is based on long-term forecasts from third parties. This is a multiple year growth algorithm. And so Prismark thinks that the printed circuit board market is going to grow volumetrically about seven percent. And we said we'd grow a point or two faster than that. The recent past, we've done much better than that, like three points better. Sustaining that level of outperformance is not something that we necessarily underwrite to. We'd rather out deliver on commitments that we can feel a high level of confidence in. There are reasons to believe that the segments in which we participate will continue to outgrow the overall market substantially. And there are reasons to believe our technology is gaining incumbency in those segments, which would deliver a better outcome. Got it.

So I want to stay on track here because there are a few questions that I definitely want to get to. But just what do you think is the gating factor for advanced packaging? Because once again, it seems as though the bar and table stakes, whatever characterization you want to kind of amplify as, are changing. But is it possible at this point to give a percent of your total portfolio, given the fact that you have so many different products we enter into it. It just seems like such a great thematic. And I'm just wondering if you could add a little color to that today.

So advanced packaging is a generic term, right? It's just new architectures for chip, integrated chip designs, which include high performance sort of high tech printed circuit boards, and then multi-layer semiconductors and the materials that go around them. And all of our businesses have solutions that solve problems and enable advanced packaging. But to be very specific on a product line, it's a little bit of a gray area. So what we say is we've got a couple hundred million dollars of revenue in advanced packaging. It's growing very quickly. Kuprian is an enabler of advanced packaging, whether that's through glass via filling or other interesting architectures around copper pillars and so forth. And that product hasn't even launched really yet. So it will be substantially bigger in any reasonable timeline.

So I asked you for a kind of a deep dive on Kuprian last September, if I'm not mistaken, and I kept on focusing on the earn out and you politely told me Parkinson, if we hit that number, that's a really, really, really good problem to have. And I hope we have it. It seems you have two facilities coming up. It seems like the customer demand poll is very, very strong. I understand it's the preliminary innings of being commercialized, but what makes Cuprion so special? Why were you willing to take a chance on it several years ago? And it seems like you're just as enthusiastic now as you were back then.

I think I'm more enthusiastic now. It was a low cost option when we did it, right? So we paid $16 million to buy this technology that was a new material science. And we structured it because with a big earn out tied to revenue. So it was risk sharing with the founders and and the very small venture capitalists who are involved. What's happened since is a lot of work to develop that material science into a product that could be used in high-volume manufacturing, get the equipment sets aligned that our customers could use for high-volume manufacturing, and build our own capacity to make this material beyond lab scale. We have our first site commissioned for this product today in California. We have two more sites that we're working on. One is a copy exact one in California, which is somewhat new news. Historically, we said we're going to do a mid-scale site and a large-scale site. Demand is so strong that we want to have two of these mid-scale sites up and running because it will take a little longer to get the large-scale site up and running. And, you know, we don't want to miss the window where our customers really want this, but they'll find an alternative mechanism if we don't have the product. And then we're going to work on an even bigger site for 2028 than the large scale site we're working on in Connecticut right now. So the limiter to revenue here is simply our capacity. You know, the motto is if you build it, they will come and we're building it. Why is this so in demand? If you think about the issues facing the electronics industry, they are associated with power density. How do you get more power through a circuit board? And thermal management, how do you keep that power from generating too much heat? And the sort of ancillary effects of all that heat on the electronics assembly. This solves those problems. It gets copper into very fine substrates. It has interesting thermal expansion attributes, and it allows for greater power density through printed circuit boards than electroplating can deliver. So the number of applications we've developed continues to grow, even though we've only spoken to a small handful of customers. and those customers are using excess samples we provide to them to come up with their own applications. So the universe of addressable market for this technology continues to expand and the amount of customer pull continues to grow and that's why we've got so much excitement around this and it's really a matter of us executing on the build-out.

So sticking with the M&A side, So I think we're clearly happy about that one, enthusiastic for the future. Soon at the M&A side, you also acquired Micromax last year, which has historically been part of the portfolio at DuPont. It was then part of Sell and Ease, and now it's part of your portfolio. And suffice it to say, it seems like your enthusiasm has been very strong there. I have been telling people not to extrapolate the one key performance which you've been articulating. So I'd like to ask you why not and what fits in there about why are you the better owner? Why is this so cohesive with your culture? It seemed like that was a big part of the call as well. So I'd love to hear more about that as well.

So Micromax is a great business. They make electronic inks and thick film pastes that are used in manufacturing passive components. So historically, we said that we spoke to everywhere an electron goes in electronics assembly, but we didn't have this passives piece of the business. So these are like capacitors and resistors that go around a chip to regulate the flow of energy through the assembly. And when we first saw the business, we weren't that excited about it. The margins didn't look as good as we would have expected for a value-added materials consumables business. You know, we had some experience with electronic inks and we weren't particularly excited about the use cases for that. We thought it was older tech. As we dug in, we realized there's a big metal pass-through there, which was something we uniquely, I don't want to say uniquely, but particularly understand because in our assembly business, there's a metal pass-through and they manage that metal dynamic really well. And X metals, the margins on the business are exceptional, right? So out of 300 or so million of revenue, there's only about, there's about 200 to pass through, right? So this is a 40-ish percent EBITDA margin business X Metals, which is accretive to our business. And then as we dug in, it was clear they had the best technology for these passives in the market. And the innovation data center started with the chip, and then it went to the server board, and it was just getting to these passive components. So if you open your smartphone, there are about 1,000 passive components. And if you look at sort of a newer generation server board, there may be 5,000 and the next generation is 12,000. So the density of this material is increasing as electronics performance in the data center is becoming more demanding. And so there was a lot to be excited about. And then as we spent time with the team, it was clear that the access that they had to the supply chain was limited inside of Celanese because Celanese wasn't a big vendor into these markets. And the model is different when you're dealing with continuous flow manufacturing versus niche batch specialty materials that are customized for certain applications, which is what Micromax does. And so the carve-out has been complex. The team is incredibly energized to be part of an electronics-focused company that understands what they do, that understands how they interact with their customers, that gives them access to some of these specifiers. And I wish I could say that the performance inflection in the first part of the year was driven by anything we did. but we've only owned the business for, you know, a couple months. It's really driven by the market and organic volumes being up 10% is an indicator of the market. And we think that the business can accelerate from here inside of Element. So the performance has been great. The team is highly energized and, you know, we caught them at a really good time. It's been a great one for us so far.

I'll be quick on this one. Any quick comments? You also purchased EFC gases. Obviously you have some tech side of there, some industrial satellite. Perhaps a quick comment on that as well.

EFC is a great business. When you think about gases, you think about big capital intensive gas synthesis type companies, and this is not what they are. They buy technical grade gases, and they refine them, purify them, formulate them, and work on applications know-how to support very niche applications for the customers where the majors just aren't that focused because the volumes aren't there and the sort of level of work to meet the service requirements aren't, are higher than they're used to. And so these guys have found a really great high value niches in semiconductor manufacturing, in satellite propulsion systems, and in electrical transmission infrastructure where they can do really, really well and delight their customers. So their customers are pulling them to bring new capabilities into the market. They are benefiting from being a part of Element because of our relationships in some of these supply chains. And we're benefiting from owning them because of the depth of their relationship with some of these semi-fabricators and foundries. Company's growing really well. Cultural fit is really good. There's a lot of room to grow there.

So you bought these two businesses at a time when Element's leverage was the lowest in public company history. You've gone up a little bit, not too much. And the trajectory, at least based on my numbers, I'll speak for those, seems like you could get back to a very low, reasonable level, however you want to characterize it, fairly Just how quickly do you think you can be back on the M&A landscape? What are you interested in? It doesn't seem like you need to add anything, but what are the substrates which you'd like to add potentially?

So leverage should be back in the mid twos by the end of the year. Our ceiling is three and a half times. We don't like to run the business at three and a half times, but there's no floor for leverage, right? I mean, we're very much opportunistic around how we deploy capital. We have a very high bar from a quality perspective. We've shown discipline around value. These are, you know, scarce assets of scale, but we are a good owner of them. And for good transactions, the capital is available. So our focus is electronics, businesses that are better inside of our company than outside, meaning they have some synergy content and make our business So their business quality is defined by customer intimacy, margins, cash flows, enhance our overall business quality. Those are the types of things we're going to look for. And there are not a lot of them, but we know them when we see them, and we're a great owner of them.

Just as a final question, I always love to ask the CEOs of my coverage universes in terms of the buy-side community, the sell-side community. It's early in the morning, so you haven't had a full day of meetings yet. But what do you think at this point, there's been a lot going on with your thesis for a while, and obviously your stock performance speaks for itself, but what do you think, I don't care if you take a shot at me or anybody else, what do you think people are perhaps missing, underappreciating? Is there anything when you sit with your board, wow, I really wish people focused on this more, wrote about this more. Is there anything that comes to mind?

The simple answer is what we spoke about earlier, which is just, I think, a misperception around the printed circuit board, the value to the electronics ecosystem of the printed circuit board market, which my predecessor up here was just talking about, the structural uplift in interconnect driven by materials intensity and complexity. That's a story that has a long way to run.

The quality of the business, I think, is misperceived due to that. and I'd like to thank you very much for your time today hopefully you have a great day of meetings and you have a full schedule thank you very much thanks for having me