Ladies and gentlemen good day and thank you for standing by. Welcome to the Lindy first quarter 2026 earnings call and webcast. At this time all participants are in a listen-only mode. Please be advised that today's conference is being recorded and after the speaker's presentation there will be a question and answer session. I would now like to hand the conference over to Mr. Juan Pelayas, Head of Investor Relations. Please go ahead sir.

Abby, thank you. Good morning everyone and thanks for attending our 2026 first quarter earnings call and webcasts. I'm Juan Pérez, Head of Investor Relations, and I'm joined this morning by Matt White, Chief Financial Officer. Today's presentation materials are available on our website at lindy.com in the Investor section. Please read the forward-looking statement disclosure on page two of the slides and note that it applies to all statements made during this talk conference. The reconciliations of the adjusted numbers are in the appendix to this presentation matt will provide some opening remarks i'll give an update on lindy's first quarter financial performance and then matt will finish the updated outlook after which we will wrap up with q a let me now turn the call over to matt thanks juan hey good morning everyone

the lindy team delivered another solid quarter against a challenging economic backdrop eps of $4.33 grew 10%. Operating margins reached 30%. And return on capital remained at a healthy level of 24%. The high-quality, compounding growth of our company, no matter what the environment, is a testament to the unwavering commitment of all 65,000 employees to create shareholder value. And given the recent geopolitical volatility, it may be helpful to provide a brief update by end market, which you can find on slide three. As a reminder, the top half shows consumer-related end markets at approximately one-third of sales, while the bottom half represents industrial-related markets for the remaining two-thirds. The growth rates reflect price and volume, but exclude FX or M&A. Starting at the top, health care at 16% of global sales grew 1% year-over-year. We provide gases, equipment, and services to medical institutions, such as hospitals, and direct to the home. Normally, a resilient market like this should grow in line with demographic trends, or low to mid single-digit percent. And while we're experiencing those growth rates in most countries, the U.S. home care business has been relatively flat. In late 2025, a new U.S. healthcare policy resulted in less services for a specific piece of equipment, which is reflected in the current run rate and will continue for the next several quarters. Aside from this particular issue, the rest of healthcare is performing as anticipated while providing a resilient balance to the more cyclical markets. At 9% of sales, food and beverage grew 5% from broad-based strength. The largest contributor is the U.S. beverage business, where we continue to see increased customer need for new services and applications. In addition, traditional bottling and food freezing growth remain quite strong, especially in North and South America. Overall, food and beverage has grown mid to high single digits over the last several years and is expected to remain a steady contributor. Electronics increased the most at 10%, primarily driven by continued investments in advanced chips to support AI. The growth is heavily weighted toward the U.S., China, and Korea, since our substantial electronic sales in Taiwan are excluded as a non-consolidated 50% joint venture. As both the scale and industrial gas intensity continue to expand in this sector, Lindy remains well positioned. We're currently investing more than a billion dollars of the project back wall for ultra high purity plants, which will support the most advanced fabs in the world and there's more to come as we have a high degree of confidence in adding substantial new projects to the backlog this year moving to industrial end markets you can see growth across the board which supports the notion we're starting to lap more difficult comps after years of stagnant industrial activity. Chemicals and energy, representing 22% of sales, increased 3% as growth in Americas and APAC more than offset contractions in Emmaus. Americas was driven by higher activity for hydrogen and nitrogen in U.S. Gold Coast refining and Latin American upstream energy, while APAC increases primarily came from our recent investments in the Gerong island integrated complex amea continues to experience negative volumes primarily from on-site customers shifting production to more competitive assets outside continental europe it remains to be seen what the longer term effects could be for the middle east conflict but so far it appears activity is relocating to more feedstock advantaged assets in america's and, to a lesser extent, AIPAC. And while we're on this topic, I think it's worth providing a brief update on our helium business. Helium was in oversupply for a few years through 2025, but recent events have created acute global shortages. Linde sources from a very broad base since supply chain constraints are a recurring challenge. Therefore, we are currently well-positioned, despite some of the recent outages. Given our business is largely contracted, the priority is to meet existing customer commitments. After that, we still anticipate excess molecules, allowing us to pursue new, multi-year contracts with high-quality customers. Therefore, I don't anticipate significant spot sales this year, since we're focused on securing long-term agreements. Returning to the unmarket slide, metals and mining grew 3%, similar to chemicals and energy. The entire growth is coming from Americas, as both AIPAC and EMEA are relatively flat. A combination of better industrial activity and protectionist policies from U.S. to Latin America have supported local metals production over imports. Furthermore, we're seeing renewed competitiveness from customers of more gas-intensive integrated blast furnaces when compared to EAS, primarily from constraints associated with cost-effective to scrap and electrical infrastructure the last industrial end market of manufacturing grew five percent half of the increase came from aerospace activity in the united states primarily supporting space vehicle production testing and launch as this end use continues to see strong double digit percent growth we'll isolate aerospace as a separate end market when it consistently exceeds 5% or more of global sales, which will be a function of the frequencies, size, and propellant type of future space launch. Excluding aerospace, the Romanian market grew low single-digit percent as strength across the Americas, especially in the U.S., was partially offset by continued weakness in EMEA, while APAC slightly improved over last year. Within the U.S., packaged gases grew mid-single-digit and hard goods double-digit percent, which aligns with the recent favorable U.S. production statistics. In hard goods, growth was balanced between consumables and equipment and driven by energy, construction, and general metal fabrication. AMEA activity was softer from continued weak industrial activity, including direct and indirect impacts from the Middle East conflict. And in APAC, we experienced moderate volume growth driven by China and Southeast Asia. In summary, the portfolio is doing what one would expect. As geopolitical events shift production around the world and secular growth trends drive concentrated investments, our business units continue to adapt and capture their fair share. And while no one can predict how the next few months will play out, let alone the next few years, I'm confident the Linde team can navigate the volatility and continue to deliver high-quality compounding growth. And I'll turn the call over to Juan to walk through the financial results.

Matt, thank you. Please turn to slide four for our consolidated results. Sales of $8.8 billion were up 8% year-over-year and flat sequentially. Versus prior year, foreign currency was a 5% tailwind, driven primarily by the strengthening of the euro. Net acquisitions contributed 1% from attractive roll-ups we've been executing globally this quarter alone we signed nine more bolt-on acquisitions primarily in the americas which will continue adding to future eps growth underlying sales increased three percent versus last year from two percent higher pricing and one percent higher volumes volume increase was driven by the project startups primarily in apac Both Americas and APAC continued to see base volume growth, but it was mostly offset by EMEA due to the weaker economic activity in the region. Sequentially, underlying sales were flat, as higher pricing was offset by lower volumes, mainly in APAC and EMEA. The lower volumes was driven by seasonal factors, especially in APAC, followed by EMEA, where we continue experiencing weaker trends in the industrial and markets. Price continues to drive underlying sales growth, highly correlated to local inflation levels. Recall that actual price increases are higher for the combined packaged and merchant gases, which represent roughly two-thirds of total sales. Operating profit of $2.6 billion increased 8% year-over-year and resulted in a margin of 30%, similar to prior year. sequentially margins improved 50 basis points driven by management actions in pricing and cost productivity that more than compensated for seasonal volume declines we expect management actions to continue to support profit growth and margin expansion for 2026 eps of four dollars and thirty three cents was ten percent over prior year or five percent when excluding the effects of currency translation we finished the quarter slightly above the top end of the guidance range due to better effects as the business performed as anticipated considering the many challenges globally operating cash flow was 2.2 billion dollars four percent higher than prior year capital expenditures were 1.3 billion dollars and as a result our free cash flow was 900 million dollars which we use primarily to pay dividends and repurchase shares the capex of 1.3 billion dollars was roughly split between space capex and project backlog have in mind that base capex is primarily maintenance and all other growth investments not meeting our stringent backlog definition for example current investments to serve commercial space in this quarter we started up 10 projects from the sale of gas backlog mostly in america than apac with investments of approximately 300 million dollars furthermore we signed five new projects that added 100 million dollars to the sale of gas backlog which ended the quarter at 7.1 billion dollars industry leading return on capital end of the quarter at 23.8 percent a reflection of capital discipline consistent earnings growth and good backlog execution slide five provides further details on quarterly capital management the operating cash flow trend can be seen to the left with the most recent quarter of 2.2 billion dollars note the first half of the year is weaker due to the seasonality of cash payment timing for interest taxes and incentives for 2026 we anticipate a similar trend as last year to the right of the slide you'll find a pie chart that demonstrates the balance across investing into the business and returning capital to shareholders discipline capital allocation is a hallmark at lindy and it's something that differentiates us from others during the quarter we raised the annual dividend by seven percent making it 33 consecutive years of dividend growth with an average growth rate of 13 percent we also repurchased 800 million dollars of stock during the quarter while reinvesting almost 1.5 billion dollars into the business our cap allocation model remains consistent across all environments in periods of uncertainty and volatility like today a fortress balance sheet is critical not only to maintain stability but also to capitalize on growth and share repurchase opportunities as they arise. Thank you. I'll now turn on the call over to Matt, who will wrap up with the guidance subject.

Slide six provides the updated 2026 guidance. Starting with the second quarter, we anticipate ETS in the range of $4.40 to $4.50, or 8% to 10% growth. This includes a 1% currency benefit, benefit but consistent with prior quarters assumes no economic improvement at the midpoint for the full year we're updating to a new range of 16 17.60 to 17.90 or seven percent to nine percent growth like the second quarter this includes a one percent currency tailwind and assumes no economic improvement at the midpoint also note both ranges do not include any improvements in the helium business versus the february guidance so any incremental volumes or price would be upside and when compared to the prior guidance we raised the bottom by 20 cents from increased confidence in the overall business resiliency. However, we left the top at $17.90 because it's still early to signal increased optimism. There are a lot of things happening in the world right now, and I'd like a few more months before considering a top end raise. Overall, we had a decent start to the year, but remain guarded until we see more clarity on current geopolitical events. I'll now open the call to Q&A.

Thank you. And we'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one to join the queue. And our first question comes from the line of Laurent Favre with BNP Paribas. Your line is open.

Yes. Good morning, guys. Thank you. My first question is on margins. You mentioned a strong improvement in the Americas. And I was wondering if you could talk about, I guess, the big moving parts of why Europe was flat, Asia down. Is it helium? Is it the rapid cost inflation in March, which created the temporary squeeze?

in your hand there would be very helpful. Sure, Laurent. I'll start with, and we said this last time, and I just want to reiterate it again this time. On a full year basis, you know, we feel pretty confident we're not only going to raise margins for the full year 2026, but probably at the upper end or even above our traditional range that we tend to talk about of 40 to 60 basis points. Now, stating that in the full year, you're always going to have some moving parts within the quarters i think when you when you think about europe clearly the volume is a bit of a drag um you know i think within emea as a whole we mentioned on the call between a combination of the overall weaker industrial environment weaker chemicals environment add to it both direct and indirect impacts from the current middle east conflict um you know we're just not seeing the volume recovery there but i can tell you we're not happy with the performance the business team is taking actions to improve that. They know that. So I expect to see some improvements there in Europe. With APAC, we did mention on the backup slides, we had about half of the sales growth was a sale of equipment. That actually is equipment that is connected to long-term merchant contracts and electronics. So that does come with future contracted merchant sales, but that'll tend to be a little bit lower margin on average. It's a kind of a one-off. But also, as you know, Q1 is traditionally weaker in APAC, just given some of the seasonality effects. So I expect APAC to kind of get back up to the 29 type percent margins we saw last year as the team there continues to work towards improving that. So some of it's timing, some of it's just a little bit of some effects on the volume, but on the full year, we fully expect to not only raise margins, but probably the top end or above. And again, this is all X pass through, up or down, as you know, which is just more optics on the margin and no real effect to profit dollars.

Sure. Thank you. And as a follow-up, you mentioned that you would disclose commercial spaces when you get to 5% of the group, which is about $1.7 billion. And I think recently, or on a prior call, you mentioned that you thought sales in commercial space would get to about a billion by the end of the decade. So I'm just wondering, I mean, are you now thinking that we may get closer to 1.7 billion by the end of the decade, it's a big change.

Yeah, so, Laurent, I mean, I'll start with, look, we feel very good about our positioning to support the space economy and as that develops. Clearly, in the U.S., you're seeing that much more rapidly with the private commercial space sector. But even across outside the U.S., we're definitely seeing acceleration in those efforts. You know, with controlling the customer, that's going to be their determination on launch, but it's like I mentioned on the call, it's going to be a function of frequency size and propellant type. And what that means, you know, I think frequency is self-evident, how many launches occur. With size, it can be dramatically different. Much larger rockets and much larger booster systems can use orders of magnitude higher of propellant. As you can imagine something, for example, the largest rockets out there versus the smaller ones, you could see 10x difference on fuel and propellant. And then the fuel or propellant type is important because while we supply oxygen for the oxidizer and nitrogen for densification, fuel-wise, there's really three types today you'll see, which is either kerosene, methane, or hydrogen. Obviously, we supply hydrogen. We do not supply the other two. We would do only sale of equipment for things like lng and so if you do see more hydrogen based rockets that could also accelerate the growth for us depending on the fuel type used so we feel pretty good about it you look at the ambition on getting satellites and constellations in space today you look at the existing population and what needs to be replaced in low earth orbit roughly every five years i think it continues to bode well for launch and not only the major players but there's more room for maybe some new players that can be um supporting uh the demand out there to get more constellations in space so we'll see where it ends up i think it will all be a function of the launch cadence but we feel quite good about our positioning to supply that when it happens okay thank you

and our next question comes from the line of patrick cunningham with city your line is open

all right good morning thanks for taking my question i guess first you know as you think of you know, maybe the longer term implications of this crisis, it seems like there's probably a heightened focus on, you know, energy security, deglobalization. So, I'm curious as to how you're thinking about, you know, the potential for, you know, how potential conventional energy and energy

transition projects should trend as a result. Yeah, thanks, Patrick. I mean, the natural reaction is exactly like you stated, right? Energy independence will be more accelerated. One can argue we've already been de-globalizing as a global economy, and this may have accelerated some of that. But energy security continues to get a lot of highlight and spotlight when you see these supply-type shocks that occur. But my opinion, ultimately, it still comes down to economics um and ability so while renewable energy will continue to be a area of high interest it's still going to require government intervention it'll require some support sponsorship potentially some kind of subsidies as we've seen in certain geographies and so i think without that it's it's hard to see that um happen on its own as we've seen but um time will tell i think as far as other hydrocarbons, I absolutely believe you'll see more of that. You know, clearly with other LNG and areas that are probably less of concern, countries, you could see areas like oil sands of Canada become more interesting, again, just given that the exploration risk is almost non-existent. They know the product is there. It's just more of a logistics challenge to get it seaborne or to get it, you know, piped to where it's needed. So I just think that some of the more traditional areas, we'll get another hard look, given the uncertainties in the hydrocarbon space. I do think you'll get renewed interest in renewables. But again, without the support of government to help that on everything from right-of-ways to land to permitting to bridging some of the economics, it'll be hard to see that accelerate at a clip that people want it to.

Got it. And just on European outlook, how should we think about onsite volumes and potential earnings upside for the balance of the year. I think despite some of the feedstock and energy challenges, we have heard some more advantaged or flexible refining and pet chem assets running a bit harder sort of month to date. So how do you square that with sort of the outlook? What are sort of the puts and takes in terms of mix there as well? Sure. I think we do have some onsites

that are running well that you could argue are state champions or regional champions. But on the flip side, we've definitely seen some shift production, right? And they're shifting it to some of the assets we supply in other geographies, primarily in Americas. You know, I do think part of it also, in Europe right now, in my opinion, you have a bit of a challenge with some of the uncertainties, right, around energy policy, around some of the environmental policy. Clearly, there's a lot of imports, and not just on the base material sides, but on the finished good sides as well. And so at this point, it's hard to see how all of those factors will create any significant change without some catalyst. And whether that catalyst is some type of restrictive import policy or more clarity on the environmental policy, clearly with the IAA, that could help. I think that money needs to find its way on the ground. If it does, that could help turn some of that around so that's to me what we just need to see if we see a catalyst there of some significant type that it should help and it could be anywhere from maybe some import restrictions to the iaa hitting the ground um but aside from that it's hard to see a major

shift great thank you so much and our next question comes from the line of vincent andrews with morgan

Stanley. Your line is open. Thank you, and good morning. Matt, certainly back on the space side of the equation and the idea of getting to that 5% of sales, do you have the capacity you need to get there, or should we be anticipating some type of capacity increase, maybe it's in different geographies, and would you do that in concert with customers, or would you do that on your own and make it more of a merchant business? How should we be thinking about that?

Yeah, sure. I think it's really in concert with customers. In my opinion, you have several launch providers that are doing a variety of different engine testing. They could do static testing, gimbal testing, whatever they're doing, and the locations they want to do that could very well be different than where their pad is where they'll launch. Once they start migrating to more frequent launches, which can migrate from, you know, wet dress rehearsals all the way to full launch, you're going to want to make sure logistically you're as close to the pad as you can be. So from my perspective, you know, we are working with the major launch providers and also a lot of the up-and-coming providers to make sure that we have the capacity and the contractual relationships to support them and their ambition. And the way it kind of works is, you know, in the early stages, you're probably going to do longer logistics hauls when it's more infrequent and intermittent. And then as they get onto a better cadence, then you start talking about new requirements contracts in supporting a more stable launch cycle. And that you put closer. And so you eliminate the logistics costs, which obviously makes their costs lower on the propellant so and it's a combination it'll be uh sale of gas obviously it also could be some sale plant it's we do both we support it's very similar to what you would see in the large on-site where at times we've sold plants and sell a gas and we literally run the system of all the plants um so i think that's what you're seeing and as you can imagine there are some very specific areas where the launch sites are concentrated given FAA regs and what you need to do around that for the airspace. And so that's where we have a very strong capacity today, and we're working to secure more contracts with our customers for the future launch needs.

Thank you.

And our next question comes from the line of Duffy Fisher with Goldman Sachs. Your line is open.

Yeah, good morning, guys. By far the most incoming questions I'm getting on you guys is around helium. And I know you guys talk about it being kind of a small part of your business, but in the last supply shock we had with Russia, you did see pricing start to roll into some of the contractual business. I guess, how do you see this supply shock playing out differently than what the Russian supply shock did? And how long would the straight have to be closed before you'd start to see some of that pricing roll through some of your contractual business?

Sure, Duffy. Maybe I can level set it with, you know, what are we seeing in helium in the first quarter? So I'll start with, you know, our helium business, depending on the time, we're anywhere from 85% to 90% contracted on our customer base. So that's kind of a starting point. And when I look at Q1 year over year, our global helium sales, for the most part, were roughly flat. And what we saw was a couple percentage decline in pricing year on year. and a couple percentage increase on volumes year on year. Now, as you know, with the Iranian conflict, it sort of happened two thirds into the quarter. So one can roughly argue you had kind of two months before and one month after based on the date. And what we saw, we've been seeing the pricing rise on the average pricing. So even though we're a few percent below pre and post that there is a difference. And likely that price will continue to go up and roll its way through. I fully would anticipate that to happen throughout the year. Separately, our volumes are up and we've actually already secured some long-term agreements. I fully expect we'll secure more long-term agreements. That is our priority. And that's how I would see that play out. Now, when you think about the helium situation, you have two sort of distinct issues happening at once. You obviously have the straight over moves with cutter and their inability to get product out and also the question of how much capacity is out for multi-years based on damage separate and distinct you have this russian issue going on which is probably a little more political in nature now we don't take russian supplies you can imagine but that is having an effect primarily on the chinese market that one could fix itself much quicker as you can imagine and so that one we'll see how long that lasts but But I think either way, you know, the way we built the guidance, we just didn't want to take a view either way. We just left it as we had it. But when opportunity presents itself both on pricing and volume, that will be incremental. And that's something we will get above how this is guided today.

Terrific. Thank you, guys.

And our next question comes from the line of David Begleiter with Deutsche Bank. Your line is open.

Thank you. Good morning. Matt, on electronics, I know you're expecting a couple of large contracts this year. Are they still in progress on the come for 2026?

Yeah, David. So consistent with how the prepared remarks, we have a pretty high degree of confidence that we'll be announcing some here shortly. And when I think about the project backlog itself for sale of gas, we're sitting a little over $7 billion right now. And I'd look to these being added, and based on some timing of some other projects, I'd fully expect us to have a higher backlog by end of year based on this, higher than the $7 billion and could potentially have an aid handle on it based on this. So we feel pretty good about that, and that's something I expect in a few months we'll be able to lay out there.

Very good. And just on what side, there's been some confusion, some conflicting news stories. can you level set us as to where you stand on that project and what's embedded in 2026 guidance?

Yeah, I think, David, you may recall in prior conversations, we described this project and other very, very large projects like it. They tend to phase in how they start up. You'll start up pieces and phases. And originally, our expectations were that we'd be bringing nitrogen on mid this year. And then the ATR and what's called the TNS for the sequestration back end of this year. And the reason was so they could make gray hydrogen as soon as possible and then convert it to blue by end of year. And on the nitrogen, we still fully expect that. So that'd be a pro rata, so to speak, startup on the backlog this quarter. But on the ATR and the TNS, that has slipped a few months into essentially Q1 of next year. You know, the construction and subcontractor environment in the U.S. coast remains challenging, and we've had some delays there, but I rest assured the team is 100% focused on this to get this up as fast, as safe, and as reliably as possible so that's our focus but this slip has caused a little bit of that so my expectation on that project is you'll have a small portion in contributing the startup this year through the atmospheric side of it and then the hydrogen and tns side will kick into probably q1 of next

year thank you and our next question comes from the line of josh specter with ubs your line is open

yeah hi good morning um i was wondering if you could talk about the overall volume landscape across kind of the two major areas here between Asia and then Europe and the Americas? I mean, understanding your guidance is kind of no economic improvement, but I mean, just the geographic location of your assets relative to where there's disruption, it would seem like there's probably some volume benefits on the Americas and Europe side versus Asia. I'd be curious, one, is that right or is there more disruption in Asia that makes it kind of even? And then also, if you can comment just you know in your uh north america specifically you know are you seeing any kind of benefits from what we've seen from positive pmis the last few months thanks yeah josh so we'll

let me start with the first part um definitely we are seeing improvements in america's on the dislocation or shifting of product we are seeing um some contraction in emea and both continental Europe. Now, we have a very, very small Middle East business, but as you can imagine, that's most impacted as a percentage basis. But continental Europe itself, we also saw some drag there. And then impact for us is relatively neutral to slightly positive. So when you kind of break those three down, in America, as I mentioned on the prepared remarks, we're seeing not only benefits in the U.S. Gulf Coast refining. I mean, you think about refining in the U.S. Gulf Coast, you tend to have very high Nelson complexity. You have ability to use a variety of slates of crude. And so given where the 3-2-1 spreads have gone, given their ability to manage some of the crude spreads, I think they're in a very, very strong position. And a lot of their product is supplied via the continent. And so they can take advantage of that. And we've seen that. We've also seen Latin American upstream improvements, given the price of seaborne brent. It just makes it more attractive for them to produce. So we've clearly seen that. In EMEA, you've seen, as we mentioned, some of the chemicals was one of our weaker performing chemicals in energy, as we've seen some reduced volumes on that front. APAC, you know, I think with AIPAC, there's probably, it's a tale of two stories in the sense that, you know, certain countries are very negatively impacted, but we really don't supply them. When you think about Japan or certain industrial markets, maybe in Korea, where they rely on seaborne delivery for some of their hydrocarbon chain, that is very negatively affected, right? Whether it's NASA or LNG or oil. But we are really not supplying many of those. We have no presence in Japan. And on the flip side, coal to X, you know, coal to chemicals or coal to something in China is actually performing better. And we're seeing that we have several customers that are C to X customers within China, and they do have an advantage in this scenario. So the simple way I think about it is, you know, if your feedstock is coming on a ship, it's probably a tough scenario for you. But if it's land-based, right, either a pipeline or maybe even a rail car, you're probably in a little bit better position. And that's kind of how I would say we're seeing it play out today. As far as, sorry, the PMI, yeah, that was kind of per the prepared remarks. You know, our hard goods business is up double-digit percent right now in the U.S. package business. Our package gases are up mid-single-digit. And really where we're seeing that strength is on some of the construction energy side, which you can imagine plays a little bit to some of the hyperscaler constructions and things you're seeing on that front. And so I think that continues to be good. Metal fabrication continues to be strong. So we've really seen that pick up across. And on the hard goods, it's really split between consumables and equipment, which is a healthy split. So I think you're absolutely seeing that positive benefit from the U.S. PMI prints.

If I could just also quickly clarify a prior question. When you've talked about commercial space getting to a billion, my understanding is that was more commercial space launch. You have another $600 million plus in commercial aero. That's more the coatings business. So your prior comments were more that maybe you get to that 5% in 2030 timeframe maybe. and then maybe your comments today about some of the disclosures is maybe you can get there sooner than expected is that the right interpretation or do i have it wrong

no i think you're right josh i mean look i i've used the word aviation within aerospace and yes aviation is a very different animal that's for primarily jet engines and that business is doing quite well uh in addition but you know the one there's always a saying never give a number in year right but i think uh we we put something out there to give us enough room to do it um but we feel quite good on not just our propellant launch infrastructure and capability but even when you get to things like electric propulsion um for positioning of space vehicles on things like xenon krypton argon and so when you add all the opportunities together yeah i think we feel pretty good about our ability to grow this business quite well. And really, like I said, it'll just be a function of the space launch. But you're right that any of those numbers fully exclude aviation or anything to do with land-based pieces around jets or jet engines. Thank you.

And our next question comes from the line of Matthew Dale with Bank of America. Your line is

open. Good morning. European energy price is clearly up from pre-conflict levels, and I know it gets passed through on onsite, but how are you managing merchant and package pricing? Is this going to be something where you go out with structural price or you surcharge? Is it not enough inflation yet to be pushing price more in Europe than normal? And And if you are, what should we think about as being kind of the year-over-year price traction for the EMEA market come like 4Q?

So, Matt, the way to think about it is, is it a sustained increase in energy or is it a volatile up and down? Right now, so far, it's been volatile up and down. When it's volatile up and down, it is surcharging. That goes up, that goes down, and that's what we're seeing. When you see a sustained long range, it eventually, then it becomes price, and it starts to work its way into the overall inflation of the market. You know, 2021 was an example, or 2022, I should say. In early 2022, as that evolved throughout the year, you saw a more sustained impact to inflation that worked its way through the entire economy. It started as surcharges. It eventually became price. Right now, it's just surcharges. But if it does stay sustained and you start to see it show up in a lot of the major basic inflation metrics, then it does find its way in a price. That's the way I would characterize it today, and time will tell how that plays out.

Thanks, Matt. I'll hand it back.

And our next question comes from the line of Michael Sisson with Wells Fargo. Your line is open.

Hey, guys. Good morning. I guess it's going to be, what, the third or fourth year of no economic improvement for industrial demand. And I can't imagine the Iran conflict is going to help that move in the right direction. So just curious, what do you think, you know, this sort of needs to happen? It just seems like overall there's been some impairment for industrials. And what do you think needs to happen to get that overall globally to improve over time?

Well, Mike, I think some level of stability always helps, right? When you think about industrial demand, at least in my opinion, it tends to be large items, non-durable goods, non-resi infrastructure. And to embark on those kind of projects, they usually require financing. They usually require a long-range view on a return profile. They usually require some form of government engagement support. And so right now it's been a little volatile. It's been volatile in the macro. One can argue in certain micropolitics and microeconomics, it's been volatile in certain countries. And so I think that's been part of the challenge. Additionally, you know, the service economy, the consumer has been pretty resilient over the last few years, which has held GDP up. If that changes, I think that could actually ironically bode well for industrials, because then there could be more call to action to support injections into economies. And you could argue the IAA to some extent is that, right? You've seen continued lagging in Europe, and they've made the determination they need to inject capital into the economy. And that capital tends to be more industrial intensive. Now, it has to reach the ground. It has to have clarity around its use and its ability to be deployed. But that's kind of the type of catalyst. And look, Look, I think the Americas and the U.S. especially has been a little bit of an indicator that, to some extent, certain placed protectionist policies can work. I mean, we've seen it in the metals. We've seen it in some other areas. Yes, it brings some confusion initially, but the U.S. has seemed to bounce back. And so we all know there is excess capacity in certain markets in the world, and we kind of know where it's coming from. And so I think it's really a function of how, who is making the capacity for what. So we'll see. I think right now, though, the Americas, we continue to feel pretty bullish on and the trajectory it's on. And as I mentioned, I think with EMEA, it really is going to come down as some catalysts to try and change that trajectory. And APAC is fine right now. I think APAC is, you know, we're seeing certain geographies do better than others, clearly. But our Chinese business is very stable. India is growing. And we'll just have to see how the rest play out.

Great. And then a quick follow-up for chemicals and energy. Sales were up 3% in the first quarter on slide three. What do you think the run rate of that is heading into the 2Q? I would imagine March was much stronger than the other two months, given the conflict. Just curious where that segment is sort of moving into this quarter.

Sure. It's led by the Americas, as mentioned, and we really haven't seen any reason that that should decline or abate. I think the strength is still there and is still anticipated. So, and the comps, as I mentioned, definitely get a little easier here on out as we start to lap, as we mentioned, a couple of years of some industrial stagnant conditions. So we'll see, but I feel pretty good it will remain positive throughout the year, and we'll see how much it remains positive.

Thank you.

And our next question comes from the line of Jeff Secaucus with J.P. Morgan. Your line is open.

Thanks very much. In your commentary on the Americas for the first quarter, you talked about weakness in chemicals and energy and markets, And, you know, I assume that that will strengthen. So as a base case, should volume of, you know, 2% year over year, you know, move up to, I don't know, three or more in the second quarter? And, you know, are there also pricing opportunities because energy and chemicals are better?

So, Jeff, I think with chemicals and energy, yeah, we're better in Americas, but weaker in EMEA, as mentioned. I think this is mostly on-site, so the pricing will just be a function of the annual escalation, which the contract would state. That being said, we are seeing some more merchant activity for upstream oil, primarily Latin America, which is an opportunity for further volume expansion. So I feel pretty good about the America's position, competitiveness, and capability in chemicals and energy. You know, as mentioned before, it's been on a good trend, and I'd expect that to continue. And, you know, recall, there were a little bit of some normal weather aspects that happened in Q1, which could always dampen it a little bit, and you get through that by Q2. So we feel pretty good about what we could see in Q2 on those trends. And again, it always comes down to, in my mind, the same basic situation, which is the lowest cost suppliers in this environment tend to win in these times of supply shock stress and when you think about a lot of the assets in america's with their advantage feedstock their infrastructure their capabilities the complexity they can handle um they tend to be some of the lowest cost and best producers in these environments and and so i feel pretty good about how they'll perform looking forward, and especially in the near term.

And then secondly, your other income in the quarter was $63 million versus $26 a year ago. What happened there? And was the currency benefit in the quarter about 3% on EPS or maybe $80 million

pre-tax or do you have a different number okay so let's just take the second question first on fx the simple way to think about it is just take whatever we put in the sales variance so in this case we had the five percent globally and that pretty much drops all the way down that's that's sales that's sgna that's operating income that's eps um because of the way our business is structured it's very localized and so our exposure to sales on translation is quite similar to our exposure to costs so five percent would be that impact as far as other income yeah uh you know in the last few years other income has been anywhere from 100 to 200 million i would expect this year for the full year we'll be on the lower end of that range and to sort of characterize what is there right it is operating income it is part of operations but we tend to put things there that usually are settlements could be time lags could be gains losses on sales of things so we put it there generally to isolate it so it doesn't get embedded into the sales and cost of goods sold uh from a trending perspective so this particular quarter we had a gain on a sale it was a cash gain it was a real gain. But that basically created that. I don't expect very much in the next couple quarters, hence why I think the full year will probably be at the lower end of the range from

the last couple of years. Great. Thank you very much. Yep. And our next question comes from the line of John Roberts with Mizuho. Your line is open. Thank you. Could I ask if Sanjeev is not

available today, or is this the new format for the earnings calls? So, John, yeah, if you may

recall in the past, we've always kind of alternated, and sometimes Sanjeev would be on, or Steve would be on or not, and Sanjeev would kind of evolve to that. So, no, he's not on today, but he'll

definitely be on in a future call. I wanted to make sure he knew he was missed. I'm a little confused about EMEA. I thought the shortages from the Persian Gulf conflict were so severe that Europe was actually going to have to run at higher rates. Even though it's higher cost, we're going to need most of the latent capacity in the world to run higher. And so it sounds like you're still expecting it to be soft in the June quarter in EMEA. Well, let's start with, as you

know, the guidance of what we said is no economic improvement of endpoint. So that's just the baseline based on the guidance. So if you take that and extend it out, what it's implying is What we're seeing in Q1 just continues going forward. Whether or not it improves, we'll see. But from what we experienced in our EMEA and Q1 on the onsite, the chemicals and energy, on a year-over-year basis, we saw a decline based on the effects from those operating assets of the customers.

Thank you.

And our next question comes from the line of Kevin McCarthy, Vertical Research Partners. Your line is open.

Yes, thank you and good morning. Matt, just to follow up on the volume discussion, if I look at your America's number of plus two, I think that's the best that you've posted since the third quarter of 2022, which is coincidentally when we tend to think of the onset of the industrial recession, certainly in the chemicals industry anyway. So, you know, I'm listening to you today talk about, you know, hard goods up double digits, energy and chemicals trending for the better. Do you have enough confidence to say we're now on the cyclical upswing, or do you think there's too much war-related uncertainty and potential for an oil shock to start playing offense, if you will, in the Americas?

So, Kevin, I always remain a little guarded, right? I think I need to. But I sort of think about it as, you know, we have an engine here with a few cylinders, right? And one cylinder is America's, one is APAC, and one is EMEA. And we're not running on all three cylinders. So, while the Americas, both results and trend, I think, are positive, we're just not seeing that in EMEA, for example, today. So, I think to see a true, what I view as global recovery, i'd like to see all three running in the same direction um but time will tell how that ends up um but i i feel in the americas and like you mentioned the package gases what we're seeing on some of the competitiveness in the us coast um that does include commercial space as you know we expect that to continue to post some pretty good numbers uh as far as are there offsets to that or not elsewhere in the world that's the thing the challenge that we need to see to kind break out of this and start to see global positive volumes. I will say, you know, the global basis, while we showed one percent global volume, which is mostly our project backlog contribution, we did turn positive on base volumes. It's just not positive enough to round to one percent, but it has started to turn positive. So we'll see if that trend continues and actually breaks out and rounds to a positive base volume. But right now you're seeing puts and takes around the world and we'll see if the comps lapped to where that could be positive thank you for that and then

i wanted to follow up on helium as well i guess my simple question would be how much incremental volume opportunity do you think may be available again through long-term contracts that you're you're pursuing maybe you could speak to your flexibility on sourcing and you know how much of an inventory cushion uh you may be able to take advantage of here well i mean we feel good

about our sourcing and we feel good about our capability to not only meet our current customer uh contractual commitments but that we would have some excess molecules and and assets to be able to to deliver to future um new customers as far as how much it's really just going to be a function of the extension of this situation and where it goes but we will be you know selective we want to make sure we get the right kind of contracts that make sense with the right kind of customers that we know will make that commitment to supply so time will tell i mean we've already been able to sign a few new long-term commitments um and we'll just have to see how it plays out over the

next several quarters all right thank you and our next question comes from the line of lawrence

Alexander with Jeffries. Your line is open. Good morning. Two quick ones. First, are you seeing in any regions or significant delays in projects where you're seeing the CapEx decisions at least get delayed, even if the underlying production rates are fairly stable? Secondly, if customers have to shut down capacity because of feedstock supply issues, whether government mandated or just they can't get the molecules. Your contracts don't give them any adjustment for that. I mean, they still need to pay you the same rate or pay the full exit penalty. Is that correct?

Okay. So first on the delays, just to segregate now, in our backlog, no, no concern, right? What's in our project backlog right now is moving forward as expected. No concerns on that front. As far as potential new projects to be signed with customers' willingness to go to FID, essentially sign a contract, it depends on the end market. I would say, as you imagine, electronics, commercial space, you're seeing a continued very strong push to move forward with projects and investments. I think when you get to the more traditional industrial markets, it's really geographic specific right now. I think in the U.S., there are a lot of interest for future investments. I think places like India, you're seeing some good positive views, but in other parts of the world, not so much. So that's more of a geographic specific. You know, as far as contracts, I mean, what it gets to is force majeure language. You know, this has been something you focus on heavily in any contractual business. We've worked and tested our force majeure language over many, many decades. Economic is not a force majeure, as you can imagine. And so this is something that we always will work with our customers in these scenarios. But when we build these assets, you know, we don't benefit when things go great. And in the same token, we don't take the downside when they don't. So from that perspective, we are well protected. against any type of economic force majeure or other aspects of that. But it's really something that's going to be a contract by contract review. Thank you. And our final question comes from the

line of Arun Viswanathan with RBC Capital Markets. Your line is open. Great. Thanks for taking my

question. Congrats on the results. Just a quick question on the earnings algorithm. So if I heard you correctly, it sounded like FX was maybe 5% contribution to Q1 of that 10% that you You're guiding the 7% to 9% for the year. So do you expect FX would continue to play that contribution for the year's EPS? And if you do fall short of your 10% goal, is there other actions you would consider getting up there, maybe increased buybacks or management actions or anything else?

that we should consider thanks so ruin i think with the algo as you well know we have the management actions we have the capital allocation we have the macro if you just take the macro in isolation yes we put a one percent fx tailwind in the assumption i will say and as you probably well know you know we base this number on sort of the first of month forwards which is about a month gold. Right now, spots are better. The foreign currency strengthened since that time. So that would provide FX upside if these spots remained. But we can set that aside. You know, as far as the management actions and the capital allocation, look, we know we need to get back to that 8% to 12% range, excluding macro. I think we had a little bit of a drag, as you know, with helium for a period of time we have about a percent or so drag just on the engineering business from its timing of projects um which is really more just a function of what is done as internal projects it's capitalized versus external projects for a profit and so we've got to get through those two and i think that can get us back into that eight to twelve percent range so we'll see you know right now it's seven to nine percent uh kind of range we have out there and we've got to work through to get higher than that, right? And we know that. And so that's how I would think about it, but the algo is still intact, and we will take incremental actions if we need to bridge this further to help get us back to that double-digit EPS growth. Thanks. And that concludes our

question and answer session. I would now like to turn the call back over to Mr. Juan Feliz for any

additional or closing remarks. Abby, once again, nice job. Thank you, everyone, for participating today's call if you have any further questions please feel free to reach out to me directly

have a great day and ladies and gentlemen that concludes today's call and we thank you for your participation you may now disconnect