Earnings Presentation
Enabling Technology.
Growing Sustainably.
Operational Excellence
Prudent Capital Allocation
Full Year 2025 Highlights
- New records for net sales, adjusted EBITDA* and adjusted EPS*
-
10% Electronics Organic Net Sales Growth*
Outpacing printed circuit board and semiconductor market growth1 in 2025
- Specialties Segment margin expansion despite broad industrial market softness
• +800 bps improvement in gross margin in past 3 years
High-performance electronics paste and inks focused on specialty, high-value niches
Brings highly-complementary capabilities, strong brand and team
Creates ~$2 billion market-leading Electronics
performance technology portfolio
Leading supplier of niche, rare gases, advanced materials and associated services to high-growth semiconductor manufacturing, electrical transmission infrastructure and satellite propulsion end-markets
As measured by printed circuit board area (square meters) from Prismark and SEMI Quarterly Shipments of Silicon* Materials in Million of Square Inches (MSI)
* These financial measures, on this slide and subsequent slides, are not prepared in accordance with GAAP. For definitions, discussions of adjustments and reconciliations, please refer to the footnotes and appendix of this presentation 3
Fourth Quarter 2025 Financial Results
($ in millions)
Q4 2025
Q4 2024
YoY
Constant Currency*
Organic*
YoY
YoY
Net Sales
$676
$624
8%
6%
10%
Electronics
487
401
21%
20%
13%
Specialties
189
223
(15%)
(18%)
4%
Diluted EPS
$0.03
$0.23
Adj. EBITDA*
$136
$130
5%
3%
% margin
20.2%
20.8%
(60 bps)
(70 bps)
Electronics
95
87
10%
8%
% margin
19.6%
21.6%
(200 bps)
(210 bps)
Specialties
41
43
(5%)
(7%)
% margin
21.6%
19.4%
220 bps
260 bps
Adj. EPS*
$0.37
$0.35
6%
Organic net sales* increased 10% year-over-year led by high-end electronics growth from AI and data center investment
Electronics segment organic growth* of 13% with all three business verticals growing double digits
Specialties organic growth* of 4% with modest volume improvement in core Industrial surface treatment and 9% Energy Solutions growth
Constant currency adj. EBITDA* increased 8% excluding the impact of the Graphics divestiture
Steep tin and silver price increases contributed high-single digit reported sales growth to Electronics and negatively impacted adj. EBITDA*
and free cash flow* in the quarter due to hedge timing which should be recaptured in 2026
Excluding net sales from Assembly pass-through metals ($141 million), adj. EBITDA* margin would have been 25.5%, a 40bps improvement YoY1
Adjusted EPS* increase of 6%, despite impact of Graphics divestiture
Note: Totals may not sum due to rounding or due to varying sizes of the two reportable segments
* See non-GAAP definitions and reconciliations in the appendix
Calculation for adjusted EBITDA* margin excluding net sales from Assembly pass-through metals is $136 million in adjusted EBITDA* divided by ($676 million net sales less $141 million metals net sales)
Full Year 2025 Financial Results
($ in millions)
FY 2025
FY 2024
YoY
Constant Currency*
Organic*
YoY
YoY
Net Sales
$2,551
$2,457
4%
3%
6%
Electronics
1,786
1,561
14%
14%
10%
Specialties
765
896
(15%)
(15%)
1%
Diluted EPS
$0.79
$1.00
Adj. EBITDA*
$548
$535
2%
2%
% margin
21.5%
21.8%
(30 bps)
(30 bps)
Electronics
382
362
6%
5%
% margin
21.4%
23.1%
(170 bps)
(180 bps)
Specialties
165
173
(5%)
(4%)
% margin
21.6%
19.3%
230 bps
250 bps
Adj. EPS*
$1.49
$1.44
3%
Organic net sales* increased 6% led by broad-based Electronics growth of 10%
Double digit organic growth* in Circuitry and Semiconductor led by AI and data center driven demand for advanced PCB chemistry and advanced packaging metallization solutions
Organic growth* in Specialties of 1% despite soft western industrial end markets
Constant currency adj. EBITDA* increased 7% excluding the impact of the Graphics divestiture
Excluding net sales from Assembly pass-through metals ($481 million), adj. EBITDA* margin of 26.5%, a 60 bps increase YoY1
Record Adjusted EPS*, increasing 3% despite impact of the Graphics divestiture
Note: Totals may not sum due to rounding or due to varying sizes of the two reportable segments
* See non-GAAP definitions and reconciliations in the appendix
1. Calculation for adjusted EBITDA* margin excluding net sales form Assembly pass-through metals is $548 million in adjusted EBITDA* divided by ($2.55 billion net sales less $481 million metals net sales) 5
Full Year 2025 Segment Details
Market Commentary
($ in millions) | Growth* Key Drivers | |
Assembly | $907 | 8% Increased consumer electronics demand in Asia and the Americas and strength in high- performance computing end markets |
Circuitry | $528 | 10% AI and data center investment driving demand for advanced metallization solutions |
Semiconductor | $351 | 13% Growth in wafer plating and advanced packaging material solutions; power electronic growth with new EV customers |
Total | $1,786 | 10% |
Net Sales
Electronics
Organic
Specialties
($ in millions) | Growth* | Key Drivers | |
Industrial | $651 | 0% | Growth in Asian automotive end markets offset by lower European industrial activity |
Energy | $89 | 7% | Growth from market strength, competitive wins, and continued pricing actions |
Total1 | $765 | 1% |
Net Sales
Organic
* See non-GAAP definitions and reconciliations in the appendix
1. Note segment total includes $24M in Q1 2025 Graphics sales Note that totals may not sum due to rounding
Balance Sheet and Cash Flow Considerations
Key Cash Flow Items
Balance Sheet Management
FY 2025 adjusted free cash flow* of $256 million
Q4 2025 adjusted free cash flow* of $83 million
$40M+ of working capital investment and hedge outflows associated with rapid rise in metal prices
Net capex of $61 million
Strategic growth projects such as nano-copper manufacturing capacity expansion to continue into 2026
Maintenance capex requirements remain modest and long-term investment level (~2% of sales) remain unchanged
Closed EFC acquisition Jan 2, 2026 for $369 million, net of cash1
Closed Micromax acquisition Feb 2, 2026 for approximately
$500 million, net of cash1
Net debt to adj. EBITDA ratio* of 1.8x on an LTM basis as of December 31, 2025
$450M in term loan add-on as of Feb 2, 2026 with an effective interest rate of ~4.3% when including $350M of fixed-rate, cross currency swaps
Expect to reduce leverage ratio by half of a turn to approximately 2.5x by the end of 2026, barring any further capital deployment
FY 2025 Cash Flow Uses and FY 2026 Outlook
FY 2025 Capital Structure
$ millions
FY 2025
FY 2026
Instrument
(in millions)
Cash Interest $69 ~$80
Cash Taxes $99 ~$120
Net Capex* $61 ~$75
Term Loans $836
Total Debt
$1,636
Senior Notes due 2028 800
Net Debt
$1,010
Cash Balance 627
Adjusted Shares Outstanding2 245
Market Capitalization3 $6,115
Total Capitalization
$7,125
Note: Totals may not sum due to rounding
* See non-GAAP definitions and reconciliations in the appendix
Subject to customary post closing adjustments
See p.11 for reconciliation to Adjusted Shares Outstanding
Based on Element Solutions' closing stock price of $24.99 at December 31, 2025 7
Full Year 2026 Financial Guidance
As of February 2026
Electronics
Specialties
FY 2026
Considerations
Expect continuation of 2025 demand dynamics
Robust demand in leading-edge applications for high-performance computing and datacenter adjacent applications
Growth in power electronics from new EV customers
Continuation of 2025 demand dynamics
$5M adj. EBITDA* headwind from Graphics
comparison in Q1 '26
EFC to contribute positively to growth rate and margin
FY Adj. EBITDA*
Guidance
$650 million to $670 million1
reflects expected full-year contribution of Micromax and EFC acquisitions
FY Adjusted EPS* Guidance
$1.70 to $1.75
before any contribution from potential incremental capital allocation
* See non-GAAP definitions and reconciliations in the appendix
1. Based on FX rates and metals prices as of Jan 2026 8
Defining Success for 2026
Execution and share gain in key growth areas to deliver market outperformance Customer traction and supply chain progress for emerging technologies Successful integrations Mid to high teens adj. EPS* growth* See non-GAAP definitions and reconciliations in the appendix
AppendixEnabling Technology.
Growing Sustainably.
Reconciliation to Adjusted Share Counts
(amounts in millions) | Q4 2025 | Q4 2024 | FY 2025 (Average) | FY 2024 (Average) |
Basic common shares outstanding | 243 | 242 | 242 | 242 |
Number of shares issuable upon vesting of granted Equity Awards1 | 2 | 2 | 2 | 2 |
Adjusted common shares outstanding | 245 | 245 | 244 | 245 |
Note: Totals may not sum due to rounding
1. Equity awards with targets that are considered probable of achievement vested at target level
Net Income Reconciliation to Adjusted EBITDA
($ millions) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | FY 2025 |
Net income | $98 | $48 | $39 | $6 | $191 |
Add (subtract): Income tax expense | 18 | 16 | 16 | 25 | 75 |
Interest expense, net | 14 | 13 | 13 | 13 | 53 |
Depreciation expense | 10 | 10 | 10 | 11 | 41 |
Amortization expense | 27 | 29 | 29 | 26 | 110 |
EBITDA | 167 | 114 | 107 | 81 | 470 |
Adjustments to reconcile to Adjusted EBITDA: Restructuring expense | 1 | 2 | 2 | 1 | 6 |
Acquisition, integration and transaction expenses | 8 | 3 | 11 | 12 | 35 |
Foreign exchange losses on intercompany loans | 6 | 11 | 12 | - | 28 |
(Gain) loss on divestitures | (72) | 6 | 7 | 1 | (59) |
Unrealized losses (gains) on metals derivative contracts | 11 | (4) | 6 | 3 | 17 |
Debt financing costs | 2 | - | - | - | 2 |
2025 executive share grants | - | - | - | 37 | 37 |
Other, net | 5 | 4 | 2 | 1 | 12 |
Adjusted EBITDA | $128 | $136 | $147 | $136 | $548 |
MacDermid Graphics Solutions Adjusted EBITDA | $5 | - | - | - | $5 |
Adjusted EBITDA excluding Graphics | $123 | $136 | $147 | $136 | $542 |
Net income margin % | 16.5% | 7.6% | 6.0% | 0.9% | 7.5% |
Adjusted EBITDA margin % | 21.6% | 21.7% | 22.4% | 20.2% | 21.5% |
Note: Totals may not sum due to rounding
Net Income Reconciliation to Adjusted EBITDA
($ millions) | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | FY 2024 |
Net income | $56 | $93 | $40 | $55 | $245 |
Add (subtract): Income from discontinued operations, net of tax | - | (2) | - | - | (2) |
Income tax expense (benefit) | 14 | (18) | 37 | 12 | 45 |
Interest expense, net | 14 | 14 | 14 | 14 | 56 |
Depreciation expense | 10 | 10 | 10 | 10 | 40 |
Amortization expense | 30 | 30 | 29 | 28 | 118 |
EBITDA | 124 | 129 | 131 | 119 | 502 |
Adjustments to reconcile to Adjusted EBITDA: Restructuring expense (income) | 2 | 4 | (0) | 2 | 8 |
Acquisition, integration and transaction expenses | 2 | 3 | 6 | 10 | 22 |
Foreign exchange (gains) losses on intercompany loans | (7) | (4) | (14) | 0 | (24) |
Unrealized losses (gains) on metals derivative contracts | 1 | 1 | 2 | (7) | (4) |
Debt refinancing costs | - | - | 0 | 0 | 1 |
Kuprion Acquisition research and development charge | 4 | - | - | - | 4 |
Other, net | 2 | 3 | 17 | 6 | 27 |
Adjusted EBITDA | $127 | $135 | $143 | $130 | $535 |
Net income margin % | 9.7% | 15.2% | 6.3% | 8.8% | 10.0% |
Adjusted EBITDA margin % | 22.1% | 22.1% | 22.1% | 20.8% | 21.8% |
Note: Totals may not sum due to rounding
Net Income Reconciliation to Adjusted EPS
($ millions, except per share amounts) | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 |
Net income | $6 | $55 | $191 | $245 |
Income from discontinued operations, net of tax | - | - | - | (2) |
Net income attributable to non-controlling interests | (0) | (0) | (0) | (0) |
Reversal of amortization expense | 26 | 28 | 110 | 118 |
Adjustment to reverse incremental depreciation expense from acquisitions | 0 | 0 | 1 | 1 |
Restructuring expense | 1 | 2 | 6 | 8 |
Acquisition, integration and transaction expenses | 12 | 10 | 35 | 22 |
Foreign exchange losses (gains) on intercompany loans | - | 0 | 28 | (24) |
Loss (gain) on divestitures | 1 | - | (59) | - |
Unrealized losses (gains) on metals derivative contracts | 3 | (7) | 17 | (4) |
Debt financing costs | - | 0 | 2 | 1 |
Kuprion Acquisition research and development charge | - | - | - | 4 |
2025 executive share grants | 37 | - | 37 | - |
Other, net | 1 | 6 | 12 | 27 |
Tax effect of pre-tax non-GAAP adjustments | (16) | (8) | (38) | (30) |
Adjustment to estimated effective tax rate | 19 | (1) | 21 | (13) |
Adjusted net income | $90 | $85 | $363 | $352 |
Adjusted earnings per share | $0.37 | $0.35 | $1.49 | $1.44 |
Adjusted common shares outstanding1 | 245 | 245 | 244 | 245 |
Note: Totals may not sum due to rounding
1. See p.11 for a reconciliation to Adjusted Share Counts
Net Debt to Adjusted EBITDA Ratio Reconciliation
($ millions) | FY 2025 |
Net income | $191 |
Add (subtract): | |
Income tax expense | 75 |
Interest expense, net | 53 |
Depreciation expense | 41 |
Amortization expense | 110 |
EBITDA | 470 |
Adjustments to reconcile to Adjusted EBITDA: | |
Restructuring expense | 6 |
Acquisition, integration and transaction expenses | 35 |
Foreign exchange losses on intercompany loans | 28 |
Gain on divestitures | (59) |
Unrealized losses on metals derivative contracts | 17 |
Debt refinancing costs | 2 |
2025 executive share grants | 37 |
Other, net | 12 |
Adjusted EBITDA | $548 |
Net Debt | $1,010 |
Net Debt to Net Income Ratio | 5.3x |
Net Debt to Adjusted EBITDA Ratio | 1.8x |
Note: Totals may not sum due to rounding
Quarterly Results Overview
($ millions) | 2024 | 2025 | ||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
Net Sales | ||||||||
Electronics | $349 | $392 | $419 | $401 | $394 | $439 | $465 | $487 |
Specialties | 226 | 221 | 226 | 223 | 199 | 186 | 191 | 189 |
Total Net Sales | $575 | $613 | $645 | $624 | $594 | $625 | $656 | $676 |
Net Income | $56 | $93 | $40 | $55 | $98 | $48 | $39 | $6 |
Adjusted EBITDA | ||||||||
Electronics | $84 | $92 | $99 | $87 | $89 | $97 | $102 | $95 |
Specialties | 43 | 43 | 44 | 43 | 40 | 40 | 45 | 41 |
Total Adjusted EBITDA | $127 | $135 | $143 | $130 | $128 | $136 | $147 | $136 |
Note: Totals may not sum due to rounding
Organic Net Sales Reconciliation
Three Months Ended December 31, 2025 | |||||
Reported Net Sales Impact of Currency | Constant Currency | Change in Pass-Through Metals Pricing | Divestitures | Organic Net Sales | |
Electronics | 21% | (2)% | 20% | (7)% | -% | 13% |
Specialties | (15)% | (2)% | (18)% | -% | 22% | 4% |
Total | 8% | (2)% | 6% | (4)% | 8% | 10% |
Twelve Months Ended December 31, 2025 | |||||
Reported Net Sales Impact of Currency | Constant Currency | Change in Pass-Through Metals Pricing | Divestitures | Organic Net Sales | |
Electronics | 14% | (1)% | 14% | (4)% | -% | 10% |
Specialties | (15)% | 0% | (15)% | -% | 16% | 1% |
Total | 4% | 0% | 3% | (3)% | 6% | 6% |
Note: Totals may not sum due to rounding or due to varying sizes of the two reportable segments
Adjusted Free Cash Flow Reconciliation
(dollars in millions) | Q4 2025 | Q4 2024 | 2025 | 2024 |
Cash flows from operating activities | $91 | $139 | $290 | $362 |
Capital expenditures | (17) | (22) | (62) | (68) |
Proceeds from disposal of property, plant and equipment | 1 | - | 2 | - |
Adjustments | 8 | 27 | ||
Adjusted free cash flow | $83 | $116 | $256 | $294 |
Note: Totals may not sum due to rounding
Non-GAAP Definitions
Adjusted Earnings Per Share (EPS): Adjusted EPS is a key metric used by management to measure operating performance and trends as management believes the exclusion of certain expenses in calculating adjusted EPS facilitates operating performance comparisons on a period-to-period basis. Adjusted EPS is defined as net income adjusted to reflect adjustments consistent with the Company's definition of adjusted EBITDA. Additionally, the Company eliminates amortization expense associated with intangible assets, incremental depreciation associated with the step-up of fixed assets and incremental cost of sales associated with the step-up of inventories recognized in purchase accounting for acquisitions. The resulting adjusted net income is then divided by the Company's adjusted common shares outstanding. Adjusted common shares outstanding represent the shares outstanding as of the balance sheet date for the quarter-to-date period and an average of each quarter for the year-to-date period, plus shares issuable upon exercise or vesting of all outstanding equity awards (assuming a performance achievement target level for equity awards with targets considered probable). The Company uses a non-GAAP effective tax rate of 20%, as described in the Release. This rate, which reflects the Company's estimated long-term expectations for taxes to be paid on its adjusted non-GAAP earnings, is consistent with how management evaluates the Company's financial performance. The Company also believes that providing a fixed rate facilitates comparisons of business performance from period to period. This non-GAAP effective tax rate is lower than the average of the statutory tax rates applicable to the Company's jurisdictional mix of earnings, primarily because it reflects tax benefits derived from U.S. tax attribute carryforwards, which consist of operating losses and tax credits. Without taking into account these benefits and other similar adjustments, the Company projects its non-GAAP effective tax rate would be 24.7% based on its results for the full year 2025. This rate would have resulted in a $0.09 reduction in Adjusted EPS fpr the year ended December 31, 2025.
Constant Currency: The Company discloses net sales and adjusted EBITDA on a constant currency basis by adjusting results to exclude the impact of changes due to the translation of foreign currencies of its international locations into U.S. dollars. Management believes this non-GAAP financial information facilitates period-to-period comparison in the analysis of trends in business performance, thereby providing valuable supplemental information regarding its results of operations, consistent with how the Company internally evaluates its financial results.
The impact of foreign currency translation is calculated by converting the Company's current-period local currency financial results into U.S. dollars using the prior period's exchange rates and comparing these
adjusted amounts to its prior period reported results. The difference between actual growth rates and constant currency growth rates represents the estimated impact of foreign currency translation.
EBITDA and Adjusted EBITDA: EBITDA represents earnings before interest, provision for income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, excluding the impact of additional items included in GAAP earnings which the Company believes are not representative or indicative of its ongoing business or are considered to be associated with its capital structure, as described in the Release. Adjusted EBITDA for each segment also includes an allocation of corporate costs, such as compensation expense and professional fees. Management believes adjusted EBITDA and adjusted EBITDA margin provide investors with a more complete understanding of the long-term profitability trends of the Company's business and facilitate comparisons of its profitability to prior and future periods. However, these measures, which do not consider certain cash requirements, should not be construed as an alternative to net income or cash flows from operations as a measure of profitability or liquidity.
Net Debt to Net Income and Net Debt to Adjusted EBITDA Ratios: Net debt is a non-GAAP measure and is comprised of total debt (current installments of long-term debt, revolving credit facilities and longterm debt), excluding unamortized discounts and debt issuance costs, which totaled $10.3 million at December 31, 2025, less cash. For the non-GAAP reconciliation of Net debt, please refer to the "FY 2025 Capital Structure" table on page 7. Net debt to net income ratio and net debt to adjusted EBITDA ratio is net debt divided by net income and adjusted EBITDA, respectively.
Free Cash Flow and Adjusted Free Cash Flow: Free cash flow is defined as net cash flows from operating activities less net capital expenditures. Net capital expenditures include capital expenditures less proceeds from the disposal of property, plant and equipment. Adjusted free cash flow for 2025 is defined as net cash flows from operating activities less (1) net capital expenditures, (2) non-recurring payments associated with a multi-year tax settlement and (3) professional fees, non-recurring expenses and taxes paid in association with acquisitions and divestitures. Management believes that these non-GAAP measures, which measure the Company's ability to generate cash from its business operations are important financial measures for evaluating the Company's liquidity. Free cash flow and adjusted free cash flow should be considered as additional measures of liquidity to, rather than as substitutes for, net cash provided by operating activities.
Organic Net Sales Growth: Organic net sales growth is defined as net sales excluding the impact of foreign currency translation, changes due to the pass-through pricing of certain metals, and acquisitions and/ or divestitures, as applicable. Management believes this non-GAAP financial measure provides investors with a more complete understanding of the underlying net sales trends by providing comparable net sales over differing periods on a consistent basis.
For the three months ended December 31, 2025, Electronics' consolidated results were positively impacted by $26.9 million of pass-through metals pricing and Specialties consolidated results were negatively impacted by $48.8 million of divestitures.
For the twelve months ended December 31, 2025, Electronics' consolidated results were positively impacted by $64.4 million of pass-through metals pricing and Specialties consolidated results were negatively impacted by $139 million of divestitures.
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