MIAMI – Element Solutions reported first quarter electronics net sales increased 21% year-over-year to $427 million. Organic net sales increased 8%.
Electronics adjusted EBITDA was $97 million, up 5% compared to the first quarter of 2021. On a constant currency basis, adjusted EBITDA increased 7%.
Total net sales for the first quarter were $680 million, an increase of 24% year-over-year. Organic net sales, which exclude the impact of currency changes, certain pass-through metal prices and acquisitions, increased 7%.
Element’s total net income was $56 million, down 31.7% year-over-year. Adjusted EBITDA was $145 million, an increase of 5%. On a constant currency basis, adjusted EBITDA increased 9%.
“Our businesses once again delivered strong results in a complicated business environment,” said president and CEO Benjamin Gliklich. “We saw robust demand across many of our key end markets in the first quarter, despite increased macroeconomic uncertainty and ongoing cost inflation. The team is executing well to capture value from the megatrends propelling our company. Electronics momentum continued, growing 8% organically, with particularly strong contributions from semiconductor and memory disk applications. Despite margin pressure from inflation across all categories of our costs and mix, first quarter adjusted EBITDA grew against a difficult year-over-year comparison.
"Strong sales growth, coupled with inflation and the continuing scarcity of key raw materials, led us to invest significantly in inventories, impacting first quarter free cash flow. This is a trend that should abate as and when supply chains stabilize. We expect this to help cash flow improve sequentially in line with historical trends for our business, which should lead to a net leverage ratio of close to 2.5x adjusted EBITDA by year end. While the macro environment became more complex and challenging over the course of the quarter, the strength in our results gives us confidence to increase the bottom end of our full-year 2022 adjusted EBITDA guidance, despite incremental foreign exchange headwinds. I am very grateful to our excellent team, who put forward an extraordinary effort again this quarter and delivered another strong result.”
For 2022, the company increased the bottom end of its financial guidance for adjusted EBITDA to a range of $580 million to $590 million, and reaffirmed its 2022 financial guidance for free cash flow of $310 million to $325 million. For the second quarter, adjusted EBITDA is expected to be approximately $140 million.