Q3 2025 Quaker Houghton Earnings Call
Greetings, welcome to the Quaker Houghton third quarter 2025 earnings conference call.
A brief question-and-answer session will follow the formal presentation.
If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
I would now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relations. Mr. Schnell, you may begin.
Thank you. Good morning and welcome to a quaker hton. Third quarter, 2025 earnings conference call.
Joining us on the call today are Joe Burke West, our President and Chief Executive Officer; Tom Kohler, our Executive Vice President and Chief Financial Officer; and Robert Trob, our General Counsel.
Our comments relate to the financial information released after the close of the US markets yesterday, October 30th, 2025, our press release and accompanying, slides can be found on our investor relations website.
Both the prepared commentary and discussion during this call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Quaker hatton's operating and financial performance.
These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements.
This presentation also contains certain non-gaap Financial measures and the company has provided reconciliations to the most directly comparable, gaap Financial measures in the appendix of the presentation materials which are available on our website.
For additional information, please refer to our filings with the SEC.
Now, it's my pleasure to hand the call over to Joe.
Thank you, Jeff and good morning, everyone.
We had a strong performance in the third quarter with adjusted IBA up 5% and adjusted earnings per share up, 10% year-over-year.
By another consecutive quarter of organic volume growth across all regions.
This was Amplified by ongoing strength in asia-pacific and strong new business wins of 5% globally.
Enabling Quaker House and to outperform its underlying in markets.
Our earnings growth reflects the increase in organic sales contribution from acquisitions, especially Dipole.
And a sequential expansion in operating margins, as we better, leverage our scale.
The organization is balancing both operational discipline and strategic execution while advancing our key objectives.
This is resulting in an acceleration of new business wins at appropriate levels of profitability across the portfolio.
Sustainable, long-term outperformance.
Cash generation and capital discipline also remain strong.
In the third quarter, we generated $51 million of operating cash flow and made progress on our capital allocation strategy.
including our net leverage to 2.4 times, and returning cash to shareholders through, share repurchases and dividends
Our business continues to perform well.
And we remain focused on what we can control while navigating the dynamic and uncertain environment.
I am proud of the team's performance in 2025 as well as the organization's renewed focus in delivering meaningful productivity and results for our customers, through Innovation, technical expertise and service.
Third quarter results, were in line with our expectations, despite markets being softer than anticipated.
Uncertainty around tariffs, continue to weigh on customer operating plans.
We estimate and Market activity declined, a low single digit percentage compared to the prior year and on a year-to-date basis production levels. Across our major and markets, including steel Automotive, internal combustion engines, and Industrial Products are down a low single digit percentage globally compared to 2024
Relative to our markets, we are outperforming.
In the third quarter, we delivered a 7% year-over-year. Increase in sales on a 3%. Increase in organic sales volumes
This was most notable in asia-pacific which delivered another 8% increase in organic sales volumes.
Net share gains or also strong at 5% globally.
As the team is successfully executing our commercial strategy.
Capitalizing on the pipeline of cross-selling opportunities.
Reducing churn.
And solving complex customer needs.
These wins in the evolution of the pipeline should provide continued benefit to the organization as we wrap into 2026.
Our organic growth was complemented by a contribution from Acquisitions namely dipole, which we closed in the second quarter.
We are pleased with the ongoing integration of Dipole. The business is performing in line with our expectations, and we are excited by the commercial opportunities that the combined organization provides.
Gross profit dollars increased compared to both the prior year and the prior quarter.
Importantly, trust margins improve from the second quarter.
And are within our targeted range which promotes growth at solid levels of profitability.
We generated 83 million of adjusted ibida.
An increase of approximately 5% year-over-year and 10% sequentially.
This reflects the topline growth and operational improvements, including ongoing cost controls.
Adjusted earnings margins of 16.8%.
Continued to prove improve towards our targeted range.
When I stepped into the role a year ago I set out 3 key priorities, underpinned by several initiatives aimed at strengthening the core of our organization.
Our strategy is working, and these actions are yielding results, as demonstrated in the resilience of our earnings profile.
From a commercial standpoint.
We have doubled down on our commitment to serving the customer.
We have taken a focused strategic approach to customer segmentation.
And there are advancing key initiatives to improve service levels and optimize our portfolio.
Scaling the organization to have the capabilities to deliver the right Solutions and services to meet and exceed. Our customers needs.
We have also increased our discipline and are pursuing new business opportunities, leveraging innovation.
For instance, in aluminum, where we recently, introduced new products.
Cross-selling our leading portfolio and being more intentional with pricing.
Our teams are working diligently to reduce churn which I am pleased has trended back to Historic low single digit levels.
In winning back previously, lost business.
These efforts are paying off with positive, year-to-date organic, volume growth and new business wins which are at the high end of our targeted range.
To give some context to these actions.
We are leveraging our global scale footprint and R&D capabilities. We have localized or transferred production of Select products for instance in forging and Specialty greases
This flexible sourcing provides greater consistency speed and cost efficiency.
Enhancing our competitiveness.
When aggregated these smaller wins add up and are meaningful contributors, to the strong organic volume growth, that we have delivered for the past 9 consecutive quarters in asia-pacific.
We believe we are well positioned to continue to capitalize on the growth in China, India, and Southeast Asia.
And will further benefit as our new China facility comes online in 2026.
Our new R&D lab in Brazil, expands our Global Innovation Network straighten. This technical capabilities for local customers. It supports the growth of advanced Solutions in the region.
These enhancements highlight some of the Swift targeted actions we're taking to accelerate growth and provide the full portfolio in all regions.
Our team is hyper-focused on growing our portfolio of advanced solutions.
In the third quarter, we delivered our fourth consecutive quarter of high single digit or low, double digit organic volume growth in the product segment.
With a strong contribution across all regions.
We have significant opportunities ahead to continue to align the business towards these attractive areas of the portfolio.
Especially as we leverage our increased scale with dipole.
We have also maintained a clear emphasis on controlling what we can control.
From a cost perspective. On a year-to-date basis. Organic sgna is down approximately 3%.
As we make progress on our costs and efficiency actions announced earlier this year,
we began to put in motion further Network optimization actions aimed at Unlocking The Leverage in our model.
We have closed 1 manufacturing facility year to date in the Americas.
And we consider further actions in our manufacturing, footprint will be needed to improve our asset utilization.
Reduce manufacturing costs while maintaining the quality and service levels. Customers expect from us.
These actions support our ability to deliver adjusted ibida margins in the High Teens as a percent of sales over time.
We will continue to benefit from the ongoing cost actions in the fourth quarter of 2026.
And lastly, we are fully committed to executing on our discipline Capital allocation strategy.
In the quarter, our outstanding debt balance was reduced by $62 million, and our net leverage ratio is below our targeted range of 2.5 times.
Year to date. We have returned approximately 62 million dollars to shareholders through dividends and share repurchases while maintaining our balance sheet, flexibility to execute on strategic acquisitions.
The team is energized.
We are executing on our strategy to deliver growth reduce complexity and efficiently deploy Capital to unlock our potential.
Turning to Outlook.
Macroeconomic Trends have remained soft through 2025 and we expect them to remain. So at least through Q4.
We also expect a return to normal seasonal trends in the fourth quarter.
And there is lingering uncertainty that continues to weigh on customer operating rates from tariffs and global trade.
We anticipate continued momentum driven by share gains and our ongoing cost actions. Will help mitigate these impacts?
Based on our current visibility in the fourth quarter, we expect to deliver another quarter of revenue and adjusted EBIT growth on a year-over-year basis and should generate solid cash flow.
We have conviction in our strategy and are balancing the near-term and long-term needs of the organization.
We have delivered strong results year-to-date despite a softer macro backdrop.
And current data suggests markets, could begin to stabilize in 2026.
Irrespective the share gains and cost actions. We are delivering. Give me confidence that we are well positioned to return to growth in 2026 and Beyond
with that. I'd like to pass it to Tom to discuss the financials in more detail.
Thank you, Joe, and good morning, everyone.
Third quarter, net, sales were 494 million, a 7% increase from the prior year.
Organic volumes increased, 3% and we, and were strong, segments driven by share gains of approximately 5%.
Acquisitions contributed an additional 5% to sales primarily related to dipole, which closed in the second quarter of 2025.
Pricing largely associated with indexes.
Gross profit dollars increased year-over-year and sequentially on a non-GAAP basis.
Gross margins were 36.8% compared to 37.3% in the third quarter of 2024 and are comfortably within our targeted range.
Gross margins increased compared to the second quarter of 2025 due to some modest raw material cost favorability and productivity actions. Partially offset by higher manufacturing costs in the impact of mix.
On a non-gaap basis sgna increase approximately 5 million dollars or 4% compared to the prior year.
Excluding Acquisitions sgna is approximately 3%. Lower on the year-to-date basis. As we effectively manage costs.
We are making good progress on our previously announced cost actions without sacrificing. Our ability to serve customers and invest in our strategic initiatives. As we expect more, and we expect more benefit in Q4 and 2026.
We delivered 83 million of adjusted ibida. In the third quarter, an increase of 5% compared to the prior year and 10% sequentially.
Adjusted ibida. Margins of 16.8% are trending to work. Our targeted range driven by the Topline growth and discipline cost management.
Switching to our segment results.
The momentum in our Asia-Pacific segment is evident, as the business is consistently outperforming its markets.
the asia-pacific segment has delivered positive, organic sales growth in 8 of the last 9 quarters, including approximately 3% in the third quarter of 2025
This is driven by a strong contribution from new business, winning trials with new and existing customers in higher growth geographies like India.
Through cross-selling and a new areas of our portfolio, like Advanced Solutions.
Asia-pacific segments sales, increased 18% year-over-year as organic growth was Amplified by contribution from our acquisition of dipole, which is performing in line with expectations, despite the challenging and Market environment, particularly in Automotive.
Sales and organic volumes increase approximately 4% in asia-pacific sequentially.
We are improving operating leverage in asia-pacific, as segments, earnings increased 16% year-over-year on the Improvement in sales and modest raw material deflation.
Segment earnings also increased more than 20% sequentially as we had some 1-time acquisition, related items, impacting margins in the prior quarter which did not repeat.
We continue to have opportunities for growth across the region.
While n market conditions Remain the most challenging in AA, net sales, grew compared to the prior year and prior quarter for the second consecutive quarter.
Organic sales grew 2% compared to the prior year across most product categories. And once again, deliver delivered double-digit growth in advanced Solutions.
Segment earnings in AA. Also improved due to the increase in net sales and consistent segment operating margins.
net sales in the Americas, increased 1% year-over-year
Or organic volumes were flat as new business wins especially in advanced and operating Solutions, offset softer than expected end Market activity, which we estimate declined, a low single digit percentage in the quarter primarily in metalworking applications.
America's segment earnings declined, $3 million or 5% compared to the prior year primarily driven by lower margins due to higher raw material and Manufacturing costs as well as the impact of mix.
Margins were consistent with the second quarter of 2025.
Overall, we delivered sales growth and an increase in organic sales volumes in all segments in the third quarter.
Our initiatives to return to growth and reduce complexity are gaining traction. Share gains are strong and we are maintaining discipline around costs to better. Leverage, our scale and footprint to drive adjusted yvanna margins towards our targeted range
Turning to non-operating costs. Our interest expense was 11 million in the third quarter. Our cost of debt remained approximately 5% in the quarter.
Our effective tax rate, excluding non-recurring and non-core items was approximately 28%.
And we expect our full year effective tax rate will be approximately 28%.
% year-over-year, increase.
Cash generated from operations was 51 million in the third quarter.
Working capital was a modest use of cash as expected as we built some inventory related to ongoing manufacturing and network optimization actions.
We also had approximately 6 million dollars of incremental restructuring related Cash Out flows.
Despite these items, cash conversion was within our targeted range, and we continue to expect to deliver another solid year of cash flow in 2025.
Capital expenditures in third quarter were approximately 13 million reflecting the timing of the construction of our new facility in China, which is expected to be online in the second half of 2026.
Capex is expected to be between 2 and a half and 3% of sales in 2025, as we make progress on the construction of our new China facility and consolidate our headquarters and labs in Pennsylvania.
In the quarter we prioritize debt repayment, reducing our outstanding debt by 62 million.
Our net debt at quarter-end declined to $703 million, and our net leverage ratio improved to 2.4 times our trailing 12 months adjusted EBITDA.
Our consistent cash generation capabilities provide ample balance sheet flexibility to support our growth aspirations.
We have also returned to shareholders approximately $62 million year-to-date through dividends and share repurchases.
The third quarter was a positive reflection of our execution, improving our cost competitiveness, responsiveness, and delivering value for customers. While we expect macroeconomic conditions to remain soft in the fourth quarter, we are confident in our strategy and our ability to outperform underlying market conditions by capitalizing on our pipeline, managing costs, improving margins, and generating strong cash flow. With that, I'll turn it back over to Joe.
Thank you, Tom.
I am proud of the global Quaker house and team who continue to execute for our customers, our company, and our shareholders.
we are making progress on our strategic initiatives and positioning the company for long term above Market profitable growth,
With that, we'd be happy to address your questions.
Thank you. We'll now be conducting a question and answer session.
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1 moment, please while we pull for questions.
Thank you. And our first question is from the line of Mike Harrison with Seaport research Partners, please receive your questions,
Hi, good morning.
Good morning, Mike.
Uh, congrats on a nice volume quarter in a challenging environment. I was hoping that you could maybe give us some details on the Asia-Pacific business and specifically on the margin performance.
I think the last quarter there were some mix issues. You mentioned the acquisition.
Uh, there may be some initial integration costs there, as well as oleochemical raw materials that were dragging last quarter.
Really nice sequential Improvement this quarter. Even though you still uh, seem to be showing some negative price, mix. And so I'm wondering is, are there still some margin pressures that are happening even with the Improvement that you saw? Uh, I think we're just trying to get a sense of whether we could still see some further improvements.
Uh, in any specific margin over the next few quarters.
Yeah. Uh thanks Mike. Thanks for the for the question, you know? Oh, overall asia-pacific, I think has been a really bright spot for for the company.
Uh, We've we continue to win new business. We're selling the whole portfolio, right? In in that portfolio, I think there's a mix of things across, uh, the margin range. Not all of them are on the high end. Not all of them are on the low end somewhere in the medium. So there's there's some lumpiness at times, um,
But overall, um, you know, it's been a really good story for us. Um, there's some Geographic,
Things that come into play as well. I think, uh, you know, our growth in India is also part of the story in Asia Pacific is not just a China thing. So, again, some lumpiness, I think, uh, overall like, targeted range of of where we want to be in that, in that business. Uh, we think we're at a good place uh, to grow profitably continue to, to win, share in that part of part of the world.
Yeah, Mike. This is Tom uh, good morning. I I would just add to Joe's comments. I think he hit on, you know, we're really pleased with uh, you know, the growth in in Asia Pacific, uh, and um, you know, our opportunity to continue to do win, new business, their opportunities in India, specifically on on on um segment margins in uh, in the quarter, I would say there's 2 components, Joe, sort of talked about the the raw material impact. We have saw some site deflationary, uh, impact associated with that in uh in Q3 the other part of that is, we had some non-recurring, um, 1-time items in Q2 related to the acquisition of, um, of of dipole. So that, that sort of the other half of what you're seeing in the margin improvement from Q2 to Q3
All right, very helpful. Thanks and and then, uh, you mentioned a couple times Joe, uh, the advanced Solutions, uh, strength. Uh, and you recently expanded that offering with dipole, uh, there's also just with within the industry, uh, 1 of the major players in surface treatment, uh, is going to be transitioning into private Equity ownership which can sometimes lead to disruption. So I was just wondering, can you talk about how you're seeing the opportunity going forward, uh, to pick up further market share in advanced Solutions and particularly in surface treatment and and some of the metal uh treatment that you acquired with diesel,
Yeah, Mike. I mean that that part of our business is something again. We're, we're excited about because, uh, part of the play that we've been running over the past few years is
You know, our customers want to buy. Um, not just lubricants from us, uh, they're actually looking to, to buy, uh, the things across the portfolio, to help them manufacture things, better, and
So our entry into this Advanced solution space, and our investment in that space is, is really a good opportunity for us to grow in different parts with our customers. And in parts of their business. That actually, maybe are growing a little bit better than some of the traditional, uh, chemistries. And, and I think from a Quaker Houghton perspective, uh, I'd like to use that the old baseball analogy, right? Um,
We're still in the really early Innings, uh, with some of these Acquisitions even Norman, hey, that we made back in, in 2019 in globalizing. That it, it does take some time to transfer the technology, uh, into the sales force. It takes some time to build the supply chain to be competitive in all regions. And, you know, dipole,
it's been performing I think as expected and maybe even a little bit better when you consider the the their heavier weighted and and and Japan Inn in with Automotive, which has been a tougher place. But um
You know, we're we're, we're excited about the opportunity to, you know, to continue to roll that out across our other regions and provide that full offering, uh, to the market. Um, you know, for and gives us a opportunity to grow. I think, uh, you know, as we as we look forward
All right. And then, uh, I was just looking for a little bit of clarification on the, the Q4 Outlook. Uh, last Q4, uh, I believe there were some strike related, uh, issues and and downtime some unusual margin weakness associated with that, and then in the meantime you you've taken out costs. You've also done an acquisition. So I guess just the, in terms of the view that Q4 should be up uh revenue and earnings year on year. Can you give us maybe a little more precision?
Uh, on how you're thinking about organic growth year on year in the fourth quarter, uh, and maybe on uh.
Margin improvement year on year. Thank you.
Yeah, thanks Mike. Yeah, I mean, look, we have we have really good momentum heading into Q4. I think, uh, we have confidence in in that business wins that, we've
Collected throughout the year, and that should carry into Q4. Um, and the wrap of the things that we've won in addition to things in our pipeline that we continue to convert,
uh,
Around holidays uh primarily in Europe. And in the Americas you have less working days. You have some, some holiday outages.
So, uh, we'll expect, you know, to experience that again this year. As you mentioned, um, our costs are under control. We continue to work on that previously announced program, uh, with some more work to be done there, right? So, uh, we would expect that to continue into Q4.
Margin stability again. Um, you know you have a little bit of tug, uh, in a lower volume environment, uh, around capacity utilization. But, uh, we've taken some good steps. I think, as you see sequential margin improvement, then I wouldn't expect, um, anything other than stability from what I'm seeing today.
Uh so you know overall uh consider the fact that we have dips all we didn't have dips. All last 4 quarter.
Uh, we feel, we feel pretty good about about Q4, um, but I think there's just a reality that, you know, that that, uh, we will see this sort of normal seasonality this year, which we saw last year. It was also compounded last year by some some other factors that you mentioned.
All right, thanks very much.
Our next question is coming from the line of Lawrence Alexander with Jeffrey's please.
See with 3 questions.
Good morning. Um,
I guess first just a short-term 1, the, you know, where you mentioned sort of some optimism on 2026,
Are there areas where you're hearing that from customers?
Um, either directly or indirectly, like they're seeing their customers to investments that now have to gear up production to satisfy or support.
Um, or is that more just a general macro comment?
I think it's more of a general comment. Uh, Lawrence. I I look as far as the market goes next year. I mean, we we mentioned a couple times. We think the markets that we've been in this year are down low single digit, right? And even stability next year would be we view that as a good thing, right? Um, I I don't think anyone, you know is saying, hey next year's going to be underlying market growth, but I we're also not seeing anything get any worse. So we're we're, we're kind of entering the year looking at our ability to continue to, to deliver above market, share gains. And, uh, with with visibility on the wrap that we've acquired this year with visibility on, you know, uh, the full annualization of the Acquisitions that we've made.
And also, knowing what we can control and our controlling and targeting around costs. So, that's where, where our kind of a a optimism is for, for 2026 is not necessarily about a about a market, uh, Improvement or any sort of inflection yet. Um, there should be continued, you know, Asia can should continue to be strong Europe. I think may have hit bottom, right? So, uh, against the ability, there would be a positive for us and, and then um,
You know, America is is, is is a question mark, but we're, we're not, we're not really factoring any any uh, big inflections positive or negative at this point.
and then, when you think about how what's driving the share game, uh, dynamic
When and markets do accelerate, do you expect the rate of share gains?
To accelerate as well, so that you get a double, you get an amplified effect. Where do you see kind of your focus moving to supporting the end markets as the rate of share gains decelerates? Because the end markets are healthier and you're focused more on supporting kind of new business that's coming in the door. Can you just give us a sense for how to think about modeling out what a recovery scenario might look like?
Yeah. No, a great question. Lawrence, I look I think over the Long Haul. Like I feel really good about our sales model how we're going to Market. I think
1 of the things that we really focused on is reducing our churn and getting our churn back to this, you know, low single digit number.
And you know, sort of stopped shooting ourselves in the foot and we've done that and feel really good about how we're we're serving our customers number 1. Number 2, um, you know,
A little bit above that. Um, I think it's possible Lawrence with, with the mix and the new business that we've acquired that we could continue to, to grow on the top end of that range. These are still competitive markets, there's still a long sales cycle. So, you know, there can have there can be lumpiness as well over time. Um, we're going to we're going to try to get as much as we can, uh, with responsible levels of profitability. But, um, you know, I think, uh, I think we feel really good right now about sustaining, at least, uh, kind of the levels that that we're at into, uh, the next few quarters.
thanks and then just, I appreciate this might be
Of a fuzzy question, or I might need a fuzzy answer. Um, but if you think about it.
The trends in in the industrial markets in terms of Robotics and additive Manufacturing.
Do you have the right? You know, first of all, how do you have a sense for how significant those are for you currently but more importantly, do you have the right?
Sales mix.
To be relevant to those markets, or do you need to add on additional?
Packages or Technologies.
No, I think the good news there. I mean the
Your question about how how we Quantified what that impact will be we really haven't. Um that's something that you know from a strategy standpoint. We we we're looking at and trying to understand that better but I think the great news there Lawrence is we have you know, we've been compiling some of these Technologies through acquisitions
Uh, you talked about, you know, added additive manufacturing, our our uh, Ultra seal business uh which is related, not only to die casted product. But sealing, uh, products that are 3 3D printed or, uh, diecast. That's something that's really good. Our
Growing presence with specialty greases around the world. And some of these greases are going to play a really big part in robotics, uh, they do already today, but as that robotic Market grows, we think there's an opportunity there for some of the specialty greases, uh, that we produce anything made out of metal. Uh, ha has our, you know, our products in the processing, uh, side of it. But now, uh, with the addition of dipole, when you get into plating of of these things and and the Fasteners and even, even the, uh, the anodizing of of the parts. Those are all things that uh, we think will be a benefit for us as we go. Forward, haven't Quantified exactly what that benefit will be over the long term but but we feel it's a positive thing.
Thank you.
Our next question is from the line of John 10110 with czs Securities, please. Just see with your question.
Hi, good morning, and thank you for taking my questions and congrats on a nice, uh, quarter here. Um, first off, if you could, I was wondering if you could discuss just the, the sustainability of the, the, the share gains in your business, you talked about, can you clarify, if that, if you're expecting that to remain above that 2 to 4% range, your historically had, um, number 1 and number 2, how much is pricing and the margin you're willing to have on that new business, been a factor in gaining that share have you, um, taken a little bit less margin there, or is it, uh, still in that higher range versus your kind of target range.
Yeah, great. Great question, John. Um,
Look overall, I, I, I still think, uh, our range over the long term is this 2% to 4%. Um, I'm really pleased that we've been doing better than that. Um, and it's possible we sustain that. You know, it's hard to say. Uh, as I said earlier, uh, it's still a competitive market and our sales cycle is a little bit longer, but, um, we feel really good about that 2% to 4% range because we've done that consistently, and, uh, I would expect we would continue to do that as we go forward when it comes to pricing. Um,
Complex question. I I think what we have done is we've been very strategic about getting back to this sort of
uh, good better, best offering with our portfolio, giving our customers some choices, especially as you know, they're they're struggling in in tough environments and
you know, uh, we want to make sure that we're we're giving them the full range of
it the, uh,
Us as, as uh, we talked to our customers.
Got it. That's helpful. Sure, thank you. And then, um, just a question on the Outlook. I know you've got it the growth for Q4 but um, I noticed you declined to update. I think the the prior language around guidance which was in the range of 2024 for earnings. Can you just help us understand where you stand relative to the the the prior Outlook and is that still valid?
yeah, I
we still feel as I as I mentioned earlier. Um you know our our fourth quarter is going to be better than it was last year, right? Um
In the third quarter. Uh, I think, uh, we got there.
On the overall sort of we you know our expectations. How we got there was a little bit different.
um,
in that, you know, the volume was up, but there's still some price mix, uh, headwind. Um, I absolutely feel like within range, you know, within range. How do do I quantify that John? It's hard to give you an exact quantification of that but I I I feel like, uh, our fourth quarter, we are very confident. It's going to be better than than last year. Our second half of this year is as we said will be better than the first half of this year and uh you know you layer in some things like our our dipole acquisition which we didn't have last year in the fourth quarter and the cost of of
The cost, um, um, actions that we've taken, um, you know, we we think we can still come within range. Let's let's say that within range of last year.
Okay, great. Thank you very much.
Our next question is from the line of Arun, this 1 Nathan with RBC, please just see with your questions.
Sorry, I was on mute. Um, thanks for taking my question. Um, hope you guys are. Well, I guess I'm just curious on the APAC, uh, uh beat now for a couple quarters does that, you know, potentially, um, you know, signal, uh, you know, what could happen in other regions. Uh, why are you guys outperforming there is that, uh, a combination of share gains and market growth? Or is it just 1 or the other? Um, and does that, you know, again, you know, would you expect similar kind of trajectory and in other regions as you as you as you progress forward.
Yeah, it's it's a it's a good Insight. Uh it is a combination, right? Those markets are stronger are growing more investment in those areas. So in addition to, you know, really executing on on the margin game but uh, or not margining any sorry, the new business wins, um,
So, it's a combination of a strong market and, and, uh, executing the sales, uh, pipeline.
And then, um, the pricing, uh, you may have addressed this earlier apologies but, um, you know, are you kind of, uh, you know, do you think that you you've kind of finished giving back all all that pricing that, uh, you know, maybe flows through with lower raws and as you look ahead, um, what do you expect on the raw side? Um, and with that also kind of, you know, if you do expect, maybe some continued deflation, does that mean that pricing continue has to adjust lower? Um, and does that actually ultimately result in, um, you know, maybe some volume gain or, or could you keep this 3% going? Um, maybe just talk about the dynamic between for the trade-off between price and volume. Thanks.
Yeah, thanks, everyone. This is Tom. I'll, I'll, I'll talk a little bit about that. So, um, you know, I think when we think about the price mixed Dynamic, again, we saw that impact in Q 3 is about 2% that continues to moderate. As we as we go through the year on a sequential basis. It was essentially no no impact on our on our Topline. Um, you know, I think as Joe had mentioned earlier some of that some of that pricing, uh, Dynamic was, uh, was and is intentional as we focus on our Port. You know, the breadth of our portfolio and our ability to give customers options from a good better best.
Um, perspective, we all. We also do have some targeted, uh, pricing, uh, actions where we've got, you know, sort of a fit for purpose uh pricing strategy and and pockets of our portfolio and in various geographies. So if we think about uh Q3
Margin profile. And then also there's Regional differences. So, so, again, I think is we think about it, um, going into 2026, we do expect the impact of this to lessen as we, as we wrap some of these impacts, but it is a dynamic Market environment. And we are trying to be responsive to our customers in terms of our product offering and how we think about good better best.
Great, thanks for that. And then lastly, um, just curious on, you know, you mentioned, uh, IC vehicles. Um, how are you viewing? You know, uh, your exposure there in relation to EVS? Um, are you expanding your offering with EVS? Um, if I recall correctly. Um, you know, maybe maybe your your, your, uh, performance would be better with an icy. Um, could you just reiterate, uh, you know, what would be what's more advantageous for you for you guys. And, uh, I'm just curious because we've obviously seen stronger growth on the EV side. Um, or you know, and, and are you increasing your exposure there or or um, not necessarily. Thanks.
Yeah, I think that's that's 1 of the things that's really exciting about the Asia story, is we're growing with some of these new winners in EV and that's, you know, that's intentional, that's something that we we recognized was was coming. Um, it's certainly accelerated in that part of the world. It's it's maybe stalling a bit in other parts of the world, but uh, we
Find an important that we we grow uh, with the new winners in that space and we're doing that. Uh, We've added some things to our portfolio. That really position us very well for for Ev um the overall sort of as we look at that uh you know, a traditional ice engine.
If you called that part, uh, an EV, uh, it would use a little bit less of our traditional metalworking fluids.
A Hybrid engine would use a lot more uh or not a lot, but a little bit more so on balance, I think it's, you know, the the algorithm that we look at is Automotive production in general and uh, our opportunities uh, for ice and Evie are are are both compelling and and, and similar.
Thanks.
Thank you. At this time. We've reached the end of our question and answer session. I'd like to turn the floor back over to Joe Berkus for closing comments.
Thank you. Thank you for joining our call today. Uh, we're we are excited about our future and excited uh, for Quaker Houghton and and all of our employees, appreciate your continued interest in our company and please reach out to Jeff if you have any additional follow-up questions,
Thank you.
This will conclude today's conference, let me disconnect your lines at this time and have a wonderful day.