All right, thank you, everybody. I'm super excited for day two here at the Laguna Conference. No better way to kick it off than with 3M, new CEO, Bill Brown. We also have Bruce Jermeland from IR. Before we get into the fireside, Bruce, Bill is gonna start with some opening comments.
Good morning, everybody. It's great to be here. Four months now in the role. You know, I thought I would just talk a little bit about our earnings release very recently, about four or five weeks ago. We released second quarter earnings, you know, solid results, pretty much in line with the trend in the first quarter of the year. So for the first half, you know, our adjusted earnings per share was up 38%. Year-over-year revenue growth, organic revenue growth, was about 1%. You know, about $2 billion worth of free cash in the first half. It was about 83% conversion ratio, so pretty good start to the year.
We brought the bottom end of our guidance range on earnings per share up by about $0.20 to now $7.00-$7.30. For perspective, that's 16%-21% adjusted growth year over year, so pretty good earnings performance outlook for the year. Organic growth we see in the year, 0%-2%. Again, 1% in the first half. The way we see Q3 and that's shaken out in Q4, we see the trend line pretty much in line with the first half, around 1%. So we think we'll be probably in the middle of that range as we get through the balance of this year.
So I took a long time at the, at the earnings release to give a lot of color on what I was looking at, what I was prioritizing, you know, and it really was about three priorities. One is reinvigorating top-line growth. It clearly is top of my list for sure. It's got a thread on driving innovation. There's a piece on driving commercial excellence, but it's something that, we're really focused pretty heavily on. The second is driving operational performance across the enterprise. You know, the way I talk a lot is about what's happening in our supply chain, our factory supply chain, logistics, et cetera. But when I think about operational excellence, it's really throughout everything in the company, so we include all the staff functions and everything we do throughout the company.
and the third is about effective capital deployment. Our top priority is investing organically into the business through CapEx, R&D, and that's gonna be our number one priority, has been. You know, we're gonna pay an attractive dividend, you know, maintain a strong balance sheet, which we have today. And then any excess cash that we generate, we'll use for, either redeployment back to shareholders through repurchases or to M&A over time. You know, and that's kind of why what I set out as our sort of high-level agenda for, you know, the next few years. It truly is a back to basics, sort of focus on fundamentals approach, and that's the way I articulated at the earnings release, because it really is back to focusing on what really matters, what drives the company, which makes us different and better.
A lot of the anecdotes that I provided at the earnings release, I think some of it resonated externally, you know, things I think were new to investors, but I think more importantly, resonated inside the company. You know, people really heard the message around what we're trying to do, and the response has been very, very positive. People are really excited about coming back to doing what they came to 3M to do, and that's innovate, drive solutions for customers, drive value creation for owners. You know, so there's been a lot of excitement and enthusiasm around that. So, you know, I'm pretty pleased with the way that happens to be. That being said, there is going to require some culture shifts over time.
You know, the messages I'm driving to our employees is that every single day, we ought to be challenging the status quo. We have a lot of people been around for a long time. It's great to have a lot of experience and seasoning. But at the end of the day, we can't look at yesterday to be the same as tomorrow. We got to keep innovating, keep changing the way we do things, and offload those things that don't add value to customers, don't add value to our shareowners. So I'm really pushing the agenda pretty hard, moving with speed and urgency. I talk faster. I think we, you know, it's a Midwestern culture. We're trying to drive that a little bit, but, we're really pushing hard on those kinds of dimensions.
You know, again, I think the response internally has been quite positive. So, you know, we're off to a good start. I look forward to your questions, Chris. Thank you.
Yeah. No, I appreciate that. And maybe starting off super high level, you know, everyone's, I think, aware of 3M's had a lot of challenges over the last five years. So what drew you to the job and the opportunity?
Look, I mean, I think 3M is an iconic company. You know, I was an engineer by trade, went to business school, I was at McKinsey for a number of years, worked at United Technologies, a couple of other places. You know, but everybody looks at 3M as a really, truly iconic company. The spirit of innovation, the things that they have brought, new solutions and new creations to the world is pretty inspiring, but what's also inspiring, not just what they innovate, is but how they do these things at scale, how they manufacture innovative products at scale, and I think that's the secret sauce of the company, is both the innovation as well as the manufacturing scale and footprint around the world.
So I have an opportunity to come back and lead the company through what I think is a transformative stage in the history of our organization, a hundred and twenty years old, plus. And it's, to me, it was very exciting, and I'm looking forward to the challenges ahead and what's coming in the next quarters and years.
On the Q2 conference call, you talked a lot about, you know, the supply chain complexity at 3M and, you know, the ability to simplify that.
Yeah.
So, you know, when you look out over the next, you know, 12 months, where do you see the biggest opportunities to drive improvement or, you know, maybe the lowest hanging fruit?
Yeah
-so to speak?
Yeah. Look, I see, I see opportunities in a number of different areas, really across top-line growth as well as driving operational performance, some of which are gonna take time, and we've got to sort of work through the process. Driving and reinvigorating organic growth from R&D, there's a dwell time. There's a cycle time with developing and launching new products, so this could be some time, which I'm getting at it so quickly because that does take some time to move, and I'm pushing people to really say, "Okay, well, if we're not innovating and driving new product into the marketplace in the next couple of quarters, what do you do? Well, you gotta be better at selling what you have in the market today, so I'm really pushing that." It's around salesforce effectiveness, distribution effectiveness...
how we price, cross-selling opportunities, and importantly, doing better at what we call on time in full. So the performance of our factories and supply chain to our customer expectations. We have not been where we wanted to be. Frankly, a couple of years ago, we were below 80% on time in full to customers, which is way below what the expectation happens to be. We ended Q2 around 86.5%, or probably around 88%, thereabout. So we're making very steady month-by-month progress to delivering on time in full. But the reality is that for the company as a whole, we're at 88%, but that means there's some, like consumers, above 90%, which is good, and others are below 88%, but like the industrial businesses and transportation. So we've got to bring this whole performance level up across the company.
When, when you're delivering below 95%, or even sometimes 98% to your consumer customers, you know, you're getting fined. There's expectations you should be there, and we're not there. So we know we've lost business because we're not delivering on time in full. So that the team is really, really focused on. But there's a whole bunch of things we need to do to drive operational performance, partly because we've got to get better at delivering against customer expectations. We've got to be better at quality at the customer interface. We have opportunity to take cost out. You mentioned the supply chain complexity. It's pretty amazing. I gave an example at the earnings release, and it's one of many, many examples, and it's about how many factories does a Command strip hit before it actually gets to the end customer?
There's five factories and two distribution centers, and we use that as a fairly simplistic example, but it's amazing that that's what happened. But you think about that. Lots of our products are the same way. They go through multiple factories and then through distribution centers before getting to the customer. You can just imagine the amount of time, amount of inventory held up in there, the freight and logistics costs of moving things through that supply chain. So there's a lot of opportunities there. You know, when I think about operational excellence, we've got to get at purchasing. We've got to get outsourcing is a big opportunity in our company. So a lot of different pieces here that we've got to get at.
They're not necessarily low-hanging fruit, but these are things that are going to start to deliver, really starting, as we speak today. So, that's kind of my agenda, what I'm focused on.
Yeah, no, I appreciate that. You know, it sounds like a lot of gross margin opportunities, you know, better utilization, reducing supply chain complexity. You know, but you're also, you know, very focused on restoring growth. So I guess, you know, how should investors think about, you know, the opportunity for maybe operating margin? Because it does feel like maybe some of that gross margin will be offset by maybe higher SG&A or reinvestment into the business.
Look, I mean, the team has done a very good job on margins, actually. I think they focused on this, and I would say in some respects, they may be over indexed on margin at the expense of growth. So some of the things that we've done, we've pulled back on some of the investments in growth that you need to grow your business. We've pulled back on advertising, merchandising, we pulled back on sales force. There's different things that we pulled back on, but we're sitting there, you know, front half of the year, up five hundred basis points of margin, which is very, very good. For the full year, we're guiding up two twenty-five to two seventy-five. So the margin performance is pretty good.
We'll probably end the year between 21%-21.5%, probably drifting towards the higher end of the range, but we're doing a pretty good job here. We're about 75% through the restructuring program. You know, as we get into next year, we'll sort of lose the cost, which is embedded in our numbers, the restructuring cost, and we'll see sort of the tail end of that going away, plus savings kicking in. So we'll see some upside next year in margins, simply because the restructuring is kicking in and all. Of course, all of the other opportunities that I've talked about on operational performance will start to bear fruit. They're bearing fruit now, will bear more fruit next year, for sure. Volume for us is a big, big margin driver, frankly. Our drop-through is around 35%.
So part of us driving margins over time, you know, really is about driving top-line growth. So you mentioned about gross margins. I'm talking about operating margin. When we talk about gross margin, we in the first half of the year, we're at 44%. We at times have been in the high 40s. You know, structurally, there's no reason why we can't get back there over time, and when I lay out all these different opportunities across our supply network, you know, there's plenty of opportunity to drive, you know, margin improvement, you know, up over time. We're looking at 2% net of inflation as our productivity goal every year, and with a $13 billion cost of goods sold base, you can run the math. It's going to be, you know, pretty accretive to margins over time.
The only caveat is, look, you know, we've got to watch what's happening on our mix. We sell a lot of electronics. Electronics this year is a higher margin product, so that can move up and down, so we've got to be really careful about that. We will have to invest in some of these growth initiatives. I think we can do that without impacting margins. Why? Because I have an opportunity in our roughly 18-19% SG&A ratio to shift and pivot some of the spending around. You know, some of the things as I look at it, I'm spending money in parts of SG&A that aren't driving growth, and I think I can pivot some of that spending over to driving growth. Same thing in R&D. There's only about 4.5% of revenue is our spend in R&D.
We have an opportunity to shift some of the R&D around and pivot more of that to growth initiatives, which is what we're trying to do. So there's lots of opportunities to sort of optimize what we're spending, drive some productivity, so we have some oxygen to invest in growth without impacting the trajectory on margin expansion, and that's, that's kind of how I see the thing rolling out in the next couple of years.
Maybe one last one on margins before we get to growth, which I think is, you know, more interesting. You know, so, you know, you've talked about a lot of incremental opportunities to drive margin expansion beyond the existing restructuring program. But, you know, you are inheriting someone else's restructuring program. You know, how do you feel about it?
No, the team has done a good job on this. Look, it's, you know, you run the numbers between $700 million and $800 million worth of cost, so it'll be an equivalent amount of savings, roughly. We haven't, for whatever reason, disclosed it across our businesses, business lines or across the company timing. You know, as we turn the corner next year, there's a little bit dragging into next year, where we may or may not articulate that with investors. The reality is, the program has been pretty comprehensive... It has, there have been some factories that are closing within that, but it's not that many, and a lot of it's driven across corporate center and other types of opportunities to reduce SG&A. So I think it's been effectively run.
We're about 75% complete, and it's gonna drive us some tailwind going into next year. But the things that I'm talking about, around driving operational excellence, it's not a program. It's not a one-time event. You don't take a charge and then do a factory. These are, these are really just how people work every single day. At the factory floor, what do they do to drive down cost, improve quality, drive waste, et cetera? You know, and that is a grind. You're never there. You're always on that journey to get better. That's the whole spirit of Kaizen and operational excellence.
Yeah, and maybe I'll just pause on my question list and see if anyone in the audience has any questions that they'd like to ask.
Thank you. Talley Horne from Morgan Stanley. Just a quick question. You mentioned volumes, right? But what's going on on the price side? Like, are you guys pushing price more aggressively in certain areas?
Good, yeah, good question. This year, we're back to where we were pre-pandemic on pricing, about 30-50 basis points. It's where we were pre-pandemic. So again, in our roughly 1% organic growth this year, 30-50 basis points is gonna be price. In the middle of COVID, it spiked over 200, you know, basis points to over 2% growth on pricing as we were covering inflation. So we're doing a pretty good job with that. But I do think that there's more opportunity on pricing, and the way to look at it is really in two threads. One is when we talk pricing, we talk net, but there's a big gap between gross and net. We don't report gross sales, we report net sales, and the delta is pretty substantial.
What's in the middle of that? It's all the market development funds, it's chargebacks, it's volume rebates, it's cash back, whatever it happens to be. Sometimes it's a fine because I'm not delivering on time. There's a lot of money that we can actually look at that to try to tighten it up and be more effective, so we have more of a drop through the net price. That's one. And the other is a much more surgical approach at pricing. When I look at least one of our segments, when I looked at the sort of volume margin, volume price spread, it's a scatter shot. You would expect to see some correlation between, you know, the greater the volume, the lower the price or the lower the margins. In fact, we don't see that. It's sort of a scatter shot.
So there's an opportunity to get a lot more surgical in how we price. I put those two pieces together, I do expect we'll continue to see some price momentum going into next year.
You know, maybe just following up on that, I mean, I think it makes all the sense in the world that, you know, people who are doing less volumes with the company, you know, you charge a higher price for. But, you know, I guess, how do you balance that versus maybe a negative volume response? You know, I imagine some customers-
Yep.
out there would say, "Okay, fine, well, we're going somewhere else.
That's the magic of how you price, is you, you've got to look at elasticity. You look at your competitive nature to see what you've embedded into your product in terms of differentiation. If you're delivering better, you're better, your quality is better, you have innovation you can bring to the customer, you can generate a better price. But if you don't have those elements and you try to raise prices, and I know we've had, we've done that, probably a lot of other folks have done that, you sacrifice on the volume side. So you've got to be really careful about how you do that. You know, the one element I didn't mention when I talked about price is NPI.
The reality is, one of the best levers to drive price is develop innovative products to be able to price up and have better margin. We know that. We have much better margins on newer products than we do have some things on that are... We'd expect that to be the case. So that piece we've got to really kind of work on as well.
Yeah, I know. And then maybe kind of going over to growth, you know, you said reinvigorating growth is number one priority. You know, you kind of talked about set more, maybe sales force, maybe some additions there, R&D, innovation. I don't think you mentioned anything on the portfolio, but I'll ask, is there any portfolio pruning that would support that? Like, how do you kind of rank those and ultimately-
Yeah
you know, getting that business back?
Well, it's really all three of those major threads. I talked about the two, about R&D and commercial excellence, and having the right portfolio mix is gonna be important as well. Maybe a couple more words on the R&D side. Look, we. It's, I went through these numbers, and I talked about this a lot within the company. When you go back over time, because now we don't have Solventum, if you look at just the R&D spend over the last five to 10 years, on a nominal basis, it has been basically flat, so meaning on a real basis, it's coming down. And when you look at the mix of spend, how much of our spend is going towards new product development, it used to be in the like 40% range. It's dropped below 30%.
We're in the high twenties, you know, last year. It's coming back up. You know, the reality is, when you're not investing in new product development, what happens? You're not getting new product introductions. So we saw the number of new product introductions drop almost by an order of magnitude over the last decade to where we were last year. So we've got to correct that mix. It's also making sure we're investing in high-growth markets. We're improving the velocity of products through the pipeline. We're fixing the capacity. So I look at this, you know, almost like this R&D factory we call R&D in many ways. It's got a capacity utilization, and when you have people that are spending a lot of time on non-value-added things, they're not putting time on the things that do add value.
So we have a lot of opportunity to kind of free up some things from the researchers to actually focus on doing real work. So it's a lot of work that's happening here on R&D, including on the governance side. This is a big thread. It's something that's very important. I went through a lot of the pieces on commercial execution. You know, we're all over this. It's a bunch of nickels on the ground, and we've got to go and find them and deliver against that. A lot of times it's training of sales force, it's incentives of sales force, maybe some gap coverage, doing some things differently with our distribution chain. And then the third piece, as you mentioned, around the portfolio.
The fact is, probably a third of our company is more in the commodity-like areas, and we've got to look over time at what should the business model look like at the company? You know, do we, as 3M, as an innovation-driven organization, should we be in businesses where technology doesn't drive differentiation at the customer interface? So it doesn't mean if it's commodity, then it has to always be commodity. It could we could be finding some opportunities to come up with some new product innovation ideas that could change the dynamic of the business. But at the end of the day, where we're really good is where the technology skills of the company can drive the differentiation inside of a product and make a difference at the customer interface. So over time, I imagine there'll be some portfolio shifts that happen.
Nothing I'm gonna talk about today, but that's the lens that I think I'm gonna be looking at this in the coming months and quarters.
Yeah, and I guess, would you rank, you know, R&D and innovation as, you know, the number one driver of getting back to GDP plus?
It has to happen. It doesn't mean these others are unimportant, but you can't drive sustained organic growth at 3M if you're not sustainably driving new product introductions, new-to-the-world creations, innovation. You can't have a vitality index, a five-year vitality index, which was historically in the 25% or 30% range. It's a good company, not a company that's reported anymore, but 25%-30% is pretty good. You know, we're barely in the double digits right now, and that just reflects the aging of the portfolio. So you can't drive better than GDP or whatever growth organically, unless you start to bring more products to market. That is essential. These other elements have to be fixed, but it can't be done without fixing the R&D side.
I mean, when you look at, you know, the portfolio, what are the businesses that you feel like are differentiated, and ultimately deserve capital, whether it's, you know, inorganic R&D or even, you know, at some point, maybe some M&A to bolster them?
We've got, we've got great businesses across the portfolio. We really do. Even in the consumer side, I mean, the brands are fantastic. I mean, they're absolutely incredible brands in the consumer business. When we talk a lot about our transportation electronics business, some of the things we do to drive, display technology for notebooks, for iPads, for phones, for other technologies, now converting that into displays in cars, a lot of electrification in cars, a lot more sensors, more panels, you know, that all that film technology comes from 3M and through the innovations that I think are just really incredible. These multilayer optical films, it's just amazing how this company does that. It's both the innovation side of it, but also the manufacturing that technology at scale.
You know, we basically multilayer optical film, it's between 2 and 600 layers of a polymer on a film, and each about 40 to 80 millimeters wide. We bend right at the wavelength level, and we basically produce these sheets that are a couple of yards wide coming off the line at 350 feet per minute. It's just amazing what we can do, and there's great technology to doing that, and we're seeing a lot of benefit from that. We see some of the same technologies over in the safety and industrial business. It's, you know, terrific opportunities there. So really across the portfolio, we've got really good technology. You know, some places, maybe not as much as it used to be, but I think many of the places we do.
You know, I think, you know, the beauty of 3M was the ability to leverage shared technology across an incredibly wide range of applications and then leverage that R&D spend. But does that make it difficult to shift the portfolio? You know, because there is this interconnectedness, you know, among what's there, and then also on the other side, bringing things into that.
Yeah, no, it's... Clearly, there's a lot of interconnectedness, but like the IP as well as the manufacturing chain. So when I talk about how many different factories the products touch, the reality is we have 38 big factories, 38 of our 110. That's about 75% of our volume, and you have products from across the divisions, across the segments, going and hitting a lot of these factories. So when you pull something out, yeah, you've got to. It's a consideration. You've got to think about IP licensing, you gotta think about supply agreements, but the reality is we've done that. That's what's happening with Solventum right now.
We've carved off a big chunk of the organization, and there's a whole host of IP agreements and supply agreements in place with Solventum because they are leveraging our factories, our IP today, in their business model. So we know how to do it. It is, it's a consideration, but it's not an impediment to portfolio changing, I would say.
You know, I appreciate that. Maybe, maybe getting back to the or looking at the served markets, you know, company, you know, turned organic growth positive for the first time in a while. But, you know, when we look at short cycle industrials-
Yeah
or consumers, you know, it still generally seems.
Yeah
sluggish out there. What are you seeing?
Yeah
across the served market?
Yeah, no, you know, the industrial side still is fairly mixed. We are flat in the front half. You know, again, for our guidance, flat to up low single digits in the full year. You know, we saw some pockets of strength in our business, you know, in a couple of areas, like tapes and adhesives going into electronics was pretty good. We have a roofing granule business, one of the areas which is not significantly technology-intensive, but it's good margin there, good cash flow, you know, growing pretty well. It's driven by a replacement cycle, but 80% of that's going into replacement. So that was up for us. Personal safety was about flat. We saw some other business, abrasives and other areas being down, being weaker this year.
We see that trend continuing through the balance of the year, so flat to up, those single digits, but still fairly mixed. In our transportation electronics business, we had a really good start in electronics this year. A lot of this technology I mentioned earlier, winning the spec and wins, a lot goes into China, and then so back out of China. That's been strong, and that's continuing to be pretty solid through into the third quarter. We expect that through the fourth quarter. Automotive was a good start to the year, but if you watch IHS, you know, the forecast for auto build is coming down, has come down. You know, our first quarter was down 50 basis points for the year.
You know, as we got to the end of July, we reported earnings down about two. About the back half of the year is down three hundred and fifty basis points on auto build, and we're seeing that in our business. We reflect that in our guidance, but we are seeing sort of auto build, you know, start to become a bit of a challenge. You know, we're watching the inventory levels there pretty carefully. That's in the transportation electronics business. You know, in consumer, it's a pretty muted behavior, frankly. We've seen good performance in home improvement, which is our Command strip. That's done; it's actually done pretty well, so hanging things. You know, other areas have been more flat to down, like Post-its have been down and stationery supplies, Scotch tape has been down.
It's been fairly muted consumer. It's really mirroring a lot of the trends I think you're seeing with Targets, the Walmart's, and others of the world. You know, consumers are more price-focused, bargain-focused, value-focused, and I think it's gonna continue to be that way until you see a turn in rates and people start to get more confident in the economic outlook.
You know, 3M, and pretty much every company I cover, has faced destocking headwinds over the last 12-18 months. Do you feel like those are in the rearview now, and now we're, you know, really more just shipping to demand?
Yeah, we don't see a concern right now in the channel. We watch it very carefully. You know, in our industrial channels, you know, probably 90% plus of our industrial business goes through distribution, so we watch what they're holding. You know, it's been in, like, the 60-65-day range, maybe a little bit better than that, but it's been holding pretty well. It was well above that at points in time. So the inventory in the channel seems pretty good. We watch it, and it's not a big concern of us right now as we speak.
Appreciate that. And maybe, you know, looking at demand geographically, you know, what are you seeing in, you know, U.S., Europe, Asia, maybe China specifically?
U.S. and Europe, it again, is pretty mixed. It follows the industrial and the consumer commentary. You know, most of our consumer business, 70%, is in the U.S. You know, that's been pretty soft, pretty muted. You know, it, it reflects the comments I made on industrial and consumer. Same thing in Europe. Europe is more industrial, less consumer, but again, fairly mixed, fairly flat, moving more horizontally. You know, at the beginning of the year, we saw pretty good growth in China. It was driven by electronics, so about mid-teens, I think, 13%-14% growth in China in the first half. A lot of that is driven by what comes out of China. Our China-for-China business was up about 1% in the first half, so really flat. We see that continuing, watching it very carefully.
Everyone's sort of questioning what's going on in the macro environment in China, and we're watching it pretty carefully, but for the first half of the year, at least, was pretty decent, and we're keeping an eye on the local economy in the back half of the year.
You know, maybe on China, you mentioned, you know, a lot of products that, you know, you sell to China actually shipped out.
Yeah.
You know, we get a lot of questions on tariffs, you know, with the election coming up. You know, what does that mean for you as a company who produces in China and ships out?
Yeah, look, we're watching it carefully and watching and listening to what the two candidates are talking about. It's not 100% clear, you know, as we're trying to understand and parse, you know, what's going on there. But look, a lot of what we do, our factories, you know, we have a lot of factories in the U.S. Generally speaking, we produce for local markets, so many times, tariffs aren't that big of a consideration. I think a few years ago, when it was a bigger deal for the company, it was more the retaliatory tariffs from China more than the U.S.-based tariffs that went into place. But it's something that we and other multinationals are watching very, very carefully.
We're monitoring it, and, you know, we'll talk to investors as we- if and when we see impact from it.
Yeah. You know, a lot of focus on the market, on semiconductors, you know, kind of touching everything now. What are you guys seeing? And can you just talk about your exposure to that market and ultimately what you're selling?
Semi is not very big. I think our semiconductor exposure is relatively small. We do. It's mostly, it's not CapEx driven, it's more OpEx. It's so we do pads and other things within the wafer manufacturing process itself. But it's not a very big business for us. It's much more electronics driven for us, as opposed to semiconductor. But that's it, both have been pretty good for us so far this year and continues in the back half of the year.
Yeah. You know, maybe on, on PFAS, and the production of PFAS, you guys are, you know, stopping production at year-end 2025. But, you know, the chemical is a really critical input into, you know, auto and semi. I guess, you know, what do you think happens, and is there an opportunity for the company to kind of develop a new technology and, you know, continue to serve that market?
So you're right, we are exiting PFAS manufacturing by the end of next year, by end of 2025. For this year, it's about $1 billion. We're non-GAAPing that, so you don't see it in our results. You know, it'll start to ramp down through next year. As you talk about beyond 2025, look, there will be some strain to cause anyone. I've got to manage through a lot of the work I'm doing on OpEx and restructuring. It's on the horizon, but I'm watching very carefully about that. But we're not gonna be in the PFAS manufacturing business, so anything that is durable and persistent in the body is not something that we're gonna be doing in our business. PFAS is not gonna go away.
There's lots of things you can't, you know, you can't produce today, you can't operate today without PFAS. So we are working with our customers to transition them to other PFAS manufacturers, and we're doing the best we can of that. But that's a business that we firmly decided to get out of, and that's the path that we happen to be on.
And then, you know, only 20 seconds left. Maybe last one. You know, you talked a little bit about consumer electronics starting off strong.
Yeah.
You know, what do you see there going forward?
So we're gonna watch what's happening in the holiday season, the back end of the year. But front half was pretty good. Our technology's been pretty good. There's opportunity, not just in electronics, but taking that electronic technology and taking it into autos and other things. Right now we're seeing, I think, good trends in our consumer electronics business. Bruce, if I... Anything different? Yeah.
Yeah, we're watching the demand, Chris, as we go through the balance of the year, because obviously, back to school holiday-
Yeah
... season tends to be when the vast majority of devices are purchased, so-
Yeah, uh-
Something that we're monitoring, but good, good first half of the year.
Yeah, absolutely. Well, we're up on the thirty minutes, but thank you guys so, so much.
Thank you.
I really appreciate you guys. I appreciate the conversation.
Thank you.
Thank you. Thank you.