What changed in this filing

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Item 1. Business

2025-02-24 compared with 2024-02-29 · 79 added, 110 removed, 113 unchanged (63% of the section changed)

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Quaker Houghton is the global leader in industrial process fluids.

With a presence around the world, including operations in over 25 countries, the Company’s customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies.

With a robust presence around the world, including operations in over 25 countries, the Company’s customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking companies.

Quaker Houghton develops, produces, and markets a broad range of formulated specialty chemical products and offers chemical management services (which we refer to as “Fluidcare TM ”) for various heavy industrial and manufacturing applications throughout its three segments:

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Sales Revenue

A substantial portion of the Company’s sales worldwide are made directly through its own employees and its Fluidcare TM programs, with the balance sold through distributors and agents.

The Company’s sales worldwide are made directly through its own employees and its Fluidcare TM programs, with the balance sold through distributors and agents.

The Company’s employees typically visit the plants of customers regularly, work on site, and through training and experience, identify production needs which can be resolved or otherwise addressed either by utilizing the Company’s existing products or by applying new formulations developed in its laboratories.

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Where the Company acts as an agent for its customers, revenue is recognized on a net reporting basis at the amount of the administrative fee earned by the Company for ordering the goods.

See Note 5 of Notes to Consolidated Financial Statements in Item 8 of this Report.

See Note 5, Net Sales and Revenue Recognition , to the Consolidated Financial Statements for more information.

The specialty chemical industry comprises a number of companies similar in size to Quaker Houghton, as well as companies larger and smaller in size.

The Company cannot readily determine its precise competitive position in every industry it serves.

However, the Company estimates it holds a leading global position in the market for industrial process fluids including leading global positions in the markets for process fluids in portions of the automotive and industrial markets, and a leading position in the market for process fluids to produce sheet steel and aluminum.

However, the Company estimates it holds the leading global position in the market for industrial process fluids including leading global positions in the markets for process fluids in portions of the automotive and industrial markets, and a leading position in the market for process fluids to produce sheet steel and aluminum.

The offerings of many of the Company’s competitors differ from those of Quaker Houghton;

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In 2024, Quaker Houghton’s five largest customers (each composed of multiple subsidiaries or divisions with semi-autonomous purchasing authority) accounted for approximately 12% of consolidated net sales, with its largest customer accounting for approximately 3% of consolidated net sales.

A significant portion of the Company’s revenues are realized from the sale of process fluids and services to manufacturers of steel, aluminum, automobiles, aircraft, industrial equipment, and durable goods and, therefore, Quaker Houghton is subject to the same business cycles as those experienced by these manufacturers and their customers.

A significant portion of the Company’s revenues are realized from the sale of process fluids and services to manufacturers of steel, aluminum, automotive, aerospace, industrial equipment, and durable goods and, therefore, Quaker Houghton is subject to the same business cycles as those experienced by these manufacturers and their customers.

The Company’s financial performance is generally correlated to the volume of global production within the industries it serves, rather than directly related to the financial performance of its customers.

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Raw Materials

Quaker Houghton uses approximately 3,000 raw materials, including animal fats, vegetable oils, mineral oils, oleochemicals, ethylene, solvents, surfactant agents, various chemical compounds that act as additives to our base formulations, and a wide variety of other organic and inorganic compounds and various derivatives of the foregoing.

Quaker Houghton uses approximately 3,000 raw materials, including animal fats, vegetable oils, mineral oils, oleochemicals, surfactant agents, and various chemical compounds that act as additives to our base formulations.

Quaker Houghton utilizes a significant number of raw materials derived from crude oil and natural gas.

The price of mineral oil and its derivatives can be affected by the price of crude oil and industry refining capacity.

Animal fat and vegetable oil prices, as well as the prices of other raw materials, are impacted by their own unique supply and demand factors, and by biodiesel consumption which can be affected by the price of crude oil and by government incentives for low-carbon fuels.

Animal fat and vegetable oil prices, as well as the prices of other raw materials, are impacted by their own unique supply and demand factors, and by biodiesel consumption, which in turn can be affected by the price of crude oil and by government incentives for low-carbon fuels.

Accordingly, significant fluctuations in the price of crude oil can have a material impact on the cost of these raw materials.

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Research and Development- Laboratories

The Company maintains approximately thirty separate laboratory facilities worldwide that are primarily devoted to applied research and development.

The Company maintains approximately 30 separate laboratory facilities worldwide that are primarily devoted to applied research and development.

In addition, the Company maintains quality control labs at each of its manufacturing facilities.

Quaker Houghton research and development is directed primarily toward applied technology since the nature of the Company’s business requires continual modification and improvement of formulations to provide specialty chemicals to satisfy customer requirements.

If problems are encountered which cannot be resolved by local laboratories, the problem is referred to one of our ten principal laboratories, located in Conshohocken, Pennsylvania;

If problems are encountered which cannot be resolved by local laboratories, the problem is referred to one of our 10 principal laboratories, located in Conshohocken, Pennsylvania;

Valley Forge, Pennsylvania;

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Santa Fe Springs, California;

Uithoorn, the Netherlands;

Uithoorn, Netherlands;

Coventry, United Kingdom;

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Recent Acquisition Activity

Subsequent to the date of these financial statements, in February 2025, the Company acquired Chemical Solutions & Innovations (Pty) Ltd.

(“CSI”), for approximately $3.9 million, subject to routine and customary post-closing adjustments.

CSI is based in South Africa and is a supplier of metalworking fluids and lubricants to the South African market.

CSI will be reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s position in South Africa and expands the Company’s presence in that region.

In July 2024, the Company acquired the Sutai Group (“Sutai”), for approximately $16.2 million, including an initial cash payment of $14.6 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels, as well as earn-out provisions with an initial estimated payout of $1.6 million related to the finalization of 2024 and 2025 earnings.

Assets acquired included cash and cash equivalents of $5.5 million.

Sutai is based in Japan and provides impregnation treatment products and services to the automotive and other industries.

Sutai is reported as part of the Asia/Pacific reportable segment.

This acquisition strengthens Quaker Houghton’s technology portfolio, enabling the Company to better support and optimize production processes for customers across the Japanese, Asia Pacific and global markets.

During February 2024, the Company acquired I.K.V.

Tribologie IKVT and its subsidiaries (“IKVT”) for approximately 27.0 million EUR, or $29.1 million subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels.

IKVT will be part of the Company’s EMEA segment and specializes in high-performance lubricants and greases, including original equipment manufacturer first-fill greases that are primarily used in the automotive, aerospace, electronics, and other industrial markets.

The acquisition of IKVT strengthens the Company’s position in first fill greases.

See Note 2 of Notes to Consolidated Financial Statements in Item 8 of this Report.

Tribologie IKVT and its subsidiaries (“IKV”) for $35.2 million, including an initial cash payment of $29.7 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels as well as earn-out provisions related to the finalization of 2023 earnings.

Assets acquired included approximately $4.8 million of cash and cash equivalents.

IKV, which is part of the Company’s EMEA segment, specializes in high-performance lubricants and greases, including original equipment manufacturer first-fill greases that are primarily used in the automotive, aerospace, electronics and other industrial markets.

The acquisition of IKV strengthens the Company’s position in first-fill greases.

The results of operations of Sutai and IKV subsequent to the acquisition dates are included in the Consolidated Statements of Operations for the year ended December 31, 2024.

Regulatory Matters

In order to facilitate compliance with applicable federal, state, and local statutes and regulations relating to occupational health and safety and protection of the environment, the Company has an ongoing program of site assessment for the purpose of identifying capital expenditures or other actions that may be necessary to comply with such requirements.

In order to facilitate compliance with applicable federal, state, and local statutes and regulations relating to occupational health and safety and protection of the environment, the Company has an ongoing program of site assessments for the purpose of identifying capital expenditures or other actions that may be necessary to comply with such requirements.

The program includes periodic inspections of each facility by the Company and/or independent experts, as well as ongoing inspections and training by on-site personnel.

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and (iii) Asia/Pacific.

Prior to the Company’s reorganization, the Company’s historical reportable segments were:

(i) Americas;

(iii) Asia/Pacific;

and (iv) Global Specialty Businesses.

Prior period information has been recast to align with the Company’s business structure as of January 1, 2023, including reportable segments and customer industry disaggregation.

As a result of the Company’s new organizational structure effective January 1, 2023, the Company reallocated goodwill previously held by the former Global Specialty Businesses segment to the remaining business segments as of January 1, 2023.

However, the Company did not recast the carrying amount of goodwill for the years ended December 31, 2022 and 2021.

See Notes 4, 5, and 15 of Notes to Consolidated Financial Statements in Item 8 of this Report.

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operations, the Company’s financial results are affected by currency fluctuations, particularly between the U.S.

dollar and the euro, the British pound sterling, the Brazilian real, the Mexican peso, the Chinese renminbi and the Indian rupee, and the impact of those currency fluctuations on the underlying economies.

Reference is made to (i) the foreign exchange risk information contained in Item 7A of this Report, (ii) the geographic information in Note 4 of Notes to Consolidated Financial Statements included in Item 8 of this Report, and (iii) information regarding risks attendant to foreign operations included in Item 1A of this Report.

dollar and the euro, the Brazilian real, the Mexican peso, the Chinese renminbi, the British pound sterling and the Indian rupee, and the impact of those currency fluctuations on the underlying economies.

In addition, trade policies and tariffs, including those affecting the Company’s key markets, could further impact exchange rates and economic stability, influencing both the cost of raw materials and the competitiveness of the Company’s products in international markets.

Reference is made to (i) the foreign exchange risk information contained in Item 7A of this Report, (ii) the geographic information in Note 4, Business Segments , to the Consolidated Financial Statements and (iii) information regarding risks attendant to foreign operations included in Item 1A of this Report.

Number of Employees

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Quaker Houghton considers its employees as its greatest strength in differentiating our business and strengthening our market positions.

We have established core values that are inclusive of embracing diversity and creating a culture where we learn from and are inspired by the many cultures, backgrounds and knowledge of our team members.

The Company’s goal is to have an organization that is inclusive of all its people and is representative of the communities in which we operate.

The Company’s goal is to have an organization that is inclusive of all of its people and is representative of the communities in which we operate.

The Company’s core values are (i) live safe;

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and (vi) do great things together.

Our core values embody who we are as a company, and these values, in words and actions, build a safer, stronger Quaker Houghton, and these values guide the Company’s internal conduct and its relationship with the outside world.

Our core values embody who we are as a company, build a safer, stronger Quaker Houghton, and guide the Company’s internal conduct and relationship with the outside world.

By fostering a culture and environment that exemplifies our core values, we gain, as a company, unique perspectives, backgrounds and varying experiences to ensure continued long-term success.

The Company respects and values all of its employees and believes inclusion, diversity and equality are essential pillars to drive the Company’s success.

Aligned to our core values, in 2023, we evolved our enterprise-wide approach to volunteerism.

All full-time employees are provided up to 16 hours per calendar year to volunteer for a non-profit or charity of their choice.

The policy is supported by recommendations to our colleagues regarding volunteering opportunities, such as educational or cultural institutions, healthcare institutions, civic and community centers, and non-profit organizations focusing on science, technology, engineering, and math (“STEM”) learning.

Aligned to our core values, all full-time employees are provided up to 16 hours per calendar year to volunteer for a non-profit or charity of their choice.

The approach is supported by recommendations to our employees regarding volunteering opportunities, such as environmental conservation, STEM education, community health, safety and development opportunities for underrepresented groups.

In 2024, we expanded our donation-matching and grantmaking programs to impact our local communities globally with matching and grants available to eligible organizations across the globe.

Sustainability Governance and Strategy

In 2020, we established the Board Sustainability Committee, which has specific responsibility to assist the Board of Directors (the “Board”) in its assessment, evaluation, and oversight of the Company’s sustainability programs and initiatives pertaining to the Company’s business, operations, and employees.

In 2020, the Company established the Board Sustainability Committee, which has specific responsibility to assist the Board of Directors (the “Board”) in its assessment, evaluation, and oversight of the Company’s sustainability programs and initiatives.

In formulating our sustainability strategy, our Executive Leadership Team (“ELT”) and Board consider certain risks and uncertainties that may materially impact our financial condition and results of operations.

These risks and uncertainties are further described in Item 1A of this Report.

In 2021, we set a target to achieve carbon neutrality in our global operations by 2030 and net zero emissions across our entire value chain by 2050.

In addition, the Company established 15 long-term environmental and social goals, based on the results of the Company's 2020 materiality assessment, which was completed with input from customers, investors, suppliers, and internal stakeholders.

Our 15 long-term goals are closely aligned with the United Nations Sustainable Development Goals.

We also identified short-term and medium-term milestones that may help support the achievement of our 2030 targets.

In 2022, we made progress on certain of the Company’s identified 2030 goals in accordance with the baselines set during 2021.

During 2022, the Company launched Green Chemistry Guidelines globally that align with principles recommended by the American Chemical Society and the Company’s established sustainability goals.

Additionally, the Company made investments in renewable energy certificates, and increased the percentage of raw materials that are renewable.

We will provide further updates on our short-term milestones in our 2023 Sustainability Report.

In 2020, we completed an impact materiality assessment identifying critical environmental, social, and governance topics that our sustainability program was founded on in 2021.

Since then we have made significant progress towards our strategy to Innovate Together for a Better Tomorrow, Protect Our Planet, Empower Our Colleagues and Communities, and Source Our Materials Responsibly.

Details of that progress can be found in our Sustainability Report.

In 2024, the Company initiated its first double materiality assessment to identify its material sustainability impacts, risks and opportunities as a part of Corporate Sustainability Responsibility Directive (“CSRD”) compliance.

The potential impacts of this assessment are still being evaluated.

In 2024, we achieved eighteen of the twenty internal sustainability goals set to support our strategy.

The Company increased its renewable electricity usage by approximately 5% compared to 2023 and implemented over 167 projects to reduce waste, water and energy usage.

The Company consumes approximately 76% of its electricity consumption from renewable and zero carbon sources.

Additionally, the Company launched its See Beyond™ portfolio of sustainable solutions and avoided or eliminated over 23,000 metric tons of waste at Fluidcare TM customer locations.

Finally, we achieved zero serious injury recordables and exceeded our industry’s standard for volunteering.

We plan to provide further progress updates in our 2024 Sustainability Report.

Sustainability Report

We report our progress on our Sustainability strategy in our sustainability report, which is published annually and is available on our corporate website at home.quakerhoughton.com/sustainability.

The Company’s 2022 Sustainability Report reflects the most recent available data on a variety of topics, including specific information relating to the Company’s:

(i) environmental footprint and climate change commitments;

(ii) diversity initiatives;

(iii) safety initiatives and performance;

and (iv) sustainable solutions portfolio.

We report our progress on our Sustainability strategy in our sustainability report, which is published annually and is available on our corporate website at https://home.quakerhoughton.com/sustainability.

The Company’s 2023 Sustainability Report reflects the most recent data on a variety of topics, including specific information relating to the Company’s environmental, social, and governance initiatives.

Information in these sustainability reports and on our website are not incorporated by reference in this Report and, accordingly, should not be considered part of this Report.

Talent Development, Culture and Total Rewards

We strive to make Quaker Houghton a great place to work for all employees.

We are committed to creating a workplace where employees feel valued, respected and challenged, while fostering an environment that attracts and engages a talented workforce that contributes to the Company’s growth and sustained success.

Our Compensation and Human Resources Committee is responsible for overseeing our policies and strategies related to culture and human capital, including diversity, equity and inclusion.

Our Quaker Houghton University is available to all employees and provides a library of tools and resources for career development and growth.

Through ongoing dialogue with leaders, employees are encouraged to plan for their development and leverage the tools available to create meaningful and actionable development plans that drive personal and company growth.

We place importance on developing our leaders at all levels, whether a colleague is leading themselves or providing for others, as wells as providing them with opportunities to enhance their effectiveness.

Our leaders have access to various learning and development experiences, including our Quaker Houghton internal leadership development program (“MAP”) for new or first-time managers, Performance and Rewards training, and specialized opportunities for external coaching, leadership assessments, or external development programs.

We continue to enable a robust Organization and Talent Review (“OTR”) process in which each department’s talent landscape is evaluated, potential of talent is assessed, critical roles are identified, and succession planning occurs for our most senior positions.

Output of these processes results in career development and other related talent plans designed to ensure we have the talent we need both now and in the future to deliver results.

Additionally, we regularly evaluate our total rewards offerings for our employees, including health and wellness benefits, paid-time off policies, monetary compensation, and educational reimbursements, to ensure that our total compensation and benefits packages are aligned with our business strategy, organizational culture, and diversity and inclusion approach and allow us to remain competitive in the markets we serve and comply with local statutory wage and benefit laws.

We strive to create a culture where recognition is ingrained, including utilization of an enterprise reward and recognition program that celebrates and incentivizes the results and behaviors of our employees and their impacts on our teams and Company.

Creating, fostering, and maintaining a culture in which every colleague can be their best self is a driving force in our engagement efforts.

We pay particular attention to the wellness and well-being of our employees with specific investments in a variety of health-related topics including forums for learning, dialogue, and enterprise collaboration.

During 2023, we prioritized these efforts, with purpose driven investments in wellness and well-being.

We launched a global well-being platform, Virgin Pulse, which provides access to activities, tools and resources on a variety of wellness topics.

We celebrated World Mental Health Day with enterprise discussions and education on various topics.

We also increased our benefits investments by providing paid parental leave for our U.S.

colleagues regardless of birthing status, and we implemented a global family planning program to support the fertility-related healthcare needs of our colleagues.

Diversity, Equity, and Inclusion (“DEI”)

Quaker Houghton strives to cultivate a diverse, equitable, and inclusive culture that reflects the global nature of our organization.

We believe diversity and inclusion are embodied by having working norms whereby employees feel included, engaged, and rewarded, regardless of their background or where they sit in the organization.

When employees feel this way, we are a stronger, more inclusive organization and better equipped to utilize our colleagues’ diverse skills and talents to drive innovation and business success.

Our Compensation and Human Resources Committee is responsible for overseeing our policies and strategies related to culture and human capital.

We place importance on developing our leaders at all levels.

Our leaders have access to training on coaching, performance and rewards, development planning and change management, as well as specialized opportunities for external coaching, leadership assessments, or external development programs.

We continue to utilize a robust process in which each department’s talent landscape is evaluated, talent is assessed, critical roles are identified, and succession planning occurs.

Output of these processes results in career development and other related talent plans designed to ensure we have the talent we need to deliver results both now and in the future.

Additionally, we regularly evaluate our total rewards offerings to ensure that our total compensation and benefits packages are aligned with our business strategy and organizational culture.

We strive to create a culture where recognition is ingrained, including utilization of an enterprise reward and recognition program that incentivizes the results and behaviors of our employees and their impacts on our teams and business.

Quaker Houghton strives to cultivate an inclusive culture.

Accordingly, Quaker Houghton provides equal employment opportunities and does not discriminate based on age, ethnicity, sex, sexual identity, disability/medical condition, race, religion, or sexual orientation.

Diversity is one of our core values, and our unwavering commitment to DEI is further reflected as a core element in our Code of Conduct.

We seek to create an environment where every employee can feel their best allowing them to be their best.

Inclusion and diversity begin with the Board and ELT.

The Board is comprised of ten individuals with diverse experience and credentials, selected for their business acumen and ability to challenge and add value to management.

Our current Board composition includes two female and four racially diverse directors out of a total of twelve directors.

Inclusion begins with the Board and ELT.

For additional information on the Company’s leadership, refer to Item 4(a) Information about our Executive Officers and Item 10.

Directors, Executive Officers and Corporate Governance.

As part of our Human Capital strategy, we established a Culture and Engagement Taskforce (“Taskforce”) that represents the voice of our colleagues in focusing on the Company’s overall culture, as well as driving forward progress with specific DEI related initiatives.

The Taskforce also functions as our Diversity and Inclusion Council.

The Taskforce helped launch our Culture Survey, supported the implementation of our global framework for Colleague Resource Groups (“CRGs”) and launched two new CRGs at the Company.

We remain on track to achieve the goals we have set for ourselves tied to diverse representation in our workforce.

In addition to providing learning and engagement opportunities to Company colleagues, we also recognize the importance of building an inclusive talent pipeline and external partnerships play a key role in how we do this.

For example, the Company is a corporate member of Women in Manufacturing and a sponsor of the Women Automotive Network, both of which are organizations invested in supporting and promoting women in their respective industries.

We are also a corporate supporter and sponsor of the Future of STEM Scholars Initiative, an organization that strives to increase the presence of students currently underrepresented in the STEM talent pool.

We are proud of our collaboration with these organizations and others, and believe they will be an important part of ensuring we enable a pipeline of diverse candidates both now and in the future.

We continue to invest in women and diverse talent through partnership with external leadership development firms, providing opportunities to our talent that will accelerate their leadership development professionally and personally.

Workplace Safety

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Factors that May Affect Our Future Results

Certain information included in this Report and other materials filed or to be filed by us with the SEC, as well as information included in oral statements or other written statements made or to be made by us, contain or may contain forward-looking statements that fall under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Act of 1933, as amended.

Certain information included in this Report and other materials filed or to be filed by us with the SEC, including the Company’s other periodic reports on Forms 10-K, 10-Q and 8-K, press releases, and other materials released to, or statements made to, the public, as well as information included in oral statements or other written statements made or to be made by us, contain or may contain forward-looking statements that fall under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Act of 1933, as amended.

These statements can be identified by the fact that they do not relate strictly to historical or current facts and can generally be identified by words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “outlook,” “target,” “possible,” “potential,” “plan” or similar expressions, but these terms are not the exclusive means of identifying such statements.

We have based these forward-looking statements on assumptions, projections and expectations about future events that we believe are reasonable based on currently available information, including statements regarding the potential effects of the conflicts in Ukraine and the Middle East, inflation, and global supply chain constraints on the Company’s business, results of operations, and financial condition;

Such statements include information relating to current and future business activities, operational matters, capital spending, and financing sources.

We have based these forward-looking statements on assumptions, projections and expectations about future events that we believe are reasonable based on currently available information, including statements regarding the potential effects of economic downturns, tariffs, including uncertainty surrounding changes in tariffs, inflation, and global supply chain constraints on the Company’s business, results of operations, and financial condition;

our expectation that we will maintain sufficient liquidity and remain in compliance with the terms of the Company’s credit facility;

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These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance, and business, which may differ materially from expectations, estimates and projections because of many factors, including, but not limited to:

• the timing and extent of the projected impacts on our business of acts of war or terrorism, including the conflicts in Ukraine and the Middle East, and actions taken by various governments and governmental organizations in response;

• inflationary pressures, cost increases, and constraints and disruptions in the global supply chain;

• the potential timing, impacts, and other uncertainties of acquisitions and divestitures, including our ability to realize synergies, integrate acquisitions or separate divested assets and businesses;

• the potential for changes in global and regional economic conditions and for a variety of macroeconomic events, including the possibility of global or regional slowdowns or recessions, inflation, deflation or stagflation and its impact on our business, raw materials purchases and/or profitability of our business, a global pandemic, and interest rate changes, to impact the value of our assets or result in asset impairments;

• our current and future results and plans including our sustainability goals and enterprise strategy.

Such statements include information relating to current and future business activities, operational matters, capital spending, and financing sources.

From time to time, forward-looking statements are also included in the Company’s other periodic reports on Forms 10-K, 10-Q and 8-K, press releases, and other materials released to, or statements made to, the public.

Any or all of the forward-looking statements in this Report, in the Company’s Annual Report to Shareholders for 2023 and in any other public statements we make may turn out to be wrong.

This can occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties.

Many factors discussed in this Report will be important in determining our future performance.

Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

However, any further disclosures made on related subjects in the Company’s subsequent reports on Forms 10-K, 10-Q, 8-K and other related filings should be consulted.

A major risk is that demand for the Company’s products and services is largely derived from the demand for our customers’ products, which subjects the Company to uncertainties related to downturns in a customer’s business and unanticipated customer production slowdowns and shutdowns, including as is currently being experienced by many automotive industry companies as a result of supply chain disruptions.

Other major risks and uncertainties include, but are not limited to, inflationary pressures, including the potential for continued significant increases in raw material costs;

supply chain disruptions;

customer financial instability;

rising interest rates and the possibility of economic recession;

economic and political disruptions including the impacts of the military conflicts between Russia and Ukraine and between Israel and Hamas;

tariffs, trade restrictions and the economic and other sanctions imposed by other nations on Russia and/or other government or government organizations;

suspensions of activities in Russia by many multinational companies and the potential expansion of military activity;

• the timing and extent of the impacts on our business from acts of war, terrorism and military conflicts, including those in Ukraine and the Middle East, as well as related economic, political and governmental actions taken by various governments and governmental organizations in response;

• inflationary pressures, increases in raw material costs, supply chain constraints and other impacts of economic downturns, as well as high interest rates and their impact on our and our customers’ business operations;

• the potential timing, impacts, benefits and other uncertainties of acquisitions and divestitures, including our ability to realize synergies, integrate acquisitions and acquired businesses or separate divested assets and businesses;

• broader macroeconomic factors, including potential for changes in global and regional economic conditions, the possibility of global or regional slowdowns or recessions, a global pandemic, interest rate fluctuations, tariffs, deflation or stagflation and the potential for an economic recession;

• our future results and plans including our sustainability goals and enterprise strategy.

Other major risks and uncertainties include, but are not limited to, legislative and regulatory developments including changes to existing laws and regulations, or the way they are interpreted, applied or enforced;

tariffs, trade restrictions and the economic and other sanctions imposed by other nations on Russia and Belarus and/or other governments or government organizations;

suspensions of activities in Russia by many multinational companies;

foreign currency fluctuations;

significant changes in applicable tax rates and regulations;

future terrorist attacks and other acts of violence;

terrorist attacks and other acts of violence;

the impacts of consolidation in our industry, including loss or consolidation of a major customer;

and the potential occurrence of cyber-security breaches, cyber-security attacks and other security incidents.

Furthermore, the Company is subject to the same business cycles as those experienced by our customers in the steel, automobile, aircraft, industrial equipment, aluminum, and durable goods industries.

Our forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its operations that are subject to change based on various important factors, some of which are beyond our control.

the effects of climate change, fire or other natural disasters;

and the potential occurrence of cyber-security breaches, cyber-security attacks, other technology outages and security incidents.

Furthermore, the Company is subject to the same business cycles as those experienced by our customers in the steel, automotive, aerospace, industrial equipment, aluminum, and durable goods industries.

Any or all of the forward-looking statements in this Report, in the Company’s Annual Report to Shareholders for 2024 or in any other public statements we make may prove to be incorrect due to inaccurate assumptions or unforeseen risks and uncertainties.

In addition to the factors above, our forward-looking statements are qualified with respect to the risks disclosed elsewhere in this Report, including in Item 1A, Risk Factors, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 7A, Quantitative and Qualitative Disclosures About Market Risk.

These risks, uncertainties, and possible inaccurate assumptions relevant to our business could cause our actual results to differ materially from expected and historical results.

Therefore, we caution you not to place undue reliance on our forward-looking statements.

These risks, uncertainties, and possible inaccurate assumptions relevant to our business could materially impact our future performance and cause our actual results to differ materially from expected and historical results.

We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

However, additional disclosures on related subjects can be found in the Company’s subsequent reports on Forms 10-K, 10-Q, 8-K and other related filings.

We caution you not to place undue reliance on our forward-looking statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business