Ecovyst Inc. (ECVT) Earnings Call Transcript & Summary

Good afternoon. My name is David Begleiter of Deutsche Bank's U.S. Chemicals team. Up next is the team from Ecovyst, CEO, Kurt Bitting...

Bitting, yes.

Bitting. I apologize, Kurt. And CFO Jon (sic) [ Mike ] Feehan.

Mike Feehan.

Mike Feehan. My goodness. Sorry about that.

It's okay.

Gentlemen, welcome. I'll lead off with some questions on for you guys.

Kurt, the company has gone through a significant transformation over the past 1.5 years with 2 business divestitures as well as rebranding the new Ecovyst. Can you walk us through the rationale in selling the 2 businesses? Any strategy for your 2 remaining business segments going forward?

Sure. Well, the decision was made a few years ago really to simplify the business, really focus on our high-growth, high-margin segments, particularly those that have really exposure to the low-carbon technologies value chain. So for us, that meant divesting the chemicals -- PQ Chemicals business and the Potter segment. So now we have a simpler story. We believe we have leadership positions in the 2 remaining segments of the company. So remaining segments, Ecoservices produces high-quality sulfur products with really exceptional end-to-end logistics for our customers, and we recently added the Catalyst Activation Business, Chem32, which we're really excited about, hope we get to talk about. And then Catalyst Technologies really produces custom and unique polyethylene and zeolite catalyst solutions for their customers. So going forward, really excited about the underlying growth trends really for both segments, but particularly, we feel we're going to grow our sales into those -- into that low-carbon technologies chain.

Very good. And how have inflationary pressures impacting your business? And how are you dealing with these inflationary input costs on raws, freight, et cetera?

Sure. Great question. So we feel that Ecovyst is very well insulated from the current inflationary pressures. And actually, some of the segments actually benefiting. So if you look at the Ecoservices segment, the -- due to the long-term nature of the customer contracts in that segment, we have a very high raw material pass-through percentage. But we also index our pricing to things like PPI indexes, commodity indexes, labor cost indexes. So over time, our prices keeping pace with inflation, while our cost is obviously rising at a similar pace or even below. So that allows us to hold our margins and expand them over time. The Catalyst Technologies segment is slightly different. They don't have the same kind of I would call, mechanical pass-through component. But they do have the ability to raise prices, which they did here at the end of 2021 in anticipation of the inflation, and they've also instituted things like energy surcharges to offset the rising fuel costs.

Excellent. So both Ecoservices and Catalyst Technologies are associated with the refining industry, specifically through your sulfuric acid regeneration business with its role in alkylate production and a cell catalyst used in hydrocracking. How has this business performed in the current environment? And longer-term, what is your outlook for this business given expectations for continued growth in EVs?

Thanks for that question. We get that a lot. So both business segments really have a great track record are based on producing clean liquid fuels. We do see, over time, obviously, sustainability trends are going to encourage the adoption of electric vehicles. But we really view that adoption as being at a measured pace. Even by 2030, it's expected that the U.S. vehicle fleet will still be less than 10% electrified. So this really gives us the belief that the demand for the clean liquid fuels that we produce into like ultra-low-sulfur diesel and alkylate, the demand will continue to be strong, both in the short and the long term. So if you look at regeneration, which supports refinery alkylation. Alkylate, of course, is the highest value cleanest gasoline component. It's demand continues to grow for things like low vapor pressure, low sulfur gasoline regulations, which are constantly tightening around the globe. Most recently here in the U.S., we instituted Tier 3 sulfur regulations on our gasoline, which has encouraged the consumption of alkylate. Alkylate plays a major role in the production and blending of premium gasoline, which continues to grow its proportion in terms of the overall motor gasoline pool. And then finally, U.S. refineries, particularly those in the Gulf Coast, where we have a heavy presence, continue to produce more alkylate to support refined product exports. So -- and that's been even under more of the microscope, obviously with the geopolitical, the world is demanding more and more refined products coming from the U.S. Now moving to Catalyst Technologies in terms of hydrocracking. Hydrocracking utilization rates are very high. I'm sure you've read and we've all seen that the diesel supply is under pressure right now because there's -- the production constrain. So we feel really good moving forward on hydrocracking demand because it will continue to be supported by not only just baseline demand but continued regulations for low-sulfur bunker fuels and low-sulfur [ highway ] diesel as well.

This is a similar question, but again, a large part of your business is tied to associated with technologies driving cleaner fuels, reduced emissions and plastics circularity. So how do you approach these markets and its operations to drive sustainability?

Sure. So the way we look at it is we really -- one, we support the sustainability efforts of our customers, right? And that's the products and services we offer are really going into the value chain to those low carbon and sustainability technologies. But Ecovyst also has its own challenging sustainability goals, which I'll talk about in a second for 2025 and 2030. But -- and if you look at our baseline businesses are based on supporting the production of clean liquid fuels, but also things like reuse and recycling. When you look at our regeneration and waste treatment business, that's -- their baseload is recycling and reuse. So great exposure there. That really gives us a good baseload and a really great ability as we continue to move into these areas of sustainable technologies. We have a really great ability to maximize the opportunity in those spaces. For instance, our virgin acid position, we're a leading producer of virgin acid here in North America. That's enabled us to become a leading supplier to the mining and mining of metals and minerals here in the U.S., which is obviously crucial for things like electrification and green infrastructure. In our zeolites and Catalyst Activation Business obviously are supporting their exposure to renewable fuels is promoting the proliferation of the renewable fuels plants around the globe, really. Because going forward, our investment and things like research and development, our capital investments are really going to be focused on supporting those sustainable technologies, low-carbon technologies. We've got development and things like catalysts for the recycling that will allow the chemical recycling of polyethylene and then bioderived materials as well. And I should probably talk about, we have our own -- we've made a lot of great progress towards our own sustainability goals that we set forth for 2025 and 2030. We just recently republished our sustainability report for 2021, we published it last week. So I would encourage everybody to look at that and check out the progress that we've made.

Excellent. Excellent. Now given the end markets you serve, how should we think about growth opportunities for you guys over the next 2 to 5 years here?

Yes, let's talk a little bit about, I mean, if you look at the Ecoservices segment, regeneration and the alkylation that it supports is going to continue to grow in, we believe the, 4% to 5% range. And again, being driven by tight gasoline standards as well as the premium gasoline growing as a proportion of the overall motor gasoline pool. So refineries are going to be incentivized to run, run their units at maximum rates but to look for opportunities to debottleneck those units or even incrementally expand them. The virgin acid business and sulfur product side is going to continue to grow for lightweight materials that we support like nylon and PVC and then the mining and metals segment that we participate in. Polyethylene, and we look at Catalyst Technologies, which our silica catalyst business is based on polyethylene. That market continues to grow at 5%. Historically, we've been able to outpace that growth. And again, we produce a very unique and highly customized product, which has allowed us to have a much higher adoption rate with new units. So we feel really good about our ability to continue that outpacing of that market moving forward. And then finally, on -- our zeolite products, strong hydrocracking utilization rates, driving continued hydrocracking catalyst demand, our pressure products that we produce for NOx capture on heavy-duty vehicles, that's going to continue to grow due to air quality specifications, tightening around the world. And finally, probably the most thing that we're most excited about is for zeolite and the Catalyst Activation Business play heavily into the renewable fuel segment, which is obviously growing very rapidly. I think this year, at the end of 2021, renewable diesel made up 2% of the diesel pool. By 2025, that moves to 5%. Beyond that, you're talking about things like sustainable aviation fuel as the airlines start to try to meet their low carbon goals. So really excited about that as well.

Great. Now actually you acquired Chem32, so how is the business performing? And what are the growth opportunities you see for this business going forward?

Yes. We've been really happy with the Chem32 acquisition. So I came out of Ecoservices, as you know, David. That was our first acquisition in over 30 years for that business. So very exciting for us. So we've been very happy with the acquisition. It's got 2 -- I would say, 2 major growth drivers, I would highlight: one, renewable fuels. So it's not only the fact that there's more renewable fuels plants coming. Renewable fuels tend to require 2 to 3x the frequency of catalyst activation than a traditional hydro processing refinery. So as more and more renewable plants come online, that's really going to ramp up the amount of activation that's required. So we're seeing a lot of demand coming from that space, which is great. And secondly, the other thing we loved about that business is the tremendous opportunity for further conversion of refineries and pet chem plants performing, activation services on-site or in-situ versus ex-situ, which -- or offsite, which Chem32 does. So we've been really successful over time of shifting refineries as they continue to outsource a lot of the things that they've traditionally done to outside providers like Chem32. That market is still probably 80% in the in-situ. So there's still tremendous opportunity for further conversion there. So we really love the growth prospects of that business.

Great. Maybe bring Mike into the conversation.

Yes.

You are a strong cash generator. In the past years, you talked about deleveraging. Most recently, we announced a large share buyback program. So how should we think about capital allocation, share buybacks and deleveraging going forward for Ecovyst?

Yes, sure. Great question, David. So I mean, we've had a very good history even when we own the other 2 businesses of delevering. We generated cash and delevered about 0.5 a turn a year. And then actually, since we sold the last business and we really became Ecovyst as a stand-alone, we've delevered about 3/4 of a turn in the last 6 months, right? So we're down to a little over 3x levered. And we feel like we're getting into a little more of the sweet spot. What we have shown and demonstrated in a lot of Kurt's comments earlier is that we're a growth business. We generate a lot of cash. Our free cash flow conversion has continued to improve, and we see it continuing to improve going forward. Our historical capital allocation process has been a little more towards delevering and actually paying down debt. But with the new stock buyback program, our structure has changed a little bit. That first dollar that we get from our operations, we're going to put it back into the business for organic growth opportunities. And we have a lot of them. We've shown we've done it before, whether they're debottlenecking projects, capacity expansion projects, really a good way to continue to grow the existing business that we have today and even grow a business like the Chem32 Catalyst Activation Business. We're going to put some money back into that, of course as that continues to grow. But after that, then you take that free cash flow and you look at other opportunities in the market for bolt-on acquisitions, similar to the Chem32 size that we did. And we believe that there's some opportunities out there, and we're excited to make an investment that's accretive, strategic, has the right technology, and there are some good things out there. And then, of course, with the stock buyback program, I think our capital allocation process is an and with so both the bolt-on and the stock buyback, which really is to help increase shareholder value. I mean there's opportunity out there with an undervalued stock and what we look at for our capital allocation to really to take that dollar and put value back into it for our shareholders.

Very good. You mentioned M&A. How is the pipeline? And where are the opportunities you're seeing right now in that pipeline?

Yes. So in both businesses, we really like the M&A opportunities in both businesses. If you look at Ecoservices, it has a lot of large industrial footprint with a lot of long-term customers. So it gives us a really good to -- look at all kinds of M&A opportunities that can fit into a structure like that, like Chem32, right, with its sulfur technology, and it's -- the customers, it services, it made a really good fit into Ecoservices. And then on the Catalyst Technology side, it's much more innovation-driven R&D. So it allows us to look at opportunities in that space that are really innovation-based or intellectual property based. So we really feel it's a wide breadth of which when you look at what we put our products into and the industries we put our products into like sulfuric acid is obviously the most widely used chemical in the world. So it really opens up a huge window of what makes sense to bring into the company. So we feel really good about what's out there for us to look at. As Mike said, we've proven that we can really integrate bolt-on size and M&A opportunities very quickly into our model.

Organically, how should we think about organic growth of the 2 businesses? And how much capital is required to support that growth?

Yes. And I think Mike touched on this a little bit. You look at the organic -- we really like the secular growth trends in both businesses. Again, we have a great baseload in terms of our support of production of clean liquid fuels, those segments continue to grow when you talk about alkylate production, hydrocracking as well as renewable fuels. But we've been able, over the past few years as we've been a public company, we've focused on debottlenecking and really small expansions that have abled us to really maximize our utilization. So we have a really good track record of doing that. We're going to continue that going forward and really just maximizing the utilization of our assets through really targeted debottlenecking supported by those secular trends.

Very good. Any questions from the audience? Otherwise, we'll keep on going. Very good. Maybe switching to more near-term activities. How are near-term business trends by business, by end market, by geography?

Yes. I think as we've stated on our most earnings -- most recent earnings release, I mean in terms of the inflation environment, the geopolitical environment, a lot of our businesses have benefited from these near-term trends, right? So the Ecoservices segment benefits greatly from the pool of U.S. refined products from the world, especially alkylate plays a very big role in terms of exported gasoline. So really, really strong trends there. Our sulfuric acid business has benefited again from the strong demand for lightweight materials and mining materials, metals and minerals to support those electrification trends. On the Catalyst Technology side, polyethylene continues to grow for things like lightweight materials, packaging and such. So strong trends there. And then zeolite materials, the higher hydrocracking utilization is extremely high right now and probably needs to be higher to meet the demand. So very strong pull for our products in that. So we feel really good with the current trends. Again, we talked a little bit about the inflation and the nature of both businesses being able to kind of absorb that and even benefit from that right now.

Very good. And if we were to go into a downturn or a recession, how resistant is this business through a downturn? And like what levers could you pull to offset or mitigate some of these inflationary-type impacts?

Yes. I mean, it's interesting because you go back, I mean, Kurt's been associated with the Ecoservices business for 15 years, and I've been associated with the historic PQ business for roughly 15 years. So we both saw the '08, '09 recession in our own lens, and both businesses did okay. I mean in the Ecoservices it was down, but it was only down single digits. In the Catalyst Technologies side, it was actually favorable and positive during that time. And some of the interesting parts of it is it's definitely a different business a decade later, but you still have a lot of the same trends where the Ecoservices business is strong in the alkylation demand and what's happening there. Obviously, the virgin sulfuric acid going into electrification. I mean that probably won't stop or slow down. It might actually increase with infrastructure and other things during a recession. But I would say that from a lever standpoint, what we were able to do even in the COVID period, when we did have a little bit of a different look, we were able to manage our cost well, we could pull back on certain types of costs and whether they're fixed SG&A or even in CapEx. I mean there is some room there. So our history showed that even during the COVID period, we were able to maintain a really strong cash profile. And with the business that we have, we feel very confident that it wouldn't be as big of a challenge as some other companies.

And right now, where are you seeing inflation impact your business most directly?

Well, I mean, the inflation, as we talked about earlier, is really a positive for us. I mean our contract structure in our Ecoservices business really allows us to benefit. It's very rare, but 90% of our contracts in that business have a pass-through provision and take-or-pay provisions and the other 10% that just follows along anyway. And so the inflation of the raw materials including labor, freight and natural gas all have provisions to allow us to pass those costs through. And that's really in the Ecoservices business. And then I think we talked earlier, but in the Catalysts business, even though we don't have the contract structure because of the unique nature of the specialized nature and our relationships with our customers, we're able to pass those costs on. And those will be sticky prices, too, right? It's not that if things go back, you're going to see a pullback. But those inflationary pieces, if they continue to go up or even moderate, we'll still be in a very good position.

And hopefully, my next question, if and when [ raws ] and as you do roll over, how much of these price increases can be retained? Obviously, Ecoservices not very much, I would presume. But...

Well, the Ecoservices business, I think, while there is some aspect that it's indexed, we also do have these long-term contracts where every time it does contract comes up for renewal, we reset the base price, and that is very sticky and that stays along. So there will be some benefit there. And as I mentioned on the catalyst side, there's a little more stickiness in then pricing unless you see a significant step change going in the other direction.

And margins in this business, they're already very high, but how should we think about incremental margins as you move forward here?

Yes. I mean, I think both businesses have high margins. I mean, it's unique for a specialty chemical company like ours to be have 2 segments in the 30% EBITDA margin businesses. And those have been sustained for years now. So it's not like it's a new phenomenon. And I think the ability that we've been able to manage our costs very well over the years, and create this contract structure to allow for that cost maintenance has really improved and given us that benefit. If you look at some of our price-to-cost ratio dynamics, it's positive, right? So as people try to capture those costs and keep those margins, we're able to do that. Plus, we're investing in higher margin sustainable end use products and technologies, whether it's a Catalyst Activation Business that we acquired or the organic growth projects that we're putting money into to the higher-margin businesses.

And we're really -- I mean I'd just add, when you look at where we participate with our customers, we're extremely essential to them, right? So they want to enter into long-term agreements with us because they're trying to protect like their valuable alkylate production, which is their highest margin business in their refinery, right? So -- and then same thing really on the catalyst side, where we're developing catalysts -- unique catalyst solutions for them that they need to run their catalyst unit for their polyethylene units long term. So that enables us to really hold our margins going forward and have those healthy margins. We're differentiating ourselves with really our expertise in those areas, which by the way happen to be extremely critical to our customers.

I know innovation is critical to your success. How do you -- now that you're in charge, how would you assess Ecovyst overall R&D effort?

Yes. What I'm really and pleased about with the R&D efforts is it's where it's focused, right? So we're focusing more than 80% of our R&D efforts towards sustainable technologies, right? And that's the great thing about our business, I've said it a few times, we've got this really strong base load of -- a strong track record of already supporting the production of the cleanest liquid fuels, right? So it's pretty easy for us to identify opportunities in those spaces. So we're looking at, again, like things, chemical recycling for polyethylene, right, which fits right in with our current polyethylene catalyst business as well as things like catalyst for bioderived materials. So a really huge open space, open field for us on that end. And again, we're going to focus really a lot of our R&D investment and capital investment in those areas.

And what are you most excited about from an R&D effort? Any one in 2 areas of products that really captured your attention?

Yes, I mean, I think it's really on that recycling side. Polyethylene is obviously recycling, and reuse is a huge effort going forward in terms of just the globe needing to address that. So that really presents us with a unique opportunity to develop catalysts that allow us to recycle and reuse those materials with less energy intense, right? You can always go out and recycle things mechanically and thermally that technology exists, but how do we do that better, right? And I think that's where we can really provide a lot of value to that as some of the catalyst that allows that to be done in a more efficient way with less thermal intensity.

Very good. Looking at share price, you have a uniquely good business margins, cash flow generation, market positions. Your stock is, I think, very much mispriced. We can discuss the reasons why. But why do you think the stock is -- what you think the Street is missing or not giving you enough credit for in your share price today?

Yes. Well, I mean, we do believe that the stock is undervalued. We would agree there. What I think we're going to do and what we've been doing in the past few months is really getting out and speaking with investors, current holders, prospective shareholders to really educate them on, again, those things that Ecovyst is all about, right? We have a really strong base load business in supporting clean liquid fuels production, our exposure, particularly into low-carbon technologies and supporting the mining and the catalyst-related areas there. So I think we're trying to -- I think what people are maybe missing is we have a great business that supports like really critical infrastructure, I would say, that we really -- the economy needs, but also we have this really great exposure to all these sustainable technologies and a lot of technology and things to offer in that space. And really trying to educate people on our growth prospects while they appreciate the things that we've always been, right, the high margins, like you mentioned, and the great cash generation.

And what do you think this portfolio can do from a top line EBITDA and EBITDA margin perspective in the next 3 to 5 years?

Yes. I mean we believe that we have a lot of tailwinds behind us. We've shown that we've been able to grow this business over the last several years. We did have some targets out there from a little over a year ago, and we're well on our way to those targets. I think all of the end uses that we talked through today are really not just short-term but they're long-term, right? And they're going to really take us into that next level. So it's not just one unique part of the business, I think there's a lot of different pieces of that business. So our sales are going to continue to increase our margins, and then especially our cash conversion and cash profile is going to continue to increase. So I think we're very excited about the future.

And Kurt, you've been [ charging out ] for maybe a couple of months or you...

A month and a week.

A month and a week. I round up, okay?

Yes.

What will you do differently than your predecessor? Or what would you like to change? Is there a -- or [indiscernible] compensation structure, in your view, is it properly aligned with what you're trying to push? Or how will you imprint on Ecovyst?

Yes. I think the company has come a long way over the past couple of years, like we talked about. We've really simplified it, and we're focused on these high-growth high-margin segments. So I think like I like to say and I talk with Mike, I think we're really good fighting shape, right? So we're out there -- the new mission is really going to be -- get the growth accelerated, right? We've got great growth opportunities. We talked about our R&D. I mean one thing impresses me about our R&D efforts is we have a tremendous ability to really take our technology and commercialize it quickly. And if you look at just our catalyst products that are out there now. I mean, they're developed fairly new, and we continue to come up with new products. So it's really going to be to focus of the team on capturing those growth opportunities. The past few years have been spent really simplifying the business, restructuring the business to its current form. We've got the business as we want to go forward. We've got great tailwinds in terms of the market segments that we serve. It's really to deliver on that growth.

And your entire -- can you talk about how ESG is core to the strategy? Obviously, 8% R&D efforts are focused on sustainable products. How is ESG ingrained in the culture and in your growth strategy going forward?

Yes. I think ESG is -- for us, we always talk about in terms of the Ecoservices business, it was really borne out of recycling and reuse. That's really the basis of the entire business. So as ESG becomes -- as that becomes a bigger and bigger piece of the overall economy and the efforts, it's pretty easy for us to adapt to that because we've always spent a lot of our efforts and how do we do things more efficiently? How do we recycle more materials? How do we lower our the raw materials that we're using? So we've always had a tremendous sense of that because it's always been important. It's always been important to the business. Going forward, we really feel strongly that how we are supporting ESG efforts outside of the company, too, right, by providing products and services that are allowing others to advance their sustainability goals as they try to develop end products for low-carbon technologies.

Very good. Mike, under your purview, where can we see further improvement in terms of the working capital, maybe tax, maybe productivity? Where do you think there is further room to grow from your perspective?

Yes. I think that there's a couple of things that we're looking at. I mean, certainly, when you think about our cash flow in generation, that's one of the most critical pieces, right? So as we're growing our EBITDA and running the business of getting that, what can we do with cash and how can we do it? We're looking at different tax strategies, right? So we are a cash taxpayer now, and there's different opportunities out there that we're certainly looking at that, hopefully, we can start to implement in the near term. We also manage our interest pretty well. We have interest rate caps. So our -- especially with the rising rate environment, it's a benefit for us to have that. So we're continuing to look at ways to mitigate that. And from a working capital standpoint, we're always continuing to analyze and see how can we do things better. We have different process improvements on the table to do across the companies. We look at best practices and figure out ways to make things more efficient and more effective. We're using automated systems. We're taking that a next step to -- through technology and looking at ways to really improve both the cash and the operating efficiency for our business.

Very good. And Kurt, going back to your businesses, how wide are your competitive moats in your view?

Yes. I think you look at -- both businesses had a tremendous amount of customer stickiness and obviously, barriers to entering those customers. So on the Ecoservices side, we always like to say we build a pipeline in between us and our customers through our logistics capabilities, which are really best-in-class. So customers really wanted -- we talk about our long-term contracts. When we say regeneration contract, it could be anywhere from 3 to 10 years, not really at the request of us, it's our customers, right? They want that because they're trying to protect their valuable alkylation processes, they highly value that exceptional logistics service that we deliver and the reliability that we deliver over time. And by the way, regeneration is something that they've outsourced over time because they found that we can, quite honestly, do it more effectively, more efficiently than we can. So we feel the really strong about the moats in the Ecoservices side. On the Catalyst Technologies, I mean, I can't stress enough about the uniqueness and the customized level of our catalysts. We are developing solutions in conjunction with customers. So when you talk about a customer is they wouldn't develop a certain polyethylene product. They're talking to us really on that front end of the process when they're trying to decide what kind of polyethylene they want to make. So we're customizing a catalyst around that, which makes the incentive to switch very low, right, because they've come up with the product. They've designed their equipment all around a certain catalyst specification. So very, very sticky businesses. And really, I can't -- the overlying -- the overarching is the customer relationships are great. We have customers going back more than 100 years in Ecoservices, and Catalyst Technologies is the same thing, very, very long trusted customer relationships.

And just on oil prices, is there -- I presume higher oil prices are better for Ecovyst? Is it actually a sweet spot where you think your business is optimized from oil price perspective?

Yes. We don't look so much at the actual oil. And we've got a lot of questions today about are you benefiting -- refineries are obviously benefiting from [ career ] high margins if you talk to somebody in the refining world. But what I always stress is we focus -- the alkylation process has always been high margin, and they've always wanted to run it at high utilization. So while the overall refining economics have certainly improved their desire for alkylation, and the need for alkylation really hasn't changed all that much because it's always been a highly desired product. Hydrocracking, the same thing. I mean, we've always seen expansions on hydrocracking. And we do feel good about, obviously, higher diesel spreads will help the hydrocracking utilization. So we really look at it from a utilization standpoint. And obviously, there's a tremendous pull for product right now with the current environment of diesel shortages and the tight inventory situation. So not so much on oil prices, we're focused, but just more on the value of those products, ultra-low-sulfur diesel and how could it play in the overall fuel pools.

Great. And last question. How do you think about international growth for Ecovyst going forward?

Yes. I think there's great opportunity. I mean we obviously have a -- developed a very great reputation and for reliability and innovation here in the U.S. The Ecoservices business has traditionally been all North American base. With the addition of the Chem32 business, we've introduced an international component to that, right? So the catalyst activation can be -- they activate catalysts that get shipped all over the world. It has a long shelf life in its drum. So we view that as a real opportunity for us on that side of the business. And the catalyst business has always been pretty international in terms of where we can go. We have an international production site in the Netherlands. So we view areas where the technologies that we provide are still expanding, particularly if you look at refining side, areas like the Middle East or India, which are still tremendous growth areas in that space. But on the renewable side, obviously, renewables is proliferating really in every corner of the world. So our exposure there from the Catalyst Technology side and Chem32 is great. So we expect even more international growth.

Great. With that, our time is up. So Kurt, Mike, thank you very much, okay?

Thank you, David.

Thank you.

Bye-bye.