Chris Parkinson

Chris Parkinson sought an assessment of growth and ultimate profitability potential in Crown Holdings' Asian market over the next two years, considering improved cost structure, competitive dynamics, and regional conflicts like the Thailand-Cambodia border dispute. He also asked about material differences in growth rates across European subregions (southern Europe, UK, northern Europe) and their impact on Crown's business.

Answer

Tim Donahue, Chairman, President and CEO, stated that Crown can achieve growth in Asia through commercial adjustments, constantly evaluating if these adjustments improve long-term business profitability. He highlighted Crown's low-cost structure and strong margin profile in Asia. For Europe, Donahue noted that Crown's regional setup differs from competitors and that while the entire market is doing well, southern Europe and the Gulf States are expected to have another strong year in 2026, partly due to tourism.

Chris Parkinson asked for an assessment of the growth and ultimate profitability potential in the Asian market over the next two years, considering competitive changes and regional conflicts. He also inquired if there are material differences in growth rates across European subregions (Southern Europe, UK, Northern Europe) or if the growth is uniform across the board.

Answer

Tim Donahue, Chairman, President and CEO, stated that Crown can achieve growth in Asia through commercial adjustments, constantly evaluating if these adjustments improve the long-term business. He noted that Crown has a very low-cost structure and a strong margin profile in Asia, making it well-positioned to flex commercially for growth. In Europe, he explained that Crown cannot comment on regions where it has limited presence (Scandinavia, Eastern Europe, Benelux) but highlighted that Southern Europe and the Gulf States had a very strong year due to tourism and anticipate another strong year in 2026, with the entire European market performing well.

Chris Parkinson asked about the continuous improvements in operating profitability across Crown Holdings' global operations, specifically seeking insights into opportunities for 2026, particularly in Asia and newer U.S. facilities. He also inquired about free cash flow conversion for 2026 and capital allocation priorities now that the 2.5x leverage target has been met.

Answer

President and CEO Tim Donahue stated that continuous operational improvements are an annual goal for manufacturing teams, but noted that higher delivered aluminum prices, especially in North America, will impact percentage margins due to the denominator effect. He highlighted healthy double-digit margins across all reportable segments. Regarding free cash flow, Donahue and SVP and CFO Kevin Clothier indicated that while CapEx might shift slightly, exceptional cash flow is expected in 2026, allowing for responsible cash return to shareholders while maintaining leverage around 2.5x.

Chris Parkinson asked about consistent improvements in global operating profitability, opportunities for 2026, particularly in Asia and newer U.S. facilities. He also questioned the free cash flow conversion and capital allocation priorities for 2026, given the achievement of the 2.5x leverage target.

Answer

President and CEO Tim Donahue emphasized continuous operational improvements and healthy double-digit margins across segments, noting potential percentage margin impact from higher aluminum prices in North America. He and SVP and CFO Kevin Clothier confirmed exceptional cash flow for 2026, a strong balance sheet, and a commitment to responsibly return cash to shareholders while maintaining the 2.5x leverage target.

Chris Parkinson asked about customer conversations regarding market tightness, particularly in Europe, and how this impacts Crown's intermediate to long-term outlook. He also requested color on the performance drivers for the Americas Beverage Can business in Q2 and the growth outlook for the second half.

Answer

President & CEO Timothy Donahue stated that European customers remain bullish on their long-term need for more cans, driven by business growth and a shift towards sustainable packaging. He noted that while there may be soft spots, the overall outlook is strong, with compounding growth leading to high utilization. For the Americas in H2, he indicated that guidance bakes in 0-1% growth in North America and flattish volumes in Brazil, with some expected softness in Mexico due to economic and tariff concerns.

Chris Parkinson asked for a breakdown of the Bayer litigation agreement (Slide 27), specifically how it accelerates triple-stack options, insect resistance, and cotton, if it affects E3 or Conkesta acceleration, and whether gene editing assumptions are included in the published chart.

Answer

Chuck Magro (CEO, Corteva) highlighted the strategic importance of the agreement for increased licensing market access, accelerating corn licensing to 2027, enabling cotton licensing, and projecting $1 billion in licensing income over the next decade, while resolving litigation. Judd O'Connor (EVP, Seed Business Unit, Corteva) detailed benefits including freedom to operate in canola, bringing triple-stack options 5 years earlier, accelerating third-gen above-ground products by 2 years, and a reciprocal licensing arrangement for cotton (HT4 for Enlist Cotton), emphasizing strong licensee demand and R&D certainty.

Chris Parkinson asked about the breakdown of Corteva's Slide 27 regarding the Bayer litigation, specifically how it accelerates triple-stack corn, insect resistance, and cotton, and if it impacts the acceleration of E3 or Conkesta. He also inquired if the chart includes gene editing assumptions.

Answer

CEO Chuck Magro expressed satisfaction with the comprehensive Bayer agreement, highlighting increased freedom to operate and accelerated access to the licensing market for corn (as early as 2027) and entry into cotton licensing, projecting $1 billion in licensing income over the next decade. EVP Judd O'Connor added details on freedom to operate in canola, bringing triple-stack options 5 years earlier, and accelerating the third-gen above-ground product by 2 years, emphasizing the strategic investment for farmers, investors, and licensees.

Chris Parkinson asked about the most overlooked aspects of Corteva's strategic separation into two public companies, specifically regarding the crop protection (CP) pipeline, the balance between plant health and biologicals, and the Spinosad franchise, seeking insights on how the independent CP company will differentiate itself for future growth and margin expansion.

Answer

CEO Chuck Magro highlighted the crop protection business's strong performance over the last five years, its deep R&D pipeline, and the continued growth of the Spinosad franchise. He emphasized that the separation would open more opportunities, particularly in seed-applied technology and broader market access, without altering the core strategy of driving differentiated technology. Magro also noted the commitment to achieving 20% EBITDA margins by 2027 and maintaining R&D investment at 6-7% of revenue.

Chris Parkinson inquired about the most overlooked aspects of Corteva's strategic separation into two public companies, specifically regarding the Crop Protection (CP) business's baseline pipeline, the balance between plant health and biologicals, and the Spinosad franchise's role in insecticides.

Answer

CEO Chuck Magro highlighted the Crop Protection business's strong performance, deep R&D pipeline, and the continued growth of the Spinosad franchise. He emphasized that the separation would open more opportunities, particularly in seed-applied technology, and reiterated the commitment to 20% EBITDA margins by 2027 for the CP business, with continued R&D investment.

Chris Parkinson sought a breakdown of the Life Sciences growth algorithm, including the effect of VP&D on price mix and momentum in tablets/cellulosics, and whether it's returning to low single-digit volume growth with constructive price mix and prior year margins for 2026/2027. He also asked about Personal Care's recovery in biofunctionals/bioactives, NPI momentum, regional demand, and growth rates excluding haircare issues for FY2026.

Answer

Guillermo Novo, Chair and CEO, noted VP&D volumes and pricing are stable. Alessandra Faccin Assis, SVP, Life Sciences and Intermediates, expects healthy growth from resilient pharma demand (low single digits) plus 200 basis points from innovate/globalize, with strong double-digit growth in injectables and tablet coatings. Guillermo Novo and Jim Minicucci, SVP, Personal Care, explained that core Personal Care is stable, with growth driven by new biofunctionals, microbial protection, and new technologies, performing well in Europe and China.

Chris Parkinson with Wolfe Research requested a breakdown of the Life Sciences growth algorithm, including the effect of VP&D on price mix and momentum in tablets and cellulosics, and the outlook for volume growth, price mix, and margins into fiscal 2026 and 2027. He also asked about Personal Care's recovery in biofunctionals and bioactives, new product momentum, and regional demand trends.

Answer

Chair and CEO Guillermo Novo noted VP&D volumes and pricing are stable. SVP, Life Sciences and Intermediates, Alessandra Faccin Assis expects healthy growth for Life Sciences, driven by resilient pharma demand (low single digits) and 200 basis points above-market growth from Innovate and Globalize pillars, with injectables and tablet coatings showing strong double-digit growth. SVP, Personal Care, Jim Minicucci highlighted strong performance in biofunctionals, stabilization in the base business, and growth in microbial protection across regions, with customer outages being a Q1 specific issue.

Chris Parkinson asked about the factors influencing the implied gross margin guide, including healthcare, labor assumptions, and the raw material basket, specifically divergences in solvents, acrylics, and CO2, and asset utilization.

Answer

Jim Jaye, Head of Investor Relations and Communications, stated that the raw material basket is expected to be up a low single-digit percentage in 2026, driven by tariffs, packaging, non-TiO2 pigments, extenders, and industrial resins. Ben Meisenzahl, VP of Investor Relations, added that about half of the administrative segment's SG&A growth is due to interest expense, with healthcare costs also rising but mitigated by company actions.

Chris Parkinson asked about the factors within the company's control influencing the implied gross margin guide, specifically requesting comments on healthcare, labor assumptions, raw material basket divergences (solvents, acrylics, CO2), and asset utilization, to understand the confidence in the initial framework.

Answer

Head of Investor Relations and Communications Jim Jaye stated that the raw material basket is expected to be up a low single-digit percentage in 2026 due to tariffs and inflating commodities, particularly in Packaging, non-TiO2 pigments, extenders, and resins. VP of Investor Relations Ben Meisenzahl added that about half of the administrative segment's SG&A growth is due to interest expense, with the other half from normalization of non-operating costs and general SG&A. He acknowledged double-digit healthcare cost increases but noted mitigation efforts, emphasizing continued cost control in a lower volume environment.

Chris Parkinson inquired whether, considering all dynamics of price, cost, and manufacturing, there is a scenario for Sherwin-Williams to consistently achieve a 50% gross margin without a material volume recovery. He also asked if these dynamics or puts and takes have changed since last year's Analyst Day.

Answer

Al Mistysyn, SVP of Finance and CFO, stated that sustaining a 50% gross margin 'implies volume growth.' He expects the Paint Stores Group (excluding Suvinil) to grow faster than other segments, contributing to overall consolidated gross margin improvement due to its higher gross margin. He acknowledged supply chain headwinds from lower production volumes but noted efforts to control costs. He would not commit to above 50% without consistent sustained volume growth but believes the company is 'positioned very well to get there when volume does come back.'

Chris Parkinson asked if there's a scenario for Sherwin-Williams to consistently achieve 50% gross margin without material volume recovery, and if the dynamics or puts and takes have changed since last year's Analyst Day.

Answer

SVP of Finance and CFO Al Mistysyn stated that sustaining 50% gross margin implies volume growth, acknowledging choppiness across segments. He believes the Paint Stores Group will grow faster than other segments over the next year and midterm, at a higher gross margin, which will help consolidated gross margin. He noted that supply chain inefficiencies from lower production volumes were a headwind in 2025, but the team has controlled costs. He expressed confidence in reaching above 50% gross margin when consistent sustained volume growth returns, as the company is well-positioned.

Chris Parkinson of Wolfe Research inquired if recent competitor actions, such as layoffs, have altered Sherwin-Williams' approach to allocating growth spending between its Paint Stores and Consumer Brands segments.

Answer

Chair, President & CEO Heidi Petz confirmed the company will be "extremely aggressive" in customer acquisition where competitors are retrenching. CFO Al Mestyshin added that while they are managing expenses in Consumer Brands due to its softer outlook, they are not cutting in a way that would harm long-term growth and are maintaining focus on new account activity in Performance Coatings.

Chris Parkinson of Wolfe Research asked if recent competitor actions, such as layoffs, have altered Sherwin-Williams' strategy for allocating growth spending between its Paint Stores and Consumer Brands segments.

Answer

CEO Heidi Petz confirmed the company will be "extremely aggressive" in customer acquisition in the current environment. CFO Allen Mistysyn added that while they will manage expenses in Consumer Brands according to its softer outlook, they will not cut spending in a way that hurts long-term growth, and he praised the Performance Coatings Group for its cost control.

Chris Parkinson asked Jim Fitterling to elaborate on the evolution of polyethylene integrated margins from early 2026 through 2028, considering the $6 billion figure mentioned in the presentation and current market conditions. He sought insights into the underlying assumptions and what the street might be overlooking regarding margin recovery.

Answer

Jim Fitterling, Chair and Chief Executive Officer, expects integrated margins to improve, citing stable input costs in the Americas and year-end inventory drawdowns supporting Q1 pricing power. He cautioned against extrapolating bottom-of-cycle Q4/Q1 data. Karen S. Carter, Chief Operating Officer, added that polyethylene demand remains resilient, growing above GDP, with November 2025 seeing a 400 million pound industry inventory reduction and record total sales. She anticipates Q1 integrated margin improvement and price increases, noting the industry's motivation to move margins up from prolonged low levels.

Chris Parkinson asked for Dow's outlook on the evolution of polyethylene integrated margins from the first half of 2026 through 2027 and 2028. He sought insight into the underlying assumptions and what the market might be overlooking regarding potential improvements.

Answer

Jim Fitterling, Chair and Chief Executive Officer, expects integrated margins to improve, citing stable input costs in the Americas and inventory drawdowns. Karen S. Carter, Chief Operating Officer, added that polyethylene demand remains resilient, growing above GDP, with November 2025 setting a total sales record. Both emphasized that current low margins are not indicative of future trends, with conditions ripe for price increases.

Chris Parkinson questioned how the evolving cost curve, where third-quartile assets become operational fourth-quartile assets, influences Dow's return assumptions and decision-making process for the Alberta project over the next 6 to 12 months.

Answer

Chair and CEO Jim Fitterling acknowledged that cost curves change over time but affirmed that the Canadian asset (Alberta) would consistently be a low-cost, first-quartile asset in any scenario. He emphasized that Dow's strategy involves maximizing the next market peak for shareholders by optimizing its asset footprint, removing high-cost assets, and increasing the proportion of low-cost assets. Fitterling also highlighted the impact of European market right-sizing and global trade regulations on the industry's supply-demand balance and operating rates.

Chris Parkinson inquired how the evolving cost curve, particularly the rationalization of fourth-quartile assets potentially making third-quartile assets the new fourth-quartile and flattening the curve, influences Dow's return assumptions and decision-making process for the Alberta project over the next 6-12 months.

Answer

Jim Fitterling, Chair and Chief Executive Officer, acknowledged that cost curves fluctuate but affirmed that the Canadian asset (Alberta) will consistently be a low-cost, first-quartile asset. He emphasized Dow's strategy to maximize shareholder value during market peaks and remove high-cost assets during troughs. He discussed the impact of trade regulations on non-low-cost capacity, especially from China, and noted that a 10% global capacity rationalization would significantly boost ethylene operating rates, leading to pricing power when demand recovers.

Chris Parkinson asked about the drivers behind PPG's solid organic growth in Q4 2025, questioning whether it was due to a better macro environment, share gains, or new product introductions, and how this breakdown informs the 2026 guidance.

Answer

Chairman and CEO Tim Knavish clarified that the macro environment was not better than expected. He attributed the growth to a combination of macro tailwinds in Aerospace, Mexico, and Protective and Marine Coatings (PMC), significant share gains in Automotive OEM, Packaging, and Refinish, and technology-driven new product introductions, particularly in packaging and refinish.

Chris Parkinson asked about the drivers of PPG's solid organic growth in Q4 2025, specifically inquiring whether it was due to a better-than-anticipated macro environment, share gains, or new product introductions, and how this breakdown informs the 2026 guidance.

Answer

Chairman and CEO Tim Knavish explained that the macro environment was not better than expected. He attributed the growth to a combination of macro tailwinds in Aerospace, Mexico Architectural Coatings, and Protective and Marine Coatings, significant share gains in Automotive OEM, Packaging, and Refinish, and technology-driven gains in Packaging and Refinish productivity tools. He reiterated that the macro view for most businesses remains largely flat.

Chris Parkinson from Wolfe Research asked about PPG's strategic focus for 2026, particularly regarding volume growth, market outperformance, new products, and margin opportunities across its segments, assuming an eventual macro improvement.

Answer

Chairman and CEO Tim Knavish outlined that PPG anticipates a largely unchanged, choppy macro environment for 2026, with some markets stabilizing by mid-year. He highlighted continued refinish volume challenges in 1H26 due to industry normalization and tough 1H25 comps. Knavish emphasized offsetting these headwinds with organic growth momentum, self-help cost reductions, and aggressive discretionary cost management, expecting a softer 1H26 than previously envisioned.

Chris Parkinson inquired about the key focus areas for PPG's three segments, including volume growth, market outperformance, new products, and margin opportunities, as the company looks towards 2026 amidst a challenging macroeconomic environment.

Answer

Chairman and CEO Tim Knavish outlined the 2026 outlook, anticipating a largely unchanged, choppy macro environment with some market stabilization by mid-year. He highlighted continued refinish volume challenges in the first half due to normalization and tough comps, and a muted industrial environment. These headwinds are expected to be offset by PPG's organic growth momentum, cost reductions, and a benign raw material supply chain.

Chris Parkinson of Wolfe Research asked where management has the highest degree of confidence in their ability to significantly outgrow markets over the next 18 months or longer.

Answer

Chairman & CEO Timothy Knavish provided a comprehensive list of high-confidence areas, including Aerospace, Protective & Marine, and Traffic Solutions, driven by technology and infrastructure spending. He also highlighted Automotive Refinish (through digital tools), Packaging (due to regulations), and Industrial Coatings (share gains). He framed these as key components of PPG's long-term algorithm to deliver 2-4% organic growth and 8-10% annual EPS growth.

Chris Parkinson of Wolfe Research asked where management has the highest conviction in their ability to significantly outgrow markets over the next 18 months.

Answer

CEO Timothy Knavish provided a broad overview of high-confidence areas, including Aerospace, Protective & Marine, and Traffic Solutions. He also highlighted outperformance in Refinish (driven by digital tools), Packaging (due to new regulations), and Industrial Coatings (share gains). He concluded by reaffirming the company's long-term algorithm for delivering 2-4% organic growth and 8-10% EPS growth.

Chris Parkinson asked for an intermediate-term overview of Nutrien's nitrogen strategy, including how other facilities might offset the Trinidad gap and the longer-term strategy regarding asset acquisitions or greenfield projects.

Answer

Ken Seitz, President and CEO, explained that reliability improvements and debottlenecking initiatives are yielding results, with a 94% operating rate in nitrogen. He stated that low-CapEx, high-margin brownfield opportunities would be prioritized over greenfield projects. High operating rates in the fleet ex-Trinidad are helping to offset the Trinidad shutdown, and discussions are ongoing with the Trinidad government for optimal operating conditions.

Chris Parkinson asked for an update on Nutrien's nitrogen strategy, focusing on how the company plans to fill the volume gap from the Trinidad asset shutdown in the intermediate term, and its longer-term strategy regarding asset interest or greenfield considerations.

Answer

Ken Seitz, President and CEO, explained that reliability improvements, including a 94% ammonia operating rate, and ongoing debottlenecking/brownfield initiatives are yielding results and adding tons at low capital intensity. He stated that these high-margin opportunities are prioritized over greenfield projects. High operating rates in the fleet outside Trinidad are helping to offset the shutdown. For Trinidad, Nutrien is assessing options to secure stable and economic gas supply and port access, with 2024 investor day targets of 11.5-12 million tons having included Trinidad's contribution.

Chris Parkinson asked what the street might be missing about the independent company's outlook, what management is most enthusiastic about post-independence, and the broader strategy for the water portfolio beyond filtration.

Answer

CEO Lori Koch suggested the street might be confused by the numbers post-separation and still views DuPont as a chemical company rather than a transformed multi-industrial. She expressed enthusiasm for the streamlined portfolio and refreshed team. Regarding water, she noted looking beyond filtration into systems plays or other areas of filtration, but not metering due to high valuations.

Chris Parkinson asked what the street might be missing most about DuPont's independent company outlook, particularly regarding strategy, margins, and market performance, and what management is most enthusiastic about post-independence. He also inquired about the water portfolio strategy, specifically if DuPont has the willingness to expand into tangential growth themes like metering beyond filtration.

Answer

Lori Koch, CEO, identified short-term confusion around numbers due to the CUNY separation and Aramidz as discontinued operations, and longer-term, the misperception of DuPont as a chemical company rather than a transformed multi-industrial with a streamlined portfolio and refreshed team. Regarding water, Lori Koch stated that while they are the largest in key filtration technologies, they are looking beyond filtration into systems or services plays, but metering is not actively pursued due to high valuations.

Chris Parkinson from Wolfe Research questioned the rationale behind DuPont's divestiture of Micromax and what makes Element Solutions Inc the optimal owner for the platform today. He also asked about the semiconductor growth outlook, specifically the softness in power electronics, whether it was due to a singular customer, and the momentum expected into year-end and the next 12-18 months.

Answer

President and CEO Benjamin Gliklich speculated that DuPont's decision might have been influenced by Micromax's lower GAAP margins (before ex-metals adjustment) and the timing before the recent surge in PCB innovation. He highlighted Micromax's over 40% ex-metals margins, high value, and sticky product portfolio, emphasizing its strategic fit within Element Solutions Inc's electronics portfolio. Regarding semiconductors, Mr. Gliklich explained that the power electronics business was impacted by the EV market, but the wafer-level packaging business continued double-digit growth. He anticipates continued growth for the semi business above market into 2026, driven by new customer wins and share gains in power electronics.

Chris Parkinson questioned Micromax's history as part of DuPont, seeking insight into why it was divested and what makes Element Solutions Inc the optimal owner for the platform today. He also asked for preliminary thoughts on 2026 semiconductor growth, specifically addressing the 'soft power electronics' comments, whether it was a singular customer issue, and the momentum expected into year-end and the next 12-18 months.

Answer

CFO Carey Dorman and President and CEO Benjamin Gliklich speculated DuPont's divestiture might relate to Micromax's GAAP margins appearing lower due to metals content (ex-metals margins are over 40%) and the timing before the recent surge in PCB innovation. They emphasized Micromax's sticky, high-value product portfolio and its strategic fit within ESI's electronics capabilities. For semiconductors, Mr. Gliklich clarified that the 'soft power electronics' was due to the EV market, impacting the semi assembly business, while wafer-level packaging continued double-digit growth. He anticipates continued growth in power electronics through market share gains and new applications in network infrastructure and data centers.

Chris Parkinson asked for an update on the Life Sciences segment, focusing on the recovery in bioprocessing and pharma, top-line performance, capacity additions, and progress towards 2027 goals.

Answer

Christophe Beck, Ecolab's Chairman and CEO, expressed confidence in the Life Sciences business, noting that while growth was low to mid-single digits in recent years (during a market downturn), it is now clearly accelerating. He mentioned strong new business and more commercial drugs in the pipeline. Beck addressed capacity challenges in the purification business, stating that new plants in China opening mid-2026 will unleash growth. He also discussed margins, currently in the mid-teens (or mid-20s underlying due to investments), with a clear path to 2030, prioritizing growth before margin expansion.

Chris Parkinson asked for an update on the Life Sciences segment, focusing on top-line recovery in bioprocessing and pharma, current status of capacity additions, and progress towards the 2027 goals for the segment.

Answer

Christophe Beck, Chairman and CEO of Ecolab, expressed confidence in the Life Sciences business, noting accelerating top-line growth despite past volatility and a challenging market. He mentioned that new business is strong, and more commercial drugs are in the pipeline. Beck addressed capacity constraints in the purification business, with new plants in China expected to open mid-2026 to unleash further growth. He also discussed the segment's mid-teens operating income margins, which are effectively mid-20s underlying due to investments, with a clear path to 30% margins once sufficient growth is achieved.

Chris Parkinson from Wolfe Research asked what the strong Q2 margin performance in Institutional and Life Sciences, despite a sluggish macro environment, implies about the company's long-term opportunities.

Answer

Christophe Beck, Chairman & CEO, responded that the results validate Ecolab's strategy, with the Institutional & Specialty segment achieving its highest margin in history. He credited this success to a focus on labor automation solutions, digital technology adoption, and market share gains, which have more than offset the drag from exiting low-margin businesses.

Chris Parkinson asked for context on Axalta's cost management strategy since the CEO took helm, current progress, and whether cost improvements can continue even with volume recovery or if costs will need to be added back.

Answer

Chris Villavarayan, CEO and President, stated that the team has executed on over 500 basis points of margin expansion, largely driven by cost actions. He believes they are 'still early in our innings,' citing increased capital investment for productivity, remaining flow-through from the $75 million transformation initiative, and opportunities in supply chain and footprint optimization. He expects cost opportunities to continue into 2026.

Chris Parkinson of Wolfe Research inquired about the current state of the U.S. Refinish market, the divergence between collision rates and claims, and the outlook for 2026. He also asked for an update on Axalta's cost improvement and margin expansion story.

Answer

President and CEO Chris Villavarayan explained that while collision rates are down only slightly, claims have fallen due to high repair and insurance costs, a trend he sees stabilizing. He anticipates a market recovery in 2026 as cost pressures abate and distributor inventories normalize. On costs, Villavarayan stated Axalta is only two years into its 'A Plan' and has already achieved significant savings, with more opportunities in operational excellence, material performance, and technology-driven efficiencies, suggesting further margin upside.