CC - Earnings call transcript Q3 2018

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Operator

Good morning. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to The Chemours Company Q3 2018 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President, conference. and Vice may Relations, begin your Corporate Lock, Investor Development you Jonathan

Jonathan Lock

Welcome The Mark morning. Senior call. Chief Good to Officer, Vice I’m earnings quarter Executive Financial joined conference President XXXX and today Officer. Mark by and Vergnano, Chief and Chemours President Newman, Company’s third

risks and remind statements Before as provided These information the Chemours to and comments uncertainties, future new on performance expectations website, undertakes on forward-looking update any no forward-looking you and results presentation as not and assumptions contain events our we involve guarantees described with future Actual start, certain may duty documents I’d this those made that result supplemental has in or that to on statements that Chemours developments are like the statements of future of in call, be well including our as SEC. information. forward-looking not the and are a differ of realized. based filed may

the the evaluating release quarter. During from we of to included and our call, useful are to the Mark? refer at review will A are believe measures over will highlights investors non-GAAP the adjustments management financial Mark this call Vergnano, company’s of certain presentation. to non-GAAP that performance. in reconciliation turn terms of end I now and the course this the who will

Mark Vergnano

long-term I'm us our growth reflect for you, to everyone, the Jonathan. joining of execute and thanks our today. work diligence creation. we value teams our excited Thank third And morning, results, hard good report and for as quarter strategy which and

our of. the achievements participant. the stewards entry world while are very of into first a United a all a that October, In a Global recognition into corporate we released value report, great people's the our jumping Chemours better the memorializes Nations through the results, a live Before workforce. we also certification, of is week, we making highlight including good we as wanted our commitment commitment work being spirit to higher responsibility team report achieved in. Last the pride Compact chemistry, ever lives This our formal number recent to to of of by I place and company have proud

management here remain a global proud continue we talent brightest to and the of the our and continue As that at pool to I'm team, and we to on focused Chemours very with we this be best have I team Chemours. impressed ensuring attract achievement.

approximately we earnings as with numbers. businesses even Technologies now, Titanium of in first half the from when segment We So, our each quarter margins Strong XX%, segments considering two of quarter, second half solid on highlight third seasonality repurchase $XXX the majority quarter return to the quarter’s of October, million quarter year. our we end including call, our flow Since new we continued to repurchased execute plan shares of X million our the In last X.X the Fluoroproducts and EBITDA grew Chemical delivering a million cash third to to the into our alone. these record on shares our share on adjusted in shareholders. have free in expected the announcing third the over for year-over-year commitment growth, Solutions. the execution, through including move

the the volume $XXX In outlook believe customers half strategic is line in range change EBITDA, This Looking also free in to $X.XX million. XXXX our for of will We Ti-Pure bottom flow guidance the the of billion that to adjusted to now by we Chemours. the and $X.X we plan for change year, remain Ti-Pure stabilization original the to XXXX. EBITDA have ahead is second committed in approximately TiOX of believe our cash our and with full value adjusted faster-than-expected adjusted half long-term it our to strategy for right driven be decline billion. XXXX

of as we the higher our believe this share date, range. end However, of top result furthermore, repurchases be have range to a we’ll revised at upward adjusted and, EPS

financial third year. to cover the now all the at path focused we execution. our quarter targets further more call three-year last on financial to to will in the over our as remain results our of our ability Newman meet remain originally businesses Looking long-term of end remain communicated Mark I and to in turn exceed detail. ahead, or confident We improved growth on

Mark Newman

start Mark. my slide I'll Thanks, on comments four.

last quarter, charge financial and related Fayetteville reflecting from the X% with We our Chemical or of an QX net basis. Titanium Solutions our in of non-cash from to partially including continue increased and $X.XX nearly volumes, in offset results. results continued earnings businesses strategy segments, Technologies. our facility. see our increased lower of year's importantly, third Fluoroproducts by margin million both $XX Net our disciplined profitability in execution to GAAP billion million, Most sales XX% to of customer growth the $XXX a consistent destocking TiOX income on

working points flow of complete unwind and EPS into of at toward translated Adjusted capital technology approximately adjusted We expenditures seasonal free reflecting a rose As the million adjusted XXX is relation our higher in XX.X%. lower development net year's the quarter. increase site quarter, in $XX third improved last an when final of site, the we an matters On of $XXX a resolution income our of of charge potential to Fayetteville to and EBITDA and year-over-year our other as third installation in XX% million and XX% than addition cash basis capital Opteon growth, measures. we charge Christi the approximately to compared environmental margin we XX% with respectively. This XX% state-of-the-art EPS to a taken and This control Fayetteville generated in quarter. at prior-year, the work plant. the earnings in exposures remedial basis, adjusted Corpus in cost have EBITDA environmental expansion

to this high-return commitment through our XX% up pretax invest demonstrates CapEx. Our portfolio our even in of projects we ramp as ROIC quarter

products. $X headwind selling effects offset in Let's last along the along adjusted favorable segment and year-over-year. the last resulted lower Solutions Solutions year, Opteon-based with performance comparison comparison Chemical refrigerants of growth our growth in modest material was to a of to third more EBITDA global volume titanium in EBITDA. delivered adjusted customer destocking, review with raw $XX with to million pass-throughs our and Higher prices for Ti-Pure average nearly increased Chemical million fluoropolymers volume slide. in year. impact products fluoropolymers products in a lower The than price of in This of the $XXX EBITDA Technologist, for our dioxide quarter adjusted on Currency million next Titanium consistent

we improved incur million million. we've to to a continue seen higher over adjusted last in including year-over-year material raw quarter comparison quarters in cost $XXX year, variable $XX As third prior EBITDA costs. year, to this Overall,

Let's six. contributor third bridge on fully $X.XX quarter the earnings move to to XX% diluted last to on to basis. adjusted was per improved Adjusted Operating a year's the EPS EPS share improvement slide the largest increase. $X.XX in comparison of

reform the $X.XX from tax-related discrete a result also related US per primarily share, of and tailwind favorable recorded of adjustments. tax items We

continues EPS contributing year-over-year to strategy on our share. a per basis, to $X.XX provide a expected, capital As meaningful allocation benefit adjusted

liquidity. on Now to

as a million Net balance cash operating working $X.X as reflects quarter cash of the quarterly $XXX capital performance solid the flow Our quarter of in our well unwind. end at was billion. modest the approximately

million Including working inventory. primarily some some quarter. increased $XXX in TiOX stocking, goods material by cash build for finished million for million titanium targeted of and $XX capital third Our costs, free capital was the additional ore of expenditures, $XXX impacted was primarily raw flow ore,

Our million. CapEx outlook quarter with in approximately of consistent spend our the is full-year $XXX

approximately for we $XXX Along quarter, through share through quarter have our authorization returned in dividend on with $XXX million over we As the more repurchased approximately leaves approximately million. announced we mentioned, shares $XXX shares repurchased is during of $XXX $XXX which this program, X.X X approximately our Mark QX. XXXX. to Since authorized million million million last than plan, That the million increased current October. million repurchase repurchase shareholders third for

to XX.X shares day we October, programs repurchased and year-to-date. reminder, since a million our repurchase And over dividend. through share have we have $XXX shareholders increased As through returned over million investor our

Our facility. total September million XX, of senior billion credit approximately at our taking $XXX secured account revolving as into $X.X liquidity stands

Our on a $X.X times approximately of billion XX-month trailing approximately leverage ratio debt translates X.X net of into a basis. net

now, We sheet manage believe our continue affords review our in ability the broader to Mark cycle. to our back turn the of each results. call I'll economic balance that us and strategic segment three And through any flexibility ample to to businesses

Mark Vergnano

Mark. Thanks,

The steady off modestly, $XXX Fluoroproducts highs demand X% our applications. next Opteon, to and million, though, adoption come see Turning both experience in from the in portfolio up were to be the continue improved Base refrigerant GWP our small which currency a year, headline total, fourth low we in to headwind. the story refrigerant earlier solid of generation offset sales where mobile for with has products. the refrigerant in segment. by quarter slide, to volume we pricing stationary here continues was up across on Price

XXX in year's an lines, of despite year-over-year same Fluoroproducts quarter. On polymer several quarter, expanded a XX% the basis in we along the side quarter the adjusted improvement the was last the point improvement. ago. third growth price with year third XX.X% EBITDA from supply million business, $XXX up Margins constraints across to volume quarter, approximate product from experienced

We offsetting our the refrigerant actions raw continue costs. into pricing benefits and modest distribution increased of price year, and to last taken and see of the declines this year impact material

strong with stationary conversion and applications quarter, drive the continues to Opteon drivers for modestly we revenue in growth, for starting warming price be Let's refrigerant more for volume Fluoroproducts well applications. Opteon as offset growth. as as offset lower in continues more review performance flat a refrigerants The Opteon year-over-year a result year-over-year basis mobile basis. low modest in fluorochemicals. In erosion demand blends saw overall price third than on demand to detail, a volume bit currency Base which the global on for QX to potential

over in to of have this year F-Gas the know, in quota year. step due you base the refrigerants As that large Europe price down the a past occurred seen lot volatility

price the base increase in large that a lower correcting Following to point. price to be last year, now refrigerants began seem

Teflon is to actions taken product fluoropolymers. supply now some expansion the our positive and, PFA for of most alleviate semiconductor is oil cabling ahead quarter, line. Demand due volume Teflon this in with XXXX. October, XXXX gas importantly, constraints to solutions, manufacturing In improved even to price polymer manufacturing move constraints for which capacity, announced the and helping we supply and PFA processing, and our used Let's in already late growing rapidly. profitability was chemical In

in resulted manufacturers production enables minimizing PFA XX% Teflon our chip capacity expansion to already double yields which of reducing maximize we by increase XXXX. and capacity in Teflon process year-end. expect to capacity Longer-term, while This downtime PFA by by XX% our PFA, to semiconductor a manufacturing Our variability. we has plan contamination, reach

in basis. in and a continue make business euro startup anticipate facility a outlook of manifesting end across and we Christi, Texas. a progress builds soon a This mid-XXs in for the variation facility this half, stronger Looking slowdown We with healthy, quarterly toward full-year the benefit. itself auto with be following ahead, second than modest the track full Asia to solidly anticipation the year, Opteon the of more as the the half despite after. to currency year, remains to complete of startup normal Europe with The for margins seasonality some in Corpus first We the by remain on is Fluoroproducts our second expected. on of

Chemical increases to price by next segment driven Solutions third on and in lines. quarter the million, performance Sales across and Turning X% the improved intermediates $XXX our business solutions mining broad-based to slide. our chemicals

favorable a up call, Chemical same the supported the of earnings Third-quarter period segment. margins of EBITDA our by Solutions along quarter increases we adjusted set year record and XX.X% material in raw Adjusted with pass-throughs. the million EBITDA from price $XX XX% was on were second last quarter for the discussed

the in solutions Our and facility tight conditions sold-out current to be market Americas. mining continues remain

to our serve we this needs. meet to ability However, is running our demand customers’ facility in remain confident efficiently and our

Moving third-quarter lower offset to for segment. Technology XX slide $XXX review were average as by million Sales prices strong more of higher titanium were to global dioxide modestly last Ti-Pure year's volume. Titanium performance than our below

as recall volume customers. history that inventory Titanium our well a year’s highest of Technologies, pigment, some second for our third build was preference may quarter You in Ti-Pure reflecting the last at as

We are regions. lower stabilize demand destocking Ti-Pure across now with experiencing customer end our markets prices as consistent and

challenging. be timing customers can As you of know, destocking forecasting at the

committed next improvement the sequential to In will a quarter. We softer EBITDA million. for third trend margin customer This Ti-Pure value local as working expect process in our held which persist the currently commercial X% XXX-basis customers and basis, Ti-Pure, adjusted point were We masked our resulted framework. of unfavorable to by XX.X%. the improved fully we a demand prices of mix. strategy to remain through in we the partially are On stabilization implement the with quarter, $XXX

Our Value good which framework. new agreements sales We is but strategy about into we believe let us. for basis and our our These published we a customers to Assured strategy expected. in is more for for out as that detail September, our playing just review me AVA, contracts minute a Ti-Pure to Agreement, different the are quickly the of customers, go or portion our back and take slides good with approach

past, to a the contracts. these expect in under we said Ti-Pure have fall we majority sales of As

long-term provide In focused value AVA we our that a and on predictable return, mechanism. generating mutual our Our assurance agreements our gain customers a pricing customers supply long-term confidence and relationship. through commitment with are

currently are implement to AVA around our allow. existing working We with agreements these the world as contracts customers

end anticipate the we to Again, again, to across the declines a very with destocking our decline digit in to continue all a do year. volume year-over-year. XXXX. mid-single robust consistent leading volume is, to prices expect through markets, For XXXX, This full-year comparison local remain stable we in customer

outlook XXXX next our review the Let's slide. on

segment at this previous have call our the As in I Technologies volume to on the we Titanium said declines of quarter. and the spoke chart, experienced outset

$XXX adjusted full-year half anticipate result, As the flow despite lower across we our continued billion. now In will that and within for cash our $X.XX two the $X.X range and line free or original XXXX EBITDA segments, approximately million now other outlook, XXXX. strength EBITDA with our believe be a of of we adjusted guidance million between

share to we our year-to-date, $X.XX adjusted However, $X.XX given repurchases EPS range. our our within to expect top per share of the outlook be half

nature designed value confident company business These Turning and XXXX are drive to Chemours. these remain through the to growth Opteon When create growth investors. application to fluoropolymers development. longer-term did unchanged. we the we targets strategies from strategies are of for these value we to each and and for so established slide remain XX, our our the that long-term for to individually programs right We implementing, Ti-Pure the targets, are stabilization collectively reinforce

brought approach each proud the I I of XXXX, company with face. plan each might As any create believe the doing we to day. In we out same the and highly a these our to to talented men team, every Chemours. we five-point are near-term that transformation we different In headwinds strategies of am resolve lead and set chemical are achieving of committed that closing, goals, kind of to X,XXX and a irrespective and women we

goals. to we We have process Chemours, achieve the taking but take people at importantly, our are right happy to challenges large your the most that, and, With questions. technology assets, are on best we

Operator

[Operator Instructions].

Fischer from of first question Barclays. comes Your Duffy

is open. line Your

Duffy Fischer

fellows. morning, Good Yes.

the First a though margins down your able around you scuttlebutt that lot got pricing, with volumes percent year-over-year can TiOX. rising, is question With ore to margin, of in of operating are about you've quarters you cost to running just even of kind couple increase of prices and rates? next that's what continue kind your run we if operating structure what at in at about the just doing lower rates, should we lower expect talk to much,

Mark Vergnano

said, up. Sure. plan. obviously, contemplated in We Duffy, prices have you as ore that our gone

that. our to has customers contemplated Our pricing already

for that mix us. already in So, was the

our the confident that our for way ways that can of we capability. what strategy, As works we’re network ore facilities operate our one and of we to have in terms use on low-grade come reasons the volume we based how see operating about through adjust down, so and we

network, of to able us strategy the have and terms to around beauty So, to from that confident the network shift. allow our Ti-Pure we manufacturing our of what very holding plans of standpoint, are continue we been in allowing and strong our volume That's produce we’ve margins. price why to adjust to

Duffy Fischer

TiOX visibility it's down what's at down vast do kind percentage majority When into volumes least do I difficult, year-over-year. the quickly what at growing kind traders? volumes of destocking Venator’s inventories, you the either XX%. paint, that's have at several were of your endpoint? look customers, of points are best into, know we goes and when XX%. what Your you but we’re clearly, How plastics, think guess some And to you get

Mark Vergnano

great question, a Yeah. It’s Duffy.

look year, GDP. you last Obviously, at year, If our X%. up above were last volumes well about

people we’re inventory. but destocking going cases other look some in prices So, But putting it when other prices cases, you you as know, at now in know up. That we gaining have occurs. were are the side some that, stabilized, in share, happens, when from

I'm questions that over sure that on really, it's planning, part we’re and the start really would many faster your the this What a it's in we I'd is than in thought. not are XXXX. mind taking thought of hold of of little destocking is phenomenon see second One you coming is We happening the seeing our what we the of bit did XXXX. happening half say last quarter, early of in really this

but sooner it as that little should out a than sooner says than we that flush So, bit well. expected expected,

play So, right out now, we’re probably year. anticipating through of the next this will beginning

Duffy Fischer

you, Thank Great. guys.

Mark Vergnano

Yup.

Duffy Fischer

from Your Alexander next Laurence of Jefferies. question comes

Your line open. is

Laurence Alexander

you are is questions. the you do give customers a follow that confident indication legal change given on in you issue any to supply how you about Opteon, is, secondly, of from or your assumptions two about question, underlying destock – seeing where just bit current just operating chain? guess see any in are a this on Duffy's of you adoption recess can I think Hello. the One the a And environment?

Mark Vergnano

Yeah.

our call very around Laurence, confident the patent around fortress first base. one, I For it, patent we’re our Opteon. would

is We application we patents this whether – our of they Opteon we to runway of are we around are we've this said, patent for XX-year call There heavier with place. day, have of patent as have can thousands Opteon process, so two, long-term and that that technology unique but, patents, based Thousands patents that because one There into aspects go to we application we really patents that. this on are us. many multiple a patents. believe phenomenon we patents There every we add that continue hinge growth around of we one that a very protect patents is this they this hinges product, for the no fingerprint estate see whole patents. they that always stationary, in see

the something So, side around of we the more, for or know second this is patent you a TiOX this. we bellwether To your is very confident that around destocking of do economy. feel question know all

this So, that's this point that. we market closely. very very time, closely. is beyond we’re how look at this in and point look in business our At phenomenon. a operating We based We don't see we at at destocking that shares anything on time believe that

Laurence Alexander

Thank you.

Operator

comes question of Sachs. Goldman from Koort next Your Robert

open. is line Your

Christopher Evans

been if the launched fully stabilization this you production to softening? this Evans destock? did value than for morning, the would you ahead I for Bob. a and This adjust that of just earlier you as think that that realize bit enhanced able better a to you customers mentioned in into you is on you and stabilization expected. little you for everyone. get do contracted have I But, in bit under And Good you were visibility have destock guess, your Chris approach volume compensate came little time value you're a launch early program, earlier program,

Mark Vergnano

just chain, getting at destocking better it’s because I destocking that a Perhaps, destocking customer. So, if at it's through and them. Chris. any from not view our at whole customers the distributors, right? is from the don't direct downstream this Remember, we’re know

not sure everybody from I'm has visibility standpoint. So, that

the are be So, right We will one. committed tell think the I'm any you, it's though, that would I strategy. to not sure different. absolutely we

the capacity have margins, proper economic, think time, XX is As allows last for so I've where price can worked said our gives their margins we XX point allows get we’ve right We this growth. hard for it many price have months today. themselves to the same our the to times time, at over before, to the add to us point customers us reinvestment it that, and, in really

the in again, no So, it's we strategy we’re of accident at. ended this our for the up And where right price think is for we terms us, point customers.

Christopher Evans

XXX you curious And with over can just the the if margins. Great. this period? bps reiterated a you outcome? your some achieve you of describe moving that you earnings improving And, your TiOX report. here that in notably, think this pieces Can gets you And XXXX targets this improvement margins without this includes

Mark Vergnano

because at a that Well, in over very Fluoro, to we to around can't plan aspects absolutely Yeah. of that or laid reason peg would I a quarter it. year, it time, all in a committed really of we’re We've performance. you TiOX. are to Sol, period out but quarter's plan. this we look in confident Chem say expanded and The is three-year margin

So, this I we ago off talked year to and Solutions we wanted think about fix What expand extremely we’re business. Chemical our executing well. was of a

doing that. We’re

growth in Opteon be the Fluoro stationary On continues grows. both good mechanism also mobile, but for us, a side, as to

That's out. playing in expanding side application development. our with We’re fluoropolymer business the

And obviously, You're the price cash time, is to time, seeing important be believe shareholders. continues what at And, to us, bulk customers our we're back investors. also the our same of to that stabilize we side, there. something deliver TiOX the going driving and we’re on to for our margin is the expand which value over for, stabilization our

three-year the are look So, a need this you of right to on goals as our quarter we’re ones. bellwether why we what at because think doing strategy that's the I believe

Christopher Evans

Mark. Thanks, Great.

Operator

of Your Research. DeYoe Matthew from comes next Vertical question

open. line is Your

Matthew DeYoe

Good morning.

would the do right volume XX% here? in maybe It more and little like drop, new could great. not so, what go a the the about of another new EBITDA relates low decrement talking XQ guidance decremental you’re be still you for it As the are get margins implies clarity range, the bit seems Titanium if guidance XXX% business Technologies, you end but believe there? maybe your

Mark Vergnano

Sure, Okay. Matt.

a our need You range all, from standpoint of of the is just to range, that at going versus first that. right? the low So, end guidance to look

we price two, So, based purpose on will have range Number on a hold. that.

see our local not will will stable. You in price. stay any That change

will volume, So, the be based I've on that move our And upfront, to how be our volume we and facilities. production your we only mentioned operate be the variable our to way ability really right there will Duffy facilities. within as have able to

give an I So, It'll indication mean assets. for be of there I What can’t you of attributed what utilization to will that's going you drop margin. the margin be tell no is in our to price. can just

Mark Newman

– point, And the lower XXs. higher some Obviously, think add Newman Mark’s year. close would said is to this was is very what with in similar margins this previously – if over Mark you could our in that that quarter, to time to low be we fixed have TiOX the we volumes, Mark expect said it expect just I unit. what very would could cost XQ XX%. of Obviously, Sequentially, per to I

are of you think But margin see be a comfortable with low to little XXs. I So, in guide would compression. we the bit our very

Matthew DeYoe

same are you prior as growth. year-over-year? what of then, some relates was then, the quite to think just the year, year? guidance, still Is And perhaps And I that it it play the in about F-Gas tailwind expecting next noting Opteon on isn't Okay. XX%

Mark Vergnano

Yeah.

later Obviously, type growth, continue Opteon growth. From mid-XXs of year. next not to a we standpoint we’ll guidance see give today. So, on,

So, to we the on continue see growth Opteon. solid

Matthew DeYoe

you. Thank

Operator

from of comes Josh question next UBS. YXour Spector

is line Your open.

Josh Spector

guys. Hey, Yeah.

you going the Just to on had have that a flexibility question and forward. how less a much use ore lever room as

bring think do if say, So, guys Or to low-priced guess, you ex going have that cause more volumes destocking, room is you to capacity? flat I ore? some and, to I year-over-year in de-raise

Mark Vergnano

get I for of you place. We but have – as linear Yeah. turn to a in bit giant You've think do look issue ores this would just programming little dime, can't us. everyone, of a got We a on caution right? it the at room,

to have your in You plans production have place.

now to what off, constantly customers manner. what to we our least quarter, are what we they're place coming facilities facilities grades anticipate in be right around those. the we right So, need, see next we as our a volumes need going the at for task And producing in need, where

going for you best always you're you low-grade facilities to the So, that can the and mix with your utilize ore products as right need.

of planning, happens. when our volume which around confident contemplated operate all lower ore that’s more we when because is feel see how why these we we cost, perturbation again that a inside low-grade operate So, in we at can facilities

Josh Spector

Okay, a prior question. thanks. a And follow-up just from

pricing So, I bit is in into that that given pricing on flat sequentially, the I term guess, on in you how confident I'm are based pricing of have quarter? guess, place? already fourth little that be destocking, contracts will you surprised, a flat?

Mark Vergnano

confident. completely I'm Yeah.

We are not going to waver on local price.

Josh Spector

you. Very clear. Thank

Operator

Your next question comes from P.J. Juvekar of Citi.

Your line is open.

Josh Spector

Good morning, Mark.

growth Fluoroproducts Fluoroproducts. months. in XX But your some last been mentioned in mid-XX% has in slowdown growth the your You there

you talk could hear Fluoro that? recent to decision that have can some not think Supreme do the business? the Court case, you about impact So, And on EPA

Mark Vergnano

Opteon first I part, sure the understood about Make Yeah. growth? talking P.J., you're

Josh Spector

Yeah. Opteon growth.

Mark Vergnano

Yeah.

in slower been Opteon Europe. little build the adjustment bit I So, in has auto we’ve for we’re XXX% penetrated auto rate in would Remember, Europe side. only seen say a growth the

That’s been builds bit on a there little we’ve bit effect Little in of the shifted. you And most have the slower sort side. of Currency currency know, so, as that change of well. Europe, auto only second has as over half. seen

side, US the about we’re XX% On penetrated. only

off the penetrated CAFE XXXX. standards that to Supreme driven continue really we that's manufacturers the believe, and of that Court auto by ruling, toward XXX% will be And move despite We that. the the are making

Court the isn't terms But what forward. next SNAP. it we that disappointed – the didn't we over think in hear really on want few the don't years our of I growth to So, rates going Supreme to appeal affect are going see

Josh Spector

you do you stocking about Just there? price And on ore give some of buying ores TiOX us just of what kind much of can that side, talk do you mentioned? one question increases? can How can ahead on you idea

Mark Vergnano

Yeah.

the for we’re used of of things, we've cash rest little little a bit a and of cash of using One the year. bit

XX bit very prudent next is little more look think would. prudent right that the a we taken cost ore a cash decision we it's We we now. up perspective we are than bit where of little reason, months. a XX normally out we for use good a have think decision from it's sort of That to a planned, we've than For more but as

overboard forward. to our to business with going do we not and thing We’re going but for do it's for the think that, the right earnings

Josh Spector

you. Thank

Operator

RBC. comes question from next Arun of Viswanathan Your

open. is line Your

Arun Viswanathan

an Great, where seeing thanks. standpoint give regions? just idea get your as would And customer you Thank from you different cycle? and how as you. across do Good you're confidence morning. that just what what of I'm in are in be? seeing an you on us normal wondering us could inventory markers what base if the can give some you’re you Maybe far

Mark Vergnano

destocking segment single As you phenomenon, we're occurring across right world. what – this no look at is across the segments, it’s it’s seeing occurring now

of tell start little we We it’s it's thought Again, than I thought really had we because more targeted play our can’t phenomenon originally at this year, we’re of XXXX end it and but the out planning. earlier from in I any earlier, than mentioned you a this this So, seeing in a heavier of as one fourth planned. would the place quarter really bit maybe really be not. year

play So, I through. to that's going think

this share We’re But say, no else on. going of another. if understand in a one and happening we would market any shift in than terms bit point than little anything across board, this close there's to there's the stronger with at region being faster time, keep if I going anticipated to very

Arun Viswanathan

the look anything distributors? on if you have their you intermediaries position like that? days are into and the provide or of any well, as China, able But metrics there to any for Especially supply wondering

Mark Vergnano

industry operates know at said, a indicator, if this we to up understand was It's with don't chain because going that build way I primarily year, said, a that, always the just this. for of GDP. It’s – it all visibility the over see just helps do that. there. rate. It’s And really right, us not as to your you you occurring really you hard be think, have just GDP. to I about growth again, this There's GDP at past, Arun, But, look perfect – have last we as X% I in there down well some customer. it’s and the think

line going you're you're stabilize to you of when get have back time come So, going below until a on it. prices for where a that bit to period

is So, I very this think happened in playing a sooner. out again little a way. bit It traditional just

Arun Viswanathan

quick next you. expect And of in Thank of I if for have type as seen, I you TiOX, pass restocking outlook when a spring to as greater this on, inflation that ability should inflation impact follow-up, or what’s the well? your Would we about possibility kind guess, we given the that a may, on environment? that happens the just think how

Mark Vergnano

Well, customers the contracts that costs contemplates points with value move ingredient into our our we stabilization have. price we as them

these in are So, all taken terms we’re account of together. these how into putting contracts

have materials I from that that see our least raw what well we going covered in. at feel So, we from

Arun Viswanathan

Thank you.

Operator

Stanley. Morgan of Andrews Vincent from comes question next Your

Your open. line is

Vincent Andrews

everyone. morning, good And Thank you.

it to you TiOX mentioned you're there if as mix going get just negative fourth the in a but negative some that. to down, then, You that during of fourth that the quarter, into negative relates quarter? not more us there little it could be was mix give insight take any risk is prices in quarter, And I could the mix? customer

Mark Vergnano

reason it mix, one, to of customers the not because any issue Yeah. I is that we said was industry to or mix any related just It region. it would – customer is, really it’s was related not have. say the it's the really we mix

price So, you that larger than customers points to imagine different going others. have can are

So, from standpoint. it that think of

that. buying wouldn't the of to them. we to bring destocking that's as our and we is applications forward. don't finished mix going develop do that we that's any But key our of with that customers into customers. products something And different improvement, What the I to and new try being around the And new would I we our new going say patterns out continue read applications itself So, would when with is to continue offset pricing settle That's period. say, do mix out get anticipate to purely see. that I is we think I I we anything anything where most

Vincent Andrews

sort accelerate is? as the repurchases, of your share And of to a but you've price long-term got share obviously, the just on the follow-up what Okay. appetite is given stock plan, where just pace repurchases,

Mark Vergnano

when we we've that said this million what $XXX we do ratably. the brought is onboard Well, would

occurred year over basically the mentioned, ratable the has has years. Mark As two occur will this to $XXX at this next – point million We’ve looked, this year. in be time,

year plan and after. at million should year you million $XXX So, $XXX next the on least

our we’ll there to with if board be to always that, the in constant that conversation feel we’re adjustment we that that. board. around needs conversation with And have However,

Vincent Andrews

very you Thank much. clear. Very

Operator

of question comes James Your SunTrust. next from Sheehan

open. Your line is

James Sheehan

Solutions. sustainable a Thank you. Very that driving that whether strong in in Good color strength results Chemical what's is and little about you XXXX? give you morning. bit Can more think us

Mark Vergnano

so one question segment to that job has excited cost The been sure is very make got a Solutions. I'm they good within But about continue well. a there. would drive price at team we they've say, Chemical looking Jim, to great business we’re done efficient. as at I

there been the a around some price, in methylamines, market which opportunities in or as it’s tighter as becoming in mining see or has you positive well. see, that's glycolic solutions whether business businesses, other we whether is So, in our that, our that acid even quarter

done business, the value the So, the good of for really team job has costs price products, their holding our getting down. time, segmenting of a at up same

the EBITDA margin. said, As I've they quarter, in this range on were XX% always

progress. Chemours that believe time in the of we margin they're Company that said will always total have the segment We and this approach making

James Sheehan

Supreme And had if legal how case? on you rates in the back you Court in been prevailed US much would Right. that think question, the adoption have faster

Mark Vergnano

Yeah.

again, been – side. that auto don't it different think I on would've much think I the

fully path to a mandate. what's was with little mandate state a on this auto in a we’re you're that It US is a HFO seeing said, to by stationary helped I the but being happening will shift side, now could've acceleration federal the be XXXX. As be going what from on market penetrated bit perhaps of

to that marketplace. adopting XX the these already of there's are regulation So, drive products states this kind same kind into of SNAP

was, at the level level the little one at at done state So, happening be really is opinion, a our more efficient as well. bit what in time, federal to

Opteon So, marketplace that we as acceleration think to into the the well. add of will this

James Sheehan

Thank you.

Operator

next Morgan. Your J.P. Zekauskas question Jeff from of comes

Your line is open.

Jeffrey Zekauskas

United TiOX very it the probably will fourth Thanks down is, the only XX% rate? much. XX% your in be your United or in in destocking or quarter. destocking, twice in is How you Mark, States and times? not Europe Are Asian is the volumes what comparable that? different do three or volumes down growth actually in at States that That volume is Asia geographies but European is volume – deceleration or the the see the

Mark Vergnano

To same. be honest, Jeff, almost they're across board the the

any than seeing region not Asia. equal including they across, say, anyone including I'd we’re higher very, So, being are very China, else. one

in this. any again, issue, seeing a this at we which not So, why not believe we’re a share market is region, we as it phenomenon, is true one look destocking

So, we don't through in see region. perturbations any this

Jeffrey Zekauskas

as demands Or that stepped you do really titanium those really affected incremental that titanium all And equivalent then, of this And don't market, how this that dioxide think data like secondly, have was the tons tons which – that? so true? it it incremental, think companies West change is were export And it the or good China. China TiOX. to be, And the up? China Okay. of exported year? as not domestic issues looks dioxide used isn't of XXX,XXX that's Chinese no think do in assess Do do dioxide China be you I environmental year, know, TiOX you an kinds of Chinese many production? outside out in prices you about but case to that were inside titanium in the the talked you think So, overall do that about production of in may sold Chinese of there it

Mark Vergnano

Yeah.

tell you theory, or right? down. right? country convinced was are Because, bit opaque, the is at environmental real, out I’ll was our that was you taken work China capacity this We know, that as least So, within a shut done that

of period for standpoint. permanent Some a a time; from some

domestically same also came China, that was time. economy is We a out in down so logic slowed there believe product at that the maybe has staying the that

us for place the So, in think it – had that case don't it theory, the I I yes, China. out because think is, – have didn't a come it's

because they So, net-net, coming grade China, no TiOX. It's of don't just we've products outside. it fungible to where stream. home maybe was capacity intercepting Again, our have say, it TiOX capacity product, a never they're a side. constantly looking has new but been than to we and didn't different intercept our not grade isn't bit for we the because sell believe I’d business is been, think inside customers markets it’s seen we and higher so But there's our the theory on higher had This perhaps adding have. exports, we the a

Jeffrey Zekauskas

you Thank so Okay, great. much.

Operator

Your from Carson of comes question Don Susquehanna. next

Your line is open.

Don Carson

rising. price falling? the of these they price on customers value understand And, Mark, to certainly when into I types in had can question of a lock might the want when I is I the willingness guess, stabilization. it enter why is contracts what's to

volumes you see evolving if you value so, over contracts on do and under XXXX? And what your are could that comment of that. currently, stabilization percentage where And,

Mark Vergnano

value to for them say for that, Yeah. who Don, really customers long-term supply idea in constant The understanding are really over new is this a a proposition that capacity. consistent is that supply. would our invest willing the grow, long-term They TiOX. need are they supplier customers gravitating to I long-term of adding to and the need partnership,

That's they at right customers. understand good not and to economics; that to where good so, them a good for for margins now. are we have basically in they And conversation we it’s One, of from us looking price reinvestment expand is with today. looking us. we’re have solid terms point for are the where place; We��re

to work start, it So, TiOX a place was price. around get have And said we think secure to for that, why to we price the calculated us done on think that's stabilization able from we long-term and firm this gravitating and be them. thought and a I hard that earlier really available we implement right call, price it's a them get the the for is to are we've to point starting because, starting are to as Always they to holding time place point. this to way lot point the point, value understand of the very conversations ability long-term this a those to this in partnership, about that

Don Carson

percentage And under be to these book? your contracts? a of big of what's percentage volume you it’s currently going your on as overall comment the how Can

Mark Vergnano

Yeah.

We right tracking we’re haven't tell but under be the are I'll We’ll That's to. business. where what now, majority shared our will contracts. be we these of you this

our no them Flex, should through business come a semi out our which for detail these that feel way be we where majority is available. another what talked call bulk spot But But we contracts. we've which for the something mechanism I commitments to going in Ti-Pure a us be here, these have under the there will people we’ll from you and product is of with on guarantee think basis that's that about be of of would volume a contracts. So, confident also to buy, into would be. going lot Without and buy of no will will be

Don Carson

Thank you.

Operator

next of Your Spitz of Bank from question America. comes Roger

Your open. line is

Roger Spitz

contractual share that if your very what over contractual TiOX the tell to towards you can book the might And minimums? be percent you morning. Do expect customers in decide can you term near minimums? of contractual much. lose you more if us Good took market TiOX your their take Thank down volumes

Mark Vergnano

I really I from volume our is strategy But allow talk our price hold will here standpoint. customers’ part through of to really that, second with to piece. that needs can't and that Yeah. say fluctuate

going goal not this base through again share our market is that Our We lose is valuable customer plan. to think to this forward.

forward stabilization I move you value dedicated standpoint, to we say I, market but to from the it. going time, are we’re that share the loss, strategy So, and same of tell I anticipate with will at don't would

Roger Spitz

Okay.

a prices that worked ore ability can call you to previously, of the us heard tell think the position price had you you and I and I negotiate during the in better us two that Can type past unique tell you your if ore rose? of particular last increases. times volume correctly, slag how provide that slow – your mentioned

Mark Vergnano

the ilmenite Yeah. because market for are chloride the we’re Again, big we that. user for

is many different who right? that’s package So, in we other We of proposition and find are is our to times either that a competitive who has that with to ilmenite both, that that from advantage we from along or we the slag have be rutile maybe are rutile standpoint. The different competitive to really very we we be those mine slag advantage could suppliers. from take producers producers. win-win our buy value Again, many a with a have helpful in try and buys. standpoint, folks buy the way. unique size. That's to one able able from other than which opportunity But hand we’re ore our ore hand with opportunity in able to doing those to worked both, as That’s buy

Roger Spitz

much. very you Thank

Mark Vergnano

Sure.

Operator

Goldman final question of Koort Bob comes Your from Sachs.

open. Your is line

Christopher Evans

thanks. Hey,

stabilization and made in earlier Just on your value Florida? source And you volatile Just you approach? integration what just especially you that vertical any today you mine grades prices, longer-term, decision given see your how your that internal then, ore much Where benefit do increasing wanted production? curious quarter and to is comment to your to Can ore expand this follow-up. from market to reducing this exposure heading? your

Mark Vergnano

where which did expand Yeah. are, we is to Chris, a southeast make we area the in already decision the the US. of

in ore. a our is of for for sweet It’s great it’s we mine that a the percentage some because ilmenite. us perfect spot – opportunities of It facilities. of there have really terms really operate the We manufacturing are body it’s the sort way ore of

really able sort eye in this sense for our to able do that us buy it our have downstream keep always the of capital make that. buying that's to sense the capital best ability was one, the really use doesn't at we would will and we be something say, It’s point of we to we to time, for areas think no-brainer doesn't on have our us where don't power grow. from Further use market to other in for based I be a standpoint, So, ores. to it us the make but,

just with physically this confused as made of be return the a I because we else extension was an and The just didn't have any that already versus don't it there of why did you lot on orebody. It’s we’re this by to going somewhere mine presence. want where So, we this tremendous already we think sense. in of – it's have

Christopher Evans

as to US which in for how able maybe appreciate than just dynamic pricing. the maybe And seems the a to more peers’ the be be just maybe you year’s be may other put better I'm last to curious But great. quick I a the little stronger end particularly US? trend, through and and your your just see on robust And through is think That’s percolating you in competitive seem commentary. marketplace. bit one pricing inventories regions

Mark Vergnano

missed Chris. I the question,

Christopher Evans

you if – I positive commented you curious somewhat US your price – stabilization value that pricing you give you your is to can stabilization get that. behind flat In Just – are to going marketplace, the forward? going

inventories competitors in your pointed pushing the regions product, Jeff curious are Just more as out, other China. as rising and are from

hold you Just world where in a not the marketplace. curious disciplined as pricing there’s will rest how think maybe the

Mark Vergnano

customers here. going been with clear on our very, strategy. We’re disciplined be very been on our We’ve clear to something. our We’ve

well do as thing as for this right We believe to do. will vary by the our customers is We’ll We the not to vary is by region. segment. right this not We believe thing for Chemours.

world. see that you're local price the in not going anywhere to – So, vary the

Christopher Evans

Okay, thank you.

Operator

now to our call turn the for session. Vergnano That back comments. Mark concludes will question-and-answer closing I

Mark Vergnano

to Chris. you want for thank I Always interest time all And continued morning. in Chemours. this listen, for Thanks, thank the you just your

are we laid to also throughout said the call, we out I As that started we three-year but plan to our year. last remarks in you with, the committed

rest you continues We strong and exactly this Technologies dedicated Opteon we of would that engine cash margin should the confidence strategy you continues our at as back our to in development told our up business drive, all executing that for strong be will quarter plan. growth Titanium is company you've and in we business, our I the we that of value and, as are to continue of we’re our seen, approaching the executing that that say business, drive the a that of the to delivering do same are time we Chemical as to to shareholders. per what business margins off us stabilization and our that move application we’re And give extremely going bulk Solutions fluoropolymers be we’re to optimize the

the this that three-year the driving hopefully, towards. gives you driving So, on goals confidence we’re and that strategy we’re

So, time again, thank you all in and for the your interest Chemours.

Operator

today’s This concludes conference call.

may now You disconnect.

The Chemours Company (CC) 2 Nov 182018 Q3 Earnings call transcript