CC - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to The Chemours Company Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

to of conference Relations. Corporate like Lock, to now President Vice Development would hand over the Jonathan I and Investor you. Thank Please go ahead, sir.

Jonathan Lock

XXXX Chief and and Chief welcome Company's Officer; Vice Mark joined And President The Vice Executive and by earnings President Sameer Senior year Senior and today President morning. Officer. I'm Officer; conference Chief Vergnano, Good Mark Financial Newman, call. Operating to full Chemours Ralhan,

and as on I’d website, start, you to supplemental this our call in those like described well that may that of be These contain of SEC. not future involve our made realized. in the we not Before risks including guarantees that presentation as and the assumptions documents remind the future statements performance filed on based expectations provided with information statements are uncertainties, comments and are forward-looking has events forward-looking and Chemours certain on

undertakes statements information. of to differ, Actual duty update no may developments forward-looking any future and results result a or Chemours as new

the evaluating release During we of to included and our call, useful are to the refer at A are believe measures will investors non-GAAP adjustments management financial this Company's of certain presentation. non-GAAP that performance. in reconciliation terms of end and the course this

the I highlights who will from our will review now call CEO, turn the year. the the to over Mark Mark? Vergnano, quarter and

Mark Vergnano

for on Valentine's this everyone, us thank joining you, you, and Thank Jonathan, Day XXXX.

been by challenging delivered These a the look year. a resilience we months throughout the as encouraged most I we've young quarter, XXXX, XX of results business I'm past the as and the showed As Company. have we back on had fourth in proud among the

of for deliver pulled set world I'd staff, like teams my at well Chemours the functions, operations a with the guidance our best results, as to of challenging we've fellow consistent year. as year. together done a in our making around recognize teams, full the updated our past, commercial as solid a However, of colleagues support to

flow better XXXX, of for anticipated, of our guidance. was fourth free higher to cash conversion We strong significantly leading delivered On chart had a flow Free adjusted year year the than EBITDA leading full free than flow updated to cash three, million. $XXX full we cash $X.XX billion. quarter, a

of results free generate reflect market Our the significant to flow, operating despite strong ability headwinds. Chemours cash and

have unappreciated our cost XXXX. know The late to in by actions a since in continue that capital deliver the I in year face cycle to come We've spin way to began an the in solid market will and the our conditions. I the of and the implemented better this results XXXX long working is we way as somewhat changing point market, turns. resolve we and demonstrate believe ability to results impact

I report customers starts our Across commercial in with our Technologies contracts, three and which the a we second half TT segments. position. sequential and of wanted XXXX, with wins, for by number segment. a XX% to from our stronger in transitioned highlight. It destocking to characterized difficult contracts heavy first volume in Titanium a half We target hitting achieved stable business begin I'm of and fully sales to pricing happy our channels, share our work of as distribution another stable AVA we all regains restoring utilized quarter flex volumes, to share AVA

new we product pigment You'll a also the of quarter ink recall that last launch for announced grades.

our be the market in specialty and that increasing in coming bringing to to participation We product years. TiOX are excited the

Europe And in continues side, GWP to On to you in refrigerants XXXX. HFOs know, converted the fully as Fluoroproducts legacy displace high Opteon automobiles.

XXXX. reach XXXX to expect Japan XXX% penetration automotive by OEMs with in and in We the U.S. by

our HFO technology. flow Opteon imports the world blends the are benefits in to the believe environmental depriving are control we of into Europe, front, countermeasures the worldwide. of applications that the stationary the stationary future investment for On are of our which of illegal We refrigerant increasing strongly

foundation set also to delivered future three programs for engineering we XXXX, scale designed large on In growth. our the

First, world scale we appropriately startup completed Corpus great facility, of in built Christi It's the state class, the world and Texas. our Opteon a site. commissioning of

completed Second, the oxidizer on in of North control facility the to facility another our Fayetteville, unique It's work air we thermal at emissions compounds at fluorinated designed Carolina. site.

We plant mission on Chemours issue succeed in emissions. are the allow confident that its lead the will to fluorinated of to

work Finally, Discovery Hub University STAR Delaware at new our Chemours' we on completed the of Campus.

but not story, great the a is Delaware. lab R&D Chemours, of state for just new Our for

We home keeping state and close great home. are committed our in to to reinvesting these R&D jobs

which Ionics continued completed Minerals, Georgia. we the Chemical the the to least, we Methylamines our year leading a In Methylamides was of not a we XXXX refresh mineral XXXX, our In December, to portfolio. business Cornerstone sale efforts but and sand in Company. in Southern Last acquired operator

While these modest greater our drive business and the commitment profitability to strengthen in the action size, deals demonstrate taking to portfolio. across

ahead forging provide on you our to the XXXX guidance. back the As we performance of full positives about heard, be build our I'll fronts. how to on. end our to call just and many year discuss And at thinking improve we're we're have

Right now, our go things over turn results. I'll to over financial to Sameer

Sameer Ralhan

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

per the year $X.XX. GAAP versus adjusted was negative earnings earnings $XXX was while Full million $X.XX were share adjusted sales share net billion down headwinds income of was while billion XXXX, net reflecting and $X.X across $XX volume businesses. negative GAAP per price million. $X.X net income was

two include in quarter. one-time figures GAAP charges the

$XXX in Netherlands of million, our vested the portion and associated the a First, related Netherlands the spin. sheet. to our plan This pension largest our of portion non-active liabilities non-active balance to our the asset transfer to off charge ability is a it of of Plan of the transfer move obligations third-party de-risking from manager. results Pension settlement It a and non-cash represents obligation

savings we the were of the surplus Chemours administration As plan from the able and also ongoing plan be This to reduced to advantage liability. of take win excited this a result big a in participants. pension costs. recognize transaction, was will for We to decrease

for our be charge potential million includes years. expenses at a along long-term operating related over water remediation Fayetteville XX Second, spent remediation onsite site accrual This the to site. to a provision at cost legacy ground address with to $XXX

projects the further the connected as operating of of Free than to cash of are of Carolina billion fourth EBITDA with in million state therefore our EBITDA the result doing change. was These flow quarter. second guidance flow North Adjusted the resulted higher we the generation improved driven are $XXX This working of subject management. $X.XX work in by cash order was capital quarter consent and from of result basis XX%. margin a updated stronger to

$X.X quarter results. in discussed billion sales. of quarter. pigment million was lower of refrigerants our volumes the to over review previously. negative and in and year's per $X.X Net share earnings reflect $XXX GAAP revenue lower Let's of income and driven sales billion move compared $X.XX to net slide quarter prices five to charges last of GAAP fourth drop Ti-Pure fourth by The Fourth negative

per $X.XX. flow $XXX year. flow segments. $XX the to at Adjusted was net $XXX EBITDA income run came quarter lower fourth solid million impacted in from a across of adjusted margins the by $XXX spot of at share cash $XX was operations of million. CapEx $XXX cash from million compared Free and in This in of bright million of coming main million was in quarter Adjusted by last million earnings resulting two the

in due EBITDA from $XXX products. fourth adjusted same Turning year $XXX quarter lower by the fourth to driven period the contractual was were modestly refrigerant and product ago. page, quarter million million to some prices lower prices declined mostly the fourth pass-through quarter TiOX prices Solutions XXXX, mix. compared customer to global this in a relative of and channel, Results Chemical

factors. volume segment lower on and in the This was other a accounted Titanium a million impacted three Technology by in $XX headwind million Lower quarter. the year-over-year additional basis. for due our was $XX primarily to quarter, headwind volumes in Cost main

volumes by quarter. successful productivity issues fixed year; new cost and during of were to and in Opteon the under-absorption F-Gas to as lost due increased to due Titanium First, the operational previous increased the HFC into lower from inventory Fluoroproducts, related Corpus the imports impact third, effects ramp-up the EU; partially from cost continued quota Technologies These illegal in site. sales offset second, produced Christi communicated the

continues slide. to solid maintain on liquidity. on next Now, sheet a with balance to strong Chemours the liquidity

well We quarter cash the we capital well-positioned are the we out and believe and I XXXX. have bottom working fourth as business of in of cycle. over managed the the move course of

at primarily normalizing $XX and the $XXX million working end of unwind, The the related capital volumes was CapEx cash was Cash flow operating project the Fayetteville combination million STAR quarter, at in working of at seasonal campus. million, the the overall to a third capital generated thermal lab $XXX management. the strong million, the of up quarter and completion of TiOX oxidizer on of business XXXX XXXX. $XXX

have year. Free EBITDA on leverage tough for basis. at at $XXX adjusted million. to remains the with a of XXXX. dated at year having billion stood times conditions I the of the confidence XXXX, the and believe trailing cash $X.X I in in heading we're well-positioned sheet Debt maturities. cash flow well-spaced our net continue longer end weathered balance was into here Net X.X stable

over things performance. I'll Mark cover now to to Newman turn segment

Mark Newman

Thanks, Sameer.

on with like next slide. Fluoroproducts start the I'd to

quarter, As the imports we HFC to illegal into we fourth the move of the impact negative continue experience through EU.

blends working efforts, a adoption this against have headwind, our be of stationery While been in Europe. ongoing significant there continues to Opteon the strong

As as on, investigation year mechanisms the that very-serious the the up positive This we underground of public progress. working to XXXX we report as implementation with includes as raising enforcement accelerate stop awareness approach can actions quota EU and well are I of states the illegal this step-down, imports. help we moves enforcement, issue. stepping hope and member to

the the X% the volumes respectively slowed $X.X imports, blend fourth as Relative were global impacted prices. billion X% Opteon stationery year, and and sales headwinds to respectively. adoption and full year and Moving results. on million in illegal to HFC full refrigerant $XXX Net pricing were quarter and

quarter, fourth the operating of for offset from and the Christi quarter of impact prior was ramp-up our $XXX occurred by EBITDA benefit production $XXX periods. full In respectively. million the which year the at in of the Corpus site at other issues the fourth Adjusted and million, sites, Opteon were

operational We will drive in better and execution XXXX. discipline

stationary build are the partnerships equipment ahead, to look momentum full to to we HFOs. OEMs. These we with stationary the important As continue conversion of market enable

across adoption sector, for We drive focus mobile adoption for will the a the coming the Japan and to our U.S. full air moving with on continue conditioning years.

application proprietary materials are have we focusing development polymers, new enable membrane around where technologies, and unique development. in XG intellectual market and help property we Finally, to

the results from let's Solutions nine, our Chemical chart On review business.

I up delivered We QX. for in quarter, record close and profitability team the the in On the looking to stepped and were the Solutions, performance operating the came despite said due QX in Chemical year and fourth full strong year contractual lower to call, we business. Intermediates the and commercial from on back pricing XXXX line the Chemicals erosion in of strong pass-through business. some top really This Performance our

million and Fourth Intermediates as full lower The neutral in came these XXXX and the $XXX figures year material revenue Performance pass-through were change the pricing Chemicals to $XXX and drop-off business. XXXX. was in was million, in quarter primarily to costs This down earnings due from business raw respectively.

$XX America. As record up adjusted was EBITDA from in in a remain very the million, North up such, average for adjusted mining our XX% Fourth EBITDA quarter segment. year. well-positioned from portfolio with and period. for with fourth We up year business $XX our was quarter, the solutions prior Adjusted XX% last EBITDA year margin XX% the the toward full in moving million, expectations was line

class us year, up across to demand. moved the look region. Americas. over to enables efficiently sodium as and continue safely to which cyanide rising Gold past serve our the provide strong see customers serve prices, have technology we an tailwind additional across demand the world Our And customers

the I'm team spending to and asset have years, productivity improve over in and investments made of the quality. the capital Ed wisely proud several business the past

line. Cornerstone operating Chemours Finally, for save state affiliate entire significant great business partner the parties for and the synergies, quarter, in Chemical sincere positive with as holidays found MAP Jonathan, get both XX Ed Virginia with transaction work deal This an over of to thanks sides, the business to this to while West the able sold through Company. ahead a were jobs. to we finish our a to My both the of the forging team was

quarter. leveraged Titanium process regaining our portal plastics cover basis the Net year quarter in including with our stable share price on respectively. Revenue with and in flex and third channels million, I'll billion, fourth team all and full XX, segment. The to customers. begin $XXX chart of $X.X skillfully were line has a was our Technologies volume the remaining On the with sequential sales

our strategy, for value product of were in TVS on approximately and of Annual basis a pigment. X%, use our XXXX of prices a recognition year-over-year the down Ti-Pure

don't globally believe the we finish exit regained we have have to as point, data While we we XXXX. at all analysis the this additional care

at basis, million The after fourth low the raw a million, across year. regional buying quarter most circuit reflect and down of in patterns from fourth the very in improvement showed $XXX inflation. were low Margins due a of across XX% came and was fixed cost some material absorption and start $XXX globe. XX% respectively. of and to On volume EBITDA to Adjusted the the XXXX. stable Europe year the full production slow volumes impact quarter

normalize as to However, our into we the will these volumes production across increase mid-XXs circuit. expect begin

to back things With that, turn I'll Mark.

Mark Vergnano

Mark. Thanks,

XX. Chart to Turning

of generate are moving we achieved in of adjusted quarter. top current combined improvement midpoint, $X.XX and the and Starting to looking this fourth chart, the in good reflects at $X.XX XXXX pockets build midline over the I market XX% the we the on we context. between some our beginning EBITDA estimation, a forward the our for As in at with the billion call, XXXX the to global XXXX. results given and our expect a momentum of case results billion business, in of represents At said

come will million. XXXX $XXX CapEx from levels to down

more As than we levels XXXX for a XXXX cash that double flow greater million. result, from project free will $XXX to than

to flow of go of The form via Our back and discipline of a shareholders free of will continue. majority to cash flow will share free the return our dividend, stable in repurchases. cash steady shareholders

As leverage based that our believe our Sameer said on earlier, we remains prudent projections.

XX. Chart to Turning

will XX% work. from on sustainability As onetime move by I XXXX in as our mentioned the levels roughly we past last XXXX decline chart, and CapEx some

to of Our run assets starts about with maintain our capital CapEx million. base required XXXX for the and $XXX

on million and sustainability $XX spend regulatory projects. also will We

that $XXX projects near and as balance growth, Technologies of Fluoroproducts. Finally, several We term. and we have this earmarked the investment million high-return in growth right strikes as the on long returns believe for Titanium projects focused mix well between and

management spend the focused capital uses investors priority a on remain with to we capital As of our portfolio. on efficient across transparency team,

last with the for I'd Turning previewed end chart, remarks our to you summary last call. to quick like priorities our prepared a which XXXX, I of with our on

and at discipline are Chemours. to renew we going our XXXX, In focus here

double we that our flow our In addition to supply cycle. on under and chain uptime, cash inventory down costs, things be to to of growing our top-line, capital number control, must through we any priority generate Free all working are the highlight the as the operating look power management. portfolio cash conversion will one

sites on governments We the of on in leading are the who face at Europe the U.S. in and issues change engaging regulatory way our the we and with climate the refrigerants. are actively legacy phase-out

our XXXX diligently Finally, to progress we commitments. against make work continue will corporate ensure we to responsibility

Company. success investment to Our Chemours long-term critical of this of is here cornerstone and the a

of difficult challenge have to will XXXX we was The this get I and we challenged ways the hard deep the and dig focused everyone clear but year, year leadership in to are XXXX Company make to continue better one find everything us can better on team for a do. working to Chemours. executing at a plan. we across have this entire targets are three

XXXX a Company. great make year the will for We

the up line open please With operator, that for questions.

Operator

our Duffy And first Fischer the comes from today of question from Instructions] [Operator Barclays. line

Duffy Fischer

guys. Yes. Good morning,

been what that in a And might took Carolina. happen What’s still need to round can in we what's First again to extrapolate with can that? is talk at be One, already? to to other spent? PFAS North question wide then, use plants? that charge just the you you range, spent What’s about down

Mark Vergnano

Sure, Mark. Yes. It’s Duffy.

primarily Fayetteville. and the If think have you water of consent second with are process third remediation, four at and elements have already residential think was on-site One emissions; of go North back dealt We with order was process the that emission. the the emissions; really off-site, about water DEQ, treatment there air as was for we the the Carolina was fourth that water groundwater.

keep we from to that we going River. the water into Cape have have Fear obviously, a So charge

in spent $XXX oxidizers Air million we emissions of December. our put that. thermal the at on we TO, place was is CapEx to our end that do That

taken So, care of. been that's

was we is residential in that The and ‘XX, treatment earlier did handled. in off-site water a year charge the

And the last on-site leg remediation. of this really was this

So, think of and this maintain. primarily, charge treat as really operate pump and

is costs. this So, is a that XX maintenance operating of and years charge for

cash XX-year going see we a operate be over out not not you're that in it's single facility. So, the to as a single bucket. charge, going period that It’s flow to

everything so place your state. that current To the the at sites, this we have the with covers part Other question, agreement in sites. we already this other all our really already of consent second have in

to fluoro we operations state. our everything do. think with we will right spending, already our So, That's That CapEx in we that we're we all our compliance. charge, beyond on in seen our sorts have to already as emissions water at well-beyond because commitment in one, the charges sites the world. the order said is in of really it’s the responsibility of call And But, and not the with our, thing you’ve because million that we air eliminate corporate consent the sites. I the is across compliance. compliance have compliance any our other area well to are out we're we two, our spend to what say of that's believe want that this number see you're we going $XX XX% rest

Duffy Fischer

be year to in. What's far making just in you the reductions the any the distributors for we this prognosis be markers that’s one HFC are believe? that now, for? to its And we we going the talk inflection headwind do Europe. you look an seem a When a doesn't gases, there, are Chinese What this primarily maybe then, as still will mile in sometime should see from about talking year? there way this year, fluoro point And to over on so or

Mark Newman

Newman. It's Duffy. Hi, Mark

an very So, very there's really and raising refrigerant awareness industry public a the effort on what environmental manufacturers impact. negative really on concerted a around consortium with is enforcement game of building

indication starting to enforcement. on see some are We traction of

blends, of of Italy fairly stable I OLAF. think the for there in the XXXX, underlying a is week, fundamentals on though go the in enough will that agency a Remember we in And to enforcement game. quotas the basis seizure significant relatively there assumption as our there's large be that yet change anti-fraud ground terms really last was not fairly by Opteon performance, into step-down XXXX.

But, of is different XXXX, if is, So, view view inflection and a in a enough in in than is progress start stable business, underlying XXXX, be year the go we'll as end the this year sales, towards quota in will to into had we XXXX. in which which, ‘XX. we there there's terms of into what move we as point limited the year our see XXXX, our

a with blends as franchise. here next around years. both play Opteon this on products. our on conditioning few our a we of decade-long mobile a future is the see growth the stationary work air And their setback OEMs going But, the still using Japan in to U.S. there's and Obviously, the this lot then, side in in

the we're illegal to continue encouraged also for plants all public we're traction we're what encouraged in game coal-fired the Europe And by some of the equivalent four enforcement. going Obviously long imported on build by So, seeing to of is refrigerants. these with here. we’re awareness

Operator

Markets. question of from John next line McNulty comes from BMO the Capital Our

Your line is open.

John McNulty

to your that America. noticeable seeing some little in speak Is it for that position portfolio, values, up that, the you for and customers see even We're in -- down markets, TiOX the a like contracts can looking things settling to your for has started you're way? to it in are or a demand part looks your AVA to hike regard with of guess, demand I locking actually price use announcements has the with North bit. to pick contracts. starting long-term So, that

Mark Newman

And been positive Newman territory John, a multiple positive Mark more like market -- perspective, now. on long-term the across to starting from So, see And we months our TVS. geographies. indicators in for where have really of are we're again. We that several

share. we're up XX%. from usually our QX of did say perspective. about was 'XX really So, lot volumes quarter a slightly positive that a volumes I year in the up Obviously, Recall, our the would were we half is the around of QX are in feeling And, down. work a second demand regaining seasonally

signs a contracts, XX% that or encouraged market AVA the which response well And to by that response as of represent the today with of we've encouraged ecommerce to channel. volume, customers in our being as the programs offering by really our our TVS terms we're we're volumes producer only more of both our our different seeing. we're So, flex introduced, great and really really

think we're very where overall, I positive about are. we So, feeling

Mark Vergnano

this John, And Mark. is

XXXX. market our add quarter we’ll gain the Just which that and our working we're AVA portal Mark's to you're comment. go That with share before plastic really by coating our had the getting able around customers share case. the with encouraged continues get flex a lot as believe them. portal. into and the to for we in us where We be seeing to laminate with is to But, traction now we said extremely contracts, fourth demonstrate we’re we be customers that And had of traction back

John McNulty

the flow. cash color for And to then, regard with on thanks just Great, that. the

you So, see? XXXX, to a way unlocked expect do much quarter. decent can amount to as you improvement to guess, Is be as cash a fourth quantify the we much free look flow look through of clearly more capital I working working in unlocked how out capital XXXX? how more of you there

Sameer Ralhan

the came one. in right, the as of we the this year, QX. side volumes last a down, QX hit of unwinding receivable payables lot we as really take in kind through the and I'll and you Sameer. saw inventory went and Clearly, as QX, in on the took is this QX John, started Yes. payables

intend operating fully performance working of really maintain that's same strong we you're XXXX. into going we of the to view, as the that kind And look So about. from to on guide Mark discipline flow talked capital And in cash us from our side. point the reflected

Mark Newman

Perhaps from of prior on some focus operational that talked is about the an ore our calls area we've perspective, biggest on our inventory.

the is another probably that remain as maybe area year. through focused go we’ll So, we

John McNulty

much Thanks color. for very the it. Got

Operator

question And of line from Financial. from the comes Don Carson our next Susquehanna

Your line is open.

Don Carson

With eat destocking second and higher to do the cost the to TiOX, coming XXXX? you plus customer that see apparently through see shipment you year-over-year in in evolving margins rest year? QX do the a your close And you back comparisons half in XX% once the level how of finished of goods inventory, getting

Mark Vergnano

Yes. John, going as seasonality. the I to we're we normal at year, see look think

but to I Company, think, we're especially TiOX. the seasonality see normal in going across

think, because back quarter look. normal we weakest will the our still cost the to first be will a have I some seasonality probably I of that flowing high say primarily through. quarter, kind we're inventory

So, high remember, not XXXX. our as we rates finished very were

to as pass And the quarter. you'll think through. beyond year to carried has first mid-XXs forward. in through cost that'll But it that going that eventually I the returning be see So, and progresses,

the So, margin mid-XXs, but our yes, heading of to the higher probably see we area by ourselves year. middle

Don Carson

again we QX? issues of China could out in in exporters are And up and then any seeing market into just get Europe getting China, TiOX as that you in situation the particular tighten into the

Mark Vergnano

we obviously getting But coming Yes. now. that far. It's about call not from our one perspective. for so that necessarily I'd real that to us a specifically are nervous say seeing the seeing us right customers see now. We're right books into it's for some volume solid hard to hard

that. So, we're in I the you that can't book happy it's related are But first seeing we with quarter. to tell the very order

Operator

line the question Laurence comes Our next from Jefferies. of from Alexander

Dan Rizzo

Laurence. to predicated particularly for in want get Titanium if expecting within are or Europe, these on you're we the Rizzo and know environment is just expecting kind Dan rebound targets? better rebound trends, macro hit the to to Technologies, a of is This I upon

Mark Newman

It's Mark Newman again.

are a I while-spread. indicators I 'XX And positive both finished that As the did the and started feel in been than while at Europe -- lot more for earlier, a we said we like have think, weaker are year. look it

say, there. I'd particular, So, we're in encouraged

Dan Rizzo

step-down put confusion. just at step-down? you end going in to from grow I'm for on of You to? the there, referring year a just by wonder little but I mentioned in the that XXXX. then, And was said, what I'm color could the Opteon before you you was the reflect sorry what sorry, and it meant then you're

Mark Newman

There's takes quota quota effect then, step-down about in arrangement And an calendar a step-down. Europe. year And F-Gas XXXX. next in XX% it's

So, step from in terms of down -- quota fairly perspective. meaningful COX a

Mark Vergnano

Mark the technology. just as the F-Gas to that moves of as beginning you quotas Is that of time, that of a adoption regulation mechanism little the And, sort HFO Dan, step-down color bit. drives the the around will, periods HFC it has you give down at and XXXX, if next mentioned, -- that being quotas, of perhaps faster

uses in the European their just that F-Gas the regulation. Union that's mechanism So,

Mark Newman

wrong. down XXXX, not said And I a it step XX%. It's in Yes. XX%

Operator

question the Arun comes of next line from Our RBC. from Viswanathan

Arun Viswanathan

customers’ out as Has I export exports of well? reading situation of were your in there post year. get elevated just perspective reached the to been both you're Maybe there's can Do that been the you price you you increases. beginning side wanted the seeing any on announcements been Asian of some And of the also, perspective. your guess, we've highlight inventory think thoughts from and the I curious, disruption into on that. the bottom? going then out exports what side I'm coronavirus? your TiOX China we've characterize just on China, could just

Mark Vergnano

Yes.

an But, value seeing normal the give AVA standpoint. or is the think you're with -- normal that one create destocking-restocking. low of to probably contracts point AVA inventories would will them our market as we've in levels uptick propositions are have of to that little in levels. than growth of That's before, bit that pull over Right? customers we contracts about side say think, Remember, our fairly I'd to the said our obviously destocking I a the is the was worry we surety that marketplace. from higher the our a for whole -- not to that customers. expect is Obviously

In corporate our side, Asia for revenue most China, is terms our view, for about from of China. XX% of used That is -- the again, in in is really fluoropolymer a really production China of point of is production.

is So, in production used that country.

not disruption And goes from our production of again, whole is that standpoint. TiOX of So, out China into seeing a primarily in that chains Taiwan. we're supply our coming lot

from that standpoint, if So, we're you ways. will, in some we that from feel insulated, that

us Company. have be to kind seeing We Chemours So, with at we're of not point. us. just honest as any it's for others, hard to that anything from And a visibility disruption see this else don't

Arun Viswanathan

And your there thoughts Has what's can slowdown impact any automotive, maybe the production I then, impact your or business? on maybe just fluoro. been fluoro in on there from the get been

Mark Vergnano

Yes. the can be are add continued two standpoint. two end from that weak. off slow continues we've to for any Those the segments, from yes, Automotive XXXX say our marketplace we large business, of And a start two this. on of to a in semicon. I'd as to automotive Mark us But well fluoropolymers as seen, major areas, color areas are bit a

of say first out We expect them. semicon quarter. to pick of I'd up definitely now, as we markets are But weak, those both the right come

Operator

line Josh Spector next the Our of UBS. question from from comes

Josh Spector

fluoro a the and takes first half year. some of on couple puts and Just questions into going next

million you the first ramp, of I as a that quarter all And it maybe that XXXX? those 'XX, you offsetting of quota at think look imagine million mean, $XX How in was around Opteon Do sales? kind quota factor, that headwind And some those at sales. still maybe benefit. offset a an goes in look 'XX? from the do if about benefit of I $XX away you I So, half assume was there is

Mark Newman

to them in quota report So, Mark Newman it's as other are we sales easy again. track Obviously, our income.

So, they're fully disclosed. they're And episodic.

yes, so, say be a And particular the a year based timing headwind in the that's and will a would on I for quarter. full headwind

a as give well result F-chem to also we think and will individual as in of committed basis. our But, price illegal on weak blends sort don't year. businesses, F-chem which have all our of Opteon volume our product We base We imports, lines. F-chem downs we the have of are about business grow both do on continue way very I as a will guidance a market

perspective the ramp-up by through which have But, this year. operational F-chem facility, provide obviously, last year benefit a weaker from the portfolio. to being lot our then, don't On that the Corpus some really will cost had go across we of side the offset And the a plan of year, real plus Christi of that ledger, we'll is this issues as repeat we we benefit prices year.

Josh Spector

more I side. rates back they That's helpful. talked at? Yes. mean, in about say XXXX, thanks. to TiOX up volume happy couple current the normal just that pick that Where Okay, operating you kind kind range? your over the if you And I seasonality. you expect with of right, do are And that's into level mid-XX% coming do are to guess, years? of next or Are the you of

Mark Vergnano

get specifically, rates rates first -- significant we we'll Those Yes, but XXXX. disclose the had here, as don't in operating ramp up We're rates. quarter, That'll as second costs. the very ended as -- operating our the quarter we're year. we don't ramp-up see a into -- obviously lower very the in we'll we confident make at our our will see difference -- our throughout we were at our on in we that we said, ramp

terms things of business. the cost that much surprised little were that's last people I that think, how we added of to the the bit our a one when of is were down year rates, that really in

So, get there year. at we're rates, back through these them move to to the assets are as and higher run made we going

Josh Spector

Okay, thanks.

Operator

comes line the Zekauskas JP next Jeff Our Morgan. of from from question

Your line open. is

Jeff Zekauskas

Opteon or did they Did X% do? sales you or Thanks grow more do XXXX in or how less, or much. volumes your grow about very

Mark Newman

So, think is growing Jeff, I from Opteon that volume a mobile we've at air always digit the double our said perspective. rates our business part of conditioning YF,

with obviously have With illegals the to tone the the side. market price depressing said, we've downs. the automotive price overall alluded on contractual before, it downs, bend we is OEMs, as of price we've And

growing saturation mid in And So, the XXXX. will was or to as market. the digits get we certainly year. way down is headwind to lower price about volume is you in is in fuller mobile in double I'd single the it say, think probably ought They the taper digit start

Jeff Zekauskas

getting volume progress XX% contracts. dioxide made in And of great. titanium Okay, you've your over AVA

that kind the get positive you some normal, theory contracts pricing. my is of of understanding inflationary So, of

of So, up, positive so why that see your XX% in the pricing it turning XXXX of X%, and because of a signed so portfolio contracts? you’ve the if average nature point aren't Is your there is the we X% down going prices going contracts? many going up is XX% other or is

Mark Vergnano

Yes.

it's our AVA when to right, a it's -- -- seeing been side, we of have year has twice again, one, the other then which gets And reset, counter that. you're on pricing, flex a think, combination, on a pricing Mark PPI. contract I Jeff based also the combination

So, resets as at AVA specific time. year, forward. a see twice you daily then, happen in like And go the look price I at terms a the pricing net very market improvement But these times, see we through probably moves price year, what think contracts. going the the you'll flex the of remember,

Operator

Our comes of next Morgan question Vincent Andrews the Stanley. line from from

UnidentifiedAnalyst

Difficulty] [Technical

Mark Vergnano

Vincent. You're I'm question. hear sorry. We really breaking the up, can't

UnidentifiedAnalyst

Hi. Vincent. This Difficulty] on Steve for is [Technical

Mark Newman

A little better. Yes.

Mark Vergnano

If to off. jump speaker, might you you’re want on

UnidentifiedAnalyst

on headset. anyway. But I’m right. my Yes. know I

had quarter. securitizations was a the there of -- side third that things, cash So, into you entered facility you on receivables the

in So, cash And capital further wanted benefiting working you in your any clarify benefit are the to working then, from XXXX all? your I facility? on is just side, this this capital at bridge -- expecting

Sameer Ralhan

Yes.

sheet. securitization AR facility on balance Our is

flow, way it like. not would traditionally it So, free the impact the does cash look

But on we think, I Off-balance is our will balance I facility sheet it. do want a to just facility. right. securitization distinction sheet, make

Operator

next from line our question comes P.J. And from of the Citi. Juvekar

Eric Petrie

Eric It's for P.J. Petrie

include for -- market? CapEx. any expansion million $XXX as growth as a for Of in earmarked to well XX% intend to does introduce expenses grades that You circuit TiOX, you your that additional that pigment

Mark Newman

Yes.

at top-line growth is, Fluoroproducts as good And TT. well opportunities, between that are of a If good just XX% balance features have, and above around position. well CapEx it's couple these a we projects look One balance It's between that. the you all IRR. a growth cost as improving

all And the along. of past, that they're include in that they some the work good moving So, talked do yes, about we've projects. capacity

within part side. we is the have of the that TT capital projects of So portfolio

Eric Petrie

few for were my Opteon you the those customers follow-up refrigerants. announced converted And to in earlier that impacted substitutes? you have question, grades EU, to of year, were those that a Of halt how high this GWP going many of

Mark Vergnano

Obviously, we product was have highest mean, portfolio. in GWP that was product there. that this It I intent was a standpoint. from line line the the very the small

those the already and HFOs, Opteon over made bridge customers of most So, have to forward. going

believe And portfolio continue do to portfolio. I this So, the and don't GWP on high part dinosaurs become obviously, just it's from hurt going to of move our anyone refrigerants is standpoint. pruning that the we of out as

Operator

question from Sheehan SunTrust. final the from And our today come Jim of line will

Jim Sheehan

litigation please the Could any for process you provide as expected? when timing resolved? be sense going update might that an DuPont? Is with And on the of

Mark Vergnano

Yes.

him. strong we're say, we case. and obviously, issues. thought comment in on we'll strong don't magistrate. hear that our in Jim, point whole hands. a hopeful lot of couple months, his legal now So, we back very view with We the And is we a have next I that from the And will a time did presented

Jim Sheehan

obviously margin in to second And on XXXX? generate executed your quarter you What you really moved level? half you had Chemical have XXXX, record and expect of in your margins performance. fourth up, do kind your sustainable Solutions, is well How margins

Mark Newman

a really approach get our of double-digit a go really year. mining we to solutions continued nice this have really to our say, job And Yes. Ed 'XX, as margins business, we year ended EBITDA as growth into with on basis our in the the and portfolio as the we business We've expect business. closer And we his there. done been to back team working to

Mark Vergnano

forward, we remind the margin, and parts this that lots saw was of of the when growth work business was going That additive average that. the a want portfolio we at quarter. that spun We work, everyone of I the terms that up that's of the do portfolio, us additive not segment just the the in the rest XX% EBITDA that we for focusing hard to Methylamines said we you be of of this and in to get of the right about looking this hard and part EBITDA of an to talked mining solutions, to we margin margin on weren't the Company. from the perspective. And that. booked business sale And, with to think And fourth really you other would

helps And so there. that

a and the play portfolio solutions talked work something by hard now for of of the is see focus the several mining about pruning and lot the So, the really growing years you the team. of last results on that we've

Jim Sheehan

the think on about competitor rationalizing could talked that's thing -- about of sulfate more capacity supply-demand I year. do impact ask If What TiOX kind in Great. end Europe region? some in have at you one a that there's might the of the

Mark Vergnano

market for seen haven't we users less of that. conditions we is probably impact tighter. and make those us to really, some any capacity of Obviously, Hard a we don't. currently to Yes. end the those But there's intercept around Obviously, going certain give sense. a anywhere little bit

Mark Newman

like where improve. And conditions see really year. we market our intend as the said it to as to I capacity we we continue market think add, we just share I’ll earlier, this regain see fully we

by encouraged really see we're here. So, what we

Operator

call would over like to to back and of the turn President CEO Chemours. Vergnano, Mark I now

Mark Vergnano

throughout as Well, all encouraged XXXX. thank we by you, mentioned Lisa. everyone, the progress we're very as call, And I to our ended

XXXX. is the fully deliver team we leadership that Our to for dedicated set commitments

So Happy Valentine's as you for Day. interest all Chemours. of always, you, And your in all thank for

Operator

participating. concludes gentlemen, and conference Thank you today's for Ladies this call.

You may disconnect. now

The Chemours Company (CC) 14 Feb 202019 Q4 Earnings call transcript