CC - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to The Chemours Company First Quarter Earnings Call. At this time, all participants’ lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to our speaker today, Jonathan Lock, Vice President of Corporate Development and Investor Relations. Thank you. sir. ahead, go Please

Jonathan Lock

Senior welcome Chief call. Chemours today I and Senior Mark Vergnano, and Officer; Chief XXXX Sameer Officer. and by first earnings President Ralhan, Newman, Officer; Executive conference am President Chief President to morning and Company’s Operating and The Vice quarter Mark Vice Financial Good joined virtually

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

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

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

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

Mark Vergnano

today. joining of a Thank frontlines those would Jonathan pandemic. in personal to you, acknowledgement us to COVID-XX I and operating start the thank for everyone call thanks you like this with and the

we control Those fuel themselves the our and food things support need those this business run to disease. service, grocery, in and that to personnel put we families. have medical and the Our in first responders our bravely gone energy risk ensure terrible help need of to to help spread at sanitation, delivery and have

collectively beneficiaries your of We are sacrifice. the all

their families, Chemours thank X,XXX nearly employees you. of behalf on global So, and of the

COVID-XX game changer. a has been

global beginning business, of have while customers adapting continues we our priority. health in to since created our been the the the starting of the a first be dynamics top pandemic our well-being supporting protecting As year and employees, by this to Asia,

been Our internal swift. has COVID-XX to response

strong all quarter, laboratory implemented and and control limiting measures and the between includes During social areas to facilities. on This first sites. distancing our we our our restricting across manufacturing access movement sites

We use implemented the also mask and health distancing. of additional have temperature increased training, checks, use social provided including

and our would communities our people return over. it’s us and and of worldwide. rules. our our us safety will officials teams to as we with when quarter, home the IT in like compliment and Chief believe teams, customers and in has infrastructure gave working. that our Mark health This customers difficult enabled are disciplined help ahead judge in manner shelter our providers our evidence our until teams and operations. it remote this public scaled office-based outsourced the our place business execution can cost. families I to the work Officer, and We disruption Operating plants health plan health first teams is all running, and and our serve enable normal our safeguard their and very which safe to to thrive and Today, our Newman Early safety to This this interventions to to continue reliably. we formula, leadership period ability first minimal are safely the and of us crisis through early of up government will from well-being Putting early our see and continuity to operating work continue

which first and financials, certain which to of quarter auto weakness for related were out electronics most At the markets, other million, plastics momentum including the call. the saw much first to end coatings. was later expectations. EBITDA with We with delivered saw total, into adjusted and across Fluoroproducts. XXXX first results was In Sameer details our sequentially COVID-XX. will $XXX some cover the carry mining, aligned relative including both in of part and financial we same continued Mark now markets, of Moving XXXX Technologies quarter some and strength margins we in in around time, improving and the performance the Titanium quarter to

COVID-XX, we demand. we beginning greater of of Sitting As consumption period a and having a to on uncertainty. are here into COVID-XX the is are today, result see consumer moving impact

sectors affected transportation. has and wave first retail, as hospitality such The

entire We expect through will ripple the this industrial chain. value

it this of the too Chemours. to the impact point, magnitude However, early timing on full forecast at is and

we our uncertainty, strength year believe we to balance position withdraw guidance. remain driven near-term logical the this and and this Despite prudent this company. full in XXXX of of competitive the it’s demand uncertainty, Given our sheet confident

over in on cash revolving balance the We of majority our next In the additional United more cash approximately sheet the hand an U.S. total, have improves liquidity. domestic We in million cash that Sameer This fortified currently facility during enable our with will including exited cash he million our $XXX discusses the billion U.S. of respond on quarter position cash from with us of first $X with balance position drawn market will of quickly few details further the April. to $XXX when sheet, $XXX of the cash and change conditions the additional we our cover credit States. any first the in million half to quarters.

the cash both improve acting Finally, cash we and are across quickly generation company. conservation to

Let’s details. some page of discuss turn next those to to the

to changes activities, management through year million a are reduce full by our costs structural actions. implementing $XXX cost management XXXX program cost combination we deferral across a of First, increasing Chemours and

hiring reducing possible. delaying are freezing discretionary We and spending external all non-critical spend, wherever

end reduced of that our at improve XXXX. was efficiency units, flight also fixed of production plant costs have We in to structural the something already the

me reduction for team. senior salary leadership leadership a salary senior temporary reductions implementing and across reduction including XX% are company, we addition, a the my In for XX%

We and jobs are layoffs. preserve and a is that are through as dislocation. temporary jobs necessary our ahead to on in of a recovery these can important for personally benefits for preserve believe avoid as I we last salary this move for us the potential this will measures aggressive demand company us our downturn economy speed will and resort healthcare way competitiveness any we other our to taking we to temporary well and further a and ensure everything employees. do as an as side. Layoffs It

savings ahead. We moves as year will on our update the these progress

CapEx full Second, our we $XXX reducing are year million. target by

position we with approximately $XXX the million reductions The growth liquidity originally actions were generation be million company in potential $XXX these year, full the will see of to will built be delaying us CapEx and cash into solid versus XXXX. this significant on we heading we For give the combined canceling expect us When and ballast this XXXX, projects The or uncertainty. targeting. forward. period we can financial of through going believe focused flexibility

time fair share our we to the willingness more than choose success. decisions Finally, this resilient. is words demonstrated make and I Sameer, of necessary our to to long-term challenges. one of again I team before over describe history, it to things there few turn I has short could tough is word In want about If overcome character say the our ensure to management Chemours. This company, the a have

have COVID-XX the been through actions will be Our and different. pandemic no

are resilient X the which grit determination, have and display will over same this last we with seen We overcome years. and crisis us you the

will that, over things hand Sameer. I to With

Sameer Ralhan

on comments X. my begin Slide will I Mark. Thanks

First headwinds stronger Technologies, quarter revenues XXXX. of sales slightly the $X.X down and from Solutions XX% period from Titanium in Fluoroproducts price in and reduced by in and billion Chemical primarily sales These Chemical in in were year, Solutions. last same year-over-year offset volume which largely were headwinds to were due up Fluoroproducts

from was GAAP net X% up quarter $XXX income first the XXXX. million, of

$XXX XX% earnings million, was per XXXX. up quarter and GAAP income share levels. in million, XX% share increase adjusted earnings with drove net per cash improvement share, first an to This adjusted million $X.XX Free flow $XXX of X% per XXXX used $XX in was share. the from of increase an per from $X.XX While

in our a reminder, capital the working quarter. As use is typically first heaviest of

During receivable similar operations. debt to amended our a million benefit from level by $XXX the which with of facility, reduction a in flow securitization our cash resulted accounts quarter, we

a is unchanged Board This per reminder, of record the from as our dividend of as Directors share. will quarter Finally, $X.XX approved be of XX. and a shareholders prior QX of May to payable

sequential first to EBITDA the improvement of of million Moving XXXX prior to flat was first quarter. a the represented and relative XX% almost chart, next year’s $XXX quarter adjusted

a over bridge, and quarter. million volumes the XX% higher partially offset average at Chemical and three across by segments lower prices lower driven Technologies in Fluroproducts in in tailwind Titanium higher volumes Solutions, all volumes by were Looking the results $XX

and of million of gains partially benefits driven in better minimal plant, other. sales delivered F-Gas This improvement businesses. first costs cost the Christi offset all across Corpus we improvement XXXX. quota Fluroproducts, impact cost Opteon Finally, reductions the new These by $XX a performance from were was negative by and in in operational the quarter

where cover giving sheet financial maintain and a balance to us turn Let’s Chemours liquidity ample strong I the next flexibility. will chart, liquidity. to continues

primarily fourth on of from said in was to seasonal due working cash million, cash consumption. of on down working prior the cash we Cash end decline focus quarter the and a This at first quarter. greater million I is generation call, the As quarter’s management the put capital. capital $XXX have $XXX

provides of revolving just Our to of provide quarter. the cash majority with from close the near-term global $XXX our U.S. are also the $XXX balance in dislocations cash cash. of of facility It additional million This representing where cash desire located. reflects flexibility to We operations first U.S. our cautionary any draw of in market. revolver to supplement chose an additional included under to our our million flexibility after million position U.S., quickly drawn half the respond balance the $XXX credit

$X $XXX remaining in added liquidity cash reserves revolver including have Turning via next chart, conditions. approximately our global to Per of the we the credit of $XXX cash, why balance roughly more to have the executed total, weather current global we here sheet, a of current million strong approximately capacity. have the ability billion our facility. our picture $X.X revolver and confident cash we holistic of a billion and position revolving prior if in domestic position. leverage are This of is million and we illustrates our page, draw liquidity, comprised liquidity In to

covenant significant our us covenants, maintenance limit to secured of leverage net senior regards Xx cushion. affords In

As structure. I fourth entire our said and debt space maturities across we call, quarter the on well-balanced have

near-term have senior of no maturities We debt.

and of liquidity. our for maturity Our another maturities well-balanced by space nearest maturity again near-term towers set of implications a no followed is set very with

to now results. segment will call Mark turn our the cover I to over Newman

Mark Newman

Sameer Thanks, everyone. morning, and good

a take and gloves, Chemours the the leader to to our Before and like the serving that member challenges people a for to faced proud this all in thank where we contributions suits the every team have are moment I rising made Chemours spirit am for businesses, started. customers I pandemic our true to cover locally the demonstration of the with protective first I together. we of and would and of responders the since operate. is indeed in It communities proof we laptops COVID-XX

As businesses, it quarter. in Fluoroproducts start Chart segments, let’s X. to most Among Fluoroproducts impacted with the by was our on COVID-XX our relates the

and are reflect fluoropolymer significantly of late refrigerants fluorochemicals other reducing quarter, sales components. demand in a the and lines. number weakened quarter for they Auto the lower end-market fluoropolymers, fabrication demand many Fluoroproducts in of volume both used First and which across product

to On at in progress. Pricing X% to the HFC least through in the slight refrigerant imports with yet the and prices. decline Europe driven a regulators work we illegal have a continue front, the see the into was Europe, control into segment by measures first in of EU to significant refrigerants but illegal on imports stationary amount global headwind quarter,

quota EBITDA for $XX at in XXXX. of result came quarter. $XXX also quarter first lower in million, same in million the the sales reflects down F-Gas This the period impact from Adjusted the

Corpus by improved offset performance our across manufacturing up Christi all partially the our were and facility. headwinds these facilities ramp operating of However,

of auto margin plant and line. an specifically, as highest we North across next weakness America, the Opteon demands highest will in on and product lower have growth COVID-XX, the volume impact Europe of quarter outsized Given our volume anticipate Asia. status one and current during continued reduced shutdowns This unit

aerospace. fluoropolymer We applications also goods, and as our such electronics, impact volumes to there some oil going and expect be industrial into gas, to

monitoring U.S. closely coming industrial be will and and capacity We in decline. of customer Asian the online European which demands, intersection is back

COVID-XX. to fight Finally, against we I good wanted some the to of mention the have work underway support

for suited medical have make them properties, emerging fluoropolymers very some which Our ideally applications. unique

We gaskets in proud have on of been arena. increased are winning cleanliness workers We healthcare used kits, new that new life-saving work in this barrier including this developments durability material working protect fluoropolymers the doing non-woven fabrics ventilators. for membrane material to teams and together on technology the chemistry. helping our of testing help that of look power our fight applications I and leveraging expanded and to to coatings applications, use the ensure forward customers’ fast-track and to am support our the of novel

Turning to here and Chart across Chemical let’s our with XXXX some We cover from PC&I lines. segment. XX, product Solutions momentum solutions our results mining exited

well. second COVID-XX for volumes half spot the part as many closures across the Americas first North our quarter products first quarter of as have America by of PC&I impacted in the However, declined demand progressed, mine driven the in and pricing.

MAP million, of weaker the just mentioned. which and market I quarter revenue $XX conditions was from lower sold we revenue XXXX at First the business, reflecting end

saving However, improving and performance on business Solutions EBITDA significantly uncertainty but better North quarter and year-to-date. up pattern COVID-XX demand XX%. closures are to the well We with as flat adjusted prices to very million Mining gold in being in mine measures basis cost America, a remain $XX hold operating result in enabled business shift a with at occurring some overall and margins of our positioned the enacted spite facing with of year-over-year

costs for the things ensuring performance. control we operational be the Our within business, this on solid of minimizing focus the can will year balance and

cover segment. market. and was year-over-year basis, and the were in a a higher Sales X%. compared sequential steady as basis across all Technologies up decline X% a price. our XX% last quarter additional higher revenue $XXX XX% offset will Moving Overall, performance, Titanium by of year’s XX, were share I Chart million laminates price modest gains in volumes plastics volume regain, to on mainly to On was in regions demand driven down

the of EBITDA In into the adjusted XX% production. higher an reflecting sequentially quarter, first of fixed improved EBITDA better across benefit XX%. circuit to from translated adjusted of margin $XXX absorption the XX% million Margins cost due to

consumers’ normally the to ahead, DIY quarters, over demand increasingly next As TiOX two the demand our we it be in by volume Coatings the and look is will forecast year. peak repaint supported difficult and likely period residential slowing COVID-XX. lag newbuild the of capital due with given real the on goods stream. in and well disposable markets spring, credit estate part early likely transactions as income to activity Automobile and will pressure

own changes through We our demand are chains actively monitoring customer any demand needs to to we move the quarter. their supply as and second adjust

channels challenging Despite unique will which offer. value market our times. a assets, our strength demand TVS segments, in continue the especially believe to of and challenging stabilization to portfolio outlook, Ti-Pure have propositions, appeal All in these different value we

volumes over AVA months. predictable And predictable distribution enhanced pricing be with not Our supply geographies reliability from with continues management our in reaching web-based next backed unique operations, the AVA capital supply access These contracts and benefits or market on of to chloride pigment to begins the offer recovery alongside flexible by our through market prices. or all method quality working in gives our channels customers customers available highest chain demand Flex. the are Flex lock class world small today. once preferred X plant

back that, to With things will turn Mark. I

Mark Vergnano

that action emphasize response I the COVID-XX. would in to chart, to Chemours like Turning last is taking

the a start formula very the I supporting our putting the As customers health have first. of said simple our and of employees at call, of we

spread and offices, quickly protocols to facilities. manufacturing enacting help safety COVID-XX laboratories by company of moved the all across the have throughout We our strong prevent

we our by health well-being to to will proactive has continue and impacted by and health safety not been COVID-XX the of be people. ensure employees’ and large Our

operating workforce to competitive communities. The stand We well near-term will any of and continuity an throughout of Chemours crisis. times. uncertain to enables local these by the disruption. advantage and our safety is we this in health customers operations to incredible believe to of our running and this plants chain up are our through our manage supply enables us provide is flexibility and customers us and our supply and source our All support

the we balance believe in of strength our sheet. Secondly,

certainly including we did flexibility. measures year, billion the magnitude billion preserve this are not of cash XXXX. this $X.X to have we believe While of of $X taken that hand, into we event prudent financial anticipate With heading we an liquidity, remainder of on well-capitalized

We have no sufficient near-term have maturities covenant headroom. and

will present a immediate financial dictated including by reduce which that by challenges, Finally, XXXX. acting to we strength will economic the COVID-XX million measured prudently cost monetary terms. $XXX pure actions environment health million rapidly cannot by reinforce are be and Chemours, $XXX changing CapEx in in of

Our the X,XXX in ready employees out to go around and by serve stand virus. to assist our those this fight Chemours communities in COVID-XX. aid hearts and affected world, the our our render customers, nearly against

please open that, With for questions. up the line

Operator

Your response [Operator Markets. from first Please Capital McNulty ahead. go BMO Instructions] John is from

Unidentified Analyst

Hey, good is John. Colton being guys. for on morning This

on the X%... So

Mark Vergnano

Good morning.

Unidentified Analyst

Good morning.

pricing, X% can or versus on of little you mix of was in sequential how the On much TiOX talk apples-to-apples much a it actual decline how was product platform price selling cuts? that bit

Mark Vergnano

mix our almost you that little in us Yes, all was bit terms mix. mix fundamentally when was regional for it mix. likely of look well entirely But at as most a channel of

Unidentified Analyst

a little core feedstock your of the Okay, And great, bit side what forward? you I’d seeing to second, great. is what That’s kind helpful. and just love outlook hear are on going on

Mark Vergnano

Yes.

be at in the got know a last are to before, bit as really but going in we what on of dependent a of as are ore not we our Obviously year into ore need point. this of inventory an and sell. we change set in we we everyone little And ore not all forward, high from to what seeing continuing tight buy this now, we whole quarter need significant feedstocks right it’s change in again, fourth a you perspective to seeing to So lot going grade demand cost year. are terms said

see from very guess So pricing standpoint, to if would anticipate guess, wants to Mark to ore from the of an we I But say to he had going kind don’t a to but would I put add we and that perturbation are can, cost we I confident not Newman maybe in that much fluctuation a market. this, feel any standpoint ore in us.

Mark Newman

Agree, Mark.

are We into good buy the coming year. for levels our with year. well situated this had inventory We ore

think I seeing a here not of are So this environment. we lot inflation ore in

Unidentified Analyst

Thanks guys. alright. Alright,

Mark Vergnano

Thank you.

Operator

Thank you.

Your next Goldman response Please ahead. is from Sachs. of Koort Bob go

Bob Koort

of you. tried I that cases another guys Mark, level one guess Thank than tree us the And years a in war we the the talk wanted ask round maybe been so wasn't you in higher few litigation in there? quarter. saw What but. that is bat but can the was a that we on had over news August of expect the to resolution sort there kind and progress I has until through on you the past you some first back a of couple had guess front, lot I next might decision good deferred a the

Mark Vergnano

very points basically one the to that and were we is us Yes the we other down we'll and through about talked which have on for said go we the of said to path and process to that June of next always appeal set there points to all guess are to X tried happen appeal continue of tremendous for be now but until judge won't the the which things we again points we had we'll have appeal we go journey work given up Bob August potential as we in we're appeal number potential ready and side they have right settlements that first folks then the the have scheduled some process to moved got that of on go going trials have you of next was to settlement think two amount trials. strong and August so cases these continue were set circuit we you those originally and always I appeals the to DuPont first for very that the as an one, getting as focused I so a was hung know through one

Bob Koort

Alright.

be you a curious On AVA the those still just Should or years how PPI we biggest of of those for held expect light established back other some customers inflation? with macro initially pricing that now to to I index contracts, am where your sort couple kind in and. of volume

Mark Vergnano

I 's they we share the of for your felt are PPI and of think year. standpoint well will from kind a share need that's don't like values due no well contracts you said for set point based seemed don't is because Bob they our they same have Yes, always they the set with the adjust COVID-XX right we an was that selling actually the worked are really will the a situation inventory because we world that buying especially far. get coding that like to they're a these their people before know buying up they yes know on of down extremely meet in demand I what work value to they've demand price twice have our customers if what beyond question we're a everything extremely so on now they we also and based one contracts the way customers when into best seeing and to as worked hold specific anything volume work it with they so level way what because have we're so AVA a now going they level some needs half the arbitrary down on their buy But had that goes now right they of consumer

Bob Koort

it. appreciate I Great.

Operator

Thank you.

Spector next response ahead. Please from go Josh is from UBS. Your

Josh Spector

for Thanks taking Yes. Hey, question. guys. my

late polymers differences maybe are color saw the any between what Just chemicals you quarter early and last and there wondering within in and quarter if perhaps you can difference in any Fluoroproducts quarter? within on the between of provide in portfolio, terms the volume the

Mark Vergnano

fluoropolymers can a down auto little towards driver of saw more and if in pick more of there up side week end as actually start to customers was from was Europe you Opteon don’t in look fluoropolymers in Josh in electronics being the toward our that Europe curves that. Yes, if places the automotive you color our fluorochemicals crossing down standpoint in know add is volume production the semi let in of end the quarter some say so will. the Fluoroproducts going going drop facilities that COVID-XX have either start automotives Across the you me the you Mark but really I started refrigerants really electronics that Asia you Automotive those the and of because first when facilities at bit and really and Mark that you cases Opteon sort saw at in the to get primarily down or of into midst end you really production the as so so automotive. when opposite epidemic think right you Asia any in then side stopped the they lot the a two U.S. the into to Opteon end started quarter slow manufacturing are the two early which was Japan you the want I that to and you significantly and US and by to to are said fluoropolymers side slow of of shut the weak the quarter within on primary slowed down give slowed on auto look our or primarily now of is quarter be a color the toward go was

Mark Newman

Yes.

up pronounced started impact the to in you quarter we between in but especially a books think COVID-XX the just to said, the towards of come build was saw, quarter I impact the but back stronger to to see had impact end see polymers more quite Asia overall similar the the on, semicon. pick We what in volume on on I'd two was somewhat of which say started Asia started different. the order we Mark, So as shape

on the into of As that half second of Opteon you the pointed plants quarter. to America carry we Europe assembly in business started YF, then shutdown March North and really refrigerant and especially the that'll see in second

on say quarter I the in going but the same but impact different were second forward very higher So in is QX to refrigerants be shapes would in with the going quarter. they quite

Josh Spector

kind gain quarter? yours thinking about of are kind Can Thanks. to of some next lot the factor. on or volumes about to have share helpful. And I tougher range and estimate XX%, maybe uncertainty your That's stick on know a side down XX%, any TiOX of given a maybe provide there's volume the on then the competitors but talked you XQ of being in thoughts how you're about volumes

Mark Newman

Yes.

So plastics into we out as we in market in came of, sequential why think impacted very strong here or but basis construction in on a as see DIY QX. volume where QX. think we resilient we I go the been is activity Obviously,

we vis-à-vis QX a slightly is have basis. expectation sequential my on So down

Mark Vergnano

Yes Josh.

we just more if a coding I bit to the you data is be architectural year producers Mark's in think at to anticipating think just note going had little some plastic with I going add weaker quarter who be of Mark point second you access that you hopefully down it's to the the the said bit think to XX% as I will Mark to area if for to the that. quarter side so volume as on saw think important to XX% The really in quarter see well strength out to new total first really that forward. second but continue came and seems and TZMI look think an DIY that performed said good that I says a that little they

Josh Spector

Okay, thanks.

Operator

you. Thank

next Your response Please Fischer go of is ahead. Barclays. from Duffy

Duffy Fischer

gases side morning. you've good us walk in there. segment you volumes the the could seen through just Question on fluoro on Yes, and the what help polymer

a As into in some are and or April volumes autos May. talking people down XX% XX% lot and of going people

do things of are to So inflection as you what quarter-to-date think do when start did there kind you seen June? customers you get in with an your talking and you see better

Mark Newman

Japan Opteon Yes. got these Opteon because into refrigerants very about to through Duffy, with Europe if think the think separate in issues working pieces with applications it's and so in stationary illegal about of sales you The is with you because restart that weak. stationary automotive we're separately, still production an you Opteon going in to be in these imports. Europe and facilities the going until bulk automotive and in see U.S.

up XX% think northern out that that's somewhere automotive. that's restocking seeing we refrigerant into in outside numbers line I XX% side ready be between pick up said a a been a restocking all that we still you in see probably into you automotive normally that the over then you standpoint Refrigerants right and seeing semiconductor the automotive weakness seeing people and what sort where we're of automotive of supplier where side would when side the equipment especially guys hemisphere going Opteon and are of restarted to on reasons second out in from the are the say see come the just getting just the would going that. for volumes pick big that the on seeing side but what of Asians reduction would know with normally are there the from as of semicon I right that positive summer this to shift we of we than quarter the now that’s because when in some again see for standpoint slower are and from as facilities pandemic Asia you polymer lot portion on very big seems

a you think give can’t I I is to So going date turn when this around.

the to think thing to I watch going when manufacturers auto be is restart.

think going be going going I big change delta, that’s things that’s to the to forward.

Duffy Fischer

as worse – the kind do or decrementals guesstimate XX halves, fluoro then volumes what’s should once volumes put about are Okay. our we or two think volume end decremental decremental the further? on down how where drops on up, XX, or pattern and XX And get whether we of does margins

Mark Newman

Yes.

the are going it’s a So, Newman. we QX The strong Duffy, cash go about Mark we I to generation. approach it through to focus we is way on as are with going – think business run

So, obviously, margin our you refrigerant that is business business. high know a

good on a pretty of margins the refrigerants. if variable I you think So, have sense

the if think on you an the should running we the second thoughtful are is to to for cash, as quarter. be perspective impact very in think I earnings we inventory the about way much build going into product how are you business

as bit on us with go there think going fact be off the in said, ready that where left earnings significant of as we higher business, decremental And of you we so I And in the recovery, to through the sort improvement operating for but our then as in performance, cash. than a recovery. quarter, pickup could the the both if QX of and impact very you noticed which cost be come Mark quarter to will be I operating analysis, performance pure strong know we encourage don’t out fluoro really about are the in we margin business little being just to the thinking for

So the fairly we way thinking are dislocation is QX automotive. large it from about volume in

are to with We it. deal going

running strong going about then to business preserving going and globally. automotive to We are thoughtful to up our be as cash are ready up we with customers, ramp be for ops and the really ramp

Mark Vergnano

Ed fluoro lot credit. as we Sparks give operating a Mark’s fix last hard to year Duffy, to said Newman those. Yes, we teams as I of their significant that and with Mark really They some point, side problems in worked well had have the

we So extremely operated quarter. fourth the well quarter. of We extremely first well in coming operating out were

fluoro have and mid-XXs margin and we build We inventory quarter. a first that no excess from in automotives inventory. need are don’t ramps we in the the to is of said range for the production But not perspective should of have to going facilities excess – were said, think until business you build Mark us always up, as we for there

inventory customers. right the have for will our We

are we they extra we ready it, inventory. them for So but need don’t when need

instance, the through do a flow because want the rest quarter. in We just system of costs, So better going all to long. the inventory idle to high-priced that year having that’s be position mill the are versus we taking year for we second for in

Duffy Fischer

Thanks guys. Great.

Mark Vergnano

Yes.

Operator

you. Thank

Susquehanna. Carson Please of Your next from go Don is response ahead.

Sandy Klugman

on Sandy Thank you. It’s Klugman for Don.

are expectations First in question, company’s and QX? your QX offering the rates for what what TiOX were

Mark Newman

as operating just XX%. we sequentially in better to the XX% I’d saw you – we quarter results materials, Yes. said rates we improved margin say QX, saw the in of operating out from our coming will EBITDA see

to fleet. share across with we produce with as and our share increases I have know being capacity better you market line the more time. ability as consistent rates our in we So our Obviously, think more over are demand still seeing operating

Sandy Klugman

Thank And then… you. great. Okay,

Mark Vergnano

Go am sorry. ahead, Sandy, I

Sandy Klugman

No, no, continue. no,

Mark Vergnano

in going demand. to we the just facilities was Mark’s terms of balance to I No, try to our production point, say

see dependent it’s we as really that from going on what standpoint. forward demand So, to be going

As maintain demand some and that will flexibility the operate on but those depending we do try operating in rates picture we is we it of smart we you have in right assets. how what guys have grade the will flexibility know, to ore those, in the

Sandy Klugman

the I the moving of there – Okay, investors for are aware that the And sheet, insight. any thank appreciate then covenants have? currently in key you. to company this be should instance, balance

Sameer Ralhan

have from as Sameer. Yes, where covenant, – the you are of our look good but will pretty this we point we at is yes, about significant outlined on we the feel covenant view. our credit that’s flexibility we take I room we maintenance presentation, when facility Essentially do in so have our covenant, a one. this available

Sandy Klugman

constraints reduction just of a And have you. just thank the refrigerant final Chinese in exports question, QX? region’s into Okay, the seen you given shipping EU

Mark Vergnano

likely was gauge in well you has to would the case. China in year as that us that for down as of perfectly. everything beginning as say the way most hard But been been exports. that production It’s know, I Yes. the

as has that up been China think I started consumption slower. country to inside the ramp their has

sure too now well. is of that there see level it’s exports some that. are think continuing But am that right early to I really as I So

out, would that delayed all been the seen haven’t because well. statistics come that’s normally We with as the pandemic

is we So, anticipation my will lower, but probably see.

Sandy Klugman

very you much. Thank

Operator

Thank you.

ahead. Laurence Please is response next Jefferies. from Alexander Your go from

Adam Bubes

Hi, or anything Bubes like refrigerants, would was are seeing this that coronavirus today. impacts HFC to your I wondering regards any the for outlook? you there is change imports Laurence on of illegal Adam from in

Mark Newman

would we overall million deterioration with COVID-XX. of terms in I the online. quarter, we field versus in the our what not did as the business million there curtailing also refrigerant across chain fluoro you we say not in have feels business I would of see like on supply Mark certainly illegal year-over-year, but a China last year. would Obviously, lockdown of sales But limitations coming a of any in saw further said So, the with further to refrigerants, question we delta in out when is some practical Europe prior Europe. issues down coming say but in work it early imports what China the sitting in today, some you seen are back the with overall, that’s our we to is at quota, year. look seen point deterioration any $XX is versus results, last this refrigerant $XX year What I are have quota here in

both when sale quota spite business. fluoro reflecting, and and our and the comparison as continues of operational headwind, say sales year-over-year are headwind, a that you earlier cost results we our of results some So COVID-XX polymer significant our would improvement at impact said the say, be I would refrigerant to in our pretty but I impact in on of look quota terms

quota So the the the and the really results. overall on quota impact and we cost in on results operating happy COVID-XX our with performance are offsetting impact based quite

Adam Bubes

I my demand thank wondering much market this if question, share of volume I wondering was gaining and where $X.XX you versus provide Okay, very more And are could a then you. how the That’s sequentially? color on bit TiOX, helpful. was second just is volumes little increase in

Mark Vergnano

Yes.

will in give we I So little a you the detail will some primarily we standpoint. from Asia primarily we when those But where the believe standpoint Adam. on at most look maybe bit you start that about laminate of that again had that, think plastics and think off share our better it Europe see are we lost I area, say if you from and can driven we and Mark it, of would share gained the and that

So probably you where the at where biggest saw occur, look volumes increase. that would we be if increases year-over-year

fourth standpoint. where don’t probably gained from So And know that year if well. then think the I sequential volume, was slight about where we first we want lost it most that? to ago is a quarter add you quarter from a share Mark, share areas to anything to increase year as this

Mark Newman

to Asia related and globally business plastics somewhat how perspective value packaging again a of made a X% on a above COVID-XX. more is that a say related strength portfolio to from our comments have would we the strength a flex regaining up a say just volume Mark XXXX the been big with Sequential have highlight plastics they probably their purchases also of plan half in terms I'd been lot the Yes. from bit really we more I'd very our laminates. which in add in is in of on probably leveraging little focus and recently with consumers starting regional to we've second saw been and channel I echo seeing share perspective ecommerce to

we're discovery lost really where us. of say regaining patterns price that's leveraging flex would for we're which as as really helpful had it, I So well been channel customers terms is helpful understanding in we and share our areas in order

Adam Bubes

much. Okay, thank you very

Operator

Thank.

of Your next response ahead. go Stanley. Morgan Andrews is from Please Vincent

Steve Haynes

It’s volume and about the second of actually question an in you in earlier quarter. to being made kind sequentially to slightly Steve on for volumes TiOX a Wanted come Haynes the response to Vincent. comment down I think back

what kind bridge of been saying they're to some of second some wanted significant declines customers I the pointing have So pretty quarter. for your coatings that versus help volume where

June like of and you if how for be apart June terms maybe April May expectations for us been helpful versus May maybe understand? guess in split to would could I So has and

Mark Newman

Yes.

is say this you versus that would Right? to quarter So we're anemic happening going see we're to view. pure that's first demand seen remember say that’s seeing would at starting well would the be April I some of down coming that we right we really demand think it's point now what was So but from are fairly say will, strengthening if based I reacting I this downstream. now on what point we've now,

market in market be about by that gain that to going lot can to into right end getting a we're be we've the try a it share that from our before And those do share but talked place so to to believe on we have pandemic back of we've beyond gains get we to gains share. needs might know goals with what to path the of XXXX capacity of last what us share year. not I we pushing take said is would So trying been steady we XXXX

to It's double of say to digits is volume I'd is weaker the I in what is a and TiOX are so I little signal much going now too side. started little but as look in the a demand Adam seeing downstream on pick So I May said a and with bit to little it's perspective honest going right the I demand is volume that telling a the be is very the quarter to the for think us second that see. digits And to a off we'll going low we're really low I tell early slow bit bit be dependent single be think to this in is on just quarter it June you we've June going quarter. like what think from up seen tell the quarter

Mark Vergnano

thing add is see. and a only of go have and The lot the we the second quarter just Mark part Yes here wait into just I'd as we'll there's to uncertainty of

Steve Haynes

appreciate I it. guys. Thanks Okay.

Operator

Thank you.

ahead. Your next Please Juvekar of Citi. P.J. is go response from

Eric Petrie

Petrie. morning, It’s good Mark. Hi, Eric

Mark Vergnano

Hey Eric.

Eric Petrie

if cycles? view slower cycles? fundamentals you currently TiOX capacity pricing compared Do prior or stable down preventing in recovery is been you to do has reductions more think How past

Mark Vergnano

think fact not if you're stimulus now inventory stimulus some end what think I be run a is turning it’s coming when to the this stable to off to had you're past have have that at that right look But well around see Mark turn is excess of were GDP additional might had seen responded Yes. I course its uplifts some had to bottomed went going largest a has stimulus when pandemic down hit as probably going add I to a of upside last you Eric start coming it. and industry before happen initial remember you one largest going year color usually it's the we are the pandemic very so fourth you it we prices destocking think that starting have industry back back on demand of then out seeing that’s of good into the and we in were is GDP we feeling to fairly starting curve hit and to back of stimulus of starts end out the a at and whole quarter so that peak to sudden come year I wasn't the third were the so you're have we're and also so were that going situation I probably not drop and coming you side. up of of the end think as levels we then very and slow driven sort were and in of a construction second the this period is would what that this at cycle downturn period that its so of so think the when in will a the the to in which start think this event a off you the different very again the say down give from demand cycles pandemic I people this this you when sector from of extremely different especially things going into of pandemic pandemic because probably situation in it and out in buying or the absolute coming the least at to different industry that's coming my this to an of you I thoughts a are well it's this kicks demand as and of destocking and there destocking off of the all you

Eric Petrie

And the auto the you. Fluoroproducts Opteon the has then commented conversions Thank Helpful. or a on Do in hold and to back? given Japan by you full still XXXX U.S. production it bit prior XXXX cut expect you those that OEM by business, changed

Mark Vergnano

those hold. Yes, our anticipation, still

Eric Petrie

you. Thank

Operator

you. Thank

Robinson. of next Please is from Sheehan Your SunTrust response ahead. Jim go

Pete Osterland

for on Pete Osterland is This morning. Jim. Good

impact quarter that expected first sequentially you TiOX Just volumes a were be of quarter operational revert fourth there? level question closer reduce quarter. how you the down then anything to will but there fronts the margin bit that the in margins Kind on is they were are the do second what up could next to the on in XX% given that doing that a quarter or expect in under

Mark Newman

that approach primary demand quarter typically move be globally the quarter needs customer in we we going of how be we look be the in impact of driver to the as we into forward in our would point in operating going some we're terms been our we've the don't made meet earlier to quarter. continue flexibility at production Yes, to by to thoughtful of the and earlier terms ways Mark the market but share said guide very to of of time very we in to quarter fleet giving marketplace to we're margin as as gaining in thoughtful as our here approach light

Pete Osterland

Thank you.

Operator

Thank you.

go comes question ahead, Arun last RBC please from Securities. Your Viswanathan,

Arun Viswanathan

Good Thank you. morning.

Mark Vergnano

Morning.

Arun Viswanathan

taking for out some just TiOX you there price when increases you you look some expect had curious I'm success QX you Thanks the curious that and table given and recent am the situation? any question. do in patterns into just my Thanks. the potential of discussed just order I on QX still

Mark Vergnano

we have be from I what's it's in on suspended the a demand AVA pricing beauty from on as prices we why think side set the I get side foggy terms you that of fit the what real that good point say higher our the our know this so AVA flex done. are than had a for to is you Arun know we the portal going obviously see point you that's going contracts to a trying is was view would are picture from portal contracts bit what us our guidance our at rest in on of the contract year of earlier Yes, year what in we adjust what don’t year of we'll TiOX later of portal least the in that the but can little in

lot the of this is things right drive best way think to now. So be this right TiOX industry I think going about is specifically, the now going to industry demand to a

guidance we going demand it’s at is this us very year, to in time, what of So, be don’t on I coming it’s not not are think – really be capacity think bunch board, going going demand for it’s what of it’s looks about point that standpoint. to predict half is hard you the and in second a the to which why to supply, from about I withdrew like

Arun Viswanathan

somewhat just an maybe share or from was mean maybe last you meaning actually in some regain given too you share years are at less demand, back? I Thanks. you is for would then that And taking was that and there look And financially those when couple maybe I of that this Thanks. suppliers was I Great. guys inroads by to continue there environment flexible, opportunity in of the curious supply that China. guess some there expect competitors

Mark Vergnano

Yes.

are are We we to be about demand standpoint. going any to not cause going to our marketplace the continue going that said that going as lower from in I are smart are And forward. in on we regaining a we share issues path if period,

that you in we is I China the do. a We very will drive right low from of a had the slight where going dislocation think on need first in demand the year. But standpoint to behaviors there quarter

a bit export why I little And so higher. the think that’s saw you probably numbers

As I think demand in that raises will stabilize. China, up

So, that’s move somewhere. to a China of demand in more I think product trying of than function suppliers

going to be So close drive this demand is to industry very we stay and going again watch the is very to. interesting to going picture to whole are something and demand

Arun Viswanathan

Thanks.

Operator

you. now Vergnano, further this At back to over Mark CEO there I Chemour. call to ahead. no like Thank would President Please turn the go are of time, questions. and

Mark Vergnano

Thank everyone I I saying you, don’t ever imagine you thanks I think for Ditomora seeing but this, really myself and guys. miss joining.

you for together able So, then, I safe. healthy am Until of as to Chemours all at all I Company. stay and hopeful get point. that always I hope we some stay to are your you you support hope going thank the

Operator

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

now disconnect. may You

The Chemours Company (CC) 6 May 202020 Q1 Earnings call transcript