CC - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. Welcome to The Chemours Company's First Quarter 2021 Earnings Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Jonathan Lock, VP, Corporate Development and Investor Relations. Please go ahead, sir.

Jonathan Lock

to Company's welcome Earnings Quarter and Call. Conference morning, The First Chemours XXXX Good by President Operating Mark Officer; today and joined I'm Vergnano, Officer. Senior Ralhan, Vice President Chief Sameer Financial Mark and Vice and and Chief Officer; Senior President Newman, Executive Chief

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

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

Mark Vergnano

the to since COVID-XX continually beginning the on everyone, been full have X. the on first focus bedrock more entire the operate. in has the begin people supporting which our and today. commentary would safety our that I and while That I has a Jonathan, and It period. global safely believe, with commitment pandemic. momentum. us the our the and recognize what our I'll year has now to to it Chart base you, our over employee time, X thank difficult families serve has quickly been customers us gained highlights by communities the North customers Star, recovery joining as but impressed than of you, company's been of of Throughout like efforts Thank allowed we is hard for quarter their my respond

amazing. focus, truly Your and resilience diligence is

our the strong as to $X.X demand the the moves laminate at Looking the encountered months the are few X% far renovation up with and quarter. Net rising on to in DIY $XXX EBITDA building a rose segment, second pandemic. and weather XXXX. QX remains we million despite challenges demand what remodel adjusted been continue to final world Titanium the plastics XX% to sales strong tide we results, quarter. hope In of billion, Contractor into Technologies strong XXXX, momentum of the have coatings, from thus and we demand see in

Thermal continue & customers remains proposition customers automotive despite to segments to add segment, our family. Opteon TVS across for rates. value Our see the all of Specialized strong to AVA the long-term contracts, we and new In build our Solutions demand continue constrained

Act EPA We warming refrigerants and transition supply conditions automotive a and activity in portfolio end global U.S., has the believe supply lower robust Opteon later toward a demand our of applications unified and across the been aftermarket. to tightening to our to strongly across the year, restock, as stationary is the to normalizes. blend in Demand as transition Performance margins markets QX In a demand expect most proof in majority in rebounded segment around global end solid world. Commercial this to continue markets. overall was increase ability Advanced growth point technology we see the chains the in Materials has framework HFO our the under underway. adoption increased, across AIM APM creating has implement

hydrogen In semicon, addition, we the in continue to make progress economy. key growth against and our XG programs

been demand storm Uri the quarter. has winter profitability strong the our across affected in board, While

Our responded concentration U.S. this the more customers. the impact all assets am facilities affected of will proud and way Southern on key impact teams with operating our region in segment the largest has in Texas. segments, and with Sameer of X I but detail, our to our Mark the minimize in our across results quickly in people, sites TSS discuss plant

first Looking the winter storm continue in the quarter. ahead, we to gain our outlook headwinds despite of confidence

XXXX $XXX adjusted low the year EBITDA now As are billion $X.X our raising a $X.XX result, between guidance by both of high We end the full of project and and full year billion. we million on range.

We our million Mark also free guidance flow cash guidance raising will million. you greater through higher by to later $XXX take our are $XXX Newman in the than presentation. targets

review our Solutions of Moving business. we March, strategic a beyond Mining financials. In announced

the efficiency driving maximizing have since the improved Solutions of know, performance focus business, all an and with behind portions operating you significantly segment improving commercial shareholder attractive Chemical investing the As we value. of stronger spin, most our to eye

the of our review, later early days but share to in hope the in some year. news are to We have

our always issues Opteon helping our pursuing the inspired goals our products our of Turning ambitious achieve include not to evolve goals we membranes, refrigerants does fundamental products on aims portfolio. goal. reduction leadership been achieving From Paris so, X will world standard. by a our to people, commitment The on and the Since planet emissions Chart from we scope Nafion set Chemours XXXX These shared Agreement. in XX% climate we designed carbon an to achieve corporate net X. XX way XXXX, a the in our doing announced climate-related and climate. were industry. responsibility absolute XXXX. first by and have month, chemical to on push Last our X lead operations This to in of will scope industry, around extended designed In of profound are the updated launch impact higher zero to report the the chemical have and a ourselves,

CRC our guiding through shines With things for program, I for all will our detailed Sameer will these in commitments stakeholders as results. to over that, know future. to the light I more a commitment Our into look Chemours turn a Sameer? long serve our and at

Sameer Ralhan

Mark. Thanks,

grew share by per $X.X the in improve Turning first GAAP compared million first quarter. Storm segments under end to Uri. rose $X.XX Adjusted Results year-over-year demand by Demand EBITDA were $XXX to quarter to share. per and with Chart fixed in EPS was at due to XX% X. of QX continued or $XXX net basis. the EPS from million the X% a up sales billion across solid on in EBITDA to and Winter QX. million most as was markets. in quarter $X.XX $X sequential to impacted nearly steadily created strong was costs year absorption of adjusted related operational negatively Adjusted prior $XXX disruptions million came

As were a quarter. to XX%, percentage as in margins X compared lower point the quarter the result, prior year

storm-related more million. on expect the the charts. headwinds detail second CapEx was in I'll cover these quarter. We $XX through subsequent for the quarter cost ease to

million from use was million, up prior the cash of Our $XX $XX period. year just

dividend in Chemours a we several cooling usage quarters, results months. May the as and quarter well our our summer to approved against a our inventory cash, markets. cash from prior to XXXX. customers And have of continue record for XX, put On April coatings on strong season $X.XX of past of the ability This in anticipation to with we the and believe positioned quarter in quarter speak shareholders spring will share. to that be strategy. build to core XXXX of is both Directors quarter, we second First is Board and per as season we focus heavy Consistent serve typically our payable XX, our are of execute unchanged and a that

consistent continue to our shareholders. dividends and to deliver We stable

This XXth cycle. parts return of shareholders economic at consecutive of dividends cash a to through of quarter the current marks all the stable the level, quarter

Turning to Chart X.

the for first adjusted review bridge Let's quarter. EBITDA the

by of and costs that quarter were remainder first remediation costs additional expense the top million the Customer quarter more line Winter in the Storm adjusted the price the and company. headwind a offset prior EBITDA year incurred but quarter primarily cover some remediation in period. than a First up of at $XX million, were supply Currently, Works. X% chain, on was basis across in operational both the strength year-over-year a chart. contractual next and the environmental $XXX in legacy were big favor. The match from the first move mix story continued XXXX our were euro-U.S. exchange rate stronger downs small headwind, Uri, to related to quarter a first here the the were in related and costs I'll with Fayetteville as to Higher benefit quarter. volumes Higher in a

X. now to Turning Chart

Our of results issues the impacted remitted Winter Storm in QX Uri. one-off number a were by to

While water in to situation pipes, in our to supply obsession to I'm logistics chain and Storm tirelessly buildings, our are and safe qualified freeze created deep safely and access several to from from repair capability. means to lakes. expedited Texas by the were the new Preventive road employees proud to much deployed were utility disruptions majeures. stranded supplier transparent power leaned here, pulled materials at ramp minimize maintenance source Working cut around Chemours and to our site critical scope service we we of dynamic responded the and no hundreds teams as safety clock, wanted as investors. thoughtfully the The steam exposure very quickly this full raw solutions for our operational southwest force our how issues forward, across be of our of unique into schedules of customers and of and locations. Uri freezing the conditions, Extended materials due return other were critical the team back creative unprecedented and countless and utilities unsafe damage burst disruptions operational conditions. Winter challenges to

and a As adjusted storm, charges. plant quarter are items of of utility from expenses result from million excluded incurred repairs higher-than-normal These the first $XX EBITDA. we

primarily of EBITDA. quarter absorption the However, fixed related expenses disruptions segment TSS under plant costs, included the $X operational million adjusted are first from in to stemming in of

Let's turn liquidity. to Chart X, where cover I'll

Our cash balance strong. position, remains and liquidity sheet

ratio We dividends. XXXX cash $XX returned end quarter. Operating $XX billion. net of quarter form flow trailing cash net of was million, in leverage balance at the the resulting was $X of debt. to gross We the first billion, with in the X.Xx. the $X was first cash of ended $XX $X in Our billion shareholders approximately while million first CapEx Debt million of of quarter was

Newman, Mark continues, demand from that, toward We benefit Chief positioned balance the Officer. the well continue turn liquidity recovery of things over sheet I'll and well to year. as have to perspective to balance ourselves our With a from and be the Operating Mark? positioned

Mark Newman

Thanks, to speed. Titanium I'll outlook improving gains you're strong, recovery first Sameer. Good the well. hope economic Technologies safe QX categories everyone. Ti-Pure Chart Technologies demand all part has the and of a I momentum XXXX. experience results pigment our continues end demand across and On morning, remained the segment. into as X, the cover sign that of geographies markets, all carried from and Titanium product

heard support global As in and of and teams But rallied headwinds both in from supply logistics logistics chain operations, customers. Sameer, the their were have you our issues Winter quarter. Uri our Storm

availability around I proud ability Ti-Pure AVA at contract have our our our customers, We TVS long-term strategy. high-quality the prioritized a of with pigment world consistent deliver product our our Flex to robust very am demand continues of and competitors upward, has grades. stronger Price struggled. product have some conditions. to spans on regions and reflecting Activity when portal all inflect time for been

are for continue result are provide. we dynamics, drawn long-term contracts the new these value with market deep relationships sign service a long-term combination of that who to new As foundation demonstrate customers TVS, and Chemours of and can up quality of the AVA customers. supply to only these reliability, These tighter the

Turning numbers. to the

globe. versus despite the customer to First from quarter slightly basis and despite for headwinds some the logistics XX% was increased net prior million. $XXX and the around storm segment product $XXX sales to sequential a winter issues year. the drag. on XX% the Price Volume rose rose up million mix EBITDA XX% Adjusted

to we remodel renovation to balance and return are As tailwinds. be more us strong We throughout and and volumes stimulus the AVA infrastructure believe believe leads look longer-term the will a year. order normalized of patterns trends strong, providing growth ahead, that with potentially QX in

and proud has the to with Over to the steady make the the significant to coming of intend Through pivot year-end. ability goal should gains, ever-changing months, we of coming course across market share our to next setting business all, the our quality the the of the first Margin have in COVID-XX very the shown share pandemic creation by adapt that demonstrated resilience returning ramp year franchise, value it we as quickly conditions. quarters. up and am of the the for of market over and several production Ti-Pure improve to I years. stage the capacity continues differentiation

the reflecting in will and to first & adoption as pre-pandemic Moving signals strengthen Solutions, that importance the patterns global in In Thermal recognizes continued combating Chart continue automotive climate warming XX. demand the world order the the stationary quarter, with Opteon to change. applications seasonality. refrigerants Specialized play in low

the by XX% rates at a regulatory Looking $XXX were QX refrigerants. of but results, closely the volumes expected legacy-based basis. blends stationary related from XXXX, decline to a million, Improved sales Opteon and more of QX offset flat applications adoption up net nearly in were phaseout on sequential

X% the demand in QX, continuation Winter $X present, $XX bill rates operating improved we at in the rates our shortages to adjustments of automotive more of Opteon plant under-absorbed patterns. from EBITDA result Segment offset for constrained This was to facility, the through downtime. Christi customer semiconductor is the million adjusted rates modest first QX order overall which fixed While of than million and year-end. anticipate quarter. Corpus strong, bill leading in costs Storm automotive slowed Uri At a rose in

underway. of I'm a to adoption cooling grow onetime efforts with who line and Auto QX hold. working put enforcement and us steady stakeholders that time from behind industry aggressive gets to regulation. the In for and as Europe, for confident such HFC as and campaigns been issues through Looking standards EPA aftermarket we QX refrigerant awareness stationary will to the and start ahead, the of F-Gas continued applaud see a cadence we the well continues the positioned the illegal season U.S., HFC QX In Opteon market seizures are for codify conversions equipment strong have blends behind take engaged an we transitions.

in market the transition We to accelerate Act. will recently the expect the AIM behind this stationery passed HFOs

our for lower with We bill are to coordination impact mindful could the on in have manage supply opt-in and customers. continue our rates mobile refrigerants automotive of chain demand close

Turning across to XXXX. due started and the the million, versus XX%, was underlying a record across to XXXX in to cover product in APM impact chain March Chart Net mix sales XX, the quarter. which geographies. Performance to cost the as improved quarter. Segment last XX% accruals by adjusted EBITDA has our QX fixed with as Advanced for weighed composition down sequentially absorption Materials Storm quarter higher segment. Margins Uri. well issues QX rose to $XX in as million, incentive to under The flat late demand continued $XXX recovery I'll for supply all related of breadth first year's Winter QX The in our was been and rebound, accelerated broad-based, of XXXX rising month demand

across segment. As the quarter fourth significant have leverage operating call, the on we we said

potential. $XX in this quarter revenue an million, was results basis, first the a earnings On Our million. $XX lift sequential in resulting up of illustrate

prepared teens, rest in focused to out will starting recovery of to margins cost on We the moment. remains return second We remain XXXX, enhance Looking is on the the top high growth while to outlook productivity APM and the this actions believe across line and strong. quarter. improvement the business returns. executing in seize

performance communicating notable EBITDA better importance we in made towards segment. plant for realizing this of defining sales, improvement, plan target. a Despite post-recovery in high delivering our recognize we mind, of the this planning reliable deep We significant with to enthusiasm operations on our and progress in a APM great With opportunity the our unpack margin an and investor greater to the host this detail. year are rapid return to level dive our this segment strategy pre-pandemic teens have already strides XXXX improvement quarterly later

ahead segment first Chart sales $XX were million. net Moving XX, Chemical on to our and quarter Solutions

return driven of the facility of adjusted Chemical February. impact at robust EBITDA for million by last Chemicals from the anticipate business in across cyanide to EBITDA the driven Performance demand improve. year-over-year million as improving impact Excluding conditions momentum anticipate Intermediate $XX for continue continued solutions, strong freezing of in margins by strong to normal mining XXXX. our our basis and conditions on in portfolio demand $X we We Memphis continued over acid quarter including Glycolic of demand first and aniline demand X% the for course a increased gold and remains more a Products. Adjusted shutdown mining XXXX, year, sales the sodium business Solutions was

Turning next our momentum our chart. The higher and are XXXX volume seeing results of confidence will us than results that our our price across we core QX and strength to give we both in call. the be the markets in communicated QX

raising we result, $X.X billion to million and guidance billion. are between by a adjusted As $XXX $X.XX our EBITDA

$X.XXX guidance from is at XX% the levels XXXX midpoint billion. of up revised now Our

We with disciplined million. continue that a CapEx in to to metric drive $XXX XXXX approximately at change to approach no

cash As guidance. guidance now from a than prior free result, flow is $XXX our our million up greater $XXX million,

of not underway. and the on generation Star cycle with I'll free closing things earnings a Chemours through back Our maximizing and over recovery We to and focus for Vergnano committed remain to cash our With flow has that, North significant generating cash fully some long turn Mark thoughts. the waned term. value

Mark Vergnano

Thanks, Mark.

and pandemic never do can felt of hesitation say is have as foundation as a our safely have start, navigate resilience to about future I chart. I today. company. the as the the strong, To that continue without demonstrated last we our positive the to COVID-XX I Chemours impact Turning of

financial sharpest we our of have through liabilities Corteva solid sheet forward. DuPont with to source continues with move and crisis, the gained disruption legacy PFAS the since to strength and the reduce risk alignment even economic our framework and a Our balance be on

all advanced the potential global up, demand recovery steam our low gain growth continue grow by to end technology demand well the APM Secondly, future markets bar warming dynamics performance. underway. HFO refrigeration conditioning. as continues is TiOX market the as globe. end material the raises improve friendly, Opteon driven climate across And embraces of demand continues and to across picks world to industrial as air for and the technology

future in product our demand and on PFA Finally, infrastructure. capacity increasing expanding to meet order growth. fuel capacity for to we semiconductor are our executing are we In new semicon, development

to We strategic structures where significant are markets, we well including coming membranes gigahertz. online come over our cycle decade. fab of positioned rapidly the to are hydrogen, at fundamental in efficiency on XX the working to the laminate the deliver necessary solutions XG fastest to chipset work In provide of implementations will above provide on electrochemistry and next-generation the U.S., capacity capacity we In are improve frequencies XG, Nafion life durability, new cost. continuing

of excellence. the the here. grit, our of Chemours. I and are employees, your X,XXX our you To portfolio, is so is Our By help in we be $X the work bright billion. the I'm of to hydrogen potential diesel transport billion market decarbonize near-term low-cost long-term reaching could and economy. believe recovery enabling reason strength determination critical XXXX, the for future global membranes From the the to total addressable parity the customers, hydrogen in to are we electrolysis heavy-duty To believe to proud $X

in of the help We products, value win appreciate that, the marketplace. open finally, trust belief let's your to to potential questions. And investors, for in in you Chemours. operator, services we and shared bring values to With our will continue line and long-term your the the us best

Operator

Instructions]. [Operator

from McNulty Markets. BMO comes question first Capital from Your John

John McNulty

of results Titanium supply Congratulations just a question despite on first was on impact the on My headwind. a set chain Tech business. the really impact Uri difficult and solid

played it And in guess more be, to those portal the also, you in that those seen volumes the guess, I'd hit might for Uri impact my might understand love how differently had how if would that would have supply the I to chain if hadn't Specifically, then and for disruptions. since a out that negative the you I that directed from assumption also have we customers, business, what nicked And have been impact quarter. pricing the that delivered have and been volumes maybe might could hadn't have business? on

Mark Vergnano

affected because Yes. question. on. and right John, well. Altamira natural great as facility affected is hypothesis The gas and it our DeLisle, issues your -- And storm-affected Johnsonville of storm affected the

we So had storm. prioritized We our that AVA issues through supply contract customers.

they we during as actually AVA that that if weren't needed. they are So supplies supplying. supply customers, but the come who were prioritizing looking not also customers contract we ones that had long-term sure us AVA for only new got to contract customers, added again, because period our that made the difficult contract in well. And AVA as customers We we

your is than a less little probably get would, same that from disruptions, right. have some much maybe of portal those possible. as to which we our to time, a the had So bit bit ore was able out higher little normally price than hypothesis through we probably be blend production the normal business We because as skewed At standpoint.

a our margin variable because higher of that. So bit as well little was

of our took have The a AVA customers So it a well of supply team up, as been the solid made but back a quarter. have did could a sure quarter yes, cost us as on standpoint care without price. way, I'd a, winter say, storm, both that great Still standpoint, getting bit a job we it right stronger stronger. both a all little been on could

John McNulty

how market about be what should ability thinking by that? pattern out host where versus I of this the also, can. compounded guess, the are about Got thinking seasonal you it. to your one maybe maybe just I of pretty helpful. of TiOX we tight I others how seems a be Got for rest we the about XQ obviously that, was it. reasons. whole an think mean meet on guess business? TT And for throughout And to as the kind normal I year, No, guess, should business. then a odd there that's look I the a how capacity follow-up

Mark Vergnano

Yes. I'd is tight say it market. a

to to very we able from full that continue have the our all standpoint. facilities We capacity be our service forward. strongly, almost customers going operate to We believe

we've that work kind fleet board on do past, meantime, we have that about of like we across facilities the that. to talked have we in time adequate As capacity 'XX in frame. of to But some come 'XX, the we in can be the capacity our incremental would the able handle feel

dynamic you're build is Just as you're you what the seeing is in said, not a here which very seeing channel. different a inventory lot of

You're they're seeing -- prices being market thoughtful the in standpoint. terms that into being going of how from

So as the are at prices I a and believe even they be months orders putting are portal portal, that -- look and what out, those different we X now. we would have in than people

I don't customers So in the excess channel think we I forward. service inventory going right just think can now. our there's anywhere

Operator

Your Spector next from from comes Josh question UBS.

Matthew Skowronski

regarding This such production is for or is energy us into as guidance Matt provide Skowronski Josh. details other on costs baked inputs? what on some you Can

Mark Vergnano

demand detail. bit maybe right Yes. how And I'll let guidance, see a all we're little at give just our Sameer strong of looking we you more segments But now. standpoint across a from

probably Our some things of based -- a From eye India is pandemic. a issues. issues, and keeping the an macroeconomic on really we're have conservatism, still of Brazil standpoint guidance reflects level on which

shortage world. we're the And of on colleagues are OEM our as our the in maybe eye go keeping across thoughts in and to the chip the world more out is still getting through right pandemic and Brazil, struggling builds who anywhere that now. than hearts India way the in auto else Our

-- from issues. Sameer, We very that? other are We're things But operating So are add you'd anything the of probably driving any our extremely strong that don't demand. to our standpoint. those we facilities outside conservatism any expect well. to that see foresee want that,

Sameer Ralhan

No.

contracts I say look, our think, of you Mark, question, the only you earlier, on the the side summarized I is pretty nicely. cost it said other we're as would well. And thing layering

those nature So feel in given the and good in of majority already that reflected guide. are have position the a pretty for thereof, the we contracts place in is contracts we we

Matthew Skowronski

then agreements new previous follow-up, the these the increased customers in the different long-term that than the of contract? terms Were And of for release quarter. percent materially my contracts during mentioned pricing on

Mark Vergnano

dive our I'll somewhere on for But that to total going set of of Mark Well, of balance volume, said the in and let between contracts to want We've TiOX stay for side, to AVA we're XX% everyone. just in that level to be we -- that range. our sort XX% you.

perturbation customers saw think Winter want in your prove able range to we forward. that AVA the Storm I from to Uri support that be that going you be to

So sit that sort of to range. in we're going

with we customers to set prices where into new in previous new level. today. at contracts, contracts you on detail As more But not or any set go are go that? AVA some at are they They're do into Mark, want

Mark Newman

the reference where for which comment enter into we contracts, where was Mark, we point don't I is on but is today, previously. pricing price by point raised, you pricing not new channel, it just is emphasize when the

quality situation the desirable and TiOX that rate. very on So tight just that's the that's segments. product think also to and forward, benchmark I'll maybe we're TiOX on layer and leveraging of emphasize we business the this to demand to our And then business across as continue is going we we business which regain contracts, more share improve in improve all long-term market

Operator

Your Bob comes Goldman Sachs. next from Koort from question

Thomas Glinski

Glinski Tom is on This for Bob.

improvement should baked you on based in have the guide your the second earlier we quarter to TT that the just on in full what the sequential exceed I the sequential think, that a pricing the think question, likely from you standpoint? business. realized comments improvement about in Should quarter. year First first

would just be helpful. So commentary some there

Mark Vergnano

that? you why don't Mark, Sure, Tom. answer

Mark Newman

Yes.

We we inflection in -- an price. call, in see as momentum. our think have I indicated seen our good we market

Storm remains Winter going AVA business. and we'll well. our is good mix our So expectation since I'd mention run the very also certainly that and strong, of Uri, have a have market Flex plants forward both that

our ran in So plants March. well

plants in run April. have well Our

So take you our of Flex clearly, are our where ability is the would And very when to you favorable. as serve can price. the markets expect, all tight, most channels channel remains

And macroeconomic that been outlook. our guidance as watching. broader of into of conservative that certainly some factored we Mark say some given has we're the I'd our factors So somewhat philosophy mentioned,

Thomas Glinski

it. Got

And then called of in Okay. That's you Europe. assuming illegal helpful. refrigerants, additional I'm on TSS out business, the phases

but wondering illegal if the of positively, this I'm absolute signal seen reads this So pickup a just in that could imports. potentially level we've

are more with there those. naturally, just some associated seizures being So

months guess, enforcement were imports than more improving? purely just maybe are into X is is there there So Or X, region that it I the coming legal X, ago?

Mark Vergnano

administration has But we're what seeing a let Yes. very for don't a being world. from back getting into they're as illegal of move that's Biden of EPA to We maybe seeing Europe Europe that. going with the think just just at terms understand Mark, important we're the across well. protections standpoint, And same out, answer they're I in positive time, forward. really time. you applaud same imports at into about little that, because give But what learned all the Mark to that are now yesterday, to rules you in their explain bit lot how we're the Kigali the against right I from that And aggressive see of I Opteon context level we're why I'll kind putting in everyone what the draft they here. seeing think for Europe. as built think coming as initial But U.S. in with the the

Mark Newman

refrigerants, market very HFO of of enforcement combination on Europe both especially tone a side. I'd the Overall, in we're the by encouraged blends. stationary Yes. refrigerants, and continued improvement It's legacy Thanks, in say Mark. the

come the course, in had early in we emerge out cooling refrigerants as in we from starting buildings You'll terms recovery some recall as come commercial earlier to stages we COVID-XX needing step year, a And the we of we're this quota. to season, start and into of of Europe. down of see that

So to we're also by Internet Mark we're what have regs action the the as improved and think AIM overall, call level being the we're on seizures, of it's say I'd factors. marketed is encouraged, takedowns, in we're I EPA and recent seeing level the and seizures all by the what product we year-over-year, Act. encouraged, of three which But Internet encouraged by said, form the on And Europe.

overall, the ready demand. stage Opteon is next team's service both USA and this stationary the Europe on growth of to in side, and the that So the

Operator

Your Hassan from next comes Global Alembic question Ahmed from Advisors.

Hassan Ahmed

volumes. a A basis, but dioxide around sequentially titanium on Obviously, volumes question were X%. strong your quite year-over-year around up

sort other there and seem volumes. compare competitors, to had to a larger have bump and large sort contrast So they of when I sequentially, sit of up in

just regain your through volumes I'm course in relative year. about share So reconcile able still trying being sort sort uptick to commentary the to you sort the gave sequential that lost to the of of the of market of

Mark Vergnano

significantly from that standpoint. to I'd from say, think of a Hassan. last we -- which things standpoint we winter were of obviously, about, difference. Right. you industry. the really from a it's disruptions year-on-year, very at I opinion, to got good things But first a had -- And you the some with if you of think starting storm we that strong year up. year if TiOX our No, Year-on-year, made from remember, But as to then quarter up the ramp look it standpoint. starting last talked COVID so got from had quarter-to-quarter saw to a us, question, you comparison, also, big standpoint we hit In will. ramp

forward more second comparison a going now, But going or going our you're anticipate -- as share quarter because I volume a, going see volume the as But in the as quarter rest the the of into say, of last think you I rest a year to year-on-year perspective. strong forward. the beyond, continually not through gain strength strong year as just the year-on-year going lot to from you're us gaining see a I'd had year. we well of and for think

Hassan Ahmed

the that now to switching to sticking gears And availability Again feedstock side. tight. tighter. Last seems it seems Titanium Technologies, ore gotten to Understood. have only Understood. was quarter

hearing from out And I'm quarter, like what sort in Iluka production This you companies and have reporting then of coming declines. particularly China. out

are with part in curves? inflation that you you in And what of the price seeing So cost guys that, And Where part how that? what cost terms ore terms you are question. high seen? of and the the are curve a of currently two of we've guys sort One, see do cost handling you with end parcel inflation? seeing ore

Mark Vergnano

have long-term in -- contracts with start I'd Yes. our ore. we

that time from standpoint. So we at are this inflation seeing ore not

plenty ore well. have of that from We of supply perspective as

we we throughout rest are feel of So year. comfortable the where very ore the from an side,

which tighter. us. seeing that's I China, think ilmenite bit little are issues you in not Obviously, some sulfate in is a

Our big going play support is, as standpoint. ample have supply we everyone knows, from that us is chloride ilmenite, where be to to forward able

which bringing talk value was And we our TVS proven for supply. strategy, customers, that and So past installed whole to concept think for them of about it. but predictable the the to the directly. give give of just our us we them our months not pricing predictable several pricing standpoint I the from have is reason to customers of don't But obviously, pricing,

think first get think, And time, that that, going occur hording, They product. price a bringing just don't to normally you know where in what things they of say, mechanisms, are going of it how that. are that be happening I'd customers they you're I from our the know in their where us. They will, they the to because do not in, know can for in need can long the change. marketplace. right They to inventory get lots is if the spikes forward. people time I So They going because know seeing for that's

versus steady which different is So then peak growth a be I a dynamic to more a say seeing think to you're that this of would TiOX crashes. I very in going market, driving

think everyone. steady that, I see benefit I but it's to anything Mark, And than don't that's going in a we've what dynamic this different you're know growth if here to add want marketplace. think seen to to I you before going

Mark Newman

to X Hassan. ore. well Yes, points Mark, just One supplied is I'd on we're make maybe

We meet had some I'd demand. able point the of Sequentially, ore to then and blend on other reduce the on didn't in remain Obviously, ilmenite QX we disruption market our in run started. competitors. our than the continue you to the more plans but QX, stronger to on of to much strength a and had And in optimize where of focus with being -- ore high-grade customer order our we some we given Uri, make, well supplied. which back dependency our goes

good. sequential strong relatively doesn't by impacted as it's but look by Uri, It's also a the comparison impacted QX. So

our think good, So focused nameplate disruption QX. is overall, is running you we're based plants our some to on as despite we had where we capacity I in ability should look forward, and and the which advantage is conditions of be market of supply strong how taking the well our is

Operator

Barclays. Duffy question Your from next from comes Fischer

Patrick Fischer

a TiOX, issues probably as volume continues sold QX and also possible from demand on inventory over. is So Question you little obviously, but side? if what's we a carried of out that you the bit and some disruptions, baseline, use had my you guess

forward, basis up have see sales on a much then level is So of QX, when grow How if we the X%, that volume? going you more off do when into quarterly room we QX? this XXXX, debottlenecks those get there, potential demand we do to And through think when that volume can go can more from year, XX%? about rest that move even

Jonathan Lock

Yes.

more expect will continue off detail. start year. I'll go have we demand let the -- maybe But and strengthen into So throughout to Mark any we

to And of a before we that capacity even to able do ways all have the increase forward. work. have meet we going be to variety capacity the our debottlenecking We

that, needs that in ends do know of full continue confident don't want be that going I this the strong facilities anticipate And operating These of ramp right the to of aspect we take if the demand for that? you Mark, to we year. to year the we anything And for to add time capacity. the to forward. supply can a rest we're know, up you very now. But We're to As our one bit now. feel facilities of midst but very, little

Mark Newman

thing is Uri coming in a ability our supply need -- our pretty nameplate to Winter the QX separate and forward. strong to ability and Duffy I'd out our going Mark, Storm emphasize supply of with only for you demand to QX, into mode ramp-up the versus

wouldn't our our of QX ability to focus gear plants on ability I to all based Storm supply want on continued volumes at QX certainly, Winter because running our capability. their our our Uri, So you and of -- to

Patrick Fischer

Europe with point that of fall? Mark's a read yesterday, a lot rule headlines actually driving pretty for out big what kind on big And being there up what does years, follow-up of if what the Great. as when just the this a step pricing ended market X earlier template, It's EPA is that Obviously, to over down. you've working way where were with year, drove change in been year And a wrote it step next the move maybe the think the step. Relative yesterday. then out came text forced. HFC several going that year big be was a of the of you this as gets first had they yesterday? U.S. you came a HFO The implemented -- up to we

Mark Vergnano

Yes.

we administration is this aggressiveness think So trying to helpful. out first in rule September, of trying this I on the is going get very Obviously, we to draft are be and supportive Duffy, which final a rule. the with like very get said, the to

working the quota they How that's that baseline. to we much our be with up XXXX, figure XX being set to them now to is out -- think Kigali. a we'll is of with think have pretty this we'll interesting, on. baseline aligning be are I solid that, comments of So going but The up off XXXX they

is So Kigali occur step on which the XXXX. XX% in step down big based would down, huge

be to So one big players a the positively going who have to And X I in of XXXX to quickly able XXXX equipment only going see to you're able think we're that. move in the -- that's place well. that's be OEMs and to their play be to drive From the technology affected new to front get of HFO standpoint going adoptions. get of remember, as

HFC you HFOs that think in move as benefit, us advantage, which the well, bigger we for which and have have that. you prices bigger advantage the with the So the going of the even to should we a get said, marketplace is we to be accordance is, as quota forward. going But

it the make that believe some night and We to early should here there, just who our that U.S. the invented from us the we the it. last they out. looked EPA technology, X big days to advantage still their rule say comments say give because players have just understand framework came But at that. we -- it sure I'd is looking that I'd So we'll draft at manufacturers of with and we're are because this

Operator

question from comes Your Markets. Capital next Arun from Viswanathan RBC

Arun Viswanathan

Just to Titanium a question, guess, wanted Technologies. on I ask

also is I So if be some as what that positive? you've could just seeing view given competitors disruptions. know you you but slight that you there? face, your not may the material obviously, you inflation gone raw just as your that chain there And inflation, there? But environment flexibility, a inflationary through describe supply are to exposed

Mark Vergnano

And contracts more little let and Yes. place chlorine. I'll Mark we like long-term give other our bit materials here. raw in But have I a you with both ore said, color as

standpoint cases, those So very are and a as supply we in around lot confident from those the multiyear standpoint from year, of of those of a feel well. the for remainder a contracts

we're of from giving TVS to customers solid whole sure making going predictable very, about in really our -- we're in we contracts standpoint. this. very that the AVA pricing -- our So are terms through concept of again, And that

our And to don't that know to to add allows up to in on supply any our very us more that want way not Mark, to if situation you to our AVA able I is that? have contract But a lining pass solid margins be important. and holders so have all

Mark Newman

we out several is, is, going optimize lower continue is everyone the our Mark, with layer blend, grades improve ability structure our clearly, didn't remind I'd variable contracts, and in we very or careful we cost were but ore forward. go customer inflation an environment QX, thing third quarters. -- chloride with competition there versus meet that significant run of we're how our duration our Uri, to clearly, add as ore in would to would that I'd as then focus something in avoid the which advantage multiyear in our we, point And we be on only protected if with to move contracts also Winter ilmenite we're demand of our terms Arun, Storm we'll that to exposure. and forward,

Arun Viswanathan

stabilizing? recovery the TiOX. little there's Great. it similarly, and a that of I year expect to so would Europe then the if say, some Or America And kind is how of you of follow-up, follow do there and guess And And guess? bit China. been of in North as in or you next, kind then, pick of up to referring dynamics? I Maybe seems China a started kind recently. Is accurate, the moderation slack I'm quick regional characterize that like

Mark Vergnano

Mark, you do want to...

Mark Newman

say space. in business where fact, is in No, ore high-grade I'd very we China in Yes. And strong. participate market our the in the

in every product said in call, volumes across are As the we board region, line. the our in up every

some we around seeing for So behind we going world that certainly we being infrastructure to with that And extend certainly spending demand see the that coming that is last time strength see a this consumer as believe And could the the innings strength come. to good from of recovery. then in significantly. we're very early the

terms certainly earlier, our So Mark the here. the a of as in give in which we're innings early TiOX like we to alluded of some recovery. should the believe things doing we that we're a in of good participation very run structurally, market, And us good

Operator

Juvekar Our next question Citi. from comes P.J. from

Eric Petrie

on This is P.J. Petrie for Eric

capture? you your hydrogen from much quarter? And opportunities sales XXXX. volumes $X could How this did billion noted of membranes You increase to by billion $X Nafion share then

Mark Vergnano

Yes.

to So variety our see a of business. obviously, It in as cells I in places, goes we continue well. Nafion fuel say would improvement

from So continue you this membrane, the Nafion in are see to business forward. if for And we ourselves. will, the going we yes, strength

I on do it's why get because going alluded a the of share segment going the going dive continue dependent for we're make membrane we on to be really -- going industry. of as in driver lot of be that. but this to the we're the is going do So to to is cost successful in that reduction is developments to -- Mark to deep I'm for be comments, hydrogen, the this and you standard his our we all to a efficiency think can convinced which the that questions be membrane membrane on

months, next especially the in this diesel lot general. why for go in get why more the the this in the as going that much we'll is heavy-duty standard in have we'll everyone. believe as on well space, on through hopefully, electrolysis detail industry, forward And really we fuel So we in membrane for few a calendar so confidence for cells

now. that So portion we're of right to capture again, market, developments be that feel we we significant able continue if can should the we to driving that drive a

Eric Petrie

secondly, recovery And noted the Helpful. in your you markets. end then

this free XXXX. on into potentially buybacks cash to question a So flow year later

Mark Vergnano

Yes.

little cash So about our bit don't you why thinking how Sameer, use we're a now. about talk right of

Sameer Ralhan

investments some Mark. Thanks, look opportunities, this, Mark in growth the highlighted the of at interesting PFA you side. be of if the Yes. it Eric, sort

So have can that some We from we're are well we from have that reduction from things given be an perspective, looking down are get kind leverage say type at over gross billion, we billion optimization of is X we with we'll excited forward. CapEx to that. respect of other about see Eric, and the kind buybacks, debt range. share overall, do But to overall, this the the going I try perspective, of organic the we growth that to $X.X our next to pretty year, and those thing would a leverage continue of support levels that. looking well, within the years $X guide we forwards so at as And to moving

using to well. cash the debt see the of gross us going So as free reduce to some flow you're

move So to you're it's balanced going forward. as pretty be to going

Operator

comes Stanley. next from Your Vincent Morgan question Andrews from

Steven Haynes

Haynes Vincent. for is This Steve on

coming -- to margin on TiOX back Just quick. pretty

I made for some in be kind still bit Or there's comment you're what you're margins given of costs? quarter, little expecting year, that to it now? for, incremental a think the looking that kind you range. should lower full mid-XX% a Is that of last the be

Mark Vergnano

TiOX mean You side? the on

Steven Haynes

Correct.

Mark Vergnano

where aiming Yes. as the be mid- say, we high look should forward, to margin. we I'd XXs is

So effect effect. forward, we on going we a don't see see a say margin negative positive I'd

the had to pretty ramp didn't because quickly. had We operate a we get Mark had we As because downtime to first production we of would from the quarter we product the out up normally way storm. said, that

So we didn't ore optimize our blend.

little as go be forward, a think see a as our going to optimizing of So we positive you'll I blends. us impact price There's bit ore well.

and in that first up range. So from say mid- I should the XXs go should to margins be upper would quarter

Steven Haynes

flow. And Okay. really quick then cash on

what I XX? expected guidance assumptions of you general receivables, reverse? working flow quarter. your through this think to that cash build kind in free are big had capital a the Is in And

Mark Vergnano

I'll had that Yes. Sameer let But there. give you detail the big do remember a revenue we quarter.

quarter. revenue receivables go anything? a add there's you a So But for Sameer, in reason up want to to big do

Sameer Ralhan

No.

think in and it. the timing, the pickup happened also in I a said where you it the It's revenue given quarter. Mark,

refrigerants So market. the the consistent in what the it. our with toward much The I in in too sales time right? is would business, read I wouldn't pretty when DSO the start into and levels the we seasonality -- this the are see pickup mean coatings cool seeing we

with consistent have this would is typically DSO we this of pretty So the season. what at time

Mark Newman

Yes. otherwise back-end Maybe than Storm whenever because the only have higher to the slightly in Uri sales might a receivables drive loaded quarter February, you it see. tends you thing remind everyone is Winter of in I'd

unusual nothing there. So

Operator

Vergnano will questions. I now There are to no the turn remarks. over closing Mark further call for

Mark Vergnano

we Thanks, are future Jacqueline. We reiterate but how close as as right company, now And about my very, really just about listen, I a to well. very feel positive where remarks. want the I

go So a into segments we insight we're the how year, to going the you have why hope we but them you as little growing about it through more we that we give in tone, good probably heard our bit forward. feel really and

your the support. again, thanks So you, in thank and for always, company, for as interest your

Operator

you today's call. This for concludes participating. Thank conference

disconnect. may You now

The Chemours Company (CC) 4 May 212021 Q1 Earnings call transcript