The Chemours Company Price & Performance (CC)

During the course of this call, we will refer to certain non GAAP financial measures that we believe useful to investors evaluating company's performance.

A reconciliation of non GAAP terms and adjustments is included in our press release issued this morning. Also, we have posted our earnings presentation to our website earlier today. With that, I will turn the call over to Denise Stigler.

Thank you, Brandon, and thank you everyone for joining us. Over the past few months, we've been focused on executing against the refreshed corporate strategy that we outlined on our last earnings call which we call Pathway to Thrive. Today, we are excited to share our results from the fourth quarter and full year 2024 as well as the significant progress we've made against our strategic pillars in just a few short months Shade and I will begin by discussing our fourth quarter and full year performance.

We will then provide a view of the first quarter and share some thoughts around the outlook for the full year 2025.

Next, we will discuss the progress we've made on our strategy in more detail and take your Beginning with our results, we delivered another quarter of strong performance building on our momentum from the last quarter. Across all our businesses, we exceeded our adjusted EBITDA expectations for the The. Demonstrating our continued focus on operational excellence fulfilling our shareholder commitments.

For our TSS business, we again achieved a quarterly sales record driven by 23% year over year growth in Opteon Refrigerants driven by The U. S. AIM Act and EU F Gas regulatory transitions underway. Our TSS earnings came in above our expectations driven by this continued Opteon adoption and supported by a favorable product mix and lower cost in the fourth quarter. In light of strong adoption, I'm pleased to share that we recently completed expansion at our Corpus Christi site where we produce our meat Opteon refrigerant and are in the process of ramping this added capacity to support market demand In TT, our team remains focused on driving strong commercial performance and advancing cost reduction efforts under the TT transformation plan. As we had guided, we saw a sequential decline in our net sales driven by seasonal volume trends and regional mix. As we reflect on the year, even with the headwinds we saw in the first half of the year, our TT transformation plan has yielded clear results with approximately $140,000,000 in annual savings exceeding our initial target of $125,000,000 While we continue to experience a weaker macro environment, the cost savings we achieved in TT more than offset weaker pricing During the year, enabling us to deliver a net one percentage point increase in adjusted EBITDA margins bringing us to 12% for the year.

Under the operational excellence pillar of our Pathway to Thrive strategy, we will continue to execute cost reduction efforts at an efficient and orderly We expect TT will achieve at least another $60,000,000 in run rate savings by the end of twenty twenty five representing approximately half of the $125,000,000 corporate wide target we set out for the upcoming year. In APM, sales for the quarter were softer than anticipated due to weaker conditions in more economically sensitive end markets combined with weaker demand for nasion membranes in our hydrogen end markets. Negatively impacting our Performance Solutions portfolio. However, much of the sequential weakness in Performance Solutions was offset by the encouraging progress we are seeing in our newly constructed high purity Teflon PFA resin production line, which serves semiconductor customers, Our earnings in APM were driven by better than expected cost performance primarily due to favorable inventory adjustments and true ups in the quarter. At the corporate level, I am pleased to share that we fully remediated our four material weaknesses in internal control which were identified in connection with the Audit Committee's internal review [indiscernible] early twenty twenty four. The remediation of these material weaknesses has been a significant undertaking for our organization and is symbolic of the final step needed to move past the events of the prior year and is reflective of efforts under our strength in the long term strategic pillar.

I also want to take a moment to highlight two recently announced updates to our executive team.

First, I'd like to welcome Damian Gumpel as President of Comor's TT business. Most recently, Damian serves as the Vice President, Corporate Strategy at the Olmian Corporation and previously led Olm's global Epoxy business. Damian's strategic experience business leadership, and transformation background will help us continue to build on the success of our existing transformation plan and contribute significantly to advancing Chemours strategy. We're looking forward to him officially joining the team in early March. Second, I want to highlight the appointment of Diane Pishow, our Chief Enterprise Enablement Officer. Since taking on the role of Interim TT business President in March 2024, Diane has made significant contributions to building on a strong foundation for the T [indiscernible] In her new role, Diane will be focused on the execution of the operational excellence and growth enablement pillars of Pathway to Thrive strategy. Working across our businesses to deliver results. Diane brings over forty years of business leadership across Chemours business segments and I can attest firsthand to her effective and collaborative leadership style. The appointment of Damian and Diane helps further solidify our leadership team and put us on the path to drive long term value for our shareholders. Now, I'll turn it over to Shane to walk through our financial results.

Thank you, Denise, and good morning, everyone. Let's take a closer look at our financial results beginning with our quarterly performance. Our consolidated net sales for the fourth quarter were approximately $1,400,000,000 down 1% compared to the prior year quarter. This decrease was driven by a 3% decline in pricing partially offset by a 2% increase in volume. With currency impacts remaining Turning to adjusted EBITDA for the fourth quarter, we saw an increase from $176,000,000 in the prior year to $179,000,000 this through the TT transformation plan favorable inventory adjustments and true ups in APM, and increased volumes in TSS. Partially offset by lower pricing across all our businesses. For the fourth quarter, Chemours reported a net loss of $8,000,000 or $0.05 per diluted share compared to a net loss of $18,000,000 or $0.12 per diluted share the prior year. Our consolidated adjusted net income came in at $16,000,000 this quarter or $0.11 per diluted share. Which was down from $46,000,000 of adjusted net income in the prior year quarter.

Or $0.31 per diluted share largely due to favorable tax impacts due to a lower effective tax rate in the prior year. Now let's turn to our full year results.

Our consolidated net sales for the full year 2024 or approximately $5,800,000,000 down 5% compared to the prior year.

This decrease was driven by a 4% pricing decrease and a 1% decrease due to portfolio changes made during 2023. Which reflects the sale of our glycolic acid business in 2023. Currency impacts were flat year over year as well as our volumes as solid increases in TSS, NTT were offset by weaker volumes in APM. Adjusted EBITDA for the full year was $786,000,000 compared to $1,000,000,000 in the prior year.

The decrease year over year was primarily driven by pricing decreases unfavorable currency impacts portfolio changes, and higher costs in TSS and corporate expenses related to the Audit Committee's internal review and remediation. These increased costs were more than offset by cost savings realized through the The transformation plan. For the full year, Chemours reported net income of $86,000,000 or $0.57 per diluted share compared to a net loss of $238,000,000 dollars or $1.6 per diluted share in the prior year. As a reminder, loss in 2023 was primarily due to costs related to the settlement of the U. S. Public Water System Class Action Our consolidated adjusted net income for the full year came in at $182,000,000 or $1.21 per diluted share. Which was down from $425,000,000 of adjusted net income last year. Or $2.82 per diluted share. Primarily due to the prior year elevated earnings drivers I previously outlined. Now let's turn to our business segment performance. Starting with TISS. In the fourth quarter, as Denise mentioned, KSS again achieved record net sales of $390,000,000 a 3% increase from the prior year. This growth was primarily driven by a volume increase of 7%, which was partially offset by a price decrease of 4%.

With currency impacts remaining flat year over year. The increase in volume was driven by 23% year over year sales growth in our Opteon referrer, which reflects continued strength in demand ahead of the transition to new low GWP stationary air conditioning equipment. Starting in 2025 as mandated under The US AMAT, Year over year pricing remains lower similar to previous quarters, due to soft pricing in our Freon refrigerants, due to elevated HFC inventory levels which continue to persist in the market. TSS's fourth quarter adjusted EBITDA decreased slightly by 1% to $123,000,000 compared to the prior year. Adjusted EBITDA margin also decreased one percentage point to 32% This decrease was driven primarily by the aforementioned pricing weakness partially offset by lower costs. That we don't anticipate will occur in the first quarter of twenty twenty five.

Sequentially, PSS's net sales decreased by 17% which was driven by a volume decrease of 13% and a price decrease of 4%.

Overall, volume and price decreases were primarily related to typical seasonal trends across our refrigerant combined with lower demand Turning to full year results for TSS. Net sales for the full year were $1,800,000,000 a 1% decrease from the prior year. This decline was primarily driven by a price decrease of 3% which was partially offset by a 2% volume increase. While currency impacts remained flat year over year. The decrease in price for the full year was primarily related to softer Freon refrigerant prices, partially offset stronger Opteon refrigerant prices. Volume growth for the full year was driven by higher demand within the Opteon The portfolio. Due to continued stationary and automotive end market adoption partially offset by a volume decrease in the Freon refrigerant portfolio in connection with the previously mentioned HFC step downs, under the US AMAT and EU FTS The. TSS's full year adjusted EBITDA decreased by 16% from the prior year to $576,000,000 resulting in an adjusted EBITDA margin of 31%. This decrease was primarily driven by the softer Freon refrigerant prices [indiscernible] higher costs associated with purchasing non corpus based low GWP refrigerant near term quota allowances, lower fixed cost absorption in PSS's HFC product line as well as other input costs.

Now let's move to our TT segment. Beginning with quarterly results. In the fourth quarter, TT's net sales fell 3% year over year to $632,000,000 primarily due to a 2% decrease in pricing and a 1% decrease in volume. While currency impact remained flat year over year. Adjusted EBITDA for the fourth quarter increased 20% to $77,000,000 compared to the prior year. With adjusted EBITDA margin improving by two percentage points to 12%. Cost savings realized through our TT plan drove this boost in earnings, and was partially offset by the previously mentioned decreases in pricing and volume. Sequentially, TT's fourth quarter net sales decreased by 6%. Driven by a 4% decline in volume and a 2% decrease in price. Turning to full year results. TT's net sales fell 4% year over year to $2.6 primarily due to a 5% decrease in pricing partially offset by 1% increase in volume. Adjusted EBITDA for the full year increased 8 percent $312,000,000 compared to the prior year. With adjusted EBITDA margin improving by one percentage point to 12%. This earnings increase was primarily driven by approximately $140,000,000 of cost savings realized through the TT transformation plan which as Denise mentioned earlier exceeded our original The impact from the TT transformation plan was partially offset by the previously highlighted decrease in pricing.

Also, TT's full year adjusted EBITDA includes $26,000,000 of costs across the second and third quarters related to the unplanned weather related downtime. At our Alta Mira Mexico manufacturing site. Since these disruptions at our site occurred over the summer, I am pleased to say that our operation temporarily allowed and we have fully supported our customer Turning to our ATM segment, In the fourth quarter of twenty twenty four, ATM reported net sales of $324,000,000 a 1% decline compared to the prior year. This decrease was largely driven by a 3% decline in price which was partially offset by a 2% increase in volume. While currency impacts remained flat. APM's volume increase was primarily related to our recent capacity expansion in high purity Teflon PSA. Which more than offset the weaker demand that we saw for our products serving the hydrogen market The pricing decrease stemmed from product mix. Connected to more economically sensitive end markets across the The. ATMs adjusted EBITDA in the fourth quarter increased 20% to $48,000,000 while adjusted EBITDA margin rose three percentage points to 15%. This increase was primarily due to favorable inventory and true ups in the fourth quarter that are not expected to recur.

Which were partially offset by the aforementioned decrease in price. Due to overall product mix. Sequentially, net sales decreased by 8% driven by a 6% volume decrease and a 2% decline in price. With currency impacts remaining flat. Turning to full year results in APM, net sales were 1,300,000,000.0 reflecting a 9% decrease compared to the prior year. This decline was primarily driven by a 5% decrease in pricing as well as a 3% decrease in volume. With currency also creating a slight 1% head decline in volumes for the full year was primarily due to weaker demand in the hydrogen market that I mentioned earlier. As well as lower volumes in more economically sensitive end markets.

The price decrease seen during the year was due to product mix connected to the same economically sensitive end markets across the broad decreased 41% to $161,000,000 resulting in an adjusted EBITDA margin decrease of seven percentage points to 12%. This decrease in adjusted EBITDA was primarily due to the previously mentioned decreases in pricing as well as lower sales volumes, and the related impact of lower volumes on fixed cost absorption. Which further contributed to the earnings Regarding our APM segment, we continue to closely evaluate this business to reduce costs and identify opportunities to further optimize our footprint and enhance shareholder value as part of our Pathway to Thrive corporate strategy. Denise will discuss recent actions taken by the team in more detail shortly. Moving to our UGGL segment, We recorded net sales of 13,000,000 and breakeven adjusted EBITDA for the fourth quarter. For the full year, our The segment recorded net sales adjusted EBITDA of $54,000,000 and $8,000,000 respectively. And finally, our corporate expenses. And all set to our adjusted EBITDA totaled $69,000,000 in the fourth quarter which represents a $20,000,000 increase from the prior year. This increase was mainly driven by changes in reserves related to legacy asbestos matters in the fourth quarter.

For the full year, we dollars a $43,000,000 increase versus the prior year. This increase was primarily due to cost associated with the The committee's internal review and related remediation as well as asbestos reserves recorded in the fourth quarter which are not anticipated to recur.

Turning to our balance sheet and liquidity. As of 12/31/2024, our consolidated gross debt stood at $4,200,000,000 with approximately $1,400,000,000 in total liquidity. This includes $713,000,000 in unrestricted cash and cash equivalents, along with approximately $640,000,000 available under our revolving credit facility. Additionally, the company retained $50,000,000 The dollars in restricted cash and cash equivalents all of which is held in escrow under the terms of the memorandum of understanding related to potential future legacy liabilities.

On a trailing twelve month basis, our net leverage remained unchanged at 4.4 times adjusted EBITDA For the fourth quarter, our cash provided by operating activities was $138,000,000 compared to $482,000,000 in the same quarter last year. Elevated cash flow in the prior year quarter was driven by the actions from previous management as previously discussed. Capital expenditures for the quarter totaled 109,000,000 compared $135,000,000 in the prior year. Driven by additional capital expenditures on APM's Teflon PFA expansion in the prior year, an efforts to focus capital spend on critical areas Additionally, the company paid $36,000,000 in dividends to shareholders during the quarter. For the full year, we had outflows of our operating cash of $633,000,000 compared to operating cash inflows of $556,000,000 in the prior year.

The higher usage of operating cash flow reflects the release of the $592,000,000 of restricted cash and cash equivalents related to the U. S. Public Water System Class Action suit settlement, following its final judgment. And also cash impacts due to the unwinding of the twenty twenty three year end net working capital actions. Capital expenditures for the full year totaled $360,000,000 compared to $370,000,000 in the prior year. During the year, the company also paid hundred and $48,000,000 in dividends to share I did want to take a moment to convey that we have been very focused on and have taken actions in recent months to ensure that we are well positioned in our debt structure to solidify this.

As we move ahead, we do not anticipate any liquidity concerns or events that would impact liquidity related compliance concerns with our bank income. Overall, we're encouraged by the progress we made during the fourth quarter. Including the strong performance the team delivered. Although we saw challenging dynamics in certain end markets, and geographies that impacted our top line, we were able to exceed our adjusted EBITDA expectations across all our businesses, as we continue to control what we can control and focus on our commitments to both strengthen our operational execution and enhance overall cost efficiencies. With these fourth quarter and full year results in mind, I would now like to move to discuss our expectations for the first quarter of twenty twenty five and our outlook for the full year. Beginning with TSS, For the first quarter, we expect overall TSS net sales to increase sequentially driven by double digit growth in Opteon Refrigerants, partially offset by a decrease in freon refrigerants. In connection with the ongoing U. S. AMAC and EU F Gas regulatory transition. Sequentially, TSS's adjusted EBITDA is expected to increase slightly reflecting impacts from increased costs from a forced outage at our Corpus site and additional input costs associated with the site's ramp up of the new The capacity expansion which are both expected to have negative impacts from the first quarter's margins.

Looking further ahead, we aim anticipate overall 2025 results to be improved versus 2024 with the pattern of year over year double digit net sales growth in Optane refrigerants to persist throughout the year.

Driven by volume expansion in our Opteon refrigerant OLED.

The strength in Opteon sales will come from the continued regulatory driven demand [indiscernible] The transition from a broader set of legacy HFC products to more targeted available options for low GWP products such as Kumor's HFO Opteon brand or alternatives such as R32. For HSC pricing, we continue to anticipate that U. S. Freon prices will remain at low levels into 2025, While we continue to monitor increasing input costs, primarily from R32, and regulatory headwinds around the world Absent significant changes, we continue to anticipate that adjusted EBITDA margins will remain around 30% for the remainder of 2025.

For our TT business, in the first quarter, we expect volumes to remain stable sequentially However, the segment's projected regional sales mix will result in lower net sales for We expect adjusted EBITDA to decrease sequentially as a result of this regional mix. As well as operational headwinds, related to cold weather downtime at our U. S. Sites in January. Contributing to this decline, Despite these headwinds, we remain committed to our TT cost reduction targets the full year, For the full year, we expect 2025 results to be better than 2024. With improvements becoming more evident in the second half of the year. We will continue to control what we can control through our cost out programs and a focus on driving commercial excellence. As evidenced in our share gains, while small particularly in Europe.

Furthermore, we've used the disruptions we face in 2024 to improve our operational planning and we are well positioned to meet customer orders moving forward. For our APM business, we expect our top line to be impacted by softer demand across driven by the continued weakness in cyclical end markets, as well as our products that serve the hydrogen and semiconductor market, Adjusted EBITDA is also anticipated to decrease question due to lower net sales during the quarter further impacted by an unfavorable product We also anticipate incurring additional costs in the first quarter as a result of an outage from scheduled major plant maintenance that extended into the beginning of twenty twenty five. Of note, as I mentioned earlier, the fourth quarter comparison period for APM did include favorable inventory adjustments and other true which are not anticipated to recur in the first quarter. On a consolidated basis, for the first quarter, we anticipate net sales to be flat to slightly down sequentially. With adjusted EBITDA also expected to be slightly down sequentially. [indiscernible] The expectation includes a sequential decrease in corporate expenses as an offset to adjusted EBITDA. Of approximately 30% compared with the fourth quarter, inclusive of the fourth quarter costs associated with legacy asbestos matters.

We anticipate these corporate costs in the first quarter of twenty twenty five to be more reflective of the corporate cost expectation for the remainder of the year. Regarding our liquidity expectations for the first quarter, we expect operating cash flow to reflect a net usage consistent with traditional seasonality. We also expect capital expenditures to be in the range of 80,000,000 Turning to the full year 2025. We expect adjusted EBITDA to be in the range of $825,000,000 to $9.75 The a more favorable macroeconomic environment for TT and APN, along with TSS pricing action success, input cost moderation, and Freon pricing strip. Alternatively, for the lower end of our range, we would anticipate a worsening macroeconomic environment higher input cost pressures in TSS, and increased local regulatory pressure on the ATM business. These current expectations for adjusted EBITDA do not include significant changes in the broader regulatory landscape. Regarding cash flow for the full year, operating cash flow is expected to improve as the year progresses. And more than anticipated capital expenditures ranging from $250,000,000 to $300,000,000 while also ensuring dividend funding subject to Board approval quarterly. With that, I'll hand it back over to Denise to discuss recent progress our Pathway to Thrive strategy.

Thank you, Shee.

Last quarter, we shared our refresh strategy for Kemure's Pathway to Thrive. This strategy is intended to capitalize on our businesses fundamental strengths our incredible talent and our competitive differentiators to enhance shareholder value creation. Kamora's strategy is focused on four pillars: operational excellence, enabling growth, portfolio management and strengthening the long term. All rooted in a foundation of balanced and disciplined capital allocation. Efforts to execute our strategy were underway when we shared it Q3 call and we've continued to take steps to structure the organization around The pillars to meet shareholder expectations. In addition to appointing Damian as Business President and Diane as Chief Enterprise Enablement Officer, we've also established a transformation office that is fully dedicated to driving results within each pillar of our strategy. Starting with operational excellence, we continue to target incremental run rate cost savings of greater than $250,000,000 across the company starting this year and building through 2027. As a reminder, this overall cost savings plan comprises an additional $125,000,000 in savings under our TT transformation plan and $125,000,000 in targeted cost savings spread evenly across the other businesses and corporate.

Of our total $250,000,000 cost target, we remain on track to deliver half of these run rate cost savings by the end of twenty twenty five. As we progress further into the year, we'll look to provide regular updates on those savings which remain focused on optimizing our asset footprint and reducing overhead costs. These efforts tie into our portfolio management pillar, which I will speak to Our ability The execute a broader cost out program, which has been a focus of mine since moving into the CEO The, is rooted in our transformational expertise as exemplified in our success through our TT transformation plan, continuing under Pathway to Thrive. To further emphasize our long term efforts to drive down cost in TT, want to highlight the announcement we made in December around our agreement with PCC Group to build and operate a chlor alkali facility on the grounds of our TiO2 plant in The Leo, Mississippi. We believe that this asset light approach working closely with a trusted partner in the chlorine space, will continue to bolster our efforts to become one of the world's lowest cost TiO2 producers providing sizable operating cost advantages once the plant is operational in 2028.

This plant adds to our vertically integrated chlorine positioning at our new Johnsonville site to ensure U. S. Domestic supply of TiO2.

More broadly, we have focused efforts on reducing corporate overhead costs taking a zero based budget approach to these costs while reducing costs in an area of focus that we can control, we are also looking at improvements to drive further operational efficiencies By using a standardized execution model, through centers of excellence, we will drive best practices across our organization and help continue our momentum. Turning to our second pillar, enabling growth, Chemours remains committed to smartly investing in high return low risk initiatives across our portfolio while driving commercial effectiveness. We are targeting a revenue CAGR of over 5% from 2024 through 2027 assuming no significant macro events over that time. As we shared at our last earnings call, we are prioritizing [indiscernible] attractive spaces with a focus on data center cooling, next generation refrigerant semiconductor fabrication and the development of next generation EV batteries. And as we saw this past quarter, we've already taken positive steps through successful capacity expansion of our high purity Teflon PFA line in our APM business. I'm pleased to say that the production ramp up of this asset has proceeded well. With our focus on growth, wanted to highlight the continued strength in demand for Opteon Refrigerants, which experienced double digit growth in 2024 and which we anticipate will continue through 2025.

As mentioned previously, we have completed a 40% of which half will be available in 2025 with the remaining capacity available in 2026. With this added capacity, we believe we will be well Taken together, these actions reflect important steps We will continue to closely evaluate all investments to ensure a disciplined capital allocation approach aligned with our strategy and continue to expect our investments to be funded by organic cash flow generation and cost savings realized across all our businesses. Our third strategic pillar, portfolio management, is reflective of our ongoing commitment to optimize our existing businesses and assets by shifting our focus from products to applications in higher growth, higher margin markets with the goal of enhancing shareholder value.

As I shared on our last earnings call, these efforts included an evaluation of our existing footprint to ensure we have an optimal asset base that is aligned with our future needs. In connection with these efforts, we are announcing with a focus on creating value for shareholders in a improving the quality of earnings as we continue to aggressively reduce costs and improve our overall profitability. Our focus is on enhancing our asset footprint provide the highest level of shareholder value.

While announcing The strategic review today, we started to take initial steps around our APN European assets in the third quarter.

Those activities included the write down of certain assets and putting our hydrogen focused NAFION expansion on long term hold. Adding to these earlier actions in January of twenty twenty five, we made the decision to exit our surface protection solutions or SPS Capstone business This action was taken due to regulatory changes uncertainty that have caused reduced demand and market deselection.

We expect all manufacturing activities for SPS products to cease by the end of second quarter of this year pending local regulatory approval. Once complete, we expect the annualized revenue loss to be approximately $80,000,000 to $90,000,000 going forward with a challenging operating environment compounded by increased costs making SPS economics unfavorable going forward. In connection with the SPS exit, we expect to incur total restructuring charges of approximately $60,000,000 of which half are expected to be cash payments The cash payments associated with this exit are expected to be incurred throughout late twenty twenty five and 2026. While these decisions are never easy, we believe these actions and continued evaluation of our portfolio are critical to ensure Kemur's long term success and drive shareholder value These actions also help us strengthen the overall Chemours The and enable us to allocate capital to areas of the business generating a more positive return. We anticipate completing our review of our European APM asset base by the end of twenty twenty five and we'll share updates we progress Lastly, in our fourth pillar, strengthening the long term, we remain focused on advocating for the criticality of our chemistries ensuring that we make measurable progress on addressing legacy liabilities and use the best science analytical methods and data to support our responsible manufacturing practices.

Our efforts in these areas are embedded at all levels of the company and we engage with our regulatory stakeholders to support science based regulation of our industry that provides clear standards that are supported by sound science and research.

I'm proud of the significant progress we have made to date in executing our Pathway to Thrive strategy over the short course of a few months. We remain confident that our continued focus on the key pillars of our corporate strategy will drive strong operational and financial performance of across our three businesses and ultimately position Chemours for long term success and value creation.

This progress was only made possible the dedication and efforts our employees I would like to thank our entire team for their hard work and efforts that have allowed us to bring this strategy forward as we continue delivering Trusted Chemistry.

I look forward to providing additional updates on our operational and financial performance and our continued progress executing our Pathway to Thrive strategy in the months to come. Thank you. And our first question will come from Arun Viswanathan.

With RBC Capital Markets. Your line is now open. Great. Thanks taking my question. Hope you guys are well.

So I guess, first off, I wanted to understand maybe the bridge from '24 to $25,000,000 EBITDA guidance I remember correctly, there were about $80,000,000 or so of one timers in 'twenty four. So, if we add that back it seems like there's about $40,000,000 or $50,000,000 of extra growth to the midpoint of your new range for $25,000,000 am I right in that assessment? And then if so, how would you kind of characterize that additional growth?

Thanks. Thanks, Arun. Appreciate the question. So first of all, I just want to start with talking about this year and what we're excited about. When we look at this year, the transition to the low GWP technology in the stationary market is is really exciting for us. We also see green shoots in our TT business and we're really laser focused on delivering on Pathway to Thrive. As you say, there's some things to explain relative to the bridge from '24 to '25, and I'm going to turn it over to Shane to give you a little bit more Yes. Thanks, Varun. You mentioned a number of one time costs, which we don't anticipate recurring next year. However, you probably saw the Q1 guidance. We are anticipating some operational headwinds in Q1 related to in TSS, a site specific forced outage some weather related items in The, especially in January here in the elongated plant shutdown in APM. That's about $15,000,000 to $20,000,000 going in Q1. But as I think ahead, we don't anticipate these to recur. We anticipate seasonality in TSS and TT in Q2 and Q3. As Denise mentioned, very excited about the Opteon adoption especially in commercial and stationary refrigerants And then further, we're going to control what we can control, continuing to to align pathway to thrive and continue to reduce costs and manage that accordingly.

And then as a follow-up to that, so Looks like your second half, I think you mentioned should be a little bit stronger than the first half. So it sounds like you could be exiting second half at a $500,000,000 or so plus run rate of EBITDA. If you annualize The, you get to $1,000,000,000 plus for 2026. Am I thinking about that the right way? And what would that require? Is that kind of maybe a better free on price environment or maybe capitalizing on the capacity growth that you've had in TSS Or would it also require some better The markets? Thanks.

Thanks Arun. I mean, I think it's early to give anything related to 2026 as at this point.

But as I think about kind of your math in 2025 and you know, items that we believe are going to help us with that guidance that we talked about for the full year, Certainly, the additional capacity at corporate Christi from Nafion perspective is contributing to The. We brought a PFA line on as well, which is going to help continuing that cost out program as we talked about as well. And then also we are seeing as Denise talked about some green shoots TT as it relates to share, but also thinking through a back half weighted some market recovery as we look at the underlying KPIs.

All right. Thanks a lot.

And the next question will come from Josh Spector with UBS. Your line is open.

Yes. Hi. Good morning. I wanted to follow-up on T2 So you mentioned a couple of times green shoots in that business that you're seeing but volumes aren't improving in your forecast sequentially and you talked about some regional mix headwinds. So I think from the outside in, it looks like your key business is maybe getting worse. But you're calling out green shoots. Can you help us understand kind of what's going on within that Thanks.

Sure. Yes. Thanks, Josh. Appreciate the question. Yes, going into so first of all, we delivered a very strong fourth quarter. Coming into The the first quarter, there's really a regional mix impact. When we talk about some of the green shoots we're seeing, it's really around some share gain that we're seeing in Europe. I would say it's still early days as you think about anti dumping impact. But if you look at The the exports from China The, as they go into Europe or even into Brazil, you see that there's quite a decline and not just a decline in overall volume, but a decline in the high purity, high quality TiO2. So there's a lot of The inventory that had to be worked out, but you can see that decline occurring which we're well positioned We have a great value proposition, a great franchise around reliability, security of supply. The other thing that, first of all, we're going we're going into the second quarter is generally a better season for the coatings market. And some of the macros that we look at the housing market index has increased again in January. It's the highest level it's been at in nine months.

And historically, that correlates to coatings demand. So that's what we mean when we say green shoots. And we are we absolutely are not saying that feeling like we're weak. The I said, the first quarter has a lot more to do with regional mix. And we're committed to our pathway to thrive and continuing to drive cost out [indiscernible] NTT.

Thanks. Just a follow-up, just the regional mix to be specific, is that selling more into Europe and less into North America? Or what's the change? And is that temporary for first quarter? Or does that reverse? Or is that a permanent shift?

Yes, I would say that that's accurate. And then I would definitely expect it to shift as we enter The the seasonal coatings market in The U. S. Okay. Thank you.

And our next question will come from Hausen Ahmad with Alembic Global Advisors. Your line is now open. Good morning, Denise and Shane.

Just wanted to dig a bit deeper into the prior questions about TT and guidance. 2025 guidance in particular. I mean from the sounds of it, it seems obviously we haven't really seen much of an impact from the anti dumping side of it. I'm just trying to get a more granular view with regards to what you're baking in, in your 2025 guidance in terms of TT pricing, volumes and a potential boost from any sort of antidumping related market share gains? [indiscernible] The, from what we're baking in, we're not baking in any large macro change, what we're seeing is that we are seeing signs and these things take time. There's inventory that has to work down. If you look at the China exports into the EU '27 and into Brazil, you can see that they are declining, which creates opportunity for us.

Understood. Understood. And as a follow-up, I mean, as I sort of talk to industry consultants, TiO2 consultants The seem to be pretty large divergences in what they're baking in, in terms of supply additions globally. Right, particularly as they relate to China, be it some of the supply additions that happened in 2024, be it some of the supply additions they're baking in for 2025 and beyond. I mean, can you sort of give us a view or a Chemours view of what the supply picture looks like. Whether there is sort of forecasted tightness in utilization rates on a going forward basis?

Thanks, Hassan. I mean, I would say that we're not anticipating any significant increase in [indiscernible] the utilization is going to depend on what happens with demand, which as we're saying, right now, we're cautiously optimistic, I would say. But we would need some more macro signs to see a utilization pickup.

So I mean just to get sorry to follow-up, but just to get a bit more specific, I mean some people have numbers north of sort of 500,000 tonnes baked in for 2025 supply additions while others have the number at 150,000 to 200,000. The mean, mean those are major swings. Which camp are you guys in?

Are you I'm not exactly sure I understand your question.

In terms of net capacity additions for 2025 in TiO2.

Yes. I mean, it would definitely be on the low side.

Thank you so much.

And our next question will come from John McNulty with BMO. Your line is open. [indiscernible] Yes. Thanks for taking my question. So I guess first one would just be around your CapEx. You're looking for $250,000,000 to $300,000,000 so down a reasonable amount.

From 2024. Is it fair to assume that your CapEx budget doesn't include any CapEx for the data center opportunity that you've been talking about And can you give us a little bit of color or thought on the timing for FID on that and any other updates around the two The Immersion Cooling platform that you've been building out? [indiscernible] I'll take care of the CapEx and then Denise can go into Immersion Cooling update.

As far as the CapEx go, as you mentioned, $250,000,000 to $300,000,000 is what we guided. We continue to think about how to continue our growth initiatives and maintain at asset light where possible. So if you think about Denise talked a little bit about the PCC and agreement in TT, in the unique way we did that. So as we think about just going forward, we're laser focused on our liquidity and CapEx is one of those as well.

And then Denise, do you want to go?

Sure. Relative to how we're doing with [indiscernible] We're really still very excited about The space. We have significant value chain engagement and we think this is going to be a large part of a big part of the overall liquid cooling demand. And I know you know this, but it's really going to be kicking in more towards the end of the decade because it there'll be requirement for new data centers. The relative to that our asset plan, we talked about that before that we're going to be giving updates. We remain focused on achieving commercial We [indiscernible] The have an underlying plan Right now, there's some confidentiality around our process and intellectual property and so there's some things that we're not really ready to disclose around The molecule, but we look forward very soon to be giving an update on that.

Great. Thanks very much for the color on that. And then just maybe on the on the TSS side, it sounds like there's a pretty wide range of outcomes as you're looking out to 2025, both on Opteon and it sounds like there's some pretty solid volume growth there. I guess can you help us to think about that? As well as where you think we may be in the Freon inventory kind of destocking, when do you think we may be getting through that where we might see price starting to inflect since it seems like that's a big part of the range of outcomes that you've got for the year?

Thanks, John. First, I'm going to start with Freon. Last year was a unique year for us, for Freon because there was a delay that was very unexpected. With the technology transition where things were pushed out a year, SouthGroup was pushed out. So we were really impacted by Freon. Coming into this year, right, we're trying to use our quota really for the low GWP refrigerant. So our we said in our strategy, we are much less dependent on Freon this year and a matter of fact, by the end of the year, we are really all Freon sales are going to be outside of The U. S. And Europe. [indiscernible] if you turn to the Opteon side, you saw 23% growth in the fourth quarter. You can expect at least that kind of growth this year. But one thing and we're committed to 30% margin in this space, one thing to keep in mind and kind of going back to when things transitioned to The HFO technology for the auto OEMs, This is a year where The where it's the OEM year.

The aftermarket space where you have more I'll say pricing flexibility is lower. So it's about a 10%. Really what we're doing with the OEMs is securing our share for the long term. With that said, we still do have opportunity to pass through raw material price increases even to the OEM part of the market.

Got it. Okay. No, that's very helpful. Thanks for the color.

And our next question will come from Vincent Andrews with Morgan Stanley. Your line is open.

Hi. Could I ask in the fourth quarter, you mentioned that you had some non recurring benefits from inventory true ups and APM as well as I guess some non recurring cost benefits in TSS. Could you tell us what those were and in particular to the inventory? Can you talk about what triggered that or how that happened and what discretion you had related to it? Yes. Sure, Vincent. Yes, as I think about some of the benefits we saw The were kind of one time in nature. I mentioned the items in APM and TSS. I mean these are really around inventory valuation items that happened in the fourth quarter The and some reserve changes. They're in the range of about $5,000,000 to $10,000,000 as I think about kind of sizing them up. But I would say, I mean, those were benefits, but we also had some items in our corporate costs that were one time in nature related to asbestos reserves as well.

And as you can think about the additional corporate costs, I mean that was in the range of $10,000,000 to $15,000,000 as well. So just trying to give some a little bit of color color on the positives and negatives we saw from a one time items in Q4.

Okay. And then if I could just ask on TT, point taken on what's happening so far in Europe and Brazil in terms of the direction of Chinese exports.

A year from now, where do you envision those Chinese exports that don't go to Brazil or Europe anymore? Where do you think think they wind up? Do you envision China cutting production or do you envision those going into other markets And if they go into other markets, what happens to the TiO2 that was previously servicing those other markets?

And what you can see in the data is it's going to Asia and The Middle East. I think time will tell based on how prolonged the recurrence of the upswing to kick in the market when that happens. I think there are some concern of customers around the profitability of some of these the Chinese producers and how long they can withstand the narrow margins.

And our next question will come from John Roberts with Mizuho. Your line is open.

Thank you.

I guess we have now an ex DuPont or back at the EPA The a key position here. You think that changes any of the complexion around the PFAS activity over the next few years The maybe give us an update on the upcoming New Jersey trial?

Sure.

Relative to the EPA, we're really as you know that the rule came out relative to The maximum limits around specific molecules that were really not science based. We're really glad that the Trump The for sixty days. So we're really hopeful for a good dialogue on science based targets. Relative to the new Jersey trial, we The is set for May. And we continue to prepare. And as always, there's there's getting ready for trial. There's also opportunity for settlement as well.

Okay.

And The, what's happening in the existing small, fluorochemical base immersion cooling market? Three ms is exiting So what are their existing customers doing? And is there anyone stepping into that space here as they exit?

Yes.

For the The bed. 3M producers, there are Chinese producers. There are I would say, some significant corrosion issues with that product. So While it's in the market, there's definitely big room for improvement.

Thank you.

And the next question will come from The Alexander open.

So good morning. We'd just like to flesh out the regulatory comments about the downside risks for 2025 for APM. Can you just flesh out what if there's any particular timeline or events you're looking for or decisions that would and then how much of a swing in your forecast [indiscernible] And also can you put that in context in terms of what is APM facing over say the next three to five years?

Yes, Lawrence. Thanks. Yes, I mentioned that as I think about the range provided within the low end to the high end, From a low end, the $825,000,000 I put, when I mentioned regulatory pressures in APM that's really making sure just from an operational perspective, Denise just talked about some of the science based items we were discussing with the EPA. We are excited about kind of developing that and having further conversations. But if there is some other conversations that go the other way, that's really what we were getting at is potential regulatory pressure there. As I think about your latter question around the next several years in APM, we're really committed to taking a look at just overall portfolio in line with Pathway to Thrive. And APM is certainly part of The. And making sure that the product lines we're operating are optimized from a return basis. And thinking through the next steps whether that be changes in portfolio like we just talked about with SPS, or putting hydrogen on The long term hold. We're really committed to making sure that that business is optimized from a return portfolio.

Thank you.

And our next question will come from Jeff Saucopka with JPMorgan. Your line is open.

Thanks very much. Your inventories were $1,470,000,000 in the quarter, which I think is up 12% sequentially and about 10% year over year. Your sales are down What's What's going on with that number? Why is it so high? Yes. Thanks, Jeff.

I think there's a confluence of a couple of events here. I would say one is we did have a lot of planned maintenance activities at the end of the year. So we did build up inventories through that side that will continue to work down we look into 2025. I think other aspects of this is really some related items in TSS around our quota. And which will continue to work down in 2025.

And then outside of that was some select purchases within TT to think through where their inventory balances are. I will say The, as we think about the path ahead of us from a liquidity, we are focused on making sure that we optimize our working capital going forward and thinking about days conversion. And I think there's opportunities within that inventory you've talked about your possible cash flows for 2025 and you said you should cover your dividend of $150,000,000 CapEx is roughly $2.75. So you total it up, that's $4.25. Is that your expectation?

With Your EBITDA between $8.08 25 and over 9. Is there something that would lead you to have The would put pressure on your cash flows or that's kind of what you're expecting? Do you have an aspiration for 2025 cash flow? Thanks, Jeff.

Certainly, we have an aspiration as we think about cash flow. We did not provide that externally As we talk about transparency, very happy with providing annual guidance on EBITDA As I think about what we talked about from cash flow was, we expect to from that perspective to at least cover the CapEx and dividends on that side, just making sure that we give confidence on on balancing strategic growth and debt pay down with other priorities of the company I. E. Making sure that we fund the organic CapEx as well as providing returns to shareholders.

Great.

And our last question will come from Pete Osterline with Truist. Your line is now open.

First, on the cost savings realized from The TT [indiscernible] And as you began working on optimizing your cost structure through the new cost savings plan, Are you finding any areas of the business where you think there may be upside to this target as well? Thanks, Steve. As I think about just the the TT transformation plan in total, very proud of the team, just executing above the The. We saw some positives as it relates to just overall manufacturing related costs and thinking through mainly around those fixed fixed cash costs in the operation side.

We're not as we think about the Techway to Thrive targets of $250,000,000 we're still very focused on achieving The. As we continue on this path and if we see any upsides, commit to being transparent around that and thinking through if there is that side. We are the first part of this and we're very excited about the organization we put around the pathway to thrive, whether it The the committed transformation teams or the other areas of pillars that are leading such. And I'm confident that they can meet those targets and exceed in Great. Thanks. And then just a quick follow-up on free cash flow. It looks like you're guiding for free cash flow to be positive this year. Is that the assumption at the middle of the EBITDA guidance range? Or do you expect to be free cash flow positive even at the low it's a great question. I mean, I think from a positive free cash flow, I indicated such given that the overall guidance was that we can fund there. Our CapEx as well as the dividends go I think that if it is at the lower range, we can take other actions to think through working capital and making sure that we're balancing such.

So committed to positive free cash flow and making sure that we're going forward focused on balancing spend to get it to there. Thank you very much.

And answer session. Thank you for joining Chemours Company fourth quarter twenty twenty four earnings [indiscernible] You may now disconnect Connect. [indiscernible] [indiscernible]