Chemours Company (The)

Good day and thank you for standing by. Welcome to the Key Morris Company second quarter earnings call. At this time, our participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, John Locke, BP Corporate Development and Investor Relations. Please go ahead.

Good morning, and welcome to the Chemours Company's second quarter 2021 earnings conference call. I'm joined today by Mark Newman, President and Chief Executive Officer, and Sameer Raham, Senior Vice President and Chief Financial Officer. Before we start, I'd like to remind you that comments made on this call, as well as the supplemental information provided in our presentation and on our website, contain forward-looking statements that involve risks and uncertainties. including the impact of COVID-19 on our business and operations and the other risks and uncertainties described in the documents Chemours has filed with the SEC. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, management will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments are included in our release and at the end of this presentation. With that, I'll turn the call over to our CEO, Mark Newman, who will review the highlights from the second quarter. Mark?

Thank you, Jonathan, and thank you to everyone on the call for joining us today. I'm excited to be speaking to you today on my first earnings call as CEO of the Chemours company. It's a busy time here at Chemours, but the energy I feel from our people, from our customers, suppliers, and investors is so incredible. This has been in part driven by the broader macroeconomic recovery from COVID-19. But more importantly, I think it reflects the enthusiasm and passion of our teams and a deeply held belief that our chemistry has the power to change the world. To that end, I have charged the people of this company to drive even sharper focus on creating the best products for our customers and helping solve the world's biggest challenges, from climate change to energy storage to high-speed data. Our chemistry is fundamental to the future, and through our innovation, we have the power to make a difference. There is a rich canvas of opportunity which lays ahead of us, and we are well positioned to drive long-term growth for the benefit of all our stakeholders. In 2021, we are focused squarely on delivering on our plans and ensuring that we take full advantage of market opportunities, which we are uniquely positioned to capture. Turning now to the highlights from the second quarter on chart three, demand momentum from the first quarter continued into Q2 as a global recovery from COVID-19 continued at pace. We set a number of revenue and profitability records across the portfolio in the second quarter, including achieving the third highest quarterly sales in Chemours history. Net sales increased 51% to $1.7 billion, while adjusted EBITDA of $366 million increased $200 million from the prior year quarter. Our titanium technologies results demonstrate the benefits of our TVS strategy and the continued economic recovery, driving our volumes to historic levels and supporting higher tie pure pricing across all channels. We are delivering on the challenging supply chain and logistic conditions, which is becoming a real differentiator in customer choice. The execution of TVS improves our quality of earnings through the cycle by creating mutually beneficial long-term relationships with our customers and building a better book of business. In our thermal and specialized solutions segment, we reported another strong quarter. Rebounding global markets are supporting improved volumes and higher pricing in base refrigerants. Operationally, we have recovered well from the weather impacted first quarter, which helped to support our strong margin performance in the quarter. The global transition to HFO technology is underway, with many years of growth ahead, enabled by better enforcement of FGAS regulations in Europe and the coming implementation of AIM regulations in the U.S. We have shown incredible progress in our advanced performance material segment. Demand has recovered across the majority of our end markets, leading to historic highs for quarterly sales and adjusted EBITDA this quarter. APM is transforming fast and primed to deliver. The business is delivering on proof points that support our near-term GDP plus growth ambitions. Meanwhile, we are positioning ourselves to capture secular growth over time as key trends take hold in semiconductor manufacturing, 5G communication, and hydrogen generation. I'm especially proud of these results in the context of global supply chain disruptions. which have impacted everything from the raw materials we procure to shipping containers, which we use to serve our customers. Everyone at Chemours has stepped up over the last several months to support stable operations. And I would like to take this opportunity to thank the entire team for their continued dedication to our customers. This week, We also announced the signing of a definitive agreement to divest our mining solutions business to Drozdlovsk for $520 million, or 10 times 2020 fiscal year adjusted EBITDA. With this transaction, we are furthering our strategy to focus our portfolio and drive long-term growth around our three core businesses. This was a great result for Chemours. the mining solutions team and for our shareholders. We executed quickly, having just launched the process in Q1 and anticipate the transaction will close by the end of this year. I would like to thank Jonathan Locke and all of the Chemours team involved for helping us achieve this great outcome. Before turning things over to Sameer, I wanted to cover one more topic. The most recent publication of our 2020 Corporate Responsibility Commitment Report released a few days ago. The annual publication of our CRC report has become a tradition at Chemours, which I look forward to. Four years into our sustainability journey, we continue to make significant progress against an ambitious set of 2030 goals. I'll discuss the content of the report in more detail here on chart 4. In 2018, we set out to chart a new course for Chemours and the chemical industry more broadly. We introduced a comprehensive set of goals designed to push ourselves to a higher standard. and we have been relentless in our pursuit of these goals over the last several years. As a reminder, these goals cover our shared planet, inspired people, and an evolved portfolio. When we set these goals, we weren't entirely sure how we would achieve them by 2030, but we have attacked them with the same resolve we took to the spin, our transformation, and reshaping our portfolios. As you can see on chart five, even in a year marked by COVID-19, our teams have rallied around this common cause to deliver significant progress across the board. This is so important and exciting to me because we know that priorities become clear on the times of duress. In 2020, we kept our focus on our North Star, keeping our people safe and serving our customers. but also saw to it that we continue to make progress against our CRC goals. On the shared planet, we have reduced our fluorinated organic compound emissions and our greenhouse gas emissions by 48% and 29% respectively from our 2018 baselines. We are on track to hit both our 99% reduction target for fluorinated compound emissions and our 60% absolute reduction in greenhouse gas emissions by 2030. We are targeting net zero greenhouse gas emissions by 2050. In our Inspired People pillar, I would like to highlight the increase in female representation on the senior executive team, up to 44% as of July 1st, from 13% only a few years ago. There's still work to be done to ensure our overall workforce gets to 50% women by 2030, but I am proud of the success we have had at the leadership level thus far. With respect to the ethnic diversity of our U.S. workforce, we are nearing our goal of 20%, again, with significant representation on our senior executive team. Finally, in the Evolve portfolio, Over one-third of our products, by revenue, make a specific contribution to the UN Sustainable Development Goals. As we move closer to our goal of ensuring 50% or more of our revenue comes from offerings that make specific contribution to the UN Sustainable Development Goals. The headlines are, of course, Option and Nafion. but Chemours is making a difference much more broadly across the portfolio. For all the details, please have a look at our CRC report posted on our investor relations website. With that, I'll turn things over to Samir to review the financial results for the quarter. I'll be back to talk about our revised guidance before turning to Q&A. Samir?