Chemours Company (The)

Good morning. My name is Sarah, and I will be your conference operator today. I would like to welcome everyone to the Chemours Company fourth quarter and year-end 2023 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the conclusion of the prepared remarks. I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference call over to Brandon Onchez, Vice President of FP&A and Investor Relations for Chemours. You may begin your conference.

Thanks, Sarah. Good morning, everybody. Welcome to the Chemours Company's fourth quarter and year-end 2023 earnings conference call. I'm joined today by Denise Dignam, Chemours Chief Executive Officer, and Chemours' Interim Chief Financial Officer, Matt Abbott. Before we start, I would like to remind you that comments made on this call as well as in the supplemental information provided in our presentation and on our website, contain forward-looking statements that involve risks and uncertainties as described in Chemours' SEC filings. 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 the call, we 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 press release we issued yesterday. As a reminder, our press release 10-K and our supplemental earnings deck have been posted to the investor relations section of our website. With that, I will turn the call over to our CEO, Denise Dignam.

Thank you and good morning, everyone. I appreciate that you've joined us today. Before I introduce myself, I want to thank all of you for your patience and understanding. We've been working diligently over the past few weeks to get to today. I have great confidence in this company, our values, and our people, and I am energized to lead our important work going forward. I acknowledge that we face challenges. At the same time, though, we have opportunities to unlock the potential of Chemours, and we're moving ahead with a sense of focus and urgency to do so. I know our shareholders want to own a company that they can count on for profitability and growth with strong ethics, values, and integrity. I share these priorities. So let's talk about how we're going to deliver on them. First, let me give you some perspective on what you can expect of me as CEO of Chemours. Fresh out of Drexel University, I joined DuPont 36 years ago as a design engineer. I worked shifts in our manufacturing operations, the first woman to do so at our Chambers Works site in New Jersey. Here I learned firsthand about the people and processes that underpin a successful manufacturing operation. how hard the work was, and how skilled you had to be to do it well. It also ingrained in me an appreciation for how much pride there was in driving efficiency and process improving, in doing the job better, delivering tangible results. In a manufacturing business like Chemours, the safety and well-being of our people come first. It's where integrity starts. I learned this early on too. Later I moved into customer facing roles in sales and in marketing. I learned customers have choices. I learned how important customer relationships are and how those trusting relationships create real and sustained value. These experiences taught me that you need to do what's right for customers and what's right for employees. These are keys to success. I also established a track record for making quick, bold, and sound moves that drove results, and a reputation for transparency, directness, being hands-on, and using simple language. When I joined Chemours as part of the spin-out in 2015, I was excited to join a new company with really good roots. These were based on our leading technology and our superior manufacturing. When I started at Chemours, I led the North American region for fluoropolymers, as well as having responsibility for our global Nafion and Krytox businesses. This is when I saw the potential for Nafion. At the time, hydrogen was not considered a strategic growth priority. We quickly pivoted to making it one of our growth engines aligned with the growth of hydrogen. Next, I raised my hand to lead operations. then went on to become president of our advanced performance materials segment, where during my tenure, we took down costs by about 10% and doubled margins in the business. About a year ago, I took on the role of president of our titanium technology segment. I launched our transformation plan and we are well underway to enhancing performance and efficiency. Yes, there's more work to be done on both businesses, but we are headed in the right direction. Let's be clear about where we stand today. We have two dynamics at play with our business, and I want to be plain spoken about each, the difference between them and how we are going to act accordingly. One, we operate in certain mature markets where we must have the lowest cost position. TT and Advanced Performance Materials, APM Advanced materials. Two, we operate in markets with great opportunities to grow through technology developments, TSS and APM performance solutions portfolio. Now let's focus on how we're going to deliver on our priorities. First, we will relentlessly take costs out of all of our businesses, like what we are doing through our TT transformation plan. We launched the transformation plan to drive effective resource allocation for higher productivity while driving costs out of the business. Our TT employees have embraced this challenge and are producing results. We closed the Quan Yin site, a high-cost asset. We shifted resources to process innovation to deliver greater efficiencies in manufacturing. We put laser focus on our mining operations to maximize the return on our mining investments, delivering more ore to our pigment plants through backward integration without increasing capital. You will see the impact of these actions in our results. We achieved approximately $50 million in cost savings in 2023, even in the face of input cost headwinds. We are on track to take out at least another $125 million of cost of the business in 2024. Let me emphasize, this is not our expected year-over-year improvement in earnings. It is sustainable cost takeout that is returning TT to a leading cost position. What we are doing in TT is a good example of what you can expect in a second phase of cost out in APM. We're looking carefully at optimizing our product portfolio and at the same time driving efficiency and productivity. As I said earlier, the second element of our value creation formula is investing in high return market and customer driven growth opportunities. This is important in TSS and APM performance solutions portfolio. TSS is uniquely positioned to capture the significant secular growth opportunity driven by changing regulations that will favor low global warming potential refrigerants and advanced cooling solutions. We have clear investment plans to capture this opportunity, including the expansion of Corpus Christi, as well as investment in next generation refrigerants and immersion cooling, all of which is currently underway. For APM, we are executing on growth projects to address high growth potential in applications such as hydrogen production, semiconductors, and electric vehicles. Also, you may recall we launched a joint venture, the Mobility FC Membranes Company, in 2023 to accelerate the capacity to manufacture fuel cell and humidifier membranes for mobility applications. This JV is off to a fantastic start. Now let me introduce Matt Abbott, our interim CFO. Matt joined Chemours in 2017 from PWC where he was an audit partner. He started his tenure with Chemours in our internal audit group and later served as chief accounting officer and controller. In June of last year, Matt was promoted to chief enterprise transformation officer. We appreciate his leadership as we continue our comprehensive search for a permanent CFO. I'll now turn the call over to Matt.