Chemours Company (The)

Good morning, my name is Michelle and I will be your conference operator today. I would like to welcome everyone to the Chemours Company fourth quarter 2024 research results conference call. Currently 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 Onchus, Vice President of Investor Relations for Chemours. You may begin your conference.

Good morning, everybody. Welcome to the Chemours Company's fourth quarter and full year 2024 earnings conference call. I'm joined today by Denise Dignam, Chemours President and Chief Executive Officer. and our Senior Vice President and Chief Financial Officer, Shane Hostetter. Before we start, I would like to remind you that comments made on this call, as well as the supplemental information provided on our website, contain forward-looking statements that involve risks and uncertainties as described in Comorz's SAT file. 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, 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 is included in our press release issued this morning. We've posted our earnings presentation to our website earlier today. With that, I will turn the call over to Denise Stigman.

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 questions. 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 quarter, demonstrating our continued focus on operational excellence and fulfilling our shareholder commitments. For our TSS business, we again achieved a quarterly sales record driven by 23% year-over-year growth in Option refrigerants driven by the U.S. AIM Act and EUF gas regulatory transitions underway. Our TSS earnings came in above our expectations, driven by this continued Option 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 the expansion at our Corpus Christi site. where we produce our neat Option 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 million in annual savings, exceeding our initial target of $125 million. 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 pace. We expect TT will achieve at least another $60 million in run rate savings by the end of 2025, representing approximately half of the 125 million corporate wide targets 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 napheon 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 in early 2024. 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 Strengthen 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 Chemours TT Business. Most recently, Damian served as the Vice President Corporate Strategy at the Olin Corporation and previously led Olin'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 Camorra's strategy. We're looking forward to him officially joining the team in early March. Second, I want to highlight the appointment of Diane Pischo, 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 TT business. 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 40 years of business leadership across Chemours business segments, and I can attest firsthand to her effective and collaborative leadership style. The appointments 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.