Chemours Company (The)

Good morning. My name is Therese, and I will be your conference operator today. I would like to welcome everyone to the Chemours Company Second Quarter 2026 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 Ontjes, Vice President and Head of Strategy and Investor Relations for Chemours. You may begin.

Good morning, everybody. Welcome to the Chemours Company's second quarter 2026 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 in the supplemental information provided 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 this call, we'll refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. Our reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we posted our earnings presentation on our website yesterday evening as well. With that, I will turn the call over to Denise Dignam.

Thank you, Brandon, and thank you, everyone, for joining us this morning. On today's call, I'll start with highlights from our recent performance Then turn it over to Shane to walk through our outlook for the third quarter and the balance of 2026. After that, I'd like to share my reflections as we've reached our halfway point under Pathway to Thrive and discuss the opportunities ahead before we open the line for your questions. For the second quarter, our results reflect disciplined commercial execution, continued pricing actions, and progress against our priorities across all three businesses. Net sales were slightly below expectations primarily due to softer residential stationary AC demand in thermal and specialized solutions. However, pricing improved across all our businesses including continued execution in titanium technologies. Adjusted EBITDA exceeded expectations supported by stronger operational performance and an improved product mix in advanced performance materials, lower corporate costs, and the reference pricing strength in TT. Importantly, we continue to see tangible evidence that the actions we are taking under Pathway to Thrive are strengthening the business. In TT, we announced an additional global TIO2 price increase effective June 1, building on prior pricing actions and supporting local price increases of approximately 5% year-to-date. Separately, in APM's Performance Solutions portfolio, net sales grew 8% year-over-year, underscoring the momentum we are building in high-value specialty applications for Data Center and Semiconductor End Markets as we fulfill a backlog of existing orders. More recently, we also recorded nominal sales of two-phase liquid cooling products for sampling across two-phase applications with several customers. These early sales support continued progress through product trials, which have increased 70% year-over-year while reinforcing the relevance of our innovation pipeline in attractive growth markets. As an indication of the momentum in this space, recent research from the Uptime Institute, an industry-leading authority on data center infrastructure and operations, identified a growing share of operators evaluating two-phase systems for future deployments as AI-driven compute demands accelerate the shift toward liquid cooling. Additionally, we continue to strengthen Comor's financial position through strong cash generation and disciplined capital allocation. enabling further debt reduction and enhancing our financial flexibility. We also made notable progress resolving legacy litigation as demonstrated by our recent settlements with the U.S. EPA and the West Virginia Department of Environmental Protection. Collectively, these actions represent important steps to de-risk the balance sheet, improve leverage and cash positioning, while enabling Chemours to invest with discipline in opportunities that support long-term value creation. Now let me expand on the quarter's business activities. Our TSS business delivered solid second quarter results. Net sales were slightly down versus the prior year quarter, driven by lower volumes from reduced aftermarket sales of Option blends in North America, while Option OEM volumes saw growth year over year in addition to continued growth into data center end markets. In the second quarter, that volume pressure was partially offset by higher pricing supported by strength in Freon refrigerants primarily in automotive applications. It's important to note that the prior year quarter benefited from advanced demand tied to the initial aftermarket channel fail associated with the stationary AC transition under the U.S. AMAC. Given our advantage position in the market, Chemours moved quickly to help ensure distributors and technicians were well supplied to support the new equipment installations. As a result of the initial channel fill, aftermarket customers built additional inventory, creating an oversupply channel heading into 2026. Today, while we continue to see strength in the OEM market, the aftermarket is working through elevated inventory levels. At the same time, residential demand is being pressured by higher interest rates, affordability challenges, and a slower housing market. Together, these factors weighed on second quarter order activity and may continue to drive destocking as we move through the year. Looking ahead, we would expect the aftermarket to begin normalizing as inventory levels are reduced and seasonal restocking begins ahead of next year's pulling season. Adjusted EBITDA for TSS increased year over year with margins also expanding. This improvement was driven by higher pricing and benefited from the timing of certain costs in the quarter. Overall, TSS continues to demonstrate the value of disciplined commercial execution and strong margin performance, even while facing some near-term weakness in the stationary aftermarket. In titanium technologies, the team continued to execute well in a challenging and inflationary market environment. Second quarter net sales increased slightly versus the prior year quarter, driven primarily by global pricing strength. Pricing increased across all regions, reflecting the discipline and consistency of our commercial pricing approach in light of a dynamic demand environment. Volumes were lower across QIA markets with the exception of Asian markets, excluding China and Latin America, where demand remained more resilient in connection with recent anti-dumping duties in Brazil. Adjusted EBITDA for TT also improved year-over-year, while adjusted EBITDA margin was flat. The increase was primarily driven by the global pricing strength noted earlier, partially offset by higher costs from inflation. Importantly, our performance shows that even as inflation continues to pressure the cost structure, the business is responding with strong commercial execution and disciplined cost management, outpacing any inflationary headwinds. We have now announced three TIO2 price increases since December 2025, including our most recent global increase effective June 1. Together, these actions have contributed to an approximately 5% year-to-date price increase relative to where we started the year. As we look ahead, our team remains agile and responsive with an optimized manufacturing circuit that enhances efficiency and flexibility, enabling us to adjust production levels to meet demand while continuing to deliver outstanding service and quality for our customers. This combination of disciplined pricing, Operational Flexibility, and Customer Focus positions TT to manage your dynamic environment and capture value as opportunities emerge. In APM, second quarter net sales were down versus the prior year quarter, primarily driven by lower volumes associated with the SPS capstone line closure completed in the third quarter of 2025. This was partially offset by higher pricing in the business. Adjusted EBITDA declined year-over-year, reflecting the lower sales volumes from the line closure as well as higher costs tied to the now-resolved Washington Works outage. Notably, we continue to see strong momentum in the performance solutions portfolio, where net sales increased 8% year-over-year. Order book strength is driven by long-term sustainable demand tailwinds in data center and semiconductor end markets, where our specialty products play an important role in supporting complex and high-performance applications. Performance Solutions is becoming a larger part of APM's portfolio, reinforcing our focus on higher value markets with stronger growth and margin potential. As a point of emphasis, our exposure to high growth markets is expanding across Comores. Sales into data center, semiconductor, AI, and advanced electronics and markets now represent a high single digit percentage of total sales across APM and TSS, supported by strong demand for differentiated solutions in both businesses. Within performance solutions, more than 40% of sales are focused on these targeted markets, where we see durable demand trends and robust growth potential in the years ahead. Importantly, this does not include the investments we are making in liquid cooling and next generation refrigerants, which we believe will further expand our participation in these attractive growth platforms. Collectively, These dynamics position Comores to participate more meaningfully in high-value applications that we believe can become a meaningful driver of overall earnings over time. With that, I'll turn it over to Shane to walk through our third quarter guide and our updated outlook for the full year of 2026. Shane?