Venator Materials PLC Ordinary Shares

Good day and welcome to the Venator Fourth Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Kate Robertson with Venator Investor Relations. Please go ahead.

Thank you, Rocco, and good morning, everyone. I am Kate Robertson, Investor Relations for Venator Materials. Welcome to Venator's fourth quarter and full year 2021 earnings call. Joining us on the call today are Simon Turner, President and CEO, and Kurt Ogden, Executive Vice President and CFO. This morning, we released our earnings for the fourth quarter and full year 2021 via press release and posted the release and accompanying slides to our website at venatorcorp.com. During this call, we may make statements about our projections and expectations for the future. All such statements are forward-looking and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. All performance additives comparisons we make on this call exclude the water treatment business which was sold in May 2021. You should review our annual report on Form 20F for the year ended 31st December 2021 and our other filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. We will also refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, free cash flow and net debt. you can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at venetocorp.com. I would now like to turn the call over to Simon.

Thanks, Kate, and good morning, everyone. Welcome to our fourth quarter and full year 2021 earnings call. Beginning on slide three. In 2021, demand recovered and remained strong throughout the year. Supply chains were under pressure, and we incurred significant cost inflation, primarily TIO2 feedstocks, other raw materials, energy, and shipping. In response, we implemented a range of actions, including increased selling prices, surcharges, and cost control measures. Notwithstanding these challenges, the Venator team delivered 40 million of adjusted EBITDA in the fourth quarter and 180 million in the full year of 2021, an increase of 15 million and 44 million respectively. Turning to slide four on our titanium dioxide segment. Fourth quarter adjusted EBITDA from our titanium dioxide segment was 35 million compared to 25 million in the prior year quarter and 54 million in the third quarter. Throughout the fourth quarter, demand for our functional TO2 products continued to be robust across all regions and sectors. We continue to see a recovery of demand for our specialty TO2 products most notably into textiles applications. CO2 sales volumes declined 2% compared to the prior year quarter. The decrease reflects strong demand in the prior year period as the global economy emerged from COVID-19 shutdowns and limited inventory levels in 2021. Volumes declined 10% sequentially, which is consistent with historical seasonality and the impact of plant maintenance. In the fourth quarter, we incurred significant cost inflation from energy, primarily in Europe, and raw materials, which was in line with our expectations at our prior earnings call. We mitigated these headwinds through a range of actions, including increased selling prices, targeted surcharges, and cost control. CIO2 average selling prices increased 20% compared to the prior year period, and 6% sequentially in local currency. Now, turning to the outlook for CIO2, Underlying demand remains strong, specifically in Europe and North America. We continue to see high demand across all major sectors. Recovery continues in specialty TO2 applications such as textiles, personal care, and automotive. Our inventories are at historically low levels, and we expect inventories to remain lean throughout 2022. We are increasing production to meet the requirement of our customers for all products. Shipping availability remains tight, ports are congested, and lead times are longer. Inventories are low, and we don't have the benefit of normalized inventory levels to fall back on, which brings additional pressures to already fragile supply chains. Looking at our cost base, we expect to see inflationary pressure on most TO2 feedstocks during the first half of the year. We expect energy costs in Europe to remain elevated, with volatility due to current political turmoil. We continue to manage our costs with programs such as fixing a significant portion of our variable costs. However, we are subject to market rates on the remainder. We will expand and intensify our range of price increase actions, which will now include monthly price reviews and tailored surcharges. This will bring more flexibility to manage margin in this increasingly volatile raw material, energy, and freight cost environment. These initiatives are supportive of our customer-tailored approach. Turning to slide five and our performance additive segments. Our performance additive segment delivered adjusted EBITDA of 19 million in the fourth quarter of 2021, compared with 15 million in the prior year period and 5 million in the third quarter. Strong demand continued for our functional additives products into automotive, electronics, and coatings applications. Demand in the fourth quarter for color pigments and timber treatment products were at normal seasonal levels. In the fourth quarter, total segment sales volumes declined 2% compared to the prior year period and 5% sequentially. Average selling prices increased 8% compared to the prior year period and 9% compared to the third quarter in local currency as we implemented price increases and surcharges to mitigate increased cost inflation. In 2022, we expect demand to remain robust and volumes to follow normal seasonal patterns. As with our TO2 segment, we expect continued inflationary pressures on raw materials, energy, and shipping costs, which we will offset with increased selling prices in accordance with our customer tailored approach. Moving on to slide six and our cost programs. In 2021, we delivered the full benefits of our 2019 business improvement program. And we exceeded our 2021 target delivery for our 2020 Business Improvement Program by 6 million and substantively completed the actions to capture 55 million compared to the 2019 baseline. We expect to incur total cash restructuring costs of approximately 25 million in 2022, which will support the delivery of this program. I will now pass the call over to Kurt for him to comment on our financials.