Q3 2024 Chemours Co Earnings Call

In This Article:

Participants

Brandon Ontjes; VP-Investor Relations; Chemours Co

Denise Dignam; President - Titanium Technologies and Chemical Solutions; Chemours Co

Shane Hostetter; Chief Financial Officer; Chemours Co

Arun Viswanathan; Analyst; RBC Capital Markets

Josh Spector; Analyst; UBS

Mike Leithead; Analyst; Barclays

Vincent Andrews; Analyst; Morgan Stanley

Laurence Alexander; Analyst; Jefferies

John Roberts; Analyst; Mizuho

Hassan Ahmed; Analyst; Alembic Global Advisors

Presentation

Operator

Good morning. My name is Daniel and I will be your conference operator today. I would like to welcome everyone to the Chemours company third-quarter 2024 results conference call. Currently all participants are in 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 of Investor Relations for Chemours. You may begin your conference.

Brandon Ontjes

Good morning, everybody. Welcome to The Chemours company's third-quarter 2024 earnings conference Call. I'm joined today by Denise Dignam, Chemours' President and Chief Executive Officer; and our 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 and 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 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. Also, we have posted our earnings presentation to our website earlier today.
With that, I will turn the call over to Denise Dignam.

Denise Dignam

Thank you, Brandon, and thank you, everyone, for joining us. In addition to releasing our quarter 3 results earlier this morning, we outlined a refreshed corporate strategy for Chemours. This strategy is the result of a lot of hard work over the last several months, and we are excited to share it with you. We have strong businesses, good momentum across the company and a path to value creation.
Shane and I will start with our strong third quarter performance, provide our outlook for the fourth quarter and share some key considerations as we head into 2025. We will then review our refreshed strategy and take your questions.
Starting with the quarter, there were two key factors that contributed to our strong performance. Our teams demonstrated consistent and effective operational execution across the business, and we continue to put many of the one-off events and disruptions from earlier this year behind us.
We are pleased to see stability in the macro environment around our target markets and with strong continued execution, we are confident that we will be well positioned to meet customer demand. Our efforts are reflected in year-over-year volume increases across all of our businesses and stronger than-anticipated results in our TSS and TT businesses.
Our TSS business hit a sales record for the third quarter with a robust 21% year-over-year increase in Opteon refrigerants. This reflects nearly 60% of our total TSS refrigerant sales for the quarter, up from 50% in the prior year. These results are in line with our previous expectations of double-digit growth in Opteon refrigerants and affirm our continued transition to Opteon as we move deeper into stationary air conditioning adoption.
We saw the same execution in our TT business with volumes stronger than we anticipated even with some of the lagging constraints from the Altamira drought that impacted our capacity early in the third quarter. Our underlying TiO2 circuit has operated well and with these impacts behind us, we are well positioned to meet customer demand as markets improve. The TiO2 team continued to make strong progress against our TT transformation plan, achieving an incremental $30 million in savings during the quarter and bringing total savings to approximately $130 million in 2024.
This year-to-date achievement exceeds the targeted $125 million in year-over-year savings, driving an improvement in our adjusted EBITDA margin to 13%. These results are inclusive of $18 million in Altamira drought related costs reflected during the third quarter.
While we've exceeded our year-over-year annual savings goal, our continued focus on cost leadership under this program will continue with an additional $10 million to $15 million in savings anticipated in the fourth quarter plus additional savings layered on in 2025, which will address later in more detail.
Turning to APM. While Advanced Materials results were weaker than anticipated due to pricing conditions in softer market environment, we did experience sequential volume growth across both parts of the APM portfolio as well as a 9% year-over-year net sales increase in Performance Solutions, underscoring the continued demand for our high-value specialty fluoropolymer applications.
In early September, we ramped up production on our second high grade Teflon PFA resin production line, which is a critical material for semiconductor manufacturing. This expansion will be a meaningful contributor to our Performance Solutions portfolio as we move into the fourth quarter and periods ahead.
Before moving on to an overview of our refreshed corporate strategy, I'll turn it over to Shane to walk through our financial results. Shane?