Q4 2021 Chemours Co Earnings Call
Speaker 1: With that, I'll turn the call over to our CEO , Mark Newman, who will cover the highlights from the past quarter and full year.
Over to our CEO , Mark Newman, who will cover the highlights from the past quarter and full year Mark.
Speaker 1: Thank you, Jonathan, and thank you for joining us this morning. I will begin my remarks.
Thank you Jonathan and thank you for joining us this morning.
I will begin my remarks on chart three.
Speaker 1: 2021 was a year where the Chemours team pulled together to deliver strong results quarter after quarter.
2021 was a year, where the <unk> team pulled together to deliver strong results quarter after quarter.
Despite being a year full of challenges.
Speaker 1: despite being a year full of challenges.
Speaker 1: Our performance reflects strong customer demand for our products and our commitment to customer service and supply chain reliability through the toughest conditions.
Our performance reflects strong customer demand for our products and our commitment to customer service and supply chain reliability through the toughest conditions.
Speaker 1: all underpinned by our company-wide commitment to the holistic safety and health of our workforce.
All underpinned by.
By our company wide commitment to the holistic safety and health of our workforce.
Speaker 1: Revenue was up 28% year-over-year to $6.3 billion, adjusted EBITDA rose 49% to $1.3 billion, and we generated $543 million of free cash flow consistent with our focus on sustainable growth.
Revenue was up 28% year over year to $6 $3 billion, adjusted EBITDA rose, 49% to $1 $3 billion.
And we generated $543 million of free cash flow consistent with our focus on sustainable growth.
Speaker 1: and high quality earnings across our businesses with strong free cash flow conversion.
And high quality earnings across our businesses with strong free cash flow conversion.
Speaker 1: 2021 was truly a team effort across the entire business.
2021 was truly a team effort across the entire business in our TT segment. We built what we believe is the strongest book of contracted business ever with strategic customers, who appreciate our value proposition and with whom we can grow over time.
Speaker 1: In our TT segment, we built what we believe is the strongest book of contracted business ever with strategic customers who appreciate our value proposition and with whom we can grow over time. In TSS, we delivered strong sales and margin performance despite all the OEM headwinds and look forward to the growth we can achieve under the U.S. AMIN.
In TSS, we delivered strong sales and margin performance, despite auto OEM headwinds and look forward to the growth we can achieve under the U S a minute.
Speaker 1: and in APM we achieve record-setting results on both the top and bottom line in a business which is being driven by several exciting secular growth trends.
And in APM, we achieved record setting results on both the top and bottom line in a business, which is being driven by several exciting secular growth trends.
Speaker 1: Finally, in chemical solutions, we completed the sale of our mining solutions business, which will give us greater bandwidth to focus on our industry-leading TTTSS and APM business.
Finally in chemical solutions, we completed the sale of our mining solutions business, which will give us greater bandwidth to focus on our industry, leading TT TSS and APM businesses.
Speaker 1: I'm proud of the results we're reporting today and proud of the entire Comoros team that delivered them.
I am proud of the results, we're reporting today and proud of the entire <unk> team that delivered them.
Speaker 1: I would also like to thank our customers for their trust and confidence in Kmora.
I would also like to thank our customers for their trust and confidence in <unk>.
Speaker 1: But 2021 wasn't just about the financial results. We made significant contributions to the planet our people and the communities in which we operate through progress on our corporate responsibility commitment.
But 2021 wasn't just about the financial results, we made significant contributions to the planet.
Our people and the communities in which we operate through progress on our corporate responsibility commitments.
<unk> believes that together with our employees customers suppliers and communities, we will create a better world. So the power of our chemistry.
Speaker 1: Tim Morris believes that together with our employees customer suppliers and communities we will create a better world through the power of our chemistry.
Speaker 1: Our chemistry is essential to so much of our daily lives today and is also key to a more sustainable infrastructure, clean energy and advanced electronics. In fact, we are integral to the U.S. semiconductor industry supply chain.
<unk> chemistry is essential to so much of our daily lives today and is also key to a more sustainable infrastructure clean energy and advanced electronics. In fact, we are integral to the U S semiconductor industry supply chain.
And we are making significant investments to manufacture this chemistry responsibly with the latest abatement technology.
Speaker 1: and we are making significant investments to manufacture this chemistry responsibly with the latest abatement technology, all part of our commitment to reduce emissions of floor organic compounds by 99% and greenhouse gas emissions by 60% by 2030.
All part of our commitment to reduce emissions of floor organic compounds by 19, 9% and greenhouse gas emissions by 60% by 2030 <unk>.
Speaker 1: Additionally, we continue to focus on our remediation commitments at our key sites, including the barrier wall project at our Fayetteville, North Carolina plant. Finally, with the DuPont Corteva-Camorras MOU behind us, we are actively working to address, manage, and resolve risks to the company related to legacy PFAS liability.
Additionally, we continue to focus on our remediation commitments at our key sites, including the barrier wall project at our Fayetteville, North Carolina plant.
Finally, with the Dupont <unk> Mou behind us.
We are actively working to address manage and resolve risk to the company related to legacy PFS liabilities.
Speaker 1: A good example of this is the resolution of legacy natural resource damage claims in the past year with the state of Delaware.
A good example of this is the resolution of legacy natural resource damage claims in the past year with the state of Delaware.
As we look forward to 2022, our guidance reflects our confidence in <unk> and our intent to drive consistent performance through the cycle, while generating significant free cash flow.
Speaker 1: As we look forward to 2022, our guidance reflects our confidence in Chemours and our intent to drive consistent performance through the cycle while generating significant free cash
Speaker 1: We continue to invest behind key secular growth drivers, especially in clean energy and advanced electronics, and behind innovative and responsible chemistry that enables the sustainable products of the future, from advanced coatings to low GWP thermal solutions to fuel cells and beyond, all while strengthening our balance sheet and returning the majority of our free cash flow to shareholders.
We continue to invest behind key secular growth drivers, especially in clean energy and advanced electronics and behind innovative and responsible chemistry.
That enabled us to sustainable products of the future from advanced coatings, Hello, GW thermal solutions to fuel cells and beyond.
All while strengthening our balance sheet and returning the majority of our free cash flow to shareholders.
Turning to the next chart I'd like to highlight more of the good work, we're doing across <unk> through our corporate responsibility commitment programs.
Speaker 1: Turning to the next chart, I'd like to highlight more of the good work we're doing across Chemours through our Corporate Responsibility Commitment Program.
Last quarter, we discussed our revolve portfolio pillar and how the aim act will help drive opt in low DWP refrigerant adoption across the U S.
Speaker 1: Last quarter we discussed our evolved portfolio pillar and how the AIM Act will help drive opt-in low GWP refrigerant adoption across the U.S.
Speaker 1: Today, I'd like to cover our inspired people pillar.
Today I'd like to cover our inspired people pillar.
The inspired people pillar has been one where we have consistently delivered outstanding progress through all three platforms safety excellence vibrant communities and employee empowerment.
Speaker 1: The Inspired People pillar has been one where we have consistently delivered outstanding progress through all three platforms, safety excellence, vibrant communities, and employee empowerment.
In the fourth quarter, we launched a new program, we call Ken first.
Speaker 1: In the fourth quarter, we launched a new program we call CAMFES.
Speaker 1: short for the Chemours Future of Engineering, Science, Trades, and Technology.
Short for the <unk> future of Engineering science trades in technology.
Speaker 1: ChemFest helps bring STEM education to under-resourced middle schools in communities in which we operate.
<unk> first helps bring stem education to under Resourced middle schools and communities in which we operate.
Speaker 1: This year, with an initial investment of $4.3 million, we are bringing improved access to early STEM education to schools around our Wilmington headquarters, our New Johnsonville site, and our Chambers Works site. This program is a natural feeder to our FOSSI program, which targets high school seniors pursuing STEM education.
This year with an initial investment of $4 $3 million.
We're bringing improved access to early stem education.
The schools around or Wilmington headquarters, our new Johnson Bill site under Chambers work site.
This program is a natural feeder to our phosphate program, which targets high school seniors.
Pursuing stem education at the college level.
Speaker 1: In total, Chemours has committed over $15 million to our Inspired People initiative, an investment which will pay back many times over in the lives we change and the impact we have on the communities in which we operate.
In total <unk> has committed over $15 million to our inspire people initiatives and investment which will pay back many times over in the lives we change and the impact we have on the communities in which we operate.
I am proud of this work, which reflects our company's strong commitment.
Speaker 1: I'm proud of this work, which reflects our company's strong commitment.
Speaker 1: to purpose and people, and we'd like to thank Alvina Scarborough, a Chief Brand Officer, and her entire team for leading the charge over the last several years.
To purpose and people and we'd like to thank Albania, Scarborough, Chief brand officer, and her entire team for leading the charge over the last several years.
Speaker 1: With that, I'll turn things over to Samir to review the financial results for the fourth quarter. I'll be back to talk about our guidance before turning to Q&A. Samir? Thanks, Mark.
With that I'll turn things over to Sameer to review the financial results for the fourth quarter <unk>.
Ill be back to talk about our guidance before turning to Q&A.
Samir.
Thanks, Mark and thanks to everyone for joining us today.
Speaker 2: Before I begin my remarks, I would also like to recognize all my employees for their outstanding efforts over the course of 2021.
Before I begin my remarks, I would also like to recognize all our employees for their outstanding effort over the course of 2021.
Speaker 2: Your energy and determination were instrumental in delivering the outstanding financial results that Mark and I have the privilege to report.
Energy and determination was instrumental in delivering the outstanding financial results, which mark and I have a privilege to report.
Let me turn to chart five to cover the full year results.
Our 2021 full year results were driven by strong demand across all three of our primary businesses with a significant rebound in demand from 2020.
Speaker 2: Our 2021 full year results were driven by strong demand across all three of our primary businesses, with a significant rebound in demand.
Speaker 2: Foliar net sales rose $1.4 billion to $6.3 billion.
Full year net sales rose $1 4 billion.
To $6 3 billion.
Volume and price gains across the portfolio backed by solid operational performance drove the strong results.
Speaker 2: volume and price gains across the portfolio, backed by solid operational performance, drove the strongest.
Speaker 2: Gas EPS more than doubled to $3.60 per share in 2021, from $1.32 per share in 2020.
GAAP EPS more than doubled to $3 60 per share in 2021.
$1 32 per share in 2020.
Adjusted EPS was $4 per share in 2021.
Speaker 2: Adjusted EPS was $4 per share in 2021.
Speaker 2: also more than double the $1.98 per share we earn in 2020.
Also more than doubled to $1 98 per share we earned in 2020.
Speaker 2: Our full year 2021 adjusted EBITDA was $1.313 billion, up $434 million, or 49% from the prior year.
Our full year 2021, adjusted EBITDA was $1 $31 3 billion.
$434 million or 49% from the prior year.
This resulted in adjusted EBITDA margins of 21% for the full year.
Speaker 2: This resulted in adjusted EBITDA margins of 21% for the full year, up 300 basis points from 2020.
Up 300 basis points from 2020.
Free cash flow continues to be a strong point for the company.
Speaker 2: In 2021, we generated $543 million of free cash.
In 2021, we generated $543 million of free cash flow.
Speaker 2: This is despite the shift to networking capital consumption in 2021, based on improved customer demand and inventory lines.
This is despite the shift to net working capital consumption in 2021 based on improved customer demand and inventory levels.
Speaker 2: Our performance on free cash flow reflects the power of the business to generate significant cash through any part of the economic cycle, and reflects our collective effort to improve the earnings quality of the business and spend.
Our performance on free cash flow reflects the power of the business generates significant cash through any part of the economic cycle and reflects the collective effort to improve the earnings quality of the business in Spain.
Turning to chart, six and a fourth quarter.
On our results.
Speaker 2: Fourth quarter net sales of $1.6 billion were up 18% from the fourth quarter 2020.
Fourth quarter net sales of $1 $6 billion were up 18% from the fourth quarter 2020.
Speaker 2: Price gains were strong across the breadth of the portfolio, while volume was up across most of our sectors.
Price gains were strong across the breadth of the portfolio, while volume was up across most of our segments.
Speaker 2: Adjusted EBITDA rose 25% in the fourth quarter to $307 million, resulting in slight margin expansion to 19% versus 18% in last year's fourth quarter.
Adjusted EBITDA was 25% in the fourth quarter to $307 million.
Resulting in slight margin expansion to 19% versus 18% in last year's fourth quarter.
Free cash flow was $131 million due.
Speaker 2: Pre-cash flow was $131 million due to higher working capital needed to support increased sales and the impact of certain tax items in that quarter.
Due to higher working capital needed to support increased sales and the impact of certain tax items in the quarter.
Turning to chart seven let's review the adjusted EBITDA Bridge for the fourth quarter.
Speaker 2: Turn to chart seven, let's review the adjusted defense outrage for the fourth quarter.
Speaker 2: Fourth quarter of 2021 adjusted EBITDA was $307 million, up $61 million from the same period in 2020.
Fourth quarter of 2021, adjusted EBITDA was $307 million up $61 million from the same period in 2020.
Speaker 2: Price was a large contributor to the improved results, but pricing gains across the entire portfolio.
Price was a large contributor to the improved results.
But pricing gains across the entire portfolio.
However, the impact of volume gains across multiple segments was more than offset by demand had been from automotive Oems primarily related to the impact of semiconductor shortages on auto builds.
Speaker 2: However, the impact of volume gains across most of our segments was more than offset by demand headwinds from automotive OEMs, primarily related to the impact of semiconductor shortages on automobiles.
Our net price versus cost contribution continues to be positive. Despite the inflationary environment we are in.
Speaker 2: Our net price versus cost contribution continues to be positive despite the inflationary...
As I said in the last quarter, we continue to be diligent across our businesses to ensure that we stay ahead of inflation.
Speaker 2: As I said in the last quarter, we continue to be diligent across our businesses to ensure that we stay ahead of inflation.
Speaker 2: Turning now to chart 8, our cash position, liquidity and balance sheet remain strong as they have throughout the year.
Turning now to chart eight.
Our cash position liquidity and balance sheet remained strong as they have throughout the year.
Speaker 2: Our cash balance at the end of the year was $1.45 billion, up from $1 billion in the prior quarter.
Our cash balance at the end of the year was $1 45 billion up from $1 billion in the prior quarter.
Speaker 2: In the fourth quarter, we generated $214 million of operating cash flow and CapEx was $83 million.
In the fourth quarter, we generated $214 million of operating cash flow and Capex was $83 million.
We returned $134 million of cash to shareholders through dividends and share repurchases.
Speaker 2: We returned $134 million of cash to shareholders through dividends and share repurchases.
We reduced our debt by $17 million and.
And proceeds from the mining solutions sale were also recognized in the fourth quarter.
Speaker 2: and proceeds from the mining solutions deal were also recognized in the fourth quarter.
Speaker 2: We ended the year with gross debt of $3.8 billion.
We ended the year with gross debt of $3 8 billion.
Speaker 2: Our net leverage ratio improved to 1.8 times on trailing 12-month basis, down from 2.3 times in the prior quarter.
Our net leverage ratio improved to one eight times on trailing 12 month basis down from two three times in the prior quarter.
Total liquidity stands at approximately $2 $3 billion, including revolver availability of approximately $800 million.
Speaker 2: Total equity stands at approximately $2.3 billion, including revolver availability of approximately $800 million.
Speaker 2: Turning to chart 9, as we continue to strengthen our cash generation, we also continue to execute on our disciplined approach to capital allocation.
Turning to chart nine as we continue to strengthen our cash generation. We also continued to execute on our disciplined approach to capital allocation.
In 2021, we invested $277 million in Capex to maintain our assets meet our COC commitment and grow the business long term.
Speaker 2: In 2021, we invested $277 million in CapEx to maintain our assets, meet our CRC commitment, and grow the business long-term.
Speaker 2: Timing of our capital expenditures in 2021 was impacted by labor and material issues, which shifted several projects from 2021 into 2022. From a credit profile perspective, we reduced debt by $204 million in 2021.
Timing of our capital expenditures in 2021 was impacted by labor and material issues, which shifted several projects from 2021 into 2022.
A credit profile perspective, we reduced debt by $204 million in 2021 and.
Speaker 2: And we also contributed $100 million earlier in the year into the escrow account, as per the MOU agreement with Dipant and Koteva.
And we also contributed $100 million earlier in the year into the escrow account as one of the Mou agreement with Dupont and <unk>.
This amount is reflected as restricted cash on our balance sheet.
Speaker 2: This amount is reflected as restricted cash on a balance.
Last but not least we continue to return the majority of our free cash flow to our shareholders.
Speaker 2: Last but not least, we continue to return the majority for free cash flow to our shareholders.
Speaker 2: with $164 million returned via dividends and $173 million through share repurchases in 2021.
$164 million returned via dividends.
$173 million through share repurchases in 2021.
Since then we have retired more than 10% of our total shares outstanding going from approximately 181 million shares to approximately 161 million shares at year end 2021.
Speaker 2: Since then, we have retired more than 10% of our total shares outstanding, going from approximately 181 million shares to approximately 161 million shares at year-end 2021.
Speaker 2: Let's now turn to chart 10, where I'll cover the results and outlook for our titanium technology segment.
Let's now turn to chart 10, when I will cover the results and outlook for our titanium technologies segment.
Speaker 2: Our titanium technology segment continued to deliver in 2021 with strong performance over the course of the entire year despite global logistics issues and feedstock disruptions.
Our titanium technologies segment continued to deliver in 2021 with strong performance over the course of the entire year, Despite global logistics issues and feedstock disruptions.
<unk> pigment demand was strong across all regions and all end markets as the global economy recovered from the low levels, we saw in 2020.
Speaker 2: Type A pigment demand was strong across all regions and all end markets as the global economy recovered from the low levels we saw in 2020.
Speaker 2: Our TVS strategy continues to deliver with strong traction across all three sales channels.
Our PVA strategy continues to deliver with strong traction across all three sales channels.
Customers continue to see the value of a long term relationship with <unk> as a reliable high quality supply is enable them to succeed.
Speaker 2: Customers continue to see the value of a long-term relationship with Comoros as a reliable, high-quality supply has enabled them to succeed despite other supply chains.
The supply chain issues.
Speaker 2: As a result, our contracted customer base has never been stronger, and we have welcomed many new customers on our Flex portal who want to buy Type A or Funcom motors.
As a result, our contracted customer base has never been stronger and we have welcomed many new customers on our flex portal, who want to buy tightly upon promoters.
Turning to the results.
Speaker 2: Fourth quarter net sales rose 25% to $865 million versus the prior year.
Fourth quarter net sales rose, 25% to $865 million worth.
Versus the prior year quarter.
Price rose, 19%, while volume grew 6% on a year over year basis.
Speaker 2: Price rose 19% while volume rose 6% on a year-over-year basis.
Fourth quarter, adjusted EBITDA of $198 million improved 33% versus the prior year quarter.
Speaker 2: Fourth quarter adjusted EBITDA of $198 million, improved 33% versus the prior year quarter.
Speaker 2: Segment margins were a healthy 23% despite ongoing over logistic.
Segment margins were a healthy 23% despite ongoing or logistics constraints.
Speaker 2: sequential price of 5% more than off that increased cost in the quarter.
Sequential price of 5% more than offset increased costs in the quarter.
Speaker 2: For the full year 2021, net sales were $3.4 billion, up 40% from $2.4 billion in 2020.
For the full year 2021.
Net sales were $3 4 billion.
Up 40% from $2 4 billion in 2020.
Price rose, 10% and volume was up 28% as demand return from pandemic induced lows in 2020.
Speaker 2: Price rose 10% and volume was up 28% as demand returned from pandemic-induced lows in 2020.
Adjusted EBITDA rose, 59% to $809 million from $510 million in 2020.
Speaker 2: adjusted EBITDA rose 59% to $809 million from $510 million in 2020.
Full year margins came in at 24%.
We exited 2021, having regained all of the shared loss on installation of our TV strategy and then some.
Speaker 2: We exited 2021 having regained all of the share lost on installation of our previous strategy and then.
Speaker 2: I stayed ahead of rising costs throughout the year, despite the inflationary environment with higher costs required to support higher production.
I stayed ahead of rising costs throughout the year, despite inflationary environment with higher costs required to support <unk> production.
Speaker 2: Looking ahead, we anticipate strong demand for types of pigment to continue in all geographies and environments.
Looking ahead, we anticipate strong demand for Tycho pigment to continue in all geographies and end markets.
Speaker 2: At the same time, all constraints are likely to continue into the first part of the year, but will moderate over time.
At the same time or constraints are likely to continue into the first part of the year, but will moderate over time.
Speaker 2: As Mark said earlier, we have never felt better about the customer book we have built and look forward to continuing to serve them with the highest quality type of pigment available in the market today.
As Mark said earlier, we have never felt better about the customer book, we have built and look forward to continuing to serve them with the highest quality type youll pigment available in the market today.
Turning to chart 11.
Speaker 2: Thermal and specialized solutions deliver a strong fourth quarter and full year 2020.
Thermal and specialized solutions delivered a strong fourth quarter and full year 2021.
Speaker 2: driven by improved demand despite headwinds from automotive OEMs related to semiconductor shortages.
By improved demand despite headwinds from automotive Oems related to semiconductor shortages.
Speaker 2: Our execution throughout the year was solid, and we continue to execute on pricing initiatives to stay ahead of rising raw material costs.
Our execution throughout the year was solid.
And we continue to execute on pricing initiatives to stay ahead of rising raw material costs.
Speaker 2: The breadth of our portfolio across stationary, aftermarket, and non-refrigerant applications enabled us to deliver solid financial performance.
The breadth of our portfolio across victory after market and non refrigerant applications enabled us to deliver solid financial performance. Despite the drag of automotive OEM demand headwinds and contractual price downs.
Speaker 2: despite the drag of automotive OEM demand headwinds and contractual prices.
Looking more closely as a result.
Speaker 2: Looking more closely at the results, fourth quarter net sales improved 8% from the prior year fourth quarter.
First quarter net sales improved 8% from the prior year fourth quarter.
Strong price contribution in the quarter of 19% more than offset the impact of 11% nor volumes.
Speaker 2: strong price contribution in the quarter of 19% more than offset the impact of 11% door volume.
Speaker 2: As a reminder, the fourth quarter of 2020 was an exceptional quarter from an auto OEM demand perspective.
As a reminder, the fourth quarter of 2020 was an exceptional quarter from an auto OEM demand perspective.
Speaker 2: But bills have been down across 2021 due to semiconductor shortages.
But both have been down across 2021 due to semiconductor shortages.
As a result of these headwinds adjusted EBITDA declined 8% to $97 million in the quarter.
Speaker 2: As a result of these headwinds, adjusted EBITDA declined 8% to $97 million in the quarter.
Speaker 2: For the full year, net sales rose 14% to $1.3 billion, the result of stronger volumes and price, which rose 9% and 4% respectively.
For the full year net.
Net sales rose, 14% to $1 3 billion, the result of stronger volumes and prices rose, 9% and 4% respectively.
Speaker 2: earlier adjusted EBITDA was $412 million, up 16% from $364 million in 2020.
Full year, adjusted EBITDA was $412 million up 16% from $364 million in 2020.
Speaker 2: Adjusted EBITDA margins improved from 32% to 33%, demonstrating the earnings power of the sector.
Adjusted EBITDA margins improved from 32%, 33% demonstrating the earnings power of the segment.
Speaker 2: We deliver solid growth in both legacy refrigerants and low GWP opt-in refrigerants across most end markets.
We delivered solid growth in both legacy refrigerants and low DWP opt you and refrigerants across most end markets.
Speaker 2: As we look ahead, we expect a continued market recovery in 2022 with a recovery in automotive OEM build rates from the semiconductor-related shortages of 2021.
As we look ahead, we expect a continued market recovery in 2022 with recovery in automotive OEM build rates from the semiconductor related shortages of 2021.
The U S APAC and additional SaaS enforcement in Europe will drive continued conversion to <unk> low global warming potential solutions.
Speaker 2: The U.S. AMAC and additional FCAS enforcement in Europe will drive continued conversion to opt-in on low global warming potential.
Speaker 2: At the same time, we continue to enter new markets with innovative products, including Option 1150, our newest low-GWP, home-blowing HVAC.
At the same time, we continue to enter new markets with innovative products, including <unk> and $11 50.
Newest low DWP, one blowing agents.
<unk> remains well positioned to be the sustainable from a management provider of choice for our customers.
Speaker 2: Morse remains well positioned to be the sustainable thermal management provider of choice for our customers.
Let's now turn to chart 12, where our advanced performance materials segment.
Speaker 2: Let's now turn to chart 12 for our advanced performance material section.
The Andean segment has delivered outstanding results throughout 2021 and exceeded our own expectations by profitability throughout the year.
Speaker 2: The APM segment has delivered outstanding results throughout 2021 and exceeded our own expectations for profitability throughout the year.
Speaker 2: As the business has continued its turnaround, the power of our chemistry continues to grow.
As the business has continued its turnaround the power of our chemistry continues to shine.
Speaker 2: From polymers to membranes, the portfolio contains class-leading products, which are key to unlocking the future potential of high growth end markets in clean energy and advanced electronics.
From polymer membranes, our portfolio contains class leading products, which are key to unlocking the future potential of high growth end markets in clean energy and advanced electronics.
Speaker 2: sales had an all-time record of $346 million in the fourth quarter, up 24% from $279 million in the prior year fourth quarter.
Sales at an all time record of $346 million in the fourth quarter up.
Up 24% from $279 million in the prior year fourth quarter.
Strong demand drove 10% price and 15% volume gains on a year over year basis.
Speaker 2: Strong demand drove 10% price and 15% volume gains on a year-over-year basis, with strong demand underpinning growth.
Strong demand and underpinning growth across the breadth of the portfolio.
Speaker 2: Rajasthani Bajaj rose 160% to $65 million as price actions and productivity more than offset sharply higher energy and logistics costs in the quarter.
Adjusted EBITDA was 160% to $65 million.
As price actions and productivity more than offset sharply higher energy and logistics costs in the quarter.
For the full year 2021, we delivered record net sales and adjusted EBITDA of $1 4 billion.
Speaker 2: For the full year 2021, we delivered record net sales and adjusted EBITDA of $1.4 billion and $261 million respectively.
And $261 million respectively.
Speaker 2: The top line grew 27% from 2020 levels, with 20% volume growth reflecting strong demand across all product.
The top line grew 27% from 2020 levels with 20% volume growth, reflecting strong demand across all product lines price growth and currency contributed 4% and 3% respectively to the top line growth.
Speaker 2: price growth and currency contributed 4% and 3% respectively to the top line growth.
Speaker 2: We continue to experience a favorable price-cost dynamic across the diverse product portfolio.
We continued to experience a favorable price cost dynamic across a diverse product portfolio per segment.
Speaker 2: And as a result, margins expanded to 19% in 2021 from 11% in 2020.
And as a result margins expanded to 19% in 2021 from 11% in 2020.
Speaker 2: This achievement was exceptional, given the logistics and weather-related challenges we experienced during the year.
This achievement was exceptional given the logistics and weather related challenges we experienced during the year.
Looking ahead, we believe the strong underlying demand will continue into 2022, we anticipate headwinds from raw material costs energy and logistics will moderate over the course of the year.
Speaker 2: Looking ahead, we believe that strong underlying demand will continue into 2022. We anticipate headwinds from raw material costs, energy, and logistics will moderate over the course of the year.
In total we continue to target top line growth in excess of GDP.
Speaker 2: In total, we continue to target top-line growth indexes of GDP.
Speaker 2: We are also targeting adjusted EBITDA margins in the low 20% with operating discipline and efficient plant operations helping to offset rising input costs. We see significant market momentum building in clean energy and advanced electronics, where our technology is uniquely suited to drive higher levels of performance.
We are also targeting an adjusted EBITDA margin in the low 20% with operating discipline and efficient plant operations, helping to offset rising input costs, we see significant market momentum building in clean energy and advanced electronics.
Our technology is uniquely suited to drive higher levels of performance.
Speaker 2: Whether it's NAPM members in hydrogen, or Teflon PFA in semiconductor fabs, or white-on-elastomers in electric vehicles, ATM is playing a leading role in enabling the technologies that will help shape the future.
Whether it's on lithium members and hydrogen are teflon PFA and semiconductor Fabs are whitestone elastomers in electric vehicles.
<unk> is playing a leading role in enabling the technologies that will help shape the future.
Turning to chart 13.
Speaker 2: We continue to focus the overall portfolio of Comores and completed the sale of our mining solutions business in the fourth quarter.
We continue to focus the overall portfolio of <unk> and completed the sale of our mining solutions business in the fourth quarter.
Speaker 2: compatibility of results in the fourth quarter and full year for chemical solution segment was impacted by these portfolio actions.
Compatibility of results in the fourth quarter and full year for chemical solutions segment was impacted by these portfolio actions.
Speaker 2: That said, the underlying business performance in PC&I and mining solutions was solid throughout the year.
That said the underlying business performance and PCI and mining solutions was solid throughout the year.
Speaker 2: fourth quarter net sales were $69 million, and the impact of price and volume gains of 8% and 14% respectively was more than offset by portfolio changes.
Fourth quarter net sales were $69 million as the impact of price and volume gains of 8% and 14% respectively was more than offset by portfolio changes.
Speaker 2: Adjusted EBITDA was $8 million in the fourth quarter of 2021, again reflecting the impact of portfolio changes in the quarter.
Adjusted EBITDA was $8 million in the fourth quarter of 2021 again, reflecting the impact of portfolio changes in the quarter.
For the full year net sales were $336 million, while the full year adjusted EBITDA was $51 million.
Speaker 2: For the full year, net sales were $336 million, while the full-year adjusted EBITDA was $61 million.
Speaker 2: Strong demand and pricing gains across the most end markets and key product lines contributed to the solid result.
Strong demand and pricing gains across most end markets and key product lines contributed to the solid results.
Looking ahead. The segment is now focused on our world class glycolic acid franchise.
Speaker 2: Looking ahead, the segment is now focused on a world-class glycolic acid trend.
We anticipate solid growth in 2022 across both technical and high purity greater product.
Speaker 2: We anticipate solid growth in 2022 across both technical and high-purity grades of product, along with continued expansion into new markets such as clean and disinfect and electronics.
Along with continued expansion into new markets, such as clean and disinfect and electronics.
Speaker 2: With that, I'll turn things back over to our CEO , Mark Newman, to cover our 2022 guidance. Mark.
With that I'll turn things back over to our CEO Mark Newman to cover our 2022 guidance Mark.
Speaker 1: Thanks, Samir. I'll continue my remarks on chart 14.
Thanks, Samir I'll continue my remarks on chart 14.
Our business results have continued to improve steadily and are now well above pre pandemic levels reported in 2019.
Speaker 3: Our business results have continued to improve steadily and are now well above pre-pandemic levels reported in 2019.
A result of the hard work of our employees and execution of our focused strategies.
Speaker 1: a result of the hard work of our employees and execution of our focus strategies.
As we look ahead to 2022.
Speaker 1: We believe our results will continue to improve with another year of solid earnings and cash flow growth.
We believe our results will continue to improve with another year of solid earnings and cash flow growth.
Speaker 1: Our full-year adjusted EBITDA is projected to be between $1.3 and $1.425 billion, up 8% at the midpoint after accounting for the divestiture of our mining solutions business at the end of last year.
Our full year adjusted EBITDA is projected to be between one three and 142 5 billion.
Up 8% at the midpoint.
After accounting for the divestiture of our mining solutions business at the end of last year.
Speaker 1: We project adjusted EPS of between $4.07 and $4.17.
We project adjusted EPS of between $4 seven.
And $4 70.
Finally, we forecast free cash flow of greater than $500 million.
Speaker 1: Finally, we forecast free cash flow of greater than $500 million in 2022, inclusive of CapEx of approximately $400 million.
In 2022 inclusive of Capex of approximately $400 million.
Speaker 1: Taken together, these results reflect the higher quality business we are driving across Chemours and our ability to improve earnings through the cycle.
Taken together these results reflect the higher quality business, we are driving across <unk> and our ability to improve earnings through the cycle.
Speaker 4: From a capital allocation perspective, we remain committed to returning greater than 50% of that free cash flow to our shareholders in the form of dividends and share repurchase.
From a capital allocation perspective, we remain committed to returning greater than 50% of that free cash flow to our shareholders.
In the form of dividends and share repurchases.
Speaker 1: To that end, we expect to complete the remaining portion of our $1 billion share repurchase authorization by mid-2022.
To that end, we expect to complete the remaining portion of our $1 billion share repurchase authorization by mid 2022.
With the momentum we have built in 2021, we believe 2022 will be another excellent year for <unk> and for all our stakeholders.
Speaker 1: With the momentum we have built in 2021, we believe 2022 will be another excellent year for Chemours and for all our stakeholders.
Speaker 1: I would like to close with some thoughts on the next chapter of Comoros.
I would like to close with some thoughts on the next chapter of <unk>.
At spin, we set out to create a new kind of chemistry company, one which would have the courage to make difficult decisions and lead the industry forward.
Speaker 1: At Spin, we set out to create a new kind of chemistry company.
Speaker 1: one which would have the courage to make difficult decisions and lead the industry forward.
Speaker 1: The foundation which has been laid is strong.
The foundation, which has been laid it's strong.
As we look to the future. The next chapter of <unk> <unk>, two point or as we call. It we will refocus our efforts to create a better world through the power of our chemistry.
Speaker 1: As we look to the future, the next chapter of Chemours, Chemours 2.0 as we call it, will refocus our efforts to create a better world through the power of our chemistry.
Speaker 1: This vision will be underpinned by four key elements.
This decision will be underpinned by four key elements.
Speaker 5: Agile innovation and sustainable solutions
<unk> innovation and sustainable solutions.
Environmental leadership.
Community impact and.
Speaker 1: community impact, and making Chemours the greatest place to work for every employee.
<unk>, making <unk> the greatest place to work for every employee.
Speaker 1: To that end, I have challenged every Chemours employee to ensure their work helps to contribute.
To that end I have challenged every <unk> employee to insure their work.
Helps to contribute to these goals.
I truly believe the spirit of this vision.
Speaker 1: I truly believe the spirit of this vision, owned collectively by our 6,400 employees, can take the company to new heights.
One collectively by our 6400 employees can take the company to new Heights.
And it will reward our customers our planet.
Speaker 1: and it will reward our customers, our planet, our team, and of course, our shareholders. I'm excited to be leading Chemours on this leg of the journey and look forward to engaging with all of you in the coming year. With that, Operator, please open the line for Q&A.
Our team and of course, our shareholders I'm excited to be leading <unk> on this leg of the journey and look forward to engaging with all of you in the coming year with that operator. Please open the line for Q&A.
Speaker 1: At this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
And your first question comes from the line of John Silverstein from Wolfe Research. Your line is open.
Speaker 1: And your first question comes from a line of John Silverstein from Wolf Research. Your line is open.
Hey, good morning, good morning, guys.
Speaker 6: Hey, good morning, guys. For 2022, for TIO2, you're still factoring in continued ore constraints and supply chain issues and raw material inflation. Are you factoring it to get worse relative to the fourth quarter or improvements throughout the course of the year? And if there continues to be ore constraints, what are the supply alternatives for that?
For 2022 for <unk>, you're still factoring in continued or constraints in supply chain issues and raw material inflation.
Are you factoring it to get worse relative to the fourth quarter versus.
Our improvement throughout the course of the year and then that there continues to be or constraints, what are the supply alternatives for them.
Hey, good morning, John Mark here.
Speaker 1: Hey, good morning, John . Mark here. Our guide really assumes that we continue to build momentum in all three of our industry leading businesses.
Our guide really assumes that we continue to build momentum in all three of our industry leading businesses.
Speaker 1: And on TIO2 in particular, you know, we were down sequentially in the quarter in line with expectations from a volume perspective.
<unk> in particular.
We were down sequentially in the quarter in line with expectations from a volume perspective.
Speaker 1: on very strong demand, but as we had indicated in our Q3 call, we were ore constrained. We expect that ore constraint to relieve itself in the first half of the year.
On very strong demand.
As we had indicated in our Q3 call, we were or constrained and we expect that or constraint to relieve itself in the first half of the year. So we start the year with ore constrained our expectation is volumes will be relatively flat from Q4 to Q1.
Speaker 1: So, you know, we start the year with ore constraint. Our expectation is volumes.
Speaker 1: will be relatively flat from Q4 to Q1, but will then mirror more over the seasonal patterns beyond that as the ore situation resolves itself. So, you know, great quarter on a great year, but I just want to share with you that we see real good momentum in all of our businesses, especially from a demand and a pricing perspective, which
But we will then mirror Moreover, the seasonal patterns beyond that as as they or situation resolves itself. So.
Great great good quarter on a great year.
But I just wanted to share with you that we see real good momentum in all of our businesses, especially from a demand and a pricing perspective, which we expect to continue.
Speaker 6: Thanks for that. And then just on pricing under the TVS model, you pushed through another 5 percent increase this quarter on top of a 6 percent increase in the third quarter. With inflation indicators continuing to push higher and higher, is the expectation for you guys to keep being able to push through higher prices in 2022? Thanks.
Thanks for that and then.
Just on <unk>.
Pricing under the <unk> model.
During our 5% increase this quarter on top of the six.
<unk> percent increase in the third quarter with inflation indicators considerably higher and higher as the expectation for you guys to keep being able to push through higher prices in 2022.
So are there.
Speaker 1: So are the short answer is yes. And as you've seen or even a bridge you know we are continuing to be able to to take price you know across our entire businesses.
The short answer is yes, and as you've seen our EBITDA bridge, we are continuing to be able to take price.
Cross our entire businesses.
Speaker 1: in excess of cost. Clearly, you know, you're going to have some lumpiness as you move through time, so it's not always, you know, perfect timing in terms of how those two move together. But recall that, you know, we have, you know, three go-to-market approaches on the TVS, which provide us real price latitude. Maybe I'll ask Samir to comment on that, because that's something that we watch very carefully.
In excess of cost clearly.
Youre going to have some lumpiness as you move through time, so it's not always.
Perfect timing in terms of how those two move together.
But recall that we have three go to market.
Approaches under TBS, which provide us rail price attitude, maybe I'll ask Samir to comment on that because thats something that we watch very carefully.
Speaker 2: Thanks, Mark. John , look, you touched on the ABA contract. At the same time, in flex and distribution, as Mark talked about, there's an opportunity to push prices even faster than the ABA contract, right? So, all in all, we feel pretty good about where the supply and demand is and what our opportunity is to pass through prices.
Thanks, Mark John look.
On the Ava contracts at the same time, and flex and distribution as Mark talked about Theres, an opportunity to push prices, even faster than the Ava contract right. So.
All in all we feel pretty good about where the supply demand is and what our opportunity is to pass through prices.
Speaker 1: And Josh, bottom line, I would say, you know, our expectation is to, you know, have our TIO to business, you know, for the full year, we were at a 24%, even the margin. Our expectation on this business is to be in the mid 20s going forward. Clearly, you know, you had a quarter in which we, you know, had lower volumes.
Josh bottom line I would say our expectation is to have our <unk> business for the full year, we were at 24% EBITDA margin our expectation on this business is to be in the mid twenties.
Going forward clearly you had a quarter in which we had lower volumes.
Speaker 1: related to ore, and as that relieves itself, our expectation is through both price as well as volume, you know, we would return this business to mid-20s going forward.
Related to ore.
And as that relieves itself, our expectation is through both price as well as volume.
You had returned this business to mid Twenty's going forward.
Great. Thanks, guys.
Speaker 1: Your next question comes from the line of John McNulty from BMO. Your line is open.
Your next question comes from the line of John Mcnulty from BMO. Your line is open.
Speaker 1: Yeah, thanks very much for for taking my question. So a question on the on the TSS business.
Thanks, very much for taking my questions. So a question on the on the TSS business.
Just in terms of how youre thinking about how 2022 plays out I know, we had some of the issues around auto as being a little bit weaker in the back half of the year I assume that there is an assumption in your in your guide for a recovery. There you also had some really strong pricing as well. So I guess can you speak to how youre thinking.
Speaker 1: Just in terms of how you're thinking about how 2022 plays out. I know we had some of the issues around autos being a little bit weaker in the back half of the year. I assume that there's an assumption in your in your guide for a recovery there. You also had some really strong pricing as well. So I guess can you speak to how you're thinking about how that business progresses in terms of earning trajectory through 2022?
About how that business progresses in terms of earnings trajectory through 2022.
Yes.
John Thanks for the question TSS had a good year, despite the auto OEM headwinds and of course, we had the winter storm Yuri that impacted our Corpus Christi plant early in the year. So when you look at the year of being up 14% with greater than 30% margins with all those headwinds.
Speaker 2: with greater than 30% margins with all those headwinds. A really great job by the team. You know, when we look at IHS forecasts...
A really great job by the team.
When we look at IHS forecasts.
Speaker 2: for auto bills. We expect that to be in line with those projections.
For auto builds we expect that.
To be in line with with those projections clearly we're focused on both the OEM and aftermarket growth in opt in and so we feel quite encouraged by that and our guide reflects.
The continuing improvement.
The auto as we go through the year on the pricing side.
Being a better market.
In the stationary.
Mainly here in North America, but also in Europe and.
Speaker 2: And, you know, as we get through this next COVID wave, you know, our expectation is we'll see a lot more folks, you know, returning to offices.
As we get through this next Covid wave.
Our expectation is we'll see a lot more folks in our returning to offices.
Speaker 2: business travel picking up, we'll see a lot more sort of normal recovery in the commercial aspects of the refrigerant demand across the spectrum. So quite encouraged by early indications in the year, but clearly, you know, we have a cautious note in our guidance until the auto OEM situation clears itself. Got it. Got it. I know that's helpful.
Business travel picking up you will see a lot more sort of a normal recovery in the <unk>.
Commercial aspects of the refrigerant demand across the spectrum, so quite encouraged by early indications in the year, but clearly.
We have a cautious noted in our guidance until the auto OEM situation clears itself.
Got it got it no that's helpful and then maybe just.
Speaker 1: Just as a follow-up to kind of a broader question. So when I look at the guidance that you provided.
As a follow up kind of a broader question. So when I look at the guidance that you provided it is a pretty wide range admittedly and look at it it's a crazy year to start so so maybe that's part of the rationale, but but when I look at the low end of the range I mean, it's basically pointing to when you adjust for the Chem Sol sale about one five.
Speaker 1: it's a pretty wide range admittedly and look it's a crazy year to start so so maybe that's that's part of the rationale but
Speaker 1: But when I look at the low end of the range, I mean, it's basically pointing to when you adjust for, you know, the ChemSol sale, about one and a half to 2% EVDA growth, which, you know, given kind of the outlook that you laid out for TO2, the outlook that you laid out for TSS.
<unk> to 2% EBITDA growth, which given kind of the outlook that you laid out for <unk> to the outlook that you laid out for TSS and what I would think it's going to be continued decent demand growth in the APM segments candidly I can't figure out what could get you to that low end of the range. So can you can you kind of help us to at least.
Speaker 1: and what I would think is going to be continued decent demand growth in the APM segment. Kandily, I can't figure out what could get you to that low end of the range, so can you kind of help us to at least...
Speaker 1: frame the risks or the potential or the things that could go wrong that maybe put you toward that low end of the range or is it just, hey, look, it's early and we don't want to set the bar too high type of thing? Yeah, John , I'd say it's early and we're starting the year obviously with a number of uncertainties. We did mention being more constrained in TIO2.
Frame the risks or the potential that the things that could go wrong, maybe put you towards that low end of the range or is it just hey look it's early and we don't want to go we don't want to set the bar too high type of thing.
John I'd say, it's early and we're starting the year, obviously with a number of uncertainties, we did mentioned being or constrained in tio too.
Speaker 2: You know, we're seeing, you know, we're not through the semi con issue with auto.
We're seeing we're not through the semicon issue with auto.
Speaker 2: There's been some auto disruptions, even in the court, unrelated to Semicon.
There has been some audio disruption dividend courted unrelated to semi con.
Speaker 2: And, you know, so I think it's just, you know, starting the year, you know, with a lot of uncertainty and having some some caution in our guidance.
And so I think it's just.
Starting the year with a lot of uncertainty and having some some caution in our guidance.
Speaker 2: But I would not factor anything more into that than this being thoughtful early on in the year. Got it. Thanks very much for the...
But I would not factor anything more into that than this being thoughtful early on in the year.
Got it thanks very much for the color.
Thank you.
Speaker 7: Your next question comes from the line of Bob Cort from Goldman Sachs. Your line is open.
Your next question comes from the line of Bob <unk> from Goldman Sachs. Your line is open.
Speaker 8: Hey, this is Emily Keck on for Bob. So looking again at the 2022 outlook, it reflects a continued economic recovery and you guys mentioned the expected supply chain normalization in early 2022. So just kind of across the businesses, what trends have you seen that give you confidence in that normalization?
Hey, this is Emily <unk> on for Bob.
So looking again at the 2022 outlet. It reflects a continued economic recovery and you guys mentioned the expected supply chain normalization in early 2022, so just kind of across the businesses what trends have you seen that give you confidence in that normalization.
Speaker 2: Yeah, so Emily, great question. I would start by saying that demand remains strong in all key markets and all key product lines. And in fact, in many cases, we are we remain sold out.
Yes, so Emily Great question, I would start by saying that demand remains strong in all key markets and all key product lines and in fact in many cases, we are we remain sold out and pricing power is in our favor obviously we are working.
Speaker 2: and you know pricing power is in our favor. Obviously we are working carefully with our customers to make sure we're not doing anything that's disruptive but as I look at it you know
Carefully with our customers to make sure we're not doing anything that's disruptive.
But as I look at it clearly.
Speaker 2: Demand is strong at the outset, but we're somewhat constrained, especially in TIO2 as we start the year. So I think our guidance really reflects.
Demand is strong at the outset.
But we're somewhat constrained, especially in tio too as we start the year. So I think our guidance really reflects.
Speaker 2: growth, top-line growth in all of our businesses this year.
Growth topline growth in all of our businesses this year.
Speaker 2: Clearly, you know, if I go through the businesses, you know, we're, you know, outside of TIO2, you know, we would be looking at the impact, starting the impact of the, you know, AIM Act in our TSS business, where we're going to start to see more traction on some of our blends businesses in refrigerants.
Clearly.
If I go through the businesses.
Outside of Tio too.
Will you be looking at the impact starting the impact of the aim act in our TSS business, where we're going to start to see more traction on on some of our brands businesses and refrigerants.
Speaker 2: our expectation around our APM business is that's a GDP plus growth from this point on because of all the secular trends related to both Semicon and EVs that are you know driving our portfolio.
Our expectation around our APM business is a GDP plus growth from this point on because of all the secular trends related to both semi con and evs that are driving our portfolio.
Okay, Great and then just one more can you provide more color on the new strategic partnerships you mentioned in the TNF that business.
Speaker 8: Okay, great. And then just one more. Can you provide more color on the new strategic partnerships you mentioned in the TNSS business?
Yes.
Speaker 9: Yeah, Emily, just let me just jump in it. These are the strategic partnerships we have with the HVAC OEMs. Some of these are public and some are, of course, not in the public domain, but across a broad spectrum of OEM suppliers.
Let me just jump in it these are the strategic partnerships, we have with the automobiles starting with <unk>.
<unk> Oems some of these are public and some are of course not in the public domain, but across a broad spectrum of OEM suppliers.
Speaker 9: We have been working, and as they transition to the new equipment, right, as the AIM regulation comes in, yes, it'll be initially the Blenz portfolio, but all the OEMs are working through their models and upgrading how they will work with the new refrigerant. So, there's a great, exciting opportunities to be working with our key customers and to help them transition into the new product lines.
We have been working and as they transition to the new equipment right.
The regulation comes then yes, there'll be initially the blends portfolio, but all of the.
Oems are working through their models and upgrading how they will work with the new refrigerant. So theres a great exciting opportunities to be working with our key customers and to help them transition into the new product lines.
Thank you.
Your next question comes from the line of Arun Viswanathan from RBC capital markets. Your line is open.
Speaker 7: Your next question comes from the line of Arun Viswanathan from RBC Capital Markets. Your line is open.
Great. Thanks for taking my questions I guess first off just real quickly on the cash usage and maybe you can just kind of go through in order. Your priority uses of cash it looks like you do have quite a bit of.
Speaker 1: Great. Thanks for taking my questions. I guess first off, just real quickly on the cash usage, maybe you can just kind of go through and order your priority uses of cash. It looks like you do have quite a bit of cash on the balance sheet there and about close to $1.5 billion, 1.45. But it sounds like your buyback plans are for about $2.50 in the first half. How do you plan to spend the remainder of the cash there? Thanks.
Cash on the balance sheet, there and about.
Close to $1 5 billion or five but it sounds like your buyback plans are for about $2 15 in the first half.
How do you plan to spend the remainder of the cash there. Thanks.
Speaker 2: So, Arun, a great question, and I'll start and ask Samir to follow on as well. So clearly, when you look at our free cash flow generation in 2021 and the guide that we've given for this year, this will be the third year of free cash flow greater than half a billion. So what we want investors to understand is this is a franchise which has improving earnings quality across all three businesses. And significant cash.
Great question, I'll start and ask Samir to follow on as well. So clearly when you look at our free cash flow generation in 2021, and the guide that we've given for this year. This will be the third year of free cash flow greater than $5 billion.
So what we want investors to understand is this is a franchise, which has improving earnings quality across all three businesses.
And significant cash conversion.
Speaker 2: This is a management team with support from our board that believes in returning the majority of free cash flow to our investors. And in 2021, coming out of COVID-19, we thought a more balanced approach with that in mind made sense. And so you'll see, you know, we made really good gains in terms of improving the strength of our balance sheet and our leverage ratios, as well as returning the majority of free cash flow. We actually stepped up the cash flow to share.
This is a management team with support from our board that believes in returning the majority of free cash flow to our investors and in 2021 coming out of COVID-19, we saw a more balanced approach.
With that in mind made sense and so youll see we made really good gains in terms of improving the strength of our balance sheet and our leverage ratios as well as returning the majority of free cash flow, we actually stepped up the cash flow to shareholders.
Speaker 2: more so in the second half of last year as we got more confident on the full year outlook.
More so in the second half of last year as we got more confident on the full year outlook.
Speaker 2: and we're coming into the new year and stepping that up again. So we have $250 million remaining on our current share buyback authorization.
And we're coming into the new year and stepping that up again, so we have $215 million remaining on our current share buyback authorization.
Speaker 2: And, you know, our commitment is to have that completed in the first half of this year, you know, consistent with the cash generation of the business going forward. Maybe, Samir, I don't know if you have any other thoughts. Thanks, Mark. Arun, just I will just go back to how we kind of talked about the cash usage in the past, right? As a manufacturer, our first priority in terms of investing in a cash is to make sure we have safe and reliable operations. As you know, we have, you know, our responsibility commitments that we have to ensure.
<unk>.
Our commitment is to have that completed in the first half of this year.
In a consistent with the cash generation of the business going forward every Sameer I don't if you have any other thoughts thanks Mark.
Ill just go back to help you kind of talked about the cash usage in the past right look we as a manufacturer our first priority in terms of investing in our cash is to make sure we have safe and reliable operations as you know we have.
Our responsibility commitments that we have to ensure.
Speaker 9: We can cut down on the emissions and there's some pretty attractive growth opportunities as well as Mark kind of talked about with.
We can cut down on the emissions and are there's some pretty attractive growth opportunities as well as mark talked about with.
Speaker 9: with AMAC and all the stuff that's happening around semiconductor on sharing, it's a great exciting opportunity for us on both on the ATM, TSS and TT franchises. So our first priority is to make sure we do the right CAPEX.
But <unk> and all the stuff that's happening around semiconductor onshoring to create exciting opportunities for us on the on both on the APM TSS NPD franchises. So we our first priority is to make sure we.
And do the right Capex and Thats why Youre seeing in the guide roughly $400 million of Capex and the way I would look at Capex around as I said in my remarks, a number of projects moved from 21% to 2022, so combine that 'twenty, one and 'twenty two is roughly $350 million of Capex and after that as Mark said, we will do a little bit of a debt reduction we are.
Speaker 9: And that's why you've seen the guy in roughly 400 million of CapEx.
Speaker 9: And the way I would look at CAPEX, Rune, as I said in my remarks, is the number of projects moved from 21 into 2022. So combine that, the 21 and 22 is roughly $350 million of CAPEX. And after that, as Mark said, you know, we'll do a little bit of a debt reduction. We are committed to our $3.5 billion growth debt target. We made pretty significant improvement in that. We'll continue to march forward on that.
Committed to a $3 5 billion gross debt target, we made pretty significant improvement and that will continue our march forward on that and then last is our commitment to space <unk>. We will return the majority of the free cash flow to shareholders. So.
Speaker 9: And then last is our commitment to states that we will return majority of the free cash flow to shareholders.
Speaker 9: If you look at our comments around that we expect to finish the remaining commitment on the buyback program in the first half, that's roughly $250 million of cash coming back to the shareholders via repurchases just in the first half of the year. So that's how you should think about our cash usage, investment, credit profile enhancement, and majority cash coming back to shareholders.
If you look at our comments around that we expect to finish the remaining commitment on the buyback program in the first half that's roughly $250 million of cash coming back to the shareholders via repurchases just in the first half of the year. So that's how you should think about our cash usage investment credit profile enhancement and cat majority of cash coming.
Back to shareholders.
Speaker 1: Okay, thanks for that. And just as a follow-up, I want to understand the high end of the guidance. I know there's about a $60 million difference between the midpoint versus the high end. So would you characterize that as mostly possible, that $60 million in APM and TSS, that there's quicker resolution on chip shortage issues or supply chain? Is that the right way to think about it? Thanks.
Okay. Thanks for that and just as a follow up just I wanted to understand the high end of the guidance.
Out of $60 million difference between the midpoint versus the high end. So would you characterize that as mostly possible that $60 million.
APM in TSS, if theres quicker resolution on chip shortage issue is your supply chain.
Is that the right way to think about it. Thanks.
Speaker 9: Yeah I mean there are lots of puts and takes but I would say it's pretty balanced. Look I mean there are growth opportunities across all three businesses right. If or situation resolves I think on the TI side as Mark said earlier the demand remains really strong.
Yes, there are lots of puts and takes but I would say, it's pretty balanced look at their growth opportunities across all three businesses right.
<unk> situation resolved I think on the theatrical side as Mark said earlier the demand remains really strong so there isn't.
Speaker 9: So there's an opportunity from there, from the midpoint to the high end. And on the TSS here, you hit the nail on the head. You know, if the auto OEM market recovers, I think that provides us some pretty interesting, exciting opportunities.
Charity from there from the midpoint to the high end and on the PSS here you hit the nail on the head if the auto OEM market recovers I think that provides us some pretty interesting exciting opportunities F gas regulation Mark mentioned about <unk> at the same time as the enforcement increases in Europe on the webcast that provides us an opportunity as well.
Speaker 9: FCAS regulation. Mark mentioned about AMAC. At the same time, as the enforcement increases in Europe on the FCAS, that provides us an opportunity as well. And similarly, on the APM side, I mean, as we talked about,
And similarly on the APM side, I mean, as we talked about.
Speaker 9: The margin improvement as the efficiency of the operation improves, you know, getting into the margins in the low 20%, that provides us a great opportunity as well. So, it's an opportunity-rich environment, and I want to cross all three businesses. So, on the high end, I would keep it pretty balanced. Arun, as I said, you know, we really love the momentum we have in all of our businesses. Obviously, we're being very thoughtful on our guide early in the year.
The margin improvement is the efficient efficiency of the operation improves getting into the margins in the low 20% that provides us a great opportunity as well so its dividend and this is an opportunity rich environment.
Across our three businesses. So on the high end I would keep it pretty balanced <unk>.
I said, we really love the momentum we have in all of our businesses, obviously, we're being very thoughtful on our guide early in the year.
Speaker 2: But, you know, when I look at TIO2, we have the best book of business that we've ever had and we can grow with our customers. We're working to, you know, unlock the bottleneck capacity to achieve that growth.
But when I look at <unk>, we have the best book of business that we've ever had and we can grow with our customers we are working to.
Unlocked debottleneck capacity to achieve that growth when I look at TSS, we have the recovery of auto plus the growing impact of aim over time as well as just more more commercial refrigeration as as things go back to normal post COVID-19 .
Speaker 2: When I look at TSS, you know, we have the recovery of auto plus, you know, the growing impact of AIM over time, as well as just, you know, more, more commercial refrigeration as, as, you know, things go back to normal post COVID.
Speaker 2: And then in APM, you know, we're working on so many exciting opportunities from Semicon to hydrogen to EVs to advanced electronics.
And then in APM.
We're working on so many exciting opportunities from semi con to hydrogen to evs to advanced electronics.
Speaker 2: where our floral polymers really are the only, you know, are the only answer to sort of solving the world's most difficult issues. So I'm very excited about, you know, the potential of these three businesses and the focus we have of our leadership team and our employees to, you know, to keep driving forward.
There are floor of polymer Israeli are the only.
<unk>.
Are they only answer to sort of solving the world's most difficult issues. So.
I am very excited about the potential of these three businesses and the focus we have of our leadership team and our employees.
To keep driving forward.
Thanks.
Speaker 7: Your next question comes from a line of Duffy Fisher from Barclays. Your line is open.
Your next question comes from the line of Duffy Fischer from Barclays. Your line is open.
Yes, good morning.
Speaker 1: Yeah, good morning. First question is just around your free cash flow. So last year you guys did about 41 percent conversion from EBITDA to free cash flow. At the midpoint this year that would give you five sixty four million of free cash flow which is a pretty big distance. I mean it's within the guidance but you know it's much higher than the five hundred.
First question is just around your free cash flow so.
Last year, you guys did about 41% conversion from EBITDA to free cash flow at the midpoint. This year that would give you $5 $64 million of free cash flow, which is a pretty big distance.
It's within the guidance, but it's much higher than the 500 is that conversion ratio still good in your mind or are you likely to convert less EBITDA to free cash flow this year than last year.
Speaker 1: Is that conversion ratio still good in your mind or are you likely to convert less EBITDA to free cash flow this year than last year?
Speaker 9: No, definitely. Let me just take that one. As you kind of look at that 2020, 2022 versus 2021, I think that one of the biggest drivers is CapEx, right, as we kind of move from this year to next.
Duffy just let me let me just take that one as you kind of look at the 2000 22022 versus 2021 I think the one of the biggest driver just capex right as we kind of moved from this year to next.
Speaker 9: As I said just to Arun, CapEx is going up, it's just a transition given how some of the projects got delayed. And also I think from the working capital perspective, this is a year.
As I said.
So arun.
Capex is going up it's just a transition given some of the projects got delayed and also I think from a working capital perspective. This is a year.
Speaker 9: in which we will be more seasonal in terms of the working capital consumption and release of the working capital. So that's going to have a little bit of impact as well.
And which we will be more seasonal in terms of the working capital consumption and release of the working capital. So that's going to have a little bit of impact as well.
Speaker 9: 2019-2022 inventories have been pretty light across the chain and that applies to us as well. So as we kind of move into 2022, you're going to see some of the working capital stuff as well. So all in all, I would say, you know, combination of the two years given the CapEx movement kind of makes more sense the way you look at it.
2019, 2022 inventories have been pretty light across chain and that applies to us as well. So as we kind of move into 2022, you're going to see some of the working capital stuff as well. So all in all I would say a combination of the two years given the Capex movement kind of makes more sense. The way you look at it.
Fair enough and then a couple of quick ones just on <unk>.
Speaker 1: Fair enough. And then a couple of quick ones just on TIO2. One, as you exited last year, what percent of your TIO2 was on the ABA contracts? And then two, if you look at the tons you produced last year, where is that relative to your capacity, you know, so we can kind of build in if we think things are going to grow, how many more tons we're going to be able to add over the next couple of years, you know, to your revenue line?
One as you exited last year what percent of your tier two was on the Ava contracts and then two if.
If you look at the tons you produced last year.
Where is that relative to your capacity. So we can kind of build and if we think things are going to grow how many more tons, we're going to be able to add over the next couple of years.
To your revenue lines.
Speaker 2: Yeah, so definitely, you know, we've guided to about 70% of our book of business is contracted and the rest, you know, is either our distributive business or our flex portal. And, you know, we oscillate around that, you know, from quarter to quarter, but that's a pretty good guide. What I tell you is in 2021,
Yes, so duffy.
We've guided to about 70% of our book of business is contracted and the rest.
Our distributor business or our flex portal and we oscillate around that.
From quarter to quarter, but thats, a pretty good guide.
What I would tell you is in in 2021.
Speaker 2: you know, our mix of contracted business, you know, really improved. We use the market tightness as a way to enhance both product and customer mix throughout the year, to where we can now say this is, you know, this is where we're supplying.
Our mix of contracted business in a really improved use of market tightness.
The way to enhance both product and customer mix throughout the year.
So where are we can now say this is this is where we're supplying.
Speaker 9: you know, the best set of strategic customers with the best contracts that we've had in our history. So, you know, I'm really encouraged by that.
The best set of strategic customers with the best contracts that we've had.
In our history, so I'm really encouraged by.
By that.
Speaker 2: You know, clearly the impact of ore as it relates to capacity had an impact on our Q4 volumes and we're starting the year that way, so we would expect our volumes to be relatively flat from Q4 to Q1. But beyond that, you know, we would expect to be able to show volume growth, you know, as well, given our capacity.
Clearly the impact of or as it relates to capacity had an impact on our Q4 volumes and we're starting the year that way. So we would expect our volumes to be relatively flat from Q4 to Q1, but beyond that we would expect to be able to show.
Volume growth.
As well <unk>.
Given our capacity.
Terrific. Thank you guys.
Thanks Duffy.
Speaker 7: Your next question comes from a line of Vincent Andrews from Morgan Stanley . Your line is open. Thank you. Good morning everyone. Could you just give us a sense of the visibility you have on your supply improving after the first half. And I just ask you directly you know the situation has gotten more challenging over the last three months.
Your next question comes from the line of Vincent Andrews from Morgan Stanley . Your line is open.
Thank you and good morning, everyone could you just give us a sense of the visibility you have on the ore supply improving for after the first half and then I'll. Just ask is obviously the situation has gotten more challenging over the last three months just like.
Speaker 6: like to get a better sense of, you know, how much comfort you have in that view on war.
Wanted to get a better sense of how much comfort you have in that view on war.
Yes, I would say.
Speaker 2: Yeah, I would say the main thing that we're watching currently is ore supply to TiO2. Vincent, that related to some force majeure activity in Q3 of last year, which we see improving as we move forward in time. Clearly, even though things at the mine face are improved,
The main thing that we are watching currently is or supply to tier two.
No.
Vincent that related to some forced mature activity in Q3 of last year, which we see improving as we move forward in time.
Clearly, even though things at the mine face are improved.
Speaker 2: you still have the impact of a pretty congested logistics.
Still have the impact of a pretty congested logistics so.
Speaker 2: So, you know, that that's really playing into sort of our near term, you know, performance, but but again, our view is, you know, we see that resolving itself here in the first half and, you know, we'd expect to have more to say at the end of Q1.
That's really playing into sort of our near term.
Performance, but again, our view is we see that resolving itself here in the first half.
And we would expect to have more to say at the end of Q1.
Speaker 6: Okay. And just as a follow-up, if I look at your historical balance sheet and the cash balances at the end of the year, the lowest number I see is 2015's $366 million. Is that, for a walking around assumption, is that sort of an amount that you could comfortably finish the year with on an ongoing basis, or would you need more than that?
Okay, and just as a follow up if I look at your historical balance sheet.
And our cash balances at the end of the year, the lowest number I see 2000, fifteen's $366 million.
Is that for walking around assumption is that sort of an amount that you could comfortably finished the year with on an ongoing basis or would you need more than that.
Speaker 9: Yes, this is Sameer. It really depends on the needs of the businesses and what kind of investments you're looking at, US versus non-US cash. What I would say is the balance sheet cash, you should really look in the context of where we are spending.
Yes. This is Samir look I mean it clearly.
<unk> and the needs of the businesses and what kind of investments you're looking at the U S versus non U S cash.
I would say is the.
The balance sheet cash should really looking.
In the context of where we are spending.
R R.
Speaker 9: uh... you know view is the country will continue to make investment in the businesses on both on the run and maintain reliability perspective and uh... you know make continue to make progress on our CRT commitments
Our view is we continue we'll continue to make investments in our businesses both on the run and maintain reliability perspective and.
<unk> continued to make progress on our CRC commitments get our balance sheet debt to come back to three $5 billion out of our range. So we are committed to that and then go back to returning majority of the free cash flow to shareholders. So that's how I would look at it.
Speaker 10: get a balance sheet debt back to $3.5 billion range. So we are committed to that. And then go back to returning majority of the free cash to shareholders. So that's how I would look at it. Exact balance sheet cash, as you know, can move around based on where the needs are. And also, really importantly, how we generate the cash into US versus non-US and making sure we have enough US cash.
The exact balance sheet cash as you know can move around based on where the needs are and also really importantly, how we generate the cash into U S versus non U S and making sure we have enough U S cash.
Thanks very much.
Thank you.
Speaker 7: Your next question comes from the line of Josh Spector from UBS. Your line is open.
Your next question comes from the line of Josh Spector from UBS. Your line is open.
Hey, guys. Thanks for taking my question, just a couple ones to take forward.
Speaker 6: Hey guys, thanks for taking my question. Just a couple ones to pick on ore again. Just, you know, as ore limits supply, I guess, is it fair for me to think about most of your North America sales to be on AVAs already, so they get perhaps first dibs at North America supply? And does that mean that Europe
Again.
As or limit supply I guess is it fair for me to think about most of your North America sales to be on Ava is already so they get perhaps first bids at North America supply and does that mean that Europe gets a bit shorted in the near term the next couple of quarters.
Speaker 6: gets a bit shorted in the near term, the next couple of quarters.
Speaker 6: And just on your 2Q seasonal ramp comment.
And just on your <unk> seasonal ramp comment.
Speaker 6: I assume for you to meet that, you need the ore for 2Q already on the water and shipped now.
Soon for you to meet that need the ore for <unk> already on the water and chips now.
Speaker 6: Is that in place to get a 2Q seasonal ramp?
Is that in place to get it to Q seasonal ramp.
So I'd say as I said earlier.
Speaker 2: So I'd say, as I said earlier, the issue at the mine has largely been resolved and we're seeing improvements there and shipments are on the water. So, yes, the last question is the short answer is yes, obviously, it's something we keep monitoring.
The issue at the mine has largely been resolved and we are seeing improvements there and shipments are on the water. So yes.
Last question is.
The short answer is yes, obviously, its something we keep keep monitoring.
Speaker 11: Clearly, we are very focused on meeting our contracted book of business and their customer needs first.
Clearly we are very focused on meeting our contracted book of business and their customer needs first.
Speaker 2: And when I look at our growth in 2021, you know, we grew in all markets, so there's no sort of North America versus Europe versus AP trade-off here. The trade-off is, hey, you make sure you deliver first and protect your contracted book of business.
And when I look at our growth in 2021.
We grew in all markets. So there is no sort of North America versus Europe versus AP.
Tradeoff here the tradeoff is hey, you make sure you deliver <unk> and protect your contracted book of business and Thats.
Speaker 2: candidly part of the value prop that so many customers have flocked to or are being contracted with Chemours. So in the short term it will put a little bit more volume as a percentage you know on our ABA book, but again this is just a matter of a couple of quarters here where we're somewhat more constrained.
Candidly part of the value prop that so many customers have flocked to our.
There are being contracted with <unk>. So so so in the short term it will put a little bit more volume as a percentage.
Our Eva book, but again this is just a matter of a couple of quarters here, where we're somewhat or constrained.
And maybe another way to ask that is is there a flex portal distribution significantly different than your average.
Speaker 6: Maybe another way to ask that, then, is your flex portal distribution significantly different than your average? I mean, I guess I would think maybe AP perhaps has more of the spot market activity. Is that a fair way to think about it?
I mean, I guess I would think.
A&P, perhaps as more of the spot market activity is that is that a fair way to think about it.
Speaker 2: Our Flex portal is available to our global customers, so customers around the world in different markets.
Our flex portal is available to our global customers so customers around the world.
In different markets.
Speaker 2: the availability on flex is somewhat reduced when you're constrained and then that usually results in prices on flex, you know, which reflect the spot market.
The availability on flex is somewhat reduced when you're constrained and then that usually results in prices on on flex rich reflect the spot market.
Speaker 2: being significantly higher. So, you know, that's, that's, that's, we always want to have volume.
Being significantly higher so that's that.
We always want to have volume avail.
Speaker 2: available for flex and distribution because of the opportunity it brings in a tight market like we have. And that's why, you know, we made this sort of rule of thumb that we would constrain our contracted book of business to about 70% of our volumes.
Available for.
<unk> flex and distribution because of the opportunity it brings in a tight market like we have and that's why we've made this sort of rule of thumb that we would constrain our contracted book of business to about 70% of our volumes.
Okay. Thank you.
Welcome.
Your next question comes from the line of Matthew <unk> from Bank of America. Your line is open.
Speaker 7: Your next question comes from a line of Matthew Dio from Bank of America. Your line is open. Morning, thanks.
Good morning. Thanks.
Speaker 7: A few quick ones on the TSS volumes. So if the business was down like 11%, does that mean Opteon was down closer to 18 to 20? And why did it take until 4Q to see that headwind given what we kind of saw transpiring even into 3Q? I know you mentioned comps from last year. Is that the case? And what do we see is this type of volume, like should we see this kind of volume print consistently until we get to the back half of next year or do things ease up a little bit?
Two quick ones on the TSS volumes. So if the business was down like 11% does that mean update on was down closer to 18 to 20 and why does it take until <unk> to see that headwind given what we've just kind of saw transpiring EBIT industry Q I know you mentioned comps from last year is that the case.
What should we see as type of this type of vault like should we see this kind of volume print consistently until we get to the back half of next year that things ease up a little bit.
Speaker 12: Now, I'll start and maybe ask Samir to comment a little bit further. Recall Q4 of last year was a very robust recovery for auto. So it's just a tough year-over-year comp on auto volumes.
So I'll start and maybe ask <unk> to comment a little bit further recall Q4 of last year was a very robust recovery for audio. So it's just a tough year over year comp on auto volumes. These are the the semicon constrained build and omicron constrained build.
Speaker 2: vis-a-vis the semicon-constrained build and omicron-constrained build in Q4. So, you know, the way you should read that is just a year-over-year comp.
In Q4, so the way you should read that as just a year over year comp.
Speaker 13: Our expectation and I think if you look at IHS Outlook, they're projecting auto volumes this year to be up around 10%.
Our expectation and I think if you look at IHS outlook there.
They are projecting auto volumes this year to be up around 10% and so we're using IHS as the guy clearly.
Speaker 2: And so, you know, we're using IHS as a guide. Clearly, you know, we're focused on both OEM and aftermarket opportunities as the Optium car park continues to build.
We're focused on both OEM and aftermarket opportunities as the RPM car Park continues to bill.
Okay, and then a quick one on <unk> so.
Speaker 7: okay and then a quick one on PFOA so um DePont made some comments about making progress on settlement work they didn't really go into a lot of detail on the call maybe not on purpose but um you know there's kind of this outstanding South Carolina MDL and and and perhaps other cases i'm just kind of wondering through what the cadence of any kind of
Dupont made some comments about making progress on settlement Mark and really go into lot of detail on the call maybe not on purpose, but.
There's kind of this outstanding South Carolina, MTL, and perhaps other cases and I'm just kind of wondering through what the cadence of any kind of.
Speaker 14: uh... announcements we might get through the year what you're looking at and and you know how you frame out liabilities versus perhaps risk to setting precedence
Announcements, we might get through the year, what youre looking at.
How you frame out liabilities versus perhaps.
Risks to setting precedents.
Yes.
Speaker 2: So, Josh, I wouldn't speculate on cadence, but I'd make two comments here. First is...
So Josh I wouldn't speculate on cadence, but I'd make two comments here first is.
Speaker 15: you know, DuPont, Corteva, and Chemours.
Dupont, Kurt Teva and <unk>.
Speaker 2: continue to work well together under the MOU framework. And you saw that this year, you know, with the Delaware settlement that we announced last year.
Continue to work well together under the Mou framework and you saw that this year.
The Delaware.
Settlement that we announced last year.
Speaker 2: Secondly, you know, as a leadership team.
Secondly, as a leadership team.
Speaker 2: We're always open to potential for settlements.
We're always open to potential for settlements.
Speaker 2: that reduce the risk to the company but are done in a way that we believe create value to our shareholders.
That reduce the risk to the company.
But are done in a way that we believe create value.
To our shareholders.
Speaker 2: And so, you know, we will continue to have that mindset. I'm very encouraged by the fact that, you know, in my discussions with DuPont and Cortevo, you know, we have a shared view of using the MOU to, you know, work through issues that relate to our legacy past. So, stay tuned, but nothing more to say at this time.
And so we will continue to have that mindset I am very encouraged by the fact that.
In my discussions with Dupont and Curt Teva, we have a shared view of of using the Mou to work through issues that relate to our legacy past so.
Stay tuned, but nothing more to say at this time.
Understood. Thanks.
Your next question comes from the line of Eric Petrie from Citi. Your line is open.
Speaker 16: Your next question comes from the line of Eric Petrie from Citi. Your line is open.
Hi, Good morning, Martin Humira.
Hi, Eric Boyer.
Speaker 17: Hi Eric. I saw your second patent infringement case in Japan and it's a good example of enforcement. But I was wondering could you give an overview of your patent estate and when could we expect the competitor to produce an HFO for the auto air conditioning market.
I saw your second patent infringement case in Japan, and it is a good example of enforcement, but I was wondering could you give an overview of your patent estate and when could we expect a competitor to produce <unk> for the auto air conditioning market.
Speaker 18: Hey, we we continue to view our path in this state as going well.
Hey, we continue to view our patented state is going well.
Speaker 19: towards the end of this current decade. And we will vigorously defend defend our IP estate globally. And so I just say you know we continue to innovate.
Towards the end of this current decade.
And.
We will vigorously depend defend our IP estate globally and.
So I would just say we continue to innovate.
Speaker 20: around our Optium franchise, bring new IP to market that, you know, makes the product better for our customers. And we would expect, you know, to continue to have significant IP defenses through later half of this decade.
Around our op Tien franchise brand, new IP to market that makes our product better.
For our customers and we would expect.
To continue to have significant IP defenses.
Through the through later half of this decade.
Okay, and then secondly on <unk>, two given I think the shipping and logistics constraints.
Speaker 1: Okay. And then secondly on TIO2, given the shipping and logistics constraints, did you have to reroute any of your TIO2 volumes? I know Altamira is a big exporter of TIO2. So any changes in trade routes?
Did you have to reroute any of your CIO to volumes I know Ulta Merit.
Big exporter of Tio too so any changes in trade routes.
Speaker 9: Hey, Eric, this is Samir. Nothing of significance. Look, there's always supply chain teams making some adjustments here and there based on the port availability and the vendors that we use, but nothing, nothing material.
Hey, Eric good Samir nothing of significance look theres always supply chain teams, making some adjustments here and there based on the port availability and.
The vendors that we use but nothing nothing material.
Eric I would just say.
This year.
Speaker 2: This year, our operations teams.
Our operations teams.
Speaker 21: work hand-in-glove with procurement and logistics.
Worked hand in glove with procurement and logistics.
Speaker 22: and our customer service organization to ensure minimal disruption to our customers.
And our customer service.
Organization to ensure minimal disruption to our customers and.
Speaker 23: You know, you don't build a book of business like we have.
You don't build a book of business like we have by not really taking seriously your value prop to your customers. So I really it was a year, where we had collaboration.
Speaker 24: by not really taking seriously your value prop to your customers. So I really, you know, it was a year where we had collaboration.
Speaker 2: across all aspects of the organization. But, you know, a big shout out to our ops teams who, despite, you know, three waves of COVID, you know, ran our plants really well and worked with our logistics team to make sure our customers had minimal disruptions.
Across all aspects of the organization, but Ah.
A big Shout out to our ops teams, who despite three waves of Covid.
Aeroplan trailing well and worked with our logistics team to make sure our customers had minimal disruptions.
Thank you.
Hi.
Thanks.
Speaker 2: Your next question comes from a line of Hassan Ahmed from Alembic Global. Your line is open. Morning Mark.
Our next question comes from the line of Hassan Ahmed from Alembic Global Your line is open.
Good morning, Mark.
Yes.
Speaker 6: How are you doing? Question around titanium technologies. Look, sequentially, your volumes were down 10%. And I obviously understand the seasonality of things. I understand the supply chain constraint considerations and the like. But one of your
How are you doing question.
Titanium technologies.
Sequentially volumes were down 10%.
Do you understand the seasonality of things I understand.
Sort of supply chain constraints considerations and the like.
But one of your.
Speaker 6: sort of larger competitors you know back in November had guided to volume decline sequentially in the mid single digits. So I'm just trying to understand did you guys lose some market share in in in Q4 or was that just.
Sort of larger competitors back in November had guided to volume declined sequentially.
In the mid single digits. So I'm just trying to understand did you guys lose some market share.
In Q4 or was that just.
Speaker 6: you know the way the market was and part and parcel with that on a go forward basis in 2022 now that you guys stated that you've regained your lost market share how should we think about your volumes in tio2 uh year on year will you grow with the market or will you continue uh to try to regain market share as you consider the bottlenecks and the like
The way the market was and part and parcel with that on a go forward basis. In 2022 now that you guys stated that you regain lost market share how should we think about your volumes in tio too.
Year on year, while you grow with the market or will you continue.
To try to regain market share as you consider the bottlenecks and the like.
Speaker 25: Yeah, Hassan, it's a great question. And clearly, you know, among competitors, you will have variation quarter to quarter. But when you look at our overall volumes for the year, you know, TI2 revenue up 40%.
Yes, it's a great question and clearly.
Among competitors, you will have variations quarter to quarter, but when you look at our overall volumes for the year.
Ti to revenue up 40%.
Speaker 2: it's hard to argue with the result that we had in the year. As Samir said in his remarks, we regained the market share we lost with TBS and then some. So, our focus here is to really maintain
It's hard to argue with with the with the result that we had in the year.
As Samir said in his remarks, we regain the market share we lost with Tvs and then some.
So our focus here is is to really maintain.
Speaker 2: or market share maintain slash grow our market share. And by doing that by growing with our customers first you know we have really a really good strategic book of business.
Our market share maintain slash grow our market share.
By doing that by growing with our customers first.
<unk> really a really good strategic book of business and our focus now is how do we do.
Speaker 2: And our focus now is how do we
Speaker 26: grow as our key strategic customers grow.
As our key strategic customers grow as it relates to sort of a volume outlook for the year clearly we're starting the year.
Speaker 2: As it relates to you know sort of a volume outlook for the year, clearly we're starting the year more constrained and as I said earlier we expect that to alleviate itself as we move through the first half.
Or constrained and as I said earlier, we expect that to alleviate itself as we move through the first half.
Speaker 2: And our expectation is, based on the strength of the market we're seeing and how light inventories are throughout the whole system, that we should have another great year in terms of revenue growth in this business.
And our expectation is based on the strength of the market, we're seeing and how light inventories are throwing the whole system.
That we should have another great year in terms of revenue growth in this business.
Speaker 27: Understood and as a follow-up just sticking to tio2 again
Understood and as a follow up just sticking to Tio two again.
Speaker 28: You know, as you sort of sit there and look at where the cost curves are today, you know, with, you rightly pointed out, ore constraints, obviously, ore prices going up, but also sort of the chlorine side of things, you know, all in out there, sort of shuttering as much as 15% of their capacity. Could 2022 be a year where you see major differences?
As as you sort of sit there and look at where the cost curves are today.
You rightly pointed out or constraints, obviously oil pricing the prices going up but also sort of the chlorine side of things all in out there sort of shuttering as much as 15% of <unk>.
<unk>.
2020 to be a year, where you see major differences.
Speaker 29: between the integrated TiO2 producers versus the non-integrated ones. And again, you know, I'm thinking about the flexibility that you guys have in sort of, you know, toggling between a whole range of force. So could this be a year where the non-integrated, you know, feast or famine, you know, relative to whether you're integrated or not?
Queen the integrated.
There are two producers versus the non integrated ones and again.
Im thinking about the flexibility that you guys have any sort of toggling between a whole range of force. So so could this be a year, where the non integrated feast or famine.
Relative to whether you are integrated or not.
Speaker 30: So listen we we like our book of business. We like our our supply on on all of our route. Ross you know we continue to work you know across both.
So listen we like our book of business, we like our our supply on on all of our rollout raws, we continue to work.
Across both chlorine and ore.
Speaker 31: chlorine and ore to be well supplied through time.
To be well supplied through time, so I'd, just say and then we like our cost curve, where we are on the cost curve and as we debottleneck capacity.
Speaker 32: So I just say, and then we like our cost curve, where we are on the cost curve. And as we de-bottleneck capacity, we're seeing opportunities to do that at some of our lower cost plans as well. So overall, Hasan, I remain very encouraged about where we are in our TIO2 journey. Clearly we're starting the year slightly more constrained and that's something we'll work our way through.
We are seeing opportunities to do that at some of our lower cost plants as well so overall.
And I remain very encouraged about where we are.
In our <unk> journey.
Clearly we are starting the year slightly more constrained and thats something we will work our way through that.
Speaker 9: Yeah, the only other thing, Hassan, I would add is, look, I mean, if you look at the quality of our operations, the technology in TI2, I wouldn't exchange that for anything else. At the end of the day, what matters is return on capital. And with our technology, we believe we have very attractive return on capital in the broader scheme of things. So we take a lot of pride in that. Perfect.
Yes, So let me get on the other.
With us on our AD is look I mean, if you look at.
The quality of our operation the technology in tier two hour exchange it for anything else.
At the end of the day, what matters is return on capital and with our technology. We believe we have a really attractive return on capital.
In the broader scheme of things so we take pride in that.
Perfect. Thank you so much.
Thanks.
And there are no further questions at this time, Mr. Mark Newman I turn the call back over to you for some closing remarks.
Speaker 33: And there are no further questions at this time. Mr. Mark Newman, I turn the call back over to you for some closing remarks.
Speaker 34: Yes, thank you. Listen, we are very excited about the momentum we have in all of our businesses. We are starting the year with very strong customer demand. Our focus this year will be to continue to grow earnings and to throw off significant free cash flow as we grow revenue and earnings going forward. Thank you for your continued interest. I look forward to speaking to many of you today.
Yes, Thank you and.
We are we are very excited about the momentum we have in all of our businesses.
We are starting the year with very strong customer demand.
And our focus this year will be continue to grow earnings.
And to throw off significant free cash flow as we grow revenue and earnings going forward. So thank you for your continued interest and we look forward to speaking to many of you today.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker 35: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Okay.
Okay.
Okay.
Okay.