Q4 2024 The Chemours Co Earnings Call

February 18, 2025

Our research results Conference call. Currently all participants are in a listen only mode. A question and answer session will follow the conclusion of the prepared remarks.

I would like to remind everyone that this conference call is being recorded.

Brandon: I would now like to hand, the conference call over to Brandon on just Vice President of Investor Relations for <unk> you May begin your conference.

Speaker Change: Good morning, everybody welcome to the course companies' fourth quarter and full year 2024 earnings conference call.

Speaker Change: I'm joined today by to these signals Morris, President and Chief Executive Officer.

And our senior Vice President and Chief Financial Officer, Shanghai Center.

Good morning, my name is Michelle and I will be your conference operator today.

Speaker Change: Before we start I would like to remind you that comments made on this call as well as in the supplemental information provided on our website.

Speaker Change: Forward looking statements.

Speaker Change: Risks and uncertainties as described.

Speaker Change: <unk> SEC filings.

Speaker Change: These forward looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized.

Speaker Change: Actual results may differ and <unk> undertakes no duty to update any forward looking statements as a result of future developments or new information.

Speaker Change: During the course of this call we will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance.

Speaker Change: A reconciliation of non-GAAP terms and adjustments is included in our press release issued this morning.

Speaker Change: So we have posted our earnings presentation to our website earlier today.

Denise: With that I will turn the call over to Denise.

Denise: Thank you Brandon and thank you everyone for joining us.

Denise: Over the past few months, we've been focused on executing against our refreshed corporate strategy that we outlined on our last earnings call, which we call pathway to thrive.

Speaker Change: Our SEC filings.

Speaker Change: These forward looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may.

Denise: Today, we are excited to share our results from the fourth quarter and full year 2024, as well as the significant progress we've made against our strategic pillars in just a few short months.

Speaker Change: May not be realized.

Speaker Change: Actual results may differ.

Speaker Change: Undertakes no duty to update any forward looking statements as a result of future developments or new information.

Denise: Shane and I will begin by discussing our fourth quarter and full year performance.

Speaker Change: During the course of this call we will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance.

Denise: I will then provide a view of the first quarter and share some thoughts around the outlook for the full year 2025.

Denise: Next we will discuss the progress we've made on our strategy in more detail and take your questions.

Speaker Change: A reconciliation of non-GAAP terms and adjustments is included in our press release issued this morning.

Denise: Beginning with our results we delivered another quarter of strong performance building on our momentum from the last quarter.

Speaker Change: Also we have posted our earnings presentation to our website earlier today.

Denise: With that I will turn the call over to Denise.

Denise: Across all our businesses, we exceeded our adjusted EBITDA expectations for the quarter.

Denise: Thank you Brandon and thank you everyone for joining us.

Denise: Over the past few months, we've been focused on executing against our refreshed corporate strategy that we outlined on our last earnings call, which we call pathway to thrive.

Denise: Demonstrating our continued focus on operational excellence and fulfilling our shareholder commitments.

Denise: For our TSS business, we again achieved a quarterly sales record driven by 23% year over year growth in ASEAN refrigerant, driven by the U S APAC and EU F gas regulatory transitions underway.

Denise: Our TSS earnings came in above our expectations driven by this continued update on adoption and supported by a favorable product mix and lower costs in the fourth quarter.

Denise: Shane and I will begin by discussing our fourth quarter and full year performance.

Denise: We will then provide a view of the first quarter and share some thoughts around the outlook for the full year 2025.

In light of strong adoption I'm pleased to share that we recently completed the expansion at our Corpus Christi site, where we produce our neat <unk> refrigerant and are in the process of ramping this added capacity to support market demand.

Denise: Next we will discuss the progress we've made on our strategy in more detail and take your questions.

Denise: Beginning with our results we delivered another quarter of strong performance building on our momentum from the last quarter.

Denise: NTT our team remains focused on driving strong commercial performance and advancing cost reduction efforts under the TT transformation plan.

Denise: Across all our businesses, we exceeded our adjusted EBITDA expectations for the quarter demonstrating.

Denise: Demonstrating our continued focus on operational excellence and fulfilling our shareholder commitments.

As we had guided we saw a sequential decline in our net sales driven by seasonal volume trends and regional mix.

Denise: For our TSS business, we again achieved a quarterly sales record driven by 23% year over year growth in ASEAN refrigerants, driven by the U S APAC and EU F gas regulatory transitions underway.

Denise: As we reflect on the year, even with the headwinds we saw in the first half of the year. Our TT transformation plan has yielded clear results with approximately $140 million in annual savings exceeding our initial target of $125 million.

Denise: Our TSS earnings came in above our expectations driven by the continued update on adoption and supported by a favorable product mix and lower costs in the fourth quarter.

Denise: While we continue to experience a weaker macro environment the cost savings, we achieved in TT more than offset weaker pricing during the year, enabling us to deliver a net one percentage point increase in adjusted EBITDA margins, bringing us to 12% for the year.

Denise: In light of strong adoption I'm pleased to share that we recently completed the expansion at our Corpus Christi site, where we produce our neat <unk> refrigerant and are in the process of ramping this added capacity to support market demand.

Denise: Under the operational excellence pillar of our pathway to drive strategy, we will continue to execute cost reduction efforts at an efficient and orderly pace.

Denise: NTT our team remains focused on driving strong commercial performance and advancing cost reduction efforts under the TT transformation plan.

Denise: We expect TT will achieve at least another $60 million and run rate savings by the end of 2025.

Denise: As we had guided we saw a sequential decline in our net sales driven by seasonal volume trends and regional mix.

Denise: Representing approximately half of the $125 million corporate wide target, we set out for the upcoming year.

As we reflect on the year, even with the headwinds we saw in the first half of the year. Our TT transformation plan has yielded clear results with approximately $140 million in annual savings exceeding our initial target of $125 million.

Denise: And APM sales for the quarter were softer than anticipated due to weaker conditions and more economically sensitive end markets combined with weaker demand for gnathion membranes in our hydrogen end markets negatively impacting our performance solutions portfolio.

Denise: Much of the sequential weakness in performance solutions was offset by the encouraging progress we are seeing in our newly constructed high purity Teflon PFA resin production line, which serves semiconductor customers.

Denise: Under the operational excellence pillar of our pathway to drive strategy, we will continue to execute cost reduction efforts at an efficient and orderly pace.

Denise: Our earnings in APM were driven by better than expected cost performance, primarily due to favorable inventory adjustments and true ups in the quarter.

Denise: At the corporate level I am pleased to share that we fully remediated, our four material weaknesses in internal control, which were identified in connection with the audit committee's internal review in early 2024.

Denise: We expect TT will achieve at least another $60 million and run rate savings by the end of 2025.

Denise: Representing approximately half of the $125 million corporate wide target, we set out for the upcoming year.

Speaker Change: The remediation of these material weaknesses has been a significant undertaking for our organization and as Kim <unk> of the final step needed to move past the events of the prior year and is reflective of efforts under our strengthen our long term strategic pillar.

Speaker Change: I also want to take a moment to highlight two recently announced updates to our executive team.

Denise: However, much of the sequential weakness in performance solutions was offset by the encouraging progress we are seeing in our newly constructed high purity Teflon PFA resin production line, which serves semiconductor customers.

Speaker Change: First I'd like to welcome dominant Campbell as President of <unk> TT business. Most recently dominant served as the vice President corporate strategy at the Olin Corporation and previously led <unk> Global <unk> business.

Denise: Our earnings in APM were driven by better than expected cost performance, primarily due to favorable inventory adjustments and true ups in the quarter.

Speaker Change: Tommy and strategic experience business leadership and transformation background will help us continue to build on the success of our existing transformation plan and contribute significantly to advancing comore strategy.

Speaker Change: We're looking forward to him officially joining the team in early March.

Speaker Change: Second I want to highlight the appointment of Diana <unk>, our Chief Enterprise Enablement officer.

Denise: The remediation of these material weaknesses has been a significant undertaking for our organization and it can fall off of the final step needed to move past the events in the prior year and is reflective of efforts under our strengthen the long term strategic pillar.

Speaker Change: Taking on the role of interim TT business President in March 2020 for Diane has made significant contributions to building on our strong foundation for the TT business.

Speaker Change: In her new role Diane will be focused on the execution of the operational excellence and growth enablement pillars of pathway to thrive strategy working across our businesses to deliver results.

Denise: I also want to take a moment to highlight two recently announced updates to our executive team.

Denise: First I'd like to welcome dominant Campbell as President of Commerce TT business. Most recently dominant served as the Vice President corporate strategy at the Olin Corporation and previously led <unk> Global <unk> business.

Speaker Change: Diane brings over 40 years of business leadership across <unk> business segments, and I can attest firsthand to her effective and collaborative leadership style.

Denise: Tommy and strategic experience business leadership and transformation background will help us continue to build on the success of our existing transformation plan and contribute significantly to advancing comore strategy.

Speaker Change: The appointment of dominant and Diane helps further solidify our leadership team and put us on the path to drive long term value for our shareholders.

Speaker Change: Now I'll turn it over to Shane to walk through our financial results.

We're looking forward to him officially joining the team in early March.

Shane: Thank you Denise and good morning, everyone.

Shane: Let's take a closer look at our financial results beginning with our quarterly performance.

Denise: Second I want to highlight the appointment of Diane <unk>, our Chief Enterprise Enablement officer.

Shane: Our consolidated net sales for the fourth quarter were approximately $1 4 billion down 1% compared to the prior year quarter.

Denise: Since taking on the role of interim TT business President in March 2020 for Diane has made significant contributions to building on our strong foundation for the <unk> business.

Shane: This decrease was driven by a 3% decline in pricing, partially offset by a 2% increase in volume with currency impacts remaining work.

Denise: In her new role Diane will be focused on the execution of the operational excellence and growth enablement pillars of pathway to thrive strategy working across our businesses to deliver results.

Shane: Turning to adjusted EBITDA for the fourth quarter, we saw an increase from $176 million in the prior year to $179 million this quarter.

Denise: Diane brings over 40 years of business leadership across <unk> business segments, and I can attest firsthand to her effective and collaborative leadership style.

Shane: This increase was primarily driven by cost savings realized through the TT transformation plan favorable inventory adjustments and true ups and Apu and increased volumes in TSS, partially offset by lower pricing across all our businesses.

Denise: The appointment of dominant and Diane helps further solidify our leadership team and put us on the path to drive long term value for our shareholders.

Shane: For the fourth quarter <unk> reported a net loss of 8 million or <unk> <unk> per diluted share compared to a net loss of $18 million or <unk> 12 per diluted share in the prior year.

Now I'll turn it over to Shane to walk through our financial results.

Shane: Thank you Denise and good morning, everyone.

Speaker Change: Let's take a closer look at our financial results beginning with our quarterly performance.

Shane: Our consolidated adjusted net income came in at $16 million this quarter or <unk> 11 per diluted share, which was down from $46 million of adjusted net income in the prior year quarter or <unk> 31 per diluted share largely due to favorable tax impacts due to a lower effective tax rate in the prior year.

Speaker Change: <unk> net sales for the fourth quarter were approximately $1 4 billion.

Speaker Change: One 1% compared to the prior year quarter.

Speaker Change: This decrease was driven by a 3% decline in pricing, partially offset by a 2% increase in volume with currency impacts from me.

Shane: Now, let's turn to our full year results. Our consolidated net sales for the full year 2024 were approximately $5 8 billion down 5% compared to the prior year.

Speaker Change: Turning to adjusted EBITDA for the fourth quarter, we saw an increase from $176 million in the prior year to $179 million this quarter.

Speaker Change: This increase was primarily driven by cost savings realized through the TT transformation plan favorable inventory adjustments and true ups and Apu and increased volumes in TSS, partially offset by lower pricing across all our businesses.

Shane: This decrease was driven by a 4% pricing decrease and a 1% decrease due to portfolio changes made during 2023, which reflects the sale of our glycolic acid business in 2023.

Shane: Currency impacts were flat year over year as well as our volumes as solid increases in TSS NTT were offset by weaker volumes in the Epo.

Speaker Change: For the fourth quarter <unk> reported a net loss of 8 million or <unk> <unk> per diluted share compared to a net loss of $18 million or <unk> 12 per diluted share in the prior year.

Shane: Adjusted EBITDA for the full year was $786 million compared to 1 billion in the prior year.

Speaker Change: Our consolidated adjusted net income came in at $16 million this quarter or <unk> 11 per diluted share, which was down from $46 million of adjusted net income in the prior year quarter or <unk> 31 per diluted share largely due to favorable tax impacts due to a lower effective tax rate in the prior year.

Shane: The decrease year over year was primarily driven by pricing decreases across all businesses unfavorable currency impacts portfolio changes and higher costs in TSS and corporate expenses related to the audit committee's internal review and remediation.

Speaker Change: Now, let's turn to our full year results. Our consolidated net sales for the full year 2024 were approximately $5 8 billion down 5% compared to the prior year.

Shane: These increased costs were more than offset by cost savings realized through the <unk> transformation.

Shane: For the full year <unk> reported net income of $86 million or <unk> 57 per diluted share compared to a net loss of $238 million or $1 60 per diluted share in the prior year.

Speaker Change: This decrease was driven by a 4% pricing decrease and a 1% decrease Q2 portfolio changes made during 2023, which reflects the sale of our glycolic acid business in 2023.

Shane: As a reminder.

Shane: In 2023 was primarily due to costs related to the settlement of the U S public water system class actions.

Speaker Change: Currency impacts were flat year over year as well as our volumes as solid increases in TSS NTT were offset by weaker volumes in the EPS.

Shane: Our consolidated adjusted net income for the full year came in at $182 million or $1 21 per diluted share, which was down from 425 million of adjusted net income last year or $2 82 per diluted share primarily due to the prior year elevated earnings drivers I previously.

Speaker Change: Adjusted EBITDA for the full year was $786 million compared to 1 billion in the prior year.

Speaker Change: The decrease year over year was primarily driven by pricing decreases across all businesses unfavorable currency effects portfolio changes and higher costs TSS and corporate expenses related to the audit committee's internal review and remediation.

Shane: Yeah.

Shane: Now, let's turn to our business segment performance starting with TSS.

Shane: In the fourth quarter estimates mentioned TSS again achieved record net sales of $390 million, a 3% increase from the prior year.

Speaker Change: These increased costs were more than offset by cost savings realized through the TT transformation plan.

Speaker Change: For the full year <unk> reported net income of $86 million or <unk> 57 per diluted share compared to a net loss of $238 million or $1 60 per diluted share in the prior year.

Shane: This growth was primarily driven by volume increased 7%, which was partially offset by a price decrease of 4% with currency impacts remaining flat year over year.

Shane: The increase in volume was driven by 23% year over year sales group and our <unk> refrigerants, which reflects continued strength in demand ahead of the transition to new low DWP stationary air conditioning equipment, starting in 2020 as mandated under the U S. EMEA.

As a reminder.

Speaker Change: In 2023 was primarily due to costs related to the settlement of the U S public water system class actions.

Speaker Change: Our consolidated adjusted net income for the full year came in at $182 million or $1 21 per diluted share, which was down from $445 million of adjusted net income last year or $2 82 per diluted share primarily due to the prior year elevated earnings drivers I previously.

Shane: Year over year pricing remained lower similar to previous quarters due to soft pricing in our <unk> refrigerants due to elevated HFC inventory levels, which continue to persist in the market.

Speaker Change: Yeah.

Shane: TSS as fourth quarter, adjusted EBITDA decreased slightly by 1% to $123 million compared to the prior year.

Speaker Change: Now, let's turn to our business segment performance starting with TSS.

Speaker Change: In the fourth quarter estimates mentioned TSS again achieved record net sales of $390 million, a 3% increase from the prior year.

Shane: Adjusted EBITDA margin also decreased one percentage point to 32%.

Shane: This decrease was driven primarily by the aforementioned pricing weakness, partially offset by lower costs that we don't anticipate will recur in the first quarter of 2025.

Speaker Change: This growth was primarily driven by volume increased 7%, which was partially offset by a price decrease of 4% with currency impacts remaining flat year over year.

Shane: Sequentially TSS as net sales decreased by 17%, which was driven by a volume decrease of 13% and a price decrease of 4%.

Speaker Change: The increase in volume was driven by 23% year over year sales growth in our ASEAN recruiters, which reflects continued strength in demand ahead of the transition to new low DWP stationary air conditioning equipment, starting in 2025 as mandated under the U S. EMEA.

Shane: Overall volume and price decreases were primarily related to typical seasonal trends across our refrigerant portfolios combined with lower demand for our <unk> products during the quarter.

Speaker Change: Year over year pricing remained low similar to previous quarters due to soft pricing in our <unk> refrigerants due to elevated HFC inventory levels, which continue to persist in the market.

Turning to full year results for TSS net sales for the full year were $1 8, billion% to 1% decrease from the prior year.

Shane: This decline was primarily driven by a price decrease of 3%, which was partially offset by a 2% volume increase while currency impacts remained flat year over year.

Speaker Change: TSS as fourth quarter, adjusted EBITDA decreased slightly by 1% to $123 million compared to the prior year.

Speaker Change: Adjusted EBITDA margin also decreased one percentage point to 32%.

Shane: The decrease in price for the full year was primarily related to softer free on refrigerant prices, partially offset by stronger <unk> refrigerant prices.

Speaker Change: This decrease was driven primarily by the aforementioned pricing weakness, partially offset by lower costs that we don't anticipate will recur in the first quarter of 2025.

Shane: Volume growth for the full year was driven by higher demand within the opt out refrigerants portfolio due to continued stationery and automotive end market adoption, partially offset by volume decrease in the free on refrigerant portfolio in connection with the previously mentioned HFC step downs under the U S APAC and EU F gas regulation.

Speaker Change: Sequentially TSS net sales decreased by 17%, which was driven by a volume decrease of 13% and a price decrease of 4%.

Speaker Change: Overall volume and price decreases were primarily related to typical seasonal trends across our refrigerant portfolios combined with lower demand for our <unk> products during the quarter.

Shane: <unk>.

TSS as full year adjusted EBITDA decreased by 16% from the prior year to $576 million.

Speaker Change: Turning to full year results for TSS net sales for the full year were $1 8, billion% to 1% decrease from the prior year.

Shane: Resulting in an adjusted EBIT margin of 31%.

Shane: This decrease was primarily driven by the softer free on refrigerant prices that I mentioned higher costs associated with purchasing non corpus based low DWP refrigerant near term quota allowances lower fixed cost absorption in TSS as HFC product line as well as other input costs.

Speaker Change: This decline was primarily driven by a price decrease of 3%, which was partially offset by a 2% volume increase while currency impacts remained flat year over year.

Speaker Change: The decrease in price for the full year was primarily related to softer freon refrigerant prices, partially offset by stronger <unk> refrigerant prices.

Shane: Now, let's move to our <unk> segment, beginning with quarterly results.

Shane: In the fourth quarter <unk> net sales fell 3% year over year to $632 million, primarily due to a 2% decrease in pricing and a 1% decrease in volume while currency impact remained flat year over year.

Speaker Change: Volume growth for the full year was driven by higher demand within the opt out refrigerants portfolio due to continued stationary and automotive end market adoption, partially offset by a volume decrease in the free on refrigerant portfolio in connection with the previously mentioned HFC step downs under the U S APAC and EU F gas regulation.

Shane: Adjusted EBITDA for the fourth quarter increased 20% to 77 million compared to the prior year with adjusted EBITDA margin improving by two percentage points to 12%.

Speaker Change: Sure.

Speaker Change: TSS as full year adjusted EBITDA decreased by 16% from the prior year to $576 million.

Shane: Cost savings realized through our TT transformation plan drove this boost in earnings and was partially offset by the previously mentioned decreases in pricing and volume.

Speaker Change: <unk> and an adjusted EBIT margin of 31%.

Speaker Change: This decrease was primarily driven by the softer freon refrigerant prices that I mentioned higher costs associated with purchasing non corpus based low DWP refrigerant near term quota allowances lower fixed cost absorption and Tss's HFC product line as well as other input costs.

Shane: Sequentially TTS fourth quarter net sales decreased by 6% driven by a 4% decline in volume and a 2% decrease in price.

Turning to full year results <unk> net sales fell 4% year over year to $2 6 billion.

Speaker Change: Now, let's move to our TT segment, beginning with quarterly results.

Shane: Primarily due to a 5% decrease in pricing, partially offset by a 1% decrease in volume.

Speaker Change: In the fourth quarter <unk> net sales fell 3% year over year to $632 million, primarily due to a 2% decrease in pricing and a 1% decrease in volume while currency impact remained flat year over year.

Shane: Adjusted EBITDA for the full year increased 8% to $312 million compared to the prior year with adjusted EBIT margin improving by one percentage point to 12%.

Shane: This earnings increase was primarily driven by approximately 140 million of cost savings realized through the TCE transformation plan during the year.

Speaker Change: Adjusted EBITDA for the fourth quarter increased 20% to 77 million compared to the prior year with adjusted EBITDA margin improving by two percentage points to 12%.

Denise: As Denise mentioned earlier exceeded our original commit.

Speaker Change: Cost savings realized through our TT transformation plan drove this boost in earnings and was partially offset by the previously mentioned decreases in pricing and volume.

Denise: The impact from the TT transformation player was partially offset by the previously highlighted decrease in price.

Denise: Also <unk> full year adjusted EBITDA includes $26 million of costs across the second and third quarters related to the unplanned weather related downtime at our <unk>, Mexico manufacturing site.

Speaker Change: Sequentially TTS fourth quarter net sales decreased by 6% driven by a 4% decline in volume and a 2% decrease in price.

Speaker Change: Turning to full year results <unk> net sales fell 4% year over year to $2 6 billion.

Denise: Since these disruptions at our site occurred over the summer I am pleased to say that our operations have run well and we have fully supported our customer demands.

Speaker Change: Primarily due to a 5% decrease in pricing, partially offset by a 1% increase in volume.

Denise: Turning to our APM segment.

Speaker Change: Adjusted EBITDA for the full year increased 8% to $312 million compared to the prior year with adjusted EBIT margin improving by one percentage point to 12%.

Denise: In the fourth quarter of 2020 for APM reported net sales of $324 million, a 1% decline compared to the prior year.

Denise: This decrease was largely driven by a 3% decline in price, which was partially offset by a 2% increase in volume.

Speaker Change: This earnings increase was primarily driven by approximately $140 million of cost savings realized through the TCE transformation plan during the year, which as Denise mentioned earlier exceeded our original commit.

Denise: While currency impacts remained flat.

Speaker Change: Apm's volume increase was primarily related to our recent capacity expansion and high purity, Teflon, Psa, which more than offset the weaker demand that we saw for our products serving the hydrogen market in the quarter.

Denise: The impact from the TT transformation player was partially offset by the previously highlighted decrease in price.

Denise: Also <unk> full year adjusted EBITDA includes $26 million of costs across the second and third quarters related to the unplanned weather related downtime at our Altamira, Mexico manufacturing site.

Speaker Change: The pricing decrease stemmed from product mix connected to more economically sensitive end markets across the segment.

Speaker Change: Apm's adjusted EBITDA in the fourth quarter increased 20% to $48 million, while adjusted EBITDA margin rose three percentage points to 15%.

Denise: Since these disruptions at our site occurred over the summer I am pleased to say that our operations have run well and we have fully supported our customer demands.

Speaker Change: This increase was primarily due to favorable inventory adjustments and true ups in the fourth quarter that are not expected to recur.

Denise: Turning to our APM segment.

Denise: In the fourth quarter of 2020 for APM reported net sales of $324 million, a 1% decline compared to the prior year.

Speaker Change: Which were partially offset by the aforementioned decrease in price due to overall product mix.

Denise: This decrease was largely driven by a 3% decline in price, which was partially offset by a 2% increase in volume while currency impacts remained flat.

Speaker Change: Sequentially net sales decreased by 8% driven by a 6% volume decrease and a 2% decline in price with currency impacts remaining flat.

Denise: Apm's volume increase was primarily related to our recent capacity expansion and high purity, Teflon, Psa, which more than offset the weaker demand that we saw for our products serving the hydrogen market in the quarter.

Speaker Change: Turning to full year results in APM net sales were $1 3 billion, reflecting a 9% decrease compared to the prior year.

Speaker Change: This decline was primarily driven by a 5% decrease in pricing as well as a 3% decrease in volume with currency also creating a slight 1% Ed.

Denise: The pricing decrease stemmed from product mix connected to more economically sensitive end markets across the segment.

Denise: Aam's adjusted EBITDA in the fourth quarter increased 20% to $48 million, while adjusted EBITDA margin rose three percentage points to 15%.

Speaker Change: The decline in volumes for the full year was primarily due to weaker demand in our hydrogen market that I mentioned earlier as well as lower volumes and more economically sensitive end markets.

Speaker Change: The price decrease seen during the year was due to product mix connected to the same economically sensitive end markets across the broad segment.

Denise: This increase was primarily due to favorable inventory adjustments and true ups in the fourth quarter that are not expected to recur, which were partially offset by the aforementioned decrease in price due to overall product mix.

Speaker Change: <unk> adjusted EBITDA for the full year decreased 41% to $161 million, resulting in an adjusted EBITDA margin decrease of seven percentage points to 12%.

Denise: Sequentially net sales decreased by 8% driven by a 6% volume decrease and a 2% decline in price with currency impacts remaining flat.

Speaker Change: This decrease in adjusted EBITDA was primarily due to the previously mentioned decreases in pricing as well as lower sales volumes and the related impact of lower volumes on fixed cost absorption, which further contributed to the earnings decrease.

Denise: Turning to full year results in APM net sales were $1 3 billion, reflecting a 9% decrease compared to the prior year.

Denise: This decline was primarily driven by a 5% decrease in pricing as well as a 3% decrease in volume with currency also creating a slight 1% Ed.

Speaker Change: Regarding our APM segment, we continue to closely evaluate this business to reduce costs and identify opportunities to further optimize our footprint and enhance shareholder value as part of our pathway to thrive corporate strategy Denise will discuss recent actions taken by the team in more detail shortly.

Denise: The decline in volumes for the full year was primarily due to weaker demand in our hydrogen market that I mentioned earlier as well as lower volumes and more economically sensitive end markets.

Denise: The price decrease seen during the year was due to product mix connected to the same economically sensitive end markets across the broad segment.

Speaker Change: Moving to our <unk> segment.

Speaker Change: We recorded net sales of $13 million and breakeven adjusted EBITDA for the fourth quarter.

Speaker Change: For the full year, our other segment recorded net sales and adjusted EBITDA of $54 million and $8 million respectively.

Denise: Aam's adjusted EBITDA for the full year decreased 41% to $161 million, resulting in an adjusted EBITDA margin decrease of seven percentage points to 12%.

Speaker Change: And finally, our corporate expenses.

Speaker Change: And offset to our adjusted EBITDA totaled $69 million in the fourth quarter, which represents a $20 million increase from the prior year.

Denise: This decrease in adjusted EBITDA was primarily due to the previously mentioned decreases in pricing as well as lower sales volumes and the related impact of lower volumes on fixed cost absorption, which further contributed to the earnings decrease.

Speaker Change: This increase was mainly driven by changes in reserves related to legacy asbestos matters in the fourth quarter.

Speaker Change: For the full year corporate expenses totaled $255 million, a $43 million increase versus the prior year.

Denise: Regarding our APM segment, we continue to closely evaluate this business to reduce costs and identify opportunities to further optimize our footprint and enhanced shareholder value as part of our pathway to thrive corporate strategy.

Speaker Change: This increase was primarily due to costs associated with the audit committee's internal review and related remediation as well as especially reserves recorded in the fourth quarter, which are not anticipated to recur.

Denise: These will discuss recent actions taken by the team in more detail shortly.

Speaker Change: Turning to our balance sheet and liquidity.

Denise: Moving to our <unk> segment.

Speaker Change: As of December 31, 2020 for our consolidated gross debt stood at $4 2 billion with approximately $1 $4 billion in total liquidity.

Denise: We recorded net sales of $13 million and breakeven adjusted EBITDA for the fourth quarter.

Denise: For the full year, our other segment recorded net sales and adjusted EBITDA of $54 million and $8 million respectively.

Speaker Change: This includes $713 million in unrestricted cash and cash equivalents, along with approximately $640 million available under our revolving credit facility.

Denise: And finally, our corporate expenses and offset to our adjusted EBITDA totaled $69 million in the fourth quarter, which represents a $20 million increase from the prior year.

Speaker Change: Additionally, the company retained $50 million in restricted cash and cash equivalents all of which is held in escrow under the terms of the memorandum of understanding related to potential future legacy liabilities.

Denise: This increase was mainly driven by changes in reserves related to legacy asbestos matters in the fourth quarter.

Denise: For the full year corporate expenses totaled $255 million, a $43 million increase versus the prior year.

Speaker Change: On a trailing 12 month basis, our net leverage remained unchanged at four four times adjusted EBITDA sequentially.

This increase was primarily due to costs associated with the audit committee's internal review and related remediation as well as the <unk> reserves recorded in the fourth quarter, which are not anticipated to recur.

Speaker Change: For the fourth quarter, our cash provided by operating activities was $138 million compared to $482 million in the same quarter last year.

Speaker Change: Elevated cash flow in the prior year quarter was driven by the actions from previous management as previously disclosed.

Denise: Turning to our balance sheet and liquidity.

Denise: As of December 31, 2020 for our consolidated gross debt stood at $4 2 billion with approximately $1 $4 billion in total liquidity.

Speaker Change: Capital expenditures for the quarter totaled $109 million compared to 135 million in the prior year.

Speaker Change: Driven by additional capital expenditures on Atms Teflon PFA expansion in the prior year and efforts to focus capital spend all critical areas in the current year.

Denise: This includes $713 million in unrestricted cash and cash equivalents, along with approximately $640 million available under our revolving credit facility.

Speaker Change: Additionally, the company paid $36 million in dividends to shareholders during the quarter.

Denise: Additionally, the company repaid $50 million in restricted cash and cash equivalents all of which is held in escrow under the terms of the memorandum of understanding related to potential future legacy liabilities.

Speaker Change: For the full year.

Speaker Change: Outflows of our operating cash of $633 million compared to operating cash inflows of $556 million in the prior year.

Denise: On a trailing 12 month basis, our net leverage remained unchanged at four four times adjusted EBITDA sequentially.

Speaker Change: A higher usage of operating cash flow reflects the release of the $592 million of restricted cash and cash equivalents related to the U S. Public water system class action suit settlement following its final judgment.

Denise: For the fourth quarter, our cash provided by operating activities was $138 million compared to $482 million in the same quarter last year.

Speaker Change: Also cash impacts due to the unwinding of the 2023 year end net working capital actions.

Denise: Elevated cash flow in the prior year quarter was driven by the actions from previous management as previously disclosed.

Speaker Change: Capital expenditures for the full year totaled $360 million.

Denise: Capital expenditures for the quarter totaled $109 million compared to 135 million in the prior year.

Speaker Change: 370 million in the prior year.

Speaker Change: During the year. The company also paid 148 million in dividends to shareholders.

Denise: Driven by additional capital expenditures on Apm's Teflon PFA expansion.

Speaker Change: I did want to take a moment to convey that we have been very focused on our balance sheet liquidity and have taken actions in recent months to ensure that we are well positioned in our debt structure to solidify us as.

Denise: In the prior year and efforts to focus capital spend all critical areas in the currency.

Denise: Additionally, the company paid $36 million in dividends to shareholders during the quarter.

Speaker Change: As we move ahead, we do not anticipate any liquidity concerns or events that would impact liquidity related compliance concerns with our banking covenants.

Denise: For the full year, we had outflows of our operating cash of $633 million compared to operating cash inflows of $556 million in the prior year.

Speaker Change: Overall, we're encouraged by the progress we made during the fourth quarter, including the strong performance the team delivered.

Denise: Higher usage of operating cash flow reflects the release of the $592 million of restricted cash and cash equivalents related to the U S. Public water system class action suit settlement. Following its final judgment and also cash impacts due to the unwinding of the 2023 year end net working capital actions.

Speaker Change: Although we saw challenging dynamics in certain end markets and geographies that impacted our top line, we were able to exceed our adjusted EBIT expectations across all our businesses as we continue to control what we can control and focus on our commitments to both strengthen our operational execution and enhance overall cost efficiencies.

Denise: Capital expenditures for the full year totaled $360 million compared to 370 million in the prior year.

Speaker Change: With these fourth quarter and full year results a month I would now like to move to discuss our expectations for the first quarter of 2025, and our outlook for the full year.

Denise: During the year the company also paid $148 million in dividends to shareholders.

Speaker Change: Beginning with TSS for the first quarter, we expect overall TSS net sales to increase sequentially driven by double digit growth in ASEAN refrigerants, partially offset by a decrease in <unk> refrigerants in connection with the ongoing USA Mac and eus guests regulatory transitions sequentially.

Denise: I did want to take a moment to convey that we have been very focused on our balance sheet liquidity and have taken actions in recent months to ensure that we are well positioned in our debt structure to solidify us.

Denise: As we move ahead, we do not anticipate any liquidity concerns were events that would impact liquidity related compliance concerns with our banking covenants.

Speaker Change: TSS as adjusted EBITDA is expected to increase slightly reflecting impacts from increased costs from a forced outage at our corporate site and additional input costs associated with the <unk> ramp up of the new alteon capacity expansion, which are both expected to have negative impacts from the first quarter's margins.

Denise: Overall, we are encouraged by the progress we major fourth quarter, including the strong performance the team delivered.

Denise: Although we saw challenging dynamics in certain end markets and geographies that impacted our top line, we were able to exceed our adjusted EBIT expectations across all our businesses as we continue to control what we can control and focus on our commitments to both strengthen our operational execution and enhance overall cost efficiencies.

Speaker Change: Looking further ahead, we anticipate overall 2025 results to be improved versus 2024 with a pattern of year over year double digit net sales growth in <unk> refrigerants to persist throughout the year.

Denise: With these fourth quarter and full year results a month I would now like to move to discuss our expectations for the first quarter of 2025, and our outlook for the full year.

Speaker Change: Driven by volume expansion in our opt out refrigerant.

Speaker Change: The strength in ASEAN sales will come from the continued regulatory driven demand amid the transition from a broader set of legacy HFC products. Some more targeted available options for low GWB products, such as <unk>, <unk> <unk> or alternatives such as <unk>.

Denise: Beginning with TSS for the first quarter, we expect overall TSS net sales to increase sequentially driven by double digit growth in ASEAN refrigerants, partially offset by a decrease in <unk> refrigerants in connection with the ongoing USA Mac and EU F gas regulatory transitions succumb.

Speaker Change: For HFC pricing, we continue to anticipate that U S crude oil prices will remain at low levels into 2025.

Denise: Sequentially TSS as adjusted EBITDA is expected to increase slightly reflecting impacts from increased costs from a forced outage at our corporate site and additional input costs associated with the <unk> ramp up of the new alteon capacity expansion, which are both expected to have negative impacts from the first quarter's margins.

Speaker Change: While we continue to monitor increasing input costs, primarily from our 32 and regulatory headwinds around the world absent significant changes we continue to anticipate that adjusted EBIT margins will remain around 30% for the remainder of 2025.

Denise: Looking further ahead, we anticipate overall 2025 results to be improved versus 2024 with a pattern of year over year double digit net sales growth in <unk> refrigerants to persist throughout the year.

Speaker Change: For our OTT business in the first quarter, we expect volumes to remain stable sequentially. However, the segment's projected regional sales mix will result in lower net sales for the quarter.

Denise: Driven by volume expansion in our <unk> refrigerant.

Speaker Change: We expect adjusted EBITDA to decrease sequentially as a result of this regional mix as well as operational headwinds related to cold weather downtime at our U S sites in January further contributing to this decline.

Denise: The strength in ASEAN sales will come from the continued regulatory driven demand amid the transition from a broader set of legacy HFC products. Some more targeted available options for low DWP products, such as <unk> <unk> off the embraer or alternatives such as <unk> 32.

Despite these headwinds we remain committed to our cost reduction targets for the full year.

Speaker Change: For the full year, we expect 2025 results to be better than 2024 with improvements becoming more evident in the second half of the year.

Denise: For HFC pricing, we continue to anticipate that U S crude oil prices will remain at low levels into 2025.

Speaker Change: We will continue to control what we can control through our cost out programs and a focus on driving commercial excellence as evidenced in our share gains while small, particularly in Europe.

Denise: While we continue to monitor increasing input costs, primarily from our 32 and regulatory headwinds around the world absent significant changes we continue to anticipate that adjusted EBITDA margins will remain around 30% for the remainder of 2025.

Speaker Change: Furthermore, we've used the disruptions we faced in 2024 to improve our operational planning and we are well positioned to meet customer orders moving forward.

Denise: For our OTT business in the first quarter, we expect volumes to remain stable sequentially. However, the segment's projected regional sales mix will result in lower net sales for the quarter.

Speaker Change: For our ATM business, we expect our top line to be impacted by softer demand across the segment driven by the continued weakness in cyclical end markets as well as our products that serve the hydrogen and semiconductor markets.

Denise: We expect adjusted EBITDA to decrease sequentially as a result of this regional mix as well as operational headwinds related to cold weather downtime at our U S sites in January further contributing to this decline.

Speaker Change: Adjusted EBITDA is also anticipated to decrease sequentially due to lower net sales during the quarter further impacted by an unfavorable product mix.

Denise: Despite these headwinds we remain committed to our TT cost reduction targets for the full year.

We also anticipate incurring additional costs in the first quarter as a result of an outage from scheduled major plant maintenance that extended into the beginning of 2025.

Denise: For the full year, we expect 2025 results to be better than 2024 with improvements becoming more evident in the second half of the year.

Speaker Change: Of note as I mentioned earlier, the fourth quarter comparison period for APM did include favorable inventory adjustments and other true ups, which are not anticipated to recur in the first quarter.

Denise: We will continue to control what we can control through our cost out programs and a focus on driving commercial excellence as evidenced in our share gains while small, particularly in Europe.

Speaker Change: On a consolidated basis for the first quarter, we anticipate net sales to be flat to slightly down sequentially.

Denise: Furthermore, we've used the disruptions we faced in 2024 to improve our operational planning and we are well positioned to meet customer orders moving forward.

Speaker Change: With adjusted EBITDA also expected to be slightly down sequentially.

Speaker Change: This expectation includes a sequential decrease in corporate expenses as it also to adjusted EBITDA of approximately 30% compared with the fourth quarter inclusive of the fourth quarter costs associated with legacy asbestos matters.

Denise: For our ATM business, we expect our top line to be impacted by softer demand across the segment driven by the continued weakness in cyclical end markets as well as our products that serve the hydrogen and semiconductor markets.

Speaker Change: We anticipate these corporate costs in the first quarter of 2025 to be more reflective of the corporate cost expectations for the remainder of the year.

Denise: Adjusted EBITDA is also anticipated to decrease sequentially due to lower net sales during the quarter further impacted by an unfavorable product mix.

Speaker Change: Regarding our liquidity expectations for the first quarter, we expect operating cash flow to reflect a net usage consistent with traditional seasonality.

Denise: We also anticipate incurring additional costs in the first quarter as a result of an outage from scheduled major plant maintenance that extended into the beginning of 2025.

Speaker Change: We also expect capital expenditures to be in the range of $80 million.

Denise: Of note as I mentioned earlier, the fourth quarter comparison period for APM did include favorable inventory adjustments and other true ups, which are not anticipated to recur in the first quarter.

Speaker Change: Turning to the full year 2025, we expect adjusted EBITDA to be in the range of $825 million to 975 million.

Denise: On a consolidated basis for the first quarter, we anticipate net sales to be flat to slightly down sequentially.

Speaker Change: For the high end of our range, we would anticipate a more favorable macroeconomic environment for TT and APN, along with TSS pricing action success input cost moderation and free on pricing strength.

Denise: With adjusted EBITDA also expected to be slightly down sequentially.

Denise: This expectation includes a sequential decrease in corporate expenses as an offset to adjusted EBITDA of approximately 30% compared with the fourth quarter inclusive of the fourth quarter costs associated with legacy asbestos matters.

Speaker Change: Alternatively for the lower end of our range, we would anticipate a worsening macroeconomic environment.

Speaker Change: Input cost pressures in TSS and increased local regulatory pressure on the ATM business.

We anticipate these corporate costs in the first quarter of 2025 to be more reflective of the corporate cost expectations for the remainder of the year.

Speaker Change: These current expectations for adjusted EBITDA do not include significant changes in the broader regulatory landscape.

Speaker Change: Regarding cash flow for the full year operating cash flow is expected to improve as the year progresses and more than fund anticipated capital expenditures ranging from $250 million to 300 million, while also ensuring dividend funding subject to board approval.

Regarding our liquidity expectations for the first quarter, we expect operating cash flow to reflect a net usage consistent with traditional seasonality.

Denise: We also expect capital expenditures to be in the range of $80 million.

Denise: Turning to the full year 2025, we expect.

With that I'll hand, it back over to Denise to discuss recent progress for our pathway to thrive strategy.

Denise: Adjusted EBITDA to be in the range of 825 million to $975 million.

Denise: Thank you Shane.

Denise: For the high end of our range, we would anticipate a more favorable macroeconomic environment for TTM APN.

Denise: Last quarter, we shared our refreshed strategy <unk> pathway to thrive this.

Denise: This strategy is intended to capitalize on our business as fundamental strengths are incredible talent and our competitive differentiators to enhance shareholder value creation.

Denise: Along with TSS pricing action success input cost moderation and free on pricing strength.

Denise: Alternatively for the lower end of our range, we would anticipate a worsening macroeconomic environment higher input cost pressures in TSS and increased local regulatory pressure on the ATM business.

Denise: <unk> strategy is focused on four pillars.

Denise: Operational excellence, enabling growth portfolio management and strengthening the long term.

Denise: All rooted in the foundation, a balanced and disciplined capital allocation.

These current expectations for adjusted EBITDA do not include significant changes in the broader regulatory landscape.

Denise: Efforts to execute our strategy, we're underway when we shared it in our Q3 call and we've continued to take steps to structure the organization around its pillars to meet shareholder expectations.

Denise: Regarding cash flow for the full year operating cash flow is expected to improve as the year progresses and more than fund anticipated capital expenditures ranging from $250 million to $300 million, while also ensuring dividend funding subject to board approval.

Denise: In addition to appointing gummy <unk> TT business, President and Dianne as Chief Enterprise Enablement Officer. We've also established a transformation office that is fully dedicated to driving results within each pillar of our strategy.

Denise: With that I'll hand, it back over to Denise to discuss recent progress for our pathway to drive strategy.

Denise: Thank you Shane.

Denise: Last quarter, we shared our refreshed strategy for <unk> pathway to thrive.

Denise: Starting with operational excellence, we continue to target incremental run rate cost savings of greater than $250 million across the company starting this year and building through 2027.

Denise: This strategy is intended to capitalize on our business has fundamental strength are incredible talent and our competitive differentiators to enhance shareholder value creation.

Denise: As a reminder, this overall cost savings plan comprises an additional $125 million in cost savings under our TT transformation plan and $125 million in targeted cost savings spread evenly across the other businesses and corporate.

Denise: <unk> strategy is focused on four pillars.

Denise: Operational excellence, enabling growth portfolio management and strengthening the long term.

Denise: All rooted in our foundation, a balanced and disciplined capital allocation.

Denise: Of our total 250 million cost target, we remain on track to deliver half of these run rate cost savings by the end of 2025.

Denise: As we progress further into the year, we'll look to provide regular updates on those savings, which remain focused on optimizing our asset footprint and reducing overhead costs.

Denise: In addition to appointing gummy and as TT business, President and Dianne as Chief Enterprise Enablement Officer. We've also established a transformation office that is fully dedicated to driving results within each pillar of our strategy.

Denise: These efforts tie into our portfolio management pillar, which I will speak to shortly.

Denise: Our ability to execute a broader cost out program, which has been a focus of mine since moving into the CEO role is rooted in our transformational expertise as exemplified in our success to our TT transformation plan continuing under pathway to thrive.

Denise: Starting with operational excellence, we continue to target incremental run rate cost savings of greater than $250 million across the company starting this year and building through 2027.

Denise: To further emphasize our long term efforts to drive down costs in TT I want to highlight the announcement, we made in December around our agreement with PTT group to build and operate a chlor alkali facility on the ground of our <unk> plant until Leon Mississippi.

Denise: Of our total 250 million cost target, we remain on track to deliver half of these run rate cost savings by the end of 2025.

Denise: We believe that this asset light approach working closely with a trusted partner in the chlorine space will continue to bolster our efforts to become one of the world's lowest cost tio two producers, providing sizeable operating cost advantages once the plant is operational in 2028.

Denise: As we progress further into the year, we'll look to provide regular updates on those savings, which remain focused on optimizing our asset footprint and reducing overhead costs.

Denise: This plant add to our vertically integrated clean positioning at our New Johnson Hill site to ensure U S domestic supply of Tio too.

Denise: These efforts tie into our portfolio management pillar, which I will speak to shortly.

Speaker Change: Our ability to execute a broader cost out program, which has been a focus of mine since moving into the CEO role is rooted in our transformational expertise as exemplified in our success to our TT transformation plan continuing under pathway to thrive.

Denise: More broadly we are focused efforts on reducing corporate overhead cost taking a zero based budget approach to these costs, while reducing costs and an area of focus that we can control. We are also looking at improvements to drive further operational efficiencies.

Speaker Change: To further emphasize our long term efforts to drive down costs in TT I want to highlight the announcement, we made in December around our agreement with PTT group to build and operate a chlor alkali facility on the ground of our <unk> two plant into Leon Mississippi.

Denise: By using a standardized execution model to centers of excellence will drive best practices across our organization and help continue our momentum.

Denise: Turning to our second pillar, enabling growth <unk> remains committed to smartly investing in high return low risk initiatives across our portfolio, while driving commercial effectiveness.

Speaker Change: We believe that this asset light approach working closely with a trusted partner in the <unk> space will continue to bolster our efforts to become one of the world's lowest cost tio two producers, providing sizeable operating cost advantages once the plant is operational in 2028.

Denise: We are targeting a revenue CAGR of over 5% from 2024 through 2027, assuming no significant macro event over that time.

Speaker Change: This plant adds to our vertically integrated clean positioning at our new Johnson <unk> site to ensure U S domestic supply of Tio too.

Denise: As we shared at our last earnings call, we are prioritizing expansion and attractive spaces with a focus on data center cooling next generation refrigerant semiconductor fabrication and the development of next generation EV batteries.

Speaker Change: More broadly we are focused efforts on reducing corporate overhead cost taking a zero based budget approach to these costs, while reducing costs and an area of focus that we can control. We are also looking at improvements to drive further operational efficiencies.

Denise: And as we saw this past quarter, we've already taken positive steps to expand our presence in the semiconductor space to a successful capacity expansion of our high parity Teflon PFA line in our APM business I am pleased to say that the production ramp up of this asset has proceeded well.

Speaker Change: By using a standardized execution model to centers of excellence will drive best practices across our organization and help continue our momentum.

Denise: With our focus on growth I wanted to highlight the continued strength and demand for <unk> refrigerants, which experienced double digit growth in 2024, and which we anticipate will continue through 2025.

Speaker Change: Turning to our second pillar, enabling growth <unk> remains committed to smartly investing in high return low risk initiatives across our portfolio, while driving commercial effectiveness.

Denise: As mentioned previously we have completed a 40% expansion at Corpus Christi of which half will be available in 2025 with the remaining capacity available in 2026 with this added capacity. We believe we will be well positioned to meet customer demand driven by the growth in <unk> in connection with the regulatory transition to low.

Speaker Change: We are targeting a revenue CAGR of over 5% from 2024 through 2027, assuming no significant macro event over that time.

Speaker Change: As we shared at our last earnings call, we are prioritizing expansion and attractive spaces with a focus on data center cooling next generation refrigerant semiconductor fabrication and the development of next generation EV batteries.

Denise: <unk> DWP refrigerants.

Denise: Taken together these actions make black important steps towards achieving our targeted sales growth over the coming years and enhancing our competitive positioning in high growth areas.

And as we saw this past quarter, we've already taken positive steps to expand our presence in the semiconductor space to a successful capacity expansion of our high parity Teflon PFA line in our APM business I am pleased to say that the production ramp up of this asset has proceeded well.

Denise: We will continue to closely evaluate all investments to ensure a disciplined capital allocation approach aligned with our strategy and continue to expect our investments to be funded by organic cash flow generation and cost savings realized across all our businesses.

Speaker Change: With our focus on growth I wanted to highlight the continued strength and demand for <unk> refrigerants, which experienced double digit growth in 2024, and which we anticipate will continue through 2025.

Denise: Our third strategic pillar portfolio management is reflective of our ongoing commitment to optimize our existing businesses and assets by shifting our focus from product to applications in higher growth higher margin markets with the goal of enhancing shareholder value.

Speaker Change: As mentioned previously we have completed a 40% expansion at Corpus Christi of which half will be available in 2025 with the remaining capacity available in 2026 with this added capacity. We believe we will be well positioned to meet customer demand driven by the growth in <unk> in connection with the regulatory transition to low.

Denise: As I shared on our last earnings call. These efforts included an evaluation of our existing footprint to ensure we have optimal asset base that is aligned with our future needs.

Speaker Change: Low DWP refrigerants.

Denise: In connection with these efforts we are announcing a strategic review of our APM European asset footprint with a focus on creating value for shareholders and improving the quality of earnings as we continue to aggressively reduce cost and improve our overall profitability.

Speaker Change: Taken together these actions make black important steps towards achieving our targeted sales growth over the coming years, and enhancing our competitive positioning and high growth areas.

Speaker Change: We will continue to closely evaluate all investments to ensure a disciplined capital allocation approach aligned with our strategy and continue to expect our investments to be funded by organic cash flow generation and cost savings realized across all our businesses.

Denise: Our focus is on enhancing our asset footprint to provide the highest level of shareholder value.

Denise: While announcing the strategic review today, we started to take initial steps around our APN European assets in the third quarter.

Speaker Change: Our third strategic pillar portfolio management is reflective of our ongoing commitment to optimize our existing businesses and assets by shifting our focus from product to applications in higher growth higher margin markets with the goal of enhancing shareholder value.

Denise: Those activities included the write down of certain assets and putting our hydrogen focused gnathion expansion on long term hold.

Denise: Adding to these earlier actions in January of 2025, we made the decision to exit our surface protection solutions or Sps Capstone business.

Speaker Change: As I shared on our last earnings call. These efforts included an evaluation of our existing footprint to ensure we have an optimal asset base. It is aligned with our future needs.

Denise: This action was taken due to regulatory changes and uncertainty that have caused reduced demand and market deselection.

Denise: We expect all manufacturing activities for Sps product by the end of second quarter of this year pending local regulatory approval.

Speaker Change: In connection with these efforts we are announcing a strategic review of our APM European asset footprint with a focus on creating value for shareholders and improving the quality of earnings as we continue to aggressively reduce cost and improve our overall profitability.

Denise: Once complete we expect the annualized revenue loss to be approximately $80 million to $90 million going forward with a challenging operating environment compounded by increased costs, making Sps economics unfavorable going forward.

Speaker Change: Our focus is on enhancing our asset footprint to provide the highest level of shareholder value.

Denise: In connection with the Fps exit we expect to incur total restructuring charges of approximately $60 million of which half are expected to be cash payments.

Speaker Change: While announcing this strategic review today, we started to take initial steps around our APN European assets in the third quarter.

Speaker Change: These activities included the write down of certain assets and putting our hydrogen focused gnathion expansion on long term hold.

Denise: Cash payments associated with this exit are expected to be incurred throughout late 2025 and 2026.

Speaker Change: Adding to these earlier actions in January of 2025, we made the decision to exit our surface protection solutions or Sps Capstone business.

Denise: While these decisions are never easy we believe these actions and continued evaluation of our portfolio are critical to ensure <unk> long term success and drive shareholder value.

Speaker Change: This action was taken due to regulatory changes and uncertainty that have caused reduced demand and market deselection.

Denise: These actions also help us strengthen the overall <unk> portfolio and enable us to allocate capital to areas of the business generating a more positive return.

Speaker Change: We expect all manufacturing activities for Sps product to cease by the end of second quarter of this year pending local regulatory approval.

Denise: We anticipate completing a review of our European APM asset base by the end of 2025, and we'll share updates as we progress.

Speaker Change: Once complete we expect the annualized revenue loss to be approximately $80 million to $90 million going forward with a challenging operating environment compounded by increased costs, making Sps economics unfavorable going forward.

Lastly, in our fourth pillar strengthening the long term, we remain focused on advocating for the criticality of our chemistries, ensuring that we made measurable progress on addressing legacy liabilities and use the best science analytical methods and data to support a responsible manufacturing practices.

Speaker Change: In connection with the Sps exit we expect to incur total restructuring charges of approximately $60 million of which half are expected to be cash payments or cash payments associated with this exit are expected to be incurred throughout late 2025 and 2026.

Denise: Our efforts in these areas are embedded at all levels of the company and we engage with our regulatory stakeholders to support science based regulation of our industry that provides clear standards that are supported by sound Science and research.

Speaker Change: While these decisions are never easy we believe these actions and continued evaluation of our portfolio are critical to ensure <unk> long term success and drive shareholder value.

Denise: I am proud of the significant progress we have made to date in executing our pathway to drive strategy over the short course of a few months.

Speaker Change: These actions also help us strengthen the overall <unk> portfolio and enable us to allocate capital to areas of the business generating a more positive return.

Denise: We remain confident that our continued focus on the key pillars of our corporate strategy will drive strong operational and financial performance across our three businesses and ultimately position <unk> for long term success and value creation.

Speaker Change: We anticipate completing a review of our European APM asset base by the end of 2025, and we'll share updates as we progress.

Denise: This progress was only made possible through the dedication and efforts of our employees and I would like to thank our entire team for their hard work and efforts that have allowed us to bring this strategy forward as we continue delivering trusted chemistry.

Speaker Change: Lastly, in our fourth pillar strengthening the long term, we remain focused on advocating for the criticality of our chemistries, ensuring that we made measurable progress on addressing legacy liabilities and the best science analytical methods and data to support a responsible manufacturing practices.

Denise: I look forward to providing additional updates on our operational and financial performance and our continued progress executing our pathway to drive strategy in the months to come.

Speaker Change: Our efforts in these areas are embedded at all levels of the company and we engage with our regulatory stakeholders to support science based regulation of our industry that provides clear standards that are supported by sound Science and research.

Denise: Okay.

Denise: Thank you.

Denise: To ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.

Speaker Change: I am proud of the significant progress we have made to date in executing our pathway to drive strategy over the short course of a few months, we remain confident that our continued focus on the key pillars of our corporate strategy will drive strong operational and financial performance across our three businesses and ultimately position come.

Denise: Please standby, while we compile the Q&A roster.

Speaker Change: And our first question will come from Arun Vishwanathan with RBC capital markets. Your line is now.

Speaker Change: <unk> for long term success and value creation.

Speaker Change: This progress was only made possible through the dedication and efforts of our employees and I would like to thank our entire team for their hard work and efforts that have allowed us to bring this strategy forward as we continue delivering trusted chemistry.

Arun Vishwanathan: Great. Thanks for taking my question I Hope you guys are well.

Denise: So.

Denise: I guess.

Denise: First off.

Denise: I wanted to understand maybe the bridge from 24% 25 each.

Speaker Change: I look forward to providing additional updates on our operational and financial performance and our continued progress executing our pathway to drive strategy in the months to come.

Denise: EBITDA guidance.

Denise: If I remember correctly, there were about $80 million or so.

Denise: One timers in 'twenty four so if we add that back.

Speaker Change: Okay.

Denise: It seems like there is about 40 or $50 million.

Speaker Change: Thank you.

Speaker Change: To ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Denise: Extra growth.

Denise: Midpoint of your new range for 'twenty five.

Speaker Change: Am I right in that assessment and then if so how did you kind of characterize that additional growth.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Thanks, Thanks, everyone I appreciate the question.

Speaker Change: Question. So first of all I just want to start with talking about this year and we're excited about I mean, when we look at this year the transition.

Unidentified Moderator: And our first question will come from Arun Vishwanathan with RBC capital markets. Your line is now.

Speaker Change: The DWP.

Speaker Change: Larry aftermarket in the stationary market is is really exciting for us. We also see green shoots in our PT business and we're really laser focused on delivering on pathway to thrive as you say there is there are some things to explain relative to the bridge from 2025 and I'm going to turn.

Arun Vishwanathan: Great. Thanks for taking my question I Hope you guys are well.

Unidentified Moderator: So.

Unidentified Moderator: I guess.

Unidentified Moderator: First off.

Unidentified Moderator: I wanted to understand maybe the bridge from 24 to 25.

Unidentified Moderator: EBITDA guidance.

Unidentified Moderator: If I remember correctly, there were about $80 million or so.

Unidentified Moderator: One timers in 'twenty four.

Speaker Change: Over to Shane to give you a little bit more color on that thanks.

Unidentified Moderator: If we add that back.

Unidentified Moderator: It seems like there is about 40 or $50 million of extra growth.

You mentioned, a number of onetime costs, which we don't anticipate recurring next year.

Unidentified Moderator: Midpoint of your new range for 'twenty five.

Speaker Change: You probably saw the Q1 guidance, we are anticipating some operational headwinds in Q1.

Speaker Change: Am I right in that assessment and then if so how did you kind of characterize that additional growth.

Speaker Change: Related to TSA.

Speaker Change: <unk> as a site specific forced outage.

Speaker Change: Thanks, Thanks, everyone I appreciate the question.

Speaker Change: Some weather related items in TTS, especially in January here, and the <unk> plant shutdown in APM, that's about $15 million to $20 million going in Q1.

Speaker Change: Question. So first of all I just wanted to start with talking about this year and we're excited about I mean, when we look at this year the transition.

Speaker Change: But as I think a hedge we don't anticipate these to recur we anticipate seasonality in TSS in TT in Q2, and Q3 and as Denise mentioned very excited about the opt in adoption, especially in commercial and stationery refrigerants and then further we're going to control what we can control continue to to align pathway.

Speaker Change: The DWP stationary aftermarket in the stationary market is is really exciting for us. We also see green shoots in our tea business and we're really laser focused on delivering on pathway to thrive as you say there are some things to explain relative to the.

Speaker Change: To thrive and continue to reduce costs and manage that accordingly.

Speaker Change: Bridge from 'twenty, four 'twenty, five and I'm going to turn it over to Shane to give you a little bit more color on that thanks.

Speaker Change: Okay. Thanks for that and then.

Speaker Change: The follow up to that so it looks like your second half I think you mentioned should.

Speaker Change: You mentioned, a number of onetime costs, which we don't anticipate recurring next year.

Speaker Change: It should be a little bit stronger than the first half.

Speaker Change: So it sounds like you could be exiting second half at a $500 million or so plus.

Speaker Change: You probably saw the Q1 guidance, we are anticipating some operational headwinds in Q1.

Speaker Change: Related to.

Speaker Change: Run rate of EBITDA.

Speaker Change: In TSS a site specific forced outage.

Speaker Change: If you annualize that you get to $1 billion plus for 2006.

Speaker Change: Some weather related items in TTS, especially in January here, and the <unk> plant shutdown in APM, that's about 15% to $20 million going in Q1.

Speaker Change: Thinking about that the right way and <unk>.

Speaker Change: What would that require that kind of maybe the.

Speaker Change: Better for you on pricing environment, or maybe capitalizing on the capacity growth that you've had in TSS.

Speaker Change: Or would it also require.

Speaker Change: Some better <unk> markets.

Speaker Change: FX Arun I think it's early to <unk>.

Speaker Change: Anything related to 2026 as at this point, but as I think about kind of your math in 'twenty five and areas that we believe are going to help us with that guidance that we talked about for the full year certainly the additional capacity at Corpus Christi from an RPM perspective is contributing to that we brought a PFA line.

Speaker Change: Align pathway to thrive and continue to.

Speaker Change: <unk> reduced costs and manage that accordingly.

Speaker Change: Okay. Thanks for that and then.

Speaker Change: The follow up to that so it looks like your second half I think you mentioned should.

Speaker Change: It should be a little bit stronger than the first half.

Speaker Change: So it sounds like you could be exiting second half at a $500 million or so plus.

Speaker Change: On as well what's going to help.

Speaker Change: <unk> that cost out program as we've talked about as well.

Speaker Change: And then also we are seeing is Denise talked about some green shoots in TT as it relates to share but also thinking through.

Speaker Change: Run rate of EBITDA.

Speaker Change: If you annualize that you get to $1 billion plus for 2006 am I thinking about that the right way and.

Speaker Change: Our back half weighted some market recovery as we look at the underlying kpis.

Speaker Change: Or would that require that kind of maybe.

Speaker Change: Alright, Thanks, a lot.

Speaker Change: Better for you on pricing environment, or maybe capitalizing on the capacity growth that you've had in TSS or would it also require.

And the next question will come from Josh Beck.

Speaker Change: Sir with UBS your line.

Speaker Change: <unk>.

Speaker Change: Some better TT markets. Thanks.

Yes, hi, good morning, I wanted to follow up on <unk>. So you mentioned a couple of times green shoots in that business that youre seeing but volumes arent improving in your forecast sequentially and you talked about some regional mix headwinds. So I think from the outside and it looks like your TT business is maybe getting worse.

Speaker Change: FX Arun I think it's early to give anything related to 2026 as at this point, but as I think about kind of your math in 'twenty five and areas that we believe are going to help us with that guidance that we talked about for the full year certainly the additional capacity at Corpus Christi from Nokia.

Speaker Change: But you are calling out green shoots can you help us understand kind of what's going on within that.

Speaker Change: Perspective is contributing to that we brought a PFA line on as well, what's going to help continuing that cost out program as we've talked about as well and then also where you are seeing is Denise talked about some green shoots in TT as it relates to share but also thinking through.

Speaker Change: Sure Yeah. Thanks, Thanks, Josh I appreciate the question yeah going into its first of all we delivered a very strong fourth quarter coming into the first quarter. There is really a regional mix impact when you talk about some of the green shoots we're seeing.

Speaker Change: Back half weighted some market recover as we look at the underlying kpis.

Speaker Change: It's really around some some.

Speaker Change: Alright, Thanks, a lot.

Speaker Change: Share gain that we're seeing in Europe, I would say, it's still early days as you think about the <unk>.

Speaker Change: And the next question will come from Josh.

Speaker Change: Anti dumping impact, but if you look at the.

Speaker Change: Sir with UBS your line.

Speaker Change: The exports from China.

Josh: Yes, hi, good morning, I wanted to follow up on <unk>. So you mentioned a couple of times green shoots in that business that youre seeing but volumes arent improving in your forecast sequentially and you talked about some regional mix headwinds.

Speaker Change: Are they going to Europe, or even into Brazil, you see that there is quite a decline in not just the decline in overall volume, but a decline in high purity high quality.

Speaker Change: Tio too so.

Josh: So I think from the outside in it looks like your TT business is maybe getting worse, but youre, calling out green shoots can you help us understand kind of what's going on within that.

Speaker Change: There's a lot of inventory that had to be worked out but you can see that decline occurring which we're well positioned where we have a great value proposition a great franchise around reliable reliability security of supply. The other thing that first of all we're going we're going into.

Josh: Sure Yeah. Thanks. Thanks, Josh appreciate the question yeah going into its first of all we delivered a very strong fourth quarter coming into the first quarter. There is really a regional mix impact when you talk about some of the green shoots we're seeing.

Speaker Change: The second quarter is generally a better season for the coatings market and.

Speaker Change: Some of that.

Speaker Change: <unk> that we look at.

Speaker Change: And on the housing market Index has increased again in January at the highest levels and at nine months.

Josh: It's really around some some.

Josh: Share gain that we're seeing in Europe, I would say, it's still early days as you think about the <unk>.

Speaker Change: And historically that correlate to tick coatings demand. So that's what we mean, when we say green shoots and we are.

Anti dumping impact, but if you look at the.

Josh: The exports from China.

Speaker Change: Absolutely.

Speaker Change: R R.

Josh: Are they going to Europe, or even into Brazil, you see that there is quite a decline and not just a decline in overall volume, but a decline in high purity high quality.

Speaker Change: We're not saying that that feeling like we're in a week.

Speaker Change: Weak the as I said, the first quarter has a lot more to do with the regional mix and we're committed to our pathway to thrive and continuing to drive cost out in NTT.

Josh: Tio too so.

Theres a lot of inventory that had to be worked out but you can see that decline occurring which we're well positioned.

Speaker Change: Thanks, just a follow up just the regional mix to be specific is that selling more into Europe and less into North America or what's the change and is that temporary for first quarter or does that reverse or is that a permanent shift.

Josh: We have a great value proposition a great franchise around reliable reliability security of supply. The other thing that first of all we're going we're going into.

Speaker Change: Yes, I would say that that's accurate and then I would definitely expect that the shift as we enter the season all coatings market in the U S.

Josh: The second quarter is generally a better season for the coatings market and some of that the macros that we look at.

And on the housing market Index has increased again in January at the highest level, it's been at in nine months.

Speaker Change: Okay. Thank you.

Hassan Ahmed: And our next question will come from Hassan Ahmed with.

Josh: And historically that correlate to tick coatings demand. So that's what we mean, when we say green shoots and we are.

Speaker Change: Global Advisors your line is now.

Hassan Ahmed: Good morning, Denise and chain.

Josh: Absolutely.

Speaker Change: Just wanted to dig a bit deeper into the prior questions about about DT and guidance.

Josh: Are.

Josh: We're not saying that that feeling like we're in a week.

Josh: Weak the as I said, the first quarter has a lot more to do with the regional mix and we're committed to our pathway to thrive and continuing to drive cost out in NTT.

Hassan Ahmed: 2025 guidance in particular.

Speaker Change: From the sounds of it it seems obviously.

Speaker Change: We haven't really seen much of an impact from the anti dumping side of it I'm just trying to get a more granular view with regards to what you're baking in in your 2025 guidance in terms of GT pricing volumes and a potential boost from any.

Speaker Change: Yes, I would say that that's accurate and then I would definitely expect that the shift as we enter the season all coatings market in the U S.

Speaker Change: Sort of anti dumping related market share gains.

Speaker Change: Yeah. Thanks, Thanks Hassan from.

Speaker Change: What we're baking in we're not baking in any large.

Speaker Change: Okay. Thank you.

Unidentified Moderator: And our next question will come from Hassan Ahmed with Alembic.

Speaker Change: Macro change what we're saying is that we are seeing signs and these things take time.

Speaker Change: <unk> your line is now.

Speaker Change: Inventory that has to work down if you look at the China exports into the EU 27, and then to Brazil, you can see that they are they are declining which creates opportunity for us.

Hassan Ahmed: Good morning, Denise and chain.

Speaker Change: Just wanted to dig a bit deeper into the prior questions about about DT and guidance.

Speaker Change: 2025 guidance in particular, I mean from the sounds of it. It seems obviously, we haven't really seen much of an impact from the anti dumping side of it I'm just trying to get a more granular view with regards to what you're baking in in your 2025 guidance in terms of.

Speaker Change: Understood understood and as a follow up I mean, as I sort of talked to industry consultants Tio two consultants there seem to be pretty large divergences in what they are baking in in terms of supply additions globally, right, particularly as they relate to China.

Speaker Change: GT pricing volumes and a potential boost from any sort of anti dumping related market share gains.

Speaker Change: Be it some of the supply additions that happened in 2024 be it some of the supply additions. They are baking in for 2025 and beyond I mean can you sort of give us a view or a <unk> view of what the supply picture looks like.

Speaker Change: Yes, thanks, Thanks Hassan from.

Speaker Change: What we're baking in we're not baking in any large.

Speaker Change: Whether there is sort of forecast a tightness in utilization rates on a going forward basis.

Speaker Change: Macro change what we're saying is that we are seeing signs and these things take time. There is inventory that has to work down if you look at the China exports into the EU 27 and into Brazil, you can see that they are they are declining which creates opportunity for us.

Hassan Ahmed: Thanks Hassan.

Hassan Ahmed: And I would say that we're not anticipating any significant increase in supply and it really depends on that.

Hassan Ahmed: <unk>.

Utilization is going to depend on what happens with demand, which we're seeing right. Now are we are cautiously optimistic I would say, but we would need some more macro signs to see utilization pick up.

Speaker Change: Understood understood and as a follow up I mean, as I sort of talked to industry consultants Tio two consultants there seem to be pretty large divergences in.

Hassan Ahmed: So I mean, just to get sorry to follow up but just to get a bit more specific I mean, some people have numbers north of sort of half a million tons baked in for 2025 supply additions, while others have the number at 150 to 200000, I mean, I mean, there was a major swings which camp are you guys doing.

Speaker Change: What they are baking in in terms of supply additions globally, right, particularly as they relate to China.

Speaker Change: Some of the supply additions that happened in 2024 be it some of the supply additions. They are baking in for 2025 and beyond I mean can you sort of give us a view or a <unk> view of what the supply picture looks like.

Hassan Ahmed: Yeah.

Speaker Change: Whether there is sort of forecasted tightness in utilization rates on a going forward basis.

Speaker Change: Not exactly sure I understand your question Tim.

Hassan Ahmed: In terms of net capacity additions for 2025 and <unk>.

Speaker Change: Thanks Hassan.

Speaker Change: I would say that we're not anticipating any significant increase in supply and really depend on that.

Speaker Change: Yes, it will.

Definitely on the low side.

Speaker Change: Thank you so much.

Speaker Change: And our next question will come from John Mcnulty.

Speaker Change: Utilization is going to depend on what happens with demand, which we're seeing right. Now are we are cautiously optimistic I would say, but we would need some more macro signs to see utilization pick up.

Speaker Change: With BMO your line is open.

John Mcnulty: Yes, Thanks for taking my question, So I guess.

John Mcnulty: First one would just be around your capex youre looking for.

Speaker Change: So I mean, just to get sorry to follow up but just to get a bit more specific.

John Mcnulty: 250 to 300, so down a reasonable amount.

John Mcnulty: From 2024 is it fair to assume that your Capex budget doesn't include any capex for the data center opportunity that you've been talking about.

Speaker Change: People have numbers north of sort of half a million tons baked in for 2025 supply additions, while others have the number at 150 to 200000.

John Mcnulty: And can you give us a little bit of color or thoughts on the timing for E on that and any other updates around the two phase immersion cooling platform that <unk> been building out.

Speaker Change: I mean, there was a major swings which camp are you guys.

Speaker Change: I'm not exactly sure I understand your question Jonathan.

Speaker Change: In terms of net capacity additions for 2025 and <unk>.

Yes, John Thanks.

I'll take care of the Capex and then Denise can go into the emerging cooling update as far as the Capex goes you mentioned 250 to 300 is what we guided we continue to think about how to.

Speaker Change: Yes, it would definitely be on the low side.

Speaker Change: Thank you so much.

Speaker Change: And our next question will come from John Mcnulty with BMO. Your line is open.

John Mcnulty: Our growth initiatives and maintain asset light where possible. So if you think about that.

John Mcnulty: <unk> talked a little bit about the PCC.

John Mcnulty: Yes. Thanks for taking my question. So I guess first one would just be around your capex youre looking for $2 50 to 300, so down a reasonable amount from from 2024 is it fair to assume that your Capex budget doesn't include any capex for the data center opportunity that you've been.

John Mcnulty: Agreement NTT and the unique way we did that so as we think about just going forward. We're laser focused on our liquidity and Capex is one of those as well and then Denise you want to sure.

Speaker Change: Allative to how we're doing with the emerging cooling we're really still very excited about this space, we have significant value chain engagement and we think this is going to be a large part.

Speaker Change: Talking about.

Speaker Change: And can you give us a little bit of color or thought on the timing for <unk> on that and any other updates around the two phase immersion cooling platform that <unk> been building out.

John Mcnulty: A big part of the overall liquid cooling demand.

John Mcnulty: I know you noted, but it's really going to be kicking in more towards the end of the decade, because there'll be requirement for new <unk>.

Speaker Change: Yes, John Thanks I'll.

Speaker Change: I'll take care of the Capex and then Denise can go into the emergent cooling update as far as the Capex go as you mentioned 250 to 300 is what we guided we continue to think about how to continue.

John Mcnulty: Data centers are relative to that our asset plan, we talked about that before that we're going to be giving updates.

John Mcnulty: We remain focused on achieving commercialization by next year we.

Speaker Change: Continue our growth initiatives and maintain asset light where possible. So if you think about.

John Mcnulty: Our underlying in our we have an underlying plan right now there's some confidentiality around our process and intellectual property and so there are some things that we're not really ready to disclose around that.

Denise: Denise talked a little bit about the PCC.

Speaker Change: <unk> agreement.

Speaker Change: And the unique way we did that so as we think about just going forward. We're laser focused on our liquidity and Capex is one of those as well and then Denise you want to sure.

John Mcnulty: Our molecule, but we look forward very soon to be giving an update on that.

Speaker Change: Relative to how we're doing with the emerging cooling we're really still very excited about this space, we have significant value chain engagement and we think this is going to be a large part.

John Mcnulty: Great. Thanks, very much for the color on that.

John Mcnulty: And then just maybe on the on the TSS side. It sounds like there's a pretty wide range of outcomes as youre looking out to 2025, both on <unk> and it sounds like there's some pretty solid volume growth. There I guess can you help us to think about that.

Speaker Change: A big part of the overall liquid cooling demand at.

Speaker Change: You notice, but it's really going to be kicking in more towards the end of the decade, because there'll be requirement for new data centers are relatively skewed at our asset plan, we've talked about that before that we're going to be giving updates.

As well as.

John Mcnulty: Where you think we may be in in the free on inventory kind of Destocking.

John Mcnulty: When do you think we may be getting through that where we might see price starting to inflect since it seems like that's a big part of the range of outcomes that you've got four for the year.

Speaker Change: We remain focused on achieving commercialization by next year we.

John Mcnulty: Okay.

Speaker Change: Thanks, Thanks, John first I want to start with with <unk> last year was a unique year for us for free on because there was a delay that was.

Speaker Change: Our underlying in our we have an underlying plan right now there's some confidentiality around our process and intellectual property and so there are some things that we're not really ready to disclose around that.

Speaker Change: Unexpected with the technology transition wall, where things were pushed out a year sell through was pushed out. So we were we were really impacted by by freon.

The molecule, but we look forward very soon to be giving an update on that.

Speaker Change: Great. Thanks, very much for the color on that.

Speaker Change: Coming into this year right, we're trying to use our quota really for the low GW P refrigerant until our as we said in our strategy we are.

Speaker Change: And then just maybe on the on the TSS side. It sounds like there's a pretty wide range of outcomes.

Speaker Change: As Youre looking out to 2025, both on <unk> and it sounds like there's some pretty solid volume growth. There I guess can you help us to think about that.

Speaker Change: <unk>.

Speaker Change: Dependent on free on this year and as a matter of fact by the end of the year we are.

Speaker Change: As well as where you think we may be in in the free on inventory kind of Destocking.

Speaker Change: Really all of Freon sales are going to be outside of the U S and Europe, so, but if we can turn to the <unk> side.

Speaker Change: When do you think we may be getting through that where we might see price starting to inflect since it seems like that's a big part of the range of outcomes that <unk> got four for the year.

Speaker Change: You saw 23% growth in the fourth quarter, you can expect at least that kind of growth this year, but one thing and we're committed to 30% margin in this space one thing to keep in mind and kind of going back to when things transitioned to load into the <unk> technology for the auto Oems. This is a year.

Speaker Change: Yeah. Thanks, Thanks, John first I want to start with with <unk> last year was a unique year for us for free on because there was a delay that.

Speaker Change: Year, where the where it's the OEM gear, where the aftermarket.

Speaker Change: Unexpected with the technology transition, well, where things were pushed out a year sell through was pushed out. So we were we were really impacted by by freon.

Speaker Change: Where you have more.

Speaker Change: More I'll say pricing flexibility is lower so it's about a 10% really what we're doing with the Oems and securing our share for the long term with that said, we still do have opportunity to pass through raw material price increases.

Speaker Change: Going into this year right, we're trying to use our quota really for the low DWP refrigerant until our as we said in our strategy we are.

Speaker Change: Much less.

Speaker Change: Dependent on free on this year and as a matter of fact by the end of the year we are.

Speaker Change: Even to the OEM part of the market.

Speaker Change: Got it okay. That's very helpful. Thanks for the color.

Speaker Change: All three on sales are going to be outside of the U S and Europe, so, but if we can turn to the <unk> side.

Vincent Andrews: And our next question will come from Vincent Andrews with Morgan Stanley. Your line is open.

Speaker Change: You saw 23% growth in the fourth quarter, you can expect at least that kind of growth. This year, but one thing and we're committed to a 30% margin in this space one thing to keep in mind and kind of going back to when things transitioned to load in to the HMO technology for the auto Oems. This is.

Vincent Andrews: Hi can I ask in the fourth quarter, you mentioned that you had some nonrecurring benefits from inventory true ups.

Vincent Andrews: APM as.

Vincent Andrews: As well as I guess, some nonrecurring cost benefit in TSS could you tell us what those were and in particular to the inventory can you talk about what triggered that or.

Speaker Change: The year, where the where it's the OEM gear, where the aftermarket space.

Vincent Andrews: How that happened and what discretion you had related to it.

Speaker Change: Space, where you have more I'll say pricing flexibility is lower so it's about a 10% really what we're what we're doing with the Oems and securing our share for the long term with that said, we still do have opportunity to pass through raw material price increases.

Vincent Andrews: Yes sure Vincent.

Vincent Andrews: I think about some of the benefits we saw there were.

Vincent Andrews: Kind of onetime in nature, I mentioned, the items and APM in TSS. I mean, these are really around inventory valuation items that happened in the fourth quarter and some reserve changes. They are in the range of about $5 million to $10 million as I think about kind of sizing them up.

Speaker Change: Even to the OEM.

Speaker Change: Part of the market.

Speaker Change: Got it okay, no thats very helpful. Thanks for the color.

Vincent Andrews: I would say I mean, those were benefits, but we also had some items in our corporate costs that were onetime in nature related to asbestos reserves as well as you can think about the additional corporate costs I mean that was in the range of $10 million to $15 million.

Speaker Change: And our next question will come from Vincent Andrews with Morgan Stanley. Your line is open.

Speaker Change: Hi can I ask in the fourth quarter, you mentioned that you had some nonrecurring benefits from inventory true ups in <unk>.

Vincent Andrews: So just trying to give some a little bit of color on the positives and negatives we saw from a onetime items in Q4.

Speaker Change: APM.

Speaker Change: As well as I guess, some nonrecurring cost benefit in TSS could you tell us what those were and in particular to the inventory if you could talk about what triggered that or.

Speaker Change: Okay, and then if I could just ask on TCE.

Speaker Change: Point taken on what's happening so far in Europe, and Brazil in terms of the direction of Chinese exports.

Speaker Change: How that happened and what discretion you had related to it.

Speaker Change: We're a year from now.

Speaker Change: Or do you envision those Chinese exports that don't go to Brazil, or Europe in a more where do you think they windup envision China cutting production or do you envision those going into other markets.

Speaker Change: Yes sure Vincent.

Speaker Change: I think about some of the benefits we saw there were.

Speaker Change: Kind of onetime in nature, I mentioned, the items and APM in TSS. I mean, these are really around inventory valuation items that happened in the fourth quarter and some reserve changes. They are in the range of about $5 to $10 million as I think about kind of sizing them up but I wouldn't say I mean, those were benefits, but we also had some items in our <unk>.

Speaker Change: If they go into other markets what happens to the <unk> two that was previously servicing those other markets.

Speaker Change: And what you can see in the data as it's going to Asia and the Middle East I think time will tell based on how prolonged.

Speaker Change: Corporate costs that were onetime in nature related to asbestos reserves as well as you can think about the additional corporate cost I mean that was in the range of $10 million to $15 million as well. So just trying to give some a little bit of color on the positives and negatives we saw from a onetime items in Q4.

Speaker Change: The theme.

Speaker Change: We current have that the upfront checking the market when that happens.

Speaker Change: <unk>.

Speaker Change: I think there is some concern our customers around the profitability of some of these.

Speaker Change: Chinese producers and how long they can sustain withstand the narrower margin.

Okay, and then if I could just ask on Tc.

Speaker Change: Point taken on what's happening so far in Europe, and Brazil in terms of the direction of Chinese exports.

Speaker Change: Yeah.

Speaker Change: We're a year from now.

John Roberts: And our next question will come from John Roberts with Mizuho. Your line is open.

Speaker Change: Do you envision those Chinese exports that don't go to Brazil, or Europe in a more what do you think they windup envision China cutting production or do you envision those going into other markets and if they go into other markets what happens to the <unk> that was previously servicing those other markets.

Speaker Change: Thank you I guess, we have now and <unk> Dupont are back at the EPA in a key position here do you think that changes any of the complexion around the <unk> active.

Speaker Change: Activity over the next few years, and maybe give us an update on the upcoming New Jersey trial.

Speaker Change: And what you can see in the data as it's going to Asia and the Middle East I think time will tell based on how prolonged.

Speaker Change: Sure.

Speaker Change: Relative to that.

Speaker Change: We're really.

Speaker Change: The theme.

Speaker Change: As you know that the rule came out relative to maximum concentration limits around specific molecules that were really not science based we're really glad that the Trump administration. The EPA is has come up and put those into bands for 60 days. So we're really hopeful for a good dialog on science based targets.

Speaker Change: Turns out that the upfront to chicken the market when that happens.

Speaker Change: <unk>.

Speaker Change: I think there is some concern our customers around the profitability of some of these Chinese producers and how long they can mustain withstand the narrower margin.

Speaker Change: Relative to.

Speaker Change: To the New Jersey, New Jersey trial.

Speaker Change: That is set for may and we continue to prepare and.

Speaker Change: And our next question will come from John Roberts with Mizuho. Your line is open.

Speaker Change: As always.

Speaker Change: There is no.

Speaker Change: Getting money for trial. There is also an opportunity for settlement as well.

John Roberts: Thank you.

Speaker Change: I guess, we have now in the next Dupont are back at the EPA in a key position here do you think that changes any of the complexion around the <unk>.

Speaker Change: Okay, and then what's happening in the existing small.

Speaker Change: Fluorochemical based emerging cooling market <unk> is exiting so what are their existing customers doing and is there anyone stepping into that space here as they exit.

Speaker Change: Activity over the next few years, and maybe give us an update on the upcoming New Jersey trial.

Speaker Change: Sure.

Speaker Change: Relative to that.

Speaker Change: Yes for the chemistry that that three and produce.

Speaker Change: We're really.

Speaker Change: Our Chinese producers there are I would say some pretty.

Speaker Change: As you know that the rule came out relative to the maximum concentration limits around specific molecules that were really not science based we're really glad that the Trump administration. The EPA is has come up and put those in advance for 60 days. So we're really hopeful for a good dialog on science based targets.

Speaker Change: Significant corrosion issues with that product.

Speaker Change: So while it.

Speaker Change: In the market there is definitely big room for improvement.

Speaker Change: Thank you.

Speaker Change: And the next question will come from newborns Alexander with Jefferies. Your line is open.

Speaker Change: Relative to two.

Speaker Change: To the New Jersey, New Jersey trial.

Speaker Change: So good morning would just like to flesh out the regulatory comments about.

Speaker Change: That is set for may and we continue to prepare and.

Speaker Change: As always.

Speaker Change: The downside risks for 2025 for APM can you just flesh out what's.

Speaker Change: There is.

Speaker Change: We're getting ready for trial, there is also opportunity for settlement as well.

Speaker Change: If there is any particular timeline or events youre looking for or decisions.

Speaker Change: Okay, and then what's happening in the existing small.

Speaker Change: That would and then how much of a swing in your forecast that.

Speaker Change: Fluorochemical based immersion cooling market <unk> is exiting so what are their existing customers doing and is there anyone stepping into that space here as they exit.

Speaker Change: That would <unk>.

Speaker Change: Oreo would entail.

Speaker Change: And also can you put that in context in terms of what is APM facing over say the next three to five years.

Speaker Change: Yes, so the chemistry that that three am producers there are Chinese producers there are I would say some pretty <unk>.

Speaker Change: Yeah, Laurence I mentioned that as I think about the range provided within the low end or the high end from a low end the $125 million of Pud.

Speaker Change: Significant corrosion issues with that product.

Speaker Change: So while it.

Speaker Change: When I mentioned regulatory pressures and APM, that's really making sure just from an operational perspective, Denise just talked about some of the science based items, we were discussing with the EPA.

Speaker Change: It's in the market there is definitely <unk>.

Speaker Change: Room for improvement.

Speaker Change: Thank you.

Unidentified Moderator: And the next question will come from Laurence Alexander with Jefferies. Your line is open.

Speaker Change: We are excited about kind of developing that and having further conversations but.

Laurence Alexander: So good morning would just like to flesh out the regulatory comments about.

Speaker Change: If there is some other conversations that go the other way that's really what we were getting at as potential regulatory pressure there.

Speaker Change: The downside risks for 2025 for APM can you just flush out what's.

Speaker Change: As I think about your latter question around the next several years and APM, we're really.

Speaker Change: If there is any particular timeline or events youre looking for or decisions.

Speaker Change: Committed to taking a look at just overall portfolio in line with pathway to thrive.

Speaker Change: That would and then how much of a swing in your forecast that.

Speaker Change: That would <unk>.

Speaker Change: An ATM is certainly part of that and making sure that the products product lines. We are operating our optimized from a return basis and thinking through.

Speaker Change: Scenario would entail.

Speaker Change: And also can you put that in context in terms of what is APM facing over say the next three to five years.

Laurence Alexander: Yeah Laurence.

Speaker Change: The next steps whether that be.

Speaker Change: I mentioned that.

Speaker Change: Changes in portfolio like we just talked about with Sps or putting hydrogen on a long term hold.

Speaker Change: About the range provided within the low end or the high end.

Speaker Change: From a low end to the $825 million of Pud.

Speaker Change: We're really committed to making sure that that business is optimized from a return portfolio.

Speaker Change: I mentioned regulatory pressures and APM, that's really making sure just from an operational perspective, Denise just talked about some of the science based items, we were discussing with the EPA.

Thank you.

Speaker Change: And our next question will come from Jeff <unk>.

With J P. Morgan your line is open.

Speaker Change: We are excited about kind of developing that and having further conversations but.

Speaker Change: Thanks very much.

Speaker Change: If there is some other conversations that go the other way that's really what we're getting at as potential regulatory pressures there.

Speaker Change: Your inventories were 147 billion in the quarter, which I think is up 12% sequentially and about 10% year over year sales are down.

Speaker Change: I think about your latter question around the next several years and APM, we're really.

Speaker Change: What's what's going on with that number was so high.

Committed to taking a look at just overall portfolio in line with pathway to thrive.

Speaker Change: Yes, Thanks, Jeff.

Speaker Change: And APM is certainly part of that and making sure that the products product lines. We are operating our optimized from a return basis and thinking through.

Speaker Change: There is a confluence of a couple of events here that I would say one is we did have a lot of planned maintenance activities at the end of the year. So.

Speaker Change: So we did build up inventories through that side that will continue to work down as we look into 2025.

Speaker Change: The next steps whether that be.

Speaker Change: <unk> and portfolio like we just talked about with Sps or putting hydrogen on a long term hold.

Speaker Change: Think other aspects of this is really some related items in TSS around our quota.

Speaker Change: We're really committed to making sure that that business is optimized from a return profile.

Speaker Change: And which will continue to work down in 'twenty five.

Speaker Change: And then outside of that was some select purchases with NTT to think through where their inventory balances are I will say this as we think about the path ahead of us from a liquidity we are focused on making sure that we optimize our working capital going forward and thinking about these conversion and I think there's opportunities within that inventory balance.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Jeff Zekauskas with Jpmorgan. Your line is open.

Speaker Change: Thanks very much.

Speaker Change: Your inventories were $1 47 billion in the quarter, which I think is up 12% sequentially and about 10% year over year your sales are down.

Speaker Change: So you've talked about your possible cash flows for 2025.

Speaker Change: You said you should cover your dividend.

Speaker Change: What's what's going on with that number was so high.

Speaker Change: <unk>.

Speaker Change: Opex is roughly 275 total that up that's 425.

Speaker Change: Yeah. Thanks, Jeff I think there is a confluence of a couple of events here I would say one is we did have a lot of planned maintenance activities at the end of the year. So.

Speaker Change: Is that your expectation.

With.

Speaker Change: Your EBIT da.

Speaker Change: Between.

Speaker Change: So we did build up inventories through that side that will continue to work down as we look into 2025.

Speaker Change: 25 and over nine.

Speaker Change: Or is there something that would lead you to have.

Speaker Change: Think other aspects of this is really some related items in TSS around our quota.

Speaker Change: That would put pressure on your cash flows or or that's kind of what you're expecting to your openness aspiration for 2025 cash flow.

Speaker Change: And which will continue to work down in 'twenty five.

Speaker Change: And then outside of that was some select purchases within TT to think through where their inventory balances are I will say this as we think about the path ahead of us from a liquidity we are focused on making sure that we optimize our working capital going forward and thinking about these conversion and I think there's opportunities within that inventory balance.

Jeff: Yeah. Thanks, Jeff.

Jeff: Certainly we have an aspiration as we think about cash flow, we did not provide that externally.

Jeff: As we've talked about transparency very happy with providing annual guidance on EBITDA as I think about what we talked about from cash flow was we expect to from that perspective to at least cover the capex and dividends.

Speaker Change: So you've talked about your possible cash flows for 2025.

Jeff: Just making sure that we give confidence on balancing strategic growth and debt paydown with other priorities of the company.

Speaker Change: You said you should cover your dividend.

Speaker Change: <unk>.

Speaker Change: Opex is roughly $2 75 total that up that's 425.

Jeff: Making sure that we fund the organic capex as well as providing returns to shareholders.

Speaker Change: Is that your expectation.

Speaker Change: With.

Jeff: Great. Thanks.

Speaker Change: Your EBIT da.

Speaker Change: Between <unk> and.

Speaker Change: 25 and over nine.

Speaker Change: And our last question will come from Pete Australian with true with your line is now open.

Speaker Change: Or is there something that would lead you to have.

Speaker Change: That would put pressure on your cash flows or or.

Speaker Change: Hey, good morning, Thanks for taking the questions.

Speaker Change: Kind of what you're expecting to openness aspiration for 2025 cash flow.

Speaker Change: First on the cost savings realized from the TT transformation plan in 2024, what drove the upside versus your original target and as you've begun working on modifying.

Speaker Change: Yes, Thanks, Jeff.

Speaker Change: We have an aspiration as we think about cash flow, we did not provide that externally.

Speaker Change: Your cost structure through the new cost savings plan are you finding any areas of the business, where do you think there may be upside to this target as well. Thank you.

Speaker Change: As we've talked about transparency very happy with providing annual guidance on EBITDA as I think about what we talked about from cash flow was we expect to from that perspective to at least cover the capex and dividends.

Speaker Change: Yes. Thanks.

Speaker Change: As I think about just the the TT transformation plan in total very.

Speaker Change: Just making sure that we give confidence on balancing strategic growth and debt paydown with other priorities of the company.

Speaker Change: I'm proud of the team here just executing above the target we saw some positives as it relates to just overall manufacturing related costs and thinking through mainly around those fixed.

Speaker Change: Ensure that we fund the organic capex as well as providing returns to shareholders.

Speaker Change: Great. Thanks.

Speaker Change: Fixed cash costs in the operation side.

Speaker Change: And our last question will come from Peter <unk> with true with your line is now.

Speaker Change: As we think about the pathway to thrive targets of $250 million, we're still very focused on achieving those.

Speaker Change: <unk>.

Speaker Change: Hey, good morning, Thanks for taking the questions.

Speaker Change: As we continue on this path.

Speaker Change: And if we see any upsides commit to being transparent around that and thinking through if there is that side.

Speaker Change: First on the cost savings realized from the TT transformation plan in 2024, what drove the upside versus your original target and as you've begun working on monitoring your cost structure through the new cost savings plan are you finding any areas of the business, where do you think there may be upside to this target as well. Thank you.

Speaker Change: We are the first part of this and we're very excited about.

Speaker Change: The organization, we've put around the pathway to thrive whether it be the committed transformation teams or the other areas from our pillars that are leading such and I am confident that they can meet those targets and exceed and circumstance.

Speaker Change: Thanks.

Speaker Change: As I think about just the.

Speaker Change: Great. Thanks, and then just a quick follow up on free cash flow it looks like youre guiding for free cash flow to be positive. This year is that the assumption at the middle of the EBITDA guidance range or do you expect to be free cash flow positive even at the low end.

Speaker Change: TT transformation plan in total.

Speaker Change: <unk>.

Speaker Change: Proud of the team is just executing above the target we saw some positives as it relates to just overall manufacturing related costs and thinking through mainly around those fixed.

Speaker Change: Yes.

Speaker Change: It's a great question I mean, I think from a positive free cash flow I indicated such given that with the overall guidance was that we can fund our capex as well as the dividends go I think that if it is at the lower range, we can take other actions.

Speaker Change: Fixed cash costs in the operation side.

Speaker Change: As we think about the pathway to thrive targets of $250 million, we're still very focused on achieving those.

Speaker Change: As we continue on this path.

Speaker Change: Actions to think through working capital and making sure that we're balancing such so committed to positive free cash flow and making sure that we're going forward.

And if we see any upsides commit to being transparent around that and thinking through if there is that side.

Speaker Change: The first part of this and we're very excited about.

Speaker Change: Focused on balancing spend to get it to there.

Speaker Change: The organization, we put around the pathway describe whether it be the committed transformation teams or the other areas from our pillars that are leading such and I'm confident that they can meet those targets and exceed and circumstance.

Speaker Change: Thank you very much.

Speaker Change: We have reached in the FERC question and answer session. Thank you for joining <unk> company fourth quarter 2024 earnings call you may now disconnect.

Speaker Change: Yes.

Speaker Change: It's a great question I mean, I think from a positive free cash flow I indicated such given that.

Speaker Change: The overall guidance was that we can fund our capex as well as the dividends go I think that if it is at the lower range, we can take other actions.

Speaker Change: Actions to think through working capital and making sure that we're balancing such so committed to positive free cash flow and making sure that we're going forward.

Speaker Change: Focused on balancing spend to get it to there.

Speaker Change: Thank you very much.

Speaker Change: We have reached end of our question and answer session. Thank you for joining <unk> company fourth quarter 2024 earnings call you may now disconnect.

Speaker Change: Okay.

Hum.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yeah.

Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Okay.

Speaker Change: Yes.

Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Q4 2024 The Chemours Co Earnings Call

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