The Chemours Company Reports Third Quarter 2024 Results
WILMINGTON, Del.–(BUSINESS WIRE)–$CC–The Chemours Company (“Chemours” or “the Company”) (NYSE: CC), a global leader in delivering innovative performance chemistry through Thermal & Specialized Solutions (“TSS”), Titanium Technologies (“TT”), and Advanced Performance Materials (“APM”), today announced its financial results for the third quarter 2024 and provided an update on the Company’s corporate strategy.
Key Third Quarter 2024 Results & Highlights
- Net Sales of $1.5 billion, in line with the corresponding prior-year quarter, with TSS achieving record third quarter Net Sales, driven by year-over-year growth of 21% in Opteon™ Refrigerants
- Net Loss attributable to Chemours of $27 million or $0.18 per diluted share reflecting a non-cash impairment charge of $56 million1, compared with a Net Income attributable to Chemours of $12 million, or $0.08 per diluted share, in the corresponding prior-year quarter
- Adjusted Net Income2 of $61 million, or $0.40 per diluted share, compared with $65 million, or $0.43 per diluted share, in the corresponding prior-year quarter
- Adjusted EBITDA2,3 of $208 million compared to $2114 million in the corresponding prior-year quarter
- Cash returned to shareholders through dividends of $38 million in the quarter
“In the third quarter, we delivered strong results, meeting our Net Sales expectations and exceeding our Adjusted EBITDA expectations. We set a Net Sales record for TSS5, driven by robust 21% year-over-year growth in Opteon™ Refrigerants and made steady progress in APM with high single-digit year-over-year growth in our Performance Solutions portfolio. Our TT segment delivered a 23% year-over-year increase in Adjusted EBITDA amid the lingering impacts of the now resolved Altamira temporary facility closure in the second quarter, underscoring our resilient and effective operational execution,” said Denise Dignam, Chemours President and CEO. “We are also outlining our refreshed corporate strategy, designed to position Chemours for sustainable growth and long-term value creation, with a sharpened focus on near-term execution.”
Total Chemours
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|
Q3 2024 |
|
Q3 2023 |
|
Y-o-Y % ∆ |
|
Q2 2024 |
|
Q-o-Q % ∆ |
|
|
Net Sales (millions) |
$1,501 |
$1,487 |
1% |
$1,538 |
(2)% |
|||||
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Adjusted EBITDA (millions) |
$208 |
$211 |
(1)% |
$206 |
1% |
Third quarter 2024 Net Sales of $1.5 billion increased 1% compared to the prior-year quarter. A 5% increase in volume was partially offset by a 3% decrease in pricing, with currency a slight 1% headwind.
Third quarter 2024 Net Loss attributable to Chemours was $27 million or $0.18 per diluted share, reflecting an impairment charge of $56 million in the APM segment, compared to Net Income attributable to Chemours of $12 million, or $0.08 per diluted share, in the prior-year quarter. Adjusted EBITDA for the third quarter of 2024 was $208 million, compared to $211 million in the prior-year quarter. The decline in Adjusted EBITDA was primarily driven by lower pricing, and to a lesser degree, currency and portfolio changes, partially offset by increased volumes and reduced costs.
Thermal & Specialized Solutions
|
|
Q3 2024 |
|
Q3 2023 |
|
Y-o-Y % ∆ |
|
Q2 2024 |
|
Q-o-Q % ∆ |
|
|
Net Sales (millions) |
$460 |
$436 |
6% |
$513 |
(10)% |
|||||
|
Opteon™ Refrigerants |
$205 |
$170 |
21% |
$227 |
(10)% |
|||||
|
Freon™ Refrigerants |
$146 |
$170 |
(14)% |
$173 |
(16)% |
|||||
|
Foam, Propellants & Other |
$109 |
$96 |
14% |
$113 |
(4)% |
|||||
|
Adjusted EBITDA (millions) |
$141 |
$162 |
(13)% |
$161 |
(12)% |
|||||
|
Adjusted EBITDA Margin |
31% |
37% |
(6) ppts |
31% |
(0) ppts |
TSS segment third quarter 2024 Net Sales were $460 million, up 6% compared to the third quarter 2023. Net Sales growth was primarily driven by a volume increase of 8%, partially offset by a price decline of 2%, while currency impact remained relatively flat. The decline in pricing was largely attributed to softer Freon™ Refrigerant prices due to elevated market hydrofluorocarbon (HFC) inventory levels, partially offset by stronger Opteon™ Refrigerant pricing primarily in EMEA. Volume growth was driven by stronger demand for Opteon™ Refrigerants, supported by continued adoption in stationary end markets, as well as strong performance in Foam, Propellants, and Other (FP&O).
TSS segment third quarter 2024 adjusted EBITDA decreased 13% to $141 million compared to the prior year, with Adjusted EBITDA Margin down 6 percentage points to 31%. This decline was primarily driven by the previously mentioned decrease in Freon™ Refrigerant pricing, higher costs associated with securing additional near-term quota allowances and increased raw material costs. The decreases in segment Adjusted EBITDA and Adjusted EBITDA Margin were partially offset by volume increases in Opteon™ Refrigerants, supported by continued adoption of low GWP products, especially in the stationary end markets.
On a sequential basis, Net Sales decreased by 10%, driven by typical seasonal trends across refrigerants portfolios and the previously mentioned price declines in Freon™ Refrigerant pricing, partially offset by increased volumes in Opteon™ Refrigerant stationary end markets.
Titanium Technologies
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|
Q3 2024 |
|
Q3 2023 |
|
Y-o-Y % ∆ |
|
Q2 2024 |
|
Q-o-Q % ∆ |
|
|
Net Sales (millions) |
$679 |
$690 |
(2)% |
$673 |
1% |
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Adjusted EBITDA (millions) |
$85 |
$69 |
23% |
$80 |
6% |
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Adjusted EBITDA Margin |
13% |
10% |
3 ppts |
12% |
1 ppt |
TT segment third quarter 2024 Net Sales were $679 million, down 2% compared to the third quarter 2023. This decline was primarily driven by a 2% reduction in pricing. Volumes provided a 1% tailwind year-over-year, while unfavorable currency movements created a less than 1% headwind for the segment’s Net Sales compared to the prior-year quarter.
Adjusted EBITDA increased 23% to $85 million compared to the prior year, while Adjusted EBITDA Margin also improved by 3 percentage points to 13%. The TT earnings increase was driven by cost savings realized through the TT Transformation Plan, which was partially offset by the impact of the previously mentioned decline in pricing as well as the $18 million of costs related to the unplanned weather-related downtime at our Altamira, Mexico manufacturing site.
On a sequential basis, Net Sales increased 1%, driven by a 1% increase in price.
Advanced Performance Materials
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|
Q3 2024 |
|
Q3 2023 |
|
Y-o-Y % ∆ |
|
Q2 2024 |
|
Q-o-Q % ∆ |
|
|
Net Sales (millions) |
$348 |
$343 |
1% |
$339 |
3% |
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Advanced Materials |
$208 |
$214 |
(3)% |
$206 |
1% |
|||||
|
Performance Solutions |
$140 |
$129 |
9% |
$133 |
5% |
|||||
|
Adjusted EBITDA (millions) |
$39 |
$68 |
(43)% |
$45 |
(13)% |
|||||
|
Adjusted EBITDA Margin |
11% |
20% |
(9) ppts |
13% |
(2) ppts |
APM segment third quarter 2024 Net Sales were $348 million, up 1% compared to the third quarter of 2023. The change in Net Sales was primarily driven by a 9% increase in volume, partially offset by a 7% decrease in price, with currency fluctuations presenting a 1% headwind. Volume growth was seen across both Advanced Materials and Performance Solutions, while the price decline was attributed to soft market conditions in our macroeconomically exposed end markets and changes in product mix.
APM segment third quarter 2024 adjusted EBITDA decreased 43% to $39 million, with the Adjusted EBITDA Margin falling by 9 percentage points to 11%. This decline was primarily due to product mix and lower absorption of fixed costs.
On a sequential basis, Net Sales increased by 3%, driven by volume growth of 3% primarily within Performance Solutions, while both pricing and currency impacts remained unchanged.
Other Segment
The Performance Chemicals and Intermediates business in the Company’s Other Segment had Net Sales and Adjusted EBITDA for the third quarter 2024 of $14 million and $3 million, respectively.
Corporate Expenses6
Corporate Expenses were a $57 million offset to Adjusted EBITDA in the third quarter 2024, up $3 million versus the prior-year quarter.
Liquidity
As of September 30, 2024, consolidated gross debt was $4.1 billion. Debt, net of $596 million in unrestricted cash and cash equivalents, was $3.5 billion, resulting in a net leverage ratio of approximately 4.4x times on a trailing twelve-month Adjusted EBITDA basis. Total liquidity was $1.2 billion, comprised of $596 million in unrestricted cash and cash equivalents and $652 million of revolving credit facility capacity, net of outstanding letters of credit. The Company retained $70 million in restricted cash and cash equivalents, including $50 million held in escrow under the terms of the Memorandum of Understanding (MOU) related to potential future legacy liabilities, and an additional $20 million representing its estimated interest in an escrow account for insurance proceeds.
Cash provided by operating activities for the third quarter of 2024 was $139 million compared to $131 million in the prior-year quarter. Capital expenditures for the third quarter of 2024 amounted to $76 million, compared to $86 million in the prior-year quarter. During the current quarter, the Company paid $38 million in dividends to shareholders.
Fourth Quarter 2024 Outlook
In the fourth quarter, TSS anticipates a sequential low-teens Net Sales decline driven by refrigerant seasonality, while expecting TSS to maintain overall double-digit year-over-year growth in Opteon™ Refrigerants. TSS Adjusted EBITDA is expected to decrease in the low-20% range sequentially due to refrigerant seasonality.
TT expects a mid- to high-single digit sequential Net Sales decline, with seasonality driving lower volumes, as well as impacts from mix of regional sales. Adjusted EBITDA is expected to decrease between mid-to-high teens, consistent with the referenced sequentially-lower volumes and mix.
APM expects a low-single digit Net Sales decline in the fourth quarter, driven by macro weakness in Advanced Materials end markets slightly offsetting increases in Performance Solutions. Adjusted EBITDA is anticipated to be broadly flat sequentially due to the favorable contribution from Performance Solutions sales and cost reduction efforts across the business.
The Company anticipates a consolidated Net Sales decrease in the mid to high-single digits sequentially, with consolidated Adjusted EBITDA down in the high teens to low 20% range compared with third quarter 2024 results. Corporate Expenses, as an offset to Adjusted EBITDA, are expected to be generally in line with the third quarter.
Overall unrestricted cash in the fourth quarter is anticipated to remain generally in line with the third quarter, generating a positive operating cash flow. Cash uses in the fourth quarter will be concentrated around planned maintenance activities and the expansion of TSS’s production site at Corpus Christi, Texas. The Company expects total capex in the fourth quarter to be in the range of approximately $100 million, due to elevated growth capital spend in TSS.
Chemours Corporate Strategy Update
Chemours today also outlined a refreshed corporate strategy, “Pathway to Thrive,” which builds on the Company’s strong foundation in TSS, TT, and APM, and includes actionable steps to create short- and long-term value centered around four pillars: Operational Excellence, Enabling Growth, Portfolio Management and Strengthening the Long Term.
“Over the last several months, we have taken a hard look at the business to develop a strategy that will unlock value for shareholders and build on our commitments to the customers and communities we serve,” said Denise Dignam. “We have three strong businesses, a strong management team, good operational execution, and clear competitive differentiators that position us well to execute. Our strategy balances growth with disciplined capital allocation, including ongoing cost actions that are core to how we run our business.”
Operational Excellence: Chemours expects to achieve incremental run-rate cost savings of greater than $250 million across the Company from 2024 through 20277. This will include a continuation of successful cost reductions through the TT Transformation Plan, adding an incremental $100 million8 of anticipated cost savings, plus $150 million in targeted cost savings across the other businesses and corporate costs9.
The Company will apply a programmatic approach to achieve these targets, leveraging its manufacturing excellence, standardized operating model and continuous improvement to adapt to changing markets. Given progress on cost-out execution efforts as of the third quarter of 2024, the Company anticipates achieving 50% of the planned run-rate cost savings by the end of 2025.
Enabling Growth: Chemours is committed to strategically investing in high-return, innovative growth initiatives across its portfolio, targeting a sales CAGR exceeding 5% from 2024 to 2027. In the near term, the Company will prioritize expanding in rapidly growing end markets, concentrating on data center cooling, next-generation refrigerant, and semiconductor fabrication. Investments in these growth enablers will be guided by Chemours’ disciplined capital allocation program, with funding primarily from the Company’s strong cash flows and cost efficiency. By leveraging these growth opportunities and focusing on commercial effectiveness, Chemours will be poised to enhance its competitive positioning and capture significant market share in an evolving landscape.
Portfolio Management: The Company is strategically optimizing its portfolio by shifting its focus from products to applications in higher-growth, higher-margin markets. This will be paired with regular holistic portfolio analysis focused on asset base returns in order to drive shareholder value. The Company will also evaluate its asset footprint to ensure the asset base is best positioned to meet the Company’s future needs.
Strengthening the Long Term: Chemours has made measurable progress resolving legacy liabilities, highlighted in the national public water systems settlement finalized earlier this year. The Company will continue to prioritize seeking reasonable resolutions for the benefit of Chemours’ shareholders and other stakeholders. Chemours will also maintain its commitment to responsible manufacturing and continue to engage in advocacy efforts that create global awareness, as well as regulations and policies globally that recognize the criticality of the Company’s chemistries.
Conference Call
As previously announced, Chemours will hold a conference call and webcast on November 4, 2024, at 8:00 AM Eastern Standard Time. Access to the webcast and materials can be accessed by visiting the Events & Presentations page of Chemours’ investor website, investors.chemours.com. A webcast replay of the conference call will be available on Chemours’ investor website.
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1 During the third quarter of 2024, the Company reviewed recently released third-party industry projections, which for hydrogen now reflect lower end-market demand as well as slower market growth through 2030 and a more uncertain long-term growth trajectory beyond 2030. In response to these negative market outlook developments as well as increased commercial headwinds due to limited cyclical end-markets recovery and competitive intensity, the Company has revised its financial projections for the Advanced Performance Materials business which includes reductions to its investment plans. The Company concluded that these market developments, as well as the Company’s revised financial projections to reflect these events, represented a triggering event for the Company’s Advanced Performance Materials reporting unit and associated goodwill, as well as the related asset group, during the third quarter of 2024. As a result of this triggering event, a non-cash charge of $56 million was recorded in the Advanced Performance Materials segment, reflecting the full amount of goodwill in that business. |
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2 Non-GAAP measures, including Adjusted Net Income, Adjusted EPS and Adjusted EBITDA referred to throughout, principally exclude the impact of recent litigation settlements for legacy environmental matters and associated fees, in addition to other unallocated items – please refer to the attached “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)”. |
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3 Adjusted EBITDA excludes net income attributable to noncontrolling interests, net interest expense, depreciation and amortization, and all remaining provision for income taxes from Adjusted Net Income. See the corresponding reconciliation referenced in footnote #1. |
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4 The Company revised its September 30, 2023 non-GAAP Adjusted EBITDA calculation to (1) remove previous adjustments related to the write-off of certain raw materials and stores inventories and (2) correct the understatement of accrued liabilities for steam supplier contract litigation stemming from the decommissioning of the Kuan Yin, Taiwan manufacturing facility. |
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5 For the third quarter as a segment. |
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| 6 2024 consolidated Adjusted EBITDA also reflect additional unallocated costs of $5 million, $6 million and $3 million in Q1 2024, Q2 2024 and Q3 2024, respectively. These costs are reflected in consolidated Adjusted EBITDA results only | ||||||||||
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7 Cost savings applied on an Adjusted EBITDA basis with benefits not being realized until early 2025. |
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8 Expanding upon the $175 million plan previously announced in the third quarter of 2023, bringing total cost reductions to $275 million under the plan. |
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9 Restructuring costs associated with the APM business and corporate overheads are captured as a part of the 2024 Restructuring Program in the third quarter of 2024. |
About The Chemours Company
The Chemours Company (NYSE: CC) is a global leader in providing industrial and specialty chemicals products for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and advanced electronics, general industrial, and oil and gas. Through our three businesses – Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials – we deliver application expertise and chemistry-based innovations that solve customers’ biggest challenges. Our flagship products are sold under prominent brands such as Opteon™, Freon™, Ti-Pure™, Nafion™, Teflon™, Viton™, and Krytox™. Headquartered in Wilmington, Delaware and listed on the NYSE under the symbol CC, Chemours has approximately 6,100 employees and 28 manufacturing sites and serves approximately 2,700 customers in approximately 110 countries.
For more information, visit chemours.com or follow us on X (formerly Twitter) @Chemours or LinkedIn.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally Accepted Accounting Principles (GAAP). Within this press release, we may make reference to Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Total Debt Principal, Net and Net Leverage Ratio which are non-GAAP financial measures. The Company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Management uses Adjusted Net Income, Adjusted EPS and Adjusted EBITDA, which adjust for (i) certain non-cash items, (ii) certain items we believe are not indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items to evaluate the Company’s performance in order to have comparable financial results to analyze changes in our underlying business from period to period. Additionally, Total Debt Principal, Net and Net Leverage Ratio are utilized as liquidity measures to assess the cash generation of our businesses and on-going liquidity position.
Accordingly, the Company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the Company’s operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the Company’s financial statements and footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies. The Company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of unusual gains and losses, potential future asset impairments and pending litigation without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For more information on the non-GAAP financial measures, please refer to the attached schedules or the table, “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)” and materials posted to the Company’s website at investors.chemours.com.
Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical or current fact. The words “believe,” “expect,” “will,” “anticipate,” “plan,” “estimate,” “target,” “project” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date such statements were made. These forward-looking statements may address, among other things, guidance on Company and segment performance for the fourth quarter of 2024 and the Company’s strategy. Forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized, such as guidance relying on models based upon management assumptions regarding future events that are inherently uncertain. These statements are not guarantees of future performance. Forward-looking statements also involve risks and uncertainties including the outcome or resolution of any pending or future environmental liabilities, the commencement, outcome or resolution of any regulatory inquiry, investigation or proceeding, the initiation, outcome or settlement of any litigation, remediation of material weaknesses and internal control over financial reporting, changes in environmental regulations in the U.S. or other jurisdictions that affect demand for or adoption of our products, anticipated future operating and financial performance for our segments individually and our company as a whole, business plans, prospects, targets, goals and commitments, capital investments and projects and target capital expenditures, efforts to resolve outstanding or potential litigation, including claims related to legacy PFAS liabilities, plans for dividends, sufficiency or longevity of intellectual property protection, cost reductions or savings targets, plans to increase profitability and growth, our ability to develop and commercialize new products or technologies and obtain necessary regulatory approvals, our ability to make acquisitions, integrate acquired businesses or assets into our operations, and achieve anticipated synergies or cost savings, all of which are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.
Contacts
INVESTORS
Brandon Ontjes
Vice President, Investor Relations
+1.302.773.3309
investor@chemours.com
Kurt Bonner
Manager, Investor Relations
+1.302.773.0026
investor@chemours.com
NEWS MEDIA
Cassie Olszewski
Media Relations & Reputation Leader
+1.302.219.7140
media@chemours.com
