Peter Osterland • Truist Securities

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President & CEO Denise Dignam stated that cost-out efforts in TT are focused on productivity and have not impacted operational reliability, expressing confidence in the plan to fix recent discrete issues. Regarding the APM outage at Washington Works, she characterized it as a one-time '$20 million impact' isolated to Q3, caused by an external power outage, and expects the business to return to its strong Q2 performance trajectory in Q4.

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President and CEO Denise Dignam noted that while she would not comment on forward pricing, the company is seeing price stabilization and volume increases in fair trade markets. SVP and CFO Shane Hostetter confirmed the Q1 weather impacts were a one-time event and that the absence of these costs contributes to the guided earnings growth from Q1 to Q2, with no other lingering operational issues expected.

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CFO Shane Hostetter credited the 2024 savings beat to strong execution in manufacturing and fixed cash cost reductions. While confident in achieving the new $250 million target, he did not commit to upside at this early stage. He affirmed the company's commitment to positive free cash flow, stating that even at the low end of the EBITDA range, other levers like working capital management could be used to achieve that goal.

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EVP & CFO Steven Bender indicated that normalized exports for PEM products are in the mid-30% range, but Q2 levels were lower due to production outages. He also stated that the new cost-saving actions are not expected to require a large cash outlay and that the benefits will be delivered largely in 2026.

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M. Bender, EVP and CFO, clarified that planned turnarounds accounted for approximately two-thirds of the $80 million outage impact. He noted the affected units were ramping up in Q2. Regarding CapEx, he stated that while spending on safety and reliability would not be cut, the company would closely evaluate other activities and take further action if market conditions dictated.

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EVP and CFO Steve Bender highlighted that the Pipe & Fittings business, a key part of the infrastructure stream, was a strong contributor in Q4 and is seen as a leading indicator for construction. He expects this business to continue moving forward positively. He also noted that the compounds business, serving wire, cable, auto, and health markets, continues to be a nice contributor with good demand signals.

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President & CEO Benjamin Gliklich stated that in the Industrial business, the company is maintaining price discipline and driving productivity, leading to earnings growth despite flat volumes. He noted that with any volume recovery, incremental margins should be above average. For the Offshore business, he clarified that the high-teens growth from Q2 is not expected to repeat, with mid-single-digit growth being a more realistic expectation for the full year.

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CEO Ben Gliklich stated there was no clear evidence of a pre-build in their supply chain, as growth is primarily from B2B projects with visible CapEx drivers. Regarding I&S margins, he confirmed that the expected second-half recovery of the high-margin offshore business should drive margin expansion. CFO Carey Dorman added that there is further upside potential from operating leverage if volumes in the core industrial business recover.

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CEO Benjamin Gliklich expects continued margin expansion from favorable mix, some raw material deflation, and productivity, but not at the same pace as 2024. Regarding CapEx, Gliklich highlighted the Coperion project as a priority, along with other investments to support high-value niches. CFO Carey Dorman added that they are also increasing investment in customer equipment to secure long-term contracts.

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President and CEO Ken Lane expressed strong disappointment with the EU Commission's decision not to impose duties on South Korea, calling it a missed opportunity to protect a vital industry. He emphasized that as the last fully integrated epoxy supplier in Europe, Olin will adjust its commercial model to capture the value and volume it is entitled to from customers who require supply reliability, which will be a key part of its strategy.

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President and CEO Kenneth Lane explained that the increased savings target is a combination of accelerating some planned structural cost reductions and finding new in-year productivity opportunities. He emphasized that the team is focused across all sites and functions on finding efficiencies and reducing costs, indicating the savings are broad-based.

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CEO Kenneth Lane stated that Olin focuses on highly accretive, high-return bolt-on deals, like the AMMO, Inc. acquisition at a sub-2x multiple. He emphasized that any potential deal faces a high hurdle, as it must offer a better return than buying back Olin's own stock, which he described as a 'very good value' at current levels.

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CEO John Romano attributed TiO2 volume growth primarily to anti-dumping duties in Europe and anticipated duties in India and Brazil, and stated utilization rates would remain at or above 80%. CFO John Srivisal and CEO John Romano explained the CapEx reduction was half due to the Botlek idling and half from deferring other projects to meet cash flow targets. Srivisal projected normalized long-term CapEx to be $250-$300 million annually after current mining projects complete in 2026.

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CEO John Romano and CFO John Srivisal indicated that the guidance assumes high single-digit percentage volume growth for both TiO2 and zircon. Romano added that the company expects to regain market share previously lost to Chinese competitors, driven by the implementation of antidumping duties in key markets like Europe, Brazil, and soon India, where Tronox holds a strategic advantage.

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CFO Neal Sheorey reiterated that as volumes ramp in Q2, a smaller percentage will be on LTAs compared to Q1, leading to lower margins. CEO Jerry Masters opined that new derivatives will have minimal initial impact due to low trading volumes, though they could become relevant for hedging over the long term if they gain traction.

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CFO Erik Aldag acknowledged some minor pre-buying in the Asia foundry business in Q1 (approx. $1 million) but noted this was balanced by other customers holding off on orders due to tariff uncertainty. He stated the company still expects a strong year for free cash flow, forecasting around $150 million, which translates to approximately 7% of sales.

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CFO Erik Aldag explained that the Q1 margin pressure versus the prior year is primarily due to an unfavorable product mix, with softer demand in high-margin markets like high-temperature technologies, and a potential timing impact from passing through higher energy costs. CEO Douglas Dietrich clarified that the China asset sale involved a very small facility in a non-core refractory market, sold to the local government for development, with production easily absorbed by other MTI plants.

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CFO Erik Aldag acknowledged that there was some minor pre-buying in the Asia foundry business in Q1, estimated at around $1 million, but noted this was offset by other customers delaying orders due to tariff uncertainty. He confirmed the Q2 forecast for Asia has been moderated as a result. Regarding cash flow, Aldag stated that despite a slow start due to working capital builds, the company still expects a strong year and is targeting free cash flow of around 7% of sales, which translates to approximately $150 million.

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CFO Erik Aldag attributed the Q1 margin pressure versus the prior year primarily to a softer product mix, as high-margin markets like high-temperature technologies were weaker. CEO Douglas Dietrich explained the China refractory facility sale was a strategic exit from a small footprint, prompted by the local government's desire to redevelop the land, with production being absorbed by other MTI facilities.

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