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Chemours Co (CC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $1.36B, down 1% YoY and down 10% QoQ; adjusted EBITDA was $179M, up 2% YoY and down 14% QoQ, while adjusted diluted EPS was $0.11 vs $0.31 YoY and GAAP diluted EPS was $(0.05) vs $(0.12) YoY .
  • TSS set another quarterly net sales record on 23% YoY Opteon growth; TT improved margins via transformation savings; APM saw EBITDA lift from favorable inventory true-ups that will not recur in Q1’25 .
  • FY25 outlook introduced: adjusted EBITDA $825M–$975M and capex $250M–$300M; Q1’25 guide calls for flat-to-slightly down consolidated net sales and EBITDA sequentially, with corporate expense offset down ~30% QoQ .
  • Consensus estimates from S&P Global were unavailable (tool rate-limit); management said Q4 adjusted EBITDA exceeded internal expectations, a positive narrative driver, while regulatory/PFAS items and inventory build remain watch areas . Consensus estimates will be added when accessible via S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • “We delivered a strong earnings performance, exceeding our Adjusted EBITDA expectations across all our businesses… 23% year-over-year growth in Opteon Refrigerants” — Denise Dignam, CEO .
    • TT delivered ~$140M 2024 cost savings, above the original $125M commitment; TT Q4 EBITDA rose 20% YoY to $77M with margin up 200 bps to 12% .
    • APM Q4 EBITDA increased 20% YoY to $48M with margin up 300 bps to 15% aided by inventory adjustments; high‑purity Teflon PFA capacity ramp supports semiconductor end markets .

  • What Went Wrong

    • Pricing pressure persisted across businesses (Freon softness in TSS; TT pricing down YoY; APM price mix headwinds); consolidated pricing fell ~3% YoY in Q4 .
    • Corporate expenses were a $69M offset to adjusted EBITDA in Q4 (+$20M YoY), reflecting asbestos-related reserves and prior audit review/remediation costs .
    • Operating cash flow usage continued in FY24 (−$633M), including release of $592M restricted cash tied to the U.S. Public Water System settlement and unwinding of 2023 working capital actions; inventories rose to $1.47B, prompting analyst questions on build .

Financial Results

MetricQ2 2024Q3 2024Q4 2024Consensus (S&P Global)
Net Sales ($USD Millions)$1,538 $1,501 $1,359 —
Adjusted EBITDA ($USD Millions)$206 $208 $179 —
GAAP Diluted EPS ($USD)$0.46 $(0.18) $(0.05) —
Adjusted Diluted EPS ($USD)$0.38 $0.40 $0.11 —

Note: S&P Global consensus values were unavailable at the time of writing due to API rate-limit; we will update when accessible. Management stated Q4 adjusted EBITDA exceeded internal expectations .

Segment performance

Segment MetricQ2 2024Q3 2024Q4 2024
TSS Net Sales ($USD Millions)$513 $460 $390
TSS Adjusted EBITDA ($USD Millions)$161 $141 $123
TSS Adjusted EBITDA Margin (%)31% 31% 32%
TT Net Sales ($USD Millions)$673 $679 $632
TT Adjusted EBITDA ($USD Millions)$80 $85 $77
TT Adjusted EBITDA Margin (%)12% 13% 12%
APM Net Sales ($USD Millions)$339 $348 $324
APM Adjusted EBITDA ($USD Millions)$45 $39 $48
APM Adjusted EBITDA Margin (%)13% 11% 15%

TSS mix details

TSS Sub-PortfolioQ3 2024 ($USD Millions)Q4 2024 ($USD Millions)
Opteon Refrigerants$205 $178
Freon Refrigerants$146 $124
Foam, Propellants & Other$109 $88

KPIs and balance sheet

KPIQ2 2024Q3 2024Q4 2024
Operating Cash Flow ($USD Millions)$(620) $139 $138
Capital Expenditures ($USD Millions)$73 $76 $109
Dividends Paid ($USD Millions)$38 $38 $36
Gross Debt ($USD Billions)$4.0 $4.1 $4.2
Cash & Equivalents ($USD Millions)$604 $596 $713
Liquidity ($USD Billions)$1.5 $1.2 $1.4
Net Leverage (TTM, Adjusted EBITDA)~4.4x ~4.4x ~4.4x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Net SalesQ1 2025n/aFlat to slightly down sequentially vs Q4 New
Consolidated Adjusted EBITDAQ1 2025n/aSlightly down sequentially vs Q4 New
Corporate expense (Adj EBITDA offset)Q1 2025n/aDown ~30% QoQ vs Q4 New
CapexQ1 2025n/a~$80M New
TSS Net SalesQ1 2025n/aSequential increase; Opteon double-digit growth; Freon sequential decrease New
TSS Adjusted EBITDAQ1 2025n/aSlight sequential increase; margin impact from forced outage and Opteon ramp costs New
TT Net SalesQ1 2025n/aSequential decrease on regional mix; volumes stable New
TT Adjusted EBITDAQ1 2025n/aSequential decrease (mix and cold-weather downtime) New
APM Net SalesQ1 2025n/aSequential decrease (cyclical weakness; hydrogen/semiconductor softness) New
APM Adjusted EBITDAQ1 2025n/aSequential decrease; Q4 inventory true-ups won’t recur New
Consolidated Adjusted EBITDAFY 2025n/a$825M–$975M New
CapexFY 2025n/a$250M–$300M New
Dividend policyFY 2025n/aOperating cash flow expected to more than fund capex and ensure dividend funding (board approval quarterly) New
Dividend amountQ1 2025n/a$0.25 per share declared New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Opteon adoption, low-GWP transitionStrong demand; refrigerant seasonality; Freon pricing down; Opteon stationary adoption; Q3 record TSS sales with 21% Opteon growth 23% YoY Opteon growth; TSS record quarterly net sales; Q1 guide: Opteon double-digit sequential growth Strengthening volume; pricing/mix managed; margin ~30% in 2025
TT transformation savingsQ2 TT margin 12%; Q3 TT EBITDA +23% YoY; transformation benefits offset pricing ~$140M FY24 savings; margin +200 bps YoY in Q4; aiming for ≥$60M additional run-rate savings by end-2025 Continued cost-out; margin stabilization despite price pressure
APM portfolio and hydrogen headwindsQ2 APM down YoY; hydrogen weakness; PFA permit for semis Exit SPS Capstone (Europe) due to regulation; PFA capacity ramp; Q4 inventory true-ups aided EBITDA (non-recurring) Portfolio pruning; cyclical softness persists; semis ramping
Regulatory/legal (PFAS/EPA)Settlement cash release and restricted cash movements; litigation accruals noted in non-GAAP reconciliations EPA MCL critique; NJ trial set for May; insurance recoveries; asbestos reserve impact in Q4 corporate costs Ongoing legal/regulatory engagement; headline risk remains
Data center immersion coolingEarly-stage; asset-light investments; PFA relevance Commercialization targeted by next year; molecule/IP confidentiality; larger demand late decade; capex discipline Early development; watch for updates in 2025

Management Commentary

  • “We delivered a strong earnings performance, exceeding our Adjusted EBITDA expectations across all our businesses… set another quarterly Net Sales record, with 23% year-over-year growth in Opteon Refrigerants… executing our Pathway to Thrive strategy.” — Denise Dignam, CEO .
  • “Adjusted EBITDA increased from $176M to $179M… driven by TT Transformation cost savings, favorable inventory adjustments in APM, and increased TSS volumes, partially offset by lower pricing.” — Shane Hostetter, CFO .
  • “We completed the expansion at our Corpus Christi site where we produce neat Opteon refrigerant and are ramping capacity to support market demand.” — Denise Dignam .
  • “We target incremental run rate cost savings of greater than $250M across the company starting this year and building through 2027… on track to deliver half by the end of 2025.” — Denise Dignam .

Q&A Highlights

  • Guidance bridge and one-time impacts: ~$15–$20M Q1 headwinds (TSS forced outage; TT weather; APM maintenance) but non-recurring; focus on cost-out and Opteon adoption in 2025 .
  • TT “green shoots”: Share gains in Europe; antidumping effects limiting Chinese high-purity TiO2; Q1 regional mix headwind (more Europe, less North America) expected to reverse with U.S. coatings seasonality .
  • TSS dynamics: Freon destocking after delayed transition; 2025 less dependent on Freon; Opteon growth “at least” ~23% with margin target ~30% for 2025; OEM-year pricing considerations but raw material pass-through possible .
  • Non-recurring inventory adjustments: APM/TSS inventory valuation/reserve changes sized ~$5–$10M benefit; corporate asbestos reserve costs ~$10–$15M in Q4 .
  • Liquidity/working capital: Elevated inventories driven by planned maintenance, TSS quota dynamics, select TT purchases; management focused on working capital optimization and positive FCF in 2025 even at low end of EBITDA range .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, EBITDA was unavailable at time of writing due to API rate-limit; we will update the tables when accessible.
  • Management indicated Q4 adjusted EBITDA exceeded internal expectations, implying a potential positive revision bias if Street numbers were below the delivered segment-level performance (particularly TSS/TT) .

Key Takeaways for Investors

  • TSS structural tailwind: Regulation-driven transition to low-GWP refrigerants is driving sustained double-digit Opteon growth; 40% Corpus Christi expansion ramp supports volumes, albeit with near-term cost/margin friction in Q1 .
  • TT margin resilience: Transformation savings ($140M in 2024) are offsetting price pressure; additional ≥$60M run-rate savings targeted by end-2025; watch regional mix and Europe share gains .
  • APM portfolio optimization: SPS Capstone exit removes regulatory overhang and low-return assets; semis-exposed PFA ramp helps mix, but hydrogen/cyclical end markets remain weak near-term .
  • Cash/Balance sheet: Liquidity $1.4B; net leverage ~4.4x TTM; focus on working capital normalization after inventory build and settlement-driven cash movements; positive FCF targeted for 2025 with capex/dividend covered .
  • FY25 risk/reward: EBITDA guide $825M–$975M brackets macro uncertainty (TT/APM demand, TSS input costs/regulation); corporate costs expected lower vs Q4; sequential Q1 softness noted .
  • Dividend continuity: $0.25 per share declared for Q1’25; management expects operating cash flow to more than fund capex and dividends in FY25 (subject to board approval) .
  • Near-term catalysts: Confirmation of Opteon volume strength and margin trajectory; TT cost-out execution and European share gains; APM restructuring progress; regulatory/legal clarity (EPA/NJ trial) .