Chemours(CC) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Overall Company Performance Chemours surpassed Q2 2025 expectations with improved performance across all three businesses, driven by strong Opteon™ demand, TT volume growth, and favorable APM pricing, while also making significant progress against its 'Pathway to Thrive' strategy, including a major PFAS settlement in New Jersey - Results surpassed expectations with improved performance across each of the three businesses[3] - Performance was driven by strong demand for Opteon™, volume growth in Titanium Technologies (TT), and favorable pricing in Advanced Performance Materials (APM)[3] - Significant progress was made against the 'Pathway to Thrive' strategy, reaching a settlement to comprehensively resolve all statewide environmental claims, including those related to PFAS in New Jersey[3] Key Financial Metrics Total Net Sales increased 4% year-over-year to $1.6 billion, driven by volume and price, Adjusted EBITDA rose 22% year-over-year to $253 million, however, the company reported a Net Loss attributable to Chemours of $381 million, primarily due to litigation-related charges Q2 2025 Key Financial Metrics | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | | :--- | :--- | :--- | :--- | | Net Sales | $1,615 | $1,554 | 4% | | Adjusted EBITDA | $253 | $207 | 22% | | Net Loss attributable to Chemours | $(381) | $60 | (735)% | | Diluted EPS (Net Loss) | $(2.54) | $0.39 | (751)% | | Adjusted Net Income | $87 | $58 | 50% | | Adjusted Diluted EPS | $0.58 | $0.38 | 53% | - Net Sales increase was primarily driven by a 3% increase in volume and a 1% increase in price, with increased Opteon™ Refrigerant blends volumes in TSS being a key driver[4] - Net Loss attributable to Chemours was primarily driven by litigation-related charges pertaining to the announced settlement with the State of New Jersey and related tax impacts[9] Strategic & Operational Highlights The company declared a quarterly cash dividend of $0.0875 per share and continued its focus on Operational Excellence to improve its operating model and reduce business disruptions - Declared a quarterly cash dividend of $0.0875 per share on the Company's common stock for the third quarter of 2025[8] - Remains focused on Operational Excellence to drive an improved operating model and reduce business disruptions going forward[3] Segment Performance Review Thermal & Specialized Solutions (TSS) The TSS segment demonstrated strong growth in Q2 2025, with Net Sales increasing 15% year-over-year and Adjusted EBITDA up 29% year-over-year, primarily driven by robust demand for Opteon™ Refrigerant blends, particularly in connection with the stationary AC transition under the U.S. AIM Act, despite a decline in Freon™ Refrigerants TSS Q2 2025 Performance | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | Q1 2025 (millions) | Q-o-Q % ∆ | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $597 | $519 | 15% | $466 | 28% | | Opteon™ Refrigerants Sales | $375 | $227 | 65% | $279 | 34% | | Freon™ Refrigerants Sales | $123 | $173 | (29)% | $97 | 27% | | Adjusted EBITDA | $207 | $160 | 29% | $141 | 47% | | Adjusted EBITDA Margin | 35% | 31% | 4 ppts | 30% | 5 ppts | - Net Sales growth was primarily driven by an 11% volume increase and a 4% price increase, attributed to stronger demand for Opteon™ Refrigerant blends in connection with the stationary AC transition under the U.S. AIM Act[10] - Adjusted EBITDA Margin increased 4 percentage points to 35% compared to the prior-year quarter[11] Titanium Technologies (TT) The TT segment experienced a 3% year-over-year decrease in Net Sales and a significant 43% year-over-year drop in Adjusted EBITDA in Q2 2025, mainly due to a global price decrease and operational disruptions, including an external rail issue that led to the consumption of higher-cost ore feedstock, incurring $15 million in incremental costs TT Q2 2025 Performance | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | Q1 2025 (millions) | Q-o-Q % ∆ | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $657 | $677 | (3)% | $597 | 10% | | Adjusted EBITDA | $47 | $83 | (43)% | $50 | (6)% | | Adjusted EBITDA Margin | 7% | 12% | (5) ppts | 8% | (1) ppt | - The decrease in Net Sales was primarily driven by a 4% decrease in price globally, partially offset by favorable currency movements[14] - Operational disruptions, including a resolved external rail issue, impacted feedstock mix and resulted in incremental costs of $15 million from consuming higher-cost ore feedstock[15] Advanced Performance Materials (APM) The APM segment's Net Sales remained flat year-over-year in Q2 2025, as a 6% price increase was offset by a 6% volume decrease due to weakness in cyclical end markets and products serving the hydrogen markets, while Adjusted EBITDA increased 11% year-over-year, driven by pricing gains APM Q2 2025 Performance | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | Q1 2025 (millions) | Q-o-Q % ∆ | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $346 | $345 | 0% | $294 | 18% | | Advanced Materials Sales | $214 | $212 | 1% | $178 | 20% | | Performance Solutions Sales | $132 | $133 | (1)% | $116 | 14% | | Adjusted EBITDA | $50 | $45 | 11% | $32 | 56% | | Adjusted EBITDA Margin | 14% | 13% | 1 ppt | 11% | 3 ppts | - Net Sales were flat YoY, with a 6% increase in price offset by a 6% decrease in volume, primarily driven by weakness in cyclical end markets impacting Advanced Materials and products serving the hydrogen markets under Performance Solutions[17] - The company is on track to exit its SPS Capstone™ business, with final sales anticipated in the third quarter of 2025[17][19] Other Non-Reportable Segment The Performance Chemicals and Intermediates business within the Other Non-Reportable Segment generated $15 million in Net Sales and $4 million in Adjusted EBITDA for the second quarter of 2025 Other Non-Reportable Segment Q2 2025 Performance | Metric | Q2 2025 (millions) | | :--- | :--- | | Net Sales | $15 | | Adjusted EBITDA | $4 | Corporate Financials & Capital Allocation Corporate Expenses Corporate Expenses decreased by $24 million to $53 million in Q2 2025 compared to the prior-year quarter, primarily due to lower costs associated with the Audit Committee's internal review and the 2024 material weakness remediation Corporate Expenses | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Change (millions) | | :--- | :--- | :--- | :--- | | Corporate Expenses (offset to Adjusted EBITDA) | $53 | $77 | $(24) | - The decrease was primarily due to lower costs associated with the Audit Committee's internal review and the 2024 material weakness remediation[22] Environmental Claims Settlement Chemours, DuPont, and Corteva reached a settlement with the State of New Jersey to resolve all statewide environmental claims, including PFAS, with a net present value of approximately $250 million for Chemours, with payments through 2030 expected to be fully funded by $150 million from PFAS-related insurance proceeds and $50 million from a 2021 MOU escrow account - Agreement reached with the State of New Jersey to comprehensively resolve all statewide environmental claims, including PFAS, across four current and former operating sites[23] New Jersey Settlement Funding | Source | Amount (millions) | | :--- | :--- | | Net Present Value of Chemours' obligation | ~$250 | | Funding from PFAS-related insurance proceeds | $150 | | Funding from 2021 MOU escrow account | $50 | | Remaining payments after 2030 (present value) | ~$80 | - Amounts related to the settlement are included in Selling, General and Administrative costs in the second quarter of 2025 and are excluded from Adjusted EBITDA[23] Liquidity and Capital Allocation Chemours maintained $1.5 billion in total liquidity as of June 30, 2025, with a net leverage ratio of approximately 4.7x, operating cash flow significantly improved to $93 million, driven by the release of restricted cash, and the company generated positive Free Cash Flows of $50 million Liquidity and Debt Metrics (as of June 30, 2025) | Metric | Amount (millions) | | :--- | :--- | | Consolidated Gross Debt | $4,200 | | Unrestricted Cash & Cash Equivalents | $502 | | Net Debt | $3,700 | | Net Leverage Ratio (TTM Adjusted EBITDA) | 4.7x | | Total Liquidity | $1,500 | | Revolving Credit Facility Capacity (net) | $954 | Cash Flow & Capital Allocation (Q2 2025) | Metric | Q2 2025 (millions) | Q2 2024 (millions) | Change (millions) | | :--- | :--- | :--- | :--- | | Cash provided by operating activities | $93 | $(620) | $713 | | Capital expenditures | $43 | $73 | $(30) | | Free Cash Flows | $50 | $(693) | $743 | | Dividends paid | $13 | N/A | N/A | - The improvement in operating cash flows was primarily due to the release of $606 million of restricted cash and restricted cash equivalents from the U.S. public water system settlement agreement[25] Outlook Third Quarter 2025 Outlook For Q3 2025, Chemours anticipates a sequential decrease in consolidated Net Sales (4-6%) and Adjusted EBITDA ($175M-$195M), primarily due to traditional refrigerant seasonality in TSS, lower sales and operational disruptions in TT, and production constraints and an outage at the Washington Works site impacting APM Q3 2025 Consolidated Outlook | Metric | Q3 2025 Expectation | | :--- | :--- | | Consolidated Net Sales | Decrease 4-6% sequentially | | Consolidated Adjusted EBITDA | $175 million - $195 million | | Corporate Expenses | Decrease ~5% | | Capital Expenditures | ~$50 million | | Free Cash Flow Conversion | 60-80% | - TSS expects a sequential Net Sales decrease in the mid-single-digit percentage range, driven by overall traditional refrigerant seasonality concentrated in Freon™ Refrigerants[30] - APM expects a sequential Net Sales decrease in the mid-teens percentage range due to production constraints associated with an outage at the Washington Works U.S. site, with additional costs anticipated to approximate $20 million[32] Full Year 2025 Outlook For the full year 2025, Chemours projects Net Sales between $5.9 billion and $6.0 billion and Adjusted EBITDA between $775 million and $825 million, with operational disruptions in Q3 for TT and APM, totaling $35 million, expected to be resolved in the fourth quarter Full Year 2025 Outlook | Metric | FY 2025 Expectation | | :--- | :--- | | Net Sales | $5.9 billion - $6.0 billion | | Adjusted EBITDA | $775 million - $825 million | | Capital Expenditures | ~$250 million | | Free Cash Flow Conversion (H2 2025) | 60-80% | - Referenced Q3 operational disruptions in TT and outage impacts in APM, totaling $35 million, are expected to be resolved in the fourth quarter[33] Company Information About The Chemours Company The Chemours Company is a global chemistry company specializing in industrial and specialty chemicals across Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials, headquartered in Wilmington, Delaware, serving approximately 2,500 customers in 110 countries with 6,000 employees and 28 manufacturing sites - The Chemours Company is a global leader in providing industrial and specialty chemicals products for various markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and advanced electronics, general industrial, and oil and gas[35] - Operates through three businesses: Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials, with flagship brands such as Opteon™, Freon™, Ti-Pure™, Nafion™, Teflon™, Viton™, and Krytox™[35] - Headquartered in Wilmington, Delaware, with approximately 6,000 employees, 28 manufacturing sites, serving approximately 2,500 customers in approximately 110 countries[35] Conference Call Details Chemours will host a conference call and webcast on August 6, 2025, at 8:00 AM Eastern Daylight Time to discuss the Q2 2025 results, with access to the webcast and materials available via the investor website - A conference call and webcast will be held on August 6, 2025, at 8:00 AM Eastern Daylight Time[34] - The webcast and materials can be accessed by visiting the Events & Presentations page of Chemours' investor website, investors.chemours.com[34] Contacts Contact information for investor relations and news media is provided for inquiries regarding The Chemours Company - Investor Relations contact: Brandon Ontjes, Vice President, Head of Strategy & Investor Relations (+1.302.773.3309, investor@chemours.com)[39] - News Media contact: Cassie Olszewski, Media Relations & Reputation Leader (+1.302.219.7140, media@chemours.com)[39] Non-GAAP Financial Measures & Forward-Looking Statements Non-GAAP Financial Measures Explanation Chemours utilizes non-GAAP financial measures such as Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Free Cash Flows, and Net Leverage Ratio to offer greater transparency and assist investors in assessing the company's operating performance, as these measures adjust for certain non-cash, non-indicative, or nonrecurring items and are intended to supplement, not replace, GAAP financial measures - Non-GAAP financial measures, including Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Free Cash Flows, Free Cash Flows Conversion, Total Debt Principal, Net, and Net Leverage Ratio, are used to provide greater transparency and aid in financial and operational decision-making[36] - These measures adjust for certain non-cash items, items not indicative of ongoing operating performance, or nonrecurring, unusual, or infrequent items to allow for comparable financial results[36] - The presentation of these non-GAAP measures is a useful financial analysis tool when used in conjunction with GAAP financial measures, but should not be considered in isolation or as a substitute for GAAP results[37] Forward-Looking Statements Disclaimer This press release contains forward-looking statements that involve risks and uncertainties, including those related to environmental liabilities, regulatory changes, litigation, and general economic conditions, which are not guarantees of future performance, and actual results may differ materially from expectations, with Chemours assuming no obligation to update these statements - Forward-looking statements provide current expectations of future events based on certain assumptions and involve risks and uncertainties[38] - Risks and uncertainties include the outcome of environmental liabilities, regulatory inquiries, litigation, changes in environmental regulations, and general economic conditions[38] - These statements are not guarantees of future performance, and Chemours assumes no obligation to revise or update any forward-looking statement, except as required by law[38] Unaudited Financial Statements Consolidated Statements of Operations The consolidated statements of operations show a Net Loss attributable to Chemours of $381 million for Q2 2025, a significant decline from Net Income of $60 million in Q2 2024, primarily driven by a substantial increase in selling, general, and administrative expenses Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | | :--- | :--- | :--- | | Net sales | $1,615 | $1,554 | | Gross profit | $278 | $308 | | Selling, general, and administrative expense | $437 | $154 | | Net (loss) income attributable to Chemours | $(381) | $60 | | Diluted (loss) earnings per share | $(2.54) | $0.39 | - Selling, general, and administrative expense increased from $154 million in Q2 2024 to $437 million in Q2 2025, contributing significantly to the net loss[41] Consolidated Balance Sheets As of June 30, 2025, total assets were $7,488 million, a slight decrease from December 31, 2024, while total liabilities increased to $7,249 million and total equity decreased to $239 million, reflecting the net loss and other financial movements Consolidated Balance Sheets (as of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | | :--- | :--- | :--- | | Total current assets | $3,100 | $3,017 | | Total assets | $7,488 | $7,513 | | Total current liabilities | $1,850 | $1,817 | | Long-term debt, net | $4,102 | $4,054 | | Total liabilities | $7,249 | $6,925 | | Total equity | $239 | $588 | - Retained earnings decreased from $1,701 million at December 31, 2024, to $1,265 million at June 30, 2025[43] Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash used for operating activities significantly improved to $19 million compared to $910 million in the prior-year period, largely due to changes in operating liabilities, while cash used for investing activities remained stable and cash used for financing activities decreased Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | | :--- | :--- | :--- | | Cash used for operating activities | $(19) | $(910) | | Cash used for investing activities | $(128) | $(171) | | Cash used for financing activities | $(84) | $(94) | | Decrease in cash, cash equivalents, restricted cash | $(210) | $(1,188) | - The substantial improvement in cash flows from operating activities was driven by a $239 million increase in other non-current operating liabilities and an $83 million increase in other current operating liabilities in 2025, compared to decreases in 2024[45] Segment Financial and Operating Data Segment Financial and Operating Data This section provides detailed unaudited financial and operating data for each segment, including Net Sales and Adjusted EBITDA, along with a breakdown of quarterly changes in Net Sales attributed to price, volume, and currency effects on both a year-over-year and sequential basis Segment Net Sales (Q2 2025 vs. Q2 2024 & Q1 2025) | Segment | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | Q1 2025 (millions) | Q-o-Q % ∆ | | :--- | :--- | :--- | :--- | :--- | :--- | | Thermal & Specialized Solutions | $597 | $519 | 15% | $466 | 28% | | Titanium Technologies | $657 | $677 | (3)% | $597 | 10% | | Advanced Performance Materials | $346 | $345 | 0% | $294 | 18% | | Other Non-Reportable Segment | $15 | $13 | 15% | $11 | 36% | | Total Net Sales | $1,615 | $1,554 | 4% | $1,368 | 18% | Segment Adjusted EBITDA (Q2 2025 vs. Q2 2024 & Q1 2025) | Segment | Q2 2025 (millions) | Q2 2024 (millions) | Y-o-Y % ∆ | Q1 2025 (millions) | Q-o-Q % ∆ | | :--- | :--- | :--- | :--- | :--- | :--- | | Thermal & Specialized Solutions | $207 | $160 | 29% | $141 | 47% | | Titanium Technologies | $47 | $83 | (43)% | $50 | (6)% | | Advanced Performance Materials | $50 | $45 | 11% | $32 | 56% | | Other Non-Reportable Segment | $4 | $3 | 33% | $1 | 300% | Quarterly Change in Net Sales (Q2 2025 vs. Q2 2024) | Segment | Price % | Volume % | Currency % | | :--- | :--- | :--- | :--- | | Total Company | 1% | 3% | 0% | | Thermal & Specialized Solutions | 4% | 11% | 0% | | Titanium Technologies | (4)% | 0% | 1% | | Advanced Performance Materials | 6% | (6)% | 0% | Reconciliation of GAAP to Non-GAAP Financial Measures Adjusted Net Income and Adjusted EBITDA Reconciliation This section provides a detailed reconciliation from GAAP Net (Loss) Income to Adjusted Net Income and Adjusted EBITDA, highlighting adjustments for non-operating pension costs, exchange losses, restructuring charges, litigation-related charges, and environmental charges, and also reconciles GAAP Net Leverage Ratio to Non-GAAP Net Leverage Ratio GAAP to Adjusted Net Income & Adjusted EBITDA (Three Months Ended June 30) | Metric | Q2 2025 (millions) | Q2 2024 (millions) | | :--- | :--- | :--- | | Net (loss) income attributable to Chemours | $(381) | $60 | | Litigation-related charges | $299 | $(1) | | Environmental charges | $60 | $0 | | Adjustments made to income taxes | $171 | $(4) | | Adjusted Net Income | $87 | $58 | | Adjusted EBITDA | $253 | $207 | Net Leverage Ratio | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total debt principal, net | $3,675 million | $3,424 million | | Net Leverage Ratio (using Non-GAAP earnings) | 4.7x | 4.4x | - Litigation-related charges of $299 million in Q2 2025 primarily include $257 million related to the New Jersey settlement agreement and $16 million of third-party legal fees directly related to it[53] Adjusted Earnings per Share Reconciliation This section reconciles GAAP basic and diluted earnings per share to Adjusted basic and diluted earnings per share, showing the impact of adjustments on per-share metrics, where for periods with a net loss, potentially dilutive securities are excluded from GAAP EPS calculations but included in Adjusted EPS if Adjusted Net Income is positive GAAP to Adjusted EPS (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | | Basic (loss) earnings per share (GAAP) | $(2.54) | $0.40 | | Diluted (loss) earnings per share (GAAP) | $(2.54) | $0.39 | | Adjusted basic earnings per share | $0.58 | $0.39 | | Adjusted diluted earnings per share | $0.58 | $0.38 | - In periods where the Company incurs a net loss, the impact of potentially dilutive securities is excluded from the calculation of GAAP diluted EPS, as their inclusion would have an anti-dilutive effect. However, they are included in Adjusted diluted EPS if Adjusted Net Income is positive[55] Free Cash Flows and Free Cash Flow Conversion Reconciliation This section reconciles cash flows from operating activities to Free Cash Flows by deducting capital expenditures, and then calculates Free Cash Flow Conversion as a percentage of Adjusted EBITDA, with Free Cash Flows being positive $50 million for Q2 2025, with a 20% conversion rate Free Cash Flows & Conversion (Three Months Ended June 30) | Metric | Q2 2025 (millions) | Q2 2024 (millions) | | :--- | :--- | :--- | | Cash flows provided by (used for) operating activities | $93 | $(620) | | Less: Purchases of property, plant, and equipment | $(43) | $(73) | | Free Cash Flows | $50 | $(693) | | Adjusted EBITDA | $253 | $207 | | Free Cash Flow Conversion | 20% | (335)% | - Free Cash Flows significantly improved from a negative $693 million in Q2 2024 to a positive $50 million in Q2 2025[58] 2025 Estimated Adjusted EBITDA Reconciliation This section provides the reconciliation for the full year 2025 outlook, converting estimated GAAP Net Loss to estimated Adjusted Net Income and Adjusted EBITDA, with a projected Adjusted EBITDA range of $775 million to $825 million 2025 Estimated GAAP to Adjusted EBITDA | Metric | Year Ending December 31, 2025 (millions) | | :--- | :--- | | | Low | High | | Net loss attributable to Chemours | $(336) | $(300) | | Restructuring, transaction, and other costs, net | $492 | $492 | | Adjusted Net Income | $156 | $192 | | Interest expense, net | $272 | $272 | | Depreciation and amortization | $313 | $313 | | All remaining provision for income taxes | $34 | $48 | | Adjusted EBITDA | $775 | $825 | - The Company's estimates reflect its current visibility and expectations based on market factors, such as currency movements, macro-economic factors, and end-market demand, with actual results potentially differing materially[59]