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| 8-K - 8-K INVESTOR PRESENTATION - Chemours Co | a9142016investormeeting.htm |
The Chemours Company
Investor Meetings
September 2016
Exhibit 99.1
This presentation contains forward-looking statements, which often may be identified by their use of words like “plans,”
“expects,” “will,” “believes,” “intends,” “estimates,” targets,” “anticipates” or other words of similar meaning. These
forward-looking statements address, among other things, our anticipated future operating and financial performance,
business plans and prospects, transformation plans, resolution of environmental liabilities, litigation and other
contingencies, plans to increase profitability, our ability to pay or the amount of any dividend, and target leverage that
are subject to substantial risks and uncertainties that could cause actual results to differ materially from those
expressed or implied by such statements. Forward-looking statements are not guarantees of future performance and
are based on certain assumptions and expectations of future events which may not be realized. The matters discussed
in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results
to differ materially from those projected, anticipated or implied in the forward-looking statements, as further described in
our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year
ended December 31, 2015. Chemours undertakes no duty to update any forward-looking statements.
This presentation contains certain supplemental measures of performance that are not required by, or presented in
accordance with, generally accepted accounting principles in the United States (“GAAP”). These Non-GAAP measures
include Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA and Free Cash Flow, which should not be
considered as replacements of GAAP. Free Cash Flow is defined as Cash from Operations minus cash used for PP&E
purchases. Further information with respect to and reconciliations of such measures to the nearest GAAP measure can
be found in the appendix hereto.
Management uses Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA and Free Cash Flow to evaluate the
Company’s performance excluding the impact of certain non-cash charges and other special items in order to have
comparable financial results to analyze changes in our underlying business from quarter to quarter.
Historical results prior to July 1, 2015 are presented on a stand-alone basis from DuPont historical results and are
subject to certain adjustments and assumptions as indicated in this presentation, and may not be an indicator of future
performance.
Additional information for investors is available on the company’s website at investors.chemours.com.
Safe Harbor Statement
1
Titanium Dioxide
42%
Fluoropolymers
22%
Fluorochemicals
17%
Performance
Chemicals &
Intermediates
9%
Cyanides
6%
Sulfur Products
4%
Chemicals used in gold production, oil
refining, agriculture, industrial
polymers and other industries
#1 producer in Americas of sodium
cyanide
Titanium dioxide (TiO2) is a pigment
used to deliver whiteness, opacity,
brightness and protection from sunlight
#1 global producer of TiO2 by
capacity, sales and profitability
Products for high performance
applications across broad array of
industries, including refrigerants,
propellants and industrial resins
#1 global producer of both
fluorochemicals and fluoropolymers
The Chemours Company at a Glance
Sales(1): $5,526
Adj. EBITDA(1): $616
% margin: 11%
Titanium Technologies
Sales(1): $2,322
Adj. EBITDA(1): 307
% margin: 13%
Fluoroproducts
Sales(1): $2,194
Adj. EBITDA(1): 361
% margin: 17%
Chemical Solutions
Sales(1): $1,010
Adj. EBITDA(1): 45
% margin: 5%
By Geography(2) By Product(2)
Dollars in millions
(1) Data represents last twelve months ending June 30, 2016
(2) Geographic and product data reflect full year 2015 net sales; does not reflect impact of divestitures
Adjusted EBITDA includes corporate and other charges which are not reflected in individual segment Adjusted EBITDA. See reconciliation of Adjusted EBITDA in Appendix.
2
North America
45%
Asia
Pacific
24%
EMEA
17%
Latin America
14%
3
Transformation Plan Priorities
Refocus
Investments
Concentrate capital spending on investable business portfolio
Announced investment in the next increment of Opteon™ capacity
Rationalize annual capital spending to ~$350M over time
Reduce Costs
Achieved cost reductions of ~$100M in first half of 2016
Anticipating $200M of cost reductions to be realized in 2016 over 2015
Targeting additional cost reduction of $150M in 2017
Optimize The
Portfolio
Grow Market
Positions
Support customer growth in TiO2 through successful Altamira start-up and disciplined approach to pricing
Continue ramp up of Opteon™ product lines in Fluoroproducts
Grow Cyanides business with key customers
Target $150M Adjusted EBITDA growth from Opteon™ and Altamira through 2017
Plan Well Underway to Enhance Adjusted EBITDA by $500M,
Improve Free Cash Flow and Reduce Leverage to ~3x in 2017
Enhance Our
Organization
Foster an entrepreneurial organization
Operate with a simpler structure
Maintain a commitment to a safe and sustainable future
Completed strategic review of Chemical Solutions segment
Closed Aniline, Sulfur and Clean & Disinfect sales, generated ~$695M in gross proceeds
Retaining and improving cost position of Belle, WV site
Altamira
Commercial
Operations
A Year of Transformation
4
AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
TiO2 Price
Increase
Communicated
2015 2016
Set 1st Post-Spin
Dividend
Edge Moor
Plant Closure
Transformation
Plan Launch
Opteon
Capacity
Announced
DuPont Liquidity
Agreement;
Credit Facility
Amendment
TiO2 Price
Increase
Communicated
Aniline
Transaction
Closed
Sale of Clean &
Disinfect
Business
Announced
Reactive Metals
Closure
Announced
Headcount
Reduction
Sulfur
Transaction
Closed
TiO2 Price
Increase
Communicated
C&D
Transaction
Closed
SEP
Titanium Technologies
Paper
14%
Coatings
57%
Plastics
25%
Specialty
4%
North
America
32%
Asia
Pacific
32%
EMEA
22%
Latin
America
14%
Global leader in TiO2 with production capacity
of 1.25 million metric tons(1)
− 4 TiO2 plants with 7 production lines
(1)
− Packaging facility at Kallo, Belgium
− Mineral sands mine at Starke, FL
Industry-leading manufacturing cost position
− Unique chloride technology
− Feedstock flexibility
Strong brand reputation
− Ti-Pure™ sold to ~800 customers globally
Chemours Titanium Technologies Business Overview
Coatings – architectural, industrial,
automotive
Plastics – rigid / flexible packaging,
PVC pipe/windows
Papers – laminate papers, coated
paper/paperboard, sheet
Specialty – rubber, leather, diesel
particulate filters
Geography(3) End Market(3)
Source: Company filings and data. Titanium Technologies: TZMI (2015)
(1) Pro forma for completion of Altamira expansion
(2) TiO2 market share statistics based on volume statistics from company filings and market estimates
(3) Reflects full year 2015 segment net sales
6
Business Overview Chemours is #1 in TiO2 Globally
(2)
18%
13% 13%
9%
8%
5%
3%
Chemours Cristal Huntsman Kronos Tronox Lomon Henan
Ore-to-Pigment Routes
30%
TiO2
95%
TiO2
90%
TiO2
70%
TiO2
Sulfate
Pigment
Competitive
Chloride
Pigment
Ilmenites
Slags
Synthetic
Rutiles
Leucoxenes Rutiles
Chemours has scale, leading process technology and manufacturing flexibility creating
a sustainable low-cost position adaptable to customer needs and market conditions
TiO2 Process Technologies & Chemours Capabilities
7
100% chloride process
Highest throughput
operations
Process technology and
operational discipline
Flexible manufacturing
circuit with sustainable
expansion options
TiO2 Process Technologies The Chemours Advantage
Chemours delivers high-quality product to serve customers in attractive
higher value-add segments of the TiO2 market
TiO2 Market Segments Addressed by Producers
8
Source: Chemours Estimates
Quality and performance of TiO2
products differ considerably across
market segments and applications
Segments are supplied by two
manufacturing systems (Regional
and Multinational Producers)
Utilization is higher at
manufacturing facilities supplying
specialty and higher value pigment
segments
Separation remains in multi-
purpose segments based on
pigment quality, product design and
supply capability
Chemours’ product value and cost offer supply security in a stressed TiO2
industry
TiO2 Market: Cost Differentials
9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
0 500 1,000 2,600 1,800 3,100 3,600 4,100 1,400 4,500 5,000 5,500 6,000
N
o
rmail
z
ied
C
o
st/
p
ric
e
$/
T
o
n
n
e
Realizable Capacity (Metric kT)
Multi-National Producers
2Q16 avg. China
export quality
Range of China
Domestic Cost
China
Export
Chemours
China
Domestic
2Q16 avg. price HQ Global
Source: Chemours estimates based on internal calculations; price estimates from industry sources
2Q16 avg. China
domestic – low
quality
Chemours’ Profitability Focus in TiO2
10
Working towards improving profitability that supports sustainable
reinvestment levels
Pricing Actions
January 1 price increase – implemented across the globe
May 1 increase – implemented across the globe
Announced September 1 price increase of $150/t in EMEA and Latin America
Chemours applies an analytical approach to pricing and will seek prices consistent with
factors such as:
− Product value
− Supply/Demand
− Reinvestment economics
Cost Reductions
Shutdown of Edge Moor plant and line at New Johnsonville, TN
Integrated ore capability – from sourcing to use
Fixed cost and working capital reductions as part of Transformation Plan
Fluoroproducts
Supplies products for high performance
applications across broad array of industries
#1 in Fluoroproducts globally
− Fluorochemicals: #1 in refrigerants, #1 in propellants,
#3 in foaming agents
− Fluoropolymers: #1 in industrial resins, #1 in
fluoropolymer specialties
Key Brands include Teflon™, Freon™, Opteon™,
Krytox ™, Nafion™, Viton™
Fluoroproducts Business Overview
Geography(1) Product(1)
Source: Company filings and data, Fluoroproducts: Company filings and Management estimates
(1)Reflects full year 2015 segment net sales
(2)Fluorochemicals and fluoropolymers market share statistics based on 2015 internal revenue estimates and company filings
(3)Includes 100% contribution from the DuPont-Mitsui Fluorocarbon Company joint venture
12
F
lu
o
ro
chemical
s
F
lu
o
ro
p
o
ly
mer
s
(3)
Fluorochemicals – mainly
refrigerants, propellants, and foam
expansion agent
Fluoropolymers – mainly industrial
resins and downstream products &
coatings
Key End Markets – AC, refrigeration,
automotive, aerospace, wire & cable,
consumer electronics and
telecommunications
22%
17% 17%
8% 7%
Honeywell Arkema Dongyue Mexichem25%
16%
12% 11%
6%
Daikin 3M (Dyneon) Solvay Dongyue
Business Overview Chemours is #1 in Fluoroproducts Globally(2)
North
America
47%
Asia
Pacific
24%
EMEA
18%
Latin
America
11%
Fluoropo
lymers
56%
Fluoroch
emicals
44%
Fast Pace Adoption of Opteon™
13
Opteon™ YF
Next Gen Gas for mobile air-
conditioning
HFO-1336(Z)
Next Gen Liquids for Foams,
Centrifugal Chillers, Organic
Rankine Cycles, High Temp
Heat Pumps
Opteon™ YF blends
Next Gen Gas for Commercial
Refrigeration, Residential/Light
Commercial A/C, Chillers, High
Temp Heat Pump
Market-Leading Portfolio
Opteon™ Technology offers sustainable technology option
in the face of upcoming regulatory deadlines
• Opteon™ Expected to Provide >$100M of Adjusted EBITDA Growth thru 2017
• Growth beyond 2018 will be supplied by facility in Corpus Christi
Opteon™ Revenue Outlook
>$100M Incremental
Adjusted EBITDA
Fluoropolymers: Tailored Solutions for Growth Opportunities
14
Diverse End-Use Applications
Chemours delivers high value fluoropolymer solutions used in
complex and highly demanding applications
Market Dynamics
Demand conditions driven by GDP growth
in North America Europe and slower growth
in China
Weak Euro and Yen in 2015 led to pricing
pressures
Chemours’ strong collaborations in
automotive, telecommunications, and
consumer electronics markets provide solid
base of demand and growth opportunities
Targeted innovation and application
development in fluoropolymer resins and
formulations expected to produce future
customer solutions
Energy Storage – Nafion™
Specialty ion exchange polymer
membrane to store alternative
energy in flow batteries
Consumer Electronics – Teflon™
Faster data speeds & power/data
combination cable designs
Turbo Charger Hoses – Viton™
Enable higher engine temperatures
and advanced technology options to
drive fuel efficiency improvements
Chemical Solutions
Divest
Total gross proceeds of ~$695 million - Average multiple of ~10 – 12x
Minimal net free cash flow impact
Focus to drive out stranded costs as part of Five-Point Transformation Plan
Clean & Disinfect
• Sold to Lanxess for $230 million
• Completed September 2016
Sulfur
• Sold to Veolia for $325 million
• Completed July 2016
Aniline
• Sold to Dow for ~$140 million
• Completed March 2016
Strategic Review of Chemical Solutions Portfolio Complete
16
Strategic Review Results
* Includes Methylamines, Glycolic and Vazo product lines
Close
Reactive Metals
• Expected end of 2016
Retain
Cyanides Belle, WV Site*
Chemours Cyanide Opportunity
17
Americas Sodium Cyanide Market The Chemours Advantage
Aligned with customer values
On-purpose producer, reliable supply
Differentiating product stewardship
Strong logistics network
Long term contracts
9% CAGR
2014
(252 KTons)
2019
(393 KTons)
Imports
NAFTA
Producers
Chemours Imports
NAFTA
Producers
Chemours
Americas NaCN demand forecast to grow at 9%
CAGR over next four years
Remains net import market
Deteriorating ore quality contributes to underlying NaCN
demand growth
Source: Chemours internal estimates
Financial Position
2Q16 Overview
19
Second Quarter Financial Summary
2Q16 2Q15
∆
Yr/Yr
1Q16
∆
Seq.
Net Sales $1,383 $1,508 ($125) $1,297 $86
Adj. EBITDA 187 127 $60 128 $59
Adj. EBITDA
Margin (%)
13.5 8.4 5.1 9.9 3.6
Net Income
(loss)
(18) (18) 0 51 (69)
Adj. Net Income 49 17 32 11 38
EPS1 ($0.10) ($0.10) $0 $0.28 ($0.38)
Adj. EPS1 $0.27 $0.09 $0.18 $0.06 $0.21
Free Cash Flow2 $11 ($145) $156 ($219) $230
($ in millions unless otherwise noted)
See reconciliation of non-GAAP measures in the Appendix
1 Periods prior to 3Q15 are represented by pro forma diluted EPS
2 Defined as Cash from Operations minus cash used for PP&E purchases; 1Q16 excludes benefit from DuPont prepayment of ~$166M as at 3/31/16
Year-over-year
Transformation Plan cost
reductions and Opteon™ growth
were partially offset by lower
TiO2 pricing and currency
headwinds
Continued meaningful
improvement in Free Cash Flow
performance
Sequentially
Benefits from seasonal TiO2 and
refrigerant volumes, higher TiO2
pricing, cost reductions and
Opteon™ growth led to
improved profitability
Liquidity Profile Since Spin
20
$0.0
$1.0
$2.0
$3.0
$4.0
$0.0
$0.5
$1.0
$1.5
$2.0
2Q15 3Q15 4Q15 1Q16 2Q16
Cash Revolver Availability Net Debt
2Q15 3Q15 4Q15 1Q16 2Q16
T
o
ta
l
Liquidit
y
*
($B
)
Net D
e
b
t ($B
)
$0.7B
$3.8B
$1.0B
$3.8B
$1.1B
$3.6B $3.6B $3.5B
$1.2B
$1.1B
*Defined as cash plus revolver availability
2016 Outlook Reaffirmed
21
2016 Adjusted EBITDA Expected to be Greater than 2015,
including $200M of Transformation Savings,
Generating Modestly Positive Free Cash Flow
Market Factors
• TiO2 price
• Currency
• End-market demand
Chemours Initiatives
• Cost reductions
• Working capital productivity
• Ramp up in Opteon™
• Altamira start-up
Key Factors Influencing 2016 Performance:
Appendix
Quality and performance of TiO2 products differ considerably
across segments of the market that serve different applications
TiO2 Applications
Specialty and High Quality Applications: 40%
Performance polymers, Exterior Architectural Paint,
Automated Tint System Coatings and durable
Industrial coatings
Commands premium due to superior pigment
product design & performance
Pharma, Food and Cosmetics*
Multi-Purpose Applications: 30%
High quality architectural paint, white,
industrial coatings
Commands premium due to interior/exterior durability
and a high level of product consistency
Fit for Use Applications: 20%
Interior arch factory color paint, fibers, non durable
polymer applications
Less stringent batch to batch variability requirements
(lesser pigment quality needs)
Lowest Quality requirement Applications: 10%
Ceramics, road paint
C
h
e
mour
s
Fo
c
u
s
23
* Chemours does not participate in these applications
Segment Net Sales and Adjusted EBITDA (unaudited)
($ in millions unless otherwise noted)
LTM
2Q16 2Q16 1Q16 4Q15 3Q15
Titanium Technologies 2,322$ 596$ 521$ 589$ 616$
Fluoroproducts 2,194 573 531 515 575
Chemical Solutions 1,010 214 245 256 295
TOTAL NET SALES 5,526$ 1,383$ 1,297$ 1,360$ 1,486$
LTM
2Q16 2Q16 1Q16 4Q15 3Q15
Titanium Technologies 307$ 111$ 54$ 62$ 80$
Fluoroproducts 361 105 85 80 91
Chemical Solutions 45 11 10 16 8
Corporate & Other (97) (40) (21) (26) (10)
TOTAL ADJUSTED EBITDA 616$ 187$ 128$ 132$ 169$
LTM
2Q16 2Q16 1Q16 4Q15 3Q15
Titanium Technologies 13.2% 18.6% 10.4% 10.5% 13.0%
Fluoroproducts 16.5% 18.3% 16.0% 15.5% 15.8%
Chemical Solutions 4.5% 5.1% 4.1% 6.3% 2.7%
Corporate & Other 0.0% 0.0% 0.0% 0.0% 0.0%
TOTAL CHEMOURS 11.1% 13.5% 9.9% 9.7% 11.4%
* - Note summation of individual quarters may not sum to LTM figure due to rounding.
SEGMENT NET SALES (UNAUDITED)
SEGMENT ADJUSTED EBITDA (UNAUDITED)
SEGMENT ADJUSTED EBITDA MARGIN (UNAUDITED)
GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Net
Income Reconciliations
25
($ in millions unless otherwise noted)
LTM
2Q16 2Q16 1Q16 4Q15 3Q15
Net income (loss) attributable to Chemours (82)$ (18)$ 51$ (86)$ (29)$
Non-operating pension and other postretirement employee benefit costs (32) (7) (7) (8) (10)
Exchange losses (gains) 4 14 6 28 (44)
Restructuring charges 250 9 17 85 139
Asset related charges 136 63 - 3 70
(Gain) loss on sale of assets or business (79) 1 (89) 9 -
Transaction costs 24 12 3 9 -
Legal and other charges 26 13 5 8 -
Provision for (benefit from) income taxes relating to reconciling items
1
(116) (38) 25 (43) (60)
Adjusted Net Income 131$ 49$ 11$ 5$ 66$
Net income attributable to noncontrolling interests - - - - -
Interest expense, net 211 50 57 53 51
Depreciation and amortization 275 73 66 66 70
All remaining (benefit from) provision for income taxes 1 (1) 15 (6) 8 (18)
Adjusted EBITDA 616$ 187$ 128$ 132$ 169$
Adjusted earnings per share, basic
2
0.72$ 0.27$ 0.06$ 0.03$ 0.36$
Adjusted earnings per share, diluted
2
0.72$ 0.27$ 0.06$ 0.03$ 0.36$
1 Total of provision for (benefit from) income taxes reconciles to the amount reported in the interim consolidated statement of operations for the three
months ended June 30, 2016, March 31, 2016, September 31, 2015, June 30, 2015, March 31, 2015 and year ended December 31, 2015.
2 On July 1, 2015, E.I. du Pont de Nemours and Company distributed 180,966,833 shares of Chemours' common stock to holders of its common stock.
Basic and diluted earnings per common share for the three months ended March 31, 2015 and June 30, 2015 were calculated using the number of shares
distributed on July 1, 2015.
Free Cash Flow Reconciliation
26
($ in millions unless otherwise noted)
LTM
2Q16 2Q16 1Q16 4Q15 3Q15
C sh provided by (used for) operating activities 541$ 90$ 36$ 302$ 113$
Purchases of property, plant and equipment (400) (79) (89) (127) (105)
FREE CASH FLOW
3
141$ 11$ (53)$ 175$ 8$
3 As of June 30, 2016 and March 31, 2016, remaining DuPont prepayment was ~$131M and ~$166M, respectively. Free Cash Flow excluding the DuPont
prepayment was ($173M) and ($219M) for the six months ended June 30, 2016 and three months ended March 31, 2016, respectively.
27 ©2016 The Chemours Company. Chemours™ and the Chemours Logo are trademarks or registered trademarks of The Chemours Company