The Chemours Company Reports Third Quarter 2022 Results

Continued strength in APM and TSS despite uncertain macroeconomic conditions

The Chemours Company (“Chemours”) (NYSE: CC), a global chemistry company with leading market positions in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, today announced its financial results for the third quarter 2022.

Third Quarter 2022 Results & Highlights

• Net Sales of $1.8 billion, up 6% year-over-year
• Net Income of $240 million with EPS of $1.52, up $0.25 year-over-year
• Adjusted Net Income^* of $196 million with Adjusted EPS^* of $1.24
• Adjusted EBITDA^* of $363 million, down (2)% year-over-year
• Free Cash Flow of $229 million
• Completed $79 million of share repurchases in the quarter; and $351 million of repurchases year-to-date as of September 30, 2022
• Announced planned $200 million investment in Nafion™ manufacturing capacity to support green hydrogen growth
• Announced plans to enter into a Joint Venture with BWT/FUMATECH to develop heavy-duty fuel cell membranes, subject to regulatory approval
• On October 25, 2022, the Company's Board of Directors approved a fourth quarter dividend of $0.25 per share, consistent with the prior quarter

“Our Thermal & Specialized Solutions (TSS) and Advanced Performance Materials (APM) segments continued to deliver strong results despite macroeconomic headwinds and are both poised to set full-year records,” said Mark Newman, Chemours President and CEO. “In APM, we delivered our third straight record quarter and expect our announced Nafion™ capacity expansion and Joint Venture with BWT/FUMATECH to support long term growth in the hydrogen electrolyzer and fuel cell space. In TSS, we had a record 3Q for the business, and continue to lead the global transition to low-GWP thermal management solutions. Strength in APM and TSS drove the majority of our earnings, and helped to offset the headwinds in our Titanium Technologies (TT) segment. I’d like to thank all of our global employees for remaining focused on serving our customers and finishing the year strong in a time of increasing uncertainty.”

Third quarter 2022 Net Sales were $1.8 billion, 6% higher than the prior-year quarter. Price was a positive contributor to the improved results, up 18%, partially offset by lower volumes of (5)% and currency headwinds of (3)%, on a year-over-year basis. Portfolio change, driven by the sale of our Mining Solutions business in 2021, was a (4)% headwind on a year-over-year basis.

Third quarter Net Income was $240 million, resulting in EPS of $1.52, up $0.25 vs. the prior-year quarter. Adjusted Net Income was $196 million. Adjusted EPS was $1.24, down $(0.03), or approximately (2)% vs. the prior-year quarter. Adjusted EBITDA for the third quarter of 2022 declined (2)% to $363 million in comparison to $372 million in the prior-year third quarter. Price continued to be ahead of cost in the third quarter, partially offset by lower volumes of (9)% and currency headwinds of (10)%, or $(37) million headwind vs. the prior-year quarter due to a stronger USD.

Titanium Technologies (TT)

Delivering high-quality Ti-Pure™ pigment through customer-centered innovation and sustainability leadership

In the third quarter, Titanium Technologies segment Net Sales were $877 million, down $(31) million, or (3)%, from $908 million in the prior-year quarter. Compared with the prior-year quarter, price increased 16%, offset by volume which declined by (16)%, and currency was a (3)% headwind. Price increases were primarily due to contractual price changes, whereas lower volumes reflect weakening market demand, particularly in Europe and Asia. Price was flat sequentially, while volume declined by (8)%, reflecting ongoing market weakness in the aforementioned regions. Currency was a slight (1)% headwind over the prior-quarter. Segment Adjusted EBITDA was $137 million, down (38)% as compared to the prior-year quarter, resulting in a segment Adjusted EBITDA Margin of 16%. Adjusted EBITDA Margin decreased by (800) basis points, primarily driven by a decrease in volume and higher raw material, energy, and logistics costs.

Thermal & Specialized Solutions (TSS)

Driving innovation in low GWP thermal management solutions to support customer transitions to more sustainable products

The Thermal & Specialized Solutions segment delivered record third quarter financial results. Net Sales were $417 million, up $99 million, or 31%, from the prior-year quarter. Price contributed 25%, and volume increased 8%, while currency was a slight (2)% headwind. Price increased across the portfolio, excluding automotive end-markets, due to changing market and regulatory dynamics as well as steady value-based pricing growth through our refrigerants portfolio. Volume increased due to the continued adoption of Opteon™ low GWP refrigerants across nearly all regions and end-markets. Price and volume decreased (3)% and (16)% respectively, on a sequential basis. Sequential price and volume declines were primarily driven by regional mix associated with typical seasonal refrigerant demand trends. Segment Adjusted EBITDA improved $59 million, or 57%, to $162 million vs. the prior-year quarter, driven by the aforementioned increase in price and favorable product mix, partially offset by higher raw material costs. Third quarter Adjusted EBITDA Margin of 39% reflects healthy expansion from the prior-year quarter driven by strong pricing, volume, and mix shift to higher margin applications.

Advanced Performance Materials (APM)

Creating a clean energy and advanced electronics powerhouse

The Advanced Performance Materials segment delivered record-breaking financial results for the third consecutive quarter. Segment Net Sales were $450 million vs. $356 million in the prior-year quarter, an increase of 26%. Price contributed 23%, and volume 9%, to the stronger results, while currency was a headwind of (6)%. Global average selling price increased due to increasing sales in high-value end-markets, including advanced electronics, semiconductors, and clean energy, as well as customer level pricing actions to offset increased raw material and energy costs. Volume increased due to higher global customer demand across key markets, partially offset by supply chain challenges and lower demand in non-strategic end-markets where fade had been anticipated, given our strategy to drive higher value, differentiated product offerings. Sequentially, price increased by 4%, and volume rose 10%, reflective of strong demand for our specialized product offerings, while currency was a headwind of (2)%. Adjusted EBITDA of $112 million was up $36 million, or 47%, from the prior-year quarter, and Adjusted EBITDA Margin was 25%, representing a 400 basis point improvement over the prior-year period due to strong operating leverage, partially offset by higher raw material, energy costs in Europe, logistics costs, and growth investments.

APM continues to expand its presence in the growing Hydrogen Economy through strategic investments, including a planned $200 million investment to expand Nafion™ ion exchange materials technology platform capacity and a recently announced plan to enter into a Joint Venture with BWT/FUMATECH to accelerate heavy-duty fuel cell (HDFC) membrane technology development, which is subject to regulatory approval.

Other Segment

The remaining Chemical Solutions business in Other Segment had Net Sales and Adjusted EBITDA in the third quarter 2022 of $33 million and $3 million, respectively.

Corporate and Other Activities

Corporate and Other was an offset to third quarter Adjusted EBITDA of $(51) million vs. $(42) million in the prior-year quarter. The increase over the prior year was driven by higher legacy legal costs and long-term performance-related compensation expenses.

Liquidity

As of September 30, 2022, consolidated gross debt was $3.6 billion. Debt, net of $1.2 billion cash, was $2.4 billion, resulting in a net leverage ratio of approximately 1.5 times on a trailing twelve-month Adjusted EBITDA basis. Total liquidity was $2.0 billion, comprised of $1.2 billion cash, and $0.8 billion of revolving credit facility capacity, net of outstanding letters of credit.

Cash provided by operating activities for the third quarter of 2022 was $301 million vs. $311 million in the prior-year quarter. Capital expenditures for the third quarter of 2022 were $72 million vs. $67 million in the prior-year third quarter. Free Cash Flow for the third quarter of 2022 was $229 million vs. $244 million in the prior-year quarter. During the quarter we repurchased various portions of our senior unsecured notes in the open market for $53 million and funded our $100 million escrow payment as per the MOU agreement. In the quarter, we repurchased $79 million of common stock, resulting in total year-to-date share repurchases of $351 million as of September 30, 2022.

Outlook

As previously announced, Adjusted EBITDA for FY 2022 is expected to be between $1.40 billion and $1.45 billion. Free Cash Flow is expected to be greater than $575 million.

Mr. Newman concluded, "Looking ahead, we believe we have the best assets, team, and strategy to continue to deliver strong performance through the economic cycle and create value for our stakeholders, despite the macroeconomic uncertainty. We remain focused on our four key priorities to enhance shareholder value, and on delivering another solid year of financial results.”

Conference Call

As previously announced, Chemours will hold a conference call and webcast exclusively for Q&A on October 26, 2022, at 8:00 AM Eastern Daylight Time. A transcript of the prepared remarks, the webcast, and additional presentation 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.

About The Chemours Company

The Chemours Company (NYSE: CC) is a global leader in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. We deliver customized solutions with a wide range of industrial and specialty chemicals products for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and consumer electronics, general industrial, and oil and gas. Our flagship products include prominent brands such as Ti-Pure™, Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™. The company has approximately 6,400 employees and 29 manufacturing sites serving approximately 3,200 customers in approximately 120 countries. Chemours is headquartered in Wilmington, Delaware and is listed on the NYSE under the symbol CC.

For more information, we invite you to visit chemours.com or follow us on 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, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax Rate, Return on Invested Capital 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, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax Rate, Return on Invested Capital and Net Leverage Ratio to evaluate the company's performance excluding the impact of certain noncash charges and other special items which we expect to be infrequent in occurrence in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.

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. 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" 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, 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, 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, plans for dividends or share repurchases, sufficiency or longevity of intellectual property protection, cost reductions or savings targets, plans to increase profitability and growth, 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. Forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized. These statements are not guarantees of future performance. Forward-looking statements also involve risks and uncertainties that are beyond Chemours' control. In addition, the current COVID-19 pandemic has significantly impacted the national and global economy and commodity and financial markets, which has had and we expect will continue to have a negative impact on our financial results. The full extent and impact of the pandemic is still being determined and to date has included significant volatility in financial and commodity markets and a severe disruption in economic activity. The public and private sector response has led to travel restrictions, temporary business closures, quarantines, stock market volatility, and interruptions in consumer and commercial activity globally. Matters outside our control have affected our business and operations and may or may continue to hinder our ability to provide goods and services to customers, cause disruptions in our supply chains, adversely affect our business partners, significantly reduce the demand for our products, adversely affect the health and welfare of our personnel or cause other unpredictable events. Additionally, there may be other risks and uncertainties that Chemours is unable to identify at this time or that Chemours does not currently expect to have a material impact on its business. Factors that could cause or contribute to these differences include the risks, uncertainties and other factors discussed in our filings with the U.S. Securities and Exchange Commission, including in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 and in our Annual Report on Form 10-K for the year ended December 31, 2021. Chemours assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law.

* For information on our non-GAAP measures, please refer to the attached "Reconciliation of GAAP Financial Measures to non-GAAP Financial Measures (Unaudited)"

The Chemours Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

(Dollars in millions)

GAAP Net Income Attributable to Chemours to Adjusted Net Income and Adjusted EBITDA Reconciliation

Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) is defined as income (loss) before income taxes, excluding the following items: interest expense, depreciation, and amortization; non-operating pension and other post-retirement employee benefit costs, which represents the components of net periodic pension (income) costs excluding the service cost component; exchange (gains) losses included in other income (expense), net; restructuring, asset-related, and other charges; (gains) losses on sales of businesses or assets; and, other items not considered indicative of the Company’s ongoing operational performance and expected to occur infrequently, including Qualified Spend reimbursable by DuPont and/or Corteva as part of the Company's cost-sharing agreement under the terms of the MOU that were previously excluded from Adjusted EBITDA. Adjusted Net Income is defined as net income (loss) attributable to Chemours, adjusted for items excluded from Adjusted EBITDA, except interest expense, depreciation, amortization, and certain provision for (benefit from) income tax amounts.

The Chemours Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

(Dollars in millions, except per share amounts)

GAAP Earnings per Share to Adjusted Earnings per Share Reconciliation

Adjusted earnings per share (“EPS”) is calculated by dividing Adjusted Net Income by the weighted-average number of common shares outstanding. Diluted Adjusted EPS accounts for the dilutive impact of stock-based compensation awards, which includes unvested restricted shares. Diluted Adjusted EPS considers the impact of potentially-dilutive securities, except in periods in which there is a loss because the inclusion of the potentially-dilutive securities would have an anti-dilutive effect.

The Chemours Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

(In millions, except per share amounts)

2022 Estimated GAAP Net Income Attributable to Chemours to Estimated Adjusted Net Income, Estimated Adjusted EBITDA and Estimated Adjusted EPS Reconciliation (*)

The Chemours Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

(Dollars in millions)

GAAP Cash Flow Provided by Operating Activities to Free Cash Flows Reconciliation

Free Cash Flows is defined as cash flows provided by (used for) operating activities, less purchases of property, plant, and equipment as shown in the consolidated statements of cash flows.

2022 Estimated GAAP Cash Flow Provided by Operating Activities to Estimated Free Cash Flow Reconciliation (*)

Return on Invested Capital Reconciliation

Return on Invested Capital (“ROIC”) is defined as Adjusted EBITDA, less depreciation and amortization (“Adjusted EBIT”), divided by the average of invested capital, which amounts to net debt, or debt less cash and cash equivalents, plus equity.

The Chemours Company

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

(Dollars in millions)

Net Leverage Ratio Reconciliation

Net Leverage Ratio is defined as our total debt principal, net, or our total debt principal outstanding less cash and cash equivalents, divided by Adjusted EBITDA.

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