- TSS Segment Growth: Thermal & Specialized Solutions segment achieved double-digit Opteon sales growth of 37% YoY, driven by refrigerant adoption and data center demand.
- Free Cash Flow: Generated $92 million in quarterly free cash flow, with guidance for $300ā$350 million annual conversion in 2026.
- Debt Reduction: $300 million sale of Kuan Yin site to reduce leverage to below 3x adjusted EBITDA by 2026.
- 2026 Guidance: Projects net sales growth of 3ā5% and adjusted EBITDA of $800ā$900 million, with capex of $275ā$325 million.
- Inventory Overhang: Inventory levels surged 50% since 2019 despite 5% revenue growth, prompting 2026 reduction targets.
Segment Performance
The TSS segment delivered another great year, breaking quarterly records as adoption of Opteon refrigerants accelerates. The company made meaningful progress towards commercializing its two-phase liquid cooling solution. In the Advanced Performance Materials (APM) segment, there is sustained growth and continued order book strength in Performance Solutions products. The TT segment saw stable demand and announced a price increase, which has been well-received.
Guidance and Outlook
For 2026, the company expects net sales growth to be between 3% to 5% and adjusted EBITDA to range from $800 million to $900 million. The company anticipates capital expenditures to be between $275 million and $325 million, with free cash flow conversion to be above 25%. The midpoint for Q1 is $135 million, and the full-year midpoint is $850 million. The guidance assumes low ranges of zero to five in TT and APM for Q2, with some unusual items.
Valuation and Leverage
The company's current valuation metrics show a P/E Ratio of -6.64, P/B Ratio of 1.25 is not available but 10.25 is, P/S Ratio of 0.44, and EV/EBITDA of -1281.43. The Net Debt / EBITDA ratio is -770.6, indicating a significant reduction in debt. Analysts estimate next year's revenue growth at 5.1%. The company's target is to achieve a net leverage ratio below four times adjusted EBITDA by the end of 2026 and below three times adjusted EBITDA across economic cycles.
Operational Focus
Chemours is investing around $5 million per quarter in long-term growth opportunities and has formally rolled out the Chemours Business System to embed lean principles and reduce waste. The company aims to control costs, improve pricing, and drive growth through its businesses. Inventory reduction is a key focus, particularly in the titanium dioxide segment, where Asia revenues declined 30% due to a trend towards fair-trade markets in India.