Venator Materials (VNTRF) 7 Nov 192019 Q3 Earnings call transcript

Good day and welcome to the Venator Third Quarter Earnings Call. [Operator Instructions] Please note this event is being recorded. I would like to turn the conference over to Jeffrey Schnell, Director of Investor Relations. Please go ahead.

Thank you, Francesca and good morning everybody. Director Relations Schnell, Venator Jeffrey am of for Investor Materials. I earnings Venator’s third to call. quarter Welcome XXXX

Joining us President call and on the Kurt and Turner, Ogden, CEO President Executive Vice and today CFO. are Simon

press website released our and the XXXX the This morning release to earnings posted our we and slides venatorcorp.com. third for quarter via at accompanying release

involve forward-looking this risks performance. current future. All the call, expectations or for our are that we During uncertainties reflect statements and may and are not projections expectations, future they make they statements about of while such guarantees

should SEC could regarding during the You revising review differ or more our results plan actual quarter. do the filings materially that or for on factors We forward-looking these updating projections with expectations. any the statements to from information cause not publicly

will non-GAAP refer adjusted income measures and EBITDA, net as cash to net such debt. adjusted flow and EBITDA, free also We financial

to measures to release directly find most comparable the can website. financial our has reconciliations which GAAP You earnings the been our in posted

is the my over to Simon. It to call pleasure turn now

good Jeff everyone. Thanks, morning and

control, of challenges are diluted begin the $X.XX earnings quarter. subsequent X. most Slide these The and on adjusted delivered Venator third of half million adjusted macroeconomic the EBITDA, headwinds, XXXX uncertainty first experienced our persisted Let’s beyond $XX of in Notwithstanding in which and per share.

TiOX to primarily customer region were successive of most to in highest-priced second the network our which the in adjusted price compared year-over-year for On remained result the declined Europe, impacted for our titanium XXXX. a a price approach currency year year, volatility. quarter, EBITDA and third functional dioxide local period. of average the prices managing our basis, million the basis Slide quarter. to on in third TiOX $XX titanium and selling compared was This X million generated segment, Turning in products supply to stable prior but sequential The in X% quarter of dioxide was tailored our segment prior the reduce $XX a

value Asia downwards shifted with that compared we the stable prices functional U.S. pricing remained pricing exited American As American quarter, North compared Specialty region, quarter prior in the the in third to prior Europe year of dollar of the certain by the higher when period more China. modest dynamics uncertainty. the of a on average Nonetheless, relative also stability region expected, these to North to Pori our amid prices remained underscore resilient third transferring Europe other leadership third to sites demand in prices prices strengthening most our average was lower has position and production to quarter demand more below in primarily in stable Prices weaker and our TiOX that XXXX, North quarter. related products. in stable. pricing TiOX from the the In to TiOX ultimately to moved network compared trade American driven commitment remained compared products to the stable applications. basis. Globally, de-stocking in

primarily prior increase products certain availability of of prior broadly the across end-use significantly high volumes and to was year the The volumes applications compared prior including impacted and and the across compared range, dioxide average Titanium period to to compared at inventory plastics. and quarter the demand our period and improved which coatings, TiOX applications, paper end of a customer of XX% sales reductions. declined seasonal geographies. by was products, differentiated high increased broadly new increased result

trends regional impacting are well-defined. industry the The TiOX

Here are some additional region. by comments

of normalized stable was in quarter tailored prior America North at non-slurry supplemented new Charles approach compared Lake and which to smaller to of increased sites customer sell average position we our the by in and XXXX and in in customers was price at our our mentioned quarter, Demand applications. sold prior aimed The manufacturing TiOX quarter calls, selling earnings in As sales on the the into North third differentiated out price volatility. primarily our reflects third products. America, TiOX reducing

a Asia of and consumer Asia market in reflecting prices the was our China global position though in fragmented. the is important for highly stable. market and significant in Asia remained excluding remains TiOX differentiated sequentially China stable were an comparatively weak third in quarter, the region. Demand TiOX in industry demand

comparable approximately of the from benefiting reduced volumes is accounts to third to to improved our our facility North market in Asia revenue. and differentiated to and is position new modestly, exposure largest differentiated in Europe of our in of for specialty America segment’s manufacturing limited demand prior to the Compared by region. and higher exports in XXXX Europe increased compared period, the the customers and for to levels. their half and of Our quarter products Malaysia when inventory TiOX sales size year supplemented TiOX

average my in TiOX declined compared but European year the a the on earlier basis. mentioned remarks, price sequential As in stable to the quarter, prior market remained

Program, valuation, comments cycle. focused on Business will expected remain we our a were which inventory a million provide ores nonrecurring inflation, absorption rates, shortly. outlook negative TiOX benefit competitiveness TiOX and $X Business the fundamentals a contribution of and headwinds In utilization from overhead material change including portfolio longer-term Notwithstanding and improving and industry with lower our mostly million our enhancing seasonal production the TiOX from our are the near-term network. our more a I and e headwinds, $X incurred These Improvement higher specialty were as plant offset raw variable from delivering manage favorable. corresponding cost on our in throughout high-grade the pressures cost Program. quarter, we Improvement fixed benefit higher third increased benefits by costs, absorption which

within for currency the XXXX. in slightly the mix, volumes primarily additive the prior pass-through to businesses by and in volumetric fourth primarily North by demand average impact declined a lap price. volumes large offset which impacted a We policies. X% Turning construction-related products in will and automotive lower revenues X as the customer channels. lower due quarter, of driven business. these muted. pigments weaker offset than treatment impact demand. sales X% sales average comments compared for to and volumes year impacted demand continuation selling lower cost provide in and prior the ongoing due to the foreign headwind quarter In increase benefit decline performance increased to of the the and additives. by applications were The by some and third of in a three headwind de-stocking these self-help we operational primarily a quarter The compared to this performance plastics was reflects third additives, expect actions I the will period year in from applications volumes related of lost to period aggressive X% tariffs price from due were mix customer selling Slide by the the partial higher Color XX% from to to Functional continue trade negatively a lower expected the China volumes, prior the quarter declined year-over-year America to XXXX. substantially efforts and will current prices, within and and from be impact X% electronics into of additional an in average in unfavorable tender on enhancement to partially our U.S. from benefited a result Timber main

demand to We continue. expect conditions weaker

by expected I and volumes of earlier up the volumes million from generated segment sales EBITDA primarily lower adjusted higher $XX Additives improvement including than the described quarter quarter, million. and $X our costs business year-over-year principally year weaker benefits prior and was the pricing in sequential muted in to of our Performance decline growth from $X attributable headwinds a EBITDA additives the to The functional compared to due resulting The million in lower program business. offset and

EBITDA plant overhead increased a change the third nonrecurring rates we to had million utilization a In from quarter in which benefit absorption. our $X

cost performance electronics our within we steps of Over forces, we review be severe than the We in $XX businesses. profitability. EBITDA less a the million generated We automotive tempering estimate expect taken streamline of more XXXX. color end-uses, will quarter. additives light comprehensive meaningful business each the pigments segment for the in In our conducted XXXX market EBITDA especially within structure third have X and of now are past to years, in

We sale The process continue we attractive have is have X years improvements the financial Citi result, explore not As over the those $XX we will self-help we prospects of million color engage this taken, cost cash flow free pigments approximately actions identified to organic of optimize similar business and to inorganic combination In a and for by a have business. to The take, amount profitability generation. interim, augment has next we further structure complimentary offerings and the and parties intended are a identified that reinforce believe the plan are and have are cost believe this the incremental of improve growth we expressed business. investment. as the meaningful more therefore interest of to these color retained on The business measures potential our advisor We synergies in providing acquiring commentary diversified a who the to efficiencies are cash provide ongoing, shareholder of be XXXX customers. enhance color the and expected business. portfolio generation value, To global be the will and pigments we of competitiveness will savings pigments and matter. and with there of to a results. actions

financials. then return pass the our comments With will over outlook. to that, now the will to to I discuss Kurt I provide call Kurt? on

Simon. Thanks,

business to our discuss Slide X turn to program. Let’s improvement

level. our segment. all end XXXX manufacturing at in be in ending We the deliver of generate operational to completion intend and quarter business We of year program a improving following from of Performance actions the program. cost successful XXXX, the we by improvement to program improvement our $X on an complete continue program. full benefits $XX of commenced our captured the and annual our other the XXXX of prior to cash run-rate intensely million. benefit the have $XX necessary an through accumulated XXXX, improvement improvements million our In the operational We business flow. Additives in of third additional fourth on SG&A to target realized Year-to-date, manufacturing benefit we in TiOX XXXX our quarter improvement and strengthening the million designed The reduction efficiencies, is EBITDA EBITDA and focused business

currently accelerated capture and XXXX $XX to XXXX. well forecast than ahead more of year million original have of We the full generate the for more the in in expect quarter, our fourth

our pleased promised. benefits are to-date are the as and ability with confident We to in execution the targeted deliver

segment, was in decline In EBITDA third facilities certain and Business on continue the The also from higher raw of the compared our new total our average benefit improved differentiated X. the to performance year as cost third lower positive Dioxide in attributable aggressive by the Simon quarter compared described of fixed overhead volumes the an we initiatives. a our which ahead Slide nonrecurring of net were year to Improvement reasons material benefits to lower the in quarter to of XXXX. demand Most higher earlier, price costs a utilization plant TiOX and in million lower target period. resulting a to turn products, the period. manifest Titanium inventory adjusted change absorption at corresponding Let’s for partially increased sales and additives $X Notwithstanding selling million deliver result valuation rates, production were improvement EBITDA $XX offset from declined our volumes as prior prior sales increased of Program absorption,

benefit lower and was volumes quarter prior Seasonally total were and than sales the contributor EBITDA by valuation. in were rates, though the overhead offset declined change TiOX increased largest performance which the nonrecurring an our modest by materials $X absorption adjusted a and decline. plant Pricing headwind, utilization to to in $XX Compared raw to million inventory sequential additives stable more corresponding million. due

benefit Program which to from from modest continue our Improvement a other. headwind Business and we FX offset ongoing Additionally,

the at the leverage ratio net quarter resources, of Total $XXX adjusted totaled quarter, Turning and million approximately We our revolving debt cash lending not in under of our net X trailing our the third and of asset-based months facility. approximately maturities availability un-drawn and do million, $XXX X.Xx have EBITDA. at end $XXX to XX $XX end any significant Slide the XXXX. capital of consisting was our until liquidity million debt was million

which tax We benefit. to rates. generated we continue net cash function low countries where to the continue enjoy $X.X losses of from This primarily is relatively operating income the billion a in and is

tax under by affected certain than adjusted the which we allowances applied we the adjusted XXXX rate in our in effective rate current our Beginning is higher which in and XXXX, jurisdictions. various significantly effective quarter to second the tax a average mix applicable tax adjusted tax be operate income we Therefore, of jurisdictions to weighted Our is rate XX% long the rate expense of which effective in tax of better which and valuation jurisdictions expect expected losses term in tax we reflects approximately XX%. operate. XX%, normalized

Our XXXX XX% effect. cash to less our will rate tax guidance long-term and be $XX million than of in XX% taxes remains cash

We Total proceeds cross-currency the quarter $X was a U.S. contracts, concurrently new rate $XX million cost of our that not third monetization more profits. into money. include effectively million interest X cross-currency debt interest and cash utilizes euro-denominated flow new our in of of effect denominated in our and of free have the swaps does the use were X average from into contracts debt of the of converting reducing $XXX These million euros. weighted entered opportunistic rate

to Additionally, un-hedged are annual interest position. million approximately $X XXXX in compared or an approximately per through $XX year million maturity July savings

updated cash follows. as view preliminary are outlook uses XXXX Our for XXXX and of for

Our and CapEx. GAAP CapEx $XXX XXXX in to been Pori-related million forecast has million not $XX reduced approximately include for approximately of does

with previously or without operability the budget vigilant assets. As integrity we of CapEx will our stated, remain our compromising

interest capital outflow $XX at outlook than are excluding is taxes forecast is CapEx market Our preliminary cash to approximately million, and $XXX XXXX warrant. and expenditures should unchanged outlook than for XXXX $XX cash The in can less reduce be for conditions million less we this in further Pori-related million.

we XXXX, between interest cash $XX $XX expect For be to million to million.

XXXX to cash to expect estimate In to approximately reduced $XX have million. this payment $XX be million for million. XXXX, the restructuring We $XX we

to the million $XX the which $XX to working of offset that pigments anticipate mentioned, other year. in As in within and $XX costs be and identified new our XXXX in are due program to our we have self-help this be capital business. cash-neutral release, color benefit million. Simon of We million to expected XXXX pension Cash unchanged will are expenses

utilization of XXXX. expect the to to a corresponding current of year a in the the result in we and The on the quarter inventory XXXX in our of the industry capital working capital cash therefore forecast Working was full on reduction increased an EBITDA which modest on $XX deliver is our million $XX a third Based recorded TiOX compared basis, change valuation. XXXX. working net to and overhead of for plant our of change We cash source capital outlook, is absorption in rates impact unchanged. XXXX million benefit third a quarter

capital an working We update change will our call. quarter for provide fourth XXXX in on on expected

$XX million expenses are XXXX, Pori-related to to expenditures. total our capital in $XX $XX includes Finally, which approximately expected million of million

expenses $XX cash the importance intensely to million in positive far reducing uses thus cash near Pori-related expect returning We down spent the flow slowing we in is less of $XX on XXXX. be recognize to million are spend XXXX. have cash free our dramatically and We at and term. Pori focused The in than

expect cash to provide fourth to following XXXX preliminary We quarter uses call update early these next an year. earnings our

With that, concluding for turn to it I’ll I’ll remarks. back Simon turn

questions. for on summarize Thank I you, some comments open and to the Kurt. like would outlook I call the before provide

backdrop the a to So seasonal fourth to are to turning we XXXX. challenging expect continue. historical to Slide expected compared patterns quarter, quarter weak reflect the fourth X, in are of and economic Volumes

fundamentals material we on contend to rates pressure some cost higher well TiOX industry and absorption term additions margins from TiOX reduced an are fixed industry levels normalized maintenance Longer due in line remain favorable. operating expect headwind raw and lower inventories. consistent rates. and and and production are inventory understood normalized costs we growth our plant managing incremental capacity with as Additionally, with with industry

continues to to through value on be focused maximizing Venator following. shareholders the

seen our network actively The volatility. We range to which pricing of manage customer we net more price our and committed new with sales volumes production by XXXX along can increased products. are of due innovative more a to volume the diverse and inventories be implementation reduces effect in tailored approach higher Evidence customer stable and of agreements. TiOX our

phased on These applications. stable will strengthen our of actions track more transfer from specialty and in position the TiOX Pori. are with our value We these technology leadership higher

accelerated have We the $XX of business program, delivery improvement having million our improvements evidenced of delivered EBITDA by year-to-date.

We promised. delivering are intensely on remaining and as operational efficiencies costs focused the

color X EBITDA to identified over the business incremental also of our to have the We improve benefits next $XX profitability million the years. of pigments business

our taken free reduction reducing flow. XXXX evidenced focused on cash our in to by prior to expected positive usage cash and have reduce steps our outflows expectations, We are CapEx. Compared intensely we cash meaningful generating a

outlook usage a Our focused and spend. XXXX, for in on remain further to we compared reducing cash reduction preliminary XXXX this signals significant

We are in active near the fully committed includes the term potential business. portfolio to our color through exploring maximizing pigments of shareholder sale value optimization, which

to that, interest With I for in would Venator. for now you open like call your continued questions. the thank we

begin We Please question with is will Deutsche go ahead. session. from The Instructions] Begleiter question-and-answer David the first Bank. now [Operator

you. Good Simon, Thank on morning. first pigments… color

morning, Good David.

Good functional to makes are they pigments? than treatment, this more color additives and and – morning. you what longer business Why strategic timber term them not what

think important routes that always have on that that value. we previous David to to it’s calls we said note create Well, are I shareholder open

business. factories TiOX products, We recap, components somewhat let’s to main of pigments, smaller their with have to range allied red, offering And pigment. color our often a three main yellow, black our tried blue, characterize additives of the namely

denominated very into practicality which more plant. our timber couldn’t core the in in also that our strategy Duisburg, is of U.S. both separate in TiOX terms Germany franchise And timber integrated highly than finally, it’s which treatment performance in much franchise, be additives different a franchise, of our business. from Second, standalone terms and

So decided where to is our would business we part parcel we see way and pigments, aligned may see much we We whatever formal and are business of talking inquiries create timber pigments been – to That’s the color this Frankly, has that. value, a the were that run about range offer, well of we a inquiries, TiOX the have open mentioned we very we have so our business. we of color operations at time specifically have our our interest that subject are process shareholder there but functional what and additives we million the can program it remarks. now in much improve believe do than on and our $XX and to match as improvement to we consider that would business business. up against incremental prepared our we to our core very mentioned which our

That’s very XXXX? prices right stabilization your TiOX helpful. as what’s outlook And for given pricing just TiOX in now, some in lastly we speak

around – I shock this Well, start there, we back half we profile let’s had with the nothing this in mean demand. the tough last particular year of of XXXX In a industry has have challenging and industry think if XXXX. I second had through piece the this to stabilization XX% David. on demand look demand in in other tune course, of continued than like That’s much seen ‘XX. case, this all we pretty

past very I XX it’s people So, can most period think challenging months. a see these demand

a add just absorption, XX-day it are hasten our another flat the committed and use Despite to raw period, cost have and sequential the at I During activities the the stuck our at we contracted we seen up and despite business. in to And material the program, stabilization of of level tailored have very fixed around customer moderation appropriate approach, and suffering inventories remained costs manageable range mark. TiOX in the our the absolutely going circuit. two period, price this components, we yet

in stabilization, it’s see very be to through the on go could we a basis. So to very call we we I pricing it’s acknowledge would cycle. that a note this committed think are XXXX similarly too as committed budget NDA XXXX, range early We there go-forward specifically. of a important outcomes to In

continue could even tough the the on and macro course, of darken downside. Of course

at side, On higher the in level on a TiOX a other in our floor prices. Venator succeeded putting we have

think inventories a our right glimmer any through at across And which I customer fresh demand at you believe here, case, of into increases, that in we is opening now, a and pull-through a back and see there that margin are limited the of will level. a We stock base the can good point, and deceleration up raw make have demand set positive territory. our very across with material chain industry I

of are terms wouldn’t So in that’s course want set. does improvement very demand, it we in after, what some but well to need timing are call it of we

Thank you much. very

problem. No

from question ahead. with next Please Josh comes Spector The go UBS.

I Utilization time guys. over this hey, provide if you the could pretty material rates was detail is kind around past of out Yes, the wondering markup. year, called moved inventory non-recurring. have just you more it as have first guys some the but

makeup Just with of multiple or it’s how here? about adjustment the quarters for just adjustment forward wondering size fits kind it’s of kind if if it a the think a to of in trying look

have provide Yes, do This current we Perhaps standard can the costing enough size we and little of look rates those it more we assumptions that for those on expected standard at our clarity we called our the a as Thanks that’s because We recently, out. question. there that. material why has into here assumptions utilization of the outputs. feed have done for Kurt. a is costing continually asking And updated been that and bit and Josh. change, change

this because baked our standard we going quarter magnitude So, necessarily expect not in And would highlight it. not future I the that minimal expect It’s expect the of provide any be into transparency pretty and this assumptions to to forward. is the would way tried changes of for you had reverse. to to would we during costing something

Okay.

goods still kind at that normal rates I you remain decline, of of be expect XQ, to into will you relatively baked seasonal a right? looking mean high, cost if So have this at the point,

baked in. be That’s will Yes. to It correct. continue

basis raw of XXXX, give view perhaps think you should what a into your just of And just XQ perhaps a forward if curious Okay. kind think could we on into costs, incrementally an materials delta? outlook costs like kind in operating look other and of and that you on about

Simon. Yes, it’s

our feedstocks that question largest headwind million in number that couple and would item, being let’s effect. about very roughly out year spend called early preponderance said namely a of take of headwind on related a – of We times raw. about the a XQ, in $XX Let’s of spoke talk we the ores, three-fourth we two-third that front that so the We to half occur about that. get deceleration of and

So are that of what singular should in kind fourth the terms help you dimension in we millions of talking around quarter.

comment and not a as direct between type the to fundamental number should decelerates lag business that. Turning don’t traditionally XXXX, incurrence. of negotiations I’ve cost to on able any just go The see to direct TiOX That We’ve we’re through year. out to other points see cost to cost fundamentals in this this I’d have to willing still it on more and frankly on-boarding of area And to living fulsomely discussions don’t and combine inflationary pick and on cost is next of we a in we reason raws any come have raw seen be increases. yet But type to has fundamental definitively continues mentioned. outlook. comment prices. We we be only down, materials improved that supply/demand that

is we pace. million BIP million, on in. of in tracking another $XX and And terms of target we’ve area. to now color much in digging are That’s response $XX very hands. that our acceleration X/X about matters is pigments Our dug the The the ahead out in own – taking

structures. prime that’s the helpful. So our that’s response fixed to our part Hope costs of

you. Yes, thank

go next Barclays. The with ahead. Duffy is Fischer from Please question

around morning. the two of better Question is cash Pori. kind good first to Yes outflow – XXXX XXXX want in understand and I question buckets.

to of So bucket plant to your some one, the shut EBITDA? remediate just or that plants? adding incurred to the the would and two down start finishing we expect that it cost when other to cash in then should be bucket And equipment to actually cost moving

let and go Duffy, ahead me that. tackle

here just have reference #X materials, So Pori-related if our break in what the identified, of see we let’s we you items. out presentation where difference cash Slide

are $XX the million wind-down expenses CapEx bulk you in Pori we of exit that that associated estimate project spent a spending That on to we itself. the for with of as of year of XXXX. cash And have we million go included $XX million So that line of the has $XX is full early now we Pori that XXXX. The the had. in forward, there

Now as to the to row number, our manufacturing relates CapEx of is out of have moved capital network technology, expenditure Pori. of that $XXX there been it in approximately of XXXX in specialty the to in embedded rest the included year accommodate produce our above million $XX transfer there full million up for investment products the the

include product inks, such of the existing network. Now would into Pori grades transferred as we out grades specialty as go XXXX, we successfully have cosmetics, That many of fibers. product the into

different they those is we economics than to XXXX a right moving product course, It And had the in the of worth so benefits benefit that that and XXXX. are of we noting, see have in bulk rest now, will originally But out bit XXXX have we what that we’ll we back pound certainly the the were in network. XXXX. been the that planning out, on in little see of when moved

at just of question come up or volumes, second can XX% directionally you improvement in differentiated for least you on talk then And specialty? did functional, about Okay. guys, that TiOX a most

that Duffy. I’ll Yes, up, take

new response a year, being of value in innovative so globally let’s products. tough level, by the the stabilization was XXXX. the XXXX our XXXX So with to say along just measures demand industry quite year as Part introduction context down remember X%, here about is disappointing coming into

think chloride of terms new both you’ve half the the If in you think base. that are about the a there, rest, segments, being differentiated sulfate. and of and of plastics And in coating products European-centered about that form about step we in would talked I revenue up

So you number. European fundamentally that be driven But can a pro rata the specialties, it’s rest by mainly drill. not would

guys. you Thank Great.

Thank you, Duffy.

Markets. with comes question The Capital BMO from next McNulty Please ahead. John go

question was that my guys. pigments update business, EBITDA taking trailing Yes, what the With thank regard you us the can XX-month business? on color from just for you to

this John, Kurt. So is

that broken haven’t We out disclosure. public in our

that segment, units; pigments, represents there treatment. However, the of functional is three color have the what we total business approximately are of segment performance Each those said one-third within additives one and EBITDA. additives timber

hasn’t year Okay. so the I over assume? And changed last that

No, – right it’s that. around approximately it’s

Got it.

then your route those guess would do if like you that protect And be the monetizing correct? NOLs? correct which of proceeds that Is that assuming it is I down Okay. you with we asset, in certainly can sounds go help possible, the of

that’s Yes, absolutely correct.

leakage see So for itself. that’s And a that tax basis the pretty up we because pigments. we high very end we also say business where a minimal part should color I in would monetizing we with up tax also have deal end

No, the the then Sure. of, I kind I I helpful. makes markers you’re sense. can there, give of just that’d guess update aware we be in guess if timing question, lawsuit. Sure. you still the throes know last that road be should And on us any of Tronox that any

here. is Simon this Yes,

Venator. perspective, in the remains From breakthrough agreement is full which $XX under Tronox exclusivity payable million due So and recap. let’s with our from the

times in site. failure all the agreement that pay, believe Ashtabula we the So excuses to good heard definitive to for at to despite we acted reach the Tronox to purchase continue we faith

that we XXXX, give to So time. sense we like unfounded. say pressing believe set of And now any kind at claim the should the that there. of too What our a trial date are that and forward you runway can a counterclaims courts for look we March is

update. Thank very you Great. for much the

problem. No

is question of next Steve with go ahead. from The Please America. Byrne Bank

forward interest Lake good morning. debottlenecking was pulling level at your I just wondering in opportunities Yes, in what Charles? is

look was always mean, that from where here debottlenecking consider I plants any a partner our a call a of that we or I scale clear not look, standpoint. justify. about expansions because Charles Lake would case time. we’re to have debottlenecking at for would capacity felt our we’d what anything with And But or take would But is of we we or any look indeed there economics creep. a capacity at don’t yes, made the our sense we from think standpoint, talking us Yes, that it’s at

And you their little about you a into inventory and have some Simon, buy-in talk ones key your bit TiOX which market do visibility levels? can customers

it’s relatively the as United think we proportion of most route via people distribution slurry I not in Yes, are States and States. a that in know participatory United high – in the occurs

pioneered method in better of we which have we similarly fixed there visibility have which into area delivery do And ability silos, in, go participate position Europe, here inventory. that scale to – believe we much course, of rata transportation U.S., for customers solid a ours low – is with in visibility I because believe and years we we’re in of pounds feedback to from even which levels But a In a of not and number where build a we our inventory position is it in pro normal fact. our customers are stuck inventory that though to the that are the relatively say is their got low. good in as in of Europe of products in back. continue quite we’ve So limited are amount would the that

So contend western that North and are I here, is visibility saying world good to we’ve in America Europe, would low. that the we in what normal think and levels got particularly we’re here the relatively

you. Thank

with from The Koort Goldman Bob ahead. Sachs. next comes Please go question

is this Anthony Bob. [indiscernible] Hi, for

cost timeline how think pigment potentially to million shall and kind opportunities. flowing those segment, next benefits you about we On achieve of through highlighted P&L those the What’s $XX in optimization year? the the

Yes, so I’ll take that.

within That’s taken think restructurings way care on X a bulk get outflow, the in would of think million, basis. I about delivered way how the it phase about this would [indiscernible] And the cash along of monies we the that that. a spend way be years. is the the or any $XX will So first which I

side Okay, additional And regional the it by call on you’ve market for can the quarter? that’s volume on the region TiOX, then maybe experienced during helpful. just color share you just and shifts that And have may you variations price experienced? some any

view, of earlier committed I I that call Yes, in the obviously our mentioned first. to share things let’s take tailored the mean customer approach. our remain we point from

and share. seen we to we believe in had range lost That we here expected volumes. you share, we are of do we this do was third achieve. not as what end will We believe seasonal we not decline gained So past a noting have in the quarter, high

in again that see the to expect We quarter. fourth

We that to see expect type of dynamic.

segments, limited share. with a clearly plastics. enhance kind market are been activity specialized believe do competitive up introductions, we expert that differentiated that of note some third ramp net our in which some in We approach new past and customers, there notably product So on this of we net-neutral of has course in quarter,

largely though reductions only XXXX. North exports as that quarter environment. of we’ve segment, put fact downward were and quarter, nor type In we perspective ahead that compete neither the geography, highest see pressures still nothing think more time U.S. I have up the a the tail may are lost they coming quarter By of exports. to this of been would technical the ramp softening flat everyone always a and both a of fact there We third seen others year and of in I in end the note from in our of the in been little what that the most gained in and stable. in down that still that Asia year-to-date a third to that third despite growth Chinese requirement. of America has best unchanged, end we nominal we say Europe remind has where at slightly been other in very in we the So Europe significant the customer the And Chinese the stable, being bit see segments. some year-to-date. and at coatings has of or but this

the So out would of kind region. pick I by dynamics those are

of in business, seen on Just see. would that specialty basis to terms add our a good demand expect some year-on-year as pricing and robustness to we we’ve

you. Thank

The comes next from… question

to move we the can Francesca, next...

Yes, okay. The next question Morgan comes Stanley. Andrews from Vincent with

Steve X% range quarter Last you a kind comment XXXX. Hi, in underlying is made demand up this about being guys for X% to in Haynes the of on maybe Vincent.

should you of Really it would in or and called that are to to any or view, underperform kind about expect issues. You updates there that? kind macro outperform ongoing out we of still range be that thinking

range Well, go of a a that outcomes XXXX as I we forward contemplating on think said are still look, basis. we

What as the others to very budgeting and year macros have through whether We is will that or take been come position on and in recession be will view been XX factor our months this that have on brutal of outcomes. haven’t demand we set though been set a pretty we cycle. year a And Clearly, segment is finalized brighten is to frankly view. point has a darken. fact challenging picture we say a picture final the from XX, given this the would driving of whether that

that growth believe will – GDP with normalizing line are some XXXX. We see in in we

much So – the we’re as that’s destockings which a say than low the a people we earlier, about got at than in lower We other chain, year. mentioned we slightest this had last we out, benefit. well as as improvement segment the moment, pull-through And all lead We’ve inventories. probably right in think normal from think set. running to way we I are to the inventory inventory demand a through. this time now We’ve managed all lower can will will the

Okay, thank you.

Citi. P.J. Please question comes with from next ahead. go The Juvekar

morning Petrie Hi, on P.J. for Simon. Eric good It’s

Eric. Hey

chloride specialty announced supplied competitor traditionally by introducing grades for they TiOX a [indiscernible] So are like and yourselves. that like inks sulfate end-markets

what do $XX of impact you grade And in to kind switch? the volume those EBITDA what’s that targeted XXXX will tie uplift from of that the then the fast to back back customers you million is? think think in So How impact ‘XX? Pori transfer, do specialty that you

said Pori are time a Yes, one course question. attractive markets or high we two into are long ink a number producers, forth; Yes, other so for specialty of switching for with the of surprised. the very costs, that so robustness; enter technology, the points. around we thanks saw After frankly the for incident not price particularly reasons sulfate We’ve space.

So markets would it’s as attractive. surprise not that a others really see those

add Now specialty. must specialty I their that and to of course

I be these They relatively to small these tried do think in have terms to of time aren’t that subset. explain volume, different people we’ve over characteristics. to tend

wrong specific at far very in greater for cosmetics, these which materials, It’s inks for functional active forth. far products comment outline of time. so in stand of spent products, to bit many there, got of probably We case segments customers. products; with the are decades The of the trust high clear, these high, integrity it than and are up look relationships test looking customers are customers that on specialty conservative. a These and many You’ve need extremely the got areas cost level you to fibers, we these the will carefully. you’ve pharmaceuticals, after they customers years but early for in these that believe frankly – building getting us so

depending of be in on I So potentially terms the it product timing, be specialized specialty is, think probably how will very potentially slow. can

think Pori, As I don’t it it relates to makes difference. any

in as already. look earlier XXXX transfers. improving in of of that have mentioned, the our forward out Kurt majority transferred, And That’s position We Pori segment phased technology one we our inks-based the of and to beyond.

So from our any it point of doesn’t make difference. view,

It’s we of we’ve on products but know by launch market, if sulfate a range next. We much just did, we see so in of this about you’re it don’t it, very to market. calls when we plan launched were surprised talking that have products spend they say the products these time to we pipeline it life chloride about target active Just and of here. be not those to talking others the expand until that year and interest as trying part to would will

EBITDA do early benefit expenditure said of and year, million to $XX $XXX not million back that benefit conditions. for Eric, transfer capital said. EBITDA investment economic we $XX what came for annual has announcement the a later XXXX, September add on indicated million, the we let would million just million in – we of EBITDA We me were the Simon this come technology. and a of it – current going $XXX on. earlier In original to back always capital based $XX $XX that could of reduce investment, the by that for million In

to spend $XX million. current this So you view $XX million the current – in get our is order

that. of we so most completed have And

not which that as recognize economic what to need do an are we in we robust as consider However, mid-cycle. environment would we is

the color. Appreciate

a or slowing inventory from just bit For up you the chloride heard wanted caused What quarter? question, production? do I weakness on think their it little ramp Lomon do de-stocking you you my in follow-up have what see Asia And macro focus secondly, trends. the with Billions in distributors? to at Is

part second the Well, capabilities competitors’ we’ll about I talk take not to think, plans. we’re because or here first

has take that past well pretty to outcome think It’s for a that tends technology very and position been longer, to I these technology years produces on desired. of made tough that lower our couple master. a than

– around public only was others in had which what us domain, played of capacity. the So was have I planned to number delays heard related the a what delays think to we to

rather industry I ‘XX, gaps rebounded Chinese clear in again, exports region within downturn the a would than to the as comes And some far characterize into shot China, been some that and pressure Asian and macro X China prices. ‘XX, time put seeing to your it the on gloominess growth while tariffs, it. some in of had As that from increased use X. first the unscathed And demand I some between down et the pricing. product we’re the a and largely much downward It’s at and gloom. the we center really attempts customers attempts with a the itself. rates for open cetera. China, seen China we’ve the shift see it’s year, a notably this TiOX the in led counterpoint through that gone to part very to western this predominantly the demand, back as last a through this have people reduction people has low of question, the come the on largely age China here how quickly. because I it’s those Chinese later And decade TiOX that’s demand to themselves. greater has impact world’s It’s third mean, That’s Clearly to where went very quarter. that And the local China’s on think large up in back in that Asian

believe you about couple However, past of years. GDP glide down these

I it’s related would say. that to So really

Thank you.

Welcome.

ahead. go question with from Next is SunTrust. Sheehan Jim Please

there regarding Where synergies technology think the had color color And between failed pigments. lawsuit some Good also some any and I filed Performance a against Rockwood does in Are stand morning time you Simon. businesses? pigments business that Additives ago other today?

the so first. take against think Albemarle. was we’ll part that Yes, I That now lawsuit filed second Huntsman by

not did Huntsman come with the representatives of answered is separation Venator And through suggest. the that by So Huntsman. I suit business would best that question from

very the color but come question, of to frankly sell part first more are functional The there applications they pigments color small in nature. additives and and together, pigments with TiOX, and are some functional The where we additives synergy TiOX. tends or

question and So the within the the part. other set great answer color constituent is the your to Additives Performance synergy businesses, with of a isn’t there

over And $XX years. pigments that color still already I business, X in color EBITDA business are the you improvement the on think in reductions million you. you’ve of pigments? lots of that last years, programs remain the several over in opportunities a see lot or self-help the that the done Thank What cost improvement,

very that’s exercise the in Look, we year. of quarter And opportunity opportunity to comprehensive out a put together us, important third We was believe us. what this the for bottom it the was. for

own course, their strategy of depending Now else could position. opportunity different that for on a and be someone

million come with $XX of past million these $XX think over million $XX up I improvement of years, targeting we we’ve now. around were in color,

of now continued in overall in $XX to really of FAD doesn’t sight color lot of it So additives a assets bear shouldn’t automotive that the easier in first probably that functional we us been The Performance we years the we holding EBITDA flavor have the and it’s course, where than is right in pigments it forward, X been electrical, these that performance, get eroded market is effects these we a harder. that problem as have which we predominantly we��ve lose past fact a But this million that’s mind. is And the $XX this give with had gets holding fact factor most kind that’s and go reality that the at get of years. you of back franchise. million – it should Additives result, back think for the We benefits. look the that when self-help rather segment

reduction, less your spending are CapEx on pushed CapEx being out, regarding XXXX? in And what projects

hard the So look the phasing we’ve had XXXX. of in CapEx a at

You some XXXX choose, question. we where million. come won’t allude should that And and we in be see bucket, of reduce we’ve of some – phasing into to spending time than highlighted as that you would to more be at should that ability we choice that to that answer those more our have, the be reduction fact, issues that. the will time, And that $XXX do more

Thank you.

comes from with Laurence Jefferies. go next Alexander ahead. The question Please

I was in is volumes strength? Performance which when this just volume weakness down think geographies showing are Hi, Laurence Bubes wondering particular about X%, we Alexander. Adam driving were and on for Additives any

think business America. I performance look, in Europe and that is Yes, additives biased to North both

in And Europe out the so I picked America. we plastics that which and construction be North would specifically say of color for would markets, that

some For losses think I just Europe it’s the electrical in we and automotive and seeing functional are businesses. additives, Asia where

sold? was help business can about a And the is capital in pigments where wondering you us deployment then I color think scenario Okay.

is Kurt. This sure. Yes,

take me Let that.

broader TiOX time options in we that we but those we will use would we business, weigh it but and so that proceeds it’s evaluate possible do optionalities do certainly environment, sheet our receive balance course, context that of point proceeds of is And specifically as the need desire we a is to to to within so. here macroeconomic to understand de-lever portion quite you cycle if desire sell well and the that primary de-lever the our the will at the of as do

very you much. thank Okay,

The Global. go last question ahead. comes with Ahmed Please Alembic Hassan from

the that happens, there sudden that all A Simon the strategy. all walks pricing that is strategy. pricing there outrightly what this a from one whether fears consolidated question that away within morning, I questions sort know the industry’s and stabilization out obviously Good of the one pushed investors from a is just mean Kurt. stabilization of into of story. can one gets if supply/demand I whole the incremental of space sort of volume address of of And but and getting producers large marketplace, TiOX I this, don’t around and the ruins relatively you is sort the keep of

you would these address how So fears?

believe, and of the This people. We So we on concern or speak Hassan, I speak important can’t, is though of heard won’t, me tell what that on only of the is will state continue Venator. the and behalf the like and recognize we, that for to what we’ve question What and to shouldn’t dynamic Venator, behalf kind from we thing similar competitor. doing. I as are and you there industry can

all in we our I customer to and it, prices tailored think believe believe we fact been volumes consistently our of have the been we and and We’ve that approach. Now that stabilization, inventories doing point successful. the

network. back have a cost, costs We our have taken have taken pulling done fixed we pain it at absorption pain, we through

$XX significant a extra onboard to cost, million this year direct of cost. had have We

So right look, it has committed to thing. are we we cost, it’s the committed but think

is which from that their ourselves clear The the just prices others successful course, committed to because be Venator our previous very of to type their than anything it’s is We talk We must have have them others me though market. perspective, we having see in – we would see own doing way anyone noted, done this higher say doing own from something saw I that’s for in it. it. market don’t position of it, probably could that that stepping in at been to. it, are on the I And we’re drops. can’t it’s And competitive. And believe we to stay away thing outside we’re way.

position it’s to take effective a control, do very are that. easy that’s small we where in we Asia. part up various markets market, and less some continue more to see western it, particularly in of steps, regions, We our we in But and actually belief. have tactical, approaching down currently go are that’s to in pressures But prices the bigger the way where our influence

helpful. Understood. Very

you a curtailments environmental of environmental as we’ve wise, of side gotten that of things, little a the last flows over like. months couple regulations, seems the the Chinese have again. ebbs that? inspections terms of at any least and on years based follow-up and Are Now in And of seen over inspections last some things couple it seeing stricter just the off

curtailments. We haven’t any heard of new fresh

long way going noted structures of soon to it third the pulled a China. we heard production expect are to China the larger in have pressures said don’t cost relates the that come slowed within We and But have the pedal or sustainability I to around is anytime foot off more for in importantly, and being times capacity volumes Chinese We as clearly build the sophisticated back some commentary measures. are There’s go. rates rising producers. many still the have changing. quarter

it will continue. know and flow, just think don’t I don’t it think going but if away. I I the ebb that’s I pattern of intensity see helpful, actually the Hassan. will

much. Simon. Very you so much, Thank

Pleasure.

Simon would remarks. the conference to session. for Turner over our I concludes any back question-and-answer closing This to turn like

Thank you very much.

Jeff we you get quarter. have. for the to fourth everyone, to forward that reach additional thank that. look to all the road may questions out say you questions. We Please we in the to you with your on Just with throughout quarter We to address any engaging interest. don’t and appreciate the understand And

So thank interest you Venator. in much very for

attending Thank you conference concluded. presentation. today’s for The is now

disconnect. now may You