The Chemours Company (Chemours) hosted its first Investor Day in New York City. As part of the event, the company updated its 2017 outlook, provided a 2018 outlook and 2020 key financial targets, and unveiled a new capital allocation strategy.
Chemours President and CEO Mark Vergnano said: "I am pleased to announce the completion of our five-point transformation plan and the beginning of a new chapter at Chemours. We successfully delivered on our plan, which is expected to result in improved Adjusted EBITDA of over $800 million over 2015 levels and reduced our net leverage down to approximately 2 times. Demand for Ti-Pure™ titanium dioxide, Opteon™ refrigerants, fluoropolymers and Chemical Solutions products continue to drive our results. The strength of our portfolio is now expected to deliver full-year 2017 Adjusted EBITDA of approximately $1.4 billion and more than $100 million in Free Cash Flow."
Vergnano continued, "We believe that 2018 will be another great year for Chemours with Adjusted EBITDA expected to be between $1.7 and $1.85 billion. We see continued strength across our three segments, primarily driven by preference for our high quality Ti-Pure™ offerings and growth in Opteon™ refrigerants. We also expect to increase our Free Cash Flow to be within a range of $500 to $600 million, even after investing in our two new manufacturing facilities."
"We have shaped our portfolio into a set of highly investible businesses that we expect to continue to generate a Return on Invested Capital in excess of 30 percent, and believe we are poised for growth through 2020 and beyond. We have already begun implementing our value stabilization strategy in Titanium Technologies, which we expect to benefit our customers and allow us to reduce volatility in our Ti-Pure™ earnings. We are optimizing our fluorochemicals mix with the expansion of Opteon™ refrigerants, and expect to renew our fluoropolymers portfolio through application development. This growth will be paired with our capacity growth in Mining Solutions. Collectively through 2020, we expect revenue to grow at a rate of 1 to 2 times GDP, which combined with an approximate 500 basis point expansion in Adjusted EBITDA margin, will provide a magnified return on the bottom line. Together with our announced capital allocation strategy, we expect to grow our Adjusted EPS by 15 percent or greater through 2020 on a compounded annual basis over 2017. Further, our strong financial performance is expected to generate cumulative Free Cash Flow within a range of $2.0 and $2.75 billion through 2020," concluded Vergnano.
Chemours CFO Mark Newman said, "I am excited to unveil our new capital allocation strategy, which is expected to return nearly $900 million to shareholders over the next three years. We have increased our dividend by over 5 times the previous amount, and now have the flexibility to simultaneously invest in our portfolio and buy back shares opportunistically. Our new financial strategy allows us to identify and fund growth opportunities, maintain our strong balance sheet, and return significantly higher levels of cash to shareholders."
The company announced that the Chemours Board of Directors approved the first quarter of 2018 cash dividend on the shares of the company's common stock in the amount of $0.17 per share, an increase of $0.14 per share from the previous level. The dividend will be paid on March 15, 2018 to stockholders of record as of the close of business on February 15, 2018.
The company also announced today that the Chemours Board of Directors authorized a $500 million share repurchase plan. The authorization extends through the end of 2020. Repurchases may be made at management's discretion, subject to market conditions and other factors, and may be suspended or discontinued at any time.