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Chemours (CC 2.49%)
Q1 2022 Earnings Call
May 03, 2022, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to The Chemours Company first quarter 2022 earnings conference call. [Operator instructions] Thank you.

Jonathan Lock, senior vice president and chief development officer, you may begin.

Jonathan Lock -- Senior Vice President and Chief Development Officer

Hi. Welcome to The Chemours Company's first quarter 2022 earnings conference call. I'm joined today by Mark Newman, president and chief executive officer; and Sameer Ralhan, senior vice president and chief financial officer. Before we start, I'd like to remind you that comments made on this call, as well as the supplemental information provided in our presentation and on our website contain forward-looking statements that involve risks and uncertainties, including the impact of COVID-19 on our business and operation, and the other risks and uncertainties described in the documents Chemours has filed with the SEC.

These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, management will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments are included in our release and at the end of the presentation.

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As a reminder, our prepared remarks, a full transcript, and an audio recording, plus our earnings deck has been posted to our website alongside our earnings release. This morning's call will focus purely on Q&A. With that, I'll turn the call over to our CEO, Mark Newman.

Mark Newman -- President and Chief Executive Officer

Thanks, Jonathan. And good morning, everyone. I hope everyone is well and thank you for joining us. As Jonathan said, and in keeping with our refreshing simplicity value, we have made a change to our earnings call format starting this quarter, in order to make this time more efficient and useful for everyone here.

So with that, Emma, we're now ready for Q&A.

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of John McNulty with BMO Capital Markets. Your line is now open.

John McNulty -- BMO Capital Markets -- Analyst

Yeah. Good morning. Thanks for taking my question. Congratulations on some really, really solid results.

And I guess to that, like if the TSS segment was a lot stronger than expected, and I suppose it's tied to a handful of things, whether it's the Aim Act or less, F-Gas dumping, or maybe even some mix, but I guess, can you parse out the various buckets as to what drove the huge jump in margins and the strength that you're seeing. Can you help us to understand that a little bit better and how to think about the sustainability of that as we look through the rest of the year and into next year?

Mark Newman -- President and Chief Executive Officer

Hey, John. Thanks, and good morning. Let me start first with the quarter and then I'll get into TSS, and then I'll ask Sameer to sort of reflect on how he sees the numbers for the rest of the year in keeping with our guidance. You know, the quarter was, as you saw, was strong.

It showed Chemours ' wide improvements with momentum in all three businesses despite the ore limitations, which are affecting TT. And I think are really the beginning of evidence of long-term secular trends, which are going to benefit all three businesses, but in particular, will benefit TSS on low global warming refrigerants, and propellant, and foaming agents. And obviously, APM, as it relates to the mega trends which are unfolding. Today on Semicon, hydrogen coming, EVs here.

So there's a lot going on in the company, that to me is showing the importance of our TSS and APM. In the quarter and in the year, their increasing contributions to come worse earnings, which gives us confidence despite the ore limitations on the guide that we've provided for the year. As it relates to your question, I think there's a couple of things going on in the quarter and in the year that I'd like to highlight. First of all, demand -- refrigerant demand remains very strong.

As you can imagine, folks are coming back to offices, they're going to restaurants, they're going to hotels. So lots of demand here on stationary that we like. Clearly, demand on auto OEM is impacted by the ongoing Semicon shortage. Q1 was particularly weak as you'll see from the earnings reports by OEM customers.

But full-year is looking as a year-over-year improvement from a volume perspective based on iron chefs. Obviously, we're -- the market, there's some structure shifts having in the market. Here in the U.S., obviously, the implementation of the Aim Act is taking effect at a time when demand is strong. Clearly, there's some supply issues as it relates to China that are also affecting availability.

So Q1 is particularly strong, but as we look out to the year, our view is demand remains very strong on the institutional stationary side, and the Aim Act framework is working. We're also encouraged by ongoing developments in Europe to make F-Gas better. So maybe I'll ask Sameer to see if there's any other commentary on full year. But this is a great business long-term secular growth, multi-year secular growth, and EBITDA margins, North of 30%.

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

Yeah, Mark. Hey, John. Just a quick for you. Well -- only other thing I would add is as you kind of think about the year, the trends that you talked about regarding the TSS business, we feel very strong about how they will be shaping the rest of the year and that's reflected in the guide that we have given.

The market and the regulatory mechanism is at work and its benefiting the entire portfolio of the TSS business, so we feel really good just that despite the automotive OEM demand headwinds, we're in a very strong place. So TSS business is firing all cylinders.

John McNulty -- BMO Capital Markets -- Analyst

Got it. That's helpful color. And then maybe Mark, to one of the other points you brought up on the OR front it looks like that may be a little bit of an issue and it may drag on a little bit longer than you thought. I guess, can you give us an update as to how you're thinking about that? And also, I think you were looking to add capacity from -- on the TiO2 front through debottlenecking over the next couple of years, I guess.

How does the ore supply issues start to factor into that as you think about that capacity coming on?

Mark Newman -- President and Chief Executive Officer

So maybe I'll answer the question in a couple of ways. As we look at our ore situation for the full year, we now recognize that we will remain ore constraint into the second half. When exactly in the second half is moving around, but our guide contemplates, probably not having ore constraints resolved meaningfully before Q4. With that in mind, I think we've been able to narrow the range of outcomes.

Clearly, our guidance range got narrowed. So yeah, we now acknowledge that this is going to go into Q4, but the team has done a phenomenal job of finding ore where it can. And so now the range of outcomes in terms of ore availability in my view are more well-defined. And then the third point I'd make is, we continue to give priority to our contracted customers and into the highest value application.

So the team has done a nice job, first, on making sure we're serving our strategic customers with whom we want to grow. And obviously, as we focus on higher-value applications and our price mechanisms, we're staying ahead of cost inflation. And then I think the last question that you asked was capacity. Yeah.

We continue to focus on capacity and releasing the 10%. You know, we're all constrained for a few more quarters. But that's not the way we plan to run the business. And in fact, as you saw, you know, one of my four focus priorities as CEO is really to continue to take steps on improving the earnings quality of TiO2 through the cycle.

We have the best book of business, we're servicing those customers despite being more constrained, and we're focused on how we expand capacity to grow with those customers as well as take actions that will reduce earnings volatility through the cycle.

John McNulty -- BMO Capital Markets -- Analyst

Got it. Thanks very much for the color.

Operator

Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Your line is now open.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Great. Thanks for taking my question. Congrats on the progress this year. You've cited some positive dynamics within stationary.

I guess when you include that and maybe some recovery in OEM, do you believe -- what do you think the foundational level of earnings for TSS would be I guess maybe if you could give us some growth rates or maybe some margin levels or anything that would kind of help us kind of frame how that business is doing?

Mark Newman -- President and Chief Executive Officer

Yeah. We're -- Arun, great question. I'll just remind everybody we're going to have a TSS mini Investor Day in May, May 16, actually, where we'll provide a lot more insights into that segment. It's been on our list to do, and clearly, we feel the time is right.

I view this business and Alicia and her team see this as a business with multi-year secular growth. I think we would say, it's in the mid to high single-digit range. As people adopt low global warming, not just refrigerants, which are bread and butter, but propellants for all of many different applications, as well as foaming agent. So the team's doing a phenomenal job on making sure we have capacity in all of those verticals to really drive the adoption of low global warming products both in the E.U.

and in the U.S. and then around the world. So we see here, this is a -- we could call it a decade of secular growth, mid-to-high single-digit in a business that we think, long-term has EBITDA margins in the low thirties, clearly this year we're off to a great start, so we might be higher in this year, but generally speaking, we're looking to capture the growth with EBITDA margins North of 30%.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Thanks. That's very helpful. Now, if I could, there's a follow-up, just asked about PIF assets. Would you expect any updates there by year-end, maybe a settlement with the water districts? What are you working on that side? Thanks.

Mark Newman -- President and Chief Executive Officer

We are very focused and it's one of my three priorities to continue to manage and resolve legacy live other that is consistent with the MOU. Last year, as you know, we were able to reach an agreement with the state of Delaware. In North Carolina, we're very focused on the remediation work and specifically, the barrier wall work that will reduce seepage to the Cape Fear River. So team is very focused on that.

And then I'd say the three companies are aligned having signed the MOU to move forward and to have a bias to resolve legacy liabilities, but do that in a smart way. Our shareholders and our stakeholders and our communities would applaud. So the work there is ongoing. I won't comment to specific outcomes in the future, but you should know that the team here, including our general counsel, Dave Shelton, is quite focused on getting something done here.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Thanks.

Operator

Your next question comes from Josh Spector with UBS. Your line is now open.

James Cannon -- UBS -- Analyst

Hey, guys. This is James Cannon for Josh. I was wondering if you could talk about the TSS pricing in the quarter was up quite a bit. If you could just share some comments on how much of that is your actions versus market dynamics and expense if the pricing in HFCS is driving a little bit more of a shifts toward Opteon if that's faster than your initial expectations?

Mark Newman -- President and Chief Executive Officer

Thanks for the question. We continue to see increased adoption in Opteon and the related improvement in mix as a result of that. Clearly, as I said in my earlier remarks, the market demand in stationary, which is particularly bias to HFCs today or legacy refrigerants is very strong. And in some respects, there is a seasonal factor in the year, but there's also, I think, the impact of a lot of folks returning to offices, travel picking up as you've seen, and just a greater demand for institutional use of stationary refrigerants, which today remain in biased to HFC.

So the team is very proactive. From a pricing perspective, I wouldn't want anybody to think that this team isn't very focused on the supply demand dynamics. And to your point, there is regulatory impacts aimed here in the U.S, F-Gas in Europe, which are providing a structural shift in the marketplace which will continue for many years to come.

James Cannon -- UBS -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Mike Leithead with Barclays. Your line is now open.

Mike Leithead -- Barclays -- Analyst

Thanks. Good morning, guys. And maybe just first to comment, the switch in the conference call format straight to Q&A is also for what it's worth. I guess I wanted to go back or kind of stick on T&SS.

I was hoping could you just kind of talk about what you saw in the market on the legacy or HFC refrigerant pricing side this quarter and maybe you can just update us on how the illegal imports situation in Europe's going?

Mark Newman -- President and Chief Executive Officer

Well, first of all, Michael, thanks for the feedback on the call format. Another core value for Chemours is being customer-centered. So it's good to get some customer feedback in this regard. On TSS, the pricing on HFCs, as I said, is really being driven by both the structural shifts in the marketplace, driven by the Aim Act here in the US and F-Gas in Europe as well as the demand that we're seeing for a whole host of factors that I already mentioned.

We're very encouraged by ongoing enforcement actions in Europe. There are also some draft regulations as it relates to enforcement in F-Gas in Europe that we're encouraged by. Those regulations are not in effect, but clearly, as an industry participant, will be very helpful in working with regulators there. I also want to give recognition to the EPA in the Aim regulations here in the U.S.

They went out of their way to learn from what happened in Europe and to take steps. And maybe I'll ask Sameer just to comment on some of the EPA actions that we think are helping. But clearly, this is a combination of both market demand and as well as the favorable impact of the transition from HFCs to Opteon taking place in the quarter. Sameer?

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

Yes. Thanks, Mark. Michael, let me just address -- add a little bit more color on the pricing side first and then I'll move to the EP enforcement. On the pricing side, as Mark said, the market dynamics is strong, but as we are going to step back, Opteon is a low global warming potential refrigerant of the future.

And we're very well-positioned to help our customers transition to this new technology over time. And so as we kind of think about the solution offerings that we're providing to the customers ultimately, it's a value and use pricing. So the way you should be thinking about the transition of our business is, Visa, TSS, and the APM, it's all about value and use pricing and that's what you're seeing in the margin in the TSS, as well as on the APM businesses. So that's forcing pricing.

And then on the EPS side and the enforcement, especially as we look in the U.S., as Mark said, it's been great to say how EPS loan from some of the things in Europe and really put in some mechanisms in place which give us comfort and confidence in the ability to enforce the AMAK. I won't go into all the specifics. You're going to hear a lot from Alicia on basics team on these things, but simple things like having standardized scores, the QR tracking, even a 14-day advance notice for bringing in any material into U.S., which gives the customs and border control all the time to figure out whether people importing the products are ready credit allowances are not. And also the, what's been phenomenal is there's across agency task force that has already been set up to coordinate all the things which took a while in Europe to get in place.

And that includes Customs and Border Protection, Department of Homeland Security, Department of Justice. Look across all the agencies, that cross-agency thing is in place. And last thing I would say, is on the AMAK does provide the Clean Air Act Authority the ability to improve similar in criminal penalties. Again, if we go back to the Europe experience, it took a while to get people, everybody on the same page.

There's a lot of peak and the mechanisms are already in place, which gave us comfort in how we -- the structural trends that we're seeing in the transition of refrigerants is --it's really providing us nice pricing power in the market.

Mike Leithead -- Barclays -- Analyst

Great. That's super helpful context. And then maybe second one for Sameer. If I look at the full-year outlook, you raised EBITDA guidance by call it $160 million at the midpoint.

Operating cash flow, though, only goes up about $50 million or so, which is maybe a little bit lower conversion than I would've thought. Why is that?

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

That's primarily just because of the working capital dynamics as we look at how the supply chain is stressed in the marketplace right now, as we think about driving the growth in a business that you want to make sure that we are well-positioned to have the inventories in place be on the raw side on the product side. There's nothing more to it, it's mostly driven by the working capital.

Mark Newman -- President and Chief Executive Officer

Yeah. If I could make a couple of comments, obviously working capital with higher input costs is a bigger investment on our balance sheet today. Obviously, we're getting rewarded for that in terms of the margins in our business. The guide though, indicates that it's greater than 550.

If you take 550 and divide it by the midpoint of the range, you're at a 36% cash conversion. And we typically want to be in that 35% to 40% cash conversion in our business. So view the 550 as a floor in the guide. The other point I would make beyond working capital is, as we look, especially in some of our APM businesses, which by the way had a record quarter.

We're seeing demand for our Teflon PFA that goes into the Semicon industry here in the U.S. And we're expanding our capacity, but we're already sold out on that expanded capacity. And we're seeing years of [Indiscernible] that are double-digit. So we want to leave ourselves some flexibility in our free cash flow guide to make very prudent investments in areas of the business where we seeing candidly explosive growth for multi-years to come.

So again, there's nothing wrong with our cash flow guide. It's a floor. But I also, from a shareholder perspective, want to make sure that you understand that we are seeing some opportunities in all three businesses, consistent with our shareholder value creation focus that you would want us to make in this calendar year.

Mike Leithead -- Barclays -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Hassan Ahmed with Alembic Global Advisors. Your line is now open.

Hassan Ahmed -- Alembic Global -- Analyst

Morning, Mark. Just wanted to revisit some of your commentary about or constraints. Just wanted to better understand. Is it primarily a function of logistics and supply chain slash shipping issues or is there something more secular going on there? And if there is something more secular, what does that say in terms of the prospects for industry capacity growth.

Mark Newman -- President and Chief Executive Officer

Has been -- I wouldn't point to anything that's more secular at all here, clearly, within a twelve months' frame, which is our fiscal year 2022. I think we're acknowledging that starting the year with Richards Bay minerals forced minutes, you're having further compounded by the conflict in Ukraine, that within this 12 months frame, there's limitations on what you can do. And that's just based on our access today on the spot market. Also, you mentioned logistics in your question.

Even if you identify or today, it takes a lot longer to get it to our shores here or where our plans are located. So it's not a secular -- it's not a secular point, it's really just a recognition of where we are with respect to fiscal year 2022. Again, I would expect us to be beyond this sometime in Q4. And again, we just felt like it was time to acknowledge that and as we updated the guide to make sure it was clear, that it was part of our guide.

And clearly, it will limit TT volumes in the coming quarters, I would expect us, for example, to be flat in Q2 in a quarter that normally is higher. And so I think I just want to maybe call out, this is a fiscal year 2022 issue which will affect our next two or three quarters.

Hassan Ahmed -- Alembic Global -- Analyst

Understood. Very helpful. And as a follow-up, sticking to TT, obviously, we've seen a fair degree of raw material inflation, going to be it chlorine, be it ore, on the other side, pricing for pigment has been strong as well. As you holistically take a look at the global cost curve, how do you see it right now? Because of all of these moves still in the red, and if they are what percentage do you see you are in the red right now?

Mark Newman -- President and Chief Executive Officer

Yeah. Clearly, Hassan, I'm not going to comment on our competitors, but we're very grateful for where sit on the cost curve and our continued focus on efficiency. So today obviously, and we've said on prior calls, I'll reinforce it here, our EBITDA margin in this business is unlikely to be at its target level of 25% or mid-twenties until we're not ore constrained, but I'd say as I look at the cost dynamics in the world, I'm glad that the majority of our plants are tied to natural gas here in the U.S., even though those prices are also up.

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

Sameer, I'll just add one more point is, look, overall as you look over the longer term, cost curves are definitely important, but also it's what the customer's perspective is. Our value to meet the commitments even in these tough supply chain conditions is also a product and the margin that we can generate. Mark talked about the teams have done a phenomenal job in staying ahead of the inflationary headwinds. But the old issue, it does play into the margin as well if that's where you're headed because old constraints do limit our ability to optimize the circuit and that's reflected in the margin profile if so.

Hassan Ahmed -- Alembic Global -- Analyst

Very clear. Thanks, Sameer. Thanks.

Operator

Matthew DeYoe with Bank of America. Your line is now open.

Matthew DeYoe -- Bank of America Merrill Lynch -- Analyst

Morning. Sticking with TT, TiO2 pricing was 24% higher year over year. Just kind of curiously strongly consider the tie-ups, the TPI in your contract. So how are you securing this big of an increase given your sales mix? Thank you.

And then a question back on the pricing of 40% in the quarter. Is that sticky for the remainder of '22 or how do you see comps as supply issues in China resolve and so forth.

Mark Newman -- President and Chief Executive Officer

Yes. So there's -- I would say the quarter in my view is a combination of some of the coming off a COVID factors which continues as we come into here, into Q2. The structural shifts that I mentioned, aided by regulatory actions. And just strong economic demand globally.

So clearly, remember that this business tends to have more seasonality in the first half versus the second half. And obviously, some of our pricing actions are in anticipation of some cost increases we see coming through the pipeline that will hit us in the second half. So our long-term goal for this segment is to be in the low 30's EBITDA margins with the kind of growth rate that I talked about. But clearly, with the strong start, we had to the year, we could be higher.

Matthew DeYoe -- Bank of America Merrill Lynch -- Analyst

Thank you, Mark.

Operator

Your next question comes from the line of Laurence Alexander with Jefferies. Your line is now open.

Kevin Estok -- Jefferies -- Analyst

Hi. This is Kevin Estok on for Laurence. Thank you for taking my question. The first question has to do with your non-U.S.

operations. I guess I was wondering how you expect lockdowns in China to impact your business for the remainder of the year. I think in the European front, if you had any meaningful sales in Ukraine, Russia, and Eastern Europe and whether you get natural growth in that smaller location. Thank you.

Mark Newman -- President and Chief Executive Officer

So, clearly, we're monitoring the situation in Ukraine and in Mainland China. And our thoughts and prayers go out to those folks who are impacted in a very stressful way, given the humanitarian issues. As you saw, we did suspend any operations in Russia, our business with Russian entities. We had announced that along with charts, I will contributions to aid in the humanitarian crisis.

But I'll ask Sameer to comment more specifically on the impact of both China, which we mentioned as part of our guidance and the Ukraine in the quarter.

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

Thanks, Mark. As we look at, Kevin, from the Russia and the Ukraine perspective, what we've said is our revenue is around 1% in the previous year, so -- and majority of that goes in the TT business, given the supply demand dynamics that you're seeing in the TiO2 in the industry, we don't see any issues placing that volume in other parts of the world. So we feel pretty good from the topline perspective that it shouldn't have any major impact. And overall, when you look at from the cost perspective, in this quarter, we did take a charge of roughly 10 million tied to our operations, tied to some of the receivables in inventory write-offs.

But other than that, we don't anticipate any impact for the rest of the year. And on the China side, look, it's an interesting market. We are looking and keeping a tab very closely on that. Each business gets impacted in a slightly different way.

But overall, we don't expect a material impact at this point from a direct. Now, overall, if China stays shutdown, yes, it will have an impact on the broader Chinese economy and that spillovers into the global economy, I can't speculate today, sitting today and speculate on that, but overall our businesses, we do procure some raw materials from there. Those supply chains are really stretched with those -- with the shutdowns that we're seeing, but our businesses and our partners are very constructive in helping us get them materials, so we are in a good position right now. And then electronics chain, we'll keep on monitoring as well any impact that may have on the APM business.

That's the only one I would say which we are exposed one demand perspective. So this is why the impact that we anticipate are reflected in the guide that we gave.

Kevin Estok -- Jefferies -- Analyst

OK. Thank you.

Operator

Your next question comes from the line of Vincent Andrews with Morgan Stanley. Your line is now open.

William Tang -- Morgan Stanley -- Analyst

Hey, guys. This is William Tang for Vincent. Just a quick follow-up for me. Just on the Chinese -- the China side, we've been seeing Chinese TiO2 exports continuing to increase sequentially year-to-date.

Can you talk about what you're seeing in the region in terms of local production in demand, and to what extent you see heightened exports posing a risk to TiO2 price elsewhere?

Mark Newman -- President and Chief Executive Officer

First of all, we see very limited intersection between China exports grades and the markets and customers and applications in which we serve. So we've also noticed that, but I'd say has limited impact on our book of business. Our business in China on the TiO2 side tends to be at the high end of the spectrum, both from coatings and laminates perspective. A lot of our work in the laminates area are for the export market of high-end furniture, for example.

So so far, our demand in China on TiO2 remains very strong. And I'd say, yes, we understand there's more product coming out of China, in part because of Chinese demand being down for those products where they have very limited impact on our book of business globally and in terms of the customers and businesses that we serve.

William Tang -- Morgan Stanley -- Analyst

Thank you.

Operator

That concludes today's Q&A. I now turn the call back over to Mark Newman.

Mark Newman -- President and Chief Executive Officer

Yes. Thank you, everyone. And we look forward to seeing you all very soon at our mini-Investor Day, with respect to TSS, there's been a lot of great questions on the call and we just felt it was -- it was time to share more on that great segment with you going forward. In closing, I will just like to reinforce that we remain focused on our four key areas of long-term value creation.

And some of which you witness first hand in the quarter. The first is to improve our TT earnings through the cycle while growing with strategic customers. As I said, we have the best book of business and Ed and his team continuing to take steps that will make that business higher earnings quality with a great cash conversion, enjoys today. Our second objective is to drive secular growth in TSS and APM behind class-leading products with innovative chemistry.

As you see in this quarter, TSS is already off to the races. But there's much more to come. In APM, we're starting to see the impact of the mix shift related to higher-value applications. Our science in APM is at the heart of clean energy, whether you're thinking of hydrogen or EVs or in the advanced electronics revolution that's happening today.

Clearly, we're very integral to Semicon. We're one of the -- we're the only U.S. producer of PFA and our Teflon PFA is key to the global Semicon market, but also to all the efforts on reestablishing a U.S. Semicon supply chain.

So we're very excited about our work there in that area. And as I said earlier, the hydrogen revolution is happening on both sides of the Atlantic and our Nafion membrane will be key to driving the decarbonization of the planet. Our third objective is to continue to manage and resolve legacy liabilities consistent with the MOU. This isn't a key area of focus for a few dedicated professionals in the company.

And as I said earlier, all three companies having signed the MOU, are keen to make progress in this area. And then finally, we will continue to return the majority of our free cash flow we generate to our shareholders. We made meaningful progress in completing the existing shareholder authorization, which we intend to complete in Q2. And in our recent meeting with our Board, they have approved a new $750 million authorization through 2025.

And my way of thinking is, we will continue to invest behind one, two, and three, to really drive significant value to our shareholders. But item four, in returning the majority of cash through both dividends and stock repurchases, has the impact of compounding the value creation over time. So we're very excited as a leadership team as to how we can drive significant value for our shareholders and I want to share with you that everyone is focused on these four key priorities, which we think will pay significant dividends in the years to come. Thank you and have a great day.

Operator

[Operator signoff]

Duration: 46 minutes

Call participants:

Jonathan Lock -- Senior Vice President and Chief Development Officer

Mark Newman -- President and Chief Executive Officer

John McNulty -- BMO Capital Markets -- Analyst

Sameer Ralhan -- Senior Vice President and Chief Financial Officer

Arun Viswanathan -- RBC Capital Markets -- Analyst

James Cannon -- UBS -- Analyst

Mike Leithead -- Barclays -- Analyst

Hassan Ahmed -- Alembic Global -- Analyst

Matthew DeYoe -- Bank of America Merrill Lynch -- Analyst

Kevin Estok -- Jefferies -- Analyst

William Tang -- Morgan Stanley -- Analyst

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