Good morning, and welcome to the Venator second quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note that this event is being recorded today. I would now like to turn the conference over to Kate Robertson, Venator Investor Relations. Please go ahead. Thanks, Joe, and good morning, everyone. I'm Kate Robertson, investor relations for Venator Materials. Welcome to Venator's second quarter 2022 earnings call. Joining us on the call today are Simon Turner, President and CEO, and Kurt Ogden, Executive Vice President and CFO. This morning, we released our earnings for the second quarter of 2022 via press release and posted the release and accompanying slides to our website at venatorcorp.com. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking, and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. All Performance Additives comparisons we make on this call exclude the water treatment business, which was sold in May 2021. You should review our annual report on Form 20-F for the year ended December 31, 2021, Form 6-K for the quarters ended March 31, 2022, and June 30, 2022, and our other filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements in the quarter. We will also refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, free cash flow, and net debt. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at www.venatorcorp.com. I would now like to turn the call over to Simon. Thank you, Kate, and welcome everyone to our second quarter 2022 earnings call. Turning to slide 3, we've made significant progress strengthening our underlying business through delivery of our business improvement programs and a shift to customer-tailored monthly pricing reviews. Total company adjusted EBITDA in the second quarter increased to $61 million from $57 million in the first quarter and $43 million in the prior year period. Our team of dedicated associates continue to manage the significant external supply chain-centered challenges and delivered strong results. Turning to slide 4 on our titanium dioxide segment. Second quarter 2022 TiO2 segment adjusted EBITDA was $49 million, compared to $49 million in the first quarter of 2022 and $36 million in the prior year quarter. Strong demand for all TiO2 sectors continued throughout the second quarter in North America. We saw normalized demand in Europe into plastics and inks end markets. Demands for products into coatings end market application was softer in Europe and Asia. As we discussed on our last earnings call, during the second quarter, we partially suspended production of our Scarlino, Italy facility by one-third. As a result of the above factors, sales volumes decreased 9% sequentially and 7% compared to the prior year period. We continued to see cost inflation in the second quarter, primarily from feedstocks, energy, and other raw materials. Our monthly customer-tailored price reviews continue to bring flexibility to manage our margins in this volatile cost environment. Our average selling prices increased 7% sequentially and 31% compared to the prior year period in local currency. In the near term, we expect demand to remain strong in North America, remain intact in Europe, and softer in Asia. We plan to continue with our monthly customer-tailored pricing reviews for all our customers. We see market rates for energy, primarily in Europe, remaining elevated and volatile. We also see further pressure from feedstocks and other raw materials. Underlying TiO2 fundamentals remain broadly positive, and we expect this favorable dynamic to continue. I would like to provide a further update on our Scarlino TiO2 facility in Italy. Our Scarlino facility generates gypsum as a byproduct of the manufacturing process, which has been landfilled on-site and also transported for use in the reclamation of a nearby former quarry owned and operated by third parties. We continue to work with Italian governmental authorities for the authorization of continued gypsum disposal. While we continue these efforts, we have now suspended two-thirds of the production from this site to preserve our remaining available landfill capacity. We have a pathway and are hopeful that authorizations will be granted. Otherwise, we may be compelled to close the site entirely. We continue to explore all options to avoid that outcome, and we will continue to optimize production to ensure we create the most value out of our network. Turning to slide five on our Performance Additives segment. Our Performance Additives segment delivered $19 million of adjusted EBITDA in the second quarter of 2022, compared with $20 million in the prior quarter and $18 million in the prior year period. This segment continues to perform well, which has been achieved through organic growth, improved product mix of sales, successful delivery of our business improvement programs, and focus on our customer-tailored approach to mitigate cost pressures. Segment sales volumes decreased 3% sequentially and 16% compared to the prior year period. Volumes were impacted by product availability and softer demand for products into construction. Globally, demand remains strong for our ultramarine blue products, which go primarily into plastics end-use applications. During the second quarter, cost inflation persisted, particularly on raw materials, energy, shipping, and logistics, which was offset by our monthly pricing actions to reduce the impact to our margins. Average selling prices increased 10% sequentially and 26% compared to the prior year quarter in local currency. As I mentioned earlier, we expect demand for ultramarine blue products to remain strong globally and third quarter demand in other end markets to be similar to the second quarter. We continue to see cost inflation, which we expect to recover through our customer-tailored monthly pricing initiatives. I will now pass the call over to Kurt. Thanks, Simon. Let's turn to slide 6 and our adjusted EBITDA bridges. Total adjusted EBITDA increased by $4 million compared to the prior quarter. The increase was primarily due to an increase in average selling price, partially offset by higher cost inflation and lower sales volumes. As Simon mentioned, we saw further cost inflation primarily on feedstocks, energy, and other commodity raw materials. The EBITDA impact from lower sales volumes was primarily attributable to the partial production suspension at our Scarlino TiO2 facility and softer demand in Europe and Asia into coatings applications. Our SG&A/other costs are favorable primarily due to foreign exchange gains in the second quarter of 2022 and lower SG&A costs compared to the first quarter. Total adjusted EBITDA increased $18 million compared to the prior year period, primarily due to increased selling prices, partially offset by cost inflation and lower sales volumes. During the second quarter, we did not see the normal seasonal uplift in demand for our Performance Additives products that go into construction and certain product availability. We also saw softer demand into TiO2 coatings and partial production suspension at our Scarlino TiO2 facility. Our SG&A and other costs were favorable primarily due to foreign exchange gains in the second quarter of 2022. Turning to slide seven and our cash flow considerations. Free cash flow in the second quarter was + $58 million, including the $85 million receipt in cash settlement with Tronox. Working capital was a cash use of $54 million, primarily due to timing of feedstock shipments, modest replenishment of finished goods inventory, and higher valuations. Liquidity at the end of the second quarter totaled $341 million, consisting of $109 million of cash plus $232 million in availability under our ABL facility. We have taken advantage of the strong U.S. dollar, and through multiple transactions, we monetized and reentered into new cross-currency swaps. This resulted in $8 million of cash benefit in the second quarter and another $8 million in the third quarter, for a total benefit of $16 million in cash. During 2022, we expect the following cash uses: capital expenditures of approximately $90 million, which includes modest investment to support future growth. Working capital to be a cash use of more than $30 million due to higher selling prices and cost inflation. Restructuring to be a cash use of approximately $25 million as we pay for our successfully completed business improvement program. Other cash uses, including pension, are expected to be approximately $25 million-$35 million, which is approximately $10 million lower than 2021 as a result of lower pension contributions. By the end of 2024, we expect to see a substantial reduction in our annual cash uses of approximately $70 million compared to 2022. The reduction will come from lower restructuring costs of around $25 million, completion of the Pori site closure, a corresponding reduction of approximately $25 million cash use, and finally, a reduction in our pension and other cash uses of around $20 million. As a reminder, we expect most of this reduction to take place in the next 1.5 years. Putting these legacy cash uses behind us is an important milestone as we strengthen Venator. I will now turn the call back to Simon. Thanks, Kurt. Turning to slide 8. The Venator team delivered strong second quarter results, and I continue to be proud of their teamwork and innovation to navigate the challenges presented to us. Cost inflation pressure is expected to continue in the second half of 2022 on most feedstocks, and we continue to manage our requirements by working closely with our supplier base. European energy costs remain volatile with the ongoing conflict between Russia and Ukraine. We continue to mitigate these pressures through procurement and hedging strategies. Our monthly pricing review strategy has been instrumental in enabling Venator to mitigate cost inflation pressures and manage margins. We intend to continue to review prices with our customers on a monthly basis, which is fully supportive of our customer-tailored approach. Underlying TiO2 fundamentals remain broadly positive. There is no meaningful recent or new capacity on the horizon in an industry which requires approximately 200 kilotons of new supply each year. The situation at Scarlino remains uncertain. While we continue to work with Italian governmental authorities, we have suspended two-thirds of our TiO2 production from the site to preserve our remaining available landfill capacity. We have a pathway and are hopeful that authorizations will be granted. Otherwise, we may be compelled to close the site entirely. We continue to explore all options to avoid that outcome. Earnings from our collection of Performance Additives businesses continue to improve as a result of successful business improvement programs, product portfolio optimization, and pricing strategy. We see additional opportunities for long-term EBITDA improvement within this highly cash-generated segment. Venator has a world-class product portfolio which we deliver to our customers through our bespoke customer-tailored approach. We are focused on growth of differentiated and specialty product sales, and continue to optimize production from our network to deliver value-enhancing earnings. In addition, we are making good progress to reduce our cash uses by approximately $70 million by 2025. This will reposition our business for ongoing success and enhancement of shareholder value. With that, I would now like to open the call for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Josh Spector with UBS. Please go ahead. Yeah. Hey, good morning. Just two questions on TiO2. I was wondering if you could differentiate on the sequential volume move between what the impact was from your ability to produce and what's going on in Italy and other regions, I guess, versus what was actually weaker demand. Second, just curious if you could comment on where customer inventories are within Europe and Asia, where you're seeing some softer to weakness on the demand side. Thanks. Sure, Josh. I'll pick up on this. Let's deal with your first question about the second quarter, sort of trying to get a handle on parsing out the the delta there. If we think about it on a sequential basis, you know, what I would say to you is that, the less than half of the impact occurred because of the moderation of Scarlino. You know, the majority still came in TiO2 from the softer demand in Europe and Asia, specifically, and particularly in coatings. You know, to be clear, there was a small part of the the shortfall in the second quarter volumetrically because of product availability of one of our additives products out of Germany, but that was the minority. I think that deals with, you know, the question about, you know, the the the impact. You know, if you could just remind me of the second part of your question, I'd appreciate that. Sure. It was just, inventories. What are your customer inventory levels in Europe and Asia? Apologies for that. From an inventory standpoint, I mean, you know, we have come through this period where there's been very little inventory in the chain. There is no doubt that we have seen some softening, you know, in Asia and in Europe. We see some customers, particularly in the coatings area, you know, not sort of restocking a little bit there. We think this is a bit of a pause. We know that, you know, customers have painted a picture, several large customers have painted a picture, you know, in the second half where they can see some rebound or some improvement, particularly in Asia and some have made that comment in Europe too. We still see, you know, inventories as being low and of course, you know, some customers are concerned about, you know, ongoing concerns about product availability, which is further, you know, keeping a lid on what I would call, you know, heavy restocking. We haven't seen that at this time. Okay. Thank you. Thank you. Our next question will come from Hassan Ahmed with Alembic Global. Please go ahead. Morning, Simon and Kurt. You guys obviously. Good morning. Morning. You guys obviously touched on, you know, ore price inflation, obviously other raw materials as well. Can you talk a bit about what you guys are seeing in terms of ore availability? Also part and parcel with that, obviously, you know, as you're seeing ore price inflation, you guys are obviously doing your monthly pricing reviews as well. Also if you could touch a bit on, if at all you're seeing any signs of demand disruption on the back of significantly higher TiO2 pricing. Yeah, I mean, that second point, Hassan, I mean, the answer is very straightforward. No. You know, we don't see that at this time. And these prices, while, you know, higher than recent years, it's not sort of record highs, if you like. And there's a good appreciation from the customers also about the, you know, direct cost run-ups that have occurred over these past four or five years, which have sort of driven this situation. And of course, they've been passing, you know, price through to their own customers pretty successfully from what we could see. You know, in terms of your question about raw materials as it relates to ores. I mean, ores has typically been our biggest spend item within the business and our variable costs. We have seen an improvement in the securing and supply chain dimensions around feedstocks. We believe that we've done a good job navigating through a sort of tighter period these past 6-9 months. We believe that situation will sort of loosen a little bit in the second half. We currently foresee, you know, no problems getting our allocation and our requirements met in the second half across the range of the feedstocks. You know, the feedstocks contracts have now been settled. Typically these contracts, you know, go around six-month periods, not always, but typically. I would characterize to you our second half headwind on feedstock as being in line with our forecast and across the different families of products, not dissimilar from each other. I would make that comment. But of course, you know, as you, as you're well aware, of late, of course, you know, energy has become sort of in a more volatile and more elevated situation for our, you know, product costings and the like. But from a feedstocks standpoint, it's more stable. We know where we're going. We think we're getting our products, yeah. Makes sense. Very helpful. As a follow-up, on the free cash flow generation side of it, I mean, obviously scraping away the settlement amount that you guys received, I mean, it was, you know, negative sort of free cash flow in the quarter. But obviously you guys highlighted the $70 million reduction in annual cash uses by end of 2024. I'm just trying to get a better sense of when you feel, you know, you as a company will turn free cash flow positive with all these different moving parts. Yeah, Hassan, it's a good question. That continues to be our highest priority from a financial standpoint, is becoming free cash positive. Look, I'm not sure absent the legal settlement benefits that we've had here this year. If you pull those out, and we look at when we will be operationally free cash flow positive, it's probably not in 2022. We feel like we've got a shot here in 2023. Of course, as we move into 2024, the bar lowers, and our ability to be free cash flow positive becomes more probable as we shed the legacy cash uses. The further we go forward in time, the easier that hurdle will be. We continue to be hyper-focused on it in the meantime, and doing everything we can in order to achieve that goal. Very helpful, Simon and Kurt. Thank you so much. Thanks, Hassan. Our next question will come from Jeffrey Zekauskas with JP Morgan. Please go ahead. Thanks very much. What's the normal utilization rate of the Scarlino facility? Typically, you know, we'd be expected to run that at a sort of like, you know, in a band of like 85%-92% of its nameplate capacity of 80 kilotons. If you have to close it down, what would the costs of that be? You know, the accumulated costs of, you know, putting the facility to rest. Yeah, I mean, look, let's be clear. You know, we are hopeful that we are gonna get the necessary approvals from, you know, the authorities to continue operating this facility. We have had some progressive. I understand that, but I was wondering what the cost would be to close it down. Yeah. Look, we haven't got to the point where we're prepared to sort of, you know, put numbers out there on the cost. You know, I have to say that, you know, we have experience of, you know, plant closures and the different components costs, which are pretty typical, you know, severance, any contract penalties or remediations and the like. You know, I would think about Scarlino at the lower end of the range of what, you know, historical closure costs would be and spread over multiple years. You know, it's too early to be getting to that point. We've got to work through to get more specific numbers. In terms of the legal gain, what was the cash flow impact of the legal gain in the quarter? Are there any taxes that need to be paid in the future? If there are, how much are they? Yeah, Jeffrey, if you are referring to the Pori-related legal settlement. No, no, I'm sorry. The legal settlement from, From Tronox? Yeah. Sorry about that. Yes. Yeah, no, that's fine. So we collected $85 million of cash in the second quarter, and the tax rate associated with that will be roughly 10%. We did pay a couple million of tax associated with that $85 million collection in the second quarter. The remaining amount will be spread out here through the balance of 2022. Okay, great. You know, you talked about fundamentals being pretty good, but, you know, isn't European coatings demand dropping, I don't know, 10%-15%, you know, year-over-year? Haven't the Chinese shipped, I don't know, 100,000 tons more than they did in the first six months of last year? I would think that those would make operating fundamentals more difficult. Do you expect to grow volumes sequentially in the third quarter in TiO2? You know, let me pick it up, Jeffrey Zekauskas. I mean, the second part of your question, no, we would expect to hold on to the sort of volumetric levels in the third quarter that we sold in the second quarter in TiO2. Okay. Yeah. think about that as a sort of similar level. Coming back to the fundamentals, I mean, you know, if we look at China, if you look at what's being shipped into Europe this year, you know, we've seen progressive decrease, we've seen a third month of decreases and, you know, those outpace any sort of, you know, reduction in in coatings demand we see in Europe. We continue to see in Europe, you know, a significant amount coming to Europe, but it's, you know, actually at the moment lower than the Chinese shipments into all of the Americas. You know, of course, your figures on a year-on-year basis, overall exports are up by about 15%. That's true. But significant portion of that has gone into Russia, largely to sort of replace, you know, Western companies that have pulled out. I think, you know, from a demand point of view, yes, it's true, we are seeing some softness in coatings in the second quarter. But we do see that you know, we don't see that as an onward and deteriorating situation as I've explained. We continue to believe that we can manage that level of sort of, you know, Chinese exports. It really comes back to our point about supply. Supply is not getting built and underlying, you know, this market is growing, and we do expect it to be growing by hundreds of kilotons on average per year over time. You know, supply is not being built. That's what we're referring to there. I guess maybe last question. What's the price trajectory look like as best as you can tell for the remainder of the year? Have we come to an end or are we still rising? No, we certainly don't think we've come to an end. I mean, you know, we've already said that we expect to see, you know, feedstock cost increases and other raw materials in the second half, and I think everyone is seeing and going to see those. We of course have a bigger European footprint and the exposure to energy there. We've, you know, you can see in our second quarter numbers that year-on-year our local currency pricing is up by 31%. There's a s trong determination through our tailored approach and monthly approach to continue that in the second half. It's not yet clear with a bit of softening demand, of course, whether the trajectory will remain the same, you know? We certainly will be, and it's our intention to, you know, push for further price increases. I'm sorry, just one more. You know, European gas is now, you know, $50 in MMBtu plus. Does that, if it remains there through the course of the third quarter, does that put a strain on you relative to the second quarter in terms of your cost structure? And if it does, how much? Well, it certainly puts a strain, and the question is how much of it, you know, we can manage through our margin and price management, you know? You know, we're not prepared to break out the number, but you can imagine that this is, you know, while we've got significant hedging programs, you know, this type of elevated level, you know, causes some pain. You know, it does bring some pressure. You know, we can't deny that. That's why we'll be, you know, pushing on our price increases, you know? Okay, great. Thank you so much. Thanks, Jeff. Our next question comes from David Begleiter with Deutsche Bank. Please go ahead. Thank you. Simon, Kurt, do you think in TiO2 you can grow EBITDA sequentially in Q3? Well, I think it's gonna be pretty tough. We're not gonna get volumetric uplift there. There, you know, conditions are a little bit softer in the third quarter. I think we've highlighted in Europe and Asia. You know, even as that gets better, we don't expect that to happen very extremely quickly. I think I'd say the answer to your question is gonna be tough. Yeah. It's probably gonna be a difficult ask. No, thank you for that. Just in, similarly in Performance Additives, do you expect a similar or typical seasonal performance in that business? Or perhaps some further weakness given the macro backdrop? I think we expect it to be similar, you know. I think, you know, if you look at our Performance Additives business performance in the second quarter and look at historical patterns and, you know, we—there's no doubt about it, in the second quarter, we suffered from global sort of construction weaknesses, and we expected to see a bit of a better seasonal uptick, which we didn't get. We, you know, we still had a pretty decent earnings result because we've made some improvements to that business. You know, I think we're pretty positive about seeing a, you know, a pretty decent return from Additives in the third quarter. David, I will say that we've got a pretty easy comp compared to the third quarter of last year. We certainly expect it to be much stronger than what we had last year, notwithstanding a seasonal decrease into the third quarter from the second. Very good. Thank you. Thanks, David. Our next question comes from Vincent Andrews with Morgan Stanley. Please go ahead. Hi, guys. This is Will Tang on for Vincent. Thanks for taking my question. So you guys had a $103 million kind of inventory headwind to working capital during the quarter. Is that a function of a more, I guess, purposeful inventory build given kind of the lack of inventory you'd called out in the past? Or I guess, just a function of, you know, the weaker architectural demand? And then how would you kind of characterize your own inventory position, I guess, kind of ending the second quarter here? Yeah, I mean, look, it does vary. I mean, we didn't intentionally set out to grow inventory. I mean, obviously with inventory valuations being what they are, you know, we are very highly incentivized from our cash program to, you know, constrain and minimize that. That said, there was some deterioration in coatings and, you know, different plants make different products. So we did see a little bit of a modest inventory build within that, you know, within that number on the finished goods. A bigger and more, you know, sort of large issue for us in the quarter was, you know, timing of feedstocks. You know, frankly, that was quite a material number within the -$103 in inventories. I've mentioned the higher cost, but, you know, as we see inventory in the chain, I mean, we're taking all steps we can to control our, you know, raw materials and our finished goods. We don't see customers have quickly restocked here. They seem to be managing there. You know, I would say that from our evidence, you know, inventories in the chain are still relatively low, but clearly not quite as tight as they were. Got it. I guess, I think in the past you've talked about using that cash that you would see from the Tronox settlement to kind of, you know, restructure debt. I guess given the rising interest rate environment, that's kind of, you know, worked against you there. Are there any changes to your plans or, you know, is that still how you plan on using that? Yeah, Will, we continue to look for the right opportunity to use some of the cash that we have on our balance sheet and pay down our debt. Ideally, we would do that in connection with an optimization of our capital structure. We continue to look for the right window in order to do that. Stay tuned. Got it. Thank you. Our next question comes from John McNulty with BMO Capital Markets. Please go ahead. Yeah, good morning. Thanks for taking my question. A lot of my questions have been asked already, but I guess one I wanted to dig into a bit. You've got a couple of assets in Germany. I guess can you help us to understand what happens if, you know, if the spigots from regarding Russian gas get cut off to Germany, can these plants operate? Do you have a way to kind of procure the energy that you need to run the facilities? Is there a way to think about that? Yeah, I mean, look, I think some general comments apply. First and foremost, you know, we attempt to and have been achieving a pretty close relationship with the authorities in Germany to make sure the dialogue is open. We've been positive about that engagement in regards to, you know, the German authorities are showing some understanding of the cost-based situation of our energy and looking at arrangements that could help us in our plants in Germany. That's a very positive signal because it shows, you know, the willingness to engage and the understanding of potential problems. Now, the second point I'd like to make is that, you know, we're pretty positive about the fact that, you know, many of the products we make in Germany go into pretty sensitive applications, pharmaceuticals and the like. We think that there's, you know, a good chance that the German government sees and understands that, you know, they have to keep these products, you know, flowing, as building block products into other industries, and we you know we don't know this yet, but should there be any allocation or rationing regime put in place. We think we're sort of well positioned, and that would be my second point. Then thirdly, look, of course, ultimately we have got no guarantees that there wouldn't be some impact. We're staying very close to it. We do have the ability to moderate plants in a way that sort of maximizes whatever gas we would get. Of course, clearly that is a concern on a go-forward basis with winter approaching, with European and German assets, as to the, you know, energy availability. We can't speculate. We don't know what's gonna happen. We are, you know, closely talking to those authorities is what I can tell you. Got it. No, that's helpful. Maybe one question just on the performance business. You indicated you didn't see the seasonal construction lift the way you normally would. Was that just because the construction season didn't actually play out the way it normally does? Or were there supply-related issues where maybe there's a little bit of catch-up that you can get in the third quarter? I guess, how would you characterize what was driving that kind of lack of seasonal uplift? Yeah, I mean, I would say it was soft demand. You know, I don't see it necessarily as a catch up. On that though, I don't see it also deteriorating. I think we said that we expect to see us, you know, delivering a pretty decent third quarter. Of course, you know, there's our performance with the additives franchise. But, you know, the volumetric damage was done in our Colors business where, you know, both in Europe and in North America, I have to say, in both of those regions, which are our main sales regions, we saw some downdraft in construction-based demand, you know, at the volumetric level. Got it. Thanks very much for the color. Perfect. Our next question will come from Laurence Alexander with Jefferies. Please go ahead. Hi, good morning. This is Kevin Estok on for Laurence. I just had a question. Hi. About the conflict in Ukraine. Hi. Just wondering how the situation is perhaps interrupting your non-energy related supplies. Then more broadly, just curious, I guess, how you expect supply constraints to more broadly evolve globally over, let's say, the remainder of the year? Yeah, I think that where we are with, you know, on the Ukraine situation is it's not really materially impacting our overall business operations and performance either on the supply or selling end. But, you know, I don't think with feedstock situations sort of like improving a little bit, you know, our main availability-based issue for raw materials comes down to the previous question on energy really. It's you know, having sufficient you know, gas and you know, the Nord Stream 1 pipeline and what runs and you know, what may play out in that sort of like political arena around gas availability. That's our number one sort of supply chain challenging concern. I think across the board, we're pretty much getting everything else we need across all our different factories and product groups. Okay, thank you. Our next question comes from Arun Viswanathan with RBC Capital Markets. Please go ahead. Great. Thanks for taking my question. I guess I just wanted to circle back to the energy cost inflation side. So, what is natural gas, I guess, as a part of your cost structure? And, you know, given that you do have some production in Europe, is this a little bit more onerous for you guys? And I know it could be, but I just wanted to see if there's any kind of metric you can give us as far as maybe the portion of your cost structure, how much of that is in Europe, and so on and so forth. Thanks. Yeah, I mean, look, you know, we have the preponderance of our TiO2 capacity is based in Europe. You know, we have five facilities across Europe. They're all in different sort of situations. With respect to energy, I'd say, you know, there is some concern around Germany. We've talked about that. We think UK, Spain is pretty well-positioned. Scarlino is probably somewhere in the middle, and of course, you know, we are running that at a lower rate as well. You know, I think that energy is a large significant and growing portion of our cost structure. You know, historically, feedstock has been the biggest single spend item. That remains the case, it is the biggest single spend item. Of course, you know, the energy bill, if you look at some of the volatility we've seen through the course of this year, you know, it's been significantly higher, and is right now than some of the sort of like Asian or U.S.-based facilities taking, you know, these energy products. We can't deny that. You know, I think you should think about the energy component being a large and second largest part of our direct cost structure. Taken together, I would say now that, you know, feedstock and energy are probably, you know, 70% plus of the overall cost structure of the raw materials and goods we buy to make the product, not our indirect costs. Yeah. Arun, just to put a little bit of a finer point on that, think about energy as an entire basket comprising about 15%-20% of our cost of goods sold. There's a range depending on which business unit that we're talking about, but that ought to give you a feel in a sense for how meaningful energy is to us, recognizing that we're much more sensitized to ore feedstocks than we are energy. Great. That's very helpful. Thanks for that. Then, I guess just the second question was just on the market outlook itself. I think, you know, some of the industry trade forecasters have price increases in Q3, but that would be, you know, potentially mostly on this inflation, both on energy and feedstocks. Is that correct or do you expect slight margin expansion as you look ahead, or is it mainly there to cover those rising costs? Thanks. Yeah. I think we'll be looking to target to offset those, you know, input costs that we see inflationary pressures in the third quarter on our pricing across most of our, you know, practically all of our portfolio of products. We see that the third quarter demand will hold on to in, you know, TiO2 over the second quarter. In others, we think we're gonna get, you know, we're set for a pretty decent third quarter. We also note some commentary by some major consumers of our products about what they see in terms of the second half trajectories in Asia, particularly, and some in Europe as well. Thanks. Our next question will come from Eric Petrie with Citi. Please go ahead. Hey, good morning, Simon and Kurt. Good morning. In Q2, what's your order book visibility like? You know, we talked about last quarter restocking risks upside. You know, is that still second half, or is that gonna be pushed into 2023? Yeah, I mean, I think that, you know, if you look at it varies by region. I mean, I think we see, you know, demand holding up well in North America, you know. I think in Europe, of course, there has been some demand softening. We think that it feels more like some sort of correction because we haven't seen, you know, great restocking. Some customers are concerned, particularly larger ones, about potential, you know, gas rationing and knock-on effects on their own supply base. I think they are sort of leery of running their inventories down sort of too low. There could be some restocking, but, you know, we see, you know, Asia's probably. We don't see it yet, but, you know, others think it's gonna be rebounding. You know, it's certainly soft for us and we'd expect to see some pickup, you know, during the second half there. As I said earlier, we don't see an unduly high level of inventories in the chain. You know, we don't see those sort of ballooning up, if you like, in the second half. I know your exposure to China is relatively smaller compared to some of your competitors, but how much did China lockdowns impact the demand, and do you think that was attributable to the higher exports? Yeah. I mean, look, there has been a real impact in China. Demand has been down, no doubt about it. You know, even though the Shanghai lockdown was lifted quite recently, there's been a big impact on local demand. As an earlier question highlighted, Chinese exports globally, while they've come down sequentially in the second quarter, on a year-on-year basis, they are still up. That's to work by way of compensating for that local demand. You're right, we don't have a big window into China, but the window we do have shows pretty weak demand outside of specialty products. Okay. Lastly, if I may, what's the timeline for the landfill capacity reaching full utilization at, you know, Scarlino running, you know, at one-third of operating rates? Yeah, I mean, I think, you know, we still have a window to work with, but we've gotta be a bit careful here, you know, that we keep the continuity of the plant running. We've taken this precaution to come down. You know, we don't have an unlimited time to sort it out. Of course, we'd like to have sorted out already. You know, as we get through into sort of early 2023, we should have further information in Q4 to be able to update you on with where we are on these approvals. Great. Thank you for the color. Thanks, Eric. Thanks, Eric. There are no remaining questions at this time. With that, we will conclude our question and answer session. I would like to turn the conference back over to Simon Turner for any closing remarks. Okay, thanks, operator. Thanks to everyone for joining our second quarter 2022 earnings call. Thank you for your continued interest in Venator. We look forward to speaking with you at the upcoming in-person event. Of course, please feel free to reach out to Kate with any additional questions you may have. Thank you. Conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.