Tronox Holdings Plc · NYSE:TROX
Tronox — Investor Presentation (February 2006)
29 slides from Tronox's investor presentation, Feb 6, 2006
Slide 1: Investor Presentation
Investor Presentation Feb. 6, 2006
Slide 2: Forward Looking Statement
Forward) Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management and on information currently available to our management at the time of such statem
Slide 3: Use of Adjusted EBITDA
Use of, Adjusted EBITDA This presentation contains Adjusiea) EBITDA, which is a non-GAAP measure that is presetieabeeet ait material component of the Covenants that are imposed of Us) by the senion secured) credit facility. A detailed reconciliation to the comparable GAAP financial measures can be f
Slide 4: Investment Highlights
Investment Highlights Attractive Industry a Fundamentals = Experienced Global Producer & Marketer with a Team sera Position sin NI 7 i 7 Proprietary Executing Esse ley Value Strategy: Expertise with ot Well-Established World-Class - Strategic —— customer _— Technical support Relationships Across Div
Slide 5: Overview
Overview © “Strong out of the blocks” © Focused|on execution © TiO, business/environment and outlook © Financial highlights
Slide 6: IPO Proceeds
IPO Proceeds Equity proceeds, net of fees $225.5 MM Debt proceeds, net of fees: _ $537.5 MM Tronox Div to Kerr-MeGee! $763.0 MM IPO) share price $14/share Shares issued 40.4 MM Public: Class A 43% = 17.5 MM shares KMG: Class B 57% = 22.9 MM shares
Slide 7: Link to searchable text of slide
Link to searchable text of slide shown above
Slide 8: Tronox Operating Results
Tronox Operating Results Net Sales Operating Profit Adj. EBITDA Adj. EBITDA Margin EPS from Cont. Ops. Unaudited 2004 2005 $4,302 $1,364 (85) 88 162 233 12.4% 17.1% $1.13 $MM
Slide 9: Tronox Evolution
Tironox Evolution 1997-2000 2001-2003, 2004-2005. Integration Building New GeO CaS Challenges Strategy & Team > Bayer Acquisition © > Value strategy: Focus on > Kemira Acquisition Z lussrosslig) Sent Plus, Profit.Retums > capacity: 200MTto ” Standaralze foKMG) See Tronox > Drive Business from . Cust
Slide 10: Tronox Moving Ahead
Tronox =Moving Ahead 2005 IPO Process > Dual-Track Process IPO SS Filing > Completed IPO with Roadshow in November. > IPO on Nov. 22, 2005 > Strong Financial Performance 2006 Focused on Creating Value for Shareholders Péxecute Strategy ZAllgnmentof Employees, >Focus on Cash >EPS Growth 2007+ Focus o
Slide 11: Alignment of Employees
Alignment of Employees © New Variable Compensation Program — “STAR” = Program 2006 metrics © Corporate = Net Income: = Return on Invested Capital = Cash Flow © Organizational Group (By plant) “Line of Sight” = Fixed cost ™= Manufacturing efficiency variance = Quality = Uptime = Balanced Scorecard Ap
Slide 12: Tronox Balanced Scorecard
Tronox Balanced Scorecard 2005 PERSPECTIVE OBJECTNE MEASURE FINANCIAL LEARNING & GROWTH improved safety performance [Reduce incident Rate (IRR) % E t lOrganatenal_improve Org Efectveness
Slide 13: Global TiO2 Manufacturing Operations
Global TiO; Manufacturing Operations @ strategically positioned plants to effectively serve global markets @ Experienced operational management and plant-level leadership Nameplate Capacity eT aiaea i Fariton = ee iio WesiemAbsiala 110 = Botek, Bale 2 ; J Netherlands vie ‘7 j rye aiaes — Hamilton, G
Slide 14: Manufacturing Excellence
Manufactiiring Excellence Extracting More From Existing Assets: = Focused effort to improve uptime at all five TiO, facilities to world class = Reduce maintenance spend) = Focused on quality Annual Maintenance Cost as % of (eeesh el Estimated Replacement Value
Slide 15: Working Capital
Working Capital Unaudited 2003 2004 2005 Accounts Receivable $151 $222 $323 Inventories ; 285 312 Deposits & Prepaids 53 34 29 Total Current Assets 557 541 664 Accounts Payable 198 196 195, Accrued Liabilities 152 163 173 Current Portion LTD = = 2 350 359 370 Net Working Capital $207 $182 $294
Slide 16: Process Chemicals & Energy Costs
Process Ghemicals & Energy Costs @ Process Chemical Costs and Programs = Sticcessful execution of supply chaimand contracting strategies mitigated potential cost increases = Tronox cost Increases wete Lip) oy substantially below general market: = 3 major process chemicals are chlorine) petroleum cok
Slide 17: Announced Price Increases
Announced/Price Increases © Oct. 1, 2005, $.06/Ib. increase will positively impact @1 2006 © Jan. 1, 2006, $.05/Ib. increase will positively impact Q2 2006
Slide 18: TiO2 Supply / Demand
TiO; Supply / Demand ® supply / demand is tight TiO, Supply / Demand © 2006 will be the lowest supply to, demand ratio in two decades, Capacity rationalization of 248 Mt) on44% of sulfate capacity since) 2003, Major Brownfield / Greenfield efforts needed pre-2009 Supply Considerations From 2005 to 2
Slide 19: Financial Focus and Objectives
Financial Focus and Objectives: a Disciplined focus on: = Free cash flow generation = EPS growth = Debt reduction = Regular quarterly dividend payments a Efficiently manage working capital requirements @ incentivize management with equity ownership
Slide 20: Tronox Cash Flow
Tronox Cash Flow 2004 Net income (loss) $(428) Depreciation and amortization 105 Asset write-downs and impairments, 122 Other adjustments to reconcile net income (loss) to net cash prodiled by, opefating activities > 445, Changes in assets and liabilities (28) Net cash provided by operating activiti
Slide 21: 2006 Capital Expenditures
2006 Capital| Expenditures $94 MM \ Operations ee eionce Discretionary . Asset - Management . Environmental Mandatory & Safety By Type Pigment By Category
Slide 22: Legacy Sites
Legacy Sites © Company actively manages environmental issues related to legacy businesses © In 1994, a centralized unit, Safety and Environmental Affairs (S&EA) was formed to manage environmental issues @ S&EA staffed with 34 experts in environmental remediation
Slide 23: Link to searchable text of slide
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Slide 24: Profit Growth Drivers
Company Fundamentals Internal Growth Margin Enhancement External Growth Prott Growth Drivers Target: >10% EPS Growth i Positioned to Benefit from Tight 78. Demand 4 Pi erations: = Proprietary Chloride Technology Superior Customer / Technical Service = Organic Growth / Brownfield = Grow with Strategi
Slide 25: Additional Backup Material
Additional Backup Material
Slide 26: TiO2 Pigment
110, Pigment ® Quality-of-life product used| daily © No effective substitutes © Differentiated and ieguently customized 2005 Global Ti, Demand by End-Use Market Diverse Portfolio of End-Use Opportunities Plastics Diferentiated Prosucts Spectalty Products Formulation based Customized + Selective mark
Slide 27: Global Producer with Strong Market Leadership Position
Global Prodticer with Strong Market Leadership Position @ Highty concentrated industry with top five producers accounting for approximately 70% of global production = #3 global producer, #2 using higher-growih chloride-process technology @ Leading supplier to global customers In multiple regions of
Slide 28: Market Strategy
Market Strategy @® Grow higher margin Plastics and Specialty, while enhancing profitability of Coatings and Paper Harvest Maintain Grow. 2 { £) F Z \ 4 ~ an Be a) ° ee Paper 9% Plastiés 22% Specialty 2% 48 ig £ “4 Ey F Low Medium High Market Attractiveness
Slide 29: Searchable text section of graphics
Searchable text section of graphics shown above TR ONOX Investor Presentation Feb. 6, 2006 Fo rward Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our man