Tronox Holdings Plc · NYSE:TROX

Tronox — UBS Chemicals Mini-Conference (Toronto) (November 2021)

42 slides from Tronox's conference presentation, Nov 11, 2021

  1. Slide 1: Tronox Investor Presentation

    Tronox Investor Presentation November 2021 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 1

  2. Slide 2: Safe Harbor Statement and Non-U.S. GAAP Financial Terms

    Safe Harbor Statement and Non-U.S. GAAP Financial Terms Cautionary Statement about Forward-Looking Statements Statements in this presentation that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking

  3. Slide 3: Why Tronox?

    Why Tronox? Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 3

  4. Slide 4: Why Tronox?

    Why Tronox? 1• World’s leading vertically integrated TiO2 producer with an advantaged cost position 2• Diverse and well-balanced global customer base and end-market exposure 3• Positioned to benefit from attractive TiO2 market evolution 4• High-value co-products add earnings power 5• Controllable co

  5. Slide 5: Tronox – A Focused Titanium Industry Leader

    Tronox – A Focused Titanium Industry Leader 1 Sales by Region1 Sales by Product1 TiO2 Sales Volume by End Use Market2 $3.5B ~6,500 LatAm Feedstock and Paper and LTM sales employees 7% Other Products Specialty 8% 8% North America EMEA Paints and Global 21% 39% Coatings TiO2 79% TROX 76% NYSE Leader A

  6. Slide 6: Nine TiO2 Pigment Plants, Six Mineral Sands Mines, and Five Upgrading Facilities

    Nine TiO2 Pigment Plants, Six Mineral Sands Mines, and 1 Five Upgrading Facilities on Six Continents • 1.1 million tons of nameplate TiO2 pigment capacity • 297,000 tons of zircon processing capacity • 220,000 tons of pig iron • 410,000 tons of titanium slag • 230,000 tons of synthetic rutile • 182,

  7. Slide 7: Superior Competitive Position as Most Vertically Integrated TiO2 Producer

    Superior Competitive Position as Most Vertically Integrated 1 TiO2 Producer Namakwa Benefits of Integration Gingko Existing Fairbreeze East and UMM Cooljarloo Wonnerup Paraiba Operations Snapper West Mining  Zircon  Pig Iron  Full utilization of mining and Future Fairbreeze East OFS Atlas Coollja

  8. Slide 8: Balanced Geographic Footprint and End-Market Exposure

    2 Balanced Geographic Footprint and End-Market Exposure Provides Significant Advantage Relative to Competitors Balanced Geographical Sales1 Sales by Product1 Feedstock and Other Products 21% 8% Zircon 39% 13% TiO2 79% 33% Plastic Paints & 13%2 Coatings 60%2 7% Paper & Specialty 6%2 A Global Footprin

  9. Slide 9: Tronox’s Strategy is Best Aligned with the Changing TiO2 Industry Dynamics

    Tronox’s Strategy is Best Aligned with the Changing TiO2 3 Industry Dynamics Evolving industry trends… …Coupled with reduced price volatility High Quality TiO2 Price1 • Producer consolidation and migration to public ownership ($ per tonne delivered) • Higher probability of periods of feedstock and p

  10. Slide 10: TiO2 Market Has Historically Demonstrated a Healthy Track Record of Growth

    TiO2 Market Has Historically Demonstrated a Healthy Track 3 Record of Growth • Long-term TiO2 demand correlated with GDP growth $90,000 R2: 98% 6,750 $80,000 • Historical short-term swings in TiO2 demand driven by Real GDP ($ Billions)1 5,750 TiO2 Demand (KT)1 customer stocking/destocking actions $7

  11. Slide 11: Tronox is Positioned to Capitalize on a Strengthening TiO2 Market

    Tronox is Positioned to Capitalize on a Strengthening TiO2 3 Market Market Tailwinds Tronox Tailwinds • Price and volume recovery since 2H 2020 • Continued sequential improvement in quarterly Adj. EBITDA1 – up 300 basis • Proven end-market resiliency through pandemic points Q3 2021 vs. Q2 2021 and 7

  12. Slide 12: Zircon Delivering Significant Value

    Zircon Delivering Significant Value 4 Zircon Demand1 • Second largest zircon producer with ~297,000 tons of capacity Tronox Zircon • Largest production capacity of our portfolio at Namakwa Sands By Geography Assets • We estimate total zircon reserves of 4.6MT at Namakwa, 1.0MT at KZN, and 1.1MT in A

  13. Slide 13: Key 2021 Capital Projects Expected to Further Enhance Tronox’s Cost Position

    5 Key 2021 Capital Projects Expected to Further Enhance Tronox’s Cost Position Project newTRON Atlas Campaspe Jazan • Multi-year, global digital transformation • Australia mining project replacing • Completed technical modifications and strategy project Snapper / Ginkgo mines that are cold commissio

  14. Slide 14: Strong Free Cash Flow Provides Financial, Strategic and Operational Flexibility

    Strong Free Cash Flow Provides Financial, Strategic and 6 Operational Flexibility Strong Free Cash Flow Generation... ...Coupled with a Robust Financial Position Free Cash Flow Conversion1 Ample Liquidity • $764M in available liquidity as of September 30, 2021 78% 77% • $309M in cash & cash equivale

  15. Slide 15: We Remain Committed to Our Strategy

    We Remain Committed to Our Strategy 7 Essence of our strategy, driven by changing industry dynamics: To Become an Advantaged Global TiO2 Leader The right people, culture and capabilities will allow us to execute our strategy Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 15

  16. Slide 16: A Global Organization United by Our Core Values

    A Global Organization United by Our Core Values 7 Tronox has created a high-performance organization that transcends geographic and cultural boundaries Our Core Values Our Results Approach • We have an uncompromising focus on operating safe, reliable and responsible facilities. • We honor our respon

  17. Slide 17: Our Sustainability Commitment

    7 Our Sustainability Commitment › Sustainability has always been a part of how we do business at Tronox. › Vertical integration model sets us apart with holistic view of supply chain. › Sustainability embedded into every aspect of our business. › Accountable for all our actions. › Committed to inten

  18. Slide 18: Tronox’s Enhanced ESG Oversight

    Tronox’s Enhanced ESG Oversight 7 Board Level Attention Demonstrated Focus • Board committee structure reorganized • Aligned with a global warming scenario during Q3 2021 to include Governance and below 2°C Sustainability Committee to enhance • Set aspirational goal of net zero oversight of environm

  19. Slide 19: Updated Capital Allocation Policy

    Updated Capital Allocation Policy Remain committed to internal investment that will further reduce our production costs and sustain our vertical integration advantage while prudently returning capital to shareholders Following the expected achievement of reaching our $2.5B gross debt target in Q1 20

  20. Slide 20: Financial Highlights

    Financial Highlights Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 20

  21. Slide 21: Third Quarter Messages

    Third Quarter Messages Continued strong execution • Continued margin expansion given improved pricing and cost savings offsetting increased commodity and freight costs • Significant free cash flow from differentiated business model allowing for accelerated deleveraging ahead of our targeted objectiv

  22. Slide 22: Third Quarter 2021 Financial Highlights

    Third Quarter 2021 Financial Highlights • Solid financial performance in line with guidance Summary Financials Q3 Q3 YoY Q2 QoQ 2021 2020 %∆ 2021 %∆ • Revenue of $870M, driven by higher average selling prices Revenue $ 870 $ 675 29% $ 927 (6)% across all products and higher TiO2 and zircon volumes •

  23. Slide 23: Historical Financial Performance

    Historical Financial Performance Adj. EBITDA1 ($M) Adj. EBITDA1 – CapEx ($M) Adj. EBITDA1 margin Free Cash Flow Conversion2 $714 78% 77% $531 $681 $668 28% 27% $483 $473 25% 74% 24% 71% 71% $513 23% $396 62% $329 $420 15% $314 $195 3 3 2016 2017 2018 2019 2020 YTD 2016 2017 3 2018 2019 3 2020 YTD 9.

  24. Slide 24: Outlook Published October 28, 2021

    Outlook Published October 28, 2021 Q4 2021 Outlook FY 2021 Estimated Uses of Cash • TiO2 and zircon prices expected to continue to increase • Net Cash Interest Expense: ~$130M-$140M • TiO2 sales volumes expected to be flat to down mid- • Cash Taxes: ~$40M-$50M single digits • Capital Expenditures: ~

  25. Slide 25: Key Takeaways as We Prepare to Close Out 2021

    Key Takeaways as We Prepare to Close Out 2021 Continued strong execution Strong demand and volumes resulted in solid earnings performance despite some cost challenges Recognized higher average selling prices for both TiO2 and zircon Strong free cash flow allowing for leverage reduction and execution

  26. Slide 26: Appendix

    Appendix 26 © 2020 Tronox Holdings plc. | All rights reserved. | tronox.com 26

  27. Slide 27: Our Operations

    Our Operations Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 27

  28. Slide 28: The TiO2 Value Chain

    The TiO2 Value Chain • Tronox is vertically integrated from mine to pigment, with approximately 85% of our ore feedstock needs met by our internal production; the remaining 15% of ore feedstock needs are purchased externally • We believe that vertical integration is the best way to achieve our ultim

  29. Slide 29: Tronox’s Established Mining Operations

    Tronox’s Established Mining Operations Namakwa, South Africa KZN, South Africa Australia • Largest HM Reserves at ~44m MT • Fairbreeze Mine HM Reserves at ~13m • ~9m MT of HM Reserves at Northern MT Ops; ~1m MT at Southern Ops; ~7m • Processing Capacities: 30k MT Rutile MT at Eastern Ops & leucoxene

  30. Slide 30: Smelting Operations to Produce High-Grade TiO2 Feedstock

    Smelting Operations to Produce High-Grade TiO2 Feedstock Material for our Pigment Plants Namakwa, South Africa KZN, South Africa Chandala, Australia • Two smelting furnaces that produce • Two smelting furnaces that produce Ti • Metallurgical site which includes a kiln titanium slag (“Ti Slag”) Slag

  31. Slide 31: Jazan Expected to Increase Total Ti Slag Production by 500k MT

    Jazan Expected to Increase Total Ti Slag Production by 500k MT Producing high-grade feedstock for our pigment plants • Jazan is a key to further optimize vertical integration of Tronox • Jazan smelter comprised of two high-grade chloride slag furnaces with 500ktpa of combined capacity • Tronox, unde

  32. Slide 32: Nine Pigment Plants Across Six World Regions

    Nine Pigment Plants Across Six World Regions North America Europe Australia • Tronox’s largest pigment plant is located • Stallingborough, U.K plant has a production • Kwinana, Western Australia plant in Hamilton, Mississippi and has a capacity of 165k MT (chloride process) (~40km from Perth) has a

  33. Slide 33: Financial Tables & Reconciliations

    Financial Tables & Reconciliations Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 33

  34. Slide 34: Annual Reconciliation of Net (Loss) Income to EBITDA, Adjusted EBITDA and Free Cash Flow Conversion

    Annual Reconciliation of Net (Loss) Income to EBITDA, Adjusted EBITDA (Non-U.S. GAAP) and Free Cash Flow Conversion (Non-U.S. GAAP) ($ millions) Year Ended December 31, 2016 2017 2018 2019 2020 Net income (loss) (U.S. GAAP) $ (58) $ (272) $ 30 $ 41 $ 995 Income from discontinued operations, net of t

  35. Slide 35: Quarterly Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

    Quarterly Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (Non-U.S. GAAP) ($ millions) Three Months Ended 2014 2015 2016 2017 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Net income (loss) (U.S. GAAP) $ (54) $ 2 $ (

  36. Slide 36: Quarterly Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

    Quarterly Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (Non-U.S. GAAP) ($ millions) Three Months Ended 2018 2019 2020 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Net income (loss) (U.S. GAAP) $ (41) 50 15 6 $ (18) $ 32 $ 26 $ 1 $ 40 $ (4)

  37. Slide 37: Consolidated Statements of Income (U.S. GAAP)

    Consolidated Statements of Income (U.S. GAAP) TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net sales $ 870 $ 675

  38. Slide 38: Reconciliation of Non-U.S. GAAP Financial Measures

    Reconciliation of Non-U.S. GAAP Financial Measures TRONOX HOLDINGS PLC RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) (Millions of U.S. dollars, except share and per share data) RECONCILIATION OF NET INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP) TO ADJUSTED NET INCOME ATTRIB

  39. Slide 39: Consolidated Balance Sheets

    TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) Consolidated Balance Sheets (Millions of U.S. dollars, except share and per share data) September 30, 2021 December 31, 2020 ASSETS Current Assets Cash and cash equivalents $ 309 $ 619 Restricted cash 4 29 Accounts receivable (net

  40. Slide 40: Consolidated Statements of Cash Flows

    TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS Consolidated Statements of Cash Flows (UNAUDITED) (Millions of U.S. dollars) Nine Months Ended September 30, 2021 2020 Cash Flows from Operating Activities: Net income $ 216 $ 938 Adjustments to reconcile net income to net cash provided by op

  41. Slide 41: Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

    Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (NON-U.S. GAAP) TRONOX HOLDINGS PLC RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended Nine Months Ended September 30, September 30, (a) Represents non-

  42. Slide 42: Free Cash Flow (NON-U.S. GAAP)

    Free Cash Flow (NON-U.S. GAAP) TRONOX HOLDINGS PLC FREE CASH FLOW (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) The following table reconciles cash used in operating activities to free cash flow for the nine months ended September 30, 2021: Consolidated Cash provided by operating activities

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