Tronox Holdings Plc · NYSE:TROX
Tronox — Q1 2022 Earnings Presentation
25 slides from Tronox's earnings presentation, Apr 28, 2022
Slide 1: First Quarter 2022 Conference Call
First Quarter 2022 Conference Call Tronox Holdings plc April 28, 2022 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 1
Slide 2: Presenters
Presenters • John Romano Jean-Francois Turgeon Timothy Carlson Co-Chief Executive Officer Co-Chief Executive Officer Senior Vice President, Chief Financial Officer Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 2
Slide 3: 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 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-loo
Slide 4: Tronox – At a Glance
Tronox – At a Glance TiO2 Sales Volume Sales by Region Sales by Product by End Use Market $3.6B ~6,500 FY2021 LatAm Feedstock and Paper and employees 7% Specialty Revenue Other Products 8% TiO2 79% 7% Paints North and America EMEA Coatings 76% Global 21% 39% TROX Leader Plastic NYSE Asia Pacific Zir
Slide 5: Solid First Quarter 2022 Results
Solid First Quarter 2022 Results Continued strong execution, delivered on commitments • Achieved solid results despite ongoing cost inflation and logistics challenges • Delivered $240M in Adjusted EBITDA, within guided range • Invested $103M in ongoing key capital projects that reinforce Tronox's co
Slide 6: Significant Renewable Energy Project in South Africa
Significant Renewable Energy Project in South Africa A major step forward to meet emission reduction targets • In March, Tronox entered into a long-term power purchase agreement with South African independent power producer, SOLA Group, to provide 200 MW of solar power to Tronox’s mines and smelters
Slide 7: First Quarter 2022 Financial Highlights
First Quarter 2022 Financial Highlights Solid first quarter results, in line with guidance Q1 ’22 Q1 ’21 YoY % ∆ Q4 ’21 QoQ % ∆ • Revenue up YoY and QoQ driven by improved pricing Revenue $ 965 $ 891 8% $ 884 9% • Income from operations includes the settlement agreement reached with Venator totaling
Slide 8: Commercial Performance
Commercial Performance Year-0ver-year improvements driven by higher average selling prices Price Q1 ’22 Q1 ’21 YoY % ∆ Q4 ’21 QoQ % ∆ • Improved pricing in TiO2 across all geographies driven Revenue $ 965 $ 891 8% $ 884 9% largely by the continuation of our regional pricing initiatives TiO2 773 696
Slide 9: Operational Performance
Operational Performance Higher average selling prices partially offset by higher costs to serve customers Production Mix Q1 ’22 Q1 ’21 YoY % ∆ Q4 ’21 QoQ % ∆ • Lower zircon sales unfavorably impacted margins Adjusted EBITDA $ 240 $ 225 7% $ 233 3% Freight Adjusted EBITDA margin 24.9% 25.3% (40) bps
Slide 10: Executing Our Strategy
Executing Our Strategy To Become an Advantaged Global TiO2 Leader Foundational Our Distinct Advantage Enabling 1 2 3 4 Competitive TiO2 Pigment Costs Feedstock Integration Leading Global Footprint TiO2 Technology Leader • Low-cost, high-quality pigment • Profit contribution from zircon • Effectively
Slide 11: Key Capital Projects Update
Key Capital Projects Update Supporting vertically-integrated strategy, enhancing position as a leading TiO2 producer and becoming the industry leader in financial performance Growth and Vertical 1 Cost Reduction 2 Integration newTRON Atlas Campaspe Mining Extensions • Strategic, multi-year, global d
Slide 12: newTRON: Global Digital Transformation
newTRON: Global Digital Transformation Deploying new technologies to enable further leveraging of our vertical integration to reduce costs and increase efficiencies company-wide Enhanced Efficient Automation Maintenance • Implementing advanced • Using technology and data to process controls to impro
Slide 13: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Delivering value to our stakeholders and continuing to invest in our business • Achieved 2.4x net leverage on TTM basis • Invested $103M in the business in CapEx – $2.6B in total debt as of March 31, 2022 – Increase driven by key capital projects – Re
Slide 14: 2022 Outlook
2022 Outlook Metric 2021A 2022E • Anticipate TiO2 and zircon demand trends to remain Adjusted EBITDA $947M $1.025 – $1.125B solid, amidst a backdrop of continued supply chain disruptions, inflation pressures including elevated commodity prices, and ongoing geopolitical Adjusted Diluted EPS $2.29 $3.
Slide 15: Effectively Deploying Capital
Effectively Deploying Capital Capital Reducing Production Sustaining Vertical Continued Returning Capital To Costs through Allocation Integration Benefit Debt Shareholders through Strategic Priorities Investments with Capital Projects Reduction Dividends and Buybacks Priorities 2022E Investment in O
Slide 16: Key Focus Areas for 2022
Key Focus Areas for 2022 Continued commitment to strong execution, operational excellence and returning capital to shareholders Offsetting inflationary cost increases with pricing initiatives and savings initiatives Superior operational excellence to ensure reliability for our customers Investing in
Slide 17: 2022 Investor Day
2022 Investor Day Save the Date! Tronox’s 2022 Investor Day Thursday, June 16th New York City Webcast to begin at 8:30am Eastern Time Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 17
Slide 18: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 18
Slide 19: Appendix
Appendix © 2022 Tronox Holdings plc. | All rights reserved. | tronox.com 19
Slide 20: 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 March 31, 2022 2021 Net sales $ 965 $ 891 Cost of goods sold 733 685 Gross profit 232 2
Slide 21: 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
Slide 22: Consolidated Balance Sheets
Consolidated Balance Sheets TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) March 31, 2022 December 31, 2021 ASSETS Current Assets Cash and cash equivalents $ 292 $ 228 Restricted cash 4 4 Accounts receivable (net of a
Slide 23: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Three Months Ended March 31, 2022 2021 Cash Flows from Operating Activities: Net income $ 16 $ 26 Adjustments to reconcile net income to net cash provided by operati
Slide 24: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net 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) (a) Represents non-cash share-based compensation. (UNAUDITED) (b) Represents breakage fee and other costs associated with the term
Slide 25: 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 three months ended March 31, 2022: Consolidated Cash provided by operating activities $