Tronox Holdings Plc · NYSE:TROX
Tronox — Q1 2023 Earnings Presentation
21 slides from Tronox's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Conference Call
First Quarter 2023 Conference Call Tronox Holdings plc April 27, 2023 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 1
Slide 2: Presenters
Presenters • John Romano Jean-Francois Turgeon John Srivisal Co-Chief Executive Officer Co-Chief Executive Officer Senior Vice President, Chief Financial Officer Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 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 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
Slide 4: Tronox – A Diversified, Vertically Integrated Titanium Industry Leader
Tronox – A Diversified, Vertically Integrated Titanium Industry Leader TROX $3.5B $875M 85% ~6,500 ~1,200 NYSE 2022 Revenue 2022 Adj. EBITDA Feedstock Integration1 Global Employees Customers • Vertically integrated mining and inorganic chemical Sales by Sales by TiO2 Sales Volume company Region2 Pro
Slide 5: Key Messages from the Quarter
Key Messages from the Quarter Recovery from Q4 2022 trough • TiO2 volumes improved 14% QoQ, within the previously guided range, while average TiO2 selling prices improved 1% QoQ, or 3% YoY, despite 30% lower volumes YoY • Delivered Adj. EBITDA of $146M (exceeded guidance of $120-130M) and margins of
Slide 6: First Quarter Strides in Sustainability
First Quarter Strides in Sustainability We strongly believe businesses like ours must operate both profitably and sustainably • Appointed Jennifer Guenther to Chief Sustainability Officer, and Head of Investor Relations & Financial Planning – Creates a centralized approach to communicating sustainab
Slide 7: First Quarter 2023 Financial Highlights
First Quarter 2023 Financial Highlights Adjusted EBITDA and margins above guidance • Revenue improved 9% from Q4 2022 driven by Q1 ’23 Q1 ’22 YoY % ∆ Q4 ’22 QoQ % ∆ improved TiO2 volumes across EMEA, Asia Pacific and North America, and higher sequential TiO2 Revenue $ 708 $ 965 (27)% $ 649 9% pricin
Slide 8: Commercial Performance
Commercial Performance TiO2 sales volumes recovered from Q4 2022 trough Price Q1 ’23 Q1 ’22 YoY % ∆ Q4 ’22 QoQ % ∆ • Continued price improvement YoY across both TiO2 and Revenue $ 708 $ 965 (27)% $ 649 9% zircon while pig iron pricing was lower TiO2 560 773 (28)% 478 17% • Sequentially, TiO2 pricing
Slide 9: Operational Performance
Operational Performance Prudent cost and discretionary spend management enabled outperformance Freight Q1 ’23 Q1 ’22 YoY % ∆ Q4 ’22 QoQ % ∆ • Favorable rate decreases drove lower cost per ton expense Adjusted EBITDA $ 146 $ 240 (39)% $ 113 29% Production Costs Adjusted EBITDA margin 20.6% 24.9% (430
Slide 10: Taking Actions to Navigate the Current Landscape
Taking Actions to Navigate the Current Landscape Reducing Costs Managing Working Lowering CapEx • Planning for a variety of Capital • Significantly reduced economic scenarios planned annual capital • Aligning production with spend to <$275M for 2023 • Executing our cost reduction customer demand to
Slide 11: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Continuing to manage the balance sheet in light of macro economic backdrop • Total debt at the end of Q1 2023 was $2.7B • Invested $93M in the business in CapEx • 3.3x net leverage on TTM basis – ~40%in maintenance & safety capital – Amended & extende
Slide 12: Outlook
Outlook Q4 2022A Q1 2023A Q2 2023E • Q1 2023 TiO2 volume recovery reinforced Tronox’s expectation that Q4 2022 volume Adjusted EBITDA $113 $146 $160-170M levels represented the trough Adj. EBITDA Margin % 17.4% 20.6% High-teens • Expect TiO2 volumes to continue to improve – anticipate Q2 2023 volume
Slide 13: Key Priorities for 2023
Key Priorities for 2023 Adapting to the market dynamics without losing sight of long-term initiatives 1 A relentless focus on sustainability and safety Continuing to align production with customer demand to ensure we are prepared 2 to meet orders as demand increases and aggressively reducing costs M
Slide 14: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 14
Slide 15: Appendix
Appendix © 2023 Tronox Holdings plc. | All rights reserved. | tronox.com 15
Slide 16: 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, 2023 2022 Net sales $ 708 $ 965 Cost of goods sold 575 733 Gross profit 133 2
Slide 17: 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 18: Consolidated Balance Sheets
TRONOX HOLDINGS PLC Consolidated Balance Sheets CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) March 31, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 115 $ 164 Accounts receivable (net of allowance for credit
Slide 19: 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, 2023 2022 Cash Flows from Operating Activities: Net income $ 25 $ 16 Adjustments to reconcile net income to net cash provided by operati
Slide 20: Reconciliation of Net Income to EBITDA and Adjusted EBITDA (NON-U.S. GAAP)
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) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended March 31, 2023 2022 (a) Represents non-cash share-based compensation. Ne
Slide 21: 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, 2023: Three Months Ended March 31, 2023 Cash used in operat