Tronox Holdings Plc · NYSE:TROX
Tronox — Q3 2022 Earnings Presentation
19 slides from Tronox's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Conference Call
Third Quarter 2022 Conference Call Tronox Holdings plc October 27, 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 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 $3.6B $947M 85% ~6,500 ~1,200 NYSE 2021 Revenue 2021 Adj. EBITDA Feedstock Integration Global Employees Customers • Vertically integrated mining and inorganic chemical Sales by Sales by TiO2 Sales Volume company Region1 Prod
Slide 5: Key Messages from the Quarter
Key Messages from the Quarter Continued strong margin performance enabled by vertically integrated portfolio despite difficult market conditions • Generated Adjusted EBITDA of $247M, Adjusted EBITDA margin of 27.6% – 22nd consecutive quarter with Adjusted EBITDA margins >20% • Invested $314M year-to
Slide 6: Third Quarter 2022 Financial Highlights
Third Quarter 2022 Financial Highlights Continued strong margin performance despite increasing production costs Q3 ’22 Q3 ’21 YoY % ∆ Q2 ’22 QoQ % ∆ • Revenue increased 3% YoY driven by higher TiO2, zircon Revenue $ 895 $ 870 3% $ 945 (5)% and pig iron pricing and higher pig iron volumes Income from
Slide 7: Commercial Performance
Commercial Performance Improved pricing supporting commercial performance Price Q3 ’22 Q3 ’21 YoY % ∆ Q2 ’22 QoQ % ∆ • Improved pricing in TiO2 across all geographies, driven by Revenue $ 895 $ 870 3% $ 945 (5)% the continuation of regional pricing initiatives TiO2 673 682 (1)% 769 (12)% • Pricing m
Slide 8: Operational Performance
Operational Performance Higher average selling prices partially offset by higher costs to serve customers Production Mix Q3 ’22 Q3 ’21 YoY % ∆ Q2 ’22 QoQ % ∆ • Higher pig iron sales drove higher EBITDA, though Adjusted EBITDA $ 247 $ 252 (2)% $ 275 (10)% unfavorably impacted margins in Q3 vs. Q2 Adj
Slide 9: 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 • Implemented plans to economic scenarios significantly reduce our • The need to replenish planned annual capital • Executing our cost reduction critically low levels o
Slide 10: 2022 Outlook
2022 Outlook Metric 2021A 2022E Adjusted EBITDA $947M $902-$932M • Expect Q4 2022 Adj. EBITDA to be $140-170M ‒ Assumes TiO2 volumes decline 25-30% sequentially Adjusted Diluted EPS $2.29 $2.29-$2.42 driven by customer destocking in Q4 and one-time cost impacts due to reduced production as a result
Slide 11: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 11
Slide 12: Appendix
Appendix © 2022 Tronox Holdings plc. | All rights reserved. | tronox.com 12
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 2.5x net leverage on TTM basis • Invested $314M in the business in CapEx YTD – $2.6B in total debt as of September 30, 2022 – $112M invested in Q3 in key capital
Slide 14: 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, 2022 2021 2022 2021 Net sales $ 895 $ 870
Slide 15: 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 16: 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) September 30, 2022 December 31, 2021 ASSETS Current Assets Cash and cash equivalents $ 91 $ 228 Restricted cash — 4 Accounts receivable (net o
Slide 17: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Nine Months Ended September 30, 2022 2021 Cash Flows from Operating Activities: Net income $ 514 $ 216 Adjustments to reconcile net income to net cash provided by op
Slide 18: 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 19: 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 and nine months ended September 30, 2022: Nine Months Ended Six Months Ended Three