Tronox Holdings Plc · NYSE:TROX
Tronox — Merger or Acquisition (May 2012)
33 slides from Tronox's merger presentation, May 24, 2012
Slide 1: Investor Presentation May 24, 2012
Filed by Tronox Incorporated Pursuant to Rule 425 of the Securities Act of 1933, as amended Subject Company: Tronox Incorporated (File No: 001-32669) Investor Presentation May 24, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “inte
Slide 3: Additional Information & Non-GAAP Financial Measures
Additional Information & Non-GAAP Financial Measures Additional Information and Where to Find it. This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any juri
Slide 4: Table of Contents
Table of Contents I. Executive Summary II. Tronox Overview III. Industry Perspectives IV. Conclusion Appendix: Additional Materials 4
Slide 5: I. Executive Summary
I. Executive Summary 5
Slide 6: Tronox Overview
Tronox Overview Tronox Limited (“Tronox” or “the Global Leadership Company”) is a highly differentiated and attractively positioned company in 3rd largest global producer and the TiO 2 value chain marketer of TiO 2 manufactured via Only fully integrated global producer Chloride Technology and market
Slide 7: Leading Global Pigment and Mineral Sands Platform
Leading Global Pigment and Mineral Sands Platform… Pigment Facilities Location Capacity (MT) Hamilton 225,000 Botlek 90,000 Tiwest (Kwinana) 150,000 Total 465,000 Mineral Sands Facilities Namakwa Sands Capacity (MT) Botlek, The Netherlands Slag 160,000 Oklahoma City, OK Zircon Pig Iron 135,000 100,0
Slide 8: With Attractive Vertical Integration
….With Attractive Vertical Integration Tronox is long of titanium feedstock, giving the Company significant advantages compared to its peers, especially in a today’s rising ore pricing environment Pre Merger Tronox (000’s tonnes of ore) Tronox Today (000’s tonnes of ore) Tronox today is required to
Slide 9: Tronox Financial Overview
Tronox Financial Overview Pro Forma Revenue Pro Forma Adj. EBITDA $ 2,306 151% $ 844 37% Zircon, Pig Iron & Other 22% $ 1,681 $ 336 37% 20% 2010 PF 2011 PF 2010 PF 2011 PF Adjusted EBITDA Margin 9
Slide 10: Key Investment Highlights
Key Investment Highlights Best Positioned to Capitalize on Trends in Mineral Sands, TiO2 & Zircon Industries Leading Global Market Position Vertically Integrated Platform Assures Security of Titanium Feedstock Supply and Margin Capture at Both Levels of the Supply Chain Low Cost and Efficient Produc
Slide 11: Management Team
Management Team Trevor Arran Willem van Nierkerk Tom Casey Senior Vice Daniel Greenwell Senior Vice Chairman and President, Strategic Chief Financial President & Chief Executive Planning and Officer President, Tronox Business Officer Mineral Sands Development Robert Gibney Mike Foster John Romano Vi
Slide 12: II. Tronox Overview
TRONOX | Il. Tronox Overview
Slide 13: TiO2 Pigment Operations
TiO2 Pigment Operations ($US in millions) Overview 2011 Sales Volume by Geography Latin Leading Global TiO2 producer America 8% One of the largest global TiO 2 producers and marketers with 8% share Europe 24% North America 42% of global capacity Focused primarily on coatings, plastics Asia-Pacific 3
Slide 14: Low Cost and Efficient Production Network
Low Cost and Efficient Production Network The Company’s TiO2 operations are among the lowest cost producers of TiO 2 globally Vertically Network of TiO 2 and titanium feedstock facilities gives Tronox the flexibility to optimize asset and feedstock Integrated utilization Production Ability to genera
Slide 15: Long-Standing Blue Chip TiO2 Customer Relationships
Long-Standing Blue Chip TiO 2 Customer Relationships Tronox has supplied each of its top ten TiO2 Tronox’s Blue Chip Customer Relationships customers for over ten years Diversified customer base of approximately 1,000 customers in over 90 countries Customers include market leaders in each of the maj
Slide 16: Tronox Mineral Sands Operations
Tronox Mineral Sands Operations Overview Production Facilities Tronox Mineral Sands comprises three mining Namakwa Northern Capacity (MT) Sands Operations KZN Sands¹ Total operations: KZN Sands and Namakwa Sands located in Slag 160,000 220,000 380,000 South Africa and Tiwest located in Australia Zir
Slide 17: Tronox Mining Operations
Tronox Mining Operations KZN Sands Namakwa Sands Tiwest KZN Sands operations are located on the Heavy mineral resources mine in Namakwa Tiwest operations are located in Western East Coast of South Africa are on the coastal plain along the west Australia KZN Sands operations comprise four coast of So
Slide 18: Tronox Mineral Resources & Reserves
Tronox Mineral Resources & Reserves 1 2 3 Resources (metric million tonnes) Reserves (ROM) LoMP % llmenite Operation4 (Years) 5 Measured Indicated Inferred Total (Total) Proven6 Probable7 Total % THM KZN Sands Hillendale 1.5 24.6 - - 24.6 2.76 7.3 - 7.3 5.88 Fairbreeze 15 156.1 55.7 9.0 220.9 3.76 1
Slide 19: III. Industry Perspectives
III. Industry Perspectives 19
Slide 20: Significant TiO2 Pigment Capacity Reductions
Significant TiO 2 Pigment Capacity Reductions During the last cycle, over 380,000 MT of capacity was taken out of market, which management estimates to be approximately a 7% reduction Bringing new capacity online requires significant capex, long lead time and requires difficult to achieve permitting
Slide 21: Rising Demand from Emerging Markets
Rising Demand from Emerging Markets… Significant long-term TiO 2 consumption growth expected from emerging markets TiO2 usage per capita in the major emerging markets, particularly in China and India, is significantly below that seen in most Western countries TiO2 Consumption per Capita and Growth R
Slide 22: Mineral Sands Market
Mineral Sands Market Mineral Sands industry encompasses producers of titanium raw material including ilmenite, titanium slag, rutile, synthetic rutile, and leucoxene Zircon is a key co-product of titanium raw material Industry has benefited from favorable supply / demand characteristics for both hig
Slide 23: Constrained Feedstock Environment is Expected to Persist
Constrained Feedstock Environment is Expected to Persist Ore supply is tight, creating a favorable pricing environment for the foreseeable future 1 Fundamentals for titanium feedstocks remain strong, Global Supply / Demand for Titanium Feedstock despite recent softening in China 12,000 Developing co
Slide 24: Zircon Market Overview
Zircon Market Overview Overview Fundamentals Remain Strong Zircon is a mineral often produced as a co- Following three consecutive quarters of product of TiO 2 minerals primarily in Australia substantial price movements for zircon, there and South Africa was a moderation in the price increase for Q4
Slide 25: IV. Conclusion
IV. Conclusion 25
Slide 26: Structural Shift in the Industry Expected to Continue to Drive TiO2 Prices Higher
Structural Shift in the Industry Expected to Continue to Drive TiO 2 Prices Higher As a result of strong underlying demand, a lack of capacity and overall structural shift in the industry, TiO 2 prices have increased significantly and are expected to remain high TiO2 pigment producers are limited in
Slide 27: Key Investment Highlights
Key Investment Highlights Best Positioned to Capitalize on Trends in Mineral Sands, TiO2 & Zircon Industries Leading Global Market Position Vertically Integrated Platform Assures Security of Titanium Feedstock Supply and Margin Capture at Both Levels of the Supply Chain Low Cost and Efficient Produc
Slide 28: Appendix
Appendix 28
Slide 29: Acquisition of Exxaro Mineral Sands
Acquisition of Exxaro Mineral Sands Transaction Overview Tronox Pro Forma Corporate Structure On September 26, 2011, Tronox entered into a definitive agreement to acquire Exxaro Resources’ (“Exxaro”) mineral sands operations, which will create the world’s largest vertically- integrated TiO pigment c
Slide 30: Exxaro Transaction Detail
Exxaro Transaction Detail Transaction Structure Detail Current Tronox shareholders to exchange existing common stock for new Class A shares in Tronox Limited, a newly-formed Australian-domiciled corporation and $12.50 per share Option to receive exchangeable shares with right to exchange later into
Slide 31: Key Governance Terms
Key Governance Terms 9 member board comprising: 6 Class A directors (nominated by Tronox) Management and Pro 3 Class B directors (nominated by Exxaro) Forma Board of Tom Casey to remain Chairman & CEO of Directors combined company Key members of Exxaro's senior management expected to join Tronox inc
Slide 32: Key Governance Terms (cont'd)
Key Governance Terms (cont’d) Limited significant matters require supermajority (6 of 9) approval at board level, including: Limited Board Change in Executive Management Supermajority Material acquisitions / dispositions Matters Sale of the Company Decision to pay dividends Class voting (approval of
Slide 33: Tronox Mineral Resources & Reserves Endnotes
Tronox Mineral Resources & Reserves Endnotes 1 Mineral Resources are quoted inclusive of mineral resources that have been modified to ore reserves. 2 Tonnages are quoted in metric million tonnes. 3 "ROM" stands for Run of Mine, which is a mining term that means a stockpile of ore that has been creat