Tronox Holdings Plc · NYSE:TROX
Tronox — Q3 2023 Earnings Presentation
21 slides from Tronox's earnings presentation, Oct 26, 2023
Slide 1: Third Quarter 2023 Conference Call
Third Quarter 2023 Conference Call Tronox Holdings plc October 26, 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 Third quarter performance within expectations • Q3 saw relatively modest pricing declines across both TiO2 and zircon despite continued end market demand softness • TiO2 volumes improved sequentially in the Americas, while volumes were sequentially weaker in other regio
Slide 6: Q3 2023 Sustainability Update
Q3 2023 Sustainability Update • Solar project in South Africa with the South African independent power producer SOLA Group continues to progress and construction remains on- track to be completed December 2023 – Delivery of first power is planned for April 1, 2024 – Expected to reduce Tronox’s globa
Slide 7: Third Quarter 2023 Financial Highlights
Third Quarter 2023 Financial Highlights Adjusted EBITDA of $116M within guided range • Revenue declined 17% from Q2 2023 driven by Q3 ’23 Q3 ’22 YoY % ∆ Q2 ’23 QoQ % ∆ lower TiO2, zircon and pig iron sales volumes and Revenue $ 662 $ 895 (26)% $ 794 (17)% average sales prices • Income from operation
Slide 8: Commercial Performance
Commercial Performance TiO2 and Zircon volumes remain muted against challenging demand environment Price Q3 ’23 Q3 ’22 YoY % ∆ Q2 ’23 QoQ % ∆ • TiO2 and zircon pricing modestly lower both YoY and QoQ Revenue $ 662 $ 895 (26)% $ 794 (17)% against continued softer market demand TiO2 558 673 (17)% 611
Slide 9: Operational Performance
Operational Performance Delivered Adj. EBITDA within range despite weaker market backdrop & supplier outage at Botlek Production Costs Q3 ’23 Q3 ’22 YoY % ∆ Q2 ’23 QoQ % ∆ • QoQ production cost increases included $8M of lower of cost Adjusted EBITDA $ 116 $ 247 (53)% $ 168 (31)% or market (“LCM”) &
Slide 10: Taking Actions to Navigate the Current Landscape
Taking Actions to Navigate the Current Landscape Reducing Costs Managing Working Cash & Cash Flow • Executing our cost reduction Capital • Enhanced liquidity through a playbook $350M incremental term • Aligning production with loan in Q3 • Implemented a hiring freeze customer demand • Expect CapEx t
Slide 11: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Reinforced balance sheet strength with incremental term loan • Total debt at the end of Q3 2023 was $2.8B • Invested $54M in the business in CapEx in Q3 • 4.8x net leverage on TTM basis – ~55% in maintenance & safety capital – Maintain interest rate s
Slide 12: Outlook
Outlook Q1 2023A Q2 2023A Q3 2023A Q4 2023E • Assume TiO2 volumes are relatively flat Adjusted EBITDA $146 $168 $116M $105-125M compared to the third quarter, with little to no seasonal decline mid- to high- Adj. EBITDA Margin % 20.6% 21.2% 17.5% teens • Expect zircon volumes to continue to recover
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 Operations (U.S. GAAP)
Consolidated Statements of Operations (U.S. GAAP) TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Three Months Ended Septem ber 30, Nine Months Ended Septem ber 30, 2023 2022 2023 2022 Net sales $
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 (LOSS) INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP) TO ADJUSTED NET INCOME
Slide 18: 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) September 30, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 246 $ 164 Accounts receivable (net of allowance for cre
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) Nine Months Ended September 30, 2023 2022 Cash Flows from Operating Activities: Net (loss) income $ (258) $ 514 Adjustments to reconcile net (loss) income to net cas
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 (LOSS) 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, 2023 2022 2023 2022
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 and nine months ended September 30, 2023: Nine Months Ended Six Months Ended Three