Tronox Holdings Plc · NYSE:TROX
Tronox — Q4 2022 Earnings Presentation
22 slides from Tronox's earnings presentation, Feb 16, 2023
Slide 1: Fourth Quarter and Full Year 2022 Conference Call
Fourth Quarter and Full Year 2022 Conference Call Tronox Holdings plc February 16, 2023 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 1
Slide 2: Participants
Participants •John •Jean-Francois Timothy John Romano Turgeon Carlson Srivisal Co-Chief Executive Officer Co-Chief Executive Officer SVP, Chief Financial Officer SVP, Business Dev. & Finance 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: Significant Strides in Sustainability Performance
Significant Strides in Sustainability Performance Accelerated Carbon Reduction Targets in 2022 Announced Significant Renewable Energy Revised 2025 goal to 35%1 (previously 15%) and Project in South Africa revised 2030 goal to 50%1 (previously 35%) 200MW solar project with SOLA Group expected to • Pa
Slide 6: Key Messages from 2022 A Tale of Two Halves
Key Messages from 2022 A Tale of Two Halves • The first half of 2022 began with considerable momentum while the second half was characterized by a significant pullback starting in China, followed by Asia Pacific ex-China, EMEA and the Americas • Delivered Adj. EBITDA of $875M and Adj. EBITDA margin
Slide 7: Full Year 2022 Financial Highlights
Full Year 2022 Financial Highlights Pricing initiatives drove YoY improvement, though offset by lower volumes and increased costs • Revenue of $3.5B as higher product pricing and 2022 2021 YoY % ∆ favorable FX rates were more than offset by increased input costs and lower sales volumes Revenue $ 3,4
Slide 8: Fourth Quarter 2022 Financial Highlights
Fourth Quarter 2022 Financial Highlights Adjusted EBITDA performance within guided range • Revenue impacted by swift market retraction across Q4 ’22 Q4 ’21 YoY % ∆ Q3 ’22 QoQ % ∆ all regions – YoY improvements in pricing more than offset by operational cost increases and lower sales Revenue $ 649 $
Slide 9: Commercial Performance
Commercial Performance Improved selling prices offset by lower market demand on sales volumes Price Q4 ’22 Q4 ’21 YoY % ∆ Q3 ’22 QoQ % ∆ • Realized continued price improvement YoY across all Revenue $ 649 $ 884 (27)% $ 895 (27)% products TiO2 478 675 (29)% 673 (29)% • Sequentially, TiO2 and zircon p
Slide 10: Operational Performance
Operational Performance Higher production costs including ~$60M from South Africa & Australia Freight Q4 ’22 Q4 ’21 YoY % ∆ Q3 ’22 QoQ % ∆ • Unfavorable rate increases drove higher cost per ton Adjusted EBITDA $ 113 $ 233 (52)% $ 247 (54)% expense Adjusted EBITDA margin 17.4% 26.4% (900)bps 27.6% (1
Slide 11: 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 12: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Delivered significant value to our stakeholders and continued to invest in our business • Reduced total debt to $2.5B in 2022 (versus $2.6bn • Invested $428M in the business in CapEx as of YE 2021) – ~$125M in maintenance & safety capital • 2.8x net l
Slide 13: Outlook
Outlook Q1 2023 • While the pace and timing of the recovery remains to be seen, we are confident we have Adjusted EBITDA $120-130M seen the trough on TiO2 volumes • Expect to continue to see impact on our zircon volumes and operating costs in the first quarter Full Year Uses of Cash FY 2023E from th
Slide 14: 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 15: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 15
Slide 16: Appendix
Appendix © 2023 Tronox Holdings plc. | All rights reserved. | tronox.com 16
Slide 17: Consolidated Statements of Income (U.S. GAAP)
Consolidated Statements of Income (U.S. GAAP) TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Three Months Ended Decem ber 31, Year Ended Decem ber 31, 2022 2021 2022 2021 Net sales $ 649 $ 884 $ 3,454 $ 3,
Slide 18: 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 19: Consolidated Balance Sheets
TRONOX HOLDINGS PLC Consolidated Balance Sheets CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) December 31, 2022 December 31, 2021 ASSETS Current Assets Cash and cash equivalents $ 164 $ 228 Restricted cash — 4 Accounts receivable (net of allowanc
Slide 20: Consolidated Statements of Cash Flows
TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS Consolidated Statements of Cash Flows (UNAUDITED) (Millions of U.S. dollars) Year Ended December 31, 2022 2021 Cash Flows from Operating Activities: Net income $ 500 $ 303 Adjustments to reconcile net income to net cash provided by operating
Slide 21: 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 December 31, Year Ended December 31, 2022 2021 2022 2021 (a) Repr
Slide 22: 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 and year ended December 31, 2022: Year Ended Nine Months Ended Three