Tronox Holdings Plc · NYSE:TROX
Tronox — Q3 2021 Earnings Presentation
22 slides from Tronox's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Conference Call
Third Quarter 2021 Conference Call Tronox Holdings plc October 28, 2021 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 1
Slide 2: Participants
Participants • 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 | © 2021 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 – At a Glance
Tronox – At a Glance TiO2 Sales Volume Sales by Region1 Sales by Product1 by End Use Market2 $3.5B ~6,500 LatAm Feedstock and Paper and LTM sales employees 7% Other Products Specialty Paints 8% TiO2 79% 8% North and America EMEA Coatings 76% Global 21% 39% TROX Leader Plastic NYSE Asia Pacific Zirco
Slide 5: Third Quarter Messages
Third Quarter Messages Continued strong execution • Continued margin expansion given improved pricing and cost savings offsetting increased commodity and freight costs • Significant free cash flow from differentiated business model allowing for accelerated deleveraging ahead of our targeted objectiv
Slide 6: Third Quarter 2021 Financial Highlights
Third Quarter 2021 Financial Highlights • Solid financial performance in line with guidance Summary Financials Q3 ’21 Q3 ’20 YoY % ∆ Q2 ’21 QoQ % ∆ • Revenue of $870 million, driven by higher average selling Revenue $ 870 $ 675 29% $ 927 (6)% prices across all products and higher TiO2 and zircon vol
Slide 7: Commercial Performance
Commercial Performance • Revenue increased 29% YoY primarily driven by higher TiO2 USD millions Q3 ’21 Q3 ’20 YoY % ∆ Q2 ’21 QoQ % ∆ and zircon volumes and increased average selling prices Revenue $ 870 $ 675 29% $ 927 (6)% across all products TiO2 682 543 26% 740 (8)% • TiO2 volumes declined 10% se
Slide 8: Operational Performance
Operational Performance • Increased pricing and volumes drove improved Adjusted USD millions Q3 ’21 Q3 ’20 YoY % ∆ Q2 ’21 QoQ % ∆ EBITDA versus the prior year, partially offset by Adjusted EBITDA $ 252 $ 148 70% $ 237 6% unfavorable FX rates and higher freight rates Adjusted EBITDA margin 29% 22% 7
Slide 9: Key Projects Update
Key Projects Update Project newTRON Atlas Campaspe Jazan • Multi-year, global digital • Australia mining project replacing • Completed technical modifications transformation strategy project Snapper / Ginkgo mines expected to and cold commissioning reach end of life in 2022 • Will enhance benefits o
Slide 10: Tronox’s Liquidity, Capital Expenditures & Free Cash Flow
Tronox’s Liquidity, Capital Expenditures & Free Cash Flow Financial Position, Liquidity & Capital Resources CapEx, FCF, and Cash to Shareholders • Achieved our net leverage target of 2.0x-3.0x ending the • Capital expenditures in the third quarter were quarter with 2.6x net leverage on a trailing tw
Slide 11: Outlook
Outlook Q4 2021 Outlook: FY 2021 Estimated Uses of Cash: • TiO2 and zircon prices expected to continue to • Net Cash Interest Expense: ~$130-140 million increase • Cash Taxes: ~$40-50 million • TiO2 sales volumes expected to be flat to down mid- single digits • Capital Expenditures: ~$300 million •
Slide 12: We Remain Committed to Our Strategy
We Remain Committed to Our Strategy Essence of our strategy, driven by changing industry dynamics: To Become an Advantaged Global TiO2 Leader The right people, culture and capabilities will allow us to execute our strategy Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 12
Slide 13: Tronox’s Enhanced ESG Oversight
Tronox’s Enhanced ESG Oversight Board Level Attention Demonstrated Focus • Board committee structure reorganized • Aligned with a global warming scenario during Q3 to include Governance and below 2°C Sustainability Committee to enhance • Set aspirational goal of net zero oversight of environmental,
Slide 14: Key Takeaways as We Prepare to Close Out 2021
Key Takeaways as We Prepare to Close Out 2021 Continued strong execution Strong demand and volumes resulted in solid earnings performance despite some cost challenges Recognized higher average selling prices for both TiO2 and zircon Product demand remains strong across the portfolio Strong free cash
Slide 15: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2021 15
Slide 16: Appendix
Appendix © 2021 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 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, 2021 2020 2021 2020 Net sales $ 870 $ 675
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 INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP) TO ADJUSTED NET INCOME ATTRIB
Slide 19: 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, 2021 December 31, 2020 ASSETS Current Assets Cash and cash equivalents $ 309 $ 619 Restricted cash 4 29 Accounts receivable (net
Slide 20: 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, 2021 2020 Cash Flows from Operating Activities: Net income $ 216 $ 938 Adjustments to reconcile net income to net cash provided by op
Slide 21: Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (NON-U.S. GAAP)
Reconciliation of Net (Loss) 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 Nine Months Ended September 30, September 30, (a) Represents non-
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 nine months ended September 30, 2021: Consolidated Cash provided by operating activities