Tronox Holdings Plc · NYSE:TROX
Tronox — Goldman Sachs Global Metals & Mining Conference 2019
36 slides from Tronox's conference presentation, Nov 20, 2019
Slide 1: Goldman Sachs Global Metals & Mining Conference
Goldman Sachs Global Metals & Mining Conference November 19-20, 2019 © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 2: 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 safe harbor provisions of the U.S. Private Securities Litigation Reform Act o
Slide 3: Table of Contents
Table of Contents • Tronox – A Focused Titanium Industry Leader 4 • Strategy Driven by Changing Industry Dynamics 9 • A Single Unified Commercial Approach 13 • Capitalizing on the Strength of our Vertical Integration 19 • Strong Financial Position 27 • Appendix 32 © 2019 Tronox Holdings plc. | All r
Slide 4: Tronox – A Focused Titanium Industry Leader
Tronox – A Focused Titanium Industry Leader • Tronox Holdings plc (NYSE:TROX) is a vertically integrated mining and inorganic chemical company domiciled under the laws of the United Kingdom, and World’s largest vertically integrated TiO2 producer headquartered in the United States in the New York Ci
Slide 5: Global, Integrated Footprint Sets Tronox Apart
Global, Integrated Footprint Sets Tronox Apart © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com 5
Slide 6: Integration and Globalization Advantages
Integration and Globalization Advantages Vertical Integration Balanced Geographical Sales • Achieve and maintain first- quartile cost position • Greater stability in financial 21% performance 30% • Significant profitability and cash flow across varying 30% macro-economic conditions 11% 8% A Global F
Slide 7: A Global Organization United by Our Core Values
A Global Organization United by Our Core Values Tronox has created a high-performance organization that transcends geographic and cultural boundaries Our Core Values Our Results Approach • We have an uncompromising focus on operating safe, reliable and responsible facilities. • We honor our responsi
Slide 8: Commitment to Sustainability is a Part of Tronox Culture
Commitment to Sustainability is a Part of Tronox Culture Corporate citizenship and sustainability is an integral part of our global business. We are continually challenging ourselves to promote sustainable growth, invest in green technologies, be transparent in all our business operations, and make
Slide 9: Strategy Driven by Changing Industry Dynamics
Strategy Driven by Changing Industry Dynamics © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 10: Strategy Driven by Changing Industry Dynamics
Strategy Driven by Changing Industry Dynamics Changes in TiO2 Market Increased competitive Structure intensity Implications Advantaged cost structure is Flattening of cost curve critical to remain competitive / relevant Chloride Process Industry consolidation and migration to public ownership Vertic
Slide 11: Tronox Vision for the Future
Tronox Vision for the Future Vision: To be the leading, responsible, and advantaged global integrated TiO2 company delivering safe, quality, low-cost tons to our customers and exceptional returns to our shareholders – by leveraging our outward-minded talent base Sources of Advantage Performance Char
Slide 12: © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
© 2019 Tronox Holdings plc. | All rights reserved. | tronox.com 12
Slide 13: A Single Unified Commercial Approach
A Single Unified Commercial Approach © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 14: Unified Commercial Approach
Unified Commercial Approach Guiding Principles Offering A World-Class TiO2 Product Portfolio • Offering a high value proposition to our customers; • Accelerating our bespoke margin stability initiatives across regions in both coatings and plastics markets; • Partnering with strategic customers that
Slide 15: TiO2 Customer Portfolio – Growth Trajectory Is Key
TiO2 Customer Portfolio – Growth Trajectory Is Key Revenue Growth of Strategic Global Customer ANNUAL REVENUE INDEXED 3.5 2.5 Attach ourselves to the customers who are growing faster than the market 1.5 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tronox Volume Growth at Strategic Account A
Slide 16: TiO2 Margin Stability Program – Changes from Previous Cycle
TiO2 Margin Stability Program – Changes from Previous Cycle Monthly Volume, MT Price Index Price recovers as Much shorter downturn: Price rallies after Extended downturn due to: supply and demand Limited inventory build severe pigment Excess inventory built by customers due to by customers re-ba
Slide 17: Historic Price, Volume and Inventory Trends
Historic Price, Volume and Inventory Trends • Legacy Cristal significantly increased prices from Q2 2017 through Q1 2018, resulting in volume and share losses • Tactics changed in Q2 2018 as legacy Cristal rapidly decreased prices to regain share while building inventory Note: Legacy Cristal data ex
Slide 18: Zircon Delivering Significant Profitability and Margin Enhancement
Zircon Delivering Significant Profitability and Margin Enhancement • Major applications Ceramic tiles and glazes Refractories and foundry Zirconia chemicals • Tronox is the 2nd largest zircon producer with ~270,000 tons of capacity • Market Dynamics Margin Stabilization initiative precedes t
Slide 19: Capitalizing on the Strength of our Vertical Integration
Capitalizing on the Strength of our Vertical Integration © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 20: Our Operations Philosophy
Our Operations Philosophy SQLCT Operational Excellence Business Transformation Integrated Business Planning Operational Risk Organizational Management Effectiveness Project Asset Reliability Effectiveness Delivering Safe, Quality, Low-Cost Tons for our Customers and Exceptional Shareholder Returns A
Slide 21: Tronox’s Vertically Integrated Network of Assets
Tronox’s Vertically Integrated Network of Assets Mining Operations Namakwa Gingko Existing Fairbreeze UMM Cooljarloo Wonnerup Paraiba East and West Snapper Zircon Pig Iron New Coolljarloo East OFS Atlas (Direct sales) (Extensions) Fairbreeze Extension Port Durnford West UMM Expansion Campaspe Do
Slide 22: Established Mining Operations
Established Mining Operations Namakwa, South Africa KZN, South Africa Australia • Largest HM Reserves at 41m MT • Fairbreeze Mine HM Reserves at 14m MT • 11m MT of HM Reserves at Cooljarloo • 32k MT Rutile & leucoxene and 119k • 22k MT Rutile & leucoxene and 53k MT and Dongara, additional reserves a
Slide 23: Smelting Operations to Produce High-Grade TiO2 Feedstock Material
Smelting Operations to Produce High-Grade TiO2 Feedstock Material for our Pigment Plants Namakwa, South Africa KZN, South Africa Chandala, Australia • Two smelting furnaces that produce • Two smelting furnaces that produce Ti Slag • Metallurgical site which includes a kiln titanium slag (“Ti Slag”)
Slide 24: Jazan Will Increase Total Ti Slag Production to >900k MT
Jazan Will Increase Total Ti Slag Production to >900k MT Producing high-grade feedstock for our pigment plants • Jazan is a key to further optimize vertical integration of Tronox • Jazan smelter comprised of two high-grade chloride slag furnaces with 500ktpa of combined capacity • Tronox is providin
Slide 25: Nine Pigment Plants Across Six World Regions
Nine Pigment Plants Across Six World Regions North America Europe Australia • Tronox’s largest pigment plant is located • Stallingborough, U.K plant has a production • Kwinana, Western Australia plant (~40km in Hamilton, Mississippi and has a capacity of 165k MT (chloride process) from Perth) has a
Slide 26: Synergies - Actions Taken Have Delivered $45 million YTD
Synergies - Actions Taken Have Delivered $45 million YTD Total Synergies USD millions EBITDA Synergies Achieved & Reflected in P&L YTD EBITDA Synergies Achieved to be Reflected in P&L in Future Quarters Non-EBITDA Synergies Achieved $220 Increased Synergy Target Target Stated at Investor Day $175 $1
Slide 27: Strong Financial Position
Strong Financial Position © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 28: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights • Strong execution on the many operating and Pro Forma Summary Financials Q3 2019 commercial initiatives that are in our control Revenue $768 • Delivered total synergies of $45 million through Net Income from Cont. Ops. $26 September 30, 2019 EPS $ (0.13) • Raising FY 2
Slide 29: Strong Financial Position - 3Q19 & Outlook
Strong Financial Position - 3Q19 & Outlook • September 30, 2019 debt of $3.1 billion • Returned ~$309 million to shareholders YTD 2019 • $2.8 billion net of cash and cash • Repurchased ~21.5 million shares equivalents • Regular dividend payment • Liquidity of $661 million • 2019 Outlook: • Cash/cash
Slide 30: Tronox has Significant Tax Attributes
Tronox has Significant Tax Attributes Attribute Est Tax Shield Tax Planning US $4.1B • Value Chain Analysis / Transfer Pricing Initiative Foreign $1.3B – Tronox moves from long to short feedstock position Total NOLs $5.4B – Mines / smelters / synthetic rutile plant now have guaranteed demand for all
Slide 31: Global Manufacturing Platform Creates FX Exposures
Global Manufacturing Platform Creates FX Exposures Approximate Annual FX Philosophy FX Exposures By Country Adj EBITDA Impact Per Indicated Change in • Hedge known Balance Sheet exposures Functional Currency with forwards and caps/collars 1 ZAR $30M • Hedge significant capital expenditure AUD 0.01 $
Slide 32: Appendix
Appendix © 2019 Tronox Holdings plc. | All rights reserved. | tronox.com
Slide 33: 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 FROM CONTINUING OPERATIONS ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. G
Slide 34: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (NON-U.S. GAAP) TRONOX HOLDINGS PLC RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss)
Slide 35: Pro Forma Reconciliation of Net (Loss) Income from Continuing Operations
Pro Forma Reconciliation of Net (Loss) Income from Continuing Operations attributable to Tronox Holdings plc (U.S. GAAP) to Adjusted Net Income (Loss) from Continuing Operations attributable to Tronox Holdings plc (NON-U.S. GAAP) TRONOX HOLDINGS PLC PRO FORMA RECONCILIATION OF NON-U.S. GAAP FINANCIA
Slide 36: Reconciliation of Net Income from Continuing Operations to EBITDA and Adjusted EBITDA
Reconciliation of Net Income from Continuing Operations to EBITDA and Adjusted EBITDA (non-U.S. GAAP) TRONOX HOLDINGS PLC PRO FORMA RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Pro forma amounts Pro forma
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