Tronox Holdings Plc · NYSE:TROX
Tronox — Q4 2021 Earnings Presentation
25 slides from Tronox's earnings presentation, Feb 17, 2022
Slide 1: Fourth Quarter and Full Year 2021 Conference Call
Fourth Quarter and Full Year 2021 Conference Call Tronox Holdings plc February 17, 2022 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 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 | © 2022 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 Region Sales by Product by End Use Market $3.6B ~6,500 FY2021 LatAm Feedstock and Paper and employees 7% Specialty Revenue Other Products 8% TiO2 79% 7% Paints North and America EMEA Coatings 76% Global 21% 39% TROX Leader Plastic NYSE Asia Pacific Zir
Slide 5: Record Performance in 2021
Record Performance in 2021 Continued strong execution, delivered on commitments • Record revenue of $3.6B driven by robust demand across end markets • Record Adj. EBITDA of $947M and expanded Adj. EBITDA margin of 26.5% despite inflation pressures • Invested $270M+ in key capital projects • newTRON:
Slide 6: Strong Progress in 2021 on Our Sustainability Journey
Strong Progress in 2021 on Our Sustainability Journey Committed to Improvement Enhanced Oversight Set our targets for 2050 and the detailed and Enhanced Board level oversight of our ESG efforts substantive roadmap to achieve these goals • Board committee structure reorganized during Q3 to • Joined t
Slide 7: Full Year 2021 Financial Highlights
Full Year 2021 Financial Highlights Record financial performance driven by strengthened and differentiated business model • Revenue of $3.6B, driven by improved pricing & volumes 2021 2020 YoY % ∆ • Income from operations of $577M and net income of $303M, Revenue $ 3,572 $ 2,758 30% lower YoY due to
Slide 8: Fourth Quarter 2021 Financial Highlights
Fourth Quarter 2021 Financial Highlights Solid performance, in line with guidance Q4 ’21 Q4 ’20 YoY % ∆ Q3 ’21 QoQ % ∆ • Revenue up YoY and QoQ driven by improved pricing Revenue $ 884 $ 783 13% $ 870 2% • Effective tax rate of 16% due to a release of net current Income from Operations $ 134 $ 94 43
Slide 9: Commercial Performance
Commercial Performance Year-0ver-year improvements driven by improved selling prices Price Q4 ’21 Q4 ’20 YoY % ∆ Q3 ’21 QoQ % ∆ • Improved pricing in TiO2 across all geographies driven Revenue $ 884 $ 783 13% $ 870 2% largely by the continuation of our regional pricing initiatives TiO2 675 587 15% 6
Slide 10: Operational Performance
Operational Performance Higher average selling prices partially offset by higher costs to serve customers Freight Q4 ’21 Q4 ’20 YoY % ∆ Q3 ’21 QoQ % ∆ • Escalating ocean freight, particularly out of Australia, and Adjusted EBITDA $ 233 $ 204 14% $ 252 (8)% demurrage expense in South Africa drove inc
Slide 11: Executing Our Strategy
Executing Our Strategy To Become an Advantaged Global TiO2 Leader Foundational Our Distinct Advantage Enabling 1 2 3 4 Competitive TiO2 Pigment Costs Feedstock Integration Leading Global Footprint TiO2 Technology Leader • Low-cost, high-quality pigment • Profit contribution from zircon • Effectively
Slide 12: Key Capital Projects Update
Key Capital Projects Update Supporting vertically-integrated strategy, enhancing position as a leading TiO2 producer and becoming the industry leader in financial performance Growth and Vertical 1 Cost Reduction 2 Integration newTRON Atlas Campaspe Mining Extensions • Strategic, multi-year, global d
Slide 13: newTRON: Global Digital Transformation
newTRON: Global Digital Transformation Deploying new technologies to enable further leveraging of our vertical integration to reduce costs and increase efficiencies company-wide Enhanced Efficient Automation Maintenance • Implementing advanced • Using technology and data to process controls to impro
Slide 14: 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 • Achieved 2.5x net leverage on TTM basis • Invested $272M in the business in CapEx – Significant reduction from 4.1x at YE 2020 – ~$120M in maintenance & safety c
Slide 15: 2022 Outlook
2022 Outlook Metric 2021A 2022E • Anticipate strong TiO2 and zircon demand trends to Adjusted EBITDA $947M $1.025 – $1.125B continue, in addition to continued supply chain disruptions and inflation pressures Reported Diluted EPS $1.81 $3.02 – $3.52 • Expect Q1 2022 Adj. EBITDA to be $230-$245M Adjus
Slide 16: Effectively Deploying Capital
Effectively Deploying Capital Capital Reducing Production Sustaining Vertical Continued Returning Capital To Costs through Allocation Integration Benefit Debt Shareholders through Strategic Priorities Investments with Capital Projects Reduction Dividends and Buybacks Priorities 2022E Investment in O
Slide 17: Key Focus Areas for 2022
Key Focus Areas for 2022 Continued commitment to strong execution, operational excellence and returning capital to shareholders Passing through increased external feedstock, freight and commodity cost increases Superior operational excellence to ensure reliability for our customers Investing in our
Slide 18: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 18
Slide 19: Appendix
Appendix © 2022 Tronox Holdings plc. | All rights reserved. | tronox.com 19
Slide 20: Consolidated Statements of Income (U.S. GAAP)
Consolidated Statements of Income (U.S. GAAP) TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF INCOME (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, 2021 2020 2021 2020 Net sales $ 884 $ 783 $ 3,572 $ 2,758
Slide 21: 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 22: Consolidated Balance Sheets
Consolidated Balance Sheets TRONOX HOLDINGS PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) December 31, 2021 December 31, 2020 ASSETS Current Assets Cash and cash equivalents $ 228 $ 619 Restricted cash 4 29 Accounts receivable (net of allowan
Slide 23: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Year Ended December 31, 2021 2020 Cash Flows from Operating Activities: Net income $ 303 $ 995 Adjustments to reconcile net income to net cash provided by operating
Slide 24: 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 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, (a) Represents non-cash share-based
Slide 25: 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 year ended December 31, 2021: Consolidated Cash provided by operating activities $ 740 C