Tronox Holdings Plc · NYSE:TROX
Tronox — Debt Investor Presentation (September 2017)
35 slides from Tronox's debt investor presentation, Sep 7, 2017
Slide 1: Tronox Limited Lender Meeting / Conference Call
Tronox Limited Lender Meeting / Conference Call September 7, 2017 ddsdfsdfsd
Slide 2: Disclaimer
Disclaimer 1 Additional Information and Where to Find It This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval. In connection with the Transaction Agreement (the “Cristal Transaction Agreement”), by a
Slide 3: Agenda
2 Transaction Overview Bank of America Merrill Lynch Company Overview Peter Johnston (Chief Executive Officer) Key Credit Highlights Peter Johnston Financial Performance Update Timothy Carlson (Chief Financial Officer) Timothy Carlson Peter Johnston Joined Tronox in 2012Formerly Global Head of Glenc
Slide 4: Transaction Overview
Transaction Overview
Slide 5: Transaction Summary
4 Transaction Summary 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Tronox Limited (“Tronox” or the “Company”) is a global leader in the production and marketing of titanium bearing mineral sands and TiO2 pigmentOn February 21, 2017, Tronox announced the planned acquisition of the TiO2 busin
Slide 6: Company Overview
Company Overview
Slide 7: Tronox Overview
6 Tronox Overview 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Global leader in the production and marketing of titanium bearing mineral sands and titanium dioxide (“TiO2”) pigment465 kMT nameplate production capacityOne of the largest global producers and marketers of TiO2 manufactured via
Slide 8: TiO2 Value Chain
7 TiO2 Value Chain 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Titanium-Bearing Mineral Sands Zircon Ilmenite Synthetic Rutile TitaniumSlag Pig Iron Natural Rutile Leucoxene Feedstock TiO2 Pigments Markets
Slide 9: Cristal Overview
8 Cristal Overview 45-63-136 42-109-186 103-146-171 World’s 2nd largest TiO2 pigment producer 858 kMT of nameplate production capacity84% manufactured via chloride technologyHigh-quality, well-invested assets, with highly automated manufacturing processesHighly integrated into mining, chlorine, air
Slide 10: EPS accretion of more than 100% expected in year 1
EPS accretion of more than 100% expected in year 1Projected pro forma EPS, EBITDA and FCF growth rates over 2018-2021 improve by ~70%, ~30% and ~60%, respectively, versus Tronox standalonePre-tax run-rate synergies of more than $100 million by year 1 and more than $200 million by year 3 expectedPro
Slide 11: New Tronox – Global Footprint
10 New Tronox – Global Footprint 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 ThannFranceCapacity: 32 kMT Ashtabula 1 & 2USACapacity: 245 kMT Salvador, BahiaBrazilCapacity: 60 kMT YanbuKSACapacity: 200 kMT BunburyAustraliaCapacity: 110 kMT FuzhouChinaCapacity: 46 kMT StallingboroughUKCapaci
Slide 12: Highly Synergistic Combination
Pre-tax run-rate synergies of more than $100 million by year 1 and more than $200 million by year 3 expected Components of Synergies (1) Full utilization of mineral sands assets Optimizing value in use of our feedstockSharing of best practices across complementary technologies, production facilities
Slide 13: Update on Purchase of Cristal
12 Update on Purchase of Cristal 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 11/23/2016: Tronox and Cristal agree to non-binding deal construct, due diligence commences 2/21/2017: Tronox announces definitive agreement to acquire Cristal TiO2 business 8/2/2017: Tronox signs definitive agree
Slide 14: Favorable Industry Outlook
Favorable Industry Outlook
Slide 15: Early Stage of Strong TiO2 Recovery
14 Early Stage of Strong TiO2 Recovery 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 $12+ billion global market serving paints and coatings, plastics, paper and a variety of other industriesDerived from titanium bearing ores, TiO2 is the most widely used pigment in the world, comprising ~70%
Slide 16: Sustained Improvement in Industry Operating Rates
15 Sustained Improvement in Industry Operating Rates 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Indexed Global TiO2 Demand and Capacity Utilization After peaking in 2011, the TiO2 industry suffered from low capacity utilization as a result of de-stocking by end-users and new capacity indu
Slide 17: Chinese Producers Market Dynamics
16 Chinese Producers Market Dynamics 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Increasing feedstock cost Higher energy pricesWage growthIncreasing environmental costs Inflationary Pressures Stringent environmental regulatory permitsGovernmental control to limit inefficient capacity comin
Slide 18: Key Credit Highlights
Key Credit Highlights
Slide 19: Key Credit Highlights
18 Key Credit Highlights Combination Creates Largest Global TiO2 Producer with Diverse Geographic Mix 1 Opportune Time to Capitalize on TiO2 Market Recovery 2 Superior Competitive Position as Most Vertically Integrated TiO2 Producer 3 Strong and Focused Management Team with Significant Industry Expe
Slide 20: Combination Creates Largest Global TiO2 Producer
19 Combination Creates Largest Global TiO2 Producer with Diverse Geographic Mix 1 Combination creates the world’s largest TiO2 platform with approximately 18% of industry capacity in 2016World’s largest producer and supplier of TiO2 manufactured via chloride technology, used in many end-market appli
Slide 21: Opportune Time to Capitalize on TiO2 Market Recovery
20 Opportune Time to Capitalize on TiO2 Market Recovery 2 Increasingly Diversified Revenue Generation Status Quo Tronox 2016A Revenue Pro Forma New Tronox 2016A Revenue 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 TiO2 market has recovered since 2016 with underlying end market trends suppor
Slide 22: Superior Competitive Position as Most Vertically Integrated TiO2 Producer
21 Superior Competitive Position as Most Vertically Integrated TiO2 Producer 3 New Tronox Pro Forma Mineral Sands Production Feedstock Balance Shifts (2018E) (kMT, TiO2 units) 220 Long New Tronox Tronox 180 Short 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Creates world’s second largest mi
Slide 23: Low Cost and Efficient Production Driving Superior Free Cash Flow Growth
Low Cost and Efficient Production Driving Superior Free Cash Flow Growth 4 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Commitment to Efficiency Established “Operational Excellence” program to enhances performance of TiO2 business$246 million cumulative cash from cost reductions and $240 mi
Slide 24: Long-Standing Blue Chip TiO2 Customer Relationships
Long-Standing Blue Chip TiO2 Customer Relationships 5 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 23 Customers include market leaders in each of the major end-use markets for TiO2 Tronox has supplied each of its top ten TiO2 customers for over ten years Diversified customer base of app
Slide 25: Strong and Focused Management Team
24 Strong and focused management team with significant industry experience 6 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Officer Title Background Peter Johnston Chief Executive Officer and Director Mr. Johnson began serving as Tronox’s CEO May 15, 2017 and has served as a director since Au
Slide 26: Financial Performance Update
Financial Performance Update
Slide 27: 1st Half 2017 Performance Update on Tronox and Cristal
1st Half 2017 Performance 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 26 Update on Tronox and Cristal Tronox sales increased $181 million, or 29% in H1 2017 compared to H1 2016Tronox Adj. EBITDA increased $114 million(1), or 238% in H1 2017 compared to H1 2016Cristal H1 2017 sales improved
Slide 28: Historical Financial Performance
27 Historical Financial Performance 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Tronox Net Sales Cristal Net Sales Cristal Adj. EBITDA(2) Tronox Adj. EBITDA(1) Note: USD in millions. Tronox figures are for Tronox minus Alkali businessCalculated as Tronox Company Adj. EBITDA minus Alkali se
Slide 29: Capital Allocation Strategy
Capital Allocation Strategy 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 28 Maintain strategic investment flexibility Capital expenditures to support business growth and debottleneck operations Reduce debt with target leverage ratio range of 2.0-3.0x EBITDA Shareholder capital return
Slide 30: Summary
World’s Largest and Most Highly Integrated TiO2 Producer Highly Strategic and Synergistic Combination with Cristal Transaction Substantially Accretive and Deleveraging Upon Closing Higher Growth Rates, Faster-growing EBITDA, Free Cash Flow and Earnings Expanded Global Footprint, Increased
Slide 31: Syndication Overview
Syndication Overview
Slide 32: Sources & Uses and Pro Forma Capitalization
31 Sources & Uses and Pro Forma Capitalization 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 $542mm equity consideration is calculated off the share price of $14.42 as of February 20, 2017 (day prior to announcement of Cristal Acquisition)Cash and cash equivalents includes restricted cash. F
Slide 33: Summary of Terms & Conditions – New USD Term Loan B
32 Summary of Terms & Conditions – New USD Term Loan B 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Borrower: Tronox Finance LLC (1) Facility: $2,150 million First Lien Term B Facility Guarantors: Tronox Limited, as Holdings and certain of its existing and future wholly owned direct and ind
Slide 34: Transaction Timeline
33 Transaction Timeline 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Date: Event: September 7th Term Loan B Lender Presentation September 13th Lender Commitments Due September 22nd Estimated Closing and Funding
Slide 35: Organizational Chart
Tronox Sands Holdings Pty LimitedAustralia 34 Organizational Chart 45-63-136 42-109-186 103-146-171 134-184-0 112-48-160 Colors denote country of incorporation Tronox LimitedAustralia Tronox Global Holdings Pty LimitedAustralia Tronox Australia Pigments Holdings Pty LimitedAustralia Tronox Pigments