Tronox Holdings Plc · NYSE:TROX
Tronox — Q2 2022 Earnings Presentation
25 slides from Tronox's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Conference Call
Second Quarter 2022 Conference Call Tronox Holdings plc July 28, 2022 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 1
Slide 2: Presenters
Presenters • 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 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-loo
Slide 4: Tronox – A Diversified, Vertically Integrated Titanium Industry Leader
Tronox – A Diversified, Vertically Integrated Titanium Industry Leader TROX $3.6B $947M 85% ~6,500 ~1,200 NYSE 2021 Revenue 2021 Adj. EBITDA Feedstock Integration Global Employees Customers • Vertically integrated mining and inorganic chemical Sales by Sales by TiO2 Sales Volume company Region1 Prod
Slide 5: Key Highlights
Key Highlights Continued execution of our strategy • Record Adjusted EBITDA of $275 million, slightly above the midpoint of our guided range, and an Adjusted EBITDA margin of 29.1%, exceeding expectations – 21st consecutive quarter with Adjusted EBITDA margins >20% – Achieved TTM Adjusted EBITDA of
Slide 6: Tronox's 2021 Sustainability Report Accelerates Our Carbon Reduction Targets
Tronox’s 2021 Sustainability Report Accelerates Our Carbon Reduction Targets Achieve Carbon Zero Waste to Achieve Zero Harm Foster & Build a Neutrality by 2050 External Dedicated by Building Workplace that Landfills Capacity in our Reflects the 2050 2050 People, Plants and Communities in 100% Carbon
Slide 7: Second Quarter 2022 Financial Highlights
Second Quarter 2022 Financial Highlights Record Adjusted EBITDA and strong margin performance Q2 ’22 Q2 ’21 YoY % ∆ Q1 ’22 QoQ % ∆ • Revenue increased YoY driven by higher TiO2 revenues Revenue $ 945 $ 927 2% $ 965 (2)% • Income from operations of $190M and net income of $375M due to the reversal of
Slide 8: Commercial Performance
Commercial Performance Improved pricing supporting commercial performance Price Q2 ’22 Q2 ’21 YoY % ∆ Q1 ’22 QoQ % ∆ • Improved pricing in TiO2 across all geographies, driven by Revenue $ 945 $ 927 2% $ 965 (2)% the continuation of regional pricing initiatives TiO2 769 740 4% 773 (1)% • Pricing mome
Slide 9: Operational Performance
Operational Performance Higher average selling prices partially offset by higher costs to serve customers Production Mix Q2 ’22 Q2 ’21 YoY % ∆ Q1 ’22 QoQ % ∆ • Lower pig iron sales favorably impacted margins in the Adjusted EBITDA $ 275 $ 237 16% $ 240 15% second quarter – expected to roll into the
Slide 10: 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 11: Investing Now to Secure Future Vertical Integration
Investing Now to Secure Future Vertical Integration Ample titanium ore reserves for 2035 and beyond Mine Production Forecast 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Australia Snapper Atlas Campaspe Other Deposits Eastern Ops Ginkgo Ginkgo /
Slide 12: newTRON to Generate $150-$200/t Run Rate Savings
newTRON to Generate $150-$200/t Run Rate Savings Costs & Benefits by Year EBITDA Run Rate Pre-funded based on Benefit Breakout realized one-time cash 250 Volume benefits Cost Savings Contribution 200 68% 32% Annual run rate benefits 150 of $150-$200 per ton 100 expected by end of 2023 Business $
Slide 13: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Delivering value to our stakeholders and continuing to invest in our business • Achieved 2.5x net leverage on TTM basis • Invested $99M in the business in CapEx in Q2 – $2.5B in total debt as of June 30, 2022 – $202M on a YTD basis driven by key capit
Slide 14: 2022 Outlook
2022 Outlook Metric 2021A 2022E Adjusted EBITDA $947M $1.075 – $1.125B • While there have been recent shifts in the broader macro economic backdrop, and we are monitoring Adjusted Diluted EPS $2.29 $3.15 – $3.59 developments given the dynamic market conditions, our business remains sound Free Cash F
Slide 15: Effectively Deploying Capital
Effectively Deploying Capital • Elevated expected capital requirements in 2022 and 2023 – return threshold of 25% • newTRON 2022E capital: $90M Capital Expenditures • Vertical integration 2022E capital: $150M – $175M • Normalized estimated CapEx of $250M – $300M in 2025+ Growth • Will evaluate strat
Slide 16: Key Focus Areas for 2022
Key Focus Areas for 2022 Continued commitment to strong execution, operational excellence and returning capital to shareholders Offsetting inflationary cost increases with pricing and savings initiatives Investing in our business to reduce costs and increase margins Focusing on strategy execution an
Slide 17: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2022 17
Slide 18: Appendix
Appendix © 2022 Tronox Holdings plc. | All rights reserved. | tronox.com 18
Slide 19: 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 June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net sales $ 945 $ 927 $ 1,910 $
Slide 20: 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 21: Consolidated Balance Sheets
Consolidated Balance Sheets TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) June 30, 2022 December 31, 2021 ASSETS Current Assets Cash and cash equivalents $ 112 $ 228 Restricted cash 2 4 Accounts receivable (net of al
Slide 22: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Six Months Ended June 30, 2022 2021 Cash Flows from Operating Activities: Net income $ 391 $ 103 Adjustments to reconcile net income to net cash provided by operatin
Slide 23: 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) (a) Represents non-cash share-based compensation. (Millions of U.S. dollars) (b) Represents breakage fee and other cos
Slide 24: 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 six months ended June 30, 2022: Consolidated Cash provided by operating activities $ 221
Slide 25: Reconciliation of Trailing Twelve-Month Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF TRAILING TWELVE-MONTH NET INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) TRONOX HOLDINGS PLC RECONCILIATION OF TRAILING TWELVE MONTH NET INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended Trailing Twelve Month Septem