Tronox Holdings Plc · NYSE:TROX
Tronox — Q1 2024 Earnings Presentation
22 slides from Tronox's earnings presentation, May 2, 2024
Slide 1: First Quarter 2024 Financial Results
First Quarter 2024 Financial Results May 1, 2024
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the rela
Slide 3: Key Takeaways
Key Takeaways Insurance in-force reached a new record of $264B, driven by NIW of $11B and persistency of 85% Strong cure performance as cures outpaced new delinquencies, delinquency rate at 2.0% consistent with pre- pandemic levels Expenses decreased 10% Q/Q and 2% Y/Y as we continue to focus on cos
Slide 4: About Us
About Us Dynamic platform uniquely positioned with innovative approach, strong balance sheet, Leading private mortgage insurance 40+ year track record and cycle-tested company helping millions of families leadership team achieve the dream of sustainable home ownership Drive Profitable Growth Maintai
Slide 5: Financial Highlights
Financial Highlights Primary Insurance in-Force Up $1B Q/Q $264 New Insurance Written Up 1% Q/Q $10.5 Net Premiums Earned Up $1M Q/Q $241 billion billion million Net Income Up 2% Q/Q $161 Adjusted Operating Income1 $166 Net Investment Income Up 2% Q/Q $57 million Up 5% Q/Q million million Diluted Ne
Slide 6: Driving Continued Book Value Accretion
Driving Continued Book Value Accretion Book value per share excluding AOCI1 + cumulative dividends 6 1 Book value per share excluding Accumulated Other Comprehensive Income “AOCI” is a non-GAAP measure. Please see appendix for a reconciliation
Slide 7: Market and Industry Dynamics
Market and Industry Dynamics Complex market with favorable Industry well positioned to navigate underpinnings market conditions » The housing market remains slow in the near-term » High quality credit portfolio and strong given elevated interest rates and cumulative home manufacturing quality price
Slide 8: Strong & Comprehensive Risk Management
Strong & Comprehensive Risk Management FICO (Risk in-force “RIF”)1 Significant decrease in layered risk # of High-Risk 4Q07 1Q23 2Q23 3Q23 4Q23 1Q24 Layers2 LTV > +0 4.6% 0.6% 0.6% 0.6% 0.6% 0.6% 95% +1 7.9% 0.6% 0.6% 0.6% 0.6% 0.6% & +2 2.5% 0.2% 0.1% 0.1% 0.1% 0.1% FICO < 680 +3 or > 0.0% 0.0% 0.0
Slide 9: Primary Insurance in-Force (IIF) Growth
Primary Insurance in-Force (IIF) Growth NIW ($B), IIF ($B) and Persistency Rate1 Mortgage Rate IIF Concentration2 4% 18% 12% 14% 78% 52% » NIW increased 1% sequentially and decreased 20% » 4% of portfolio had mortgage rates at least 50 basis points versus the prior year on lower MI market and estima
Slide 10: Portfolio Premium Yield & Premiums
Portfolio Premium Yield & Premiums In-force primary portfolio premium yield Primary direct & ceded premiums1 ($M) 1Q23 2Q23 3Q23 4Q23 1Q24 Base Premium Rate (bps) 40.4 40.3 40.2 40.1 40.1 Single Cancellations 0.3 0.3 0.3 0.2 0.2 Ceded Premium (3.2) (3.3) (3.2) (3.9) (4.0) Net Premium Rate (bps) 37.5
Slide 11: Strong Credit Performance
Strong Credit Performance New delinquencies1 Cure activity1 2 3 Remaining 879 1,513 2,635 3,936 7,440 Total Delqs 18,633 18,065 19,241 20,432 19,492 Delqs Cumulative 91% 84% 76% 66% 35% Delq Rate 1.9% 1.9% 2.0% 2.1% 2.0% Cure Rate » New delinquency rate consistent with pre-pandemic levels » Continue
Slide 12: Losses
Losses Losses ($M) & Loss Ratio Highlights » 1Q24 loss performance driven by new delinquencies partially offset by $54 million reserve release from favorable cure performance on early 2023 and prior delinquencies and our loss mitigation efforts » Sequential decrease in new delinquencies driven by se
Slide 13: Embedded Equity
Embedded Equity1 Primary portfolio Delinquent policies 94% 88% » Cumulative HPA providing substantial embedded equity across the portfolio » 94% of delinquent policies and 88% of all policies have at least 10% equity 13 1 MTM LTVs are estimated based on amortization and house price appreciation at t
Slide 14: Continued Strong Capital Return and Low Leverage
Continued Strong Capital Return and Low Leverage GAAP Capital Position1 ($M) Highlights » Expect 2024 capital returns similar to 2023 levels » Returned a total of $75M to shareholders during the quarter, consisting of $26M quarterly dividend, and share repurchases totaling $49M (1.8 million shares;
Slide 15: Strong PMIERs Sufficiency
Strong PMIERs Sufficiency 1, 2 Sufficiency to PMIERs ($M) PMIERs credit by third-party CRT instrument » Operating leverage of 34% reflects successful execution of our well diversified CRT program in a complex market » Executed the following credit risk transactions that supported a $1.7 billion redu
Slide 16: Robust Statutory Capital
Robust Statutory Capital EMICO Policyholder Surplus & Statutory Capital Contingency Reserve Release Year $M 2024 $175 2025 $307 2026 $342 2027 $359 2028 $384 2029 $441 2030 $510 2031 $522 2032 $508 2033 $492 Contingency $3,679 $3,800 $3,923 $3,960 $4,141 Reserve Total $4,040 » PHS reduction driven b
Slide 17: Strong & Diversified Ratings
Strong & Diversified Ratings Rating Date Updated EMICO1 EHI2 LT Debt3 EMIC-NC1 Enact Re1 Agency Rating / Outlook Rating / Outlook Rating / Outlook Rating / Outlook Rating / Outlook Outlook Upgraded Moody’s A3 / Positive Baa3 / Positive Baa3 / Stable - - March 2024 Upgraded S&P A- / Stable BBB- / Sta
Slide 18: Highly Rated & Diversified Investment Portfolio
Highly Rated & Diversified Investment Portfolio $5.4B Investment Portfolio and $0.6B of Cash Equivalents 1 2 Composition by asset class Composition by rating » Top 10 issuers comprise ~6% of portfolio » 98% of portfolio is investment grade » Book yield of 3.7% up 0.1 points versus prior quarter » 1Q
Slide 19: Our ESG Pillars
Our ESG Pillars Enact has a strong foundation of corporate sustainability and we are proud of the role we play in the communities we serve and our processes that result in a sustainable business. ESG issues are a key component of our strategy to enhance long-term value creation for our stakeholders.
Slide 20: Appendix
Appendix “Enact
Slide 21: Non-GAAP Measures
Non-GAAP Measures Use of Non-GAAP Measures This communication includes the non-GAAP financial measures entitled “adjusted operating income (loss)”, “adjusted operating income (loss) per share", and “adjusted operating return on equity." Adjusted operating income (loss) per share is derived from adju
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures1 Net Income to Adj Operating Income 1Q23 2Q23 3Q23 4Q23 2023 1Q24 Net Income $176 $168 $164 $157 $666 $161 Adjustments to Net Income: Net investment (gains) losses $0 $13 $0 $1 $14 $7 Costs associated with reorganization ($1) $0 $0 $0 ($0) ($0) Taxes on adjustment