Tronox Holdings Plc · NYSE:TROX
Tronox — Q4 2023 Earnings Presentation
22 slides from Tronox's earnings presentation, Feb 16, 2024
Slide 1: Fourth Quarter and Full Year 2023 Conference Call
Fourth Quarter and Full Year 2023 Conference Call Tronox Holdings plc February 16, 2024 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2024 1
Slide 2: Presenters
Presenters • John Romano Jean-Francois Turgeon John Srivisal Co-Chief Executive Officer Co-Chief Executive Officer Senior Vice President, Chief Financial Officer Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2024 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 – A Diversified, Vertically Integrated Titanium Industry Leader
Tronox – A Diversified, Vertically Integrated Titanium Industry Leader TROX $2.9B $524M 85% ~6,500 ~1,200 NYSE 2023 Revenue 2023 Adj. EBITDA Feedstock Integration1 Global Employees Customers • Vertically integrated mining and inorganic chemical Sales by Sales by TiO2 Sales Volume company Region2 Pro
Slide 5: Key Messages from Q4 2023
Key Messages from Q4 2023 • Fourth quarter top-line performance of $686M relatively in-line with expectations • Other product revenue of $110M significantly higher due to pig iron sales, as well as opportunistic sales of ilmenite and a portion of the rare earths tailings deposit in South Africa • Ad
Slide 6: Sustainability Update
Sustainability Update • Solar project in South Africa with the independent power producer SOLA Group continues to progress; first power expected in the coming months – One of South Africa’s largest solar installations that will bring power to a country experiencing daily rolling blackouts – Enabled
Slide 7: Fourth Quarter 2023 Financial Highlights
Fourth Quarter 2023 Financial Highlights Delivered free cash flow of $51 million Q4 ’23 Q4 ’22 YoY % ∆ Q3 ’23 QoQ % ∆ • Revenue increased 6% from Q4 2022 driven by Revenue $ 686 $ 649 6% $ 662 4% higher sales from TiO2 and other products Income from Operations $8 $ 36 (78)% $ 32 (75)% • Income from
Slide 8: Commercial Performance
Commercial Performance TiO2 and other product sales drove sales increases versus the prior year Price Q4 ’23 Q4 ’22 YoY % ∆ Q3 ’23 QoQ % ∆ • TiO2 pricing was weaker in select regions, mainly Asia Revenue $ 686 $ 649 6% $ 662 4% Pacific and South America TiO2 519 478 9% 558 (7)% • Zircon pricing driv
Slide 9: Operational Performance
Operational Performance Lower operating rates in Q4 2023 drove higher operating costs Production Costs Q4 ’23 Q4 ’22 YoY % ∆ Q3 ’23 QoQ % ∆ • YoY: Increase of $12M included $10M of higher costs Adjusted EBITDA $ 94 $ 113 (17)% $ 116 (19)% associated with lower absorption and higher input costs, and
Slide 10: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Balance sheet remains strong • Total debt at the end of Q4 2023 was $2.8B; 4.9x net • Total available liquidity of $761M as of Dec 31, 2023 leverage on TTM basis – Includes $273M in cash and cash equivalents – Q4 2023 weighted average interest rate of
Slide 11: Looking to the Year Ahead
Looking to the Year Ahead Market Operations Growth • TiO2 volumes experiencing • Incurred approximately $25- • R&D efforts remain focused on positive trends – strength in 35M in fixed cost absorption product and process January sales continuing in headwinds in each quarter of innovations to enhance
Slide 12: Key Capital Projects to Sustain Vertical Integration
Key Capital Projects to Sustain Vertical Integration Namakwa East OFS Project Fairbreeze Expansion Project Life of mine finished Life of mine finished products: ~4,700kt products: ~6,480kt ilmenite, 610kt zircon, ilmenite, 935kt zircon, and ~325kt rutile and ~490kt rutile • South African mining proj
Slide 13: Outlook
Outlook Q4 2023A Q1 2024E Full Year Uses of Cash FY 2024E Adjusted EBITDA $94M $100-120M Net Cash Interest Expense ~$145M Net Cash Taxes <$10M Adj. EBITDA Margin % 13.7% mid-teens Capital Expenditures ~$395M Q1 2024 Commentary • Assume Q1 2024 TiO2 volumes increase approximately 12-16% compared to Q
Slide 14: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2024 14
Slide 15: Appendix
Appendix © 2024 Tronox Holdings plc. | All rights reserved. | tronox.com 15
Slide 16: Full Year 2023 Financial Highlights
Full Year 2023 Financial Highlights • Revenue declined 17% from 2022 driven by lower 2023 2022 YoY % ∆ TiO2 and zircon sales Revenue $ 2,850 $ 3,454 (17)% • Income from operations of $186M; Net loss Income from Operations $ 186 $ 458 (59)% attributable to Tronox of $316M Net (Loss) Income $ (316) $
Slide 17: Consolidated Statements of Operations (U.S. GAAP)
Consolidated Statements of Operations (U.S. GAAP) TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net sales $ 686 $ 649 $ 2,850 $
Slide 18: 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 ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP) TO ADJUSTED NET (LOSS)
Slide 19: 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, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 273 $ 164 Restricted cash — — Accounts receivable (net of allowanc
Slide 20: Consolidated Statements of Cash Flows
TRONOX HOLDINGS PLC Consolidated Statements of Cash Flows CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Year Ended December 31, 2023 2022 Cash Flows from Operating Activities: Net (loss) income $ (314) $ 500 Adjustments to reconcile net (loss) income to net cash provid
Slide 21: 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 (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA, ADJUSTED EBITDA AS A % OF NET SALES AND NET DEBT TO TRAILING-TWELVE MONTH ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. do
Slide 22: 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 provided by operating activities to free cash flow for the three months and year ended December 31, 2023: Year Ended Nine Months Ended Three Mo