Tronox Holdings plc · NYSE:TROX
Tronox — Q3 2006 Earnings Presentation
16 slides from Tronox's earnings presentation, Nov 1, 2006
Slide 1: Third-Quarter Preliminary Results
TRONOX Third-Quarter Preliminary Results November 1, 2006
Slide 2: Agenda
Agenda Perspective and Key Initiatives Tom Adams - Chairman and Chief Executive Officer Third-Quarter Performance Robert Gibney - Vice President Investor Relations and External Affairs Financial Highlights Mary Mikkelson - Senior Vice President and Chief Financial Officer Q&A 2
Slide 3: Forward-Looking Statement
Forward-Looking Statement Tronox makes certain forward-looking statements in this presentation that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management and on information currently available to our management at the time of such stateme
Slide 4: Right Track
Right Track Project Cornerstone Benchmarking Target Setting Team & Competitor & Board Formation & Execution Analysis Approval Planning IPO Q1 Q2 Q3 4
Slide 5: Project Cornerstone Overview
Project Cornerstone Overview Top Quartile Performance Cornerstone Targets • Profitability • Cash Cost: $60MM • Cash Flow Initiative Teams • Working Capital: • ROIC $100MM • Operations / Supply- Chain Excellence • Maintenance Capital • SG&A Productivity Spend: $20MM • Quality Improvement • Electrolyt
Slide 6: Cornerstone Execution
Cornerstone Execution Status Summary $60 Cash CashCost CostReductions Reductions SG&A Teams on track or ahead of $45 Op Costs schedule $M M $MM Savings YTD + Forecast Remain committed to target $30 attainment $15 Beginning to realize benefits in the bottom-line $- 2006 2007 2008 Inventory, Inventory
Slide 7: Tronox Global Production Platforms
Tronox Global Production Platforms 7
Slide 8: Outlook
Outlook Global TiO2 Market Status Demand growth 4% - 6% Capacity utilization mid-90s Low industry inventory levels Improving Regional Pricing Most notably in Asia-Pacific and Europe U.S. GDP and housing uncertainty Ongoing Project Cornerstone Improvements 8
Slide 9: Tronox Third-Quarter Preliminary Results ($MM)
Tronox Third-Quarter Preliminary Results ($MM) Third Quarter Ended September 30, 2006 2005 Net Sales $376.2 $327.4 Gross Margin 42.1 43.7 Gross Margin % 11.2% 13.3% Income (Loss) from Cont. Ops. (0.7) 13.7 Diluted EPS from Cont. Ops. $ (0.02) $ 0.34 * *(pro forma) 9
Slide 10: Process Chemicals & Energy
Process Chemicals & Energy Caustic Soda Price FOB Gulf 550 Chlorine & Caustic 500 $ per Short Ton 450 Prices Peaked in Q1 400 2006 350 300 Prices are Expected to 250 200 Decline in Q4 2006 5 6 5 05 5 6 06 6 05 5 06 6 00 00 00 00 00 00 00 00 20 20 20 20 -2 -2 -2 -2 -2 -2 l- 2 l- 2 p- p- n- n- ay ay a
Slide 11: Q2 to Q3 2006 Bridge: Cost of Sales per Tonne Sold
Q2 to Q3 2006 Bridge 102 100 100 Cost of Sales per Tonne Sold (Indexed)) 100 1 98 3 3 1 98 96 94 92 90 Q2 2006 Actual Process FX / Elec. Volume / Q3 2006 Prior Production Cornerstone Q3 2006 Actual Chemicals / Chandala Guidance Volume Energy / Maintenance / Mix Prior Guidance Impacts Additional Impa
Slide 12: Segment Results
Segment Results Pigment Sales 15.6% Increase Over Q3 2005 Good volume growth in Asia-Pacific and Europe TiO2 Prices Flat Q2 to Q3 2006 Pigment Production: 149,200 tonnes Up 4,700 tonnes versus Q2 2006 Savannah third-party gas disruption Electrolytic and Other Business Increased sales volumes versus
Slide 13: Financial Highlights
Financial Highlights Cash Flows Provided by Operating Activities Q3 2006 = $50MM Capital Expenditures Q3 2006 = $27MM Projected FY 2006 Capital Expenditures = $90MM Term Loan Payment = $500,000 Term Loan Balance = $198.5MM 13
Slide 14: Financial Highlights
Financial Highlights Land Sales Environmental Environmental Reserves = $242MM Environmental Receivable = $68MM 2006 Net Cash Expenditure for Environmental = $20MM to $25MM 14
Slide 15: Q&A
Q&A www.tronox.com 15
Slide 16: Third-Quarter Preliminary Results
TRONOX Third-Quarter Preliminary Results November 1, 2006