Tronox Holdings Plc · NYSE:TROX

Tronox — Non-Deal Roadshow (May 2020)

49 slides from Tronox's roadshow presentation, May 19, 2020

Slide 1: Tronox Holdings plc
Tronox Holdings plc May 19, 2020 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 1
Slide 2: 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 3: Acquisition of TiZir Titanium and Iron
Acquisition of TiZir Titanium and Iron Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 3
Slide 4: TiZir Titanium & Iron overview
Tizir Titanium & Iron (“TTI”) overview TTI Business Description Product and Process Overview • TTI is a smelting facility, which upgrades ilmenite to produce a high-value titanium • TTI produces titanium slag primarily used in the production of white pigment slag, primarily sold to pigment producers
Slide 5: TTI is a highly strategic acquisition for Tronox
TTI is a highly strategic acquisition for Tronox A world-class asset… …to support Tronox’s strategic fundamentals Established high grade titanium slag ✓ Enhances surety of high grade titanium producer with deep technical know-how feedstock supply for Tronox’s pigment operations Stable, high quality
Slide 6: Tronox's acquisition of TTI improves financial profile
Tronox’s acquisition of TTI improves Tronox’s financial profile, with a minimal increase in current leverage (1) 22.6% 24.1% Improved financial profile 2019 EBITDA margin (pre-transaction) PF 2019 EBITDA margin (post-transaction) 3.9x 4.1x Very modestly increases PF net debt / LTM EBITDA(2) Net Debt
Slide 7: Anticipate $15 – 20 million in synergies in Year 3
Anticipate $15 – 20 million in synergies in Year 3 Synergies are cost-saving in nature and derived from various opportunities Distribution 6% Supply Chain 12% Process Improvements Feedstock 56% 26% Significant upside to feedstock synergies Tronox Holdings plc | tronox.com | Confidential & Proprietar
Slide 8: TTI Provides Significant Savings by Internalizing the Purchase
TTI Provides Significant Savings by Internalizing the Purchase of Tronox’s Remaining Ti Slag Requirements 6 month moving average for high grade feedstock price and Tronox cost US$/tonne Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Global Avg Price (6 mo moving avg) South Africa Cost (6 mo moving
Slide 9: Amendment of Jazan Technical Services Agreement
Amendment of Jazan Technical Services Agreement Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 9
Slide 10: Amendment of Jazan Technical Services Agreement
Amendment of Jazan Technical Services Agreement • Under the amended agreement, Tronox will provide comprehensive consulting and advisory services to act as the project manager through the next four phases of the Jazan smelter project ‒ Next four phases are: (1) Construction and mechanical completion
Slide 12: First Quarter 2020 Highlights
First Quarter 2020 Highlights Adjusted EBITDA and Adjusted EPS exceeded preliminary results Q1 ‘20 Q1 ’19 YoY % ∆ Q4 ‘19 QoQ % ∆ • Revenue up 4% sequentially, driven by TiO2 demand in North Pro Forma Summary Financials America in architectural DIY coatings and plastics end markets Revenue $ 722 $ 72
Slide 13: COVID-19 Response
COVID-19 Response Our focus has been to prioritize three areas: Employees Operations Our Essential Role • Continue to prioritize the safety, • All sites are currently operating • Our operations around the world health and well-being of our have been designated as employees and their families • Ensur
Slide 14: Tronox Delivered $45 million of Synergies in Q1 2020
Tronox Delivered $45 million of Synergies in Q1 2020 Remain committed to our synergy targets Total Synergies $325 USD millions EBITDA Synergies Achieved & Reflected in P&L YTD $275 Tax and Other Synergies Not Reflected in EBITDA Synergy Target $190 $89 $42 $45 $7 $47 $38 2019 Q1 2020 2020 2021 2022
Slide 15: Liquidity and Capital Resources
Liquidity and Capital Resources(1) Pro Forma as of March 31, 2020(1) Pro forma (US$ in millions) March 31, 2020(1) • Current liquidity is $1,070 million Cash and cash equivalents $ 720 • Cash is well distributed across Available under ABL Facility 248 regions – no trapped cash Available under the St
Slide 16: Strong Financial Position
Strong Financial Position • Completed the offering of $500 million 6.5% senior secured notes due 2025 • Total debt of $3.5 billion, net debt of $2.8 billion, TTM net leverage of 3.9x(1) • No near-term maturities on our term loans or bonds until 2024 • No financial covenants on our term loans or bond
Slide 17: Outlook as of May 7, 2020
Outlook as of May 7, 2020 • Q2 2020 outlook: • FY 2020 Estimated Uses of Cash: ‒ TiO2 sales volumes to decline in the high teens to ‒ Net Interest Expense: ~$165-170 million(1) low twenties percent range versus Q1 2020 ‒ Zircon volumes to remain largely ‒ Cash Taxes: ~$20-30 million in line with Q1
Slide 18: Economic Scenario Planning
Economic Scenario Planning • From the onset of the global pandemic, we developed economic scenarios to evaluate the potential impact on demand, which included a mild impact case, a medium impact case, and a worst case impact • All scenarios conservatively assume various levels of DSO degradation (th
Slide 20: A Focused Titanium Industry Leader
A Focused Titanium Industry Leader Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 20
Slide 21: Tronox – A Focused Titanium Industry Leader
Tronox – A Focused Titanium Industry Leader • Tronox Holdings plc (NYSE:TROX) is a vertically integrated mining and inorganic chemical company domiciled under the laws of the United Kingdom, and headquartered World’s largest vertically integrated TiO2 producer in the United States in the New York Ci
Slide 23: Integration and Globalization Advantages
Integration and Globalization Advantages Vertical Integration Balanced Geographical Sales • Achieve and maintain first- quartile cost position • Greater stability in financial 26% performance 36% • Significant profitability and cash flow across varying 32% macro-economic conditions 6% A Global Footp
Slide 24: A Global Organization United by Our Core Values
A Global Organization United by Our Core Values Tronox has created a high-performance organization that transcends geographic and cultural boundaries Our Core Values Our Results Approach • We have an uncompromising focus on operating safe, reliable and responsible facilities. • We honor our responsi
Slide 25: Commitment to Sustainability is a Part of Tronox Culture
Commitment to Sustainability is a Part of Tronox Culture Corporate citizenship and sustainability is an integral part of our global business. We are continually challenging ourselves to promote sustainable growth, invest in green technologies, be transparent in all our business operations, and make
Slide 26: Strategy Driven by Changing Industry Structure
Strategy Driven by Changing Industry Structure Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 26
Slide 27: Strategy Driven by Changing Industry Dynamics
Strategy Driven by Changing Industry Dynamics Changes in TiO2 Market Increased competitive Structure intensity Implications Flattening of cost curve Advantaged cost structure is critical to remain competitive / relevant Chloride Process Industry consolidation and migration to public ownership Vertic
Slide 29: Tronox Vision for the Future
Tronox Vision for the Future Vision: To be the leading, responsible, and advantaged global integrated TiO2 company delivering safe, quality, low-cost tons to our customers and exceptional returns to our shareholders – by leveraging our outward-minded talent base Sources of Advantage Performance Char
Slide 30: TiO2 Global Industry Landscape
TiO2 Global Industry Landscape Exchange NYSE: TROX NYSE: CC SHE: 002601 NYSE: KRO NYSE: VNTR Global Headquarters Stamford, CT Wilmington, DE Henan, China Dallas, TX Wynyard, UK Incorporation UK Delaware China Delaware UK US, Brazil, UK, Global TiO2 Germany, Belgium, UK, Germany, Spain, Netherlands,
Slide 31: Vertical Integration Strategy
Vertical Integration Strategy Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2020 31
Slide 32: Our Operations Philosophy
Our Operations Philosophy SQLCT Operational Excellence Business Transformation Integrated Business Planning Operational Organizational Risk Effectiveness Management Project Asset Effectiveness Reliability Delivering Safe, Quality, Low-Cost Tons for our Customers and Exceptional Shareholder Returns A
Slide 33: Tronox's Vertically Integrated Network of Assets
Tronox’s Vertically Integrated Network of Assets Namakwa Gingko Existing Fairbreeze UMM Cooljarloo Wonnerup Paraiba Operations East and West Snapper Mining ▪ Zircon ▪ Pig Iron Future Atlas Coolljarloo East OFS (Direct sales) (Extensions) Fairbreeze Extension Port Durnford Campaspe West UMM Expansion
Slide 34: Established Mining Operations
Established Mining Operations Namakwa, South Africa KZN, South Africa Australia • Largest HM Reserves at ~46m MT • Fairbreeze Mine HM Reserves at ~13m MT • ~20m MT of HM Reserves in our Western Operations; 7m MT of HM • 32k MT Rutile & leucoxene and 121k • 25k MT Rutile & leucoxene and 55k MT Reserv
Slide 35: Smelting Operations to Produce High-Grade TiO2 Feedstock Material
Smelting Operations to Produce High-Grade TiO2 Feedstock Material for our Pigment Plants Namakwa, South Africa KZN, South Africa Chandala, Australia • Two smelting furnaces that produce • Two smelting furnaces that produce Ti Slag • Metallurgical site which includes a kiln titanium slag (“Ti Slag”)
Slide 36: Jazan Expected to Increase Total Ti Slag Production by 500k MT
Jazan Expected to Increase Total Ti Slag Production by 500k MT Producing high-grade feedstock for our pigment plants • Jazan is a key to further optimize vertical integration of Tronox • Jazan smelter comprised of two high-grade chloride slag furnaces with 500ktpa of combined capacity • Tronox, unde
Slide 37: Nine Pigment Plants Across Six World Regions
Nine Pigment Plants Across Six World Regions North America Europe Australia • Tronox’s largest pigment plant is located • Stallingborough, U.K plant has a production • Kwinana, Western Australia plant (~40km in Hamilton, Mississippi and has a capacity of 165k MT (chloride process) from Perth) has a
Slide 38: Value-Enhancing Benefits from Zircon & TiCl4
Value-Enhancing Benefits from Zircon & TiCl4 Tronox is the 2nd largest producer of zircon and the largest merchant seller and distributor of Metal Grade TiCl4 products globally Zircon • 2nd largest zircon producer with ~294,000 tons of capacity – Largest production capacity of our portfolio at Namak
Slide 39: Zircon Delivering Significant Profitability and Margin Enhancement
Zircon Delivering Significant Profitability and Margin Enhancement • Major applications ▪ Ceramic tiles and glazes ▪ Refractories and foundry ▪ Zirconia chemicals • Market Dynamics ▪ Margin Stabilization initiative precedes that in TiO2 ▪ Some near-term demand softening due uncertain outlook in Chin
Slide 41: Consolidated Statements of Operations
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 March 31, 2020 2019 Net sales $ 722 $ 390 Cost of goods sold 547 307 Gross profit 175 83
Slide 42: 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 INCOME
Slide 43: Consolidated Balance Sheets
Consolidated Balance Sheets TRONOX HOLDINGS PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) March 31, 2020 December 31, 2019 ASSETS Current Assets Cash and cash equivalents $ 420 $ 302 Restricted cash 9 9 Accounts receivable (net of allowance f
Slide 44: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Three Months Ended March 31, 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 40 $ (30) Adjustments to reconcile net income (loss) to net cash pro
Slide 45: Reconciliation of Net Loss Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss Income to EBITDA and Adjusted EBITDA (NON-U.S. GAAP) TRONOX HOLDINGS PLC RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended March 31, 2020 2019 Net (loss) income (U.S. GAAP) $ 40 $ (30) Interes
Slide 46: 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 three months ended March 31, 2020: Consolidated Cash used in operating activities $ (28)
Slide 47: Pro Forma Consolidated Statements of Operations
Pro Forma Consolidated Statements of Operations (U.S. GAAP) TRONOX HOLDINGS PLC PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Proforma amounts March 31, 2020 2019 Net sales $ 722 $ 720 Cost of goods sold 547 579 Gr
Slide 48: Reconciliation of Pro Forma Net Income Loss
Reconciliation of Pro Forma Net (Loss) Income from Continuing Operations attributable to Tronox Holdings plc (U.S. GAAP) to Adjusted Net Income (Loss) from Continuing Operations attributable to Tronox Holdings plc (NON-U.S. GAAP) TRONOX HOLDINGS PLC PRO FORMA RECONCILIATION OF NON-U.S. GAAP FINANCIA
Slide 49: Pro Forma Reconciliation of Net Income Loss to EBITDA
Pro Forma Reconciliation of Net Income (Loss) from Continuing Operations to EBITDA and Adjusted EBITDA (non-U.S. GAAP) TRONOX HOLDINGS PLC PRO FORMA RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Pro Forma Three Months Ended M

Tronox Holdings — Non-Deal Roadshow (May 2020) on 6ix

Tronox — Non-Deal Roadshow (May 2020)

Slide 1: Tronox Holdings plc

Slide 2: Safe Harbor Statement and Non-U.S. GAAP Financial Terms

Slide 3: Acquisition of TiZir Titanium and Iron

Slide 4: TiZir Titanium & Iron overview

Slide 5: TTI is a highly strategic acquisition for Tronox

Slide 6: Tronox's acquisition of TTI improves financial profile

Slide 7: Anticipate $15 – 20 million in synergies in Year 3

Slide 8: TTI Provides Significant Savings by Internalizing the Purchase

Slide 9: Amendment of Jazan Technical Services Agreement

Slide 10: Amendment of Jazan Technical Services Agreement

Slide 11: Q1 2020 Results

Slide 12: First Quarter 2020 Highlights

Slide 13: COVID-19 Response

Slide 14: Tronox Delivered $45 million of Synergies in Q1 2020

Slide 15: Liquidity and Capital Resources

Slide 16: Strong Financial Position

Slide 17: Outlook as of May 7, 2020

Slide 18: Economic Scenario Planning

Slide 19: Appendix

Slide 20: A Focused Titanium Industry Leader

Slide 21: Tronox – A Focused Titanium Industry Leader

Slide 22: Global, Integrated Footprint Sets Tronox Apart

Slide 23: Integration and Globalization Advantages

Slide 24: A Global Organization United by Our Core Values

Slide 25: Commitment to Sustainability is a Part of Tronox Culture

Slide 26: Strategy Driven by Changing Industry Structure

Slide 27: Strategy Driven by Changing Industry Dynamics

Slide 28: © 2020 Tronox Holdings plc. | All rights reserved. | tronox.com

Slide 29: Tronox Vision for the Future

Slide 30: TiO2 Global Industry Landscape

Slide 31: Vertical Integration Strategy

Slide 32: Our Operations Philosophy

Slide 33: Tronox's Vertically Integrated Network of Assets

Slide 34: Established Mining Operations

Slide 35: Smelting Operations to Produce High-Grade TiO2 Feedstock Material

Slide 36: Jazan Expected to Increase Total Ti Slag Production by 500k MT

Slide 37: Nine Pigment Plants Across Six World Regions

Slide 38: Value-Enhancing Benefits from Zircon & TiCl4

Slide 39: Zircon Delivering Significant Profitability and Margin Enhancement

Slide 40: Appendix

Slide 41: Consolidated Statements of Operations

Slide 42: Reconciliation of Non-U.S. GAAP Financial Measures

Slide 43: Consolidated Balance Sheets

Slide 44: Consolidated Statements of Cash Flows

Slide 45: Reconciliation of Net Loss Income to EBITDA and Adjusted EBITDA

Slide 46: Free Cash Flow (Non-U.S. GAAP)

Slide 47: Pro Forma Consolidated Statements of Operations

Slide 48: Reconciliation of Pro Forma Net Income Loss

Slide 49: Pro Forma Reconciliation of Net Income Loss to EBITDA