Tronox Holdings Plc · NYSE:TROX
Tronox — Q2 2023 Earnings Presentation
21 slides from Tronox's earnings presentation, Jul 27, 2023
Slide 1: Second Quarter 2023 Conference Call
Second Quarter 2023 Conference Call Tronox Holdings plc July 27, 2023 Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 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 | © 2023 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 $3.5B $875M 85% ~6,500 ~1,200 NYSE 2022 Revenue 2022 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 the Quarter
Key Messages from the Quarter Solid second quarter performance • TiO2 volumes continued recovery off Q4 2022 trough – Q2 volumes increased 9% versus Q1 2023 • Delivered Adj. EBITDA of $168M (guidance of $160-170M) and margins of 21.2%, above previous expectations • Free cash flow for the quarter was
Slide 6: Tronox's Sustainability Goals
Tronox’s Sustainability Goals ACHIEVE CARBON REDUCE SCOPE 3 ZERO WASTE TO ACHIEVE ZERO HARM BY FOSTER AND BUILD A NEUTRALITY BY 2050 EMISSIONS IN OUR EXTERNAL DEDICATED BUILDING CAPACITY IN WORKPLACE THAT SUPPLY CHAIN LANDFILLS OUR PEOPLE, PLANTS REFLECTS THE AND PROCESSES COMMUNITIES IN WHICH 20501
Slide 7: Second Quarter 2023 Financial Highlights
Second Quarter 2023 Financial Highlights Adjusted EBITDA at the high end of the guided range • Revenue improved 12% from Q1 2023 driven by Q2 ’23 Q2 ’22 YoY % ∆ Q1 ’23 QoQ % ∆ improved sales volumes across TiO2, zircon and pig iron Revenue $ 794 $ 945 (16)% $ 708 12% • Income from operations of $84M
Slide 8: Commercial Performance
Commercial Performance TiO2 sales volumes continued improvement trajectory off Q4 trough Price Q2 ’23 Q2 ’22 YoY % ∆ Q1 ’23 QoQ % ∆ • Continued price improvement YoY across both TiO2 and Revenue $ 794 $ 945 (16)% $ 708 12% zircon while pig iron pricing was lower TiO2 611 769 (21)% 560 9% • Sequentia
Slide 9: Operational Performance
Operational Performance Delivered Adj. EBITDA at high end of range despite higher costs associated with lower production Production Costs Q2 ’23 Q2 ’22 YoY % ∆ Q1 ’23 QoQ % ∆ • Production cost increases included $25M of lower cost or Adjusted EBITDA $ 168 $ 275 (39)% $ 146 15% market and idle facili
Slide 10: Taking Actions to Navigate the Current Landscape
Taking Actions to Navigate the Current Landscape Reducing Costs Managing Working Lowering CapEx • Executing our cost reduction Capital • Expect CapEx to be less playbook than $275M for 2023 – • Aligning production with reduced to adapt to the • Implemented a hiring freeze customer demand unfolding m
Slide 11: Liquidity, Capital Expenditures & Free Cash Flow
Liquidity, Capital Expenditures & Free Cash Flow Continuing to manage the balance sheet in light of macro economic backdrop • Total debt at the end of Q2 2023 was $2.7B • Invested $55M in the business in CapEx in Q2 • 3.8x net leverage on TTM basis – ~60% in maintenance & safety capital – Amended &
Slide 12: Outlook
Outlook Q1 2023A Q2 2023A Q3 2023E • Continued TiO2 volume recovery reinforced Adjusted EBITDA $146 $168 $115-135M Tronox’s expectation that Q4 2022 volume levels represented the trough mid- to high- Adj. EBITDA Margin % 20.6% 21.2% teens • Expect TiO2 volumes to remain relatively flat to Q2 2023 vo
Slide 13: Key Priorities for 2023
Key Priorities for 2023 Adapting to the market dynamics without losing sight of long-term initiatives 1 A relentless focus on sustainability and safety Continuing to align production with customer demand to ensure we are prepared 2 to meet orders as demand increases and aggressively reducing costs M
Slide 14: Q&A Session
Q&A Session Tronox Holdings plc | tronox.com | Confidential & Proprietary | © 2023 14
Slide 15: Appendix
Appendix © 2023 Tronox Holdings plc. | All rights reserved. | tronox.com 15
Slide 16: Consolidated Statements of Operations (U.S. GAAP)
Consolidated Statements of Operations (U.S. GAAP) TRONOX HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (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, 2023 2022 2023 2022 Net sales $ 794 $ 945 $
Slide 17: 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 18: 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, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 167 $ 164 Accounts receivable (net of allowance for credit l
Slide 19: 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, 2023 2022 Cash Flows from Operating Activities: Net (loss) income $ (244) $ 391 Adjustments to reconcile net (loss) income to net cash prov
Slide 20: 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) INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Net
Slide 21: 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 and six months ended June 30, 2023: Six Months Ended Three Months Ended Three Mont