Tronox Holdings plc · NYSE:TROX
Tronox — Merger or Acquisition (February 2017)
26 slides from Tronox's merger presentation, Feb 21, 2017
Slide 1: Tronox Announces Agreement to Acquire Cristal TiO2 and Reports 4Q and FY2016 Results
Tronox Announces Agreement to Acquire Cristal TiO2 and Reports 4Q and FY2016 Results February 21, 2017
Slide 2: Safe Harbor Statement: Additional Information and Where to Find It
Safe Harbor Statement Additional Information and Where to Find ItThis communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval. In connection with the Transaction Agreement, by and between Tronox Limited (the
Slide 3: Safe Harbor Statement: Forward-Looking Statements
Safe Harbor Statement 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 statements are based upon management’s current beliefs and ex
Slide 4: Tronox Announces Definitive Agreement to Acquire Cristal TiO2
Expands Global Footprint, Increases Participation in High Growth Emerging Markets Increases Growth Rates, Faster-growing EBITDA, Free Cash Flow and Earnings Highly Synergistic and Substantially Accretive and Deleveraging Upon Closing Very Strong Fourth Quarter 2016 Performance, TiO2 Market Momentum
Slide 5: Compelling Strategic Rationale; Substantial Accretion and Rapid Deleveraging
Substantial Accretion and Rapid Deleveraging Upon Closing Compelling Strategic Rationale Creates World’s Largest and Most Highly Integrated Producer of TiO2 EPS accretion of more than 100% expected in year 1Projected pro forma EPS, EBITDA and FCF growth rates over 2018-2021 improve by ~70%, ~30% and
Slide 6: Transaction Summary
Transaction Summary Governance & Leadership Size of Tronox board of directors remains unchanged with 9 membersCristal’s owners will receive 2 board seatsExxaro Mineral Sands will remain on the board with its 3 seatsTom Casey to remain Chairman and CEO Transaction Overview Cristal shareholders to rec
Slide 7: Cristal Overview: World's 2nd Largest TiO2 Pigment Producer
World’s 2nd largest TiO2 pigment producer 858 kMT of nameplate production capacity84% chloride2011-2016 average EBITDA of $385 millionHigh-quality, well-invested assets, with highly automated manufacturing processesHighly integrated into mining, chlorine, air separation, energy facilities and a 500k
Slide 8: Creates World's Largest TiO2 Producer
Creates World’s Largest TiO2 Producer Nameplate Production Capacity (kMT) Huntsman Chemours 14% 15% 10% 9% Kronos 7% Lomon Billions 7% 5% % Global Capacity New 1,323 Source: IHS and company filings. 7
Slide 9: World's Most Highly Integrated TiO2 and Mineral Sands Producer
World’s second largest mineral sands producer, 85% vertically integrated on net TiO2 basisFull utilization of mining and feedstock assets to maximize margins by minimizing cost per tonHigher mineral sands asset returns resulting from reduced exposure to volatility in high-grade feedstock merchant ma
Slide 10: Expanded Global Footprint
Expanded Global Footprint ThannFranceCapacity: 32 kMT Ashtabula 1 & 2USACapacity: 245 kMT Salvador, BahiaBrazilCapacity: 60 kMT YanbuKSACapacity: 200 kMT BunburyAustraliaCapacity: 110 kMT FuzhouChinaCapacity: 46 kMT StallingboroughUKCapacity: 165 kMT Namakwa SandsSouth Africa KZN SandsSouth Africa C
Slide 11: Balanced Geographical Sales Mix
Balanced Geographical Sales Mix Tronox Increased participation in higher growth emerging markets Cristal New Tronox 10
Slide 12: Significant Shareholder Value Creation Potential
Significant Shareholder Value Creation Potential ($ millions) Average EBITDA Bridge(1) 1 (1) Average EBITDA 2011 – 2016(1) $428 Tronox TiO2 $385 Cristal $200 Year 3Synergies $1,013 New Tronox (1) Does not reflect any future price recovery. 11
Slide 13: Highly Synergistic Combination
Highly Synergistic Combination Pre-tax run-rate synergies of more than $100 million by year 1 and more than $200 million by year 3 expected Components of Synergies ($ millions) Full utilization of mineral sands assets Optimizing value in use of our feedstockSharing of best practices across complemen
Slide 14: Summary
Summary World’s Largest and Most Highly Integrated TiO2 Producer Highly Strategic and Synergistic Combination Substantially Accretive and Deleveraging Upon Closing Higher Growth Rates, Faster-growing EBITDA, Free Cash Flow and Earnings Expanded Global Footprint, Increased Participation in
Slide 15: Fourth Quarter 2016 Summary
Fourth Quarter 2016 Summary 4Q16 ($ millions) Consolidated TiO2 Alkali Corporate Revenue 548 352 196 -- Adjusted EBITDA (Non-GAAP) 105 80 46 (21) Cash Provided by (Used in) Operating Activities 88 98 33 (43) Capital Expenditures (32) (26) (5) (1) Free Cash Flow (1) (Non-GAAP) 56 72 28 (44) TiO2 ($ m
Slide 16: Fiscal Year 2016 Summary
Fiscal Year 2016 Summary FY 2016 ($ millions) Consolidated TiO2 Alkali Corporate Revenue 2,093 1,309 784 -- Adjusted EBITDA (Non-GAAP) 314 236 149 (71) Cash Provided by (Used in) Operating Activities 211 343 144 (276) Capital Expenditures (119) (84) (33) (2) Free Cash Flow (1) (Non-GAAP) 92 259 111
Slide 17: Q&A Session
Q&A Session www.tronox.com
Slide 18: Appendix - Fourth Quarter 2016 Results
Appendix - Fourth Quarter 2016 Results www.tronox.com
Slide 19: Fourth Quarter 2016 Summary
Fourth Quarter 2016 Summary Strong adjusted EBITDA and free cash flow performance: TiO2 and Alkali combined to deliver $126 million adjusted EBITDA and $100 million free cash flow TiO2 4Q pigment sales volumes highest on record, higher pigment selling prices; increased feedstock and co-products sale
Slide 20: TiO2 Fourth Quarter 2016 Performance
TiO2 Fourth 2016 Performance Compared to 4Q15Revenue up 5% led by highest fourth quarter pigment sales volumes on record and higher selling pricesPigment sales up 11% as sales volume up 4% and selling prices up 7% (8% local currency basis); sales volumes and selling prices increased in all regionsTi
Slide 21: Alkali Fourth Quarter 2016 Performance
Alkali Fourth Quarter 2016 Performance Compared to 4Q15Revenue down 2% as sales volumes level and selling prices down 2% Domestic sales volumes down 2% due to timing of sales while selling prices levelExport sales volumes up 3% driven by strong demand in Asia and Latin America; selling prices down 3
Slide 22: Fourth Quarter 2016 Financial Position
Fourth Quarter 2016 Financial Position Tronox ($ millions) 4Q16 3Q16 4Q15 Corporate Income(Loss) from Operations (16) (16) 4 Adjusted EBITDA (Non-GAAP) (21) (17) (14) Cash Used in Operations (43) (108) (26) SG&A 59 54 46 Interest & Debt Expense, Net 46 46 45 Tronox ($ millions) Dec 31, 2016 Gross Co
Slide 23: TiO2 Operational Excellence
TiO2 Operational Excellence On track to generate more than $600 million cash over 2015-2017 Cash from Cost Reductions and Working Capital Reductions for the three-year period 2015-2017 Versus 2014 Baseline 2015 2016 2017 Actual Actual Target Cost Reduction 99 99 Less Cost to Deliver (9) (16) Sustain
Slide 24: 2016 TiO2 EBITDA Bridge
$98 Maintenance, Supplies & Rentals 2016 TiO2 EBITDA Bridge $178 $38 EBITDA after Revenue impacts OperationalExcellenceTotalCash ($39) 2016ReportedTiO2 EBITDA ($36) Impact of Bringing Supplyin Line with Demand ($42) Other Items $236 ($1) FX on Revenue $101 2015 ReportedTiO2 EBITDA $215 NetNon-CashLC
Slide 25: 2017 Perspectives
2017 Perspectives TiO2 TiO2 momentum generated in 2016 continues into 2017 Tight global supply-demand balance; pigment inventories, in aggregate, at or below normal at customer and producer levels Matching pigment production to demand while keeping inventory at or below normal levels Announced pigme
Slide 26: www.tronox.com
www.tronox.com