Tronox Holdings plc · NYSE:TROX
Tronox — Wells Fargo Industrials Conference 2017
26 slides from Tronox's conference presentation, May 9, 2017
Slide 1: Wells Fargo Industrials Conference May 9, 2017
Wells Fargo Industrials Conference May 9, 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: First Quarter 2017 Summary
First Quarter 2017 Summary TiO2 and Alkali combined to deliver $123 million adjusted EBITDA and $132 million free cash flow Strong TiO2 performance sourced from higher pigment selling prices - up 4 percent sequentially and 16 percent above prior year; higher sales volumes - including the highest sin
Slide 5: TiO2 First Quarter 2017 Performance
TiO2 First Quarter 2017 Performance Compared to 1Q16Revenue up 33% - higher pigment sales volumes and selling prices coupled with higher zircon and CP slag sales volumesPigment sales up 26% - sales volume up 9% and selling prices up 16% (17% local currency); selling prices higher in all regions Tita
Slide 6: TiO2 Adjusted EBITDA Bridge - 4Q16 to 1Q17
TiO2 Adjusted EBITDA Bridge - 4Q16 to 1Q17 $80 $5 $4 $1 $4 $85 4Q16 FX Other 1Q17 One-time Costs* Volume/Mix $11 Price * One-time costs associated with 1) startup of two CP slag furnaces and a mineral separation plant, and 2) impact of higher cost/ton material sold in Q1 that was produced in Q4 duri
Slide 7: TiO2 Adjusted EBITDA Margins Expected to be 30% by YE 2017
TiO2 Adjusted EBITDA Margins Expected to be 30% by YE 2017 Adjusted EBITDA MarginExpansion Q1-Q4 2017 6
Slide 8: TiO2 Adjusted EBITDA Margins Expected to be 30% by Year-end 2017
1Q17 YE 2017 22.5% 30% Sales Drivers:Higher pigment selling pricesHigher feedstock and co-products selling pricesContinued GDP-level pigment volume growth Sales TiO2 Adjusted EBITDA Margins Expected to be 30% by Year-end 2017 TiO2 Adjusted EBITDA Margin Cost Production Efficiency Gains/Cost Reductio
Slide 9: Alkali First Quarter 2017 Performance
Alkali First Quarter 2017 Performance Compared to 1Q16Revenue of $191 million level as sales volumes up 5% and selling prices down 4% ; revenue reduced by $5 million as lower sales volumes resulted from lower production volumes due to record severe winter weather conditions at its Wyoming production
Slide 10: Debt Maturities and Financial Maintenance Covenants
Debt Maturities and Financial Maintenance Covenants No meaningful maturities until 2020; annual 1% payment on term loan No financial maintenance covenants on term loan or high yield notes 48% of total indebtedness set at a fixed rate on March 31, 2017 First Quarter 2017 Financial Position Tronox ($
Slide 11: 2017 Perspectives
2017 Perspectives TiO2 Momentum in our TiO2 business continues across balance of 2017 Additional pigment selling price increases Firming conditions in titanium feedstock and co-products Margin expansion from top line growth in pigment and historically higher margin feedstock plus continued cost savi
Slide 12: 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 13: 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 14: Cristal Transaction
Cristal Transaction
Slide 15: 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 16: Substantial Accretion and Rapid Deleveraging Upon Closing
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 17: 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 18: Cristal Overview
World’s 2nd largest TiO2 pigment producer 858 kMT of nameplate production capacity84% chloride2011-2016 average EBITDA of $385 millionHigh-quality, well-invested assets, with highly automated manufacturing processesHighly integrated into mining, chlorine, air separation, energy facilities and a 500k
Slide 19: Creates World's Largest TiO2 Producer
Creates World’s Largest TiO2 Producer Nameplate Production Capacity (kMT) Huntsman Chemours 14% 15% 10% 9% Kronos 7% Lomon Billions 7% 5% % Global Capacity New 1,323 Source: IHS and company filings. 18
Slide 20: World's Most Highly Integrated TiO2 and Mineral Sands Producer
World’s second largest mineral sands producer, 85% vertically integrated on net TiO2 basisFull utilization of mining and feedstock assets to maximize margins by minimizing cost per tonHigher mineral sands asset returns resulting from reduced exposure to volatility in high-grade feedstock merchant ma
Slide 21: Expanded Global Footprint
Expanded Global Footprint ThannFranceCapacity: 32 kMT Ashtabula 1 & 2USACapacity: 245 kMT Salvador, BahiaBrazilCapacity: 60 kMT YanbuKSACapacity: 200 kMT BunburyAustraliaCapacity: 110 kMT FuzhouChinaCapacity: 46 kMT StallingboroughUKCapacity: 165 kMT Namakwa SandsSouth Africa KZN SandsSouth Africa C
Slide 22: Balanced Geographical Sales Mix
Balanced Geographical Sales Mix Tronox Increased participation in higher growth emerging markets Cristal New Tronox 21
Slide 23: Significant Shareholder Value Creation Potential
Significant Shareholder Value Creation Potential ($ 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. 22
Slide 24: 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 25: 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 26: www.tronox.com
www.tronox.com