TROX - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Tronox Holdings plc First Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jennifer Gunther. Please go ahead.

Jennifer Gunther

Thank you, and welcome to our first quarter 2020 conference call and webcast. Carlson, are Chief Chairman Chief Operating Strategy and today Officer; Chief Commercial call Officer; Turgeon, Officer. Jean-François Officer; Tim our Jeff and Quinn, Executive and On Financial Chief John Romano,

will of listening site Those should using today's our them. have broadcast you as move by we We through be call. already through Internet Web slides

Web For can access you those so site tronox.com. done at already, listening by haven't telephone, on if our you them

call that on include by Moving information various and information are to this a factors made our and the website uncertainties, reminder judgment not in our comments forward-looking information. the This specific slide represents best certain summarized presentation our including today's to to, risks and provided on our two, in filings. based limited that and on subject statements SEC

may However, based revise The risks company update and forward-looking no these statements. uncertainties. on or obligation to any actual undertakes results vary

GAAP During the the the release GAAP that useful provided Reconciliations we to are use will investors we believe refer conference their nearest in non-U. to earnings call, performance. terms in the appendix evaluating of in and and of our financial accompanying the presentation. to our will are business terms company's in management U.S. S. certain

to we As our in discussion a release, saw first a you in on of basis our XXXX quarter to assist of compared provided both pro performance results our the earnings XXXX reported quarter forma basis performance. and first

markets. are EPS basis adjusted release including business be a EBITDA of and and of our In forma quarter underlying earnings forma operations to understanding statement results and a call and of pro primary the XXXX. appendix the Our first reconciliations, pro focus our on accompanying the in enhance of this for presentation our adjusted on the the of will comparison on trends your performance

it call Quinn. the three, over my pleasure to Jeff? Moving is Jeff to slide now to turn

Jeff Quinn

late thank earnings first you issuance news I for healthy to bit At strong in you highlights to old quarter everyone a everyone of Jennifer, response be remains want the prerelease of do safe. our turning perspective good before COVID-XX markets. quarter and in and current mid-April, I and to guidance quarter three, walk through reviewing hope today. slide pandemic the to may ongoing joining the the our our on you, the and Thank morning our and the our with of but us point, this

results. Our and cover than to synergies our XX% will consistent better be strong adjusted revenue and first margin driven a came our share well operational $XXX which sequentially expense demand, at our which previously an million was largely $XXX while was X% up focus adjusted increased $X.XX year-over-year, results, million in primarily our of largely with Revenue preliminary to preliminary above due was our remarks. tax $X.XX Romano quarter purchase EBITDA Adjusted XX% increased proved a Adjusted EBITDA by excellence. conservative. EPS on of and John of actually anticipated and and was to of driven EBITDA XX%, $X.XX range EPS adjusted accounting estimate in TiOX share, by adjustments our later of sequentially,

hoped closing of Last deal has and the of we one month year we anniversary it it been believed passed the everything and the be. Cristal would

the the for impact the synergies year, economic the later other deliver in in of synergy of synergies. reflected will $XX achieving global total amount remain ahead with tax we to but the target and Jean-François reflected $X and achieving continued million more in $XX synergies our we quarter, of anticipated million of detail in million, presentation, on for despite pandemic. the During cover target that targets synergies, EBITDA

synergies, but vertically increased cost integrated prudent delivering in performance of the the TiOX optimization operating our coupled structure. with volumes, Our the strong also was management and continued global only by by footprint quarter our not of driven

at X.X% repayment position of XXXX, purposes, proceeds of on uncertain provides including optionality will notes is opportunities. million the to a offering financial investments, million due March. drawn general indebtedness, We the credit working secured strong, times. proceeds strategic Our already as Tim enhanced senior which using recently potential completed of us discuss other with We our in the of and for capital existing revolving and repay in the used $XXX We corporate our $XXX business later. these anticipate the expenditures, facilities end capital ABL portion the

the great the Cristal deriving continue strategy. with are on stability resilient great with merger their far will our even performance have synergy of strategy one is company with time we Cristal is strength and current would vertical enhancing is focus generation, execution, continued under times, certain cash this more The the operational to one uncertain of excellence, the these and flexibility substantially and execution enterprise In transaction than greater uncertainty, an benefit from optimize either on that the been this environment. own. of has our thing by financial companies and for created from in more During legacy created capture integration that

response. I'd to to now to turn COVID-XX discuss slide four like our

safely essential secondly, access sites the of things: were nonessential visitors on, travel. We've implemented world as to Our the well-prepared safety preserving dynamic an the pandemic foremost, on spread All protocols operating. our families; our in increased business X and additional were focus limiting disinfection as protocols established ability run the PPE China all our business; employees been enterprise. sites, able protocols has globe early locations. effectively and and health their With impacted cleaning, first and across we and safety, We've respond and facility plant role and the finally, at the the eliminating are operate currently at also and rapidly our to around to our well-being prioritization and of conditions.

manufacturing such as packaging, essential, the given medical other in and as applications designated of of the and products been zircon medical personal equipment, have operations gear. protective critical TiOX, food pharmaceuticals and Our continued co-products

meet find who meet determination proud continuity the work action to have to been pandemic, which results change grateful on resilience significant customers' and continue and never challenges our of allowing virus managed our shown in the to colleagues a have the continued to for operations The limit the daily Thanks throughout at adapting virtually extraordinary. extremely basis. organization. we dedication efforts we've swift the almost global of I quickly nearly facilities. We more the overnight, ourselves our efforts needs. to of around of diligently ensure am been have new to our I colleagues order spread and world, X,XXX to the my in my business

Officer, the the I to including an update the who quarter. for on now Romano, would view turn performance we will like second over report commercial the our our on near-term are seeing global trends Chief the to Commercial remainder and John? John in markets, call the of

John Romano

Jeff. Thanks,

lower were for only lower sales for increased the TiOX while to said in $XXX forma slide for X%, and comparison, by of comparison adjusted on which quarter were numbers the pigment on sales you X% line currency pro year-on-year Jennifer TiOX million X% $XXX for Moving basis, five, first to I'll with purposes. volumes year-ago year-ago focuses take was million of prices X% $XXX when million higher. sales currency. local selling of the a Revenue quarter.

selling and demand of the and stated QX as was previously, volume Europe demand is year the shortly to we the North price, The primarily COVID-XX, is after continued by in in increase South sales closed of in average slight reductions in partially acquisition. final reflected this strong in This The year-on-year which prior TiOX price harmonization issue as in America we Asia XXXX lower for we effect, the and strength Pacific. offset onset prior due to a the QX approach America commercial will quarter achieved see XXXX. Cristal reason

global prices remained You will in in once sequential average have our in see they comparison again each did XXXX. selling comparison as sequential stable, the

to million carrying early QX softer the in the Zircon trend lower were stabilizing. zircon, quarter, largely the later Southern lower primarily market prices the than quarter. ago. first early the Europe sales part lower XXXX, compared year roll driven by were a of $XX to China Moving conditions, of of before to volumes XX% the in X% quarter of when from were due the XX% quarter and fourth into in Selling forward sales

zircon versus grade a negative feedstock other increased standard products in largely run CP Cristal for tetrachloride higher million continue with titanium rate average premium and of grade and to transaction. Yanbu XX%, due sales products, the sales a of which of QX, mandated to addition selling the the higher remedy our the price, of at associated impact Our $XX had and in sales slag sales on out

quarter and fourth from higher revenue the offset million prior on up sales, TiOX from X% rates, pigment the higher were Moving primarily local $XXX impacts comparison exchange versus to million. were basis sequential and currency the lower the compared were sales by XXXX, of partially selling volumes zircon of quarter revenue euro. of $XXX U.S. on X% a basis. TiOX to and level X% a volumes Sales $XXX prices was dollar million

line Sales declined X%, from $XX in and zircon. $XX Moving finally, level previous product of feedstock selling with grade of with the the increase volumes standard grade sales prices to decreased by of were were premium X% QX which versus influenced in relatively sales quarter, zircon, volumes quarter. from previous million million while an And was XXXX. other

the time to this onset is conditions While early an quarter. In we commercial since and that what and the and market the be previous quarter's based updates information at as for the currently on changed the the anticipate what the us to know the we're end seeing for going our focus to markets. of released of to two transparently, read-through continue available global second pandemic. to review communicate completes our effort We've on seeing we're results perspective, on

changing to every evolve continue day. conditions, We which monitor indeed the market

exposure. balanced seen and As sales, our geographic benefit favorable results, our vertical as we've previously and market in we integration our from end our we've stated

sold this applications, so packaging medical those that sales are into in end have applications. volumes the us coupled with has also strong, Approximately from DIY those food, We've minimal driven or benefited point. coatings, are and and in other a paints benefited architectural market, to The majority markets. aerospace into automotive and and the our of sold and typically plastic XX% three-fourth our been by of resilience markets our exposure, volumes of sales are TiOX

seen impacts the least of been to be region. the resilient. since region The the relative has which slowdown immune has Our we've China but to changing our March impact essentially regions across balanced major demand a region are America world, expectations. profile seen COVID-XX. not the see improving most February, sales North in seen in pandemic, proven first the geographic the whereas to since the of that to of we've has demand the onset meant has was

case. into mixed, case, remained our on has of the a relative the planning basis, less into mild a medium and also seeing are Europe which other supply conditions our developed the facing the extreme model expectations. currently severe that potential and Brazil as and forecast are demand seen region, global we daily On to business a onset most evaluating with most potential constraints. scenarios integrated impacts, demand, where to by likely consideration operational Southern we're chain recently then included challenging case X economic impact case is and we rolls the areas and a and pandemic, takes evaluate our while have perspectives to From what most the which global Europe a India reduction so. regions adjusting more the

customers, our previous reductions such Italy, for change conversations anticipated versus of percent than our decline in This first high-teens and in from as an Based to upon sequential countries The by due is and the in mild Spain TiOX case do region. margin due recent statements the is in quarter volumes range to recent slower social our any to reduction XX% our reflects XX% not customers the commercial Asia availability the largely second demand and out to of volumes worst-case outlook restrictions, our while and sequentially, public impact uncertain most TiOX given and Australia recent our and economies the approximate geographies quarter global anticipate assumed XXs Brazil; into our our decline such the a scenario the world plans low evolving reopening in from in and the for decline. expectation movement outlook certain of extended India We around status much and feeder as and France; as Pacific price quarter, with TiOX assumed initiatives. significant selling reopening the XXXX. as of stability shutdowns current approach of

to we the quarter in China, to expected and volumes, see Southern in by Zircon continue anticipated change, offset remain time. quarter. largely but remain our volumes Europe are represent first from due the are number improving views demand a as prices in These to stable to line first best demand estimates remain lower subject Selling factors, this with at relatively of India. to

uncertain, macroeconomic our we vertically as model, global market network firmly remain that to of respond to and assets business conditions changing remain While with the integrated we conditions believe will well-positioned the they develop. our

profitability I and call performance operating of our the JF turn over JF? you thank the for now And a I'll with that, and to review in quarter.

Jean-François Turgeon

everyone. morning, Thanks, and John, good

million review of year-ago higher was six, to first let's EBITDA of forma slide adjusted EBITDA the Adjusted comparison. adjusted $XXX quarter. pro than the XX% year-on-year Moving EBITDA

higher of a $XX largely our increased will drivers. resulted exchange this the offset zircon QX We the margin John year-ago all dollar; cost TiOX demand, per which by partly rand the synergy in grade our favorable the selling volume African build and primary discuss by lower million As quarter commercial South benefit moment. Australian mines, I the ore ton. quarter occurred of costs and synergy; has manufacturing foreign absence deferred on and of strong rates, in production in lower and were primarily which offset XXXX Australian increased achievements which next the discussed, the slide further in were from versus price,

of increased zircon their million and in exchange XX% increased QX Favorable foreign million the rand primarily gain. in rate, dollar lower as EBITDA by again significant Australian primarily sales These achieved pricing, synergy offset also $XXX incremental adjusted comparison, by slightly given the and $XXX versus from the volume the sequential driven were the at expected. million, of Looking TiOX $X XXXX. African factors quarter, contributed move South to QX

mentioned achieved of as I Turning on the in we synergies to previous slide, EBITDA. slide seven, reflected $XX million

delivering achieved in in target. from $XX of set also we the synergies, each quarter. My done the on a in synergies million reflected opportunities synergies fourth The has $XXX million call targeted to finding remain $X target for total We earnings the and and was track team total Tronox, a during and increased quarter on XXXX tax not our other synergies additional quarter. job value-creating this for EBITDA, achieved in good in achieve first million new

sharing mentioned before, our targeted we've plants the coming our across opportunity pigment a real cost chain, savings, the or to spending majority call our reduce savings. synergies and are feedstock across As true our cost nine of various practices we best from the including use opportunities generate across value-in-use sites what to to of supply

conditions communicated confident anticipated our volume. demand to due to significantly So, to softer not pandemic. synergies the remain ability are therefore the the We in achieve previously tied despite our the target,

program. can cost-reduction situation opportunities We on based up our million, $XXX However, Excellence which Operational to as be one I identified the how the implemented had of are only develops. before, of synergies part said other

deliver of to injury-free producing our Additionally, our customers. team target We Zero which improving Journey of an on continued operations. our our safety priority on low-cost remain highest of safe, performance to ton quality, for global to our our initiative, the workplace, committed is goal achieving our

the in legacy history Tronox performance In achieved companies. of safety fact, best record new the the recently both

throughout to to effort commitment communities. mentioned, Jeff organization, are days all South in our As the XX Africa, due run employees and and operations the lockdown. continued our our running, smelter customers to their Even our of

our strength feedstocks our value-in-use of deliver which global to integration use business vertical the to portfolio the Our the flexibility gave demonstrates the model. in best reorganize of us

take I state and employees the and the want extremely customers, to their moment demand ability to our of operations how a I to seamlessly am our manage proud to COVID-XX pandemic. ongoing adapt through our of

benefit to with the an offset costs base. be for only asset you we in team lower This unabsorbed Yanbu of at is costs made commitment. costs to adjust production fixed and As line our everyone demand, the April slow to due example, will to your one plant partly Thank energy by example continued decision be but the the reduced customer to and Tronox maintenance down our increased usage. my in

like our provide the remained Before on I'd furthering update smelter, step vertical a integrated latest the to which concluding, in Jazan key strategy.

technical project, project As next Jazan agreement. continued the will existing and phases up the ramping the the consulting commissioning provide advance through to act comprehensive advisory and project smelter modification coal those to the its through towards furnace, has operations. four sustainable amount manager that of and milestone, to devote the completion agreed construction the as phases increased amendment to and commissioning, of the agreement, amended Jazan technical Tronox the resource will Under of it service to service being mechanical managerial pot an we to next

we accommodate first latest which Based delay our take the expectation quarter in XXXX. to on due anticipate of startup of to the place Jazan the COVID-XX,

obligation of complete will of next will tranches quarters. million our X $XX million, in the which funding X We occur over $XX

the and no forward acquire reminder, XXXX. the quarter option as I which we date defined would than Tronox be operational a sustainable on on anticipate agreement operations, would sooner would in mid-XXXX, to excellence smelter when asset look the call. in likely reporting early earliest more the but progress achieves As be Jazan synergies next our our

Tim? call will Carlson I of over to position. for turn a review the Tim now financial our

Tim Carlson

facility million million capital the from as forma include Thanks, $XXX the that March, $XXX XXXX draw repayment the as week, we offering. we've secured slide last our March closed the recent on resources offering well to of of XX, proceeds credit ABL end outlined On note the at of the using as from liquidity senior pro eight, our basis and proceeds JF. net a on

a including total billion over million have available cash and of cash equivalents. in We $XXX liquidity,

appropriately no have our and cash operations. our We trapped across cash distributed is global

as remain liquidity balances liquidity today, our which very Our unchanged business. and comfortable cash relatively we provides and of our current optionality enhanced remain with for

nine, to highlight of the next sheet. Turning on slide, the strength we our balance slide

debt leaving offering, secured drawn debt, our which the billion slightly at note capacity. credit cost secured only repayment is million, our senior flexibility we rate the debt our recent current $X.X Our additional Including to upsized is the successfully billion. above while our an and facilities, and weighted-average $X.X of debt total amounts ABL interest net of offering on and $XXX provides additional ample

trailing leverage a X.Xx net XX-month basis. current on Our forma is pro

We have no bonds or until on loans maturities near-term term our XXXX.

We our also covenants ABL have have are no drawn not since only any facility. bonds. this facility, expect term especially no loan on funds our We do springing which financial financial we under covenant current to trigger one against there scenario, on

Our remains capital allocation policy unchanged.

to debt on expenditures million high-return depletion was disciplined we share our to and committed first spending dividend deleveraging, amortization with quarterly net and We've depreciation, million. and continue $X.XX per $XX quarter targeted the gross our leverage remain level were and $X.X X prioritize We projects Xx capital of a a announced maintaining billion. of to expense and in $XX dividend. Capital a

the Our revenue March flow million, of of capital payments. by driven free month in was for timing given in of four reduction quarter and a the strong very a $XX cash use and expenditure mix payables, cash a

management sales because the We've India, Malaysia, million despite payable $XX accounts monitoring of and do $XX payments receivable aging our are are We not lower QX burn flow balances accounts during concern. our QX, Tunisia. any bank cash on and million of closures Vietnam anticipate us identified We receivable causes the of see We accounts that continued in only making free through receivable, impact delayed weekly. inventory. currently volumes, in up where

outlook. next the our discuss to slide, Turning I'll

low we percent in quarter to quarter to range volumes As in anticipate line XXs John with to volumes TiOX the mentioned, decline versus remain first anticipated largely XXXX. Zircon QX XXXX. second high-teens are

year $XXX of we total targeted that synergy mentioned, million remain reflected As synergies and in our including million $XXX EBITDA. previously to JF in issued targets, be this committed to

the this uses respectively. flows quarter took cash anticipated hedge exchange year. foreign South XXXX to for year, our in in and to of update we our cash the last moving at exposures, an Africa third year, rates wanted of given In and that X.XX, significant XX.X out seen on movement to the we've hedged provide Australia, positions I approximately Before XX%

EBITDA of words, $X positions over only the we'll Given quarterly million EBITDA. result ZAR movement X taken will .XX In quarterly dollar sensitivities a $X quarters, in X see movement approximately the other in in FX previously results impact the approximately million in a to next and of the on XX% communicated. Australian a in benefit the the impact

global confident remain while on, remain macroeconomic uncertain, flow. in our our conditions to manage Moving we ability cash

$XXX reduced million our year million, to lastly, expenditures million of $XX of $XX of XXXX, market we to full capital cash to pension interest to and expense $XX expense million our to net from $XXX These to estimates cash $XXX based outlook. million the million, uses of be $XXX million of expect $XX million million million. our For upon and million, million $XX $XXX taxes from $XX reduced represent working at capital current $XX

have remain flexibility additional including are need. to ample of in across maintain cash We see we reduction the our we and levers free and all management ability working the flow confident evaluating. our expenditures, the generation, to measures should cash capital capital scenarios manage generate cost economic and mentioned JF We

call turn Q&A. like provide and With Jeff turn Jeff? to to before the over outlook closing that, to to the color a our additional call I'd few to we add back remarks

Jeff Quinn

Tim customer The our outlook with demand and represent macroeconomic outlook. of Thanks, current Tim. our numbers the walked understanding you end global our through incorporating that just current uncertainty, market

predicting precisely as We landfall. we it the to to go trying a situations, like bit hurricane monitor track it make where will is though continue and a

including it ultimate range continue and potential we the factors, but storm by hurricane, is of builds much of scenarios a have paths to number and economic We how path like hovers evaluate, a of determined strengthens. the a the long how for it

our in a our on on a views, in our believe examples and remains to we markets depend needed conversations the trends our through reiterate we inform differentiated this of us impacts customers to end with bottoms-up what before, to a the That quickly case, changing latest lockdown will we ultimately to while using on and supply analysis, chain, long including deep and how only variety name factors, dives outcome the are In place to develop. are as continue network which as change global integrated day. being in assets vertically business stated market model, market to of said which and couple of every and we our positions conditions they respond

We we've remain said industry-leading the beginning deliver believe will performance. committed at what we financial year. to We of the

present We we not managing to are the the a turning future. prudently but situation, are blind eye

customer We all vertical ways multitude continue and committed a integration and to to better focus our on of safety remaining strategy serve sustainable to while our base, development.

and the an in thriving world we future. present have will current and unprecedented presents persevere, my challenge, the environment I but colleagues the While know only around that in surviving confidence unanticipated not the

we some that, with we'll And it up prepared and do apologize. believe the feedback have And line. Q&A. for that I That remarks. echo open I our concludes on

hopefully can us can I So, bear with up you please? for Operator, you it distraction. the open apologize for and questions,

Operator

Your first Markets. McNulty of from the Capital BMO comes [Operator line with John Instructions] question

John McNulty

taking for questions. my Thanks

latter, how much this the of targeting right be targeting saves be those to, guess on JF you're first should all now? you it's we the actually options or get $XXX and if The at those that things if million recession-related thinking one are had for I of would spoken cost point, worse, are

Jeff Quinn

as execute savings of upon things as a we would read Those currently that addition are doing. already situation number cost develops. we There things we're in to the it potential are and economic

reduction So additional, cost taken. already that beyond I would and above as those we've view items

John McNulty

the all saw customers in seemed the the China, Is then, from that up we Tronox the been in think significant quarter ticked terms And that contracts? of bit of scramble for be, their someone how have the disruptions of second little industry. Got in should question may that guess desire with have in a with it. I number first partnering longer-term quarter there some about would changing with assets and COVID geographically, throughout around appetite supply to how like for we a

Jeff Quinn

asset believe Yes, of number our both demand, or disruptions, global in I even sources. base differentiator of ability global think the we lesser demand a scenarios, times multiple times to supply a that of or deliver from certainly is strong in

on John to comment you Romano, do want as well? that make a

John Romano

comments on feedback in to ones channel with have when that this have raw no. and supplying, any locked from depends that question region there's I the say it that materials. regards that the getting I China, just Yes, that Jeff. Thanks, you would it we have made, but some typically had would the we're that imports agree significant to impact a area. no bit little reliance It's but like an happens, contracts, early with of down does that something a bit for are on

John McNulty

Thanks lot. a Great.

Operator

from with Research. difficulty] Fermium comes Mitsch [Technical question next Frank the Your line

Jeff Quinn

there? you are Frank,

question Mr. next hearing are having Mitsch. please? to go you trouble could We Operator,

Operator

moment. One

Jeff Quinn

next Operator, could to you please go question?

Operator

moment. one Yes,

the for next moment One question.

Jeff Quinn

Maybe go are getting we the feedback. any that not we line to. can it's Operator, alternative

Operator

Yes, one moment.

[Operator Instructions]

Jeff Quinn

on own the We situation. their to It's conference that's do difficulty. issues so apologize they to correct we apologize, and provider technical our the for having try major continue end,

Jennifer Gunther

If roll please to through ask myself, Jennifer those the in queue a Gunther, please your do this. they send of through who and work so, question could while were to you the I question questions will

have -- Operator. question go I Jeff, ahead, another

Operator

Fermium Frank, is a Frank question Research. Mitsch open. have of from your line line We with the

Frank Mitsch

Good hear me morning. Can now? you

Jeff Quinn

you. Frank, Yes, thank

Frank Mitsch

at TiOX other the four direction. quarters, one year-over-year right. price it progression you several and I'm looking glad interesting over are in the industry thought I Three major all well, the for the do. I price right, sound but really has past year-over-year players. was been showing going among Western you blowing steady was to guys improvement the the All in out say

what can if on of competitive us in on to respect And I May comment So tell what you're could you seeing was landscape and terms on you in the front? price wondering April TiOX. with that

Jeff Quinn

you would John, like to that? take

John Romano

Yes. Romano. This John is Hey, Frank.

movement as we I So when we last a through we progress -- any pricing quarter seeing China, in call, seeing where improvement. having there. as the anticipated fact due you COVID-XX were seen significant to, it the recovering it. mentioned price quarter we due move that we some of were on to but were reduction not that that initiatives we significantly, in second didn't price to price COVID-XX activity little bit, have was previously we we're of communicated I of working extent in impact are It's volumes. also the competitive started we And some as more the the to first largely guess, And raising we've know, would the have was bit slowed a forecast as bit the QX, actually on expect in a

globally, basically we're So projecting balance the for of They've stability moving average stable have And on been the last us. QX. for X quarters. been prices through stable

don't variety too know are speak there. doing. I that we're initiatives completely maintaining to if your We question of our much answers share what a We competitors globally. believe So can't There's our that in we now our but situation customer place that very initiatives. margin we're approach have we're with difficult our COVID-XX-related, in in doing stability to up line a shoring volume sure that's and make

Frank Mitsch

we of the you quarter, things? vertically to respect the guys you a ore integrated, is if with on perhaps outlook here for the of side -- feedstock in what but and feedstock comment balance are John, seeing as are terms or in second offer helpful, year can the ore of what pricing two obviously more what you Very the and progress

Jeff Quinn

JF, do one? to want you respond Maybe that to

Jean-François Turgeon

have. market. options Look, advantage integrated with a with tight obviously very vertically gave plant Being the that QX feedstock of know, us we feed we started our high-grade having different to the flexibility as you

were obviously, operate the our I situation supply-demand significant ourselves Look expect balanced, that we As able remain we that's the to are good as will the it feedstock had us. as far I going my and South during all even lockdown see What but can say needs. with in in moment. is to Africa, forward, market a our mentioned the no impact in comments, on meet smelter I we as XX-day position

Frank Mitsch

thank you much. helpful, so Very

Jeff Quinn

we but buy the one. feedstock participant We like current We the Frank, commercial and which as provided our we situations to bit, sell advantage source plants, a know, a run not serve are in has Yes of we feedstock feedstock into you pigment don't think in our flexibility assets market. market. a the

Frank Mitsch

Got it, thanks.

Jeff Quinn

question next please. Operator, difficulty] [Technical

Jennifer Gunther

the hear I don't Jeff, Operator.

move What some $XX has QX capital the capital of Bank this have million So you have environment? working working in a or driving of inflow Roger outflow? outflow email. do Spitz that from via question. I million see let to What is follow-up. me $XX questions XXXX America a also to I And

Jeff Quinn

to like Tim, please? would you that, take

Tim Carlson

be Yes, I to. would happy

QX, a significant of was actually revenue month lower a so very in QX, collections significant I working the strong the in capital working of volumes. We've month burn in see impact in Our mentioned, from despite as March. capital April, positive result seen primarily some we

of the continue We do We also that continue levels appropriately. assumption and see remainder payables inventory to we manage deteriorate. the a more somewhat our a manage further burn to should market year, probably and for the can of of down conservative

Jeff Quinn

question? next Jennifer, Tim. Thanks,

Jennifer Gunther

Tim. Thanks,

[Ph], That's [slagger] Jazan above him outflows was the $XX the slide on the shown on the million payment. per from outlook quarter XX? question on Another

Jeff Quinn

address you do want as Tim, that to well?

Tim Carlson

million the is summarized for correct. quarters a three what next quarter in have million $XX The the we of in addition XX, slide $XX Yes. to

Jennifer Gunther

And the how assume on acquire expect when do you you now debt Jazan? you balance will much sheet

Tim Carlson

of million, assume as it ownership, but a The million mid-to-late Jazan only we that that be and JF assuming amount of as that's to is mentioned, relates to debt would XXXX. unchanged, total $XXX $XXX

Jennifer Gunther

we EBITDA at what communicated remain million we does to And Day, furnace? per expect in $XX million which from $XX in terms the was that with Investor of furnace, the line around

Tim Carlson

Correct.

Jennifer Gunther

in UBS, negative talk in just expand you is terms ongoing should what's on of there, headwind that comments, EBITDA from Can about your at of Spector lower we an and Australian a going ore you on Josh that impact grades operations. your consider? bridge that

Jeff Quinn

JF?

Jean-François Turgeon

you Can now? me hear

Jeff Quinn

Yes.

Jennifer Gunther

Yes.

Jean-François Turgeon

So, built end are our of assets our the are working the slightly in it we capital life better. have and Mine, we those assets mine the South is is that those in to the or other with some as especially of expected, legacy mines Cristal grade planned Africa, toward expand but replace down, and obviously going of

years area a be. see maintain we'll of the then a now, of what a you'll mine we'll from couple we see benefit and where So delivered where you'll have new

where have is higher mine, you grade is where and the grade lower. like periods So any periods the

the for in to we three run have QX. two similar going So next years we're had to to what

Jennifer Gunther

has past how quickly premium cycles, Thank grade? back more JF. the In zircon shifted demand towards product you,

take want you do to John, that?

John Romano

Yes.

meet premium So, but will grades situation. of or prior lower a quickly to and grades we the from adjust by say how the it driven shift three lot from standard the it anywhere to the variety a I'd would our would I say quarters. to say grades has that recovers, on capability been on production depend And of cycles, factors. to I two supply-demand And depends demand. that have inventory In

the in bit volume our significant consumption flat of As strengthened. we the least And end, of QX of China, majority zircon. the noted do into the back A where At softer markets as sales that's it with beginning of basically remarks, quarter in far at the in the China. as are, amount our go was were we QX. a at and

impacts quarters, been stable to our how and recover and what second So that demand half region determined on to the expecting stage the we're over and on really the three this second-half. previously second sales last now the be were will That COVID-XX in we comment have relatively year. not half, prepared the start to particular at largely of into

Jennifer Gunther

terms you restructuring the Okay, in flow and another one terms in bridge, from spend? XXXX Josh; of are free in cash expecting of cash what

Jeff Quinn

Tim?

Tim Carlson

that last taking, Very actions quarter, different the be we'll but about talked minimal, low than are single-digit there a we've no few millions. in

Jennifer Gunther

term. synergies, you have those track? near reported limitations in of synergy plant challenges and from companies targets, travel other in on the achieving restrictions other in and terms time pace are Okay, keep to What doing lines final the given of him; one

Jeff Quinn

Yes.

believe a JF those in were that actions. Many even impact taken synergies that we been situation, blow-through remarks, said his current of already actions have on those As still are and with of we just the track.

deliver year the had in this. had occurred problem, in of our this synergy and are occurred have If a that to this fortunate more ability to capture, the synergies the So may confident we into we're rate. we targeted our difficult at has but integration continue very early stages a our of

Jennifer Gunther

received Okay, SunTrust. from questions I've great.

stability where quarter? you will in to environment that an TiOX any are if and point able visibility pricing volumes have you falling sharply, in you beyond what So would can stable be XQ, this do prices factors on support to hold

Tim Carlson

With the negotiated I'll quarter. unless regards Jeff, want seeing already to take that one. is What stage QX, price particular we're this for to, at we've you

on stage. QX lot recovery is agreements. of volumes isn't as at based where with really to this particular price a seeing we're right the in negotiated reduced, what what's already is Clearly So now and market have drive going

in based of year. So mentioned any the movement and seeing provided I we're not on we've market of QX second-half as in and with moving provide in what stable to far we're exception see beyond China, continue we as prepared into right some to now as the guidance really the what price pricing the

Jennifer Gunther

maybe rates your and us been you have and where an the give approximately QX? regions Okay, operating can a through during of major follow-up; walk idea

Jeff Quinn

first, want you then maybe perspective market to and comment rate by do could maybe region. JF, the operating the on question you John, address

Jean-François Turgeon

customer. with hidden could Tronox capacity Cristal with that have that of we it's I we with call legacy than we Look, grow demand would I legacy we Yes, deal clear grow said factory. what customer did together mean that our and we combination our the the the so more of sure. always and

always feel, we running we customers, about QX. way XX% strategy than meet to I our our we would rate of at operating produce nameplate our the were So demand. customer assets in demand adjust capacity, run to if more it's give our were to our at and you been all to mean a

John Romano

down The in into Spain locked such the where and I customer the are opening geographies and than specifically downturn to about we're comments, and a get in base not in When again has well. we you that India, say, perspective, and the as think and Spain would those more not the previously. customers area there only lockdown pandemic, I when up one France, downtime as there of far until change speaking able market, XXth, to with is but have what from as get France region that the expectations pull-through been line bit but the in is from as was that being been, significant Asia, been U.S., back mentioned a to week specifically this would say had has between our that with immune slower in a the we to mid-March, projected. Italy the And I regions standpoint that's the and significant regards has May from three as is product from the transportation much would more We been Italy the starting prepared And outlined the seeing it some certain to expectations. extended adjustments extended.

Jennifer Gunther

those go couple accommodate issues appreciate to Thanks, you the phone, We're going some you of for of still minutes to a we over we've technology hanging on had. the on.

or follow-up but additional So another off with I I'm today that take if to have, questions I'm happy later and with tomorrow. question continue going to hop here to me need you

projects CapEx cuts? you should additional What current to look estimate what your you at do that canceling? reduction, delaying is, of CapEx maintenance your are you On decide or level

Jeff Quinn

slight projects from Yes. The development long-term a in couple really mine we projects, of have, that delay really and the reduction projects the projects. the comes a technology-related

cost the on significant synergies capital of years wouldn't to if sort to million. longer-term be is we to the we but room of potential already get come. Obviously those $XXX a and we long-term would number benefit achieving of ES&H delay but once reap get They structure. in to our $XXX we there truly readjust million a maintenance of not first or Our level, about that with which quarter some needed down level, is $XXX year, impact type as able our will projects certainly projects the to for are later again, have being million passed, the

Jennifer Gunther

Stanley great. where Morgan Can were quarter? us Okay, an inventories you understanding customer a of from have question Haynes. from entering I second give the Steven

Jeff Quinn

of kind a that John, beginning to you you Do the address because compared historic good inventory quarter. were the want address want to at of Yes. certainly do to the place that, levels context? in

John Romano

Jeff. Thanks, Yes.

it kicked pull at or we've and about X -- would last happened, deem and started the at And see look, inventories demand what the quarter below first inventories to quarters, forward. we seasonal again I our the the think our norms. X as by customers' in, for So of Tronox' destocking end be the year talking we were least to as to

Our sales were in than first the expectations. our higher quarter

the as than we customers' planned perspective, actually from So the lower quarter again, for inventory feel through quarter expected, inventory that do we than process, some have far we stronger in budgeting picked any our significant plan, to on was towards don't and build first there but a March as may inventory of the that bit, our reasons the because was of we end probably believe we our up that earlier. outlined were we

Jennifer Gunther

Thanks.

of measures question have talked the from distancing consultants, measures getting preventing distancing bucket? companies them Does Another into with factories, social synergy him; et about make-up social or working change COVID the so from cetera.

Jeff Quinn

and continue. not derive how that like we had interact, the practices company that's change able outside had We've to that amongst it. those we of best That's take there. of us and in of all feedstocks to No, how the We've colleagues within they expertise and and the synergies many important practices necessarily hoards bringing best of the and consultants would things The thing but actions company. really of Again, with outside transfer forward value-in-use a It's that; providers, really change to our within interact to fortunate like we obviously. internal the were the have sharing internal of things nice really don't. we're in occurred. lot help about move our of the being that already

and forward. feel that, we'll So we've adapted move to we continue and about good

Jennifer Gunther

industry think keeping about so think from disruptions million Africa mine scenarios and million South and have I run. mild, love have question availability, some is guide extreme inbox in Thanks, He of about email think said mind to I $XXX and I Alembic. how here, we in to final light at hear the the medium earlier $XXX feedstock managing to that a the Hassan in he'd

Jeff Quinn

Yes.

to believe of and guidance first feedstock availability. I the part maybe the the the longer ask different continue full gave a that circumstances different latter sort year I'll address that under the performance. I'll do We at address we will that though then is relevant think place. looking cards and year the to play Obviously We of was beginning no we at that Jean-François to that believe and dealt communicate believe transparent seeing the We're performance in of and this early that not year. year very go open and in point, circumstances. are have try my there going but we the well, at is remarks, very as be visibility industry-leading tremendous financial any I've will often we prepared said we to under and markets, to as as into we're the to what the through back-half

call today, conference really with to very you provider, dialogue phone but joining you the to on on tomorrow questions greater So, low-cost excellence, financial delivering to us the have their thank make a and ask you and for Jennifer have world dedication great for delivering enhancing with day. strategy, about integration the landscape, quality, continue if great today. everyone safe, synergies vertical get best we'll my we likely questions to to cash will the you we the to and of of as a during provide didn't in can. the uncertainty. stability the this because Jennifer around that, your customers We the to forward and all said, the moderating We want in to the probably we that execution, Jennifer, I create thank say colleagues very, focused I to very changing reach Thanks tons to that period try continuing a continued look that sure for created which including thank technology, Q&A; just of you please answers performance difficulties, our technical operating apologize snafu much, and change and out has on and want our generation. has company remain for

Operator

conclude gentlemen, and call. conference today's Ladies this does

disconnect. now may You

Tronox (TROX) 8 May 202020 Q1 Earnings call transcript