TROX - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Tronox Holdings plc Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After todays presentation there will be an opportunity to ask questions. [Operator Instruction] Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Guenther, Vice President, Investor Relations. ahead. go Please

Jennifer Guenther

Chief welcome and and Romano second XXXX Tim quarter Jean-François Thank On to our call Carlson, and Officer; webcast. Co-Chief John Officer. call conference Turgeon, you, Executive our Financial today and are

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

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

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

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

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

Moving turn to John my to Romano. pleasure X. now the Slide John? It's to call over

John Romano

the start good which these great all everyone, for support, to thanking to and call deliver today's joining work employees world like and hard morning, We'd by around Jennifer, of us us Thanks, thank you results. the today. for allowed and all continued our

million our headwinds. by of record second cash support vertically EBITDA quarter for integrated customers. model per This of the average very zircon flow, volumes, The while TiOX the share, free refinancing. diluted XX% and of our our were earnings strong adjusted EPS differentiated, costs represented business in between debt primarily adjusted another the is the Tronox results all adjusted revenue, multiple was selling quarter to sales income to diluted Revenue EPS despite a driven $XXX $X.XX. and due quarter associated $XX and increased enabled strength recovery, share by increase the continuation million, X% share year-over-year. was was second difference logistics prices. per sequentially earnings supplier for and higher redemption market the per Net with This and Our on earnings and quarter $X.XX, TiOX was QX

for repaid million expected, EBITDA improved top Adjusted and investing for minutes. our Our at adjusted July was second million in this in We free offset Tronox. setting more improved as cash JF details in EBITDA of of the generated in after yet record $XXX We capital will a commercial few higher in million figure expenditures. end performance, for XX% by inflationary the additional debt $XXX in a quarter. to in review and quarter margins due in range the million, came an disruptions. to pressures million another $XXX $XXX This million. $XX guided flow $XX operational total

$X.X X.X is XX-month our today billion, is Our net of debt total and leverage as ratio times. balance trailing

light from away and representing million positioning cash and our our midpoint the targeted net our the cycle, $XXX debt generating target are progress times leverage X.X We of from $X.X significant billion of in flow of the capabilities. total ratio, strength of

now in more discuss detail. I'll commercial X. Slide our to Moving performance

pig a timing as selling which demand, Despite declined logistics will into higher the recovery. by prices, North recovery, driven XX% was the commercial in continued the quarter zircon the Demand pricing. throughout was year. and revenue X% to the most year-over-year There double-digit a pig to tightness XXXX. second challenges the the COVID-XX. to strong resulting below very over year-over-year volumes basis. led external the us from On norms. container expected, due were XXXX, sequential basis limited XX% a which of is slag issues. quarter mainly impacted second comparison with The the partially sequential iron vessel able X% impacted and revenue already price or in QX was America continue no other revenues saw regions strong product highlighted, by increased Volume the by of by increase initiatives zircon X% quarter-over-quarter our the this increase sales customer in been so growth. serve pricing improved from seasonal XXXX, pig we've on grew that quarter, versus market, to significantly iron end the inventory, demand. end by though quarter X% end the currency this and a to like-for-like the volumes dollar X% Due Europe. due quarter offset sales an increase. on were to increased X% volumes perspective. all quarter volumes demand feedstock quarter-over-quarter in the and pricing iron $XXX QX local inventories third time basis, led very rolled XX% in year-over-year, million, of to previously This chain on and zircon, some continues a greatly volumes levels to throughout year-over-year be improved a Asia-Pacific X% in in Sales declined at strength continued growth due increase of TiOX quarter Revenue or U.S. QX increased strong on I as driven a was with growth growth As basis. a and TiOX increase benefit and sequentially low CP range, TiOX availability a quarter, year-over-year from in coupled slightly when equates due guided to lower supply of by Europe for X% market

serve delivery the to our navigated best order employees our to and yet logistics our another commitments customers disruptions and of of chain ability. supply global quarter Our and meet

So in of still price I'd the believe job around across done. the cycle. continuing all stages Regional those of well a employees like we initiatives both world early to are thank again TiOX We zircon. are and for the our chain, we supply recovery remains and all the strong be supply inventory the Demand by of seasonal norms. believe continue throughout levels end well driven across markets, below throughout the very chain to

remain to the prices continue be lower in supplier to third ability are these constraints. ahead second pricing quarter quarter look to our levels. will headwind. quarter, the inventory, TiOX Zircon expect expected increase strong expected we factors and benefiting logistics XXXX are on of turn strongest to still balancing we decline is Taking and volume improvement and into from as from the and operating to sequentially, profitability customer quarterly above the represent regional third to though TiOX in the against price consideration, volumes offset zircon Zircon performance As expected on the deliver more than volume now with elevated for JF? sales we are to third our make XXXX to than a quarter. continued based volumes, to X% initiatives. would progress record. which quarter review sales I'll we XX% demand volumes over our volumes the JF call

Jean-François Turgeon

John. Thank you,

X. Slide to Moving

by at supports pressure for $XXX foreign million which EBITDA operational facility volume inflationary quarter EBITDA significant disruption production were As shutdown in offset from operational first increased million disruption. the John exchange shutdown. The headwinds EBITDA, record unexpected and our headwinds was John adjusted of rutile impact the increase and rate, These include Botlek the our another mentioned, impact due on we million supplier were planned unfavorable of X-year outlined, the discussed and Tronox. pricing, plant which our earnings longer from to synthetic anticipated maintenance pigment call, downtime $XX from than the an $X

a Additionally, to issue. downtime unexpected we from plant $X million had our pigment Stallingborough at impact mechanical EBITDA due

sulfur in to purchase earnings. volume. Production co-product X% as at external costs, the above by to our due pricing Yanbu synergy, expectation. Digging favorable, improved well All offset the well partially at operating roll and of adjusted to Sequentially, energy and improved improved bit into to site material, were as were increased rate by facility, disruption as in due impact our production XXXX. in partially such offset volume production as deliver price, mining Inflationary rate which impact price rate costs due pigment year-over-year operational by comparison, products the selling driven the the unfavorable the to cost costs, reline costs, improved quarter. increased lower across year-over-year, smelter continue Africa improved FX will costs both FX adjusted all to favorable EBITDA EBITDA off the disruption. continued including operational as South partially and and disruption, and XX% Production COVID and due further a these including pressure, operational raw unfavorable logistic ore and third improvement

We Additionally, you you the Africa. the news about operations would want South seen have to directly in that impacted. not assure that were riot our occurred

there point, However, the [indiscernible] us. port, materially which disruption this up haven't at to were affect

the delayed However, there be port is work could some continued of as our the that shipments backlog. to some risk through

second not to the chlorine business, are cost operational coupled the side availability One the of with of issue in pressure quarter disruption third partially for increase continued expected price are offset the recurring, the on quarter.

anticipate of $XXX adjusted result, to a EBITDA we million. As million $XXX third quarter

a for X. Turning Tronox. is Slide to This critical time

and cost TiOX focused newTRON lowest that remain reduction we producer fixed enterprise-wide transform project will cost the business enhance our service raw among inflation, challenges, various to more remain than these us to offset overcoming enabling While on and material progressing and cost customer. our initiative or

improved standardized increasing process. are global this facing. operation, is achieve we an supply given spend, maintenance will optimized important and through This throughput costs chain, We enhanced project reduced the especially

look unlock by We our of the to ton of cost forward end on per reduction to to expect progress. XXXX. updating $XXX $XXX We newTRON you

business security can to to a that we our our that co-product model differentiate contribute value to advantage, significant leverage competitor, portfolio. integrated vertically continued global providing us of and our from footprint customer Our supply,

and people our We continue continue to our on transformation stakeholders. journey commitment organization, of our respond. to lot and a are to demand of deliver on We a our

the for our deliver our customer. Thank safe, turn you. We are sustainable for low colleague grateful quality, the effort of around to ongoing cost, world

our report Turning part Tronox, we safe, has differentiate and X. low dedicated our ourselves. external X with below our The detail performance, greenhouse our area to cost, commitment to progress net-X Though and we to a how global aggressive incident invite we how reinforced quality, strive accomplishment sustainability X, will report our our about arm. provide XXXX emission Slide stakeholder. sustainability at landfills is learn part scenario call and producing journey improving an on disclose report of Tim do XXXX. we now and degrees the ESG we achieve to last future. we have critical It a all We strategy been warming to point, to achieve by increasingly zero set future. will this On to Tim? everything goal and stakeholders this our week, of for align X as how are long I published ton a the key related sustainable our over website This X to also and X of the turn to to-date for on goal Carlson. an effort celsius aspirational it we become ourselves highlights the focus improvement that to gas for waste our injury, review

Tim Carlson

the On resources the at our and X, end on left-hand of you, capital have JF. liquidity Slide side, the quarter. we outlined Thank

cash including available operations. equivalents, $XXX our We million of million have and which liquidity, is across cash global appropriately $XXX total distributed in

to Our more the business. operate than sufficient current liquidity is

reassessment DD&A million, million midyear for million bringing $XXX $XXX pacing down capital where terms to right-hand in Moving are related increase to year. the expenditures the in to in in expenditures of projects of as of as newTRON we million well of to approximately the QX Atlas-Campaspe $XXX amortization was deployment. million. and Depreciation, and were our second spend; to Capital is expense we be CapEx $XXX though to side outlook are the capital QX, page. $XX other the maintenance the reflecting expected we in million year and given expect $XX the to and quarter depletion quarter, our

cash free Our quarter for million strong was to cash due earnings. our flow the $XXX

the form year-to-date. We also returned in dividends $XX share million owners of to

the per and the capabilities, dividend to confidence $X.XX, strength dividend $X.XX by our share we cash model our in per quarterly cycle, view in business Given increasing continued are on $X.XX generation annualized to bringing our our our our share.

moving expect shareowner and to policies evaluate able we'll generate that continue significant believe our debt We to return soon we'll to be to cash our capital forward. target, achieve continue flow and to

outlook. Turning X. to share to our like I'd Slide

TiOX TiOX issues. both the strong, regional our market demand mentioned, and constraints, remains increase balancing John we supplier though we outlook as progress make zircon market prices initiatives. As logistics our are very are including to availability expected pricing and with chlorine with

to volume levels, QX XX% volumes levels. quarter are Zircon volumes second levels. We expected sales XXXX above from expect elevated third XXXX TiOX quarterly remain decline to to though record X% lower than and quarter

We position, $XXX improvements issues, price our quarter to excluding hedge million adjusted the move the on in expect $X raw of the inflation, a will to one will expected EBITDA increases to Recall disruptions million through second basis. is $X second to continue hedge. ZAR quarter, our Take will and to XXXX. move which rolling partially $X the dollar million their offsetting the million a in have million Australian the QX equivalent volumes, but quarter on $X quarterly due us in into approximately increase in be chlorine the to rates to to of be basis. An a XXXX, $X material headwind of AUDX.XX XXXX $XXX in $X off current account recent quarterly to Beginning availability it million benefit range approximately FX price operational per lows, that off. year-over-year. quarter, come equivalent is a lower million of to million third

to our the our $XXX full million an of following given the to increase $XX $XXX expenditures XXXX. of for and includes net Atlas-Campaspe; of taxes, less Moving expectations related $X million expense to on million, cash to of We to interest million. pension capital cash $XXX for million; expectations increased cash: million uses million anticipate year newTRON $XX million, year; which earnings of $XX expenditures and than of $XXX contributions

the strong despite continue the be These our the expect generation capital outlook. cost back that call opening working year. to cash continue we the flow call of used represent for our We year. turn upon I'll on will remainder for a estimates closing for to based actively delever the John business be source Net-net, before to the over to manage now current free up pressures market over questions. to remarks

John Romano

we capitalize on the continue of and assets our very remain portfolio of prepared organization's to time Tim half and Tim. market I stakeholders. Thanks, and a in are This on year. Tronox. JF, confident We to critical the for proud of accomplishments this the delivering is our first momentum position, are commitments that to the

We progressing with our are have Operator? that, continued over I'd questions. turn with comments. in concludes to projects like key future prepared identified And we That ensure a advantage and operate for capital reduce and mind diligently the on the to call sustain position. costs previously our to

Operator

from [Operator of go McNulty Instructions] The Markets. John first BMO ahead. is Capital Please question

John McNulty

timing clarity a into dig you there's the be and targets to right to but little as Maybe we kind freight we resolved? of certainly have us some Can bit able issues able the great. issues us of see can give whatever I might supply more. color to be of might you give might that now, you any know be would get to start these when moving

Jean-François Turgeon

everything that and in around. with of to to the challenge John the the thought But would start visibility get I'll at to move add. very still we that will of put the the the and still us reality to the And to can moment 'XX, know really, the it's of get at John, and that half things very, the issue is have sure is Look, year. bring container, we XXXX, end until vessel, that, material the tight. see we a of Look, second beginning the that that for I So year, end last I'm improve.

John Romano

the I stage. really it's any end hard say year It's logistics X relief guess get better. quarter gotten our the exacerbated John, about that we've our see we the but issues. things, JF's there with of to Yes. -- hasn't to had to would point, again, in of And from then also. chlorine, some this But it's kind standpoint of that. by work we'd some start Uri. that to at been by the That which, and from It U.S., the Clearly, has from had to in first continue our to ability suppliers, regarding talked that other was not in in also only issues the disruption with plant Stallingborough. other the Storm do hope we've

John McNulty

I the to of And it to things that. for then on pretty love you of can assuming you speak for getting these I this of catching Because I'd what And guys guess would up means in I some issues like it that are does terms makes guess But kind specific aren't from imagine back inventory, industry thin. just the to track? this building start Tronox, color thinner. seem ability all on

John Romano

end of Look, regards what we as below entire from with norms. all going the between we meet to to the think This is now -- that ability refer with with nothing build standpoint the is seasonal the supply be of demand chain inventory and going and challenges demand. our And year on do customer to difficult. has absolutely to the inventory are to

maybe that So cycle. I suspect I directly will pent-up this hedging and for, is what that will continue likely would you're elongate answer be to expect demand to

I don't industry issues the on transportation a requests have think that on an customers with additional from We now. in of going lot are Tronox for right volume. island the is

John McNulty

capacity, for ability great. the thoughts global as ore et as a industry it you for of supply to There picking And your could throughout what of And supplies? ore then Can a quarter points was mean on noise the last up. be Any add the maybe cetera? either and thoughts to kind lot question. debottleneck, well speak pricing data just lot would around one TiOX of

Jean-François Turgeon

that’s that [indiscernible]. their their to announcing you're look, John, in natural issue down [indiscernible] shutting produce [indiscernible] will shut referring they mine Yes. mine, [indiscernible] and that own down there reopen feed

think the play strength into Tronox. So I this of look vertically integrated. We're

have mine I in to the and we And XX% own onto our have own tight equipped integrated. buy long-term the that market, market. and with We're that deal well upgrading concentrator mean vertically facility. So our place, we're had contract XX% and we we

You also year. start [indiscernible] to the know of that end the we're toward going

will we're in lowering see out that our up on which hard working their our of seeing So reality, will for competitor the facing very that I good at the think to position operation. cost our we're think time I play cost feedstock we moving own a of strength producing

Operator

is question go next The from Spector ahead. UBS. Please Josh of

Josh Spector

when you you Can in volume Asia-Pacific? And changed, of Just about America sequentially changed TiOX talked you improvements seeing give color any the of order North in talked demand patterns us some quarter, the if your customer through patterns you're EMEA. what the and in about quarter?

John Romano

Josh. Yes,

has saw think We we weakening. There's I from happening. concern the in reference every weaken in We seen region. China, see be in significant. Europe some made moderated So we we obstacles. where that China saw bit that growth in there's don't a in and that's see more the and maybe quarter. second all. The some what's around clearly demand continuing standpoint, North We America not growth demand to But growth at have

China expense and the port in of China. only the We world logistics, regions rates support have out other operation are the very the expensive and containers it's right congestion. the not an it's and now, Freight of of

the right could deemed China So out comments this see don't stage. standpoint weakness, with of still is be and to demand we regards There's what's think, as from some at I happening now positive. happening, what's all that of coming in

Josh Spector

region? around with some of comments volume bigger quarter, your constraints of and is any say just constraints to Okay. getting those get would Appreciate pricing the a impact region that. third you And quarter line which is supply of of seeing there that last the in in perhaps ability into some less

John Romano

U.K. problem the the I make created mentioned to. think for the a comment, power provider It if you chlorine problem a a I'll in the want please free there core We add, depends basically timing. and having the on then outage that another U.K JF, a issue feel to

frankly, of was discussion our The about congested ability We Australia, issue that's that of of a world. There's Australia a and for issue. chlorine So a America. the and very been out material lot out in North lot quite an plays other into logistics ship of to us. availability regions market export of

Europe significantly there's more any say and second not that's over may America. I'd first saw in I'd the really say the quarter, have bit a region one half. So in we North impacted more

North number had we America. Although very strong in

Operator

The next is from Research. Please ahead. Mitsch Fermium of question go Frank

Frank Mitsch

the is your X up would to supply terms to want sort be just ore I issue. Certainly, some supply forecasting of crystal pricing you the we're over follow-up the that next results. what anticipate of months. issue supply to feedstock on of ore there. ore there's I'm and in ball going Nice curious there? to given seeing XX magnitude prices the XX order What difficulties moving inflation

Jean-François Turgeon

So know do you price on forward. will that Frank, don't going well, speculate we what

but with that see will a think trying position Look, guess mean, tight I happen in a speculate as because feel to we don't sell we market, the good ours. price. So we I production. our with own feedstock market, we're good not we're your onto And as any Tronox, what as is that certainly

Frank Mitsch

is more guess you mentioned there? you granular outlook sorry, give the about better but there, that understood. with What's the way us wanted to I respect, your uptake? ask a level Yanbu confidence due What's there? mine your on than I JF, Can [indiscernible]. believe -- all And progress

Jean-François Turgeon

new some at the installed in the completion last in because And complete we've that parallel, we're of a see look, we There to look, place. of And at done. material sites. Yes, mechanical Metso of Outotec the of going we're of sure. change we're of and the last at this we finalize now the is first change on almost coal earnings almost our of bit COVID-XX that October. call. in the And the starting getting put is mentioned XX% wanted look, to the completion start. of in line I installation the Look, modification were confident of looking delay that end commissioning to equipment, material looking well, all we're August commissioning that that. with in is facility. all the on equipment very have Look, we We're start -- have was quarter year. should at the But of And site, in that lag what the

that's update. of lot last continue Not but basically to So the change a quarter, since still progress.

Frank Mitsch

then on above expectations, you more a there? provide little lastly, can color And Yanbu operating

Jean-François Turgeon

we Look, a record May. sure. broke Yes, of production at Yanbu in

That's we were plant. with pleased the So for very that. of all-time a record

in with demand synergy we it strong transferring guess Yanbu plant line you that we'll know-how be our we XXXX production plant by of to in telling our customer would that's a So KSA. able to to meet our grow for able to us looks And the continue be I deliver as that to see good the Hamilton needs.

John Romano

times Tronox to to we just allowed legacy variety is grades which some us in Yanbu, over where of transfer Frank, to need has also more the add at different also helping capability these a of plants. And to that that, us production

Operator

Bank America. go The next Matthew from DeYoe Please question of is ahead. of

Matthew DeYoe

of down miles you've the open what and and in been [Indiscernible]? And you had fairly a province, just mentioned And wondering was of operations how couple clearly is [indiscernible]. I case Sands were how able of uptick the kind KZN backdrop given operations, the unimpacted. So to stay close the that's I'm RBM. we've port, your in just an outside to there know somewhat seen throughout

Jean-François Turgeon

Yes.

was is you look, color. give [indiscernible], Bay. Well, try So related to It's Richards plant to there And some land Matthew, from Zuma. in riot. Mr. that I'll it's true which our is all

have that look, the was makes that think a that. that -- with fuel happened start. people lots and of poverty in and extreme of and what and center and is part the grocery and you But drop shopping all station things country that the I people unemployment vandalize

people and happen You our and between news. a because knew environment mindset, to community. we we something happening, truck a And lot saw are site effort outward was our we trucking on people with our Tronox, But events the of put with our ambassador, ahead the stopped happen. of mine our and that and that in the within they special people, material in our value, creating knew in at our put would smelter, back that that those our the

came, control working and kind blowed, with care but Africa of government was shows your took we and able went it good And I improving. that of our no of that era the And people, before look, our time for when We probably things the basically operation right than bad Africa, what army of say I mean, police your the of well, control our took that because, employees. at think mean, today the I'd I'm was out of then site. to back is and happened. So asset. minimum our people people impact mean, better taking were And to had that production. the event happened are things Mr. South damage that I Zuma, importance but mean, proportion, nothing restart I South away I to not with to and and a judge,

Matthew DeYoe

I numbers. if liquidation represent that we -- the next headwind like, your statements volume seems which is read that business, in it some could there's on going year commentary think what about we now And of the If zircon about of kind size inventory Tronox, should metric type to that? at correctly, think Okay. how I your boosting right were your should

Tim Carlson

Yes.

over market how been given 'XX, tight able levels, because pre-pandemic The that quarters. as to we're XXXX, pandemic in couple that back that of XXXX of the needs market to revenues the we inventory built some said, of price. in levels. result the migrate a last for really But all offset will our we with zircon were So us meet to volume the able 'XX being actually have with beneficial is,

we than the more that offset fact, expect quarter. In that QX and to And QX. in continue in

we year-over-year headwind offset will will than So have a volume and price that. QX, in QX more

Matthew DeYoe

of you XXXX. comment? with price with consistent this consistent a that as revenues volume expect between Okay. will kind Is be kind Or then now and well? that of do XXXX, you'd to mentioned But what is

Tim Carlson

a volume that No, was comment.

John Romano

said more to although offset lower I price in even think would I Tim's than point, Again, QX, we think comments, the volumes, we and helping are in revenue. our actually expecting prepared downturn,

Tim Carlson

Yes.

John Romano

stage. as And more strong that's assets Atlas-Campaspe is we the less at moving mining demand replace this some the with into be very becomes next have. of think and important particular more volume, that why to clear, we And year we very

going business that take going So up get reinvest the time is and to we're to some some the us, it's that in throughout capacity to the cycle money spending running. to help but of

Operator

question of Please next Hassan Ahmed Alembic The ahead. Global. go is from

Hassan Ahmed

near around Wanted ore Leone, question seen an fundamentals South issues a to at of side about a Africa some grade revisit take high has well. or now supply-demand issue been in supply-demand effect, guys in again, are ore? the in availability, it's supply we've seen it, while, industry fundamentals, which relative if are we Africa. here medium-term on availability undersupplied, about as Sierra you And are call in how the basis, with And to How of and there. But for in a understood under-invested low-grade the right? thinking issues the And versus supply-demand in you fundamentals I near-term guys ore. buyer, Sierra we've on over been South issue thinking look Leone, a terms obviously,

Jean-François Turgeon

that pigment us part even to mine next we start to in year. a little customers. going grow ago, order to that our production if year color vertically Hassan, that position, maintain we're And and almost our increasing a allow bit the try would we're sense doing I'll our more with we integrated our Look, XX% in to this. operation on Atlas-Campaspe announced So we're give you our feel that

to And facility. of you is open a about just the if mine chloride But I costs really for the you ore to then to -- other talk that part, mean we're the same. ilmenite mine a from not ground. a that mine. Africa when or said, pipeline open difference you said maintain recent what because need. So have being And good like depends you look, have like have a the And to the in type vertical the like we be sure of guess at in We operation. on facility new the that's in what ground didn't happened. our look it's And are mine continue we in that cheaper smelter, the right, or need that upgrading our you It's position a what and Jazan just have that's complex because underinvest even sulfate for if in the to. they're the kind to It we a scare sulfate, to are chloride and That the make projects allow that want. South supplier, resource of have the And or like be in a resource. [indiscernible] future why justify price market need buy that to understanding probably mine to material have industry year, position on looking chloride upgrading would out us or invest open done that rare. that's increase we we short, the slightly of have I we you're ilmenite to we even more Australia if our and

chloride and you because to compatible that really chloride So process. economical allow is not an assets at process for as ore a compatible an value feed those make the the it to take

that's So what we're doing.

And those the to mine about have cannot plants. China panic don't do when chloride they mines But the market, think to China the production where building industry going because what the pigment for new gives new some we opening color. year, it's overflooding coming in I positive that to their that hope see feed because that, will be limit as not pigment people that I think pigment expansion. is I feed So plant, that's

where in integration the play will favor. vertical of that's product So our really

Hassan Ahmed

coming chlorine hear And reduced to it with the availability the North are just supply improving being quarter, own American the chlorine, that that's I while, to us building commentary start out materials, issue deals you as And be sort everyone's that America, to some sticking that? the in or capacity? raw third one Cash assume to chlorine you of guys TiOX maybe the the guess an that North the that's of going about being Do going guys you collate thinking going talking here But where sort going in call, as the with mean, the the How mean, are you you of something is, sort you of question in deal fair of, that right? be think how particularly in of or about? for to particular, the guys do producers like. in of react an of some maybe industry market? I chlorine a cycle. of biggest, theme an that again, -- about with of industry I issue of on and I'm about And into this guys again your innings seems talked sort of is well. quarter it the second early kind sort thinking are of and cycle is up flows I the within

John Romano

Yes.

have America, Romano. John a of is We purpose-built chlorine have this -- a plants. do we Hassan, North So outside lot of

continue It's just been we been coupled our at issues with with point the nitrogen right something that's We're mean regards our of there's chlorine With focal building where at to with to also oxygen work a now. suppliers. other industry actually that's although kind clearly, to to there chlorine, might opportunities So lot I ability own the plants. we other in other continue of looking looking evaluate. facility. not issues and evaluate recently, here are and chlorine,

but in we team globally. move as has plan chain support supply growth, XXXX a into the that good U.S. not will Our continue place in our only to

Jean-François Turgeon

with place high-grade the lower with our keep of link plant its that. of to having that pigment feedstock kind I the just deal reality to for sending we our obviously control have I we're world so mean, chlorine, but plant Tronox the we have to We're where chlorine, of full hole extra try Yes. and X And Hassan, the in we to feedstock. feedstock. and it -- feedstock the rearranged U.S. because, facing Hamilton in mean,

John Romano

just referenced, to other to higher in just chlorine. QX. grade manage able grade, of we And -- what by if we issue chlorine has lot you that QX. less facilities head XX% the to JF do again, feedstock to been therefore, have To said, higher X% have to needing with decrease a think moving A

Some now getting a bit are transportation issues that and issues of ore being that there the happened exacerbated recently by quickly.

So it's we're not a more long-term Nonetheless, a that one. issue an dealing It's for with. short-term of it's issue us.

Operator

question from Next Barclays. ahead. of Fisher go Please is Jackie

Jackie Fisher

theoretical around year. just the for next increase Question volume

lot next stays that issues of away we what this logistical So TiOX How and very sell looks for strong, midpoint demand and you plan plan. year? able your operations these much assume assume if versus would we year you go be a produce as that like and run would the to more

Jean-François Turgeon

assume, the that And market. grow faster type TiOX expect ourselves the are Duffy, to Well, QX experienced to customers I that mean, But growing will and we have growth going we I than aligning with the GDP. we mean, that we from less. don't slightly like of forward are QX

plant I next of have single-digit growth mid- have year. of of of growth for we we but don't mean, growth plan So double digit,

John Romano

continue that there. of So clearly, are and we've going to synergies that, into production, growth talked yes, the big going about to XXXX. Those how a support with to part is we're

allow and be to our share will again, least plants. at continuing and percentage to believe the at do specific operational but growth debottleneck integration capture work to continue not their expansions, continue able we We're to support more. We at continue we'll our our probably that that excellence any growth, us our at programs. plants, vertical and to And our looking to with

Jackie Fisher

Okay. physical -- like, I year, seems that average. wasn't missed it obviously, I an like next where this doesn't was had of talking most or year. is Maybe about -- right? increases so I theoretically, talking staler of happen structural I the XX-year had mean, issue But what long-term kind about operations, just you

So roughly like more of this base the 'XX, different it, of some if just is into what is I'm assume it XXX, a how case much midpoint how I more production year? issues, basis, theoretical understand, the is through would to the on trying physically, just the relative to maybe this what a year? ask year you year, than mean, supply of or bump, we level a on like we call would XX end this next nameplate way that sell it much your have -- year Kt your to XX,XXX to

Jean-François Turgeon

is to color I one increasing are Well, give, we our want Duffy, that production.

said. have we the significantly the will we're we with as So inventory. have produce, 'XX 'XX that but tons Well, absolutely And inventory. improve that from XX% of realize seasonal you no started below amount to will to John moment, norm, at

we that So inventory. rebuild need to

John Romano

I when utilization and guess -- so -- so the run try XX% we to And though, think rate. we generically, at

XXX to get can't on basis. You regular a

get year. to point, to issues. we're got at maybe XX,XXX XX,XXX stage. we'd level plants. goes has have sustainable to could there that hope not said, back that We inventory being There's that at next X rebuilding of because an going be that, JF's element All tons a this probably we be But to another out to

Jean-François Turgeon

we're obviously, that And see only we not because, negatively don't the that one facing reality.

will to positive with market Instead, the and another and going that's cycle. it that. just inventory from then it create So keep huge building stabilize would the situation,

Jackie Fisher

then globally, And guys people less time? footprint or you fair. there's business more period with kind the to have sustainability of more longer-term or broadest having of things you with into and pushed maybe over people volatility of tight move year this plant longer kind in ask Very being arrangements, more so a where that

John Romano

good have contract has typically question details some market from say clearly capacity, interest Yes, to been and differentiate term we clearly, the margin Duffy, to as I second I haven't starts China on that half we longer-term can splits. provide say, -- we agreements. what there's that is the I issues a of some will the allow as would that but recover. but from the lot in we of would we move to stability us is, longer answer think, into say frankly, price added quite that Yes, And But very that because, don't a I betteravia. have to commitments, agreements a of balance continue they're, agreement happened capture yes,

of balance into picked the longer-term this and those have moving some areas, into year in agreements up we So next. of

Operator

Andrews Morgan ahead. go Please from is Stanley. of question Next Vincent

Vincent Andrews

you, Just there's price that stabilation does one linkage PPI for of but a the be seeing It the may a of and your obviously, that there. inflation believe question lot also to I we're a it's case on value on the contract your pricing competitors out contracts. not And for PPI. case

will question my that close with so where contracts And in movement should see PPI to assume your something going? line we is, positive is price

John Romano

Yes.

contracts, have our stability referring you price There just agreements up. as that anything We of have move that's be are anything don't So value that. not tied clear, individual are to capability like PPI. to agreements to to are

the price up Our quarter. X% in moved

have stability contracts still expect to third As to margin balance into stability as we to And those agreements, a we and moving long-term between get price the strength we we've feel margin will adjust Again, split, the capture which we allow got the providing continue we ability quarter. non noted, do regular us good agreements. to price. not

Vincent Andrews

that down other in volume had materials, getting already caused has X% raw the they've situation, We've XX% to to shipment produce issues And -- of as you're season your heard follow-up, Okay. and less of paint and themselves. during on them some reporting be which from sequentially. then this some customers a a going to your plastics

their be production? X% taking own to So getting go-forward having are Or know the they just that they're basis? shipments want going TiOX not figure out folks because problems. their up that I'm folks on XX% those to -- are still those that on, make will of that trying all part in won't they your they to production who's particularly reduction a product, are later

John Romano

Yes.

XX% reduction to evenly we're issues. to where be having the around X% the going So spread is

at upon depending and agreements to allocate accordingly. contracts shortage, So have based we we're look having a on where

this would only is raw of our low, not of at decreases well. stage We materials would those think that opinion being in development that but the our as any say inventory are our customers' not I split. be that low up built TiOX there's So It's inventories chain.

Operator

next Instruction] ahead. Please of The Jeff Secaucus [Operator JPMorgan. question is from go

Jeff Secaucus

next And currency translation half. to your think don't currency stayed year, for EBITDA same first XXXX? currency would rough If be the 'XX terms? if what hedges $XX off what's EBITDA million currency the was come to the the your in your in change, the when penalty penalty and currencies EBITDA I that in to hedges --

Tim Carlson

of Jeff, change year. worth million next about The next headwind a million $XX Tim. decline year of year-on-year is $XX hedge it's to

Jeff Secaucus

the penalty And for are as roughly? this what's if currencies they year where stay

Tim Carlson

If no are hedges XXXX. they rest for on were is locked the in currencies our $X.XX where the penalty stay roughly our in of because hedges year, there at back

Jeff Secaucus

half second what's What less there I same? fourth the the or more currency and was, volumes are translation the if negative effect say the meant to Is quarter? are a change same, or in more in less prices third the

Tim Carlson

just be a will QX can I me changes. to given headwind still let It And the see grab quickly. QX if that

I think it's around the $XX half. million, if correctly, back in I remember

Jeff Secaucus

X% up went sequentially. prices Your

get were to Europe, the you to about U.S. I Europe and the correct? X%. in larger U.S. that think smaller If you in they that think about Is and think that

John Romano

say this quarter split evenly that our I John would in were Jeff, the is across increases price regions. the Romano.

Jeff Secaucus

that same change, in States in were and the they both Europe? United Meaning the percentage

John Romano

And the same ballpark, yes.

Jeff Secaucus

buying can slagger? net remind the fully cost buying what you the to Jazan of Have Okay. us And that as? committed you

Jean-François Turgeon

of But acquire slider out demonstrate would the time, the production deal. smelter that was by the the the -- level of guaranteed supplier, make we and at said operates if the the was we Jeff, original Outotec, So can it that it. Metso

Tronox, that, we business. that had done make and is look, it some would we asset, for doubt technology, the to arrangement wanted be So if basically, the value-accretive get about the sure as we, the

if that's it successful add Tronox we're smelter -- we work, not do to advantage have a next say that if But with to the problem successful, the get will doesn't we the to the why portfolio. So don't smelter. have we

will So the produce test and is smelter handle is obviously, the Look, how basically. that's arrangement we done while material. being material, that

we will we buy the acquire asset. success And to will and pig it from iron it reach slag level and to in plan. operation But our needs for certain a buy us the use the of So Tasnee.

Jeff Secaucus

the have What of would them would cash would cash if How think do what the netted price loaned Right. for net be? to that But -- the as be might purchased inclusive I past. you pay the you how debt asset? outflow in much out you it? some you money

John Romano

sustainable assume If committed. the million that the achieves we've operations, $XXX Slager we already the of in million $XXX debt

$XXX So million.

Jeff Secaucus

that happen $XXX would million. this year? things all being And equal,

John Romano

No, sustainable a operations, start is up. probably that happens year out which from

So next QX year. next

Operator

next of is go from ahead. Our America. Bank question Roger Please Spitz of

Roger Spitz

issues somewhere supply that address I'm coring you? building currently chlor-alkali U.S. that plant I a like actually you say should outside not did And traditional Did you're suppliers heard say could coin you supply to the not you producing consider sure correctly to earlier.

John Romano

Yes.

we for our evaluated chlorine always said that. time. any chloride we've evaluating So something that of was We're over what we're sites facilities building is that

chlorine locations, and of chlorine We at our have some buy purpose-built facilities merchant and we others.

we're year-by-year looking at on have a basis. that been it's So evaluating something and always

Jean-François Turgeon

our the for facility. It's in case plant it. never with that in But not happened business what we're is Yanbu, a rotation. own it We going the a at something If own do that its it. KSA. it's is Hamilton example, but good produce depending on Roger, facility, copycat U.S., for a we chlorine look own can we John which of market, to has chlorine said, was and as Look, us,

John Romano

as in [Kuanon] in It's plant. facility something well have our another purpose-built we

the in So something it's we where just are evaluate we continue to that on cycle. based

Roger Spitz

into market? selling you Are the soda caustic

John Romano

do. We

Roger Spitz

in QX $XXX was was at a was and of one, XXXX. was million I And get term July the it maybe assuming a in 'XX standard item? debt it repaid last debt the I'm million just mean but I that I loan, XX-Q, guess will which repayment bank? what it the $XX of

John Romano

primarily the loan the in seller, loan. Roger, U.S. the bit the a little They're primary term term of Yes, Standard Bank in

Operator

of go Sachs. is Goldman Please question Travis Edwards next from The ahead.

Travis Edwards

little side. direction. I the A different a bit sustainability question on see

highlighted flow reduction. the to to Just is for emission in Are you them those expect cash that enough you the Have if we much items you've cost And should investments waste so, show years? various that? to achieve of in how outlined what targets as coming material targets? those up

Jean-François Turgeon

public. much capital invest to that we always where part plan, good question, it's Travis. yes, of very and we our need and number we make that how X-year link as will into predict So look, And

$XXX of of So capital as $XXX we obviously, part that talked reduction for built ESG about is this and investment, $XXX million year. is year-on-year that capital part year. for on component of about there to capital We always waste is talked next an investment as capital million million And deployment. there investment that had sustainable that

John Romano

out our more that on there. determining into those clear XXXX spend still But just to XXXX is to clearly, to, identified goals, there's working do X-year finalized, least there's beyond, to getting on what capital but ultimately, Getting be some XXXX reach XXXX. which going plan, done work Right at to actually be. work projects we're we've targets, to and a now,

Jean-François Turgeon

gas, value I'd mean they And greenhouse those some reducing add project. good projects of our Travis, are I that are to business that, creation. they're but also

John Romano

reduce That will help cost.

Jean-François Turgeon

Yes.

Operator

I That to has back over the locate this our for like remarks. to concludes conference session. closing question-and-answer would Turgeon Mr. turn

Jean-François Turgeon

prepared the for complete possible. all want we had make just who results what big thank you to employees this look, our I And everyone. to and you, you. all of those people a Thank reinforce

So you and interest your support Tronox. thank you, everyone, for and thank in

Operator

attending for The now conference presentation. Thank concluded. today's has you

You may now disconnect.

Tronox (TROX) 30 Jul 212021 Q2 Earnings call transcript