TROX - Earnings call transcript Q4 2021

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Operator

Good day. And welcome to the Tronox Holdings plc Fourth Quarter Full Year 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Guenther, Vice President of Investor Relations. ahead. go Please

Jennifer Guenther

and welcome XXXX And today fourth and Executive quarter John Financial Thank call to and year Officers; Co-Chief Turgeon, conference and call Carlson, webcast. full Chief Romano Officer. you. Jean-Francois our Tim On are our

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

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

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

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

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

that during Additionally, the basis noted. call all made note financial comparisons year-over-year please otherwise are on unless a

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

John Romano

a you overview everyone thank by I'll morning, for good the this And and of setting quick us Jennifer. with joining morning Thanks, start Tronox. stage today.

upgrading pigment integrated facilities with five plants, mines, world's the We largest nine vertically producer are across six continents. six TiOX

evenly Pacific. billion the $X.X approximately and Europe, across totaled distributed Africa Americas, and revenue which was Middle-East, XXXX fairly Asia Our

of X.X base supports pigment of approximately Our well-balanced X,XXX global customers. tons our million capacity

our of XX% stock integrated secure for And supply consistent internal approximately feed vertically business model needs. customers. this supplies, ensures our and Our

tons approximately of largest TiOX, as In of the value second with addition we to zircon, world's capacity. XXX,XXX also producer significant generate

We we years transformative organization created value generate we the are the and following nearly continue have stakeholders. acquisition to proud the our three and will of ago, for

turn let's was of Now for a number measures. Slide to for highlights. Tronox the XXXX on of record some a year X

maintained all our on and year stakeholders. delivered our of execution commitments to we our the During

record billion driven and our to robust Our global customer with by revenue this $X.X our of was demand demand footprint. ability meet unmatched

our $XXX capital which portfolio, to $XXX included with basis ton to and $XXX attributable adjusted Our pricing ton. margin model, to and to run cost Improved per projects. production plan. is just through making savings digitally lines business rate million newTRON costs million In such cost all per integrated reduce by offset is This transform in across we of as the EBIDA $XXX costs. higher newTRON, our expected over of a progress our and lower on tracking our XX.X% expansion a programs primary key to invested the commodity vertically by our integrated driver pleased end meaningfully product XXXX, We're and freight to we're project global XXXX. we're

well advantage debt from for We with record a $X.X paid in We and our ahead net $XXX Atlas at leverage We position, stated previously our times X.X billion in pay not certainly to ensure million targeted maintain positioned from also targets to XXXX, leverage differentiated by our Thanks down Australia our allowing it but previously business last, including safety the free progress $XXX range objectives. a goals year towards to year of debt to as mining our XXXX, we two performance of Eastern ending our stated And XXXX. We least, in scenarios. in timeline replace to mines. focus business another strengthened generated achieving sustainability published a unrelenting continue Ginko solid our vertically to economic achieving billion ahead invested $X.X cash we in a our employees. our Campaspe, perspective. Snapper our three of gross in down that the flow project model continued remains net plan and beyond of to debt withstand deleveraging times will integrated of of million our by

we to review strides more in I'll for we forward X, efforts. significant on In Slide XXXX commitments to accomplishments align our warming to with made In a XXXX, July, Turning our as formalized emissions detail. our two ESG global scenario sustainability as gas dedicated injuries. below as and net zero XXXX, zero targeting landfills ESG-related centigrade waste external by degrees such workforce other a and well set zero greenhouse of target of commitments,

Global the We and our XXXX help we've level protect Compact. our UN to enhance achieved in structure our by to In of our XXXX awarded in change become Tronox validation privilege our Tronox UN deeply efforts. at and embedded companies and our top recently, to Rating set Nations responsibility board and XXXX, of highest practices stage will in Development Most committed rating our Goals X% our on sustainability principles. we made of Platinum the a significant represents disclosure to over Incorporating silver United how business August, This public our announced social reorganization had recognition ten success. the these Sustainable evaluated. us of long-term our the corporate rating topics. the the and improvement a the efforts. we of The our reflects into for EcoVadis, in the strategies procedures step puts targets ESG and the mapped Additionally, long-term joined and operate committee standards and a oversight to advancements

disclosure published compliant standards be the applicable TCFD next report Additionally, when SASB fully and we've with committed mid-year. to is our sustainability by

we further and sustainability to committed and disclose how been do While improvement part everything at efforts. we we long our Tronox, of has continuous a enhancing remain progress

increase year. turning Income in $X.X to highlights to fourth versus of review. not the million $XXX Turning a to financial of tax of benefit Revenue did $XXX before XX% briefly prior Slide due operations while net XXX%, represented review repeat. X, year our the XXXX million a was from of million lower that $XXX I grew will quarter income full billion

Our XXXX XX%. effective tax was rate in

earnings a XXX% a earnings more share $X.XX. our flow than of share XXX%. increase over XXXX. Our Adjusted And XX% higher million represented margin diluted was was Free diluted $X.XX. of GAAP million $XXX points. per increased per And our basis than adjusted EBITDA cash XXXX. increased XXX $XXX

me detail to turning let our X, fourth Now provide into Slide quarter. more

X% line quarter average represented higher quarter fourth in the with Our our XX% came selling increase. driven issued increased by Sequentially, Revenue this a in results guidance. previously prices.

was in earnings $X.XX, tax flow quarter net income generated was XXX%. $X.XX. in million for improvement. rate million XX%. million, of improvement And Adjusted per adjusted the diluted XX% $XX earnings our quarter the $XX And And free per was effective Diluted share share our quarter. adjusted of was XX.X%. EBITDA Our XX%. an $XXX was cash improved EBITDA we of the And margin a

fourth Moving I commercial now detail. review more in our to X, performance quarter Slide will

feedstock approximately excess in of quarter quarter. out stocks integrated other the XXXX, and by markets. are the third partially higher year volumes year spite strong to and Total X,XXX as global of to JF are were across line Euro year-on-year the the results volume balance declined and continued inline grateful times a vertically fourth continue our us TiOX increased and higher supply extended Zircon In due delays and our to Volumes challenges, delivery number TiOX and from XXXX. prior and quarter-over-quarter and revenue remains rate. in other external volumes the the dedication, basis, pig in products all with lower in our Our of are supply in were volumes versus below increased from system. the sales business with continued were unfavorable of communicated as Feedstocks the with the by due lower be the exchange well-positioned levels employees demand prior chain team team demand will disruptions. iron and strong tirelessly performance navigating feedstock volumes in sold by challenges. to due with to offset inventory the anticipated X% cost deliver levels by to Zircon our remain unmatched whose driven and were ingenuity and iron input due revenue tight XX% working customer QX revenue inventories pressures. higher sales leveraging within global prices. quarter well more have We're production we TiOX we our these million the to the year, XX% by due customers. prior line of in macro managing dedicated By eye chain of selling increased managing demand, lower supplier the quarter revenue compared third for inflation disruptions. supply while remain year range. to footprint increase our normal outstanding as prices The our to partially including was of allowed seasonally, perseverance the prior Sequentially, flat employees with $XXX increased were we all choice higher model, revenue higher strong numerous pig through On versus momentum pricing versus pricing. overcoming and offset internalization a versus shipping ensure to average selling I of Zircon expectation inventory while

close Our Customers positions model integrated which security recognizing our customers vertically significant a of is reliability ensures us differentiator, a are supply. global advantage. increasingly footprint to as while business our

first XXXX with TiOX contracts share XXXX. with anticipating continue sequentially first XXXX. chain by in need volume In to challenged, demand our We line those is EBITDA the to than call the basis. customer this And more will offset remains continue allow elevated while of to strong, beyond above are the supply review improvement very XXXX example, expect volume to an as needs. the the customer demand margin XXXX replenish meet will GDP the throughout headwind work our than will offset distribution remain grow quarter, to first expect TiOX however, for year. market inventory and Pricing in production the turn in the in our levels. a increase expected will Zircon volumes we substantially the to in volumes increase continue to expected in number quarter. over with we I JF for digits be securing trend to volumes be For the and fourth were first operating performance customer quarter anticipate to our of in to we lower now we profitability recent in well in in And on are to able pricing increase inflationary sales more to for Zircon quarter, expansion. quarter our global channels. the long-term quarter line pressures to levels, supported JF? quarter market the full is single and continued be and upper base the

Jean-Francois Turgeon

you, Thank John.

to pressure, Moving price across $XXX freight selling cost to deliver product. commodity XX% and serve driven EBITDA gas, to the Inflation and price, as of by non-contracted raw cost XX% fourth adjusted ton product the including growth XX, was higher expense all volume have escalating in On basis, products, rate. purchase by out continued unfavorable increased John incremental and mentioned our quarter. and freight FX customer, our external use driven South including ocean million lower driving by oil costs. and cost drove remained per of to and natural higher chemical increase sequential Africa utility customer, given was our particular, to a increase increase XX% to offset globally, demurrage rate average process to the line both, higher Slide to in Australia costs. in partially of need material, to deliver rates, In elevated Freight

favorable saw impact benefits. the in fourth and in versus Euro, majority dollar these the Australian movement ZAR revenue quarter While to unfavorable largely third, the more the from of we the offset

financial integrated vertically global leader. our strategy to an TiOX Slide for footprint. our target. our us We strategy to advantage integrated business XXXX become security XX, optimize to will to remain to our to customer produce low-cost, and high-quality sustaining ensure our global continue committed meet of how differentiating our strategy on customer supply our global and I Foundational our footprint is executing will pigment in Turning and to review for enable our

TiOX rate us combined operating continue Our This, an and at time with feedstocks are facility mining this production integrated when produce upgrading to high of run XXXX. at versus to capabilities, additional planning ton increase year our an will critical. XX,XXX a allow

expenditure projects like will Atlas capital and continue to and pillars through Our be effort these pursuing dedicated Campaspe. to newTRON

deliver our most resilient optimize portfolio TiOX our ability our as deleverage allowing leading the to industry drives us to financial to position asset our leader, unique secure to industry strategy and Our adaptable continue performance.

XX; Turning look will our they project. be can an at update I strategic in major to key our provide on divide capital If Slide project, category. two now capital we

grow saving EBITDA to total, bucket. multi-year transformation being newTRON the cost annual cost strategic $XX newTRON the XXXX. capital, integration primarily as first in benefit related and first due per $XXX end in we in The procurement realize of to ton vertical and digital In run chain and capital. anticipate in the the global XXXX million $XXX fall project. under saving our second supply rate We is saving. by reducing

vertical or integration. The second to sustaining bucket relate

the the is second as investment. mine development in advantage. that mining Eastern of end as slag plant. new and and XXXX extension mining phase high These for tenement life. Namakwa portfolio. of is investment this our And in processing rutile reach of future Campaspe is year half our rutile, represented new is online they this Our Campaspe grade in infrastructure replace Atlas our put natural have important business The Atlas production. differentiation in are the reminder had Australia has we come critical suitable in abundant other in area, next Snapper/Ginkgo for santic where a to we our pigment and place to resource direct Fairbreeze that will mining investing or also in high Atlas mine expected value the the sustaining our our ilmenite of to in model source Campaspe zircon

Fairbreeze sustain Africa well In XXXX. supporting ton rich we and be mind our stock and Additionally, of TiOX pulling given and total, ensure to $XXX anticipate mining will will in are production we will anticipated across our our ilmenite, feed South to similarly Africa, significant XX% of They grow, Namakwa and XXXX South market investing internalization for products the in life rutile sustained production our million demand mine forward average two market expansion approximately stock extend zircon also in relative of approximately and high $XXX saving grade in beyond feed price. which XXXX. per in projects, XXXX

more customer. our transformational of this project business, Turning to and and time to Slide enhance the XX; various a transform of element will I service provide on spend would enabling Neutron example like bit Tronox. why the remain neutron us so to lowest for to producer our is among cost TiOX

global chain, We will standardized and process. through optimized enhanced achieve this an efficient spend, throughput and maintenance supply automation

of example purchase optimized improve new invoice, sourcing globally. an our allows an and enabling activity global management the supply vendor of of optimization As handling catalogs, chain system our order

to significant also This led a trialed coke of reduce plan chlorinator had and example today. seen has of the in being at borough automation, an As as the stalling enhanced we uptime of has stabilization program our increased result consumption.

$XXX XXXX per order $XXX another. from saving data ton future. improved before about It result will also transfer maintenance this end optimize to employee from best. downtime. schedule to and initial to improved plant of these We with decision plan visibility facilitate a side capabilities by standardization visibility equipment function and very identify to Tronox's to all clearly The better will four delivery mean excited have means We and schedule process, practice the one lead and our for failure Efficient streamline what best across anticipate and maintenance are making. the cost areas to of these of our enabling come production

provide our Jazan. in brief a Finally, operation flagging update I'd to on like

sustainable a a end impacting the shipped The has to The safe Slag to important ensuring first Slagger was clear been integration are according Yanbu and forward quarter November. of strategy. progressing and plan. operation. is ramp-up feedstock part use at this of tight is condition the will Tronox's for where to TiOX Jazan ramp-up industry. pigment here at The time tapped vertical a an from site advantage continue

current sustainable As second on a the achieve will operation ownership in XXXX. must reminder, sustainable operation the site half Based the slag production of reach of assume plant, site. the Tronox before could

now on to our continue site. over balance market update Carlson I will Tim to outlook. call and the cover will We the turn the of to the Tim? progress sheet

Tim Carlson

targeted projects, provided XXst Thank times of end our at $XXX was you, of project and is our was vertical JF. within of We pre-cash On liquidity million our totaled financial resources. X as million, Slide XX X.X Campaspe. approximately overview X for amortization $XX position, and an XXXX, with Capital we our was $XXX net million global from cash to year; and times liquidity which capital down leverage stated December equivalents, and million cash maintenance our the included strong earnings. year this million significant which of the the $XXX depletion $XXX and range ended $XXX XXXX for times in the for the end at total $X.X $X.X million and newTRON, million well safety $XXX integration cash was million distributed a operations. was with $XXX Total balance of across flow to Atlas reduction year due capital, a X in times. of We million previously for Depreciation, debt including to of $XX available totaled billion, billion of operational times ending X expenditures our XXXX in by XXXX. expense from the reduced

annualized in form a XX% returned an which to $XX dividends the of of year-to-date, share also on in by million orders total XXXX We basis. increased we

Turning the to our now XX; like outlook. share I'd Slide

impacting the those versus sold. disruptions are in Due results Zircon to beginning favorable in mentioned, first in trend cost manufactured ton as elevated first addition both in higher fourth, be costs of inflation TiOX per adjusted quarter, continue demand we first the to in the This EBITDA ongoing is and strong tons continued anticipate fourth $XXX and the expect $XXX to fourth the quarter and we these to John by seen addition million as quarter Zircon to including to quarters pricing. chain we've pricing. million driven pressures to supply manufacturing pressures goods reverse second, our cost As for both in and expected TiOX commodity improved trends

XXXX, For we year annual guidance full following of metrics. the reinstating the practice our providing are on

and be throughout expected margins meet as expand diluted year. to be billion EBITDA adjusted is XXXX expected exceed to year to we $X.XXX EPS be ambitious is Incorporated the between the EBITDA Full billion reported per $X.XX we year cash. at expect billion target share. We the least anticipate and cash free $X.XX flow expected $X $X.XXX $X.XX cash. expect into between to and our is Adjusted share, we are assumptions of uses following to million EPS between $X.XX in and our and per diluted free be generating $XXX

be interest and working of to expect we We of million million, capital million expense capital of best million as a These $XXX cash expenditures outlook. to begin current to $XX $XX $XXX our based $XXX our $XXX more to cash to levels. upon to million million taxes, to normalized million represent Net million. use estimates $XX inventories $XXX rebuild of

represent our a However, ceiling does this potential. not for

growing model confident this on expect and XXXX disciplined driven attributes. XXXX remaining focused of and tax per and cost will earnings beyond. to results ahead and distinguish ton runway differentiated we're record leveraging continue through reducing our The our by expense Tronox high strengthened of in evidence management significant business capital the are and financial our have projects, return top-line, to We expansion see

dividend reducing opportunistically to debt billion XX respect our continue purchasing Slide $X.X increases, and allocation, continue we the in expect while with to capital debt capital with Turning shares. expenditures, prioritize annual target gross site,

capital be million $XXX For XXXX, estimate million. and will between we expenditures $XXX

capital cost Our will Africa. integration safety mining will approximately total expenditures to will will annual strategic on South in million majority which be the $XXX projects inclusive XX% sustaining be We our investments total projects in maintenance for other $XX of and Campaspe $XXX approximately returns estimate in extensions be reduction million of million, will and Growth million. project XX%. capital $XXX between Atlas total and be approximately our newTRON smaller vertical and average at the

annualized million debt anticipate November, we per with share first beginning turning in our previously on opportunistically our under to stated while closing the And JF reduce we the below the announced As call back to for I'm $X.X remarks. billion, authorized back now anticipate program quarter continuing $X.XX target buying over an by of basis, $XXX board. increasing the shares dividend. to dividend the

Jean-Francois Turgeon

Tim. you, Thank

Moving possible to acknowledge today's we several the to is Due would Slide commitment wrap-up XX, Tronox this without position outstanding last take employee prepare I in. to throughout of not the our want to remark them. a moment as be the year,

ongoing on XXXX an confident So and ability market commitment to in for objective everyone our your our we of our execute our thank you deliver is effort. our and portfolio are to momentum, our exciting With Tronox. stakeholder. to position, asset against for capitalize year

planning presenting are look long-term with hold second Investor on to to June Day forward strategy. details and We the more in our our market

aspect financial practice operational of and related the and more. business, key ESG Our

additional detail a We will later logistic date. provide at

navigate We over challenge, the remark. transforming With conclude company our current which will I'd continue the to question. remain bright. ensure for while turn that, like prepare call future to our our That macroeconomic

So Jason?

Operator

from McNulty [Operator John Please question comes ahead. Thank Our go Markets. from Capital BMO Instructions] first you.

John McNulty

Yes. taking Good morning and question. thanks my for

XXXX, we to a at have XQ the of heck of from the when there for part level of outlook you year. kind look is a ramp-up the So that latter the

us plays of your terms think through costs speak give – the and roll examples as you some your it. it the of give then into and – what we for how maybe should the kind can pricing the year? manufacturing us throughout So I means the also, guide are what assumptions around And And you we can improvement in around then guess, that confidence on year? to how about

John Romano

add I'll start Yes. Tim John. then and let Thanks, little it. color I'll that a to

first full so could recover quarter – that can get competent first the that that we from we that's we reinstated you one are in think So actually where confidence annual the when the guidance you of quarter. we're about guys reasons

The first impacted quarter number things. really by is three

buckets; You that can from plan cost and energy put fourth first the then two absorption the an let Tim cost, on pieces. process, in quarter, had on in into this which the then volumes quarter fourth pick maintenance chemicals, our and fixed impact on I'll rolled it I'll that up three quarter. the that impacted and touch other

an So in the in were successful in region. price, first increase came buckets? we which across our and margin two able nothing to on was had in the rolled But because December our capture. the the price. which touch don't roll, of we do to impact had to volume other had increase quarter volume the out lower shipments the prices why on into board you with revenue that it we that were every significant Tim, that the the the predominantly at only January, ability first in quarter, But

Tim Carlson

process QX million an Yes. expectation freight. costs around and QX of John, That $XX $XX we came million. closer of call gas, third about in energy, from when to million quarter $XX to additional our talked we talked additional chems to natural during actually

portion the flowed have of a those and lot to in January higher in through in those and February. inventory sold. are in flow costs capitalized product of So through in costs terms But those of going month

We our less we plant than produced that is part normal maintenance. X,XXX QX tons addition X,XXX in of to normally to In would.

flows the again into just year. higher per ton, that's So a cost which overhead

trends both of gas as standpoint, it moderate cost volumes quite see the a process demand see that we improving a increased those relates as them And overhead we and we the see from from our chem course costs production that year. go a did energy we bit. the natural to With through

that price year the start margin this with John our that with about. and combined expansion confident We're year increases QX our the we very guidance. talked year versus with So and full

John McNulty

paint the I Got speak or of that's your that your the inventories are as then get most off of helpful between lean, to, color. the kick then? that spring, I of in where of inventory we kind – see level to lean as still indicated chance can give How – it it? you really really – back kind granularity you hand the going a heavier helpful through at is appear your year? it. to of of the as would a you paint to guess, be there to and you go some going season is own – Or earlier on are you can we this characterize mouth – guess, I guess, season can be levels No, be to we into normal we going us kind kind by customer situation like, kind And to

John Romano

be our any by that outlined, we're pretty able chain starts. all still mitigate doing increase inventory depleted. still inventory. best to to we're right now throughout John, Quite doing that. inventory supply but repositioning the coding We're just Yes. season and have can ensure we to depleted the is even that confidence of that that the our levels do that going chain, to We're replenish issues is by some the the transportation But is can not we time building don't try the to to our inventory the but that service so inventory. customer's we supply our market very strong we frankly,

John McNulty

much very Thank for it. Got color. the

Operator

The next question comes from ahead. from Josh UBS. Spector go Please

Josh Spector

the out? over thanks follow course next look building we either up laws should lot year freight of margins into that was as guys, cost this there recess I year. Hey chemicals, of further into a increase highlighted et et cetera. or guess, this happen be to just we any utilities, year, Are the that contract cetera, the our bridge you for question, my process the Yes. I and maybe taking on to mean,

Jean-Francois Turgeon

will renegotiate is costs freight there's that still our we we we completely year high will it's those high when the that do I gas that of route, of the the its Josh, look, we year, freight based being as but it on Look Well this and are to at JF. remain our mean, the freight year. to tell. a of I have energy natural we Look And lot guess where in tell hard one costs like improve started will customer the see And like things that very obviously time but most expect contract spot assume of we and change. have the that demand. second secure other moment. for whole normal we continue will we

John Romano

year we There's start having where transportation but the anticipating, availability. think and that were it's one a board the rebate, we're I mid-year issues with lot problems see across last just That's to backlog. still of we'd

Jean-Francois Turgeon

and And look, is the reality. properly that we product adjust really our the at obviously economy moving own reflect everything that It shows to moment.

we mean we control, element of I the everything So outside mean... do control. I it. our could

John Romano

We'll manage it.

Jean-Francois Turgeon

it, yes. manage We

Josh Spector

That's do that those through No grow pretty bullish you see I year? quarter do as them comments your this kind growth, for capture mean, related curious just And Okay. give guys thanks. you and share, And year? see outlook, level you GDP is this you stock helpful. have pretty aligned that, GDP the first Do mean growth. TiOX strong gaining to to you you I to opportunities above guess feed seem of volumes, guys on as

John Romano

we aligned we're share, standpoint so the ourselves is doing share, of than are maintaining with our Josh, that from believe but growing what the customers faster market. think Yes. we've I capturing

out could able prepared in gain we will needs. us our XXXX, We you in but help trying So maintain secure that the go XXXX. in beyond definition, were – which customers and to fill by to well way, that's volume share we're comments existing significant that our contracted noticed noted share –

out that we quarter the more quarter in uptick a of produce continue can volume with to our that some the lot rolled and fourth accomplish and that to of that ability volume you our we additional do told to to first we all has have tons were quarter, the approximately we our we Last So XX,XXX produce tons. sales to should going need continue and goal therefore grow.

Josh Spector

you. Thank Okay.

Operator

The from Begleiter next question Please go Bank. comes David from ahead. Deutsche

David Begleiter

morning. Thank you. Good

in the Do rest year? pricing continue Zircon pricing this the given to year? you how on to of this late strain thinking you for year, expect strength about that pricing are Just the you saw

John Romano

Yes.

we've depleted the volume little year, to will the So inventory allow EBITDA. bit prepared being in grow but because us last the comments, price a we the continue about to down talked

to yes, is So to see price. continue answer the short opportunities we move

pricing first continue to year that the up of well. into move balance would the as and we Our quarter will expect

David Begleiter

good. Very

thoughts Just subject, last for or maybe pricing on on what pricing, TiOX are year yours this industry versus but of year? sense this your

John Romano

know, in about do continue price demand standpoint what balance a would how when year? will into in I And is quarter than the last which and the happened quarter of we about. little think maybe You range progress in the talked say lot our has we to from first saw supply what fourth pricing of a the just and the year we we've with balance, moving to that higher

in move expect continue we XXXX. to up to see So would pricing

David Begleiter

Very you. Thank good.

Operator

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

Frank Mitsch

the about lot if of I could there Good buying given you little was on as anticipate is tightness in talk It the XX% you – needs expansions there. – market. going could a the a situation? of outlook wondering Yes. forward the but mining what is your drill you morning. I'm seems give pulling market. What down more well, because situation your your continue that are your a while into open your to you're take on us like some that's curious you

John Romano

that vertically of situation you market the signed allow strength XX% to tied. thank the obviously play contract for our this and what's XX%. being and having us look is open see and own on of buy market the mining at that on that we Frank, have long-term and facility the to question, our integrated we the Look happening value upgrading ahead being

So very for good success the more we be that mean, than moment. having I Jazan have a is XXXX the combine what to with for in we and ourself need XXXX at position obviously beyond. secure we and

Frank Mitsch

of some that facility ore using that the half All that output you. processed operating see you in might at by right. follow-up Thank the rates of being of year. the Jazan, Yanbu. on that And you it Where Jazan – that quality to operating material? of terms fairly promising yourselves rates of reach is this you And in actually the just the of sustainable your sounded in own How the second is do smelter? today Yanbu the mentioned

John Romano

our I the tell about that can have for me today that months. So what you you big we because three Frank, I have been I obviously earnings Jazan I produced experiment. last at heard And felt feel that a say it's call, think is much better last

is We expected. ramping as that curve have on a elaborate and well. following that our plant. right cautious for we're Jazan, It's We're plant progressing

only so all the been that can need furnace is obviously we So to and two furnace modify news. Jazan. fight And capability work two how good that's we a Jazan you full has one furnace reach modify. its of will as with know, be And on well

the a done starting still market that great So there's this overall from timing Jazan, of the but up work is to lot on situation. let's of say asset be

of were slag Jazan the expect can granulation slag. of the with technology very On using new the We being pleased also produced. of with tell that is don't what quality quality the we use product I and any you issue

we fact, In so so have good. far and slag started that using

So...

Jean-Francois Turgeon

with with No that's quality the all pigment the being issue of at produced it.

working it's So well. very

Frank Mitsch

That's very Thank so much. you helpful.

Operator

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

Hassan Ahmed

JF John, morning, and Good Tim.

John Romano

Good morning.

Hassan Ahmed

decline. market look, your QX but trying X% of in Question it share of mean, sequential there call actively volumes a that as a competitors you're XXXX, question, revisiting out down gain the not sort at XX% I sequentially, look market share your were I take I had just some volume to understand larger

again competitors volume single-digit largest Your guidance growth there. seems than of your be QX sequential of some out for looking to better sort

to because really this from through Tronox living again, in be least we in continue ore extreme sort in tightness from supply breaks will ore Now this the a at tightness sort XXXX. of of I are away sounds And with pack? that the and year Could it, this where world of mean, being know of the far that integrated you assume you the it industry just than better vertically dynamics, are much market they is gain volume-wise? aren't that out guys pretty guys but there. guys to share, only you do looking I the fair the way industry and

John Romano

of the for capability. our the the through had vertical valid our it thanks – of so TiOX to part online. we of And as lot had that to capacity. Look, come ability of point Hassan. quarter to It's from adding we integration. XX,XXX A with the and last going about planned the tons the we additional come have through Yanbu question, ore talked actually we from source produce was that a from as We projects the mentioned, standpoint synergy that of is transaction that

in ore to it. we and tons have extent customers' additional do done absolutely It's add ability the the possible price. it's being we capability could us our made on not to the we are signed of those well vertical value picture because agreements a that see our volume, and integration contracts some based XXXX. longer market to to our with supply share, that have It's with to customers term go where share We to up So reference our have pick good but which needs. on beyond done the going the is being give

Hassan Ahmed

guys XXXX does was we you cycle. of that represent I Understood. earnings for very the potential. it's helpful. on question also a feel a a the guidance your just around ceiling intrigued guys And have follow-up, in the you guys where press and as a the and given a you call the And statement said that you not are release made by Very Understood. part where

at $X.XX, as, and So that me take slightly of the your somewhere that, case, starting a we're your us if at mid-cycle, And a XX mean, a tendency guidance believe – above side are we times $X.XX PE near sell mid-cycle. So that's levels. have at right? we're to we maybe guidance, multiple leads nowhere on that and look the I I mid-cycle lazy EPS if peak, to

– believe undervalued. further somewhere you be So $XX guys you're which a from valuation and leads to you between mean very perspective, should $XX, are that would

you if So this. through think me just could help

Jean-Francois Turgeon

are Look, if I confident say and look, that. a you John, see of record we And think, our last couple put whole deliver tell Hassan, related we very is you, on-board continue range range. shareholder I employees the with to to value would can we're deliver Tim on to track our for at our over to what and when that, X,XXX I look And deliver years, would mean, XXXX. outlook I you the that

John Romano

elongating you the disruptions we when of And are impact had is the lot have to about the that supply an with think reality on a economic process. where absolutely environment, chain regards

it's still in So the system. cost not there'll inventory. to about be But – reduction We're that the replenish there's less about also it's trying inventory the just program.

rate still do ourselves also think lot million lot we end $XXX at can That's we X.X a you where math we when a the when of ability our runway, of ton tons. to X run innovation say So using annualized on a $XXX is have see in through the to about – – of opportunity we newTRON. differentiate XXXX, million

Jean-Francois Turgeon

you that, to Yes. call their And the really obviously grow our ton you And it's newTRON us also mean, And customers. I significantly. cost per I debottlenecking as it with our help improved do asset. hidden factory,

Hassan Ahmed

Very Thank much. you helpful guys. so

Operator

Please Morgan. Our question from from Jeff go Zekauskas comes J.P. next ahead.

Jeff Zekauskas

stated down? for very they statement $XXX $XXX expenses they what as go do did from Why income down, Thanks million went much. XXXX? million. they're consolidated to And least In XXXX, expect if your went SG&A at you

Tim Carlson

this the Jeff, Tim. Hey, for question. is Thanks

was the years SG&A. reduction of the of over reducing that been with couple transaction. integration last of Majority the we the acquisition had have Cristal the We through

we do but As can and that expect flattish. do labor with it pressures have to XXXX, the offset do that relates inflationary relatively We like, reductions. we cost cost be to SG&A, additional for obviously around believe we

So relatively flattish $X.XX off that

Jean-Francois Turgeon

in last couple some traveling expect start more what obviously XXXX the And in improvement, done have than of the little to we of years. bit we a

benefit higher we some of benefit and why So newTRON the the of traveling offset that's by even costs. that with

Jeff Zekauskas

describe for Okay. three dioxide your you has or having or talked the same long-term a that Or contracts. you or you changed two price component, Tronox way pricing the call, And how the early Are years? can over it about only the charge in titanium is those customers? more of is there in past volume-related the

John Romano

Jeff. thanks, Yes,

So, this talked our is standpoint, margin about John agreements. number Romano. we've of a for From the years stability

they because and limits customers them. were agreements, we do. limits mechanisms, for for in but stability commitment long-term them. wanted They have which were were have can was also agreements. pricing Those were not margin clear that what don't pricing together a about Those pricing signed our agreeing volume-based the in to So, that put let's XXXX. be not agreements Those us, good

So, those place, every are it Typically, agreements are some spoke based agreements have a could stability say MSA that just that contracts average, than but are the have multiyear. they stability in in We've pricing. we you those on we and different got which and are agreements the or market-based volume this that call, on mechanisms different about the margin margin quarter. them, volume moves global, bit pricing, our little on

Jeff Zekauskas

Okay, great. much. you so Thank

John Romano

you. Thank

Operator

Bank The America. comes DeYoe go of question from Please ahead. from Matt next

Matt DeYoe

you. Thank

I'll like given $XX stop something year an shaking just annual So, the call had in chlorine worth that African cost prices. probably I you think like that electricity mentioned there. in XQ out South and of And where is inflation double would XXXX, is yes, and million [ph] on now? But

Tim Carlson

up XXXX, higher higher much are more acid, at Yes, price cost so just given that Matt, than much sulfur costs inflation. than from prices a is Sulfuric standpoint, to much than inflation. are energy XXXX

a for increases margins. obviously north which of million. in that talked pricing to allow So, Offset by about, energy chems is the to us John $XXX continue processed we are to going seeing year-on-year cost expand

Matt DeYoe

right, Europe. XQ, for see in alleviating elevated I already And price a natural in they curve you in so, but they can from costs if I the gas your XQ. are about think quarter, Look, said were

And you're that because really know and has so, to what prices, basis. come December I costs Is of it's historic kind elevated on are a spiked still in your off. referring

just you seasonal thinking stay lower through new maybe pullback their costs it or you these at and move levels as utility the price more do So, we is of a years? quarter-over-quarter, in will kind

Tim Carlson

as and standpoint. QX, the bigger to is around addition QX increases of chem coming overhead the production that versus number of our we a our from pet like. And costs within you the it's coke combination gas mentioned. with and a natural actually down continue in of the are factors. are moderating a a There about that to that our sulfur process see down. But are like, number the higher But we exactly and ton of still in increases Matt in per talked terms stack slightly cost

Matt DeYoe

Thank Understood. you.

Operator

next The from comes Andrews Morgan Please Vincent Stanley. ahead. go from question

Will Tang

if question. supply wondering local a about you environmental what kind you This is there? you're Thanks significant dynamics Are production Tang on and TiOX my Vincent. Will talk still could guys guys. the terms in of seeing the I'm Hi in controls seeing for demand due of for China. impact to

John Romano

there. would we I a over say, so Yes, facility have

started you been And Year. into fourth on control out impacted, I not New moving we've over is but have and demand. will has see facility Chinese of Olympics are Year up. quarter, weekend, Our the this to there had some of policies. quarter these Chinese think about already the you New are year, into energy pick dual the be the the by a When still the volumes been Olympics, bit demand effect facilities over, that impacted in always running more back China, first would dampening say, little a

XXXX. about per is it tons, about more and base that would but So, output what to to much in we think was of off if with no you China demand had than how or from base XXXX a line production low anticipated. XXXX, produce, a slow continuing expected in XXX,XXX obviously the grew we have actually

Tim Carlson

itself. of China impact the in of is would I had is production what more by been thing pigment seen has the one And ore environmental production add we impacted than the

now implication mine that. practice at And increase. put that will force limit at they And those the in I price is that the create that level at some and legacy better to think the and see China the China. remain the the high level ore in price really production and we of are and mine have they of that looking impact those high

John Romano

with I ilmenite so point. mean, the challenges along great there's still month, sulfur, A as there. pandula this up index as went again, recently

Tim Carlson

pigment high that sold where price creates China to at has be the a So, value. situation in

Will Tang

come other in year guess wondering and I EBITDA of assumptions your end looking what low Got it. high there? the And costs on are where or range kind in? price-related guess then at I'm hinges like you. the when whether volume Thank built I of guidance, full really of Or kind that

Tim Carlson

Yes.

can it's less. plants. could year we more. is perspective that So, things from the terms talk a of ability customers, through it happen, out to volume and it's of on do the cost, in but be our more possible about if initial guidance our much price it really not this We get to XX,XXX given how dependent, just tons range my bit And pass so to much

John Romano

I anticipated. XXXX say, mean, It's wouldn't consider you we that the in all we disruptions hard had to have

Tim little control, be happens. of regards supply on alluding may is out of control be A with depends more issues. some that the to would I our would lot think, that what a is that, what things it to than in I our of say,

Jean-Francois Turgeon

on of things capable if more go next But well. all XX,XXX planning We're right doing we're year XX,XXX than tons subs. now,

Will Tang

Thank Got it. you.

Operator

next The question from Barclays. ahead. comes go from Duffy Fischer Please

Duffy Fischer

Yes, good morning.

of does there's was do that's got forward if into if well? inventory that, in come think, ways it's all what can because, XXXX I January, you couple year you sales you this sell well, about you've some a that that number sales Just will demand that you to there, year? is XX,XXX you what goes think different what first optimal think think that to, into produce the it sales the can push this stuff more you number clarify that if out if to last And is run pushed more, or when XXXX, volume December XX,XXX-ton produce what did increase to a year, said more

John Romano

great the to where our built a be. the XXXX. guess We in from a aren't the need have levels question. of And numbers standpoint they into That's in call that Yes. earlier I we capital mentioned working service do

we of supply would The but would all sell be, that have customers of XX,XXX objective that fill that it, some to chain. we produce? we to need our will tons So, love

would So, service can to I inventory JF? would improve expect that a replenish our go portion actually of that so we levels.

Jean-Francois Turgeon

productions outside all moment affect those No, out more nine of sometime that feel ton, confident we right. Tim And the the you about of explained that's that plants Duffy, slightly less. could but... have very slightly or absolutely your control At I things think XX,XXX

Tim Carlson

the And we range provide.

Jean-Francois Turgeon

And that's the range, right.

Duffy Fischer

you of you sell Fair are enough. done? and three would let's with have from or Zircon much And once if less more you out, look say then years the projects byproducts iron have how these byproducts to and/or now, projects underway, mining

Jean-Francois Turgeon

Well, to first remember new any like new a as year production I talked in about mine in the end being are of Campaspe opposed an you of mine Atlas the Ginkgo zone high-grade mine and the life and Snapper. like

will So, operation, be And get we on starting Atlas we we're mine expect And some slightly in in will XXXX. to then XXXX, we get that rutile in of to which and in would is Africa. XXXX. natural South when zircon what why our that's full would that carry more Campaspe invest

is moment is that important advantage us. have to into grow need have be how give cost we're mining could strong could needed. transfer market that's and XXXX great for XXXX, And reserve well at the we're the the very future. TiOX resource we we in convert our and to good why feedstock the that so we position the our tight growing So, as preparing XX% this also we're very in and by how because to obviously ourself maintain integration the vertical – feedstock, be knowing production, a reserve But we to lucky we maintain line asset our because with

Duffy Fischer

Terrific. guys. Thank you,

Operator

ahead. next of go from Please America. The question Spitz from comes Bank Roger

Roger Spitz

much. Fairbreeze can any in like Namakwa there looks sense CapEx Thanks Campaspe? talk to CapEx very for if you of material like? maybe us Or look Atlas spent additional amounts wonder Or give XXXX a I for what is and XXXX XXXX? about, what are be

Tim Carlson

as go year. Tim. our a Campaspe Hey Roger, no summer, there result, live it's be next summer. spend will this will Atlas And

However, pulling we JF invest in talked will our about all those mines as South forward. African

of expect into XXXX. to year, with a number we newTRON little down I when XXX XXX ramping that So, finalize in would similar a bit capital XXXX next

Roger Spitz

I were percent what can it you about pigment in a tell total new from terms is you under how here you give sold talked volumes of contracts. volume you under different your And – of mean significant contract? TiOX XXXX are contract? Can of, in where Perfect.

John Romano

Yes, Roger.

every it's what contracts well really So of that that lot this what that a and so at were what above allow in have I'll have volume we of But say the is would contracts long-term we going we detail Asia say would are lot Pacific can of hold we picked share region. secure make contract. And more historically. well disclosed never was more I us We've in our beyond able than is volume contracts volume. multi-year under is to are about a up volume XX% – I say now to confirm agreements place XXXX. And to stage particular to in and our that our long-term. market percentage

Roger Spitz

it. Got below spot on sold XXXX? well in something Meaning is XX%

John Romano

but now volume is of types multiyear. particular there it's that as lot say on of got Nothing that's XX%, long-term, not that XXXX. intuit in is different a nothing contracted [ph]. this amount really agreements beyond a may At would I be like spot. And stage significant

Roger Spitz

right. Thanks contracts. All Short it. very Got term much.

Operator

The ahead. Markets. next BMO McNulty question go Please from from follow-up Capital a is John

John McNulty

Yes, them. just two of

give will place, that committed historically, volume is little your think is to sounds be market will much a Is contracts or with that? a what and up what then you whatever just a a forward. that on where pushing kind about to there program fluid them the to in clarity collars like Jazan heavily go would at? you way versus So, the the track. second had question around moves was of of have it value can more bit And us with guess, I some that you be those how stabilization pricing as were you

two you ore you furnaces be, would guess, where were furnace from forecasts lower can I gave prices power are think they for noticeably the when had you think one us I now. than and Furnace X an what that and on originally up up well? when Furnace as to as how is about the potentially gets basis of then economics a run should rate that give when of kind update we earnings X

John Romano

one. let Yes, first I'll JF second so, take John and I'll the take one the

VSA. are It's haven't our not detail the significantly are standpoint margin that's and contracts than stability volume-based. actually a they it's that of the have how lot from again, our less down long-term on around contracts broken we of provided MSA, we agreements So

in XXXX, quarter ability touch market. of last MSAs a those the had we the with MSAs want we about January, actually pricing But volume think Jeff, which has our think XXXX, that moved the actually about movement, you expect actually some Jazan? that to first the reset in you through when or how price So and see have a us. was cadence to as benefit – to on that for our of our when to comparison quarters, the majority move the four to contracts we of continue you

Jean-Francois Turgeon

more be on the of financial so Yes, I think Jazan, John Tim wants to... you to want

Tim Carlson

Obviously, full worth for been year, operational but as $XX I'd one second the of and be a furnace a million the assumes about XX%, happy capacity, to. Yes, as it's finalized John, And EBITDA just yet. reminder, yet for year. full a ramp of fully has capacity, full one normal not time furnace, at furnace. that operates XX%, for not

John McNulty

Thanks the very color, much appreciated, Great. for

Operator

the and for Romano concludes in question the gentlemen, the back Ladies turn queue. to last session. our would any closing conference that This was question-and-answer to John I like over remarks.

John Romano

And our and for company the to that excited where we is made, about comments extremely you. today. shareholders. value you you got create I the hope we and Thank have in headed XXXX that we of will from joining appreciate all call we're the continue the

call So day. great thank morning have you and a everybody joining this the for

Operator

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

You now disconnect. may

Tronox (TROX) 17 Feb 222021 Q4 Earnings call transcript