TROX - Earnings call 3 2023 | Tronox Holdings plc

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Operator

Good morning, ladies and gentlemen, and welcome to the Tronox Holdings Q3 2023 Earnings Call. [Operator instructions] This call is being recorded on Thursday, October 26, 2023.I would now like to turn the conference over to Jennifer Guenther, Chief Sustainability Officer and Head of Investor Relations and Financial Planning. Please go ahead.

Jennifer Guenther

Thank you and welcome to our third quarter 2023 conference call and webcast.

Turning to Slide 2. are John and Chief Srivisal, today Executive Turgeon, Financial call and Officers; Senior our John Jean-Francois Romano Co-Chief Officer. On Vice President,

today's be will using as move We slides through we call.

our access can investor.tronox.com. the on You website presentation at

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

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

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

comparisons over Additionally, John? Slide during now note pleasure is X. financial the noted.Moving a made unless Romano. all that on It the call to turn to my to year-over-year basis John please call are otherwise

John Romano

to Thanks, story. an On as new Jennifer, who and Tronox Slide good morning, included overview our introductory anyone be everyone. may of X, we've a for reference

information, more please For visit our website.

that job upgrading does have and vertically our great sustainable outlining our homepage also value on bring a integrated, our solutions. that to through We customers a video the of we mining

Middle on briefly highlights, quarter I the for to turning Before over the situation the in call comment East. first want

anticipated market QX to control. Tronox's support managing conflict offer our as focus those review out conditions and last We and Tronox our is are the on minimal, declines differentiated a and to in across messages are the volumes X levels recovered August are both quarter throughout to as direct key volumes. pricing turn earnings other impacted were is quarter. in on go maintaining communicated trough the within TiOX Americas as delivered contributed customers a Middle weaker what seen our an by result improved the volumes within place saw Africa. Europe, who demand the a regions, QX and the the This supply market by sales remain normal from despite performance East sequentially TiOX relatively value levels unrelenting relatively This weaker July from supplier. July prominently While TiOX those call.While softer let's than Slide zircon our September depressed third overall expectation on volumes and affected.Now confident sequentially modest despite offering in inventory in and an market as we low our Zircon expected levels represents while few that anticipated. chain. to exposure environment most of in is demand muted, we overall in to hearts

resulted September. pigment, our demand our we're TiOX front, prudently the Botlek facility, lower experienced sites in and to operational outage manage at offline and levels rates a mining At we customer cash. of being result supplier the inventory On generate continuing our reduce a upgrading utilizing as plant taken that to in

the by plant November working will been be our XX. restarted supplier closely have We with believe and

other demand ability a reposition of facilities on not product customer has this inventories from footprint. benefit our to disrupted had fulfill as to ability Importantly, our as sufficient global due asset our hand to we

partially driven details and a on primarily decreased goods and call.Our against unexpected the inventory little we'll idle backdrop higher of in finished softer further up offset We facility zircon inventory have ramped to market however unabsorbed from provide demand. inventories the pigment as later costs Atlas by incurred incremental due a quarter downtime that charges in by charges lower fixed

ensuring we bolstered and prepare which of landscape. enable by the to a decisions This integration and enhance the sheet used incremental our for third control our available the the Additionally, Tronox commitment the demonstration proactively short medium future strategic balancing needs success expenditures right XXXX. the position is for were in to what balance within will term business quarter, to manage term critical us is to the current against a macroeconomic loan; the of liquidity long-term raising in to $XXX making vertical in capital proceeds while of million we're

whom possible by is our quarter-after-quarter and dedication we'll of updates to some X, key sustainability on Slide our Our thanks our team few extend review Tronox made we initiatives. performance commitment.On for their a

in solar for our First, project progress This targets. our continues construction electricity project running by in an Africa at be emissions When power progressing greenhouse opportunities of Delivery global our December progress approximately convert solar we'll incredibly producer emissions Africa emissions. gas South and intensity Group with full and April return highest impact XX% our reducing the remain against toward is is of power highest SOLA 'XX. power and African South power X Tronox is South track reduction to baseline. in independent of expected towards XX% expected Renewable impactful our first the in XXXX XXXX. on completed stated remains power, and carbon our projects to to of reduce to

opportunities other the energy in green world.We external our also as of reducing are all exploring well, sites progressing at to of around sustainability including waste areas are We landfills.

of bricks in water base, chemicals. alternative exploring road treatment teams and uses opportunities, R&D waste Our are number for a cement, including currently

updating including continue to you Tronox preserving but extract that opportunities scandium believe and in rare others to earths, key look key We vanadium. valuable ongoing firmly continuing to metals stakeholders. to on and evaluate initiatives many differentiating we're will Tronox privilege from We be minerals and not to our Additionally, these journey. only our operate, continue for waste, at forward

market financial to Slide XX% prior $XX due to represented the let's year from softness. Now the declined relative and $XX Revenue continued review across of to was decline of second we quarter more detail. quarter volume quarter in in million pricing operations and loss $XXX lower due of to move all X the sequentially of a performance for products.This XX% net million in million. a a reported Income sales

adjusted was was the Our per quarter for nonbenefiting Adjusted normalized tax million. of EBITDA million diluted QX was EBITDA was $XX effective for and items XX% margin loss Free flow rate $X.XX. our a quarter XX.X%. cash adjusting and the was use adjusted in $XXX our share

relative to decline second offset significant by TiOX decline experienced levels rates.The compared position volumes TiOX driven by a move compared decreased to a exchange the quarter representing decrease XX% versus pricing a Tronox's from the quarter to in a revenue Zircon a Now volume for of prices Slide volumes of in continues modest prices. in quarter review and XX% strategy. the softness X%, in to decrease second average X% XX% July. while market X% X differentiated the selling commercial let's TiOX decreased to success decreased partially prove tailwind year-over-year declined volume X% average sales favorable year-ago our selling and to commercial sales due our performance. X%

largely decrease result, which prior offset volumes. pig Revenue a zircon the sales higher which products XX% driven a prior X% year year-over-year. represented by year-over-year. and of iron by decrease million, of of compared quarter, other to pricing by rare XX% was As pricing X% the was This was lower a from to lower $XX earth, partially improved

mining expertise solutions. and a our of to further integrated sets result currently value mining are options in to operations upgrading the and of our position leverage from rare in Africa as evaluating a leader a our As Australia.Our range us unique apart of South the portfolio, global generated we unlock sustainable differentiated earths

no trough reducing to fourth we flat expect prepare do XXXX. the anticipate of see levels some the represents XX% the seasonality be that to have customers increase to fourth as approximate third the restocking compared ahead impact. quarter. we quarter, customers realized Looking of the fourth believe quarter believe some in seasonality We volumes an the as completed pigment quarter to little This compared will for in relatively XXXX, We fourth quarter in which is destocking. largely we to

JF? compared strategy turn in more We we recover being demand JF substantially operational expect of decline integrated review a the over that from zircon, our continue. year to continue value of strongly stable our third the our previous to call the expect zircon of On the performance. now volumes years believe pricing will trends levels. vertically to customers.I'll of trough in to We our for over the XXXX last that provides to quarter

Jean-François Turgeon

John, you, morning. and Thank good

Turning X. Slide to

selling This cost. fixed and and costs. absorption corporate decreased was average was to volume, unfavorable decline rate represented XX% Our due of due adjusted driven tailwind, due lower XX% price lower corporate lower lower lower production This EBITDA rate offset and Sequentially, to by freight freight adjusted rate. product $XXX costs and production partially year-on-year volume, product favorable million costs, rate. lower unfavorable lower by EBITDA cost cost lower fixed pricing exchange by partially lower to sales exchange favorable offset tailwind lower absorption sales a

charge a manage inventory lower we cost rate of input include run cost order lower to as mentioned, operating level due production with are increase to higher million site costs result result, at a production market $XX and a higher facility million John lower and our costs $XX reduced million $XX associated of absorption continuing idle of demand of and As to in or year-over-year rate. cash.As lower and

adjusted the dynamic a market outlined, to we anticipate $XXX be to Looking to the of as million John $XXX result million. fourth quarter, previously EBITDA

XX. Slide to Turning

are the within manage our continue working success our control decision This action cost of position reduce we disciplined to business in for optimizing will driving fixed balance term strategic the is additional and the supply to long-term taking future ensuring managing short right chain macroeconomic are prudently what includes the to costs, Tronox We initiative.We the against medium while to capital. need landscape. and current

pigment reduced we inventory. inventory quarter and we zircon built This though feedstock

costs pigment assets a have reminder, mining side. and As our than our higher fixed upgrading

reduced result, optimal running rate production some build current result level as are a as and have we we while demand, of inventory. a So will, balancing we market at

long-term this fourth in adapt the will quarter.On short we capital it as This the year, term. has to continue XX% by year-on-year QX million to XX% asset pigment demand; production XX% integrated at continuing lower which be on was rate. customer QX, in level vertically by down our XX% a the which are While a we approximately primarily with we current year as volume and the previously, lower growth target to expenditure, $XXX macroeconomic driven our environment to TiOX run in in strategic have highlighted approximately will is in required delaying year-on-year investment unfolds this associated in result QX; year-on-year as result higher costs not of feedstock, invest

this capital delay the we While capital to realize our it's projects, benefits consistent business the key this and ability our do to spend. will ability from flex for this our our believe the with time at decision is appropriate

We generation and have I success. will continue to latest balance Tronox want positioning on while to briefly our the product meet future we necessary are Jazan. our to provide effectively customer comment for need cash ensuring

chloride the be reduced the have of balance such X interest repayment continued extend kind by in January loan Tronox our by loan the slag either Tasnee the $XXX Tronox with to As third XX, term agreed November and May in agreement million is we to all of agreement Jazan kind XXXX, to the or disclosed shipment which as going slagger expired original on. We delivered accrued cash to repayment XXXX.We required received the project. million loan related in on the of to enable while to smelter delivery. slag Jazan in X, support that will in Tronox produced and option by Tronox until filing, the chloride November the the chloride extended the our service complex XXXX Full technical Tronox are $XX quarter. of Tasnee additionally to agreement through negotiations the slag,

It and XX to for and generate has upcoming incredible Tronox as my the honored he over, transformation Tronox. leadership, updated takes a status.Before call over, never last I I on wish better.I the John having the of the positioned this part for like for is the Srivisal I'm continue will make I absolute turn value like future the announcement to the now word been to on John? forward right the John strongly to the for the an continue for I to We to will better at all Tronox lead to ahead he that the in year. our the employee shareholder. over best call navigating keep I current environment a provide what company. of retirement. yesterday would Board, a Tronox few effort have played believe it to continue and over vision extremely and confidence my I meaningful our is of look company market is the position. of would John's to journey John colleagues turn with today thank evolve and financial will review choice the

John Srivisal

Thank you, congratulations. JF, and

for made Tronox. all contributions grateful you've are invaluable the We to

ended Turning to Slide debt and of billion the XX. net with debt We quarter $X.X billion. $X.X of total

and the $XXX Our net liquidity quarter while transaction in trailing of available available used XX-month borrowings proceeds million sheet incremental the on September leverage increased of bolstered loan XXXX. facilities The to net ahead vertical liquidity leverage critical reinforced raised end a with pay of the third we term $XXX approximately million anticipated at our was on credit the basis. in as balance remaining of X.Xx cash. our neutral by expenditures the going capital down to integration related revolving outstanding total net remained This strength

the term maturity global depletion of and our was XX% XXXX million term $XX from XX quarter. expense Depreciation, as or loans Our bonds.We of million and maintained is through growth XXXX rates are across and in of the in are that XXXX for $XX term September maturities expenditures liquidity on XX% well operations. financial no loans. significant Approximately strategic which with swaps quarter. Total our distributed projects. and XX% amortization Capital fixed this totaled cash rate interest for was covenants and for including $XXX we million such fixed maintenance remain approximately was the $XXX available XXXX our our aligning of have interest cash through safety was equivalents, approximately XX% nearest and million

increased our use to dividends. up earlier, free of demand.We due plant softer million. benefit form cash to as Atlas backdrop higher production Offsetting million inventories $XX the pigment lower as the mentioned ramped shareholders our reduced of feedstock in a quarter. pigment this was levels John $XX was the As returned inventory flow of We in well as market levels zircon against

XX. XXXX and our Based adjusted Slide current $XXX to Moving John uses. fourth our to Pivoting we to outlined, expectations on quarter for that million. JF to EBITDA be anticipate our cash million view $XXX

of increased working Our assumption $XXX approximately capital to use a million.

actively through manage softer year-end, capital, While inventories to zircon is a we of expected increase inventory pigment than including are continuing continuing to market the result working levels. reduce the conditions driving higher

for is our to expected expenditures net and delivering remain million capital our comments Our turn expense for taxes to will John? be now expected the focused the We on year. questions. expected approximately million, back Romano million interest to to closing be are get John $XX cash are our $XXX approximately cash before $XXX on over call few to we a commitments.I be

John Romano

over thank him It's company upcoming congratulate and force someone with I of I transition him many with like to retirement positive as honor hold an turn months.And our in be about been next and a amount for to role also serve and for especially I'm over change to I'm his this over whom the extremely Operator? immense call confident future of valuable JF partner and together respect. John. in Co-CEO years. with being that, smooth X excited wanted there on Tronox Thanks, the a will an we'd the to an for questions.

Operator

Goldman first Fischer Our from at line the comes question of Sachs. Instructions] [Operator Duffy

Patrick Fischer

for guys your on you expectations more both seems into It quarter. on and Just TiOX fourth the a zircon. volumes going are question bullish like

things others your through of be market continuing kind you walk Can underscores down. that please? for What the commented what TiOX, and just they in to see be think flat? belief will seeing I volumes zircon are have most you both

John Romano

we So relatively the part already to on down. do said flat that has TiOX, has significantly of with been market and

we reference the volumes the called Pacific up seeing seen we've are our seen the fourth in we've of in and at quarter, for all do down volumes continually no demand, areas course its order when book like fourth run bottom little actually X destocking We the last has areas we quarter. to believe that we're and fourth uptick. look in Asia some seasonal our XXXX quarters, that to where the and For quarter the that

So because Part is that significantly? the to has customers No. because market just are is recovered starting of again. it order

stage. But pretty We've good bottom for We're quarter through we'll X/X the on cautiously the this 'XX. TiOX. lowest way feel we So first the quarter. we're about and at particular the we in this of next we had volumes up And continuing stage in we where optimistic is a a the the many are; think where moving we are order years. pick we is third at in in range visibility into where On we got stage. in in that side confident we've on book our at in was July, year move provide more the called things right guidance quarter the there many, quarter September. mean and on direction when we the are move zircon, see saw that we're right August recovery as equation, significantly particular provided.But volume this we direction to I of

forward at XX%. when than by So we the over book, fourth our our based are order look quarter more quarter the third to up expected volumes on be

in fourth looking So this and those volumes are we're but the very at are like confident we stage. up from feel what those quarter a coming numbers low base, in

answers that I hope question. So your

Patrick Fischer

that's in million that cash That year is going that we see next this need eat comment, working I year? right, on what do And the hear did for $XXX if be released? And then right, to to to is helpful. capital

John Srivisal

correct. that's Duffy,

use expect a year. do are we to the cash. for $XXX Obviously QX million We generator full guiding of be

through you months were the year the X at If $XXX count LTM, use. the first of million

the quarter. a have we So will benefit fourth for

our well we down But frankly, so the market. is pretty driver on here brought the zircon We managed inventory we mentioned, as have inventory, production levels. down

a to Zircon in year is of million produce, it $XX our that So that. the a inventory, roughly continue second we're driving half the out building product obviously build mines. running comes that's we're of so

as -- capital for market we -- as working we expect expect be we of towards do do be the we XXXX, expect to recover. So sorry, use expect source XXXX working a mentioned, do capital to look a to as John cash

do a inventory, the down sell So expect to that of amount draw we and generate cash. significant

Jean-François Turgeon

obviously Duffy, feedstock have add grade would slowed have we feedstock. as of have plant And I much but because it's high because some our also not down slowed we zircon, mine, but pigment it's built down our as them that, and we

John Romano

That's right. production, down that's building pigment using year. but feedstock brought the Obviously we're not we this so

Operator

Our line next Bank. of question comes from Deutsche Begleiter David of the

David Begleiter

TiOX, in how Just to good QX either restocking, QX expectations going in And your the are confident is you back how mentioned QX? in volume you potential some occurring visibility? or that

John Romano

some of we on month every the seeing based and this QX downturn. what and normally we seeing passed, we're in on provided it's forward October, would in happening for book we're not happening. that guidance our having so impact seasonal of rebuild again dampening order as or Well, at again demand stage particular is see an is look, effect And which that largely rebuild region what

say single while nothing quarter high you've So back kind seasonal go in the find but adjustments. we got range. digits that fourth did again decrease to to for in seeing of demand and in year, normal a We're a a year, in normal

do it significantly with start to of having lot rebuilding customers of a to has having and So some inventory. the destocked

than which on some they areas in normal more say not quarters. it's back I'd going X patterns, for to have been So buying

Jean-François Turgeon

a obviously volume John, very low QX quarter. And was

QX, not So a that's quarter. flattish for why being it's great

David Begleiter

the Understood. and even on macro here? year, if for the there And talk for challenging or gets from to delays next further just remains is any CapEx can you increase more potential the

Jean-François Turgeon

but based create always project our we in there can invest of business expect continue seeing. obviously of of the when have on at talk what adjust some good be We talking we're see that is to world XXXX. mean mean doing and in projects to And year will of to the add a add will mine, I that Africa to moment better that will the we South obviously mine wanted I said based in flexibility that that be we will our capital, investing some we XXXX consider to value we zircon with of you're then company. in do. vertical for in take capital I as And couple for we XX they will TiOX that. we commit project XXXX Look, And lot improving we have QX was and will realize, couple was on in of we're seeing position continue in integration this the year still a called of cover maybe what downturn benefit things good requirement and zircon value. 'XX to our expect the year that the to we a Look, downturn and the to well. but economy we QX case. that that improve than the for we

John Romano

adjust and on mean if event, sort was a needed and adjustment, I million war have somewhere $XXX accordingly. of flexibility we would that we do we escalated some make to unforeseen there

John Srivisal

this And Not we next levels we've do in but expect the for flexibility in million mid number. $XXX in year. XXXX, John million had as and, $XXX that year it have guided we obviously $XXX that mentioned, the million we even

Operator

of at Spector line Josh the from comes question next Our UBS.

Joshua Spector

JF thank and over all congrats, the I First, contributions the John. for years

to I guidance the ask volumes, not wanted fourth on quarter So side. on EBITDA but on the

alone. my a top see of of me your uptick if in So kind XX% is zircon, math the gets that end guidance that you

the progress other TiOX of is early within facility there in the charges of or assuming on takes into year? you're wondering ramps idle outside because some something costs would that additional price that of just how volumes, the puts roll-through there next else I'm and So quarter fourth is and

John Srivisal

is the primarily of guide commercial. EBITDA the range our for QX think key I drivers

driver pricing door it there. a of outside going our driver right, a of big to mentioned next earlier, and an obviously that's we due is you're volumes, Botlek supplier at the a that Also we've as have burden up further outage get zircon part It's couple weeks did QX So we play so now, some gets that just $X as it to Josh, of may million in create depending when a XX on on November to really expect and that well. in depending up. in but

John Romano

That's a we third-party of steam, finish provider which pigment actually there. to need the

us November could what So we confidence believe have some but on create we XX, they've coming up been number. in sort telling in that's that that definitely something variance of

Joshua Spector

Okay.

of into this but necessarily to mid the want your mines. looking year year, you're side volumes of guys how more I price I next guess anything kind operated Just guess more you're now. you or how early understand I operating changed taking just related, kind not charges you that cost with

versus look next second burden this we next plan your first half year increase about As on year? half think does at that as we the year, into your or decrease EBITDA

John Srivisal

things the question -- of a about one capital. think earlier I working we came

working that's issue the capital is other also The our inventory. impacting cost of

to have that costs and time gone our So work of it through. up little bit a takes definitely

still be we TiOX have -- going the as that that costs inventory our with we're the system ultimately into going we goes see high in to So to production. grade feedstock that burdened from we're make higher

of its bit will did a time John, to work you that the way system. it through little want to for take comment? So

John Romano

exactly that's the No, answer.

Operator

BMO at McNulty John of line the from Markets. comes Capital question next our And

John McNulty

Josh's Maybe to follow-up just call. a

a that's on based fixed tied XQ So that's the it going the cost had that higher levels million I something earlier to high to your we said front that absorption to about draconian can Is work through. have high and hit should you on. through inventory point, $XX continue of to cost to you seems you've cost higher on inventory system? is kind we drag something To this think way like drag the guess year? ore got of I that cost inventory of absorbed how the about of gauging kind works that inventory look too think that its pressures high through be 'XX how that or as that fixed most next terms in we and

John Srivisal

John, to I'd results And we'd X X months in good off next cost expect flow say of after the our year-end, question. year. first that within

John Romano

And It's side the we're assets it's feedstock, XX% John, not how utilization. at been just we've open TiOX about our pretty running either. on capacity

assets start So cost market absorption start assets we're there starting as finishing up, those to capacity. are running facilities from will back see the but up some frankly, below to that And and to those ramp we'll picking plants to come quite the those things seeing, that that fixed already we're up still down. to some full we start move in well response of we're

John McNulty

Okay. And just maybe of then a bit little color.

or comfort kind in I and I little do you at much of the think driven, color some around or to regions of Asia how inventory levels and are that? normal probably to below point? they restock major you pull that way responses Asia But have X a demand this give it's Is there just starting a be where mentioned in you do you much any if have not us bit clarity in of may of like. in had guess the were actually see demand more it's sounded it

John Romano

the that think we dialog engagement customers salespeople out thing that where have I customers, inventory and have is in lot simplest our the Well, they of with with is. a from out about do our get

a day, is that ordering back end the to price at pricing continue customers be downturn. I And the activity out reduce to towards same pull of tends when you to we an the there levels, requests end and from idea gives at going you're start the there. still think that typically of on what

destocking orders to in not have belief gotten sustainable. because I It's that's customer are mean up. inventories rebounded our our that because there even course. a has inventories picking picking the level So and industry China run we're not the up. has its it's That's inside Orders seeing significantly. China

into exports India So think of still mean us. amount Chinese X go a are strong there's of I for into area for and to continuing a element. India, India instance, be spots. an bright there's the market it's That's but volumes that I where strong significant an our India is very

John McNulty

it. Got

and And Okay. the sure. Thanks the color. retirement congratulations enjoy for for JF,

Operator

question Fermium of at next Our line Frank comes from Research. the Mitsch

Frank Mitsch

working to Let me Been to you, your come pleasure like a of John, with back to echo you, I'd and with in JF. price. role. looking you forward new my congratulations to course working

I that in and year little in you the was of your weakness in color give could Asia the year-over-year Europe America. if more what mainly America on the the pricing You wondering balance and pricing and TiOX. sequentially a you North indicated and saw for that Latin expectations was are

John Romano

say for competitive been to where amount So up a responding a that There's of detail activity right? and pricing, those still in haven't reduction I people are lot spot I don't reasonable. Europe. and in to we regional and struggling what price fair movement to certain would try even the don't more lot what areas accurate, typically activity what color pick East pricing Pacific volume of a been Asia is on are offers you said think requests we call give saw We in would and Middle we on on but

we've a going implementation we most cycle we're it's price as moving those demand. seen still specifically, North regions. have higher been believe I had we out increases not So in said, that pricing start I'd there coming and now in most have be on price to China seeing what it's pricing is Pacific, And any stronger at we and more different up.But been that about some than seen the regions. say pricing China. America, say in rate have There down of has of because to we we're environment and say stable Asia some, would erosion. but you've price on moving haven't in in the this movement in facility And a to particular we bottom China increases heard operating seen

into we on XXXX. start feel is expect So what hard that we'll the for when seen point that pretty on again see continue it's we'll that to the actually we've upside. erosion to said is in, we bottom environment would stability we -- when and confident complete moving call the pinpoint to on that considering us exactly the inflection But we're this that volume when about and price

Frank Mitsch

to wondering I very down the How through would and on air next that concerned come indicated I to actually in Okay. you tonnes was saw your you into of Can come we pockets How year? these Got in as volumes believe about where in. zircon. you revisit are And to that? story the did zircon the anticipated is like call, anomalous were pocket demand XX,XXX and July in XX,XXX another volumes one to this last progress Obviously then that you. hitting back air be you July? year you much

John Romano

say So so that anomalous to was expect Frank, would I we don't that recur.

and expecting are I they third The we customers could the significant actually low or You inflection see get we volumes XX,XXX August that price said projected up pick that expect and just reductions be so stopped we to that But and XX,XXX than as the in where of that we tonnes China they was as buying XQ from point an had that. into into a November, September. would XX% in we're started to July. that's was And in quarter fourth to we a that down up move back that were down, zircon significant was more consumed downturn we've quarter seen that what be rebounding. from third than There's mentioned, volumes in October quarter more amount and basically and nothing a number. bit to think there to up significantly that there

Operator

Our of Barclays. Leithead next the question comes at Mike line from

Michael Leithead

wanted for I said generating to year when the I just appreciate numbers, dollar look about inventory Tronox's Just working has discussion. amount But focus most everything of working gone X from cash cash now go managing back you've on capital. inventory companies at and quarters X me. this from the to chemical are up capital. all I whereas consecutive

case back this So why rates Tronox for generate why you pulling more is to are that or maybe not extra production the not cash? even

John Romano

that for question. Thanks

as Obviously we reduced production a our earlier, is we've our as pigment while of generator twofold. have I zircon it's mentioned building. mining significant driving well; down, is I think slowed but which cash,

So about the increase $XX of the quarter; mentioned it's for million it second was $XX the I year. in half as earlier, million about

as you're our input what of very high. to costs well as part continue think I seeing remain

years historically from about I $XXX quoted million from XXXX So ago, XXXX. significantly to X we've elevated it's increase think it's over

reduction why of down, total pricing elevated. -- part is that's still reason the the we aren't seeing So while pretty volume remains in

Jean-François Turgeon

price. dissimilar our Not to

it's Some starting we're a said that. people traction been It's but have bit it gain some stickier on was before. materials, than the similar on to raw

go material move down. and we'll benefits fourth next continue quarter through that. raw expect as to quarter the we the year, see So we're We to starting those first would from prices see

John Romano

big feedstock JF is well, as of the the increase. a And as mentioned component

are do we slow So production but plans, our we integrated. down vertically

So mines we building that inventory. are our in feedstock running

Operator

the of from Ahmed question next Global. of Our Alembic comes Hassan line

Hassan Ahmed

all of of JF, you EBITDA been in has the 'XX, My period down extreme last first in retirement. your from for Wishing squeeze first XX.X% mean your is around margin best XX.X% I question all, same obviously best of pretty margins. QX XX.X% QX luck. and the year.

-- margin fixed So the of pricing part the zircon always about guys squeeze mean imagine you talk my But I'd is and the question cost like. of lower absorption really is the I things, of integration. virtue side

below it be maybe as EBITDA competitors we it of basis? right? are XX.X% pertains on how to even levels, like mean call guys should a a cost are seen obviously to margins, get I'm are of I most what chunk think have about a trying right? guys go-forward thinking curves squeeze and mean your now, out like reporting a to of are integrated the you better this right the large global sense looking I'd that I if there. break-even guys sort You just margin pricing

John Romano

been thought for stated calls in producers Thanks Chinese no long talking that the we've mean there's time. fact for EBITDA question. not companies we was great and I the for are there's now. would. a that XX%s Part significantly in believe most the about period right down question, more question, are to of restructuring But us, ours last X being Hassan, than XX.X% that in of We've it process coming margins we the of making zircon a due any money.

exports price pricing in of had that only a X.X customers coming China So difference. inflection million X.X out that the tonnes point on trailing can the We to in of basis. you started much direction. And XX-month with that absorb even on other so million moving

a So going profitability I closing time pricing at we a think start is assets. a fixed. other we where lot room There's prices tonne. there's moved in are where get point or stage. absolutely Ilmenite the has where the of down particular talk to hasn't about the the of needs much people this that that. that's point think to remained feedstock, When not of grade to And the go again I direction high pricing in industry on $XXX north

that, there's be costs time. point at an input point with some So inflection to like in got

Hassan Ahmed

on input I hears pricing one I Very skittishness fair. supply on mean go-forward doing come things. quite may about being pricing with similarly, mean said, and And more pricing. chlorine thought like, held entire more and is just the a sort like basis. what there doing a With of has up that that on again side through down cost carrying thought ore. call there of the But And you I chlorine Look, well. of, mean ample of it's around sort ore school downturn is there housing some it, of this

as you role integrated to think specifically of on for Because side the for the going guys? your of a cost shake margins play obviously beyond that's things a how will broadly go-forward input sort in call about think basis So it, QX as industry you well. do and out you

Jean-François Turgeon

second Look, that a I'll start was point good by by ore there holding. response maybe the your think on I Hassan, the producer.

production QX. have the asset big that that whole announced in Australia we I think have for producer a shutting down its

in in You down producer that biggest furnace has that's domain. the and industry the public have the

that said as have We well. have our production adjusted we

So raw producers material all of adjusted to have that demand key slow market. the

that's for has feedstock. think the price why I hold stable

the supply... On

John Romano

little Maybe that call creating the right? publicity to reference a opportunities an did on cost, prices the good to It's going just made public on reference a opportunity team leverage for a and third caustic made quarter. get one to chlorine gotten last our of were you pricing. for some move, job try procurement a chlorine, to really bit pretty move. started prices the to have decrease to has we We started to price lower see many That have of that quarters in lot input us

continue to that we that movement seen there. So made opportunity reference regards that's John With raws, next materials we're negotiations we some of see moving raw on we the downward had then the end we chlorine, expected, on to see what year our this on talked about. And to to expect for quarter into pricing much as that would but those we contracts. start starting other as and first hadn't XXXX into year

Operator

from comes the Our Andrews Stanley. at Morgan of next question line Vincent

Turner Hinrichs

Turner on supplier relates from if it This on a was your some additional to you Hinrichs is building for outage color the wondering customer to or as logistical additional demand your when the fully to bridge can building Vincent. XQ I costs consider that you able of other expectations. XQ bridge? serving should does continue Will be any out imply inventory we it and provide

John Romano

the in from customers, inventory supply so standpoint we that place. made we reference of to continue to had Look, being able

us move that that a meet to sure allows make we We also around have can to footprint inventory demand.

that mentioned call had should we our to we that. stage, some of plants or based this particular is at particular up for outage additional will that But costs start that feel meet at And at be this Botlek about, there particular opportunity inventory were also until I be this at claim. But that ramping hearing Botlek on what factored that be material the at some sure an that. needs to the supplier, based there on we probably pretty miss John we're the attached talked additional that XX November is those attached expect won't for firm. make date are to point the stage any XXXX. stage, insurance see during from So in the don't we November start-up be an to There We numbers downturn on in mentioned some XX the into orders. to that still will that comfortable our any we reality Q&A around. will further costs moving all

John Srivisal

you of mid outage to month. in the mentioned from $X the Botlek out million pretty early burdened we're And was by around QX the month since

only a burden We expect in that be to of couple million October.

Turner Hinrichs

Great.

set additional do in for region well TiOX one, as to as export for underlying macro providing the level expectations you color trends? out mind some by you're seeing Another demand what

John Romano

a had trailing million export for that on up number that trailing tonnes. were made increased months month the So month very on XX I months, low. was that fell off reference million out XX a the tick that you of That couple saw of because a X.X it's China, of we X.X trends in September. TiOX to about

change but the maintain with we're Chinese in reference America to There areas compete are we exports on some to. to would we some particular some select that to continue Latin at define had not made instances and we what We Middle share expecting some where significant adjustments make any pricing in East, stage. some this we of where the strategic in

QX to volumes far running driven course and their As destocking where that's Middle customers even [Audio largely up we specifics the East QX refill and Gap] and Asia inventory. to don't as its demand Pacific to needing in are typically regionally, provide

Turner Hinrichs

and Okay. Congrats as well. both to JF John

Operator

next comes the Our of question at from JPMorgan. line Jeff Zekauskas

Jeffrey Zekauskas

price producer that's X your to since Is difference price the of pressuring lower? made factors indexes that Producer that been that and XXXX in indexes time. them November TiOX any peaked maybe Has pricing? have dropping

John Romano

to had to question. with say as your PPI doing, any had our could which using competitors impact impact. TiOX an for others what don't have indexes, If there contracts. anything could be Maybe an had have had But are I that Not pricing on don't our any indicator we contracts. pricing. indexes they're it indexes might have tie behavior. their PPI specific to PPI on on that to PPI do any competitive or answers out hope hasn't tied use of some some impact drive of it that

Jeffrey Zekauskas

Yes.

You dioxide or talked to or that both? in meet prices Chinese TiOX competitors. chloride-based titanium having Is sulfate-based about of

John Romano

It's China predominantly and between significant. the and been the gap sulfate side in has on chloride sulfate the the

to be not some more competitive make say to strategic we maintain prevent we sulfate when the we're on volume migrating had to meeting to more the their TiOX away adjustments of pricing mean doesn't means chloride So from customers Chinese. It that share, sulfate. it

having narrow So to just some needing make chloride sulfate to it, the specific not adjustments to and gap.

Jeffrey Zekauskas

more China chloride competitive Is in now?

John Romano

quality market I recently. think the they've China, had are more some here over competitive, has gotten their heard issues grades more time We've competitive.

in and element can there's think our do basket their Chinese what I is the I certain in an eggs we basis. head-to-head the chloride short that's material has of to not answer to all and there's believe think limitation But competing So quality your customers the wanting material material. question rolling areas a substitute specifically they why the of to gotten time ] on Western better a over with have to we're billions [ for Chinese

Operator

at Bank Instructions] the Spitz comes Roger of The America. from line question of next [Operator

Roger Spitz

you in I changed? talk just know TiOX to you but Can just to talk EBITDA versus European this, changed, that about put QX generalities. QX? have You talk but can on pigment numbers how you about want you it, maybe your much numbers generally it if in don't on don't how give

John Romano

Yes.

just Europe up. costs generally in QX think are QX speaking, I to

of of some that. seeing So the burden

John Srivisal

We don't ever EBITDA. provide breakdowns by on region

Roger Spitz

Sure.

the $XX So I given, cash at correctly? you've that million looking less implies negative the free OCF for CapEx guidance, flow that year. Am that full

John Romano

Correct.

zircon obviously for on year I the obviously earlier, free flat bridge an relatively well. mentioned earnings of is be a of we'd the and full it $XX as quoted previously we've think build million impact I that cash what that and lot is then flow

Roger Spitz

I you've I And recently zircon an that's my and sell mean not how remains mean in little a anyway. know that quickly weak, relatively chatted knowable that's if you've I but and the down grade this the easily built up bit. guess you about it. economy monetize here concern big But high inventories slag Got XXXX? question, can I

Jean-François Turgeon

happen and what the down I I, in very why to that an confident John mean pay we think, capital. we have to flow $XXX our mean cash we early to debt very borrowed I are. we're short-term million look that's built million was free in condition a year, position additional in like in is I any we liquidity Look, the position. risk. have Roger, of strong feel there and for to I call $XXX be working 'XX no

feedstock, able all will mentioned, XXXX, in that for John have ilmenite. it's that life or shelf had or being accumulate but some at it's matter. no relief any to Look, it and in we and of risk sell zircon monetize to we material it's 'XX it's have point As too that be that sales not into zircon, will cash. a will bad the and don't slag obviously now convert It's we of TiOX much we

John Romano

slag, only market, don't right? production talk to in we the it's selling that is when the TiOX. down thing slag about sell down we slag selling of The So

So we're of the a seller high grade not market. in out feedstock

John Srivisal

I this very Yes. mean will had obviously We at QX, And that bolstered in liquidity both the any $XXX decisions liquidity we strong. and the to business make weren't going that and million sacrifice in our approximate part drastic cases longer of was term.

costs. So all zircon we sell would not at

Operator

as floor And hand you. the Thank no the queue, Romano, are I'll John Co-CEO, closing for back questions the there to comments. in further currently

John Romano

us for you And the for look, today. for joining you thank Thank that. call

our like managing demand between pleasure our you to benefits in reducing our cost to Board work without to working JF market production forward key continuing customer as you I'd been and cash X remain with and our with for sight he's our has and priorities now a for prudently thank reducing look align free key of capital Our cost, to to focusing April a joining done to again thank be environment.So great really all all and you and the current that, flow for with and the losing of member. Co-CEO the Tronox our sustainability projects and capital working on including managing we're XXXX going per on relentless unchanged safety, remain ton, with long-term and and

So you. thank

Operator

Thank very you. attending. Thank This now conference. all you for concludes the much

You disconnect now may your line.

Tronox (TROX) 26 Oct 232023 Q3 Earnings call transcript