TROX Tronox Holdings plc

Fourth quarter performance in line with expectations

Launched cost improvement plan targeting $125-175 million of sustainable savings

STAMFORD, Conn., Feb. 12, 2025 /PRNewswire/ -- Tronox Holdings plc (NYSE: TROX) ("Tronox" or the "Company"), the world's leading integrated manufacturer of titanium dioxide pigment, today reported its financial results for the quarter ending December 31, 2024:

Fourth Quarter 2024 Financial Highlights:

• Revenue of $676 million
• Income from operations of $48 million; Net loss of $30 million
• Adjusted EBITDA of $129 million; Adjusted EBITDA margin of 19.1% (non-GAAP)
• GAAP diluted loss per share of $0.19; Adjusted diluted income per share of $0.03 (non-GAAP)

Full Year 2024 Financial Highlights:

• Total revenue of $3,074 million
• Income from operations of $219 million; Net loss of $54 million (includes $49 million tax valuation allowance); Adjusted net loss of $12 million (non-GAAP)
• Adjusted EBITDA of $564 million; Adjusted EBITDA margin of 18.3% (non-GAAP)
• GAAP diluted loss per share of $0.31; Adjusted diluted loss per share of $0.08 (non-GAAP)
• Capital expenditures of $370 million
• Returned $80 million to shareholders in the form of dividends

Outlook:

• 2025 Revenue expected to be $3.0-3.4 billion
• 2025 Adjusted EBITDA expected to be $525-625 million
• 2025 Capital expenditures of $375-395 million
• 2025 Free cash flow expected to be relatively flat at the midpoint of the range
• Identified $125-175 million of sustainable, run-rate cost improvements achievable by the end of 2026

This outlook is based on Tronox's current views of global economic activity and is subject to changes and impacts associated with global supply chain and inflation-related challenges, among others.

Summary of Financial Results for the Quarter Ending December 31, 2024

CEO Remarks
Chief Executive Officer John D. Romano commented "Tronox delivered fourth quarter results in line with expectations despite continued macro weakness. Strong TiO₂ commercial performance in Asia Pacific and Latin America mitigated continued lagging demand in Europe, while North America performed as expected. Zircon sales exceeded our previous guidance, driven by strong execution from our commercial group. Additionally, despite significant competitive dynamics across all products, pricing came in as anticipated. On operations, we realized $75 million of production cost improvements compared to Q4 2023, owing to consistent and reliable performance in the fourth quarter. As a result, Tronox delivered an Adjusted EBITDA of $129 million in the quarter, well within the previously guided range of $120-$135 million, and an Adjusted EBITDA margin of 19.1%.

"Reflecting on the full year, I am proud of the work our team did to remain focused on the things we can control and influence. In 2024, we heightened our focus on safety and reduced our total recordable injuries by 23%. We enhanced our focus on operations, resulting in significant production cost improvements in the second half of 2024. We continued to execute on our capital allocation strategy, prioritizing investments in the business including replacing our mines reaching end of life. Additionally, we strengthened our balance sheet through opportunistic refinancing transactions and returned $80 million to shareholders in the form of dividends."

Mr. Romano concluded, "As we look ahead to 2025, we remain committed to safety, continuous improvement and disciplined cost management across our entire business as we navigate through economic uncertainties. Part of our strategy includes the launch of a cost improvement program. We identified $125-175 million in sustainable cost savings, achievable on a run-rate basis by the end of 2026. This program is focused on enhancing cost efficiency and optimizing asset performance across all aspects of our business. We will continue to evaluate every aspect of our business to drive further improvements."

Fourth Quarter 2024 Results
(Comparisons are to prior year (Q4 2024 vs. Q4 2023) unless otherwise noted)

The Company reported fourth quarter revenue of $676 million, a decrease of 1%, driven by unfavorable average selling prices and product mix impact on TiO₂ and zircon and lower revenue from other products, partially offset by higher sales volumes of zircon and TiO₂.

Revenue from TiO₂ sales was $533 million, an increase of 3% driven by a 4% increase in volumes partially offset by a 1% price decrease in average selling prices and product mix. Sequentially, TiO₂ sales decreased 13%, driven by an 11% decrease in volumes, a 1% decline in average selling prices and mix, and a 1% unfavorable exchange rate impact.

Zircon revenue increased 32% to $75 million, driven by a 43% increase in volumes, partially offset by an 11% decrease in average selling prices and unfavorable mix impact. Sequentially, zircon revenue increased 1%, driven by a 9% increase in volumes, partially offset by a 8% decrease in average selling prices and unfavorable mix impact.

Revenue from other products was $68 million, a decline of 38% year-over-year, and a sequential decline of 40% primarily due to the opportunistic sales of ilmenite and heavy mineral concentrate tailings that occurred in the fourth quarter of 2023 and the third quarter of 2024 that did not repeat in the fourth quarter of 2024.

Net loss attributable to Tronox in the quarter was $30 million, or a loss of $0.19 per diluted share, compared to a net loss of $56 million, or loss of $0.36 per diluted share in the year-ago period. Adjusted net income attributable to Tronox (non-GAAP) was $4 million, or earnings of $0.03 per diluted share.

Adjusted EBITDA of $129 million represented a 37% increase compared to the fourth quarter 2023, driven primarily by improved absorption from higher production volumes and favorable production costs partly offset by lower sales volume of other products, product pricing and mix impacts, and headwinds from exchange rates. Adjusted EBITDA margin was 19.1% for the quarter.

Sequentially, Adjusted EBITDA decreased 10% due to lower sales volumes of other products and TiO₂, headwinds from average selling prices and mix impacts, partly offset by improved production costs, favorable exchange rates, and lower other company costs.

The Company's selling, general and administrative expenses were $69 million in the quarter. Net interest expense was $40 million. Depreciation, depletion and amortization expense was $71 million.

Full Year 2024 Results
The Company reported full-year revenue of $3,074 million, an increase of 8% year-over-year. Net loss attributable to Tronox was $48 million, or a loss of $0.31 per diluted share. Excluding non-recurring adjustments totaling $36 million or $0.23 per diluted share, adjusted net loss attributable to Tronox (non-GAAP) was $12 million or a loss of $0.08 per diluted share. Adjusted EBITDA of $564 million increased 8% compared to $524 million in the prior year. Adjusted EBITDA margin was 18.3% for the year.

Balance Sheet, Cash Flow and Capital Allocation
Tronox ended the year with $2.9 billion of total debt, $2.7 billion of net debt and a net leverage ratio of 4.8x on a trailing twelve-month basis. As of December 31, 2024, available liquidity totaled $578 million, including $151 million in cash and cash equivalents and $427 million under existing revolving credit agreements.

Free cash flow for the year was a use of $70 million. Capital expenditures were $370 million. The Company returned $80 million to shareholders in the form of dividends in the year.

Outlook
For the full year 2025, the Company is expecting revenue to be $3.0-3.4 billion driven by improving TiO₂ and zircon volumes, partially offset by lower sales from other products. Adjusted EBITDA is expected to be $525-625 million, with improved pigment production costs, partially offset by higher mining production costs. The Company expects the second half of 2025 to be stronger than the first half. Capital expenditures are expected to be $375-395 million. Free cash flow is expected to be relatively flat at the midpoint of the range. The Company identified $125-175 million of sustainable, run-rate cost improvements deliverable by the end of 2026. The Company expects the majority of these savings to be weighted more towards 2026.

Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, February 13, 2025, at 9:00 AM ET (New York). The live call is open to the public and can be accessed via live webcast and teleconference (a dial-in number and unique participant ID will be made available upon registration). Please visit investor.tronox.com for a link to register for the live webcast and to view the accompanying slides.

Replay: A webcast replay will be available at investor.tronox.com following the call.

About Tronox
Tronox Holdings plc is one of the world's leading producers of high-quality titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals, and zircon. We mine titanium-bearing mineral sands and operate upgrading facilities that produce high-grade titanium feedstock materials, pig iron and other minerals, including the rare earth-bearing mineral, monazite. With approximately 6,500 employees across six continents, our rich diversity, unmatched vertical integration model, and unparalleled operational and technical expertise across the value chain, position Tronox as the preeminent titanium dioxide producer in the world. For more information about how our products add brightness and durability to paints, plastics, paper and other everyday products, visit tronox.com.

Cautionary Statement about Forward-Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance, anticipated completion of extensions and upgrades to our mining operations, anticipated trends in our business and industry, anticipated costs, benefits and timing of capital projects including planned mining expansions, the Company's anticipated capital allocation strategy including future capital expenditures, the benefits and timing of the Company's cost improvement plan, and our sustainability goals, commitments and programs. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance, actual costs, benefits and timing of capital projects, or the cost improvement plan, or achievements to differ materially from the results, level of activity, performance, anticipated costs, benefits and timing of capital projects, or the cost improvement plan, or achievements expressed or implied by the forward-looking statements. Significant risks and uncertainties may relate to, but are not limited to, macroeconomic conditions; inflationary pressures and energy costs; currency movements; political instability, including the ongoing conflicts in Eastern Europe and the Middle East and any expansion of such conflicts, and other geopolitical events; supply chain disruptions; market conditions and price volatility for titanium dioxide, zircon and other feedstock materials, as well as global and regional economic downturns, that adversely affect the demand for our end-use products; disruptions in production at our mining and manufacturing facilities; and other financial, economic, competitive, environmental, political, legal and regulatory factors. These and other risk factors are discussed in the Company's filings with the Securities and Exchange Commission.

Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, synergies or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.

Use of Non-GAAP Information
To provide investors and others with additional information regarding the financial results of Tronox Holdings plc, we have disclosed in this release certain non-U.S. GAAP operating performance measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income attributable to Tronox, including its presentation on a per share basis, and a non-U.S. GAAP liquidity measure of Free Cash Flow. These non-U.S. GAAP financial measures are a supplement to and not a substitute for or superior to, the Company's results presented in accordance with U.S. GAAP. The non-U.S. GAAP financial measures presented by the Company may be different from non-U.S. GAAP financial measures presented by other companies. Specifically, the Company believes the non-U.S. GAAP information provides useful measures to investors regarding the Company's financial performance by excluding certain costs and expenses that the Company believes are not indicative of its core operating results. The presentation of these non-U.S. GAAP financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP. A reconciliation of the non-U.S. GAAP financial measures to U.S. GAAP results is included herein.

Investor Relations and Media Contact: Jennifer Guenther
+1.203.705.3701 extension: 103701 (Media)
+1.646.960.6598 (Investor Relations)

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SOURCE Tronox Holdings plc