Tronox Holdings plc Q4 FY2024 earnings call

• Tronox delivered solid Q4 results despite macro weakness, with stronger TiO2 in Asia Pacific and Latin America mitigating weakness in Europe, and North America performing as expected. - Zircon sales exceeded guidance. - Operational cost improvements realized. - Reduced total recordable injuries by 23% in 2024. - Converted 40% of power in South Africa to solar, avoiding $17M in electricity costs. - Launched a cost improvement plan identifying $125 to $175 million of sustainable run-rate cost improvements by the end of 2026, focused on enhancing cost efficiency and operational excellence.

TiO2: Fourth-quarter revenues increased 3% year-over-year with sales volumes up 4%, partially offset by a 1% decline due to price and product mix. Sequentially, TiO2 revenues declined 13% with volumes down 11% sequentially. Zircon: Fourth-quarter revenues increased 32% year-over-year as sales volumes increased 43%, partially offset by an 11% headwind from price and product mix. Sequentially, zircon revenues increased 1% driven by a 9% increase in volumes. Other products: Revenue decreased 38% compared to the prior year and 40% versus the prior quarter due to non-repeating one-off sales of ilmenite and heavy mineral concentrate tailings.

• 2025 revenue expected in the range of $3 to $3.4 billion and adjusted EBITDA in the range of $525 to $625 million. - Outlook assumes second half of 2025 will be stronger than the first half, with pricing expected to recover in the second half. - Mining transition costs of $50 to $60 million in 2025 due to moving to newer mines. - CapEx expected in the range of $375 to $395 million, with free cash flow relatively flat at the midpoint.

• Macro economic uncertainties affecting demand and pricing. - Intense competitive dynamics across products impacting pricing. - Mining transition costs and operational challenges related to bringing online new mines. - Regulatory risks related to duty implementations and plant outages.

Q: On the pricing environment, can you speak to softer pricing in the first half of the year?

A: There is competitive activity in certain regions, with some price increases in Europe and Brazil, but a slower recovery expected in the first half with improvement in the second half as duties in India are expected to take effect.

Q: How much of the cost-cutting initiatives are reliant on volume?

A: Primarily cost-related, with $25 to $30 million expected in 2025 on a run-rate basis, and the majority of the $125 to $175 million in 2026.

Q: On mining costs and transitionary impact in 2025?

A: $50 to $60 million in mining transition costs in 2025, with the majority expected to naturally recover in 2026, but some requiring work through the cost improvement program.

Q: On TiO2 market share?

A: Expecting market share recovery from losses to China, with gains expected in regions like India and Europe as duties take effect.

Q: On raw materials pricing for competitors?

A: Not seeing significant raw material price drops for competitors, with ore pricing dependent on market recovery pace.