Tronox Reports Fourth Quarter and Full Year 2024 Financial Results

Fourth quarter performance in line with expectations Launched cost improvement plan targeting $125-175 million of sustainable savings , /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 $125-175 million of sustainable, run-rate cost improvements achievable by the end of 2026 This outlook is based on Tronox's current views of global economic activity and is subject to changes and impacts associated with global supply chain and inflation-related challenges, among others. _______ Note: For the Company's guidance with respect to 2025 Adjusted EBITDA and free cash flow we are not able to provide without unreasonable effort the most directly comparable GAAP financial measure, or reconciliation to such GAAP financial measure, because certain items that impact such measures are uncertain, out of the Company's control or cannot be reasonably predicted. Summary of Financial Results for the Quarter Ending December 31, 2024 ($M unless otherwise noted) Q4 2024 Q4 2023 Y-o-Y % ∆ Q3 2024 Q-o-Q % ∆ Revenue $676 $686 (1) % $804 (16) % TiO2 $533 $519 3 % $616 (13) % Zircon $75 $57 32 % $74 1 % Other products $68 $110 (38) % $114 (40) % Income from operations $48 $8 500 % $54 (11) % Net (Loss) ($30) ($56) n/m ($25) n/m Net (Loss) attributable to Tronox ($30) ($56) n/m ($25) n/m GAAP diluted (loss) per share ($0.19) ($0.36) n/m ($0.16) n/m Adjusted diluted earnings (loss) per share $0.03 ($0.38) n/m ($0.13) n/m Adjusted EBITDA $129 $94 37 % $143 (10) % Adjusted EBITDA Margin % 19.1 % 13.7 % 540 bps 17.8 % 130 bps Free cash flow ($35) $51 n/m ($14) n/m Y-o-Y % ∆ Q-o-Q % ∆ Volume Price/Mix FX Volume Price/Mix FX TiO2 4 % (1) % 0 % (11) % (1) % (1) % Zircon 43 % (11) % — % 9 % (8) % — % CEO RemarksChief 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 ResultsThe 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 AllocationTronox 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. OutlookFor 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 CallTronox 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 TronoxTronox 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 StatementsStatements 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 InformationTo 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) TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Net sales $ 676 $ 686 $ 3,074 $ 2,850 Cost of goods sold 559 608 2,559 2,388 Gross profit 117 78 515 462 Selling, general and administrative expenses 69 70 296 276 Income from operations 48 8 219 186 Interest expense (41) (45) (167) (158) Interest income 1 8 10 18 Loss on extinguishment of debt — — (3) — Other income (expense), net 7 (3) 14 3 Income (Loss) before income taxes 15 (32) 73 49 Income tax (provision) benefit (45) (24) (127) (363) Net (loss) income (30) (56) (54) (314) Net (loss) income attributable to noncontrolling interest — — (6) 2 Net (loss) income attributable to Tronox Holdings plc $ (30) $ (56) $ (48) $ (316) Loss per share: Basic $ (0.19) $ (0.36) $ (0.31) $ (2.02) Diluted $ (0.19) $ (0.36) $ (0.31) $ (2.02) Weighted average shares outstanding, basic (in thousands) 158,038 156,818 157,819 156,397 Weighted average shares outstanding, diluted (in thousands) 158,038 156,818 157,819 156,397 Other Operating Data: Capital expenditures 117 59 370 261 Depreciation, depletion and amortization expense 71 69 285 275 TRONOX HOLDINGS PLC RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (UNAUDITED) (Millions of U.S. dollars, except share and per share data) RECONCILIATION OF NET LOSS ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP) TO ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Net loss attributable to Tronox Holdings plc (U.S. GAAP) $ (30) $ (56) $ (48) $ (316) Loss on extinguishment of debt (a) — — 3 — Sale of royalty interest (b) — — (21) — Other (c) 1 (4) 5 (1) Tax valuation allowance (d) 33 — 49 293 Adjusted net income (loss) attributable to Tronox Holdings plc (non-U.S. GAAP) (1)(2) $ 4 $ (60) $ (12) $ (24) Diluted net (loss) income per share (U.S. GAAP) $ (0.19) $ (0.36) $ (0.31) $ (2.02) Loss on extinguishment of debt, per share — — 0.02 — Sale of royalty interest, per share — — (0.13) — Other, per share 0.01 (0.03) 0.03 (0.01) Tax valuation allowance, per share 0.21 — 0.31 1.88 Diluted adjusted net income (loss) per share attributable to Tronox Holdings plc (non-U.S. GAAP) $ 0.03 $ (0.38) $ (0.08) $ (0.15) Weighted average shares outstanding, diluted (in thousands) 158,262 156,818 157,819 156,397 (a) Represents the loss in connection with the refinancing of the Term Loan Facility in the U.S. (b) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the unaudited Consolidated Statements of Operations. (c) Represents other activity not representative of the ongoing operations of the Company. (d) 2024 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Brazilian and Netherlands jurisdictions. 2023 amount represents the establishment of a full valuation allowance against the deferred tax assets within our Australian jurisdiction. (1) Only the sale of royalty interest amount and certain other items have been tax impacted. No income tax impacts have been given to other items as they were recorded in jurisdictions with full valuation allowances. (2) Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc was calculated from exact, not rounded Adjusted net income attributable to Tronox Holdings plc and share information. TRONOX HOLDINGS PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Millions of U.S. dollars, except share and per share data) December 31, 2024 December 31, 2023 ASSETS Current Assets Cash and cash equivalents $ 151 $ 273 Restricted cash 1 — Accounts receivable (net of allowance of $1 in 2024 and $3 in 2023) 266 290 Inventories, net 1,551 1,421 Prepaid and other assets 184 141 Income taxes receivable 2 10 Total current assets 2,155 2,135 Noncurrent Assets Property, plant and equipment, net 1,927 1,835 Mineral leaseholds, net 616 654 Intangible assets, net 244 243 Lease right of use assets, net 140 132 Deferred tax assets 830 917 Other long-term assets 126 218 Total assets $ 6,038 $ 6,134 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 499 $ 461 Accrued liabilities 247 230 Short-term lease liabilities 24 24 Short-term debt 65 11 Long-term debt due within one year 35 27 Income taxes payable 4 0 Total current liabilities 874 753 Noncurrent Liabilities Long-term debt, net $ 2,759 $ 2,786 Pension and postretirement healthcare benefits 85 104 Asset retirement obligations 172 172 Environmental liabilities 40 48 Long-term lease liabilities 107 103 Deferred tax liabilities 174 149 Other long-term liabilities 36 39 Total liabilities 4,247 4,154 Commitments and Contingencies Shareholders' Equity Tronox Holdings plc ordinary shares, par value $0.01 — 157,938,056 shares issued and outstanding at December 31, 2024 and 156,793,755 shares issued and outstanding at December 31, 2023 2 2 Capital in excess of par value 2,084 2,064 Retained Earnings 555 684 Accumulated other comprehensive loss (880) (814) Total Tronox Holdings plc shareholders' equity 1,761 1,936 Noncontrolling interest 30 44 Total equity 1,791 1,980 Total liabilities and equity $ 6,038 $ 6,134 TRONOX HOLDINGS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of U.S. dollars) Year Ended December 31, 2024 2023 Cash Flows from Operating Activities: Net (loss) income $ (54) $ (314) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation, depletion and amortization 285 275 Deferred income taxes 110 330 Share-based compensation expense 21 21 Amortization of deferred debt issuance costs and discount on debt 10 9 Loss on extinguishment of debt 1 - Other non-cash affecting net (loss) income 30 37 Changes in assets and liabilities: Decrease in accounts receivable, net 11 84 Increase in inventories, net (115) (151) Decrease in prepaid and other assets 40 37 Decrease in accounts payable and accrued liabilities (11) (84) Net changes in income tax payables and receivables 10 (24) Changes in other non-current assets and liabilities (38) (36) Cash provided by operating activities 300 184 Cash Flows from Investing Activities: Capital expenditures (370) (261) Proceeds from the sale of assets 27 6 Cash used in investing activities (343) (255) Cash Flows from Financing Activities: Repayments of short-term debt (18) (148) Repayments of long-term debt (228) (17) Proceeds from short-term debt 55 86 Proceeds from long-term debt 217 347 Debt issuance costs (16) (3) Dividends paid (80) (89) Restricted stock and performance-based shares settled in cash for taxes (1) - Cash provided by (used in) financing activities (71) 176 Effects of exchange rate changes on cash and cash equivalents and restricted cash (7) 4 Net (decrease) increase in cash and cash equivalents and restricted cash (121) 109 Cash and cash equivalents and restricted cash at beginning of period 273 164 Cash and cash equivalents and restricted cash at end of period $ 152 $ 273 TRONOX HOLDINGS PLC RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA, ADJUSTED EBITDA AS A % OF NET SALES AND NET DEBT TO TRAILING-TWELVE MONTH ADJUSTED EBITDA (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Net loss (U.S. GAAP) $ (30) $ (56) $ (54) $ (314) Interest expense 41 45 167 158 Interest income (1) (8) (10) (18) Income tax provision (benefit) 45 24 127 363 Depreciation, depletion and amortization expense 71 69 285 275 EBITDA (non-U.S. GAAP) 126 74 515 464 Share-based compensation (a) 4 6 21 21 Loss on extinguishment of debt (b) — — 3 — Foreign currency remeasurement (c) (11) 1 (1) (6) Accretion expense and other adjustments to asset retirement obligations and environmental liabilities (d) 1 8 23 22 Accounts receivable securitization program costs (e) 4 3 15 12 Sale of royalty interest in certain Canadian mineral properties, net of fees (f) — — (28) — Other items (g) 5 2 16 11 Adjusted EBITDA (non-U.S. GAAP) $ 129 $ 94 $ 564 $ 524 Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Net sales $ 676 $ 686 $ 3,074 $ 2,850 Net loss (U.S. GAAP) $ (30) $ (56) $ (54) $ (314) Net loss (U.S. GAAP) as a % of Net sales (4.4) % (8.2) % (1.8) % (11.0) % Adjusted EBITDA (non-U.S. GAAP) (see above) as a % of Net sales 19.1 % 13.7 % 18.3 % 18.4 % December 31, 2024 2023 Long-term debt, net $ 2,759 $ 2,786 Short-term debt 65 11 Long-term debt due within one year 35 27 (Less) Cash and cash equivalents (151) (273) Net debt $ 2,708 $ 2,551 Adjusted EBITDA (non-U.S. GAAP) (see above) 564 524 Net debt to trailing-twelve month Adjusted EBITDA (non-U.S. GAAP)(see above) 4.8 x 4.9 x (a) Represents non-cash share-based compensation. (b) Represents the loss in connection with the refinancing of the Term Loan Facility in the US. (c) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities denominated in a currency other than the functional currency of the entity holding them, which are included in "Other (expense) income, net" in the unaudited Consolidated Statements of Operations. (d) Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities. (e) Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall capital structure. (f) Represents the sale of a royalty interest in certain Canadian mineral properties, net of associated transaction costs included in "Other (expense) income, net" in the unaudited Consolidated Statements of Operations. (g) Includes noncash pension and postretirement costs, asset write-offs, severance expense, and other items included in "Selling general and administrative expenses", "Cost of goods sold" and "Other (expense) income, net" in the unaudited Consolidated Statements of Operations. TRONOX HOLDINGS PLC FREE CASH FLOW (NON-U.S. GAAP) (UNAUDITED) (Millions of U.S. dollars) The following table reconciles cash provided by operating activities to free cash flow for the three months and year ended December 31, 2024: Year EndedDecember 31, 2024 Nine Months EndedSeptember 30, 2024 Three Months EndedDecember 31, 2024 Cash provided by operating activities $ 300 $ 218 $ 82 Capital expenditures (370) (253) (117) Free cash flow (non-U.S. GAAP) $ (70) $ (35) $ (35) SOURCE Tronox Holdings plc WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Tronox Reports Fourth Quarter and Full Year 2024 Financial Results

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