Exhibit 99.1

Tronox Reports Third Quarter 2022 Financial Results

 

Continued strong margin performance enabled by vertically integrated portfolio despite difficult market conditions

STAMFORD, Conn., Oct. 26, 2022/PRNewswire/ — Tronox Holdings plc (NYSE:TROX) (“Tronox” or the “Company”), the world’s leading integrated manufacturer of titanium dioxide (“TiO₂”) pigment, today reported its financial results for the quarter ending September 30, 2022, as follows:

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

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Note: For the Company’s guidance with respect to fourth quarter 2022 and full year 2022 non-GAAP measures, 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.

($M unless otherwise noted)		Q3 2022				Q3 2021				Y-o-Y % ∆				Q2 2022				Q-o-Q % ∆
Revenue		$	895			$	870				3	%		$	945				(5	)%
TiO2		$	673			$	682				(1	)%		$	769				(12	)%
Zircon		$	128			$	116				10	%		$	111				15	%
Feedstock and other products		$	94			$	72				31	%		$	65				45	%
Income from operations		$	163			$	168				(3	)%		$	190				(14	)%
Net Income		$	123			$	113				9	%		$	375				(67	)%
Net Income attributable to Tronox		$	121			$	111				9	%		$	375				(68	)%
GAAP diluted earnings per share		$	0.77			$	0.70				10	%		$	2.37				(68	)%
Adjusted diluted earnings per share		$	0.69			$	0.72				(4	)%		$	0.84				(18	)%
Adjusted EBITDA		$	247			$	252				(2	)%		$	275				(10	)%
Adjusted EBITDA Margin %			27.6	%			29.0	%		(140) bps					29.1	%		(150) bps
Free cash flow		$	25			$	191				(87	)%		$	(67	)			n/m
		Y-o-Y % ∆												Q-o-Q % ∆
		Volume				Price								Volume				Price
TiO2			(12	)%			11	%							(13	)%			1	%
Local Currency Basis			n/a				15	%							n/a				3	%
Zircon			(23	)%			33	%							8	%			7	%

“Despite a significant reduction in demand in Europe, Middle East, Africa and Asia Pacific, we generated a gross profit margin of 25.9% and an Adjusted EBITDA margin of 27.6% against a backdrop of continuing cost pressures,” commented John D. Romano, co-chief executive officer. “Tronox’s third quarter financial results are a demonstration of the strength of our vertically integrated portfolio and transformed business model. Pricing across all products continued to increase, as a result of the execution against our commercial strategy. I am proud of the Tronox team’s ability to deliver against the fast-changing backdrop and continued challenges through which we are navigating the Company.”

 

Mr. Romano continued, “Looking to the remainder of the year, we expect fourth quarter pigment demand to decline 25% to 30% sequentially, driven by customer destocking, continued weakness in Europe, Middle East, Africa, and Asia Pacific, and seasonal weakness in North America. We believe customer inventory levels remain low relative to previous periods of economic weakness, so we do not believe we will see similar levels of destocking as we move into 2023.”

 

Jean-François Turgeon, co-chief executive officer, added, “We continue to be laser-focused on cost reductions and have a number of levers to optimize performance across a variety of scenarios on which we are executing. As we have highlighted previously, vertical integration investments and newTRON are key projects to support our medium- and long-term profitable growth initiatives. However, we have implemented plans to significantly reduce our annual capital spend to below $275 million in 2023 to adapt to the macroeconomic environment as it unfolds. Softening demand drove increased TiO₂ inventory levels in the third quarter, and allowed us to replenish our safety stocks, which have been below seasonal normal levels for the last several quarters. As a result, we have taken actions to reduce production levels in the fourth quarter due to lower customer demand. We will continue to balance cash generation while ensuring we have the product necessary to meet our customers’ needs and are effectively positioning Tronox for future success.”

 

(Comparisons are to prior year (Q3 2022 vs. Q3 2021) unless otherwise noted)

 

The Company recorded third quarter revenue of $895 million, an increase of 3%, driven by higher zircon and other product sales. Revenue from TiO₂ sales was $673 million, a decline of 1% driven by a 12% decline in volumes, partially offset by a 15% increase in average selling prices on a local currency basis, or an 11% increase on a US dollar basis. Sequentially, TiO₂ volumes decreased 13%, driven primarily by lower volumes in Europe, Middle East, Africa and Asia Pacific, partially offset by a 3% increase in average selling prices on a local currency basis, or 1% on a US dollar basis.

 

Zircon revenue increased 10% to $128 million driven by a 33% increase in average selling prices, partially offset by a 23% decline in volumes. The year-over-year volume decline was due to higher sales from inventory in 2021. Sequentially, zircon revenue increased 15%, driven by an 8% increase in volumes and a 7% increase in average selling prices.

 

Revenue from other products was $94 million, an increase of 31% year-over-year and 45% sequentially, primarily driven by higher pig iron volumes and average selling prices.

 

Net income attributable to Tronox in the quarter of $121 million included non-recurring items, primarily the Australian tax valuation allowance adjustment of $16 million. Non-recurring adjustments totaled $13 million or $0.07 per diluted share. Excluding these items, adjusted net income attributable to Tronox (non-GAAP) was $108 million, or $0.69 per diluted share.

 

Adjusted EBITDA of $247 million represented a 2% decrease driven by higher costs to serve our customers, including increased commodity costs and higher freight costs, as well as lower volumes, partially offset by higher pricing across all products and favorable exchange rates. Adjusted EBITDA margin was 27.6% for the quarter.

 

Sequentially, Adjusted EBITDA decreased 10% due to higher costs to serve our customers, including increased commodity costs, as well as lower TiO₂ volumes, partially offset by higher pricing across all products, favorable exchange rates, and higher zircon and other product volumes.

 

The Company’s selling, general and administrative expenses were $69 million in the quarter, a decrease of 9%. Tronox’s third quarter net interest expense was $30 million, a 17% decrease due to lower debt levels compared to the prior year. Depreciation, depletion and amortization expense was $66 million.

 

 

 

 

For the nine months ending September 30, 2022, the Company returned $110 million to shareholders through the repurchase of approximately 2.8 million shares at an average price of $17.38 per share and the payment of $60 million in dividends.

 

 

Included in Tronox’s feedstock and other product category are revenues from materials which were previously stockpiled as waste. This includes monazite consisting of high value rare earth elements, which have a high margin. The demand for the light rare earth elements found in monazite is increasing dramatically given their use in many facets of the emerging green economy including permanent magnets for electric vehicle (“EV”) motors and wind turbines. While revenue for these co-product streams is less than $30 million year-to-date, the rising interest has driven a 74% increase in high value co-products revenues year-over-year, enabling Tronox to realize greater value from what was previously viewed as waste. “The increasing interest by EV manufacturers in monazite and other rare earth materials found in our mines provides an opportunity for Tronox to not only generate incremental earnings, but also support growth in the renewable energy space,” commented Mr. Romano. “We will continue to evaluate opportunities to leverage our expertise in mining and the exposure we have to rare earths through our operations.”

 

¹Assumes a Q4 corporate effective tax rate of approximately 28%, which may vary depending on jurisdiction of earnings and tax assets.

Mr. Turgeon concluded, “John and I have over 65 years of combined experience in this industry and can confidently say that our business has never been stronger in previous periods of macroeconomic challenges than it is today. Our vertically integrated portfolio provides a cost advantage that is a differentiator for Tronox and provides us with the flexibility to ensure sufficient liquidity under a variety of scenarios. We remain focused on executing the strategy we detailed at Investor Day and delivering on our commitments. We will continue to demonstrate the value of our vertically integrated business model by delivering safe, quality, low-cost, sustainable tons for our customers.”

 

Tronox will conduct a webcast conference call on Thursday, October 27, 2022, at 8:00 a.m. ET (New York).  The live call is open to the public via internet broadcast and telephone.

Dial-in Telephone Numbers:

United States: 1 (844) 200-6205

International: +1 929 526 1599

Access code: 991340

Replay Dial-in Telephone Numbers:

US Toll Free: 1 (866) 813 9403 

International: +44 204 525 0658 

Replay Access Code: 243734

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 and operations, anticipated trends in our business and industry, anticipated costs and benefits of project newTRON and Atlas Campaspe, the Company’s anticipated capital allocation strategy including future capital expenditures, 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 synergies, or achievements to differ materially from the results, level of activity, performance, anticipated synergies 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 Russia and Ukraine conflict and any expansion of such conflict; 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.

Media Contact: Melissa Zona

+1.636.751.4057

Investor Contact: Jennifer Guenther

+1.646.960.6598

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Net sales		$	895			$	870			$	2,805			$	2,688
Cost of goods sold			663				626				2,078				2,011
Gross profit			232				244				727				677
Selling, general and administrative expenses			69				76				220				234
Venator settlement			—				—				85				—
Income from operations			163				168				422				443
Interest expense			(32	)			(37	)			(92	)			(123	)
Interest income			2				1				6				4
Loss on extinguishment of debt			—				(3	)			(21	)			(60	)
Other income, net			8				12				12				6
Income before income taxes			141				141				327				270
Income tax benefit (provision)			(18	)			(28	)			187				(54	)
Net income			123				113				514				216
Net income attributable to noncontrolling interest			2				2				2				13
Net income attributable to Tronox Holdings plc		$	121			$	111			$	512			$	203
Earnings per share:
Basic		$	0.78			$	0.72			$	3.30			$	1.34
Diluted		$	0.77			$	0.70			$	3.23			$	1.29
Weighted average shares outstanding, basic (in thousands)			154,548				153,762				155,027				151,472
Weighted average shares outstanding, diluted (in thousands)			156,948				159,020				158,201				157,148
Other Operating Data:
Capital expenditures			112				65				314				183
Depreciation, depletion and amortization expense			66				72				201				227

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Net income (U.S. GAAP)		$	123			$	113			$	514			$	216
Interest expense			32				37				92				123
Interest income			(2	)			(1	)			(6	)			(4	)
Income tax provision (benefit)			18				28				(187	)			54
Depreciation, depletion and amortization expense			66				72				201				227
EBITDA (non-U.S. GAAP)			237				249				614				616
Share-based compensation (a)			7				7				21				23
Transaction costs (b)			—				—				—				18
Venator settlement (c)			—				—				85				—
Loss on extinguishment of debt (d)			—				3				21				60
Costs associated with former CEO retirement (e)			—				—				—				1
Gain on asset sale (f)			—				—				—				(2	)
Foreign currency remeasurement (g)			(5	)			(10	)			(1	)			(14	)
Costs associated with Exxaro deal (h)			—				—				—				1
Severance charges and related costs (i)			1				—				4				—
Other items (j)			7				3				18				11
Adjusted EBITDA (non-U.S. GAAP)		$	247			$	252			$	762			$	714