Tronox Holdings plc

Ladies and gentlemen, thank you for standing by and welcome to the Tronox Holdings plc first quarter earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Guenther. Please go ahead.

Thank you and welcome to our first quarter 2020 conference call and webcast. On our call today are Jeff Quinn, Chairman and Chief Executive Officer, Jean-Francois Turgeon, Chief Operating Officer, John Romano, Chief Commercial and Strategy Officer, and Tim Carlson, Chief Financial Officer. We will be using slides as we move through today's call. Those of you listening by internet broadcast through our website should already have them. For those listening by telephone, if you haven't done so already, You can access them on our website at tronox.com. Moving to slide two. A reminder that comments made on this call and the information provided in our presentation and on our website include certain statements that are forward-looking and subject to various risks and uncertainties, including but not limited to the specific factors summarized in our SEC filings. This information represents our best judgment based on today's information. However, actual results may vary based on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements. During the conference call we will refer to certain non-US GAAP financial terms that we will use in the management of our business and believe are useful to investors in evaluating the company's performance. Reconciliations to their nearest US GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. As you saw in our earnings release, we provided our results on both a reported basis and a pro forma basis to assist in our discussion of first quarter 2020 performance compared to the first quarter 2019 performance. Our primary focus on this call will be on the comparison of pro forma results to enhance your understanding of the underlying trends in our business performance and our markets. In the appendix of our earnings release and the accompanying presentation are a statement of operations and adjusted EPS and adjusted EBITDA reconciliations including on a pro forma basis for the first quarter of 2019. Moving to slide three, it is now my pleasure to turn the call over to Jeff Quinn. Jeff?

Thank you, Jennifer, and good morning to everyone, and thank you for joining us today. I hope everyone remains healthy and safe. At this point, our strong first quarter earnings may be a bit of old news with the issues of our guidance late in the quarter and our pre-release in mid-April. but turning to slide three, I do want to walk you through the highlights of the quarter before reviewing our response to the ongoing COVID-19 pandemic and our current perspective on the markets. Our first quarter revenue was consistent with our preliminary results while adjusted EBITDA and adjusted EPS actually came in better than our preliminary results. Revenue of $722 million was up 4% sequentially driven largely by increased TL2 demand which John Romano will cover later in our remarks. Adjusted EBITDA of 174 million increased 12% sequentially and 23% year-over-year and our adjusted EBITDA margin was strong at 24% largely due to synergies and our focus on operational excellence. Adjusted EPS of 29 cents a share was well above our previously anticipated range of 20 to 26 cents a share, primarily driven by purchase accounting adjustments and an estimate of tax expense which proved to be conservative. Last month, we passed the one-year anniversary of the closing of the Crystal deal, and it has been everything we hoped and believed it would be. During the quarter, we continue to deliver ahead of target synergies, achieving total synergies of $45 million, with $38 million of that amount reflected in EBITDA and $7 million reflected in tax and other synergies. Jean Francois will cover the synergies in more detail later in the presentation, but we remain on target for achieving our anticipated synergy targets for the year, despite the economic impact Our strong operating performance in the quarter was driven not only by delivering synergies but also by increased TL2 volumes coupled with the continued optimization of our global vertically integrated footprint and the prudent management of our cost structure. Our financial position is strong as Tim will discuss later. We recently completed the offering of our $500 million, 6.5% senior and secured notes due in 2025, which provides us with enhanced optionality in these uncertain times. We anticipate using the proceeds for general corporate purposes, including the potential repayment of existing indebtedness, capital expenditures, strategic investments, working capital, and other business opportunities. We already used a portion of the proceeds to repay the $200 million drawn on our ABL and credit and revolving credit facilities at the end of March. During these uncertain times, we are deriving great benefit from our continued focus on execution, operational excellence, synergy capture from the crystal transaction, and enhancing our vertical integration strategy. The execution of this strategy has created and will continue to optimize an enterprise with greater stability in financial performance and cash generation even under the current environment. In this time of great uncertainty, one thing that is for certain is that the company created by the merger with Crystal is far more resilient with substantially more flexibility and strength than either one of the legacy companies would have been on their own. I'd now like to turn to slide four to discuss our COVID-19 response. Our focus has been on the prioritization of three things. First and foremost, the safety, health, and well-being of our employees and their families. Secondly, preserving our ability to operate safely and run our business. And finally, our role as an essential enterprise. With our plant in China impacted early on, we were well prepared as the pandemic spread across the globe and were able to rapidly respond to the dynamic conditions all sites around the world are currently operating we've implemented increased safety protocols and facility access protocols at the sites limiting non-essential visitors and effectively eliminating business travel we've also established additional cleaning PPE and disinfection protocols at all locations. Our operations have been designated as essential given the applications of TiO2, zircon and other co-products in the continued manufacturing of critical products such as food and medical packaging, medical equipment, pharmaceuticals and personal protective gear. We continue to work diligently to ensure business continuity in order to meet our customers' needs. Thanks to the efforts of my colleagues around the world, we've managed to limit the spread of the virus at our facilities. I am extremely grateful for the swift action and dedication of my nearly 7,000 global colleagues. We have shown continued determination and resilience throughout the pandemic, adapting to significant change virtually overnight, allowing our operations to quickly meet The new challenges in which we find ourselves on almost a daily basis. The efforts and results have been extraordinary. I have never been more proud of our organization. I would now like to turn the call over to John Romano, our chief commercial officer, who will report on our commercial performance and the trends we are seeing in the global markets, including an update on the near term view for the remaining remainder of the second quarter. Thanks, Jeff.