Tronox Holdings plc

Good day and welcome to the Toronto Holdings Q3 2020 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch confirm. To reply a question, please press star then two. I would now like to turn the conference over to Jennifer Daunter, Vice President of Investor Relations. Please go ahead.

Jennifer Daunter Thank you, and welcome to our third quarter 2020 conference call and webcast. On our call today are Jeff Quinn, Chairman and Chief Executive Officer, John Francois Turgeon, Chief Operating Officer, John Romano, Chief Commercial and Strategy Officer, Tim Carlson, Chief Financial Officer, and John Cervizal, Senior Vice President, Business Development and Finance. 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 already done so, you can access them on our website at investor.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 filing. 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-U.S. GAAP financial terms that we use in the management of our business and believe are useful to investors in evaluating the company's performance. Reconciliations to their nearest U.S. GAAP terms are provided in our earnings release and in the appendix of the accompanying presentation. Moving to slide three, it's now my pleasure to turn the call over to Jeff Quinn.

Jeff? Thanks, Jennifer. Good morning, everyone, and thank you for joining us today. I will first review the highlights of the quarter before turning it over to other members of my team for a deeper dive into the results of the quarter. I will then share an update on some of our ongoing strategic projects and our outlook for the full year. We were very pleased with our third quarter results, which continued to reflect the strength of our vertically integrated business and our ability to optimize our operations and deliver strong financial results across a variety of business conditions. Revenue in the third quarter increased 17% sequentially, driven largely by improved TIO2 sales volumes and recovery in feedstock and other revenues. The improved TiO2 market demand we began to see in July continued through the remainder of the quarter, resulting in a sequential volume growth in all geographic regions. As we will discuss, that trend also gave us some momentum as we've entered the fourth quarter, and we have seen that materialize in our October order book. TiO2 sales volumes recovered strongly in the quarter, increasing 16% sequentially, outpacing our previous expectations while pricing remained stable. Adjusted EBITDA for the quarter was $148 million, with an adjusted EBITDA margin of 22%. Utilizing our proprietary enterprise optimization model, we adjusted our operations in the quarter to accommodate the effect of the pandemic, which resulted in temporary higher production costs and a slight negative impact to margins, as we had foreshadowed on our second quarter earnings call. These temporary impacts were minimized through continued cost reduction, as well as increased acquisition synergies. Synergy capture for the year to date now totals $183 million, $134 million of which has been reflected in the EBITDA. Today, I invited John Cervasol, our Senior Vice President, Business Development and Finance, to join the call to discuss our continued outstanding achievement in synergies in more details a bit later. John is our internal guardian of our robust program to track and quantify synergy delivery. The robustness of this tracking mechanism is one of the reasons we have been successful in delivering the promise of the Crystal acquisition. To preview his comments, given our success to date in achievement of synergies and our view that we will continue to deliver even more synergies at an accelerated pace, we are raising our full year 2020 synergy target to $235 million, with $185 million of that expected to be reflected in EBITDA. We continue to deliver synergies ahead of schedule while increasing our expectation for the total synergies to come. At our investor day last year, we laid out a target of $120 million in total synergies in 2020. Our new target for this year is almost twice that much. As I have said before, we remain encouraged by the value creation through the combination of our two legacy businesses, which has led to an expectation of increased achievable synergies, both in terms of pacing and the absolute amount. Given our synergy trajectory, we will significantly exceed the increased longer-term synergy targets laid out at the beginning of this year for future years. After we complete our budget process for the year, at the year-end call in February, we will lay out new synergy, new significantly increased synergy targets for future years. John will provide more details on the breakdown of the synergies achieved year to date in 2020 to help demonstrate the areas of value creation that continue to grow. Our third quarter net income of $902 million included a non-cash deferred tax benefit of $895 million due to the reversal of a portion of our U.S. valuation allowance related to net operating loss carry forwards. This reversal of a portion of our U.S. valuation allowance is based upon an analysis of our improved profitability as well as our expectations for continued profitability in the U.S., increasing the likelihood that our U.S. subsidiaries will be able to utilize the substantial deferred tax asset on our balance sheet. This is yet again further evidence of the strength of our business model and how Tronox will deliver value to our shareholders in the future. Adjusted EPS for the quarter was five cents. From a liquidity and capital resource perspective, we are pleased with how well our business is positioned despite the pandemic. We have $1.1 billion in cash and available liquidity more than sufficient to sustain our business. As we move closer to the end of the year, we are evaluating incremental debt pay-down options, utilizing excess liquidity on the balance sheet to advance further towards our gross debt target of $2.5 billion. I will now turn the call over to John Romano, our Chief Commercial and Strategy Officer, who will comment on our commercial performance and the trends we are seeing in the global marketplace. John?