Tronox Holdings plc

Hello and welcome to the Trials Holding plc fourth quarter and full year 2020 earnings column webcast. All participants will be in listening 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 your touchtone phone. To throw your question, please press star then two. Please note, today's event is being recorded. are now returning to call us over, Jennifer Guenther, Vice President of Investor Relations. Ms. Guenther, please go ahead.

Thank you, and welcome to our fourth quarter and full year 2020 conference call and webcast. On our call today are John Romano and Jean-Francois Turgeon, co-chief executive officers on an interim basis, and Tim Carlson, chief financial officer. www.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 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 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. Moving to slide three, it's now my pleasure to turn the call over to John Romano. John?

Thanks Jennifer and good morning everyone and thank you for joining us today. For today's call, I'll first provide a review of the year and the quarter and walk through the commercial performance summary, and then I'll turn the call over to JF to discuss our operational performance, synergies, and key capital projects for 2021. Tim will then review our financial position and outlook. But before we turn to the financial highlights, I wanted to take a moment and review the priorities we laid out in 2020 in response to COVID-19. Throughout the pandemic our focus has been on the safety, health, and well-being of our employees and their families. Operating safely in all respects with managing our ongoing operations and protecting, preserving, and strengthening our business and laying the foundation for the future. JF and I are very pleased with the organization's delivery of these priorities. Safety has always been one of our first priorities at Trinox and in 2020 we achieved a record safety year. we are very proud of this accomplishment especially considering the challenging external circumstances presented over the last year i'd like to take this opportunity to thank all of our employees for their continued commitment to safety we are on a journey to zero and that journey starts with the performance records like we had in 2020. at the start of the pandemic our operations were designated as essential allowing us to continue to operate producing reliable funds for our customers additionally and importantly we've kept an eye on protecting preserving preserving and strengthening our business and laying the foundation for the future we continue to increase our focus on sustainability for the first time in 2020 we published a GRI report for the combined legacy Tronox and Crystal organization and for 2021 we'll be adding to our annual bonus metrics on carbon reduction sustainability will continue to be at the heart of everything we do at Tronox Now turning to slide 4, I'll review the fourth quarter highlights. Our strong fourth quarter results reflected the benefits of our vertically integrated business model and optimized operations during the continuation of a market recovery across all products, end markets, and geographies. Revenues in the quarter increased 13% year-over-year, or 16% sequentially, driven by improved TiO2, Zircon, and feedstock and other volumes. I'll cover more on the market recovery in a few minutes. Adjusted EBITDA for the quarter was $204 million with an adjusted EBITDA margin of 26% compared to an adjusted EBITDA of $156 million in the year-ago quarter. This represents our strongest adjusted EBITDA margin quarter performance of 2020 and our strongest adjusted EBITDA performance since closing the Crystal acquisition, a demonstration of the power of the combination and the delivery of the transaction synergies. We delivered $243 million in total synergies in 2020, exceeding the $220 million run rate synergy target we set for 2022 at Investor Day in 2019, two years earlier than anticipated. These best synergies were $193 million of the $243 million ahead of the $185 million target we laid out in the third quarter earnings call. JF will provide more details on synergies and our expectations for continued incremental synergies later in the call. We generated $57 million in net income for the fourth quarter versus $1 million in the year-ago quarter. Our adjusted earning per share for the quarter was $0.19 compared to $0.07 in Q4 2019. We generated $160 million in free cash flow for the year, evidence of the strength of our portfolio even in a challenged macro environment. JF, Tim, and I remain committed to deleveraging and reducing our gross debt to $2.5 billion by 2023. We will make an additional $300 million discretionary debt repayment by the end of the first quarter from cash on the balance sheet in addition to the $200 million discretionary debt repayment we made in December. Moving to slide 5, as I mentioned previously, our commercial performance was extremely strong on the back of a continuation of the market recovery. Revenue of $783 million was 13% higher than $693 million to the year-ago quarter, driven by volume improvements across all products and favorable FX rates. TIO2 pigment sales of $587 million were 8% higher, driven primarily by a favorable deviation from the typical fourth quarter seasonality. Shared volumes improved most significantly in Asia Pacific, followed by South and Central America, Europe, Middle East, and Africa, versus the year-ago quarter. TIO2 selling prices were stable when adjusted for currency, as expected, and attributable, again, to the continued success of a large instability program. Zircon sales of $94 million were 32% improved versus a year ago. Zircon sales volumes were 48% higher than compared to Q4 of 2019, driven by significant improvement in market demand, primarily in China. Zircon selling prices were 10% lower than the year-ago quarter, consistent with the trends from previous quarters in the year due to a decline in Zircon pricing late in the fourth quarter of 2019 and early in 2020. In feedstock and other products, sales of $102 million increased 31%, largely due to improved pig iron sales volumes. The first quarter was the final quarter for our mandated CP flag sales per the FTC consent order, which will have a temporary drag on our Q1 adjusted EBITDA margin, as the margin benefit from the internal feedstock will not be realized until the second quarter when the TiO2 is sold. This is due to the 60 to 90 day period it takes feedstock to move through our portfolio. Utilizing the feedstock internally will improve our vertical integration to approximately 85% in 2021. The quarter's performance represented a continuation of the third quarter improvement due to the market recovery, a trend we've seen continuing into the first quarter. Organic market demand has remained incredibly strong which has continued to drive improved volumes on a year-over-year basis. If the current favorable trajectory continues to the end of the quarter we anticipate TO2 sales volumes for the quarter to increase 11 to 15 percent sequentially. We have experienced a few disruptions thus far in the quarter across the shipping sector and we're working to mitigate those logistical disruptions to ensure we land comfortably inside the range for the quarter. We expect zircon demand to remain strong in the quarter as well, which should result in record zircon volumes. I now turn the call over to JF for a review of our operating performance and profitability in the quarter, as well as a review of our synergies and key capital projects. JF?