Tronox Holdings plc

the conference will begin in a few minutes thank you for your patience again the conference will begin in a few minutes Thank you. Thank you. Good morning and welcome to the Tronox Holdings first quarter 2021 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. Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Gunther, Vice President of Investor Relations. Please go ahead.

Thank you, and welcome to our first quarter 2021 conference call and webcast. On our call today are John Romano and Jean-Francois Turgeon, Co-Chief Executive Officers, 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 already done so, you can access them on our website at investors.kotronoff.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-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. I'd like to start the call with a comment on safety. Safety is ingrained in the culture at Tronox. It's our leading value, and we start every meeting with safety to ensure it stays top of mind. In previous earnings calls, we've spoken about our journey to zero. Zero harm to our employees, zero harm to our environment, and zero harm to the communities in which we operate. And we're happy to report that we continued our positive safety trends in 2020 into the first quarter of 2021, delivering on our target to zero. Now moving on to our financial highlights for the quarter. Our first quarter performance outpaced our expectations, driven by exceptional demand across all regions and in markets, resulting in a record quarter across a number of metrics. Achieving our highest TIO2 sales volume quarter in the company's history is an incredible accomplishment and is evidence of continuation of the recovery of the TIO2 cycle. Zircon sales volumes also broke company records and beat our expectations, driven by robust global demand led by China that we were prepared to meet through production as well as inventory on hand. Revenue in the first quarter increased 14% sequentially to $891 million, driven by robust market demand and higher TiO2 prices. This represented a 23% increase year over year. Net income for the quarter was $26 million, and diluted earnings per share was $0.12, while adjusted earnings per share was $0.43. The difference between diluted EPS and adjusted EPS is primarily due to costs associated with the Q1 debt refinancing transactions and the break fee associated with the TTI transaction. Adjusted EBITDA was $225 million, another record for Tronox. This figure came in ahead of our previously guided range due to stronger Zircon sales volumes and higher TIO2 pricing than we expected at the time we issued our outlook. This also drove EBITDA margins to 25% for the quarter. We generated $77 million in free cash flow after investing $58 million in capital expenditures. Given the strong free cash flow generation, we will have repaid an additional $100 million of debt by the end of the month. on top of the $300 million we committed to repay during the first quarter. During the quarter, we restructured our balance sheet, which both lowered interest and extended maturities. After adjusting for the redemption of the $450 million 5.75 senior notes, which were redeemed on April 1st of 2021 after the quarter closed, our total debt balance was $3 billion, and our trailing 12-month net leverage was 3.8 times. Tim will discuss these transactions in more detail a little bit later on the call. But overall, we are very pleased with the outcome given the improvement in our balance sheet and an anticipated increase of free cash flow from the interest savings, which will enable us to continue to progress towards our $2.5 billion gross debt target. Moving to slide four, I'll now review our commercial performance in more detail. As I previously highlighted, the first quarter was a very strong quarter from a commercial perspective. Revenue increased 23% versus the year-ago quarter to $891 million, driven by double-digit growth in both TIO2 and Zircon volumes and low single-digit percentage increase in TIO2 average selling prices. TIO2 sales volume grew 15% quarter over quarter, driven by the global economic recovery and led by growth in Europe and Asia. South America and Asia-Pacific led volume growth in the year-over-year comparison, while North America also grew sequentially in year-over-year, but at comparatively lower growth levels given the overall resiliency of the region throughout 2020. Increases in TiO2 selling prices in all regions resulted in a 3% sequential improvement globally. This equates to a 4% increase year-over-year on a U.S. dollar basis or 1% on local currency basis. Revenue from Zircon sales increased 31% sequentially. The strong recovery in China, as evidenced by their recently released Q1 GDP data and a rise in architectural completions during the quarter, was one of the primary drivers that led to a 30% increase in sequential Zircon sales volumes. Pricing for Zircon in the quarter remained level. Revenue from the feedstock and other products declined 29% sequentially, primarily due to the conclusion in the fourth quarter of 2020 of the mandated chloride slag sales per the FTC consent order as a remedy for the crystal transaction, allowing us to utilize more of our feedstock produced internally, which will benefit us on the cost side starting in the second quarter as we outlined on our year-end earnings call. The lower CP slag sales were partially offset by stronger pig iron volumes and pricing. Our Q1 performance would not have been possible without the dedication of our Tronox team, and in particular, our global supply chain, logistics, and order delivery employees, who successfully navigated numerous challenges and disruptions to meet our commitments and serve our customers. So I'd like to thank all of those employees around the world. We continue to see very strong demand as we've entered the second quarter. We will continue into the second quarter, and given the lower than typical inventory levels throughout the supply chain, we anticipate TO2 sales volumes to increase in the low to mid single digit range over record breaking first quarter levels, setting us up for another very strong quarter on volume. Zircon sales volumes are expected to remain elevated above 2019 and 2020 quarterly volume levels, though off of the first quarter peak, driven by global economic recovery, which is led by the stimulus that's been recently announced in China. We remain well positioned to meet the demand given our consignment inventory levels and our ability to source Zircon from multiple locations. And finally, TIO2 and Zircon prices are expected to increase as we progress with our regional price initiatives. And now I'd like to turn the call over to JF for a review of our operating performance and profitability in a quarter.