Tronox Holdings plc

Good morning, ladies and gentlemen, and welcome to Tronex Holdings Q1 2024 earnings conference call. At this time, note that all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. And if at any time during this call you require immediate assistance, please press star zero for an operator. Also note that this call is being recorded on Thursday, May 2nd, 2024. And I would like to turn the conference over to Jennifer Gunther, Chief Sustainability Officer and Head of Investor Relations. Please go ahead.

Thank you and welcome to our first quarter 2024 conference call and webcast. Turning to slide two, on our call today are John Romano, Chief Executive Officer, and John Cervasol, Senior Vice President, Chief Financial Officer. We will be using slides as we move through today's call. You can access the presentation on our website at investor.tronox.com. Moving to slide three. A friendly 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 what we know today. 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. Additionally, please note that all financial comparisons made during the call are on a year-over-year basis unless otherwise noted. It is now my pleasure to turn the call over to John Romano. John?

Thanks, Jennifer, and good morning, everyone. We'll begin this morning on slide five with some key messages from the quarter. As mentioned in our preliminary results announcement, we delivered a stronger first quarter than anticipated. This was driven by lower production costs through our global operations, destocking having largely run its course through the supply chain, paired with the demand trajectory outpacing normal seasonal levels and our ability to respond to that demand through the strength of our global footprint. Our revenue increased 13% compared to the prior quarter, or 20% on TO2 and Zircon revenue alone, excluding other product sales, which saw a decrease due to non-repeating sales of ilmenite in a portion of our rare earth tailings deposit in South Africa. The 18% increase in TO2 volumes from the fourth quarter exceeded both our guidance of 12% to 16% and the growth that would be more typical for this time of year. However, this type of rebound is indicative of what we would expect to see on the front end of a recovery. Demand improved across all regions and outperformed even more so in Europe, Middle East, and Africa and Latin America, where volumes declined more significantly over the past six quarters. Zircon continued to recover from the trough volume seen in July of 2023, driven by stronger underlying demand, despite the market in China remaining relatively muted. Our volumes increased 54% versus Q4, which was well above our guidance of 15 to 30%. Pricing for TiO2 and Zircon was in line with our expectations. On the operational side, we incurred significant costs in 2023 from running our assets at low utilization rates due to softer underlying demand. As we saw the market beginning to turn late last year, we began increasing our operating rates, which had a positive impact on our manufacturing cost. As a result, our first quarter cost improved when compared to both the prior quarter and the prior year. This helped drive better than anticipated EBITDA margin of almost 17% and adjusted EBITDA for the quarter, totaling $131 million, which was above our guided range. As the high-cost inventory continues to move through our internal supply chain, efficiencies from investments made in the business to reduce costs will enable margins to return to levels realized prior to the downturn. The first quarter has been a true inflection point, and we believe the trends both on the demand side and in reducing our costs will continue going forward. We're well on our way to delivering a step change in our earnings power, having already worked through much of the remaining high-cost inventory on the balance sheet. Our free cash flow for the quarter was a use of $105 million, but we will begin clawing back this use beginning in the second quarter and expect to generate positive free cash flow for the whole year. I'll let John run through more of the first quarter numbers and the balance sheet, but we're comfortable with where we are from a liquidity and a debt position. We recently consolidated and repriced two tranches of our term loan, which will result in an estimated annual savings of approximately $5 million. I'm proud of how our team has continued to work to strengthen the business. And as we stand here today, we are well positioned to continue to capitalize on the recovery that is underway. On the sustainability front, we're happy to confirm that we officially began receiving power from the 200 megawatt solar project in South Africa. This is not only a significant development on our journey to net zero by 2050, as we will realize an additional 13% CO2 emissions reductions from this project alone for a total of 18% relative to our total 2019 baseline, but it'll also provide some cost avoidance benefit from increasing electricity costs in South Africa. We're already working on our next power purchase agreement in South Africa, this time on wind, as this is the highest cost contributor to carbon emissions, so it remains a high area of focus. We expect to publish our 2023 sustainability report this quarter that will outline these and other key initiatives across emissions and waste reduction, water management, social initiatives, and more. We firmly believe that preserving our privilege to operate is critical for our strategy today and for our future. At the end of the day, our people and our planet enable us to carry out our work, and as a result, we have a responsibility to do so in a manner that is both safe and sustainable. I'll now turn the call over to John to review some of our financials from the quarter in more detail. John?