Good morning, and welcome to the Tronox Holdings First Quarter 2021 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jennifer Guenther, 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-François 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. tronox.com. Moving to Slide 2. 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-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 3. 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 for -- 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 end 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…

Thanks, JF. I want to first review the benefits of the refinancing transactions we completed in the first quarter. As a result of the great work by our treasury, controllership and legal teams, we extended our debt portfolio's weighted average maturity by approximately 3 years. Our term loan now matures in 2028 and our newly issued senior notes are due in 2029, which replaced the senior notes previously due in 2025 and 2026. We also reduced our interest cost in 2021 by approximately $20 million. Given the timing of the transactions, we'll see a reduction of approximately $30 million in 2022. We expect an even further reduction in 2022 with continued deleveraging, all of which will directly benefit free cash flow. Our total debt after the redemption of the 5.75 senior notes on April 1 was $3 billion and our trailing 12-month net leverage was 3.8x. Given our strong free cash flow in the quarter, we'll have repaid an additional $100 million of debt by the end of this month, on top of the $300 million, we committed to repay during the first quarter. This will reduce our total debt to $2.9 billion at the end of this month. We preserved sufficient prepayable debt and remain committed to using incremental free cash flow to reduce our gross debt balance to achieve our target of $2.5 billion. Given current market conditions and the strength of our vertically integrated business model, we believe we can achieve our goal of net leverage of 2 to 3x and gross debt levels of $2.5 billion, well in advance of our previously stated target of 2023. On Slide 8, on the left-hand side, we've outlined our liquidity and capital resources after the redemption of our $455 million senior notes. As of April 1, we had $740…

[Operator Instructions] Our first question comes from John McNulty from BMO Capital Markets.

Congratulations on some really solid results. So when I think about the 2Q guide, you're calling for sequential volume growth that looks to be in the low to mid-single digits, admittedly off of a really high base. I guess, when you think about any potential gating factors in the event that the demand environment is stronger. What would those gating factors be? Again, if there are any that maybe hold you back?

Thanks, John. Look, from the standpoint of -- to your point, we had a very strong first quarter, quite frankly. From a seasonality perspective, Q4 and Q1 are normally quarters where we would be building inventory, and we drew inventory down in Q4 and significantly drew that down in Q1 as well. So growth of -- again, we had a record volume in Q1. So growth of low to mid-single digits is what we see as achievable from the standpoint of where we are today. To the extent volumes grow over and above that, obviously, we'll do what we can to make sure we fill those requirements. There's a fair amount. I'm sure we'll get to talk a little bit about China. But from the standpoint of a lot of the demand that we have been seeing has been coming from China. It's been coming from a lack of exports into the rest of the world. So when we think about how we're making commitments to fill that volume, we're looking at trying to tie the additional volumes to longer term agreements. So I hope that answers your question to the extent there is a stronger pull on demand, we do what we can to make sure we can meet that.

Got it. Okay. No, that definitely answers the question. And then just as a follow-up, you spoke to inventory levels. It sounds like not only your own, but the industry is at kind of below normal levels. Have you seen much in the way of restocking it? Or is it really kind of hand to mouth at this point and the restock is still on the come?

Yes. Look, from the standpoint of restocking, we do believe that inventory levels throughout the supply chain have been reduced. Clearly, customers are trying to rebuild those supply chains, but based on order patterns at this particular stage. And quite frankly, to your point, I can't speak to the industry, but our inventory levels are well below seasonal norms I just don't think that there's a tremendous opportunity for those inventory builds to be actually completed based on current supply constraints.

Got it. And maybe if I can just sneak one last one in. I know you had indicated on the last call that you were going to have some high-cost TiO2 inventory kind of working through your system. I guess, with regard to zircon, did it have any knock-on effects for that too? Did you have higher cost inventory? I know it's kind of more of a derivative product, but was there any knock-on effect in zircon profitability as we think about how some of the higher cost or fixed cost absorption, heavy kind of inventories work through the system. Jean-François Turgeon: John, it's JF. Look, on the zircon side, the fluctuation is very small. The reason being, as you know, we're vertically integrated, but we're slightly short so that allows us to always run our mine at full capacity and maximize the fixed cost absorption by doing that. That's obviously make our zircon cost more even than what happened with the TiO2 when we had slowed down the plant in Q3 2020.

And when you think about the volumes that we delivered in the first quarter, the production that we had in Q3 of 2020, we did slow down a bit. We started to build that capacity back up in Q4 and Q1. And but to JF point, we never slowed the mining process down, and that's really what allowed us to meet a lot of the increased demand through additional production from the zircon side and inventory.

The next question comes from Frank Mitsch from Fermium Research.

A nice start to the year. I was certainly struck by the comment about European strength. Is that really predominantly driven by the pullback in Chinese exports? Or are you actually seeing some underlying demand take place there? And any comments you can offer about regional pricing would be helpful as well. Jean-François Turgeon: Frank, it's JF. Look, I'd say that the stimulus that all the governments around the world have put in place has created a very strong demand worldwide and China is experiencing a huge growth at the moment. So more of the local TiO2 stays in China. But look, that grow has been experienced everywhere. I guess it's -- we call it a different economy. I mean, people are obviously not traveling, and they're not entertain the same way that they used to be because of COVID, but that has created demand for basic products like ours and that's what we see.

And from the standpoint of pricing, Frank, we don't typically provide guidance on regional pricing. But as we noted in the call, we're progressing towards regional price initiatives and expect additional price improvement in both zircon and TiO 2 in the second quarter. And on top of the stimulus, though, we are seeing a demand pull in Europe. It's not just the stimulus generated. It's what we believe to be true demand, and it's -- we clearly see it through our order book. And there's an element of some of the Chinese volume that may not be exported over there, but we're also picking up some share on unlocking that in with longer term agreements.

Got you, very helpful. And then if I could just follow-up on Saudi Arabia. Any update that you can provide in terms of Jizan? And any update you can provide in terms of production out of Ambu? Jean-François Turgeon: So let's start with Jizan. So there's not a lot of change since our last earnings call. Metso Outotec is still working at modifying the smelter. And look, I talked to you about some of the delay created by COVID-19 and the difficulty to have some of the people going to Saudi Arabia. Look the Suez Canal, believe it or not, also had an impact on some key components that were being shipped to Jizan. So I'd say that we're probably 4 weeks behind where we thought we would be in the last 3 months. So we lost basically another 4 weeks because of COVID and logistic-related issues. So that's basically where we are on Jizan. And Yanbu, look, we have cranked up Yanbu, I mean with what we see from a demand point of view for the TiO2. So we have restarted all of our line in Yanbu. We mentioned to you, we have 6 line in Yanbu. And in 2020 because of the low demand, we were only running 2. So we now are back to 6 line operating. And this is what will allow us to create some of the synergy that we talked about by producing more TiO2 out of Yanbu running harder. Look, I'd say that it's also challenging with COVID-19 to have some of our expat to travel to KSA at the moment. But this with vaccination, the border should reopen in June and that would facilitate the transfer of know-how that that we want to encourage to really ramp up Yanbu to its best capacity. I hope that answered your question, Frank.

The next question comes from Josh Spector from UBS.

Just on zircon volumes, given the strength in the past couple of quarters and you're talking about somewhat modest decline, I think, sequentially into 2Q, where do you think volumes could be for full year 2021? Or maybe another way to ask is, what's your capability to supply in 2021 based on the capacity that you guys have?

Yes. Thanks, Josh. From the standpoint of inventory, we did finish the third quarter last year with a bit more inventory. The fourth quarter, quite frankly, was a good quarter, and we drew additional inventory down in Q1. So we -- as we stated on the call, our inventories at this particular stage, we feel confident that we can deliver similar volumes in the second quarter. A lot of what's being driven by this additional demand is actually coming from some additional pull in China. And a lot of that actually has to do with some additional ceramic production that's being driven toward -- with transit to higher-quality large-format tiles and there's a lot of Chinese producers that have actually installed new capacity for that. So that's driving demand. We're also getting some additional volume through a bit of a channel change from the standpoint of where historically, you would have seen buildings being built for apartment complexes that weren't finished. There's now a change or migration to finish buildings where you've got contractors that are actually spending a tremendous amount of volume or buying a lot of volume upfront. So you're getting a shift in the way zircon is actually purchased for ceramic tile applications. Jean-François Turgeon: Maybe, Josh, I'll add that on the production side, look, with our production capability and with the inventory that we have in hand, we feel very comfortable to meet the customer demand for zircon. So it's going to be really more the logistic of distributing that material.

Okay. I appreciate that. And just if I could try another time on TiO2 pricing. So not looking for your forward commentary, but within 1Q, can you talk about the difference in pricing that you might have achieved by each major region?

Yes. So with regards to pricing, I would say, in Asia Pacific, we saw a big push, obviously, in China. That was the first place that we saw significant increases in pricing, which actually started in the fourth quarter. And then with regards to the balance of the world, I'd say those were evenly distributed with the exception of South America, where we, again, saw some significant increases and as far as forward-looking on pricing, I can't provide a lot of detail on that.

The next question comes from Duffy Fischer from Barclays.

First question is just on pigment. So if you look at your sales volumes in the first half and kind of that run rate, how do those sales volumes line up with your ability to produce pigment? And this year, what would you estimate your maximum effective pigment production to be on a tonnage basis?

Yes. So look, from the standpoint of, again, normal seasonality, you would build inventory in Q1 and Q4 and you draw it down in Q2 and Q3. As I mentioned earlier, we drew inventory down in Q4. We drew it down in Q1, and we would expect to be somewhat closer to where we -- our production levels in the second quarter, but there'll probably be a bit of a draw there as well. So we will be able to continue to meet the demand through production, but there is an element of continued inventory drawdown if we look at our forecast through the balance of the year. And JF, do you want to talk about. Jean-François Turgeon: And Duffy, maybe you know that those plant are not like a switch that you turn on and off. And look, we slowed down last year. In Q3 and in Q4 last year, we were not running our assets at full capacity. And we obviously turned them up toward the end of the year. And look, I mentioned Yanbu, that's the biggest swing plant that we turned on. But I'd say all of our plants are in a good place and we expect to produce more in the second half of 2021 that we did in the first half of '20 -- well that we will do in the first half of 2021. And with the newTRON and with the synergy target, will continue to debottleneck those assets, and we feel very confident that we can meet the demand of our customers. Look, the reality is the demand cannot increase 15% quarter-to-quarter. I mean, it's -- at least that's not how we plan the medium to long term.

Fair enough. And then just maybe a philosophical question on price. Your reported price in Q1 is lower than when you closed the deal, if you just follow the sequential pricing trends that you've given us each quarter. But yet if you look at almost every posted spot price globally, Q1 would be much higher than what pricing was in 2019. Obviously, you've got some long-term contracts. But philosophically, how should your realized price track kind of global spot prices that we would get over multiple years? How does that smooth in, in general?

Yes, Duff, again, global spot prices are a bit different than our average selling prices. And -- but when we think -- as we said in the last call, we lost globally, about $300-ish of pricing over the last 3 years, and that was predominantly in '18 and '19, '20 was relatively flat. And we would expect to get that back quicker. And again, the 3% increase that we got in the first quarter and the guidance that we provided with additional pricing opportunities moving into the second quarter give us confidence that we're making good progress. And what we define as a recovering economy, we expect to continue well into the year and into 2022.

The next question comes from Vincent Andrews from Morgan Stanley.

Maybe you could just talk a little bit about in TiO2, the sort of end market demand you're seeing, whether it's from coatings or packaging or even the paper markets, where are you seeing particular strength? Is there anything surprising you? Did you have any impact from -- in the U.S. from all the outages on the Gulf Coast from the plastics or packaging customers, so maybe we could start there.

Yes. So look, from the perspective of kind of how the market's developed over time, I would say, clearly, the coatings market for us in North America, for instance, remained relatively strong even through 2020. It depends upon the region. Obviously, we had a lot of downturn due to COVID. But I would say coatings was doing very well, and now we're seeing every market, whether that's paper, laminate, plastic, industrial coatings, all those markets are doing very well. And from the standpoint of our ability to kind of forecast where that growth is coming from, it's coming from all the regions, specific to your question about what happened in the Gulf. We did have some customers that had some issues associated with the outages from that very cold weather spill that largely, I think, came from in the Houston area. And again, that gives us some confidence that what we're seeing in the second quarter is some actual pent-up demand. So it kind of goes back to the question where people building inventory. There wasn't a lot of inventory to be built in that situation because we -- some of our customers weren't running at capacity.

And if I can just ask on the working capital. If I heard you correctly, you expect working capital to actually be a source of cash for the full year. And I guess I'm just trying to bridge that with the idea that the volume you sell is going to be up, the price is presumably going to be up. The cost of production are presumably going to be up. So maybe the other thing I heard through the course of this was that you're probably expecting to not have built much inventory yourself through the course of the year, potentially have lower inventory. So is that the key driver of why working capital is a source? Or is it just particular things you're doing as part of your cash management plan? Or just how do we bridge to working capital being a source of cash despite higher prices and higher costs and higher sales volume?

Vincent, it's Tim. Thanks for the question. You had all the components with the exception of payables. We have a current initiative with our supply chain team to extend terms on most of our suppliers. So we'll see an improvement in payables year-on-year by the end of the year. And as you mentioned, the inventory will be a source as well. And given the timing of receivables, given that November and December typically aren't large sales months relative to other months. And we should see a little bit of a pickup at the end of the year in terms of cash collections to help that metric.

Okay. Congratulations.

Next question comes from Hassan Ahmed from Alembic Global.

It seems to me that when I sort of listen to certain industry consultants that there was a price hike on the table for January, another one for April, another one for July. Now beyond that, the backdrop seems to suggest that the ore side of things is tight. One of the largest ore producers talked about their production volumes being significantly lower through the course of Q1. So my question to you is what -- in terms of these price hikes that have been announced, what is realization of these price hikes looking like? And particularly now with ore availability being quite tight, what are you thinking in terms of further price hikes? And you guys as a unique situation of being as integrated as you are relative to other producers in the market.

Thanks, Hassan. Look, I'm not going to comment on all the announced price increases. Everybody has a different cadence and way of doing that. We do that through direct communications with customers. That being said, your question, where were we on price implementation? I think one thing we noticed in the prepared -- we noted in the prepared comments that was pricing actually increased a bit more than what we had anticipated when we actually gave the outlook back in February. And that was clearly due to higher implementation rates on increases that we were working on regionally than we had originally anticipated. With regards to feedstock cost, again, we're vertically integrated. So 15% of what we need to make our pigment is sourced outside of Tronox. So we're not nearly as impacted as others might be due to inflation and ore, but we do see that as an element. And our pricing strategy is largely driven more towards supply demand. So as long as supply demand continues to move in the right direction, which we anticipate it will, we'll see pricing initiatives continue to move out regionally. Now we also have to remember that there are margin stability agreements that we have in place, so there will be some dampening effect as we get further into the year. But right now, again, the 3% increase that we had globally in the first quarter. We've given some indication that we'll see additional pricing into the second quarter, and we're confident that we're making good progress there.

Got it. Got it. And now in terms of volumes, obviously, strong volumes in Q1. You guys came in at the higher end of your guided to range, and you're guiding to, again, volume strength in Q2. It seems there are a couple of puts and takes, right? I mean in -- at least Q4, one of the themes that was being talked about was how the Chinese producers were, I guess, lagging behind or not being able to meet their commitments. And it seemed that there were some market share gains in Europe, in particular, where the western producers were benefiting from the sort of production or supply curtailments on the Chinese side of things. And then thereafter, obviously, you have a large producer out there talking about regaining market share through the course of this year as well. So could you talk about your volume guidance a little bit? Like I said, obviously, Q1, strong Q2 guidance, fairly strong as well. I mean, are you seeing any sort of continuing shifts in trade flows, market share changes? Any color around that would be helpful.

Yes, Hassan. So I'll go back to the comment that I made earlier around demand. We do see demand growing. And it's -- again, the point JF made that started with stimulus and now we're seeing pull, I think, something over and above just stimulus its demand growth in every region that we're supplying. Clearly, if you go back to 2018, 2019, there was a lot of additional exports coming out of China on a regular basis. And that's when China wasn't very strong. So quite frankly, if you think about a lot of the commitments that were made, as the market rebounded in China, a lot of what was being exported is being consumed internally. Prices in China moved much quicker. We talked about our pricing in the China region actually started moving back in the fourth quarter significantly. So those exports from a Chinese perspective are better -- or better suited to stay in-country because the prices are higher and the cost of logistics are very expensive right now to export material out. So are we gaining -- have we gained some share in Q1 due to some of that? We actually gained some share, I would believe, in Q4 and Q1 on some of the share we may have lost historically against the Chinese. And what we're doing now with customers is trying to make sure that we lock in those agreements for longer periods of time so that we're just not a relief valve for some of this, I'd say, more tactical movement on the regional shifts.

The next question comes from Jeff Zekauskas from JPMorgan.

I've got 2 questions. The first is in terms of your -- your goal to reduce your cost by $150 to $200 a ton. How much progress have you made already? And if it turns out that a big part of that is ramping up Yanbu, does that mean you have to lower production somewhere else to get the benefit? How do you realize this $150 to $200 a ton? How long will it take you? Where are you now? Jean-François Turgeon: So Jeff, when we talk about the $150 to $200 additional cost reduction, this is linked with Project newTRON and Project newTRON is just starting for us. So I think that we were clear that we will see the benefit before the end of the project. But we haven't seen any of those cost reduction yet. Look, we should start to see some in Q4 this year. And then it will continue to progress in 2022, achieving the full benefit in 2023, toward the end of 2023, that's through the deployment of newTRON. We obviously had cost reduction based on our synergy and the work that we did in 2019 and 2020. And those synergies are real, and they have improved our cost position. The synergy that we're talking for 2021, they're linked to volume. And look, we're not slowing down the order plant. We're just selling more than we're growing with our customer, and that's where those benefits are also so I hope it helped clarify the difference, Jeff.

Okay. And for my second question, like why are titanium dioxide price is so bad? I mean, if you look at oil, polyethylene, seals, propylene, chlorine, like every commodity in the world is up enormously. And titanium dioxide is basically flat year-over-year and it's up a couple of percent sequentially. What is it about the industry that doesn't allow it to capture more price? Is it Chinese exports into the rest of the world? Is it everybody is operating at too low utilization rate? Why is everything going in slow motion?

Jeff, this is John Romano. So look, I guess it's all on your perspective. Over the last 3 years, I think the prices remained relatively stable considering the market that we were in. So we didn't lose a lot of price. If you think about where pricing went in the last down cycle, it was significantly below that. So I would just maybe make a different view on that, that margin stabilization had significantly benefited us over the last 3 years. The whole point of that was so that we could continue to reinvest in the business throughout the cycle. And then moving into the first quarter, quite frankly, I think our price increase was a good price increase from the standpoint of where we were. We've got good momentum going into the back half of the year. And finally, one thing about this particular price is that you can look at -- we don't give you a lot of guidance on it. There's no index on TiO2. So chlorine and some of those other products that you referenced are a bit different, but our objective is long, stable growth. And I think the pricing strategy that we have out with our customers and we're working with is something that will benefit our investors long term.

[Operator Instructions] Our next question comes from Roger Spitz from Bank of America.

Regarding 2021 free cash flow guidance. Besides the items you spoke about, are there other cash items we should think about, for instance, cash restructuring, et cetera?

Roger, it's Tim. There really aren't. Just given the nature of our vertically integrated business model and the fact that we've got the crystal integration completely behind us. There aren't any other significant uses of cash that I did not speak to.

Great. And the zircon volumes, if I remember correctly, they can be lumpy due to ship departure timing. Did this occur at all given your substantial volume movements this quarter?

Look, so from the standpoint of what happened in the quarter, we definitely did. And we had a range in that EBITDA that we gave you for the first quarter and some of that had to do specifically with logistics and the risk of not getting volumes out in the quarter. And our logistics group, our OTD and supply chain group did a great job, and we actually delivered a lot more on those shipments than we historically have. We've also repositioned some of our volume. In the downturn, not a lot of what we make on the zircon side of the equation actually is sold in South Africa and Australia. So we mentioned we had inventory positioned to meet the additional demand. So part of what we did in COVID was repositioned a lot of the inventory so that when the market rebounded, we would be well positioned to meet it. So that has helped a little bit, too, with that lumpiness that we historically talked about a lot on our calls. I hope that answers your question.

I think that's right. But I think what you're suggesting is by repositioning and basically keeping the zircon inventory closer to the company, you may have, going forward, reduced the historical lumpiness of volumes that we've seen. Is that -- am I reading that correctly?

You are reading that correctly, keeping the zircon volume closer to the customer helps us alleviate that. And it also helps -- we can plan the shipments a little bit better than we do, and it's just a planned shipment for a customer, and it's a revenue move as opposed to an inventory move where it can be invoiced directly inside the quarter.

The next question comes from Travis Edwards from Goldman Sachs.

Just a quick question for me. I believe in your prepared remarks, you mentioned raw material and logistics cost inflation citing I think a little electricity costs going up in South Africa. I was just curious if you can elaborate on maybe those 2 factors as far as what you're seeing either in South Africa or any more globally at the entire business, just what are you seeing again, logistics and raw material and other cost inflation? Jean-François Turgeon: Yes, Trevor. I mean, we certainly see on the logistics front, we established room being a vertically integrated producer where we know what we will have to move internally and we did very well with contracted the cost for that. But every spot shipment that we have to do, which is outside of those normal route, we have seen increase in price that are huge. So it's clear that there's a high demand for vessels and for moving goods around the world, and we're not immune to that reality. So that's one element that we saw in Q1. One thing that we decided to do is the price of ilmenite in China has continued to go up in Q1 and we had excess ilmenite in our South African operations. So we send some of our own ilmenite to feed our pigment plant in China, which was a huge cost advantage to -- instead of buying expensive Chinese ilmenite, but there was a high logistic cost to do it. So that -- because that's a route that we had not established earlier. Look, we gave the example of electricity in South Africa. Escon is the government entity that produce electricity in South Africa. And it's very difficult to predict how price will move. And look, it's not really linked to inflation. And in the is huge increase, but the exchange rate was playing in our favor. The rand was devaluating versus the U.S. dollar. So you had used electricity increase but the rand was going down. What has been a difference in Q1 of this year is we had still that huge electricity increase. But as Tim mentioned in his remarks, the rand went from 18 last year to 14.5 at the moment. So we have kind of a double impact with a huge inflation combined with exchange rate going against us. So I see that the exchange rate is the most challenging cost that we're facing at the moment. And look, that's why we have done a lot of work with Project newTRON and with the synergy to kind of mitigate the impact of those costs and continue to deliver a good margin out of our product. And we're very confident that those cost reductions are real and they're going to allow us to fight that inflation pressure that we see. I hope that gives a bit of color to your question.

Yes, that was great color.

There are no more questions in the queue. This concludes our question-and-answer session. I'd like to turn the conference back over to John Romano, Co-Chief Executive Officer, for any closing remarks.

Thank you. I want to thank everyone on the call for your questions and your interest in Tronox. This is the end of the call. So have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.