Hello, everyone and welcome to Tronox Holdings First Quarter 2022 Earnings Call. My name is Juan and I will be coordinating your call today. At this time, all participants are in listen-only mode. [Operator Instructions] I would now like to turn the call over to Jennifer Guenther, Vice President of Investor Relations. Please Jennifer, go ahead.

Thank you, and welcome to our first quarter 2022 conference call and webcast. Turning to slide 2. 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 the presentation on our website at investor.tronox.com. Moving to slide 3. 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 filings. 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. Moving to slide 4. It is 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'll start this morning by setting the stage with a quick overview of Tronox. We're the world's largest vertically integrated TiO2 producer with nine pigment plants, six mines and five upgrading facilities across six continents. Our 2021 revenue totaled $3.6 billion, which was fairly evenly distributed across the Americas, Europe, Middle East and Africa and Asia Pacific. Our 1.1 million tons of pigment capacity supports our well-balanced space of approximately 1200 customers globally. Our vertically integrated business model supplies approximately 85% of our internal feedstock needs and this ensures consistent and secure supply for our customers. In addition to TiO2, we also generate significant value as the world's second largest producer of zircon with approximately 297,000 tons of capacity. We are proud of the organization we've created following the transformative Cristal acquisition three years ago and the value we have and will continue to generate for our stakeholders. But before turning to the first quarter highlights, I want to address the crisis in the Ukraine. Our financial exposure is minimal with less than 1% of our total revenue from Russia and Ukraine combined in 2021. But more importantly our hearts go out to those impacted by the conflict and we offer our support to those who are affected. Now let's turn to slide 5 to review our first quarter results. Tronox delivered solid first quarter results and continued to serve our customers against a backdrop of increasing costs, higher commodity prices, logistics constraints and extended downtime at our Stallingborough UK pigment facility, which has since been resolved. It is a testament to the dedication of our employees that we've continued to deliver results in line with our expectations, while overcoming these ongoing challenges so we thank the…

Thank you, JF. On slide 13, we provide an overview of our financial position, liquidity and capital resources. We ended the first quarter with net leverage of 2.4 times within our previously stated targeted range of two times to three times. While we ended the quarter with $2.6 billion in debt, the refinancing transaction announced in the first quarter and completed early in the second quarter enabled us to obtain our previously communicated $2.5 billion total debt target as announced in early April and extended maturities while lowering interest costs. Total available liquidity as of March 31 was $758 million including $292 million in cash and cash equivalents, which is well distributed across our global operations. Capital expenditures totaled $103 million in the first quarter with the increase driven by the key projects JF outlined. Depreciation, depletion and amortization expense was $68 million. Our free cash flow totaled $86 million due to our strong cash earnings. We returned $25 million to shareowners in the first quarter in the form of share buybacks. We repurchased approximately 1.4 million shares. There is $275 million remaining through February 2024 under the share repurchase program authorized by the Board in November 2021. We increased our dividend to $0.50 per share beginning with the first quarter dividend which was paid out at the beginning of the second quarter. Turning to slide 14. I'd now like to share our outlook. As John mentioned, we anticipate demand trends to remain solid for both TiO2 and zircon. Amidst the backdrop of continued supply chain disruptions, inflationary pressures including elevated commodity prices and ongoing geopolitical instability in the Ukraine. We do not expect inflationary cost pressures to significantly abate. However, the planned increase in production through the end of the year will enable improved fixed cost absorption and help…

Thank you. [Operator Instructions] And the first question comes from the line of Josh Spector from UBS. Please, Josh, your line is now open.

Yeah. Hi. Thanks for taking my question. I guess just first on your TiO2 volume outlook the flattish quarter-over-quarter. Can you comment on what's the biggest limiting factor there? And to your comments about increasing production this year, do you expect to buck normal seasonal trends later this year and increased sales volumes, or is that a little bit more at risk and more of a 2023 benefit?

Yeah. Thanks, Josh. We had -- in the first quarter, we -- as we stated on the call, our volumes were at the top end of a range up about 9%. And the reality is going into the first quarter our inventories were below seasonal norms. And our team did a great job of getting our orders out in the first quarter. When you think about where we are going into Q2, our inventory is again below seasonal norms. We referenced the Stall outage which had an impact on our inventory. So this is just our ability to try to keep up with the demand. If we look at our order pattern, it's well above what our -- we believe that flat number would be. And to the extent we have some opportunities to actually get more tons out and address some of the logistics issues that's -- it's possible we could be above that. But right now, it looks more flat and it's not related to demand. It's related to our ability to meet that demand in the quarter. And as far as we think about the second half of your question around volumes, we did say we're going to make 40,000 tons of additional volume. And I would say that the majority of that volume will start to come in the latter part of this quarter and moving into Q3 and Q4. So we talked about working capital on the call. We still need to build some inventory to make sure we can meet the demand of our customers. So we're still confident in our outlook and that volume increase moving into the second half of the year will help us to meet our customer demand and our service levels.

Thanks. That's helpful. And just on the coproduct side, I mean a lot of discussion about zircon and obviously that's very important for you guys. But curious, if you could comment on pig iron. Prices moved up in the quarter. I'm not really sure what you're seeing, demand-wise there if there's still kind of a frenzy on that side. And really trying to think about, is that an incremental benefit sequentially about the flow-through of higher pricing there, or is that not really baked into your outlook at this point? Jean-FrançoisTurgeon: So Josh, it's JF here. Look pig iron as you know is always linked to iron ore. And, obviously, the conflict in Russia and Ukraine at the moment has limit the production of pig iron coming out of those two countries. And we have seen price of pig iron move up significantly. Look, we haven't assumed that that would remain the case. Obviously, we don't know what will happen with the conflict. So we've been cautious in our assumption for what will happen with price. But we're not influencing the price of pig iron. I mean, we're selling everything we produce and we benefit from the bigger market in relation to that.

Yeah. We're kind of the tail on that dog. But I mean suffice it to say that prices have moved. And when we think about the second quarter, most of those contracts are already locked in. So there is -- that higher pricing is factored into Q2 but to JF's point in the back half of the year that's probably upside if the conflict continues.

Got it. Thank you.

Thank you. Our next question comes from the line of John McNulty from BMO Capital Markets. Please, John, your line is now open.

Yes. Thanks for taking my question. So, I guess, first one would just be on Europe. Obviously, the energy outlook has gotten noticeably more difficult. I guess, can you help us to understand just given you've got a reasonable amount of exposure in Europe. How you balance the energy side versus the pricing and what looks to be still solid demand? Can you get through what you need to in terms of pricing do you think just given the fragile economic backdrop there? And so how should we think about the European assets?

John, it's Tim. Thanks for the question. As it relates to energy in Europe, our largest exposure is in Stallingborough given natural gas in the Netherlands where as part of an industrial park and we've got forward contracts in place for the year. And then the Thann it's much smaller in France and a very similar approach. We are hedged and have forwards in place for Q2 to about 67% of our exposure. And our forecast is pretty much where the current market prices are today just given the recent uptick over the last week. We're currently forecasting at that level. So not a lot of exposure as it relates to our current forecast for the rest of the year. And just given where we are with pricing right now price more than offset some of the cost increases not just the pressures from natural gas, but also the pressures that we're seeing in sulfur in Europe I'm sorry in China in sulfuric acid and in Brazil in really coke and anthracite across the board.

Got it. Okay. That's helpful. And then you had mentioned earlier around the cost to production is up about 20% or so. When I think about the offsets you've got price and you've got newTRON. Like do you expect to get more than enough price to offset that 20% cost to production, so that all of the savings for newTRON actually fall to the bottom line? Is that the right way to think about that, or does some of it actually -- some of the newTRON savings get eaten up over the next year or two just on the higher cost of production overall. How should we think about that?

John, as it relates to 2022 that 20% increase in cost structure that cost is primarily focused in process chems and energy utilities. Process chems energy and utilities are actually up 60% year-on-year. As I mentioned, we are able to cover those costs from a price perspective and we do anticipate that the newTRON benefits will help us drop to the bottom line, which is one of the reasons that we remain confident in our full year range. Jean-FrançoisTurgeon: And that's why John we expect our margin to continue to improve.

Got it. Okay. No that's helpful. Maybe if I can squeeze one last one in. I noticed the CapEx number inched a little bit higher. Is that a function of just general inflationary trends, or is that where you're pulling a bit of future CapEx forward into this year?

John, it's the former. It's all inflation.

Got it. Thanks very much for the color.

Thank you. Our next question comes from the line of Frank Mitsch from Fermium Research. Please, Frank, your line is now open.

Thank you. Thank you so much. I was just curious what did you size the Stallingborough impact in 1Q? Was there any spillover into 2Q?

Yeah, Frank thanks for the question. The Stall issue the unplanned extended outage cost us about $10 million in the first quarter. We're back up and running and obviously that will be a benefit quarter-on-quarter.

And then in Q2 Frank the -- as we mentioned there's a little bit of a flow-through due to the lower inventory.

The impact on revenues, no impact on cost.

Got you, got you. And speaking of costs and you just detailed what process chemistries have been inflating. Just curious regarding chlorine, you mentioned chlorine is one of the ones that has been inflating for you. Can you talk about the availability and your ability to source chlorine? And what your outlook is there? Obviously, there's a lot going on in that business.

Yeah, Frank, our chlorine footprint is a bit different globally, depending upon the plant but we don't have any problem getting chlorine at this particular stage. So, a couple of quarters ago we were having some issues, but at this stage availability of chlorine is not something that keeps us up at night.

Fantastic, thanks so much.

Thank you.

Thank you. Our next question comes from the line of David Begleiter from Deutsche Bank. Please David, your line is now open.

Thank you. Good morning. Just on TiO2 pricing, what's embedded in your guidance for both Q2 and the full year?

We don't provide clear guidance as far as percentage increases. But what we can say is we would expect to see pricing continue to move up in Q2. We've already locked those numbers in. And in the second half of the year considering the environment we're operating in with low inventories and demand where it is we would expect to continue to see pricing moving up in the second half as well.

Got it, very good. And just on Chinese exports of TiO2 what are you seeing right now? And what's your expectation for the back half of the year given current lockdowns over there?

Yeah. Look, so exports were up a little bit from Q4. Q4 was a reasonably high number. But when you think about what's happening in China right now, growth had slowed down a bit and then you had the lockdowns. There's clearly a lot of congestion in the Shanghai port, so there's a -- I'd say, a bit of a move to try to move material out. We have a plant in China. So we've got a lot of visibility into what's going on in that market. We had some congestion in the Shanghai port. We've now moved a lot of our shipments to the Ningbo port and Xiamen port. So we're able to get material out. And at this particular stage with demand where it is, it's -- I would say those exports and the amount that they increase weren't super surprising for us. Jean-François Turgeon: Yeah. And David I would add to John's comment that, we have seen the raw material to feed the TiO2 plant in China remain very stable at a high level and some of the commodity like sulfur for example -- even in the last three months since we talked to you where we had said that sulfur price was at record high well the price of sulfur in China has increased by 33% more. So it's at level never seen. And just to give you a feel to make a ton of TiO2 pigment, you need about 1.2 to 1.3 tons of sulfur, which that sulfur is used to make sulfuric acid. And that's why we see no trip from China related to export.

Thank you very much.

Thank you. Our next question comes from the line of Hassan Ahmed from Alembic Global. Please Hassan, your line is now open.

Good morning John and JF. I wanted to revisit your comment about the cost inflation cost per ton sort of being up 20% year-on-year. I mean you guys being as integrated as you are I'd imagine that inflationary number is far higher for your competitors. So just wanted to get a sense of what you're seeing in terms of just the global cost curve. I mean despite all of these price hikes that we are seeing in TiO2 just broadly, is there a sliver in the marketplace which is not making money right now?

I think Hassan, thanks for your question. And I would say yes, there is a sliver even at the prices that we're operating at now of operators that may not be making money. And to your point, all those costs that impacted us by 20%. I wouldn't say are maybe significantly different from our competition, but our ability to vertically integrate and use our material internally with a 30 -- about a $300 per ton at a minimum advantage over and above our competitors actually helps us continue to be more competitive as we noted earlier. Jean-François Turgeon: Yeah. And you would remember Hassan that we used to say, that our ore advantage was $200 to $300 per ton. Well what we see now it's above $300, as John mentioned. And in some cases it goes even up to $400. And look with what's happening with the tight ore market, that advantage should continue to increase.

Very helpful. And as a follow-up on zircon, I just wanted to get a sense of what you guys are seeing in terms of supply/demand over there. Obviously a bunch of moving parts there as well, China construction being one of them, but more importantly, would love to hear what you guys are seeing in terms of the white clay side of things because obviously as I understand it Ukraine was a big, big producer of white clay, and it seems none of that product is in the market anymore.

Yeah. Thanks Hassan. I'll touch on the last one first. And from a clay perspective, you have to think about -- there was a fair amount of inventory that was already in place at a lot of our customers in the tile manufacturing industry. So I think early on there was some real concern that the clay that was coming out of the Ukraine was going to have an impact. Fortunately there was a inventory of clay. And it's become I think a lot easier to reposition clay from other regions of the world into the European region. So that's one thing. With regards to the market in general, the -- if you think about -- our estimates for 2021 was that the market was about 1.2 million tons of consumption. And in 2022 it's about 1.1 million -- call it equivalent, about the same, 1.2 million tons. We talked about sales were much higher in 2021, because we had a lot -- the inventory that we had to service that demand. We believe that the industry has about 160,000 tons less inventory to service the same demand that happened, because I mentioned it was flat, which is about 13% of that demand. So in summary, you've got lower inventory. Supply chain is, I would say, very depleted. I was just in Europe, meeting with some of our zircon users, including some tile manufacturers and the inventories are visibly depleted. So I think, the market has changed very quickly. Our order books are fluctuating a bit. We talked a little bit about the mix issue in the first quarter, with regards to -- some of the products aren't all the same. So we sell zircoa [ph] which is a little bit lower quality and zircon. As those volumes fluctuate a little quarter-to-quarter you'll see some variance in our margin from that particular product segment. But we're very confident about the zircon market, between now and the end of the year and moving into 2023.

Very helpful. Thank you so much.

Thank you. Our next question comes from the line of Michael Leithead from Barclays. Please, Mike, your line is now open.

Great. Thanks. Good morning, guys. First, I just wanted to ask on Jazan. I think last quarter you said you expected a site to achieve sustainable ops in the second half of this year, but I'm not sure I heard that phrase in this quarter. So is that still the plan, or is that moved at all? Jean-François Turgeon: Mike, it's JF. It's still the plan and Jazan has been performing according to plan. So we had a very successful start of the year with Jazan. So it's still expected for the second half of 2022.

That's great to hear. And then maybe just second, a little bit broader. You're trading your stock at a quite cheap valuation on absolute or relative terms. And, obviously, I think you believe you have a pretty strong medium-term outlook with the growth projects and the like. But for whatever reason, it seems like the market isn't really giving you credit for that right now. So just curious, how you guys are thinking about improving that valuation or maybe unlocking more value for shareholders here. Jean-François Turgeon: So maybe, Mike, I could start and let my colleague add. But, look, we're planning an Investor Day in June. It's going to be June 16. And, obviously, all our investors and people who want to know more about Tronox are Welcome. We'll go in more detail into our strategy our plan. I mean, we're investing a lot in our business at the moment to make it better, to lower our costs, to increase our supply to our customer, to be a strong supplier. And I believe that this is what is in our control. And if we continue to act and do that, people will realize that we create value and we're a solid place to invest. So, I think, that's our plan and strategy.

And if you think about where we are today and to answer that question around why we're undervalued. I still think there's a lot of people out there that fear things are going to move back to where they were historically maybe two or three cycles ago. We spent a lot of time working on our margin stability initiatives. This is the 20th quarter that we've been north of 20% EBITDA margins. I don't think that is something that I would refer to as extremely volatile business profile, moving to JF's point, higher on margins back into the second half of this year. So, I think, we have to continue to communicate how we've changed and transformed the business and we're confident that we can do that.

And the last item that I will touch on a bit at Investor Day is, really the strength of our vertically integrated business model and the flexibility that we have from our global operations as it relates to a downside scenario. There are just a number of different levers that we can pull to preserve cash and generate even reasonable EBITDA in a downturn.

Great. Thanks so much.

Thank you. Our next question comes from the line of Matthew DeYoe from Bank of America. Please, Matthew, your line is now open.

Good morning, everyone. If we think about the shift in FX that we've seen, particularly with the dollar strength, I mean, how do you -- how should we think about this as a change to your guidance, given some of the EBITDA sensitivities we've talked about in the past?

Matt, it will definitely be a bit of a tailwind for our guidance. We haven't changed our full year guidance, the range. The rand has fluctuated and the Aussie dollar has fluctuated quite a bit the last couple of months. Where it is currently is actually incremental upside to where we think we might come out. But what happens with FX could change tomorrow. So we're in a very positive place right now, as it relates to our business model and FX could be a headwind or a tailwind depending on what happens in the marketplace.

That would be one of the elements when we think about the rand that could have a positive impact on the range, depending upon where that lands.

All right. Thank you. And then the Namakwa and Fairbreeze expansion sounds like they're going to come on the back of that with capacity. So, should we expect CapEx to be elevated for some time? I mean 2022 spending levels, is that consistent with 2023 2024, or should they move lower because newTRON is rolling off? How does this -- how do you think this plays out over the next few years? Jean-François Turgeon: Look, Matthew, we have flexibility with our capital. We have start those projects now specifically to make sure that we can adjust the capital depending on what we will see in the market. Look obviously, for this year Atlas-Campaspe we're just finishing the construction. So it's a big year and that mine will be in operation. So no more CapEx in 2023 for Atlas. We have start Namakwa and Fairbreeze early because we want to spread that CapEx over the year. And because we see the markets for zircon and for rutile being so strong, that those project have huge return on capital invest. So they're good project to accelerate. But because those mines are already in production and it's not like in the case of Ginkgo and Snapper we had to move the operation into a different area. We had to move the mine like 100 kilometers away from where we used to mine. In the case of Fairbreeze and Namakwa, those extension are adding capacity to existing mine and you could always pause those and reaccelerate depending on the market conditions. So that's why we said really our base capital as a company is the $100 million to $125 million which is what I call the maintenance capital. All the excess that we're spending this year is really creating value for our shareholders.

All right. Thank you.

Thank you. Our next question comes from the line of Vincent Andrews from Morgan Stanley. Vincent, your line is now open Q – Will Tang: Hi, guys. This is Will Tang on for Vincent. Thanks for taking my question. I guess just a follow-up on a previous question related to 2022 CapEx. I mean which cost buckets like labor equipment et cetera are you guys seeing kind of the greatest cost inflation at Atlas? And then to what extent is the cost kind of locked in for the rest of the year? And then I guess just and can you guys also kind of touch on what's driving that $25 million in heightened working capital needs for the year? Is it mainly related to kind of higher inventories from that 40,000 ton increase in production? Thanks.

Hi, Will. Thanks for the question. As it relates to capital the inflationary pressures are primarily third-party contract costs related to wrapping up our Atlas Campaspe project. That project comes online early in the third quarter. So we don't anticipate significantly more inflationary costs above that. And as it relates to working capital, we've taken a hard look at our inventory balances globally to make sure we've got surety of supply for our customers. So there's a bit of a tick up on inventory as well as just given increased revenues from improved pricing and volumes it's causing receivables to go up. So that's a little bit of an increase. And as we mentioned earlier, the Jazan facility continues to produce slag. So we'll have a bit of slag inventory as well in that balance. But at the higher end of the range we'll be at the higher end of the working capital range. And if things don't work out as we think, we'll manage working capital to the lower end of that range.

And with regards to the 40,000 tons of TiO2 that we talked about producing, there will be an element of building some inventory. We've repeatedly talked about we're well below seasonal norms. But I would not suggest all of that's going to go inventory because we have orders that we need to meet. Q – Will Tang: Got it. And then I guess just if I could ask one question. I'm wondering, how the cost profile of electricity from that renewable energy project in South Africa compared to what you guys are realizing currently. Is that like should we expect raw material difference, or is the motivation behind methane [ph] is mainly driven by intentions to reduce in your emissions profile?

Yes. So that -- most of that benefit is going to come in 2024 because that project will be online by the end of 2023 in full force. I would say there is some advantage attached to that but not a significant amount of advantage from a cost perspective at this particular stage but we'll continue to monitor that. Q – Will Tang: Thank you.

Yes. The only other item I was going to add to that Will is one of the issues we've had in South Africa is just the increasing cost structures related to Eskom and electricity with this project that we have with SOLA to be a relatively fixed cost structure going forward. So we won't see those significant increases going forward like we do currently. Sorry about that Juan.

I think the next question comes from the line of Ed Brucker from Barclays. Please Ed, your line is now open.

Thanks for taking the question. So my first one just on guidance for the full year and I guess inflation expectations. Are you baking in that inflation is going to be flat to where it is right now for the rest of the year, or is there going to be some upside or downside leeway in there?

Ed it's Tim. As it relates to inflationary cost structures we're expecting continued inflation through the rest of the year, both from a logistics standpoint and also from a process chems and an energy standpoint. In fact, there's probably another $100 million of inflation that we've got in our guidance for the rest of the year. And -- but we're relatively confident and very comfortable that we'll continue to offset that with the pricing that we have.

Got it. My next one you surpassed the debt reduction goal pretty quickly and was pretty impressive as well. But you noted that you still plan on paying down more debt. So, I just wanted to see if you'd be able to quantify, how much more you want to pay down. And then the thought process around that to continue to reduce debt especially relative to maybe increasing share repurchases or even M&A to further vertically integrate?

Yes. So, Ed from a cash standpoint we're very comfortable operating around the $200 million of cash on our balance sheet just given the strength of our vertical integration and our portfolio. So excess cash that we have in any given quarter. Over and above the high returning capital that we've talked about we're going to use targeting 50% continued debt reduction and continually to opportunistically buyback shares under the program that we have authorization from the Board.

And that $2.5 billion of gross debt was an interim target. So as we maybe get a little bit closer to Investor Day, we'll talk about announcing what that next target would be for debt reduction.

[Operator Instructions] We currently have no further questions. I will hand over back to John Romano for any final remarks.

Thank you. We'd like to thank you all for joining the call today. In summary, we remain focused on the levers within our control executing against our strategy, operational excellence and delivering on our key capital projects, as JF mentioned earlier to enhance our vertically integrated portfolio. Market demand remains solid and Tronox remains well positioned to continue to deliver on our commitments to all of our stakeholders and we'll continue to generate the value for our customers and our shareholders. Thank you very much and have a great day. That concludes our call.

This concludes today's conference call. Thank you so much for joining. You may now disconnect your lines.