Tronox Holdings plc Q4 FY2025 earnings call

• Safety: 2025 was best safety performance in over a decade with lowest overall injury rate.
• Financial: Stronger volumes than anticipated, TiO2 volumes in Q4 highest since 2020 due to antidumping duties, TiO2 prices lower in Q4 but price increases in Q1 showing positive momentum, zircon volumes positive at year end with price increases announced for Q2. Maintained cash preservation and inventory management, resulting in $53 million free cash flow in Q4. Executed $400 million senior secured note offering, announced closures of Botlek and Fuzhou pigment plants. Sustainable cost improvement program had over $90 million run-rate savings by end of 2025, on pace for $125 - $175 million by end of 2026. Progressed mining projects in South Africa and rare earth strategy with conditional nonbinding financing for cracking and leaching facility in Australia.

For the full year 2025, revenue was $2.9 billion. Year-over-year decline was due to unfavorable pricing, mix, and lower volumes in TiO2 and zircon. Fourth quarter TiO2 revenues increased 5% with 9% volume increase but 4% price decline including mix. Zircon revenues increased 32% sequentially with 42% volume increase but 7% price decline quarter to quarter. Adjusted EBITDA for the year was $336 million with a margin of 11.6%. Free cash flow for the year was a use of $281 million. Fourth quarter adjusted EBITDA was $57 million, down 56% year on year due to pricing, mix, production, and freight costs, partially offset by sales volumes, exchange rates, and SG&A savings. Sequentially, adjusted EBITDA declined 23% with pricing, mix offset by production costs, sales volumes, and freight costs.

2026 expects TiO2 volumes relatively flat sequentially, pricing up 2% - 4% sequentially, zircon volumes mirror strong Q4 performance with price increases expected in Q2. Focus on generating cash, keeping some assets down longer, managing FX volatility, savings from cost improvement plan. Expect Q1 2026 EBITDA $55 - $65 million, positive free cash flow in 2026 as pricing and costs improve from underway actions.

Volatility in pricing and mix, uncertainties in market demand, potential for continued headwinds from inventory, cost, and portfolio rationalization, FX volatility, and uncertainties related to the implementation of price increases and the progress of rare earth projects.

Q: Joshua David Spector at UBS asked about free cash flow guidance and how to get to positive free cash flow.

A: John D. Romano and D. John Srivisal responded on cost improvement, asset utilization, and cash flow progression.

Q: David L. Begleiter at Deutsche Bank asked about tailwinds for sustainable cost improvement and mining costs in 2026.

A: John D. Romano and D. John Srivisal discussed cost improvement program visibility, fixed costs, and mining operations.

Q: Duffy Fischer at Goldman Sachs asked about mining operations and rare earth run-rate spend.

A: John D. Romano and D. John Srivisal talked about mining operating rates, vertical integration advantage, and rare earth capital projection.

Q: Jeff Zekauskas at JPMorgan asked about TiO2 volume change and global industry contraction.

A: John D. Romano discussed volume growth, antidumping duties, and industry capacity shifts.

Q: Peter Osterland at Truist Securities asked about TiO2 mix dynamics and zircon pricing.

A: John D. Romano answered on mix tailwinds and zircon price increase expectations.

Q: Frank Mitsch at Fermium Research asked about incremental margins on volume growth and industry price discipline.

A: John D. Romano discussed volume growth location impact and industry price increase announcements.

Q: Justin Pellegrino at Morgan Stanley asked about antidumping duty story and future markets.

A: John D. Romano spoke on antidumping duty impact on share recapture and future market watch.

Q: Roger Neil Spitz at Bank of America asked about TiO2 price exclusion of mix and fixed cost savings from plant closures.

A: John D. Romano and D. John Srivisal answered on price exclusion and fixed cost savings.

Q: John Roberts at Mizuho asked about seasonal volumes and China acquisition of U.K. TiO2 plant.

A: John D. Romano discussed seasonal demand and China U.K. plant acquisition status.

Q: Aaron Rosenthal at JPMorgan Chase asked about cash flow definition and restructuring charges.

A: D. John Srivisal answered on cash flow definition and restructuring charge expectations.

Q: Hassan Ahmed at Alembic Global asked about volume growth, rationalization, and China facilities.

A: John D. Romano talked about volume growth from market share gains, rationalization expectations, and sulfur price impact.