NYSE$TROX

Tronox Holdings PLC · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Reported strong TiO2 volume recovery and raised the acquisition synergy target.

Tronox's third quarter results showed sequential growth driven by improved market conditions. TiO2 volumes increased 16 percent quarter over quarter, while pricing remained level. The company delivered Adjusted EBITDA of $148 million and an Adjusted EBITDA margin of 22 percent.

  • Revenue of $675 million increased 17 percent sequentially on improved market demand
  • Net income of $902 million primarily due to the reversal of a portion of U.S. valuation allowance relating to net operating loss carryforwards resulting in a non-cash benefit of $895 million
  • Adjusted EBITDA of $148 million with Adjusted EBITDA margin of 22 percent
  • Total year-to-date acquisition synergies of $183 million, raising total synergy target for FY 2020 to $235 million

Headline financials

Total Revenue

$675M

Previous: $768M-12.1%
EPS (adj)

$0.05

Previous: $0.21-76.2%
Adjusted EBITDA

$148M

Previous: $184M-19.6%
Adjusted EBITDA Margin

22.0%

Previous: 24.0%-8.3%
Free Cash Flow

$896M

Previous: -$13M+6992.3%
Net Income

$896M

Previous: -$13M+6992.3%
Operating Income

$49M

Previous: $48M+2.1%
Gross Profit

$139M

Previous: $133M+4.5%
Cash & Equivalents

$722M

Previous: $305M+136.7%
Total Assets

$6.48B

Previous: $5.16B+25.6%
Stock-Based Comp

$8M

Previous: $9M-11.1%

Revenue & EPS history

Tronox · Revenue · Quarterly

$675M

Q3 2020-12.1%vs Q3 2019
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Tronox · $599M total across 2 segments · Q3 2020

  • TiO2
    $543M-10.0%
  • Zircon
    $56M-17.6%

Forward guidance

Tronox anticipates a favorable deviation from normal fourth quarter seasonality, resulting in strong fourth quarter TiO2 sales volumes at or above third quarter 2020 and fourth quarter 2019 levels. Adjusted EBITDA in the fourth quarter is expected to be in the range of $155 to $170 million with an Adjusted EBITDA margin improvement back to first half 2020 levels.

Tailwinds

  • Strong sales trends reflect a favorable deviation from typical fourth quarter seasonality
  • Anticipate TiO2 sales volumes at or above Q3 2020 and Q4 2019
  • Q4 zircon sales volume to be the strongest quarter of the year
  • Zircon sales expected to increase in the range of 25 percent sequentially
  • Adjusted EBITDA margin to recover to first half of 2020 levels

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

-0.8%

Avg return

Earnings day

+0.3%

Avg return

5 days after

+2.3%

Avg return

30 days after

49%

30 / 61 earnings

Positive

+33.8%

Q4 2016

Best reaction

-20.8%

Q3 2015

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.3%+4.3%-13.2%
Q4 2025-10.5%+3.6%+0.9%
Q3 2025-0.6%+9.1%+20.4%
Q1 2025+1.5%-1.8%+5.0%
Q4 2024-11.0%-18.4%-28.0%
Q3 2024-7.5%-9.9%-8.4%
Q2 2024-17.6%-16.8%-13.8%
Q1 2024+12.9%+10.2%+16.6%
Q4 2023+9.8%+12.7%+25.0%
Q3 2023+2.7%+0.5%+20.1%
Q2 2023-4.3%-10.0%-15.6%
Q1 2023-0.4%+7.1%-9.7%
Q4 2022-3.2%-2.9%-19.9%
Q3 2022-6.8%-11.0%+5.4%
Q2 2022-0.6%-4.3%-5.8%
Q1 2022-1.6%-4.6%+1.3%
Q4 2021-6.7%-9.9%-13.1%
Q3 2021-9.1%-5.6%-8.6%
Q2 2021+1.9%-3.0%+19.2%
Q1 2021+0.3%+1.0%+7.0%
Q4 2020-2.9%+7.0%-4.1%
Q3 2020+5.8%+17.1%+37.8%
Q2 2020-2.4%-1.0%+18.5%
Q1 2020-8.4%+3.5%+24.2%
Q4 2019-12.0%-16.7%-30.2%
Q3 2019+2.9%+6.4%+5.3%
Q2 2019-2.3%-6.4%-12.1%
Q1 2019-6.1%-9.3%-8.4%
Q4 2018+2.2%+1.4%+13.7%
Q3 2018+5.2%+3.4%-17.5%
Q2 2018-8.9%-7.7%-12.2%
Q1 2018+1.4%+0.1%+9.1%
Q4 2017+8.3%+9.4%+0.9%
Q3 2017+1.9%+3.5%-24.6%
Q2 2017-1.8%-1.5%+9.9%
Q1 2017-6.2%-4.3%-8.0%
Q4 2016+33.8%+20.7%+15.5%
Q3 2016+3.1%+17.2%+36.0%
Q2 2016+6.9%+19.1%+50.4%
Q1 2016-5.4%
Q4 2015+8.3%
Q3 2015-20.8%
Q2 2015+2.2%
Q1 2015-6.0%
Q4 2014-3.7%
Q3 2014+4.1%
Q2 2014+6.5%
Q1 2014-5.9%
Q4 2013+14.3%
Q3 2013+0.6%
Q2 2013+2.9%
Q1 2012+0.5%
Q1 2013+1.5%
Q4 2012+2.5%
Q3 2012-18.6%
Q2 2012-2.4%
Q4 2011+2.5%
Q3 2011-8.2%
Q2 2011+5.2%
Q1 2011+0.7%
Q4 2010+0.0%
Q3 2010
Q2 2010

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