Caleb Boehnlein

Caleb Boehnlein followed up on the sequential production cost question, asking if the benefit was expected to grow throughout the year. He also inquired about Tronox Holdings' base case assumptions for the U.S. and Chinese housing markets embedded in the free cash flow guidance for the year.

Answer

SVP and CFO John Srivisal explained that while Q1 sees improvements from operating sites (like Stallingborough being back online), the larger driver for growing benefit throughout the year will be the sustainable cost improvement program. CEO John Romano added that TiO2 costs were relatively flat throughout 2025, and costs on the mining side would decrease if operations ramp up in the second half of 2026. Regarding housing markets, Romano stated that the current volume forecasts do not assume a significant swing up in construction, with volumes primarily driven by structural shifts from anti-dumping and seasonal improvements in Europe and North America, not a strong housing market recovery.

Caleb Boehnlein asked for clarification on whether the production cost benefit is expected to grow sequentially throughout the year. He also inquired about the base case assumptions for the U.S. and Chinese housing markets embedded in Tronox's free cash flow guidance for the year.

Answer

CFO John Srivisal explained that the Q4 to Q1 production cost improvement is largely due to better operating sites, with Stellenbosch back online. He noted that the sustainable cost improvement program will contribute more significantly throughout the year. CEO John Romano added that mining costs could decrease in the second half if operations ramp up. Regarding housing markets, Romano stated that current volume forecasts do not assume a significant upturn in construction, with growth primarily driven by structural shifts from anti-dumping and seasonal improvements in Europe and North America, rather than a strong housing recovery.

Caleb Boehnlein asked how the Botlek closure would affect inventory reduction and free cash flow, and whether the $50-$60 million in higher mining costs would see any relief in the second half of 2025.

Answer

CFO John Srivisal and CEO John Romano stated the Botlek shutdown will generate significant cash by drawing down previously built inventory. Srivisal clarified that the majority of the mining cost headwind is concentrated in the first half of 2025, with some benefit expected in the latter half of the year as the Fairbreeze mine is commissioned.

Caleb Boehnlein, on for John McNulty, sought clarification on the expected first-half versus second-half EBITDA split for 2025 and how to reconcile the very low Q1 guidance with the implied sharp recovery in Q2.

Answer

CFO Michael Feehan provided specific splits, projecting a 40/60 first-half/second-half EBITDA split for the Ecoservices segment and a more pronounced 30/70 split for the AM&C segment. He confirmed that the math implies a significant Q2 increase from the artificially low Q1 base, which is consistent with the company's expectations given the concentration of turnaround costs in Q1 and the lumpy nature of AM&C orders.