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KW

KRONOS WORLDWIDE INC (KRO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid operational improvement: revenue rose 2% year over year to $489.8M and net income more than doubled to $18.1M ($0.16 EPS) on higher volumes, modestly higher prices, and lower per‑ton production costs; operating rate was 93% vs 87% in Q1 2024 .
  • Against S&P Global consensus, KRO modestly missed: revenue $489.8M vs $501.4M consensus* and EPS $0.16 vs $0.168*; sequentially, revenue improved from Q4 2024’s $423.1M while pricing declined 3% intra‑quarter due to regional pressure and mix * .
  • EBITDA rose to $51.2M (vs $31.7M in Q1 2024; Q4 2024 was $41.7M), as higher volumes (+5% YoY) and lower raw materials/utilities offset FX headwinds (~$11M drag to net sales) .
  • Board maintained quarterly dividend at $0.05 per share in May (same as February), reinforcing capital returns while the pricing environment remains mixed .

What Went Well and What Went Wrong

  • What Went Well
    • Volume and cost execution: TiO2 sales volumes +5% YoY to 136k MT; production +18% YoY with plants at 93% capacity, lowering unabsorbed fixed costs and per‑ton costs .
    • Profitability expansion: EBITDA increased to $51.2M (vs $31.7M Q1’24) and segment profit to $41.6M (vs $23.4M) on higher volumes, slightly higher prices, and lower input costs .
    • Integration progress: Louisiana Pigment (LPC) now fully consolidated since July 2024; management cites ability to realize synergies and innovations as part of the ongoing integration .
  • What Went Wrong
    • Top‑line and EPS modestly under consensus: Revenue $489.8M vs $501.4M* and EPS $0.16 vs $0.168* * .
    • Sequential pricing pressure: Average TiO2 prices fell ~3% during Q1 2025 due to market pressure in certain regions and less favorable product mix (despite being ~2% above Q1’24) .
    • FX headwinds: Euro‑driven FX reduced net sales by ~$11M YoY and cut segment profit by ~$5M .

Financial Results

Core P&L and Profitability (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$484.7 $423.1 $489.8
Gross Margin ($USD Millions)$101.2 $86.4 $106.8
Gross Margin (%)20.9% (calc) 20.4% (calc) 21.8% (calc)
Income from Operations ($USD Millions)$38.9 $28.6 $38.4
Net Income ($USD Millions)$71.8 $(13.2) $18.1
Diluted EPS ($)$0.62 $(0.12) $0.16
EBITDA ($USD Millions)$123.3 $41.7 $51.2
EBITDA Margin (%)25.4% (incl. $64.5M non‑cash gain) (calc) 9.9% (calc) 10.5% (calc)

Note: Q3 2024 EBITDA includes a $64.5M non‑cash gain tied to the LPC remeasurement .

Q1 2025 vs S&P Global Consensus

MetricActualConsensus*Surprise*
Revenue ($USD Millions)$489.8 $501.4*-$11.6M (-2.3%)*
Diluted EPS ($)$0.16 $0.1681*-$0.0081*

*Values retrieved from S&P Global.

Segment and KPIs

MetricQ3 2024Q4 2024Q1 2025
TiO2 Segment Profit ($USD Millions)$43.4 $33.1 $41.6
TiO2 Sales Volumes (kMT)130 110 136
TiO2 Production Volumes (kMT)141 136 143
Capacity Utilization (%)92% (Q3’24) 97% (Q4’24) 93% (Q1’25)
Avg. TiO2 Price YoY-1% +2% +2%
Avg. TiO2 Price Seq.——-3% (during Q1’25)

Guidance Changes

MetricPeriodPrevious Guidance/ActionCurrent Guidance/ActionChange
Dividend per ShareQ2 2025 payout$0.05 declared (Feb 26, 2025) $0.05 declared (May 14, 2025) Maintained

Notes: The Q1 2025 press release and 8‑K did not provide quantitative revenue/margin/OpEx guidance ranges .

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document set searched.

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
PricingQ3: Avg price -1% YoY ; Q4: Avg price +2% YoY Avg price +2% YoY but declined 3% intra‑quarter due to regional pressure/mix Sequential softening
Demand/VolumesQ3 volumes +21% YoY; Q4 +4% YoY Sales volumes +5% YoY (136k MT) Still positive YoY, slower than 2H’24
Production CostsLower energy/raw materials benefited Q3 and Q4 Per‑ton costs declined on higher operating rates, lower raw materials/utilities Favorable
Capacity Utilization92% (Q3) and 97% (Q4) 93% in Q1 2025 High, down vs Q4 seasonally
FXQ3 impact comparable to prior year; Q4 nominal impact ~$(11)M YoY net sales drag; ~$5M headwind to segment profit Worsened in Q1
LPC IntegrationAcquisition closed July 2024; remeasurement gain in Q3 Now fully consolidated; integration and synergy realization emphasized Ongoing

Management Commentary

  • “We operated our production facilities at overall average capacities of 93% and 87% in the first quarters of 2025 and 2024, respectively.”
  • “Average TiO2 selling prices declined 3% during the first quarter of 2025 due to market pressure in certain regions and a less favorable product sales mix… [but] were 2% higher than the average prices during the first quarter of 2024.”
  • “TiO2 production volumes were 18% higher in the first quarter of 2025 compared to the first quarter of 2024.”
  • “Fluctuations in currency exchange rates (primarily the euro)… decreased our segment profit by approximately $5 million… and decreased net sales by approximately $11 million” YoY.
  • Regarding drivers: higher sales and production volumes, higher average TiO2 selling prices, and decreases in per metric ton production costs (raw materials, utilities, unabsorbed fixed costs) lifted income from operations.

Q&A Highlights

  • No earnings call transcript or Q&A was available in the document library for Q1 2025.

Estimates Context

  • Q1 2025 revenue of $489.8M missed S&P Global consensus of $501.4M by ~$11.6M (≈2.3%); EPS of $0.16 was ~$0.008 below the $0.168 consensus* * .
  • Prior quarters show variability vs consensus: Q4 2024 actual revenue $423.1M vs $494.2M consensus* and EPS -$0.12 vs $0.133*; Q3 2024 actual revenue $484.7M vs $569.3M consensus* and EPS $0.62 reported; S&P’s “Primary EPS” actual in their dataset reflects $0.1982 for Q3 2024 (impacted by normalization treatment of the non‑cash LPC remeasurement) * *.
  • With sequential price pressure noted and FX headwinds, Street estimates may need to temper near‑term pricing/margin assumptions despite healthy operating rates.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Execution improved: EBITDA rose to $51.2M with better volumes and lower per‑ton costs; gross margin dollars advanced to $106.8M (21.8% margin) .
  • Pricing mixed: YoY +2% but down 3% during Q1 on regional pressure/mix; monitor further quarterly price updates .
  • Strong operating discipline: 93% utilization and production +18% YoY reduced unabsorbed fixed costs, supporting margins .
  • FX is a real headwind: ~$(11)M net sales impact and ~$5M segment profit impact YoY in Q1 .
  • Slight miss vs consensus but sequential improvement vs Q4 revenue/EBITDA; watch for how Street revises near‑term price/margin outlook* * .
  • Integration: Full ownership of LPC now embedded; synergy and innovation opportunities cited, but not quantified .
  • Capital returns: Dividend maintained at $0.05 per share in both Feb and May, signaling steady shareholder payouts through a mixed pricing backdrop .

Appendix: Source Documents

  • Q1 2025 Press Release (May 7, 2025): financials, pricing, volumes, FX impacts .
  • Form 8‑K (May 7, 2025) including Exhibit 99.1: financial tables and non‑GAAP reconciliations .
  • Q4 2024 Press Release (Mar 6, 2025): sequential context and 2024 quarterly utilization rates .
  • Q3 2024 Press Release (Nov 6, 2024): prior trend, LPC remeasurement gain detail .
  • Q1 2025 dividend and other corporate actions (Feb 26 and May 14, 2025) .