Titanium dioxide giant Tronox has delivered double the savings it anticipated in the buy-out of Cristal, as it gears up to embrace the industry’s return to growth.
The US giant, now top-hatted in the 海角视频, bought out the Saudi Arabian rival in the production of the crucial whitening agent in a £1.27 billion acquisition.
A torturous process, the agreement was called in by US and EU authorities due to fears over competition, finally agreeing in the spring of 2019 - 777 days after the deal was announed.
At Stallingborough, on the South Bank of the Humber, Tronox’s third largest plant – and the biggest in Europe – employs 400 people, with an annual production capacity of 165,000 tonnes. It sits behind Hamilton US, and Yanbu Saudi Arabia in the portfolio, with Jeffry Quinn, chairman and chief executive, visiting last summer.
Reviewing the fourth quarter results that saw revenues of $693 million (£535m) contribute to an annual figure of $2.6 billion (£2b), he said: “2019 marked a transformative year for Tronox with the close of the Cristal acquisition.
“As the world’s largest vertically integrated TiO2 producer with an unmatched global footprint, we continue to grow with our customers as they grow anywhere in the world and benefit from our alignment with customers growing faster than the overall market. We are well-positioned to create significant value for our shareholders.
“Certainly, economic and global macro uncertainty remain as we have entered 2020, but we believe the outlook for the TiO2 sector is strong. As we emerge from a prolonged, but shallow industry trough, we have seen the beginning of an uptick in volumes and believe that historically this has been a precursor to an improving price environment.
"Due to our competitive advantage of vertical integration through a global footprint, we are confident that we will continue to outperform our industry peers irrespective of the economic environment. We will deliver on our financial targets while remaining committed to employee development, safety and sustainability.”
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Tronox mines raw material as well as producing the substance, used in items from toothpaste and paint to window frames and paper. During his visit Mr Quinn told how the Humber plant was ripe for growth, batting off Brexit concerns.
Continuing the analysis, Mr Quinn said: “Our financial performance in 2019 was driven by strong execution on the many operating and commercial initiatives that were within our control, such as delivering synergies through our accelerated acquisition integration programme, optimising our global vertically integrated footprint, managing our cost structure and wisely allocating capital.
“Despite macro-economic challenges, our Adjusted EBITDA margin remained strong at 23 percent, we generated free cash flow of $214 million (£165m) and returned $315 million (£243m) to shareholders through share repurchases and our dividend. We also achieved total acquisition synergies of $89 million (£68m) during the year, exceeding our Investor Day target by $44 million (£34m) and third quarter increased guidance by $24 million (£18m).
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“Every day we are finding additional value-creating opportunities in the new Tronox. As a result, we are significantly increasing our synergy targets for 2020 and beyond.
“Our global team is moving forward in 2020 together as one new Tronox. We remain focused on execution and delivery of our vertical integration strategy, which is creating an enterprise that displays greater stability in financial performance and cash generation throughout the cycle. We will continue to manage what we can control – achieving the increased synergy targets, investing in our business through well-conceived, well-executed high return projects, deleveraging the balance sheet, and returning capital to shareholders through an increased dividend.”
Looking ahead, Mr Quinn and his team have set a revenue outlook for 2020 of $3 billion (£2.3b) to $3.3 billion (£2.5b).