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PotashCorp.com
BMO Farm to Market Conference
May 2014
Wayne Brownlee
Executive VP & CFO
This presentation contains forward-looking statements or forward-looking information (forward-looking statements). These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often contain words such as “should,” “could,” “expect,” “may,” “anticipate,” “believe,” “intend,” “estimates,” “plans” and similar expressions. These statements are based on certain factors and assumptions including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective tax rates. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events to differ materially from those expressed in the forward-looking statements, including, but not limited to the following: variations from our assumptions with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and effective tax rates; risks and uncertainties related to operating and workforce changes made in response to our industry and the markets we serve; changes in competitive pressures, including pricing pressures; risks and uncertainties related to our international operations and assets; fluctuations in supply and demand in the fertilizer, sulfur, transportation and petrochemical markets; costs and availability of transportation and distribution for our raw materials and products, including railcars and ocean freight; adverse or uncertain economic conditions and changes in credit and financial markets; the results of sales contract negotiations within major markets; unexpected geological or environmental conditions, including water inflows; economic and political uncertainty around the world; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; changes in currency and exchange rates; imprecision in reserve estimates; adverse developments in new and pending legal proceedings or government investigations; acquisitions we may undertake; increases in the price or reduced availability of the raw materials that we use; strikes or other forms of work stoppage or slowdowns; timing and impact of capital expenditures; rates of return on, and the risks associated with, our investments and capital expenditures; changes in, and the effects of, government policies and regulations; security risks related to our information technology systems; risks related to reputational loss; and earnings, and the decisions of taxing authorities, which could affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal year ended December 31, 2013 under the captions “Forward-Looking Statements” and “Item 1A – Risk Factors” and in our other filings with the US Securities and Exchange Commission and the Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this release and the company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law
Forward-looking Statements
Slide#1
PotashCorp Overview
World’s largest fertilizer producer by capacity; #1 in potash and among the largest in nitrogen and phosphate.
Global leader in potash; nutrient with highest margins and significant barriers to entry.
Canadian potash operations and strategic offshore investments position us to benefit from growth markets.
World-class nitrogen and phosphate businesses focused on more stable feed and industrial markets.
Slide#2
• Strong cash flow• Cash flow from operating activities of $3.2B in 2013• Reduction in capex: 93 percent complete CDN $8.3B potash expansion
program
• Well positioned potash business• Low-cost supplier to key markets
• Operational capability aligned with anticipated near-term demand
• Flexibility to significantly grow sales volume
• Proven track record of returning capital to shareholders• Dividend increase of 950 percent since January 2011
• Dividend payout ratio of ~4%
• Anticipate Completion of 5% share repurchase program by August 1st
PotashCorp Highlights
Slide#3
Fertilizer Fundamentals
Factors to Watch in 2014
Agriculture Market Update
Spring planting delayed due to long cold winter. Farmers
expected to plant less corn and more soybeans, cotton and rice.
Political tension could disrupt grain trade. Access to credit could be an
issue for Ukrainian farmers.
Brazil soybean economics are strong and corn returns have improved since late 2013. Logistics modestly better than last year but still constrained.
European wheat production expected to be strong and more rapeseed planting
expected.
China grain and oilseed imports continue to rise despite cancelation of some corn and soybean cargoes.
Some concern that Indian monsoon could be below
average in 2014.
Source: USDA, PotashCorp
Dry weather has impacted oil palm yields and supported
prices.
Slide#5
Palm Oil Sugar Wheat Corn Soybeans0
2
4
6
8
10
12
14
16
18
20 Chart Title
Source: Bloomberg, PotashCorp
Agricultural FundamentalsStrong Underlying Support for Robust Fertilizer Demand
Slide#6
Percentage Price Change: Jan 1 – May 13, 2014 Fertilizer Affordability Index
0
50
100
150
200
250
300
350
400
450 Crop Price Index*Fertilizer Price Index**
* Based on corn, soybean and wheat prices (weighted by global consumption)
** Based on urea, DAP and KCl prices (weighted by global consumption)
PotashCorp's Nutrient Advantages
Source: USDA, PotashCorp
Potash*
Expect Improved Demand Across All Three Nutrients
2014 Global Nutrient Demand
2012 2013 2014F0
10
20
30
40
50
60
*Based on mid-point of PotashCorp guidance.
KCl – Million Tonnes
Nitrogen
2012 2013 2014F0
20
40
60
80
100
120
140
160
180
200Ammonia – Million Tonnes
Phosphate
2012 2013 2014F0
10
20
30
40
50P205 – Million Tonnes
Slide#8
10% 6%5%
Potash Phosphate Nitrogen0%
1%
2%
3%
4%
5%
4.0%
2.3% 2.2%
Source: Fertecon, CRU, PotashCorp
The Potash Advantage
Percent – CAGR (2013-2018F)
Stronger Future Growth Prospects and Significant Time and Cost for New Capacity
Estimated Demand Growth Rate
Potash* Phosphate** Nitrogen***$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
Greenfield Cost Profile
US$ - Billions
* Estimated time and cost for a 2MMT KCL conventional greenfield mine in Saskatchewan. Includes rail, utility systems, port facilities and cost of deposits
** Includes phosphate rock mine, sulfuric acid plant, phosphoric acid plant and DAP/MAP granulation plant. Does not include time for permitting, research and engineering
*** Cost of ammonia/urea complex
~ 7 years
3-4 years~3 years
Slide#9
Source: Fertecon, CRU, IFA, PotashCorp
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
F
2015
F
2016
F
2017
F
2018
F0
10
20
30
40
50
60
70
80 Shipments Shipment Range* Operational Capability
Million Tonnes KCl
Potash Operational Capability Historically in Excess of Demand
World Potash Supply and Demand
* Midpoint of shipment range based on ~2.5% annualized demand growth rate (1998-2018F).
Slide#10
Source: Fertecon, CRU, PotashCorp
PotashCorp is Uniquely PositionedLow-cost Producer with Significant Percentage of Global Capacity
Slide#11
POT (SK)
POT (NB)
Potash Industry Site Cost Profile*
* Site cost includes all cash operating costs, estimated per-tonne sustaining capital expenditures, royalties and taxes. Darker shaded bars represent CRU estimated mine site production costs at actual production levels; lighter shaded bars represent PotashCorp’s estimate of competitors cost range based on company reported data. Includes impact of PotashCorp’s announced changes for 2014 (upper end of range) and 2016 target (lower end of range).
** Competitive position dependent on end-market destination.
*** Based on nameplate capacity at year-end 2013, which may exceed operational capability
US$ Per Tonne (FOB Mine**)
PotashCorp Rest of World
Percentage of Global Capacity***
Source: PotashCorp
Gross Margin Advantage
Potash: Gross Margin % of Net Revenue Nitrogen: Gross Margin % of Net Revenue
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014F
0
10
20
30
40
50
60
70
80
90 5-Year Average 15-Year Average
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014F
-10
0
10
20
30
40
50
60
70
80
90 5-Year Average 15-Year Average
Potash Margins Support Premium Earnings Multiple
Slide#12
Percentage Percentage
Source: PotashCorp
PotashCorp Gross Margin by Category
PotashCorp’s Portfolio is Directed to Higher Margin, Less Volatile Products
Nitrogen: Focused on Greater Stability
2009 2010 2011 2012 20130%
20%
40%
60%
80%
100%
120%
140%
160%
180%Industrial Fertilizer
Percentage of Five-year Average
Trinidad Augusta Geismar Lima0
500
1,000
1,500
2,000
2,500 Industrial Fertilizer
Thousand Tonnes Product – 2013
PotashCorp Sales by Nitrogen Plant
Slide#13
Optimize Delivered Cost Advantages; US Advantaged Position
Nitrogen: Advantaged Competitive Position
Source: PotashCorp
Ammonia Urea0
100
200
300
400
500
600
700 POT Avg US Netback US Benchmark Price*• Geographic positioning and lower
transportation costs provide opportunity for higher average realized prices
• Proximity to corn belt allows for reduced freight costs on fertilizer sales
• Industrial ammonia production located near consumers, some via pipeline direct to customers
* Represents average Tampa Ammonia and NOLA Urea prices for 2013
Slide#14
US$ Per Tonne
PotashCorp OCP** Mosaic* Agrium*0%
20%
40%
60%
80%
100%Feed & Industrial Fertilizer
Source: Company Reports, CRU, PotashCorp
PotashCorp’s Product Mix Provides Flexibility and Enhances Stability
Phosphate: Diversified Product Offering
PotashCorp Gross Margin by Category
Feed & Industrial Fertilizer0%
500%
1000%
1500%
2000%
2500%
3000%
Percentage of Net Sales (2014 YTD)
Finished Product Mix
* Based on most recently reported 12-month sales volume totals as per publicly available data
** Estimate per CRU. Excludes phosphate rock sales
Percentage
Slide#15
PotashCorp's Potential
2013Cash Cost
2014 Cash Cost
Target
2016Cash Cost
Target
50
60
70
80
90
100
110
120
Source: Fertilizer Week, PotashCorp
Potash: Improving OutlookPrices Strengthening in Spot Markets; Costs Trending Lower
Slide#17
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14250
300
350
400
450
500 Brazil CFR (US$/MT)US Midwest Del (US$/ST)SE Asia CFR (US$/MT)
US$ per tonne
Potash Price By Select Market PotashCorp Per Tonne Cash Cost of Goods Sold
US$ per tonne
* As compared to 2013 levels (not adjusted for inflation); target assumes successful ramp-up of expansions at lower-cost facilities
Annualized improvement*:~$15-$20 per
tonne
Annualized improvement*:~$20-$30 per
tonne
Million Tonnes KCl
Matching Operational Capability with Expected Market Demand
Enhancing Our Competitive Position in Potash
Source: PotashCorp
2013 2014F 2015F 2016F0
2
4
6
8
10
12
14
16
18
20
Nameplate Capacity* Inventory
* Estimated capacity as per design specifications or completed Canpotex entitlement runs; does not necessarily represent operational capability.
** Estimated annual achievable production level at current staffing and operational readiness. Estimate does not include inventory-related shutdowns and unplanned downtime.
2014F 2015F 2016F0
1
2
3
4
5
6
7
8Rocanville New Brunswick
Incremental Capability** - Million Tonnes KCl
Slide#18
49.2%
PotashCorp Other Canpotex Members
Source: Company Reports, PotashCorp
Canpotex Entitlement Growth Expected to Support Sales Volumes Growth
Potash: Increasing Canpotex Entitlement
Percentage of Canpotex Entitlement
>53%
PotashCorp Other Canpotex Members
First-half 2014 Second-half 2014 (Estimate)*
Slide#19* Based on PotashCorp preliminary results.
Source: PotashCorp
Ammonia Capacity*
New Ammonia Capacity Adds Margin Growth Potential
Nitrogen: Focused Growth Initiatives
2012 2013 2016E0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5 Trinidad Augusta Lima Geismar
Million Tonnes
* All estimated capacity amounts as at beginning of year.
** Contributions based on 2013 per-tonne margins for anticipated capacity additions.
Augusta Expansion• Completed: 2012 (August)• Incremental Capacity: 70K MT• Incremental Gross Margin (2013): ~$15M
Geismar Expansion• Completed: 2013 (February)• Incremental Capacity: 500K MT• Incremental Gross Margin (2013): ~$100M
Lima Expansion• Anticipated Completion: 2015 (September)• Incremental Capacity:
• 100K MT (Ammonia)• 80K MT (Urea solution)
• Incremental Gross Margin (Potential)**: ~$40M
Slide#20
Focus on Efficiencies and Optimization of P2O5 Production Portfolio
Phosphate: Improving Cost Structure
Source: PotashCorp
2012 2013 2014F150
250
350
450
550US$ Per Product Tonne
Costs of Goods Sold
• Greater efficiency and improved procurement practices expected to reduce costs in 2014• Reduced workforce levels expected to improve
cost structure
• Mining efficiencies (course ore recovery in Aurora) to lower rock costs
• Optimizing sulfur sourcing points and freight terms to reduce delivered cost
• Lower ammonia prices and shifting sales mix away from more ammonia intensive fertilizer products
Slide#21
Creating Shareholder Value
Source: PotashCorp
0.0
0.5
1.0
1.5
2.0
2.5
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E
PotashCorp Total Capital Spending**
CAPEX Spending Largely Complete
PotashCorp’s Opportunity
93%
7%
Completed Remaining
PotashCorp Potash Projects Estimated Capital Spending*
US$ Billions
Slide#23
* As at March 31, 2014. Includes both debottleneck and expansion spending.
** Cash additions to property, plant and equipment per cash flow statement (2006-2013)
Utilizing Strong Cash Flow to Enhance Long-term Shareholder Returns
PotashCorp’s Opportunity
Source: Bloomberg, PotashCorp
5 PercentShare Repurchase
ProgramAnnounced July 24, 2013 (up to $2 billion through August 1, 2014)
Authorized amount = ~43M shares
~70% 30%
Completed Remaining
Share Authorization Percentage Completion*
Slide#24
* As at May 15, 2014.
Q4-
10**
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Q2-12
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
$0.03
$0.35
Utilizing Strong Cash Flow to Enhance Long-term Shareholder Returns
PotashCorp’s Opportunity
* Dividends declared each quarter** $0.10 per share, adjusted for 3 for 1 stock split; rounded to nearest cent.
Source: Bloomberg, PotashCorp
POT AGU MOS CF IPI0%
1%
2%
3%
4% 3.8%
3.3%
2.0%
1.7%
0.0%
Percent Yield*
* Indicated yield percentage as per Bloomberg at May 15, 2014.
Dividend* per Share – US$
950% In
crease
Slide#25
There’s more online:
PotashCorp.comVisit us online
Facebook.com/PotashCorpFind us on Facebook
Twitter.com/PotashCorpFollow us on Twitter
Thank you
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