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PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014
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PotashCorp - BMO Capital Markets Global Metals & Mining Conference, February 25, 2014

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  • 1. BMO Global Metals & Mining Conference February 25, 2014 Bill Doyle President & CEO PotashCorp.com
  • 2. Forward-looking Statements 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, 2012 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. Slide#2
  • 3. PotashCorp Overview World’s largest fertilizer producer by capacity; #1 in potash and among the largest in nitrogen and phosphate. Canadian potash operations and strategic offshore investments position us to benefit from growth markets. Global leader in potash; nutrient with highest margins and significant barriers to entry. World-class nitrogen and phosphate businesses focused on more stable feed and industrial markets. Slide#3
  • 4. PotashCorp Highlights • Strong cash flow • Cash flow from operating activities of $3.2B in 2013 • Well positioned potash business • Low-cost supplier to key markets • 93 percent complete CDN $8.3B expansion program • Operational capability aligned with anticipated near-term demand, with flexibility to significantly grow sales volume • Strong balance sheet affords good flexibility • Low leverage relative to historical levels (Net debt to EBITDA) • Access to $3.5B liquidity (commercial paper/credit facility) at low borrowing rates • Proven track record of returning capital to shareholders • Dividend increase of 950 percent since January 2011 • Executing share repurchase program (authorization to repurchase up to 5 percent of o/s) Slide#4
  • 5. Potash – Near-term Outlook
  • 6. World Potash Shipments and Consumption 2014 Shipments Expected to Match Underlying Consumption Million Tonnes KCl 60 Shipments Consumption (Estimated) 55 50 45 40 35 30 25 20 2002 2004 2006 2008 2010 2012 2014F* * Based on mid-point of PotashCorp shipment forecast of 55-57 million tonnes. Source: Fertecon, CRU, Industry Publications, IFA, PotashCorp Slide#6
  • 7. World Potash Demand Potential for Record or Near-record Shipments Estimated KCl Shipments by Market (million tonnes) Market China India Other Asia Latin America 2013E 11.0 3.1 7.8 10.1 2014F* Factors to Watch 11.3 - 11.7 Demand levels at the upper end of range will likely require consumption growth and/or appetite to restock inventories. Strong first-half 2014 commitments are expected to limit second-half import requirements. 3.7 - 4.2 Growth expected due to low inventory levels coming into 2014 and a modest improvement in consumption. Potential for stronger imports but largely contingent on changes to fertilizer subsidies. 8.0 - 8.3 Demand expected to be robust; supportive prices for palm oil and other key crops. Consumption growth has been relatively steady despite uneven buying patterns. 10.3 - 10.6 North America 8.7 9.0 - 9.5 Other 12.5 ~12.7 Total 53.2 Demand expected to be robust with supportive returns for growers and low dealer inventories at the start of 2014. Deterioration in soybean prices would be the key risk to consumption and import needs. Strong engagement in preparation for spring season. Expect full-year demand will move higher, more inline with historical average levels. 55.0-57.0 Potential for upside to demand expectation with improved consumption in Western Europe, FSU and/or central Europe. * Forecast per PotashCorp Source: Fertecon, CRU, Industry Publications, PotashCorp Slide#7
  • 8. North America Potash Shipments Demand Returning to Historical Levels; Anticipate Limited Offshore Imports Million Tonnes KCl First Half Percentage of Total Shipments Second Half Offshore Imports 10-Year Average* 10 100 9 90 8 80 7 70 6 60 5 50 4 40 3 30 2 20 1 10 0 Domestic Producers 0 2012 2013 2014F* 2012 2013 2014F * Represents Olympic average (removing highest and lowest shipment totals) Source: IPNI, TFI, USDOC, PotashCorp Slide#8
  • 9. North American Potash Recommendations Revised Recommendations by Iowa State Support Need for Higher Application Rates Corn Recommendation Soybean Recommendation lb K20 per Acre lb K20 per Acre Old Recommendation 140 New Recommendation 120 Old Recommendation 140 New Recommendation 120 100 100 80 80 60 60 40 40 20 20 0 0 80 100 120 140 160 180 Soil Test Potassium - ppm Source: Iowa State University 200 80 100 120 140 160 180 Soil Test Potassium - ppm 200
  • 10. Potash Shipments to Key Offshore Markets Demand Growth Has Been Strong in Markets Outside of India Million Tonnes KCl 35 Latin America Million Tonnes KCl China Other Asia* 7 30 6 25 5 20 4 15 3 10 2 5 1 0 India 0 2008 2009 2010 2011 2012 2013E 2014F** 2008 2009 2010 2011 2012 2013 2014F** * Excludes India. **Forecast per PotashCorp; represents mid-point of range. Source: Fertecon, Industry publications, PotashCorp Slide#10
  • 11. Global Potash Industry Operating Rate Expected to Rise on Increased Demand and Reduced Operational Capability Percent* 100 95 90 85 Historical Average (20 year) 80 75 70 65 60 55 50 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014F * Based on percentage of operational capability (estimated annual achievable production level). 2014F based on mid-point of PotashCorp’s demand forecast range of 55-57 MMT. Source: Fertecon, CRU, PotashCorp Slide#11
  • 12. Potash – Enhancing Our Competitive Position
  • 13. Potash Operating Objectives Enhance low cost delivered supplier to key markets • Match operational capability with expected market demand • Optimize production at our lowest-cost facilities Retain operational flexibility to capture growth opportunities • Expansion construction to be finalized to support > 18 million tonnes nameplate capacity
  • 14. Enhancing Our Competitive Position Matching Operational Capability with Expected Market Demand Million Tonnes (KCl) 20 18 16 • Beginning 2014, reduced near-term operational capability to better align with anticipated sales volume requirements Nameplate Capacity* Operational Capability** Inventory 14 • Operations are staffed and ramped up each year according to expected market conditions in order to reduce the costs of idle capacity 12 10 8 6 • If demand exceeds expectations, inventory can serve as a buffer to ensure customer needs are met 4 2 0 2013 2014F 2015E 2016E * 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. Source: PotashCorp Slide#14
  • 15. Enhancing Our Competitive Position Optimizing Production at Our Lowest-cost Facilities Cash Cost of Production – Potash US$ Per Tonne 120 110 Annualized Improvement*: ~$15-$20 per tonne Annualized Improvement*: ~$20-$30 per tonne 100 90 • Fully utilize lower-cost operational capability at Rocanville and Allan • Run Lanigan and Cory at reduced levels until market conditions warrant higher rates • Cease production at Penobsquis during first-half of 2014 while accelerating development of lower-cost Picadilly mine 80 70 60 50 2013 Cash Cost 2014E Cash Cost 2016 Cash Cost Target • Target other efficiencies and cost savings opportunities to further enhance competitive position * As compared to 2013 levels (not adjusted for inflation); target assumes successful ramp-up of expansions at lower-cost facilities. Source: PotashCorp Slide#15
  • 16. Enhancing Our Competitive Position Remaining Expansions to Add Lower-Cost Operational Capability Operational Capability - Million Tonnes (KCl) 8 Rocanville New Brunswick 7 6 5 • Expansion construction to be finalized on two remaining projects to support approximately 18 million tonnes of nameplate capacity • Rocanville: anticipate construction completion in 2015 with $0.3B remaining to be spent. Expect to add ~3 million tonnes of incremental lower-cost capability once fully ramped up 4 3 2 1 0 2014 2015F 2016F • New Brunswick: anticipate construction completion in late 2014 with $0.3B remaining to be spent. To improve delivered cost position to key Latin American markets Source: PotashCorp Slide#16
  • 17. Nitrogen
  • 18. PotashCorp Nitrogen Profile Portfolio of Products Leveraged to Highest Margin Products Gross Margin per Tonne (2013) Nitrogen Sales Volumes Mix (2013) Percentage of Net Sales Ammonia Urea Solutions/NA/AN 60% 50% 37% 40% 45% 30% 20% 10% 18% 0% Ammonia Solutions/NA/AN Urea Source: PotashCorp Slide#18
  • 19. PotashCorp Nitrogen Profile New Ammonia Capacity Adds Margin Growth Potential Ammonia Capacity* Highlights Million Tonnes 4.5 Trinidad Augusta Lima Geismar 4.0 3.5 • Geismar Expansion: New capacity brought on-stream in early 2013, added approximately ~$100M of incremental gross margin in 2013 • Lima Expansion: 3.0 $190 million expansion anticipated to add additional ammonia (+100K mt/year) and urea capacity (+80K mt/year) by late 2015. New capacity at Lima also anticipated to help grow higher-margin DEF capability and supply lower cost ammonia to Aurora 2.5 2.0 1.5 1.0 0.5 0.0 2012 2013 2016E * All estimated capacity amounts as at beginning of year. Source: PotashCorp Slide#19
  • 20. Nitrogen Gross Margin by Country US Facilities Benefitting From Low Gas Cost; Trinidad Relative Position Improving Gas Cost – US$ Per MMBtu 8 Trinidad Gas* Gross Margin – US$ Millions 1,200 US Gas 7 Trinidad US 1,000 6 800 5 600 4 3 400 2 200 1 0 0 Q4-10 Q4-11 Q4-12 Q4-13 2010 2011 2012 2013 * Estimate based on Tampa ammonia priced divided by 100. Actual price based on specific contract, which may vary slightly. Source: Fertecon, PotashCorp Slide#20
  • 21. Phosphate
  • 22. PotashCorp Phosphate Profile Industrial and Feed Products Provide Flexibility and Enhance Stability in Phosphate Phosphate Product Mix PotashCorp Gross Margin by Category Percentage of Net Sales (2013) Percentage Feed & Industrial Fertilizer 100% 30 80% 25 20 60% 15 40% 10 20% 5 0 0% PotashCorp Mosaic* Agrium* CF* Feed & Industrial Fertilizer * Based on most recently reported 12-month sales volume totals as per publicly available data Source: Company Reports, PotashCorp Slide#22
  • 23. Enhancing Our Competitive Position Optimizing P2O5 Production Portfolio; Well Positioned to Meet Customer Needs Production - Million Tonnes (P2O5) 2.5 Aurora White Springs Geismar • Focus on improving efficiency and optimizing production portfolio 2.0 • Close Suwannee River chemical plant – one of two plants at White Springs 1.5 • Net reduction of P2O5 (after offset from higher operating rates at Aurora) is ~215,000 tonnes; • No expected impact to customers given ability to flex production of end products 1.0 0.5 0.0 2013 2014E 2015E Source: PotashCorp Slide#23
  • 24. Enhancing Our Competitive Position Anticipate Additional Cost Reductions and Efficiencies in 2014 Costs of Goods Sold US$ Per Product Tonne 450 • Greater efficiency and improved procurement practices expected to reduce costs in 2014 • Reduced workforce levels expected to improve cost structure 350 • Mining efficiencies (course ore recovery in Aurora) lowering rock costs 250 • Optimizing sulfur sourcing points and freight terms to reduce delivered cost 550 150 2012 2013 2014F • Lower ammonia prices and shifting sales mix away from more ammonia intensive fertilizer products Source: PotashCorp Slide#24
  • 25. Creating Shareholder Value
  • 26. PotashCorp’s Opportunity CAPEX Spending Largely Complete PotashCorp Potash Projects Estimated Capital Spending* PotashCorp Total Capital Spending** US$ Billions 2.5 7% 2.0 1.5 1.0 0.5 93% 0.0 Completed 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E Remaining * As at December 31, 2013. Includes both debottleneck and expansion spending. ** Cash additions to property, plant and equipment per cash flow statement (2006-2013) Source: PotashCorp Slide#26
  • 27. PotashCorp’s Opportunity Utilizing Strong Cash Flow to Enhance Long-term Shareholder Returns Dividend* per Share – US$ Percent Yield* $0.40 $0.35 $0.35 5% $0.30 4.2% $0.25 4% $0.20 3.4% $0.15 3% $0.10 $0.05 $0.03 2.1% $0.00 Q4-10** Q3-11 Q2-12 Q1-13 Q4-13 2% 1.7% * Dividends declared each quarter ** $0.10 per share dividend adjusted for 3 for 1 stock split; rounded to nearest cent. 1% 5 Percent Share Repurchase Program Announced July 24, 2013 (up to $2 billion through August 1, 2014) 0.0% 0% POT AGU MOS CF IPI * Indicated yield percentage as per Bloomberg at February 20, 2014. Source: Bloomberg, PotashCorp Slide#27
  • 28. Thank you There’s more online: PotashCorp.com Visit us online Facebook.com/PotashCorp Find us on Facebook Twitter.com/PotashCorp Follow us on Twitter
  • 29. Looking For More Industry and Company Information? Try Our Overview Site: www.potashcorp.com/overview Explore our Key Markets… Find Data on Key Crops… Learn about our Company

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