PotashCorp.comRBC CapitalMarkets GlobalMining & MaterialsConferenceJune 19, 2013Bill DoylePresident and CEO
This presentation contains forward-looking statements or forward-looking information (forward-looking statements). Thesest...
SQMICLAPCNitrogenPhosphate(Mining/Processing)PotashInvestmentsSinofertSource: Fertecon; CRU; Blue, Johnson & Associates; P...
Source: PotashCorp* 2013F as at April 25, 20130.01.02.03.04.05.06.002 03 04 05 06 07 08 09 10 11 12 13FPotash Nitrogen Pho...
Agricultural Market Update
1,6001,7001,8001,9002,0002,1002,2002,3002,4002,500Oilseed Consumption ProductionSource: USDA, PotashCorp8.3% production gr...
050100150200250300Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13Crop Price Index* Fertilizer Price Index**Price Index (2...
Fertilizer Market UpdatePotash Update
Source: Fertecon, PotashCorp01020304050601993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013FMillion Tonnes KClWorld Po...
Potash Shipments to Key Regions Excluding IndiaStrong Growth in Key RegionsSource: Potafertz, Fertecon, CRU, IFA, IPNI, US...
Source: Fertecon, CRU, Industry Publications, PotashCorp464850525456582012 China India Other AsiaLatin AmericaNorth Americ...
Source: Fertecon, CRU, Industry Publications, PotashCorp415474010203040506070802000 2010 Asia LatinAmericaOther 2020FMilli...
China Potash Market ProfileStrong Historical Growth Trends; Significant Future NeedsSource: Fertecon, IFA, USDA, PotashCor...
India Potash Market ProfileDespite Recent Challenges, Significant Long-term Growth PotentialSource: Fertecon, IFA, PotashC...
Indonesia and Malaysia Potash Market ProfileStrong Consumption Growth Trends Expected to ContinueSource: Fertecon, IFA, US...
Brazil Potash Market ProfileStrong Historical Growth Trends; Increased Acreage Expected to Drive Future NeedsSource: Ferte...
The PotashCorp Advantage: Positioned to Deliver Superior Performance
42%PotashCorp Rest of WorldSource: Fertecon, CRU, IFA, Company Reports, PotashCorpPositioned to Respond to Expected Potash...
~48%PotashCorp Other Canpotex MembersSource: Company Reports, PotashCorpAnticipate Increasing Canpotex Entitlement and New...
Source: PotashCorp0.00.51.01.52.02.53.03.54.04.5Scenario One Scenario Two Scenario Three Scenario FourCanpotex Allocation ...
Source: AMEC, Company Reports, PotashCorp1 New Brunswick cost per tonne based on new 2MMT mine (net addition totals 1.2MMT...
Source: IFAIFA derives operational capability by multiplying capacity with the highest historical achievable operating rat...
Source: PotashCorp, Company ReportsCompetitor Greenfield Projects1PotashCorp’s CAPEX Spending Largely Complete; Competitor...
Source: PotashCorpAmmonia Capacity*New Ammonia Capacity Adds Margin Growth PotentialPotashCorp Nitrogen Profile36%21%43%Am...
Source: PotashCorp, Company Reports0100200300400500600700800Q2-09 Q1-10 Q4-10 Q3-11 Q2-12 Q1-13Fertilizer Feed & Industria...
Cash Flow Opportunity
Strong Cash Flow + Reduced Capital Spending = Greater Financial FlexibilityPotashCorp’s Opportunity05001,0001,5002,0002,50...
Utilizing Strong Cash Flow to Enhance Long-term Shareholder ReturnsPotashCorp’s Opportunity$0.03**$0.07 $0.07 $0.07 $0.07$...
There’s more online:PotashCorp.comVisit us onlineFacebook.com/PotashCorpFind us on FacebookTwitter.com/PotashCorpFollow us...
Try Our Overview Site: www.potashcorp.com/overviewLooking For More Industry and Company Information?Explore our Key Market...
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PotashCorp - RBC Capital Markets Global Mining & Materials Conference - June 19, 2013

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  • PotashCorp - RBC Capital Markets Global Mining & Materials Conference - June 19, 2013

    1. 1. PotashCorp.comRBC CapitalMarkets GlobalMining & MaterialsConferenceJune 19, 2013Bill DoylePresident and CEO
    2. 2. This presentation contains forward-looking statements or forward-looking information (forward-looking statements). Thesestatements can be identified by expressions of belief, expectation or intention, as well as those statements that are nothistorical fact. These statements are based on certain factors and assumptions including with respect to foreign exchangerates, 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. Several factors could cause actual results or events to differ materially from thoseexpressed in the forward-looking statements, including, but not limited to the following: variations from our assumptionswith respect to foreign exchange rates, expected growth, results of operations, performance, business prospects andopportunities, and effective tax rates; fluctuations in supply and demand in the fertilizer, sulfur, transportation andpetrochemical markets; costs and availability of transportation and distribution for our raw materials and products, includingrailcars and ocean freight; changes in competitive pressures, including pricing pressures; adverse or uncertain economicconditions and changes in credit and financial markets; the results of sales contract negotiations within major markets;economic and political uncertainty around the world; timing and impact of capital expenditures; risks associated withnatural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; changesin currency and exchange rates; unexpected geological or environmental conditions, including water inflows; imprecision inreserve estimates; adverse developments in new and pending legal proceedings or government investigations;acquisitions we may undertake; strikes or other forms of work stoppage or slowdowns; rates of return on and the risksassociated with our investments; changes in, and the effects of, government policies and regulations; security risks relatedto our information technology systems; and earnings, exchange rates and the decisions of taxing authorities, all of whichcould affect our effective tax rates. Additional risks and uncertainties can be found in our Form 10-K for the fiscal yearended December 31, 2012 under the captions “Forward-Looking Statements” and “Item 1A – Risk Factors” and in our otherfilings 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 orrevise any forward-looking statements, whether as a result of new information, future events or otherwise, except asrequired by law.Forward-looking StatementsSlide#2
    3. 3. SQMICLAPCNitrogenPhosphate(Mining/Processing)PotashInvestmentsSinofertSource: Fertecon; CRU; Blue, Johnson & Associates; PotashCorpA Global Crop Nutrient CompanyPotashCorp ProfilePotash Nitrogen Phosphate% of Global Capacity* 20% 2% 5%Global Position #1 #3 #3% of Total Gross Margin (2012) 57% 29% 14%* Based on nameplate capacity at year-end 2012, which may exceed operational capability (estimated annual achievable production level)Slide#3
    4. 4. Source: PotashCorp* 2013F as at April 25, 20130.01.02.03.04.05.06.002 03 04 05 06 07 08 09 10 11 12 13FPotash Nitrogen PhosphateUnique Potash Position Drives Earnings GrowthPotashCorp ProfilePotashCorp Gross Margin64%43%22%0%10%20%30%40%50%60%70%Potash Nitrogen PhosphatePotashCorp Per-tonne Gross MarginPercentage of Net Sales (2012)10-Year Growth: +1,000%Gross Margin - US$ BillionsSlide#4
    5. 5. Agricultural Market Update
    6. 6. 1,6001,7001,8001,9002,0002,1002,2002,3002,4002,500Oilseed Consumption ProductionSource: USDA, PotashCorp8.3% production growth rate scenario is based on USDA’s June 2013 forecast (assumes large acreageincrease and record yields)2013F refers to the 2013/14 crop year.Million TonnesNeed for Historically Large Production Increase to Avoid Additional ShortfallWorld Grain and Oilseed Supply/Demand2013 Production GrowthRate Scenarios6% (~ 3X Historical Growth Rate)8.3% (> 4X Historical Growth Rate)4% (~ 2X Historical Growth Rate)
    7. 7. 050100150200250300Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13Crop Price Index* Fertilizer Price Index**Price Index (2007 Average = 100)Crop and Fertilizer Price RelationshipSignificant Economic Incentive for Increased Fertilizer UsageSource: Bloomberg, PotashCorp* Based on corn, soybean and wheat prices (weighted by global consumption) as of June 7, 2013** Based on urea, DAP and KCl prices (weighted by global consumption) as of June 7, 2013Slide#7
    8. 8. Fertilizer Market UpdatePotash Update
    9. 9. Source: Fertecon, PotashCorp01020304050601993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013FMillion Tonnes KClWorld Potash ShipmentsSlower Demand Periods Have Historically Been Followed by Robust Growth6.5%CAGR5.3%CAGRPOT Sales Volume CAGR: 7%POT Sales Volume CAGR: 15%Slide#9
    10. 10. Potash Shipments to Key Regions Excluding IndiaStrong Growth in Key RegionsSource: Potafertz, Fertecon, CRU, IFA, IPNI, USDOC, AAPFCO, Industry Publications, PotashCorpMillion Tonnes KCl0510152025303540452008 2009 2010 2011 2012 2013FLatin America China Other Asia North AmericaSlide#10
    11. 11. Source: Fertecon, CRU, Industry Publications, PotashCorp464850525456582012 China India Other AsiaLatin AmericaNorth AmericaOther 2013F*Million Tonnes KClWorld Potash DemandConsumption Expected to Drive 2013 ShipmentsRegion 2012 2013FChina 10.6 ~11.5India 3.5 ~4.0Other Asia 7.5 ~8.3Latin America 9.5 ~10.2North America 7.9 ~9.5Other 12.0 ~12.5Total 51.0 55-57Estimated Shipments by Region**(million tonnes)* 2013F based on midpoint of estimated global shipment range** Estimates per PotashCorpSlide#11
    12. 12. Source: Fertecon, CRU, Industry Publications, PotashCorp415474010203040506070802000 2010 Asia LatinAmericaOther 2020FMillion Tonnes KClExpect Key Offshore Regions To Drive Future Demand GrowthWorld Potash ShipmentsSlide#12~12~5~3
    13. 13. China Potash Market ProfileStrong Historical Growth Trends; Significant Future NeedsSource: Fertecon, IFA, USDA, PotashCorpPercentage - CAGR0%2%4%6%8%10%12%14%16%18%2002-20122002-20071993-20121993-20071962-20121962-2007Potash Use on Corn* ScenariosPotash Fertilizer ConsumptionMillion Tonnes KCl0123459.5 to 1** 5 to 1 3 to 1 2 to 1N to K Application Ratio* *Current practice* Corn represents approximately 10% of China’s current potash consumption;Significant growth potential exists on other crops.Slide#13
    14. 14. India Potash Market ProfileDespite Recent Challenges, Significant Long-term Growth PotentialSource: Fertecon, IFA, PotashCorpPercentage – CAGR0%2%4%6%8%10%12%2002-20122002-20071993-20121993-20071962-20121962-2007Potash Consumption ScenariosPotash Fertilizer Consumption0123456789103 MMT 4 MMT 5 MMT 6 MMT 7 MMT 8 MMTIndia - 2009/10 N to K RatioN to K RatioSlide#14
    15. 15. Indonesia and Malaysia Potash Market ProfileStrong Consumption Growth Trends Expected to ContinueSource: Fertecon, IFA, USDA, Food and Agricultural Policy Research Institute, PotashCorpPercentage - CAGR0%2%4%6%8%10%12%14%2002-20122002-20071993-20121993-20071962-20121962-2007Potash Consumption Palm Oil Production01020304050602001 2004 2007 2010 2013F 2016F 2019FIndonesia MalaysiaMillion TonnesSlide#15
    16. 16. Brazil Potash Market ProfileStrong Historical Growth Trends; Increased Acreage Expected to Drive Future NeedsSource: Fertecon, IFA, PotashCorpPercentage - CAGR0%2%4%6%8%10%12%2002-20122002-20071993-20121993-20071962-20121962-2007Potash Fertilizer Consumption Planted Area0102030405060701970 1980 1990 2000 2010 2020FSoybeans Corn SugarcaneMillion HectaresSlide#16
    17. 17. The PotashCorp Advantage: Positioned to Deliver Superior Performance
    18. 18. 42%PotashCorp Rest of WorldSource: Fertecon, CRU, IFA, Company Reports, PotashCorpPositioned to Respond to Expected Potash Demand GrowthPotashCorp’s OpportunityPercentage of New Operational Capability(2012-2016F)*3.5%1.3%2.7%0.0%1.0%2.0%3.0%4.0%Potash Nitrogen PhosphateGrowth in Global Fertilizer Consumption (IFA)Estimated Annual Increase (2012-2016)23%Percentage of Global Operational Capability(2016F)** Based on public filings and PotashCorp’s estimates of global operationalcapabilitySlide#18
    19. 19. ~48%PotashCorp Other Canpotex MembersSource: Company Reports, PotashCorpAnticipate Increasing Canpotex Entitlement and New Brunswick CapacityPotashCorp’s OpportunityPercentage of Canpotex Entitlement(First-half 2013)0.00.20.40.60.81.01.21.41.61.82.0Current OperationalCapabilityAnticipated OperationalCapabilityNew Brunswick Sales Opportunity**Million Tonnes KCl~56%Percentage of Canpotex Entitlement(2016F)** Based on public filings of expected project completion timing and capacity increase;percentage of Canpotex entitlement based on PotashCorp’s estimates of Canpotexentitlement runs for completed projects.** New Brunswick sales are sold through PCS Sales. Utilization of newcapacity will be dependant on market conditions.Slide#19
    20. 20. Source: PotashCorp0.00.51.01.52.02.53.03.54.04.5Scenario One Scenario Two Scenario Three Scenario FourCanpotex Allocation Change*Canpotex Sales Growth**Million Tonnes KClOffshore Incremental Sales Growth Potential SignificantPotashCorp’s OpportunitySlide#20Canpotex@10MMTCanpotex@12MMTCanpotex@14MMTCanpotex@16MMT0.00.20.40.60.81.01.2Scenario One Scenario Two Scenario Three Scenario FourNew Brunswick Incremental SalesMillion Tonnes KClNB@ 40%*NB@ 60%*NB@ 80%*NB@ 100%*+0.8MMT+2.0MMT+3.0MMT+4.2MMT+0.4MMT+0.6MMT+0.8MMT+1.0MMT* Canpotex total sales * 8% entitlement change (56% of Canpotex by 2016)** Incremental Canpotex sales * current entitlement (48%)* Based on % of incremental operational capability (1 million tonnes by 2015)0.8MMT 1.0MMT 1.1MMT 1.3MMT1.0MMT2.9MMT1.9MMT
    21. 21. Source: AMEC, Company Reports, PotashCorp1 New Brunswick cost per tonne based on new 2MMT mine (net addition totals 1.2MMT).2 PotashCorp project costs exclude infrastructure outside the plant gate; assuming US$/CDN$ at par.3 Based on 2MMT conventional greenfield mine constructed in Saskatchewan.4 IRR assumes: PotashCorp average per tonne capital cost; 4 year construction timeline, 1 year ramp up and no potash production tax on incremental increase tonnes.05001,0001,5002,0002,5003,0003,500POT ProjectsCompletedPOT Projects inProgressSK GreenfieldGreenfield (Including infrastructure and reserve costs)Greenfield (Excluding infrastructure and reserve costs)US$ per TonneHigher-Cost, Low-Return Greenfield Potash Projects Could Be DeferredPotashCorp’s Opportunity0%10%20%30%40%$300/tonne $400/tonne $500/tonneEstimated PotashCorp Brownfield IRREstimated Greenfield IRR (Excluding infrastructure and reserve)Estimated Greenfield IRR (Including infrastructure and reserve)1,231,2,433Internal Rate of Return (IRR) - PercentageEstimated Capital Cost Estimated Return on Brownfield vs GreenfieldNegativeReturnNetback ScenariosSlide#21
    22. 22. Source: IFAIFA derives operational capability by multiplying capacity with the highest historical achievable operating rate.Million Tonnes KCl EquivalentSignificant Project Delays and Deferrals Over the Past Twelve MonthsIFA Potash Operational Capability Outlook5055606570758085902012 2013F 2014F 2015F 2016FIFA Forecast as of May 2013 IFA Forecast as of May 20128 million tonnesSlide#22
    23. 23. Source: PotashCorp, Company ReportsCompetitor Greenfield Projects1PotashCorp’s CAPEX Spending Largely Complete; Competitors Facing Rising CostsPotashCorp’s Opportunity86%14%Completed RemainingPotashCorp Potash ProjectsEstimated Capital Spending*0.02.04.06.08.010.012.014.016.018.020.0Original Estimate Current EstimateBillions - US$129%Increase1 Greenfield projects include: K+S (Legacy) ; Eurochem (Volgograd); Vale (Rio Colorado)2 Estimate based on publically available project cost discussion from current project developer or, in certain cases, previous project developer3 Estimate based on publically available comments in presentations or transcripts from current project developer2 3Slide#23* As at April 24, 2013
    24. 24. Source: PotashCorpAmmonia Capacity*New Ammonia Capacity Adds Margin Growth PotentialPotashCorp Nitrogen Profile36%21%43%Ammonia Urea Solutions/NA/AN2013 YTD Nitrogen Product Mix (Sales Volume)0.00.51.01.52.02.53.03.54.04.52012 2013FTrinidad Augusta Lima GeismarMillion Tonnes$190 million expansion of our Lima, OH ammonia (+88,000 short tons/year)and urea capacity (+80,000 short tons/year) expected to be complete by late 2015* All estimated capacity amounts as at beginning of yearIncremental GMof approximately~$130 millionSlide#24
    25. 25. Source: PotashCorp, Company Reports0100200300400500600700800Q2-09 Q1-10 Q4-10 Q3-11 Q2-12 Q1-13Fertilizer Feed & IndustrialPotashCorp Average Realized Sales PriceIndustrial and Feed Products Enhance Stability in PhosphatePotashCorp Phosphate Profile0%20%40%60%80%100%PotashCorp* Mosaic**Feed & Industrial FertilizerPhosphate Product Mix (Sales Volume)US$/tonne* Based on 2013 YTD sales volumes** Mosaic’s percentage based on feed sales volume relative to total phosphate salesvolume as publicly disclosed for the most recent four fiscal quartersSlide#25
    26. 26. Cash Flow Opportunity
    27. 27. Strong Cash Flow + Reduced Capital Spending = Greater Financial FlexibilityPotashCorp’s Opportunity05001,0001,5002,0002,5003,0003,5004,0002003 2004 2005 2006 2007 2008 2009 2010 2011 2012Cash Provided by Operating ActivitiesCapital SpendingUS$ MillionsSource: PotashCorp* As we adopted International Financial Reporting Standards (IFRS) witheffect from January 1, 2010; 2003 to 2009 information is presented on aprevious Canadian Generally Accepted Accounting Principals (GAAP) basis.Accordingly, information for 2003 to 2009 may not be comparable to 2010, 2011 and 2012.05001,0001,5002,0002,5003,0003,5004,0002006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015FUS$ Millions** Excluding capitalized interest, major repairs and maintenance and Lima expansionAnnual Cash Provided by Operating Activities* PotashCorp Capital Spending**Slide#27
    28. 28. Utilizing Strong Cash Flow to Enhance Long-term Shareholder ReturnsPotashCorp’s Opportunity$0.03**$0.07 $0.07 $0.07 $0.07$0.14 $0.14$0.21 $0.21$0.28 $0.28$0.35$0.00$0.05$0.10$0.15$0.20$0.25$0.30$0.35$0.40Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13Dividend* per Share – US$* Dividends declared each quarter** $0.10 per share dividend adjusted for 3 for 1 stock split; rounded to nearest cent.Source: PotashCorpOpportunity Capital (10-year total) = $8.1B24% Return5-year Average Cash Flow Return 1,2(2008-2012)Share Repurchases (since 1999) = $6.3B60% Increasein Current Share Price2 aboveaverage repurchase priceEquity Investments 3 (since 1998) = $2.0B384% IncreaseChange in Market Value of InvestmentsSince Acquisition21 See reconciliation and description of certain non-IFRS measures at www.potashcorp.com2 All figures as at June 10, 20133 Total acquisition cost for SQM, APC, Sinofert and ICLSlide#28
    29. 29. There’s more online:PotashCorp.comVisit us onlineFacebook.com/PotashCorpFind us on FacebookTwitter.com/PotashCorpFollow us on TwitterThank you
    30. 30. Try Our Overview Site: www.potashcorp.com/overviewLooking For More Industry and Company Information?Explore our Key Markets… Find Data on Key Crops… Learn about our Company

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