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SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
SQM Presentacion Corporativa Septiembre 2013
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SQM Presentacion Corporativa Septiembre 2013

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SQM Presentacion Corporativa Septiembre 2013

SQM Presentacion Corporativa Septiembre 2013

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  • 1. September 2013
  • 2. Statements in this presentation concerning the Company’s business outlook or future economic performances, anticipated profitability, revenues, expenses, or other financial items, anticipated cost synergies and product or service line growth, together with other statements that are not historical facts, are “forward-looking statements” as that term is defined under Federal Securities Laws. Any forward-looking statements are estimates, reflecting the best judgment of SQM based on currently available information and involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Risks, uncertainties, and factors that could affect the accuracy of such forward-looking statements are identified in the public filing made with the Securities and Exchange Commission, and forward-looking statements should be considered in light of those factors. 2 Important Notice
  • 3. Overview Fertilizers Specialty Chemicals Financial Information 3 Agenda Photo: Evaporation Pond - Salar de Atacama, from which we produce potassium & lithium products
  • 4. 4 SQM at a Glance • World Leader in Specialty Businesses: Potassium Nitrate, Iodine, lithium & Solar Salts • Global Company: Based in Santiago, Chile with sales in more than 100 countries and offices in 20 countries. • Strong Financial Profile Revenue LTM: US$ 2.4 Billion EBITDA† LTM: US$ 1.0 Billion EBITDA Margin LTM: ~ 42% • Highest liquidity in Chile  Listed on the Santiago Stock Exchange, and the NYSE since 1993  Most liquid Chilean ADR on the NYSE in 2012  One of the five most liquid companies traded in the Chilean Stock Market in 2012 • Responsible growth Specialty BusinessWorld Leadership Growth Opportunities 4 † EBITDA: gross profit – SGA + depreciation & amortization
  • 5. 5 SQM at a Glance Specialty BusinessWorld Leadership Growth Opportunities SQM: The world’s largest producer of lithium, iodine, potassium nitrate and solar salts Fertilizers Specialty Chemicals Potassium 22% Specialty Plant Nutrients 24% Iodine 35% Lithium 11% Industrial Chemicals 8% 5 % of Contribution to SQM Consolidated Gross Profit for the first half of 2013
  • 6. 6 Unique Natural Resources Caliche Ore Salar Brines Nitrates IodineIodine Potassium Lithium Potassium Specialty BusinessWorld Leadership Growth Opportunities 6
  • 7. Operational Synergies and a low-cost structure Caliche Ore Salar Brines  Operational synergies and low-cost structure • Similar processes and industrial technologies are used across our operations: solar ponds, evaporation, salt harvesting, crystalllizing, drying, among others • Raw materials are used in the production of several different products, reducing costs significantly • Specialty Plant Nutrients, Potassium Chloride and Industrial Chemicals volumes create logistics efficiencies  Commercial flexibility according to market conditions • Nitrates in different qualities are used for industrial applications or for the fertilizer industry • Potassium can be sold as potassium chloride or used as raw material in the production of potassium nitrate • Potassium chloride/sulfate allocation Iodine Nitrates Potassium chloride Potassium sulfate Lithium Potassium nitrate Specialty BusinessWorld Leadership Growth Opportunities 7
  • 8. 8 Overview Fertilizers Specialty Chemicals Financial Information Agenda Photo: Potassium Nitrate Plant in Coya Sur
  • 9. 9 †Market share figures are based on SQM 2012 estimates. *Figures are based on IFRS Specialty BusinessWorld Leadership Growth Opportunities Fertilizers: Uniquely Positioned 9 Specialty Plant Nutrition 46% world market share KNO3† 1H2013 Revenues* US$379M (32%) 24% of total 1H2013 gross margin* Potassium 1H2013 Revenues* US$317M (27%) 22% of total 1H2013 gross margin*
  • 10. 10 Potassium Nitrate Niche Market Demand Drivers • Chlorine free • Fully water soluble • 100% Natural origin • Fast absorption • High cost of land • Water scarcity • Demand for premium crops • North America and European vegetable and tomato markets Modern Agricultural Techniques Fertilizers: Specialty Plant Nutrition 24% of Total 1H2013 Gross Margin Vegetables 41% Fruits 22% Industrial Crops 28% Others 9% Main uses: Premium crops* *SQM estimates 2012 Specialty BusinessWorld Leadership Growth Opportunities 10
  • 11. 11 Fertilizers: Specialty Plant Nutrition 24% of Total 1H2013 Gross Margin SQM & SPN: World Leader • Completion of new potassium nitrate facility in Coya Sur (300,000 tons/year) • Developed distribution network: Proximity to customers allows for us to meet changing needs and new market tendencies • Largest Producer: 46% World Market Share* Other producers: Haifa, Kemapco • Prices are expected to decrease in 2013 as a result of the new potash price environment Specialty BusinessWorld Leadership Growth Opportunities 11 * Figures are based on 2012 SQM estimates.
  • 12. 12 Fertilizers: Potassium 22% of Total 1H2013 Gross Margin Potassium Chloride Market Demand Drivers • Commodity Fertilizer • Market expected to grow in 2013 compared to 2012 • Largest Global Producers: • Potash Corp • Uralkali • Global crop supply pressure should have a positive impact on fertilizer prices • Remain vigilant in the potassium market in light of recent announcements by Uralkali • Main Uses: •Fruits/Vegetables •Corn •Rice • Demand growth still being seen in Brazil • Population Growth • Farmer economics & yield optimization Specialty BusinessWorld Leadership Growth Opportunities 12
  • 13. 13 SQM & Potassium: Growth Opportunities • Expansion of potassium-based products: • Installed capacity of approximately 2 million MT in 2012 • 2013 production volumes to be similar to 2012 • Effective capacity expected to be approximately 2.3 million MT by the end of 2014 • Three main products of potassium that exist in market today: SQM is the only company that produces all three products • Internal development of production technologies has allowed for a better utilization of natural resources and for higher yields through increased efficiencies Fertilizers: Potassium 22% of Total 1H2013 Gross Margin • MOP is potassium chloride (KCl), also known as potash • SOP is potassium sulfate (K2SO4) Specialty BusinessWorld Leadership Growth Opportunities 13 0 400 800 1200 1600 2000 2006 2007 2008 2009 2010 2011 2012 2013E Th.MT Year SQM Production Volumes MOP + SOP
  • 14. 14 Overview Fertilizers Specialty Chemicals Financial Information Agenda Photo: Salar de Atacama
  • 15. 15 Specialty Chemicals: World Leadership †Market share figures are based on 2012 SQM estimates ⁰ Considering the lithium chemicals market, excluding concentrated minerals *Figures are based on IFRS Specialty BusinessWorld Leadership Growth Opportunities 15 Iodine & Derivatives 34% world market share† 1H2013 Revenues* US$255M (21%) 35% of total 1H2013 gross margin* Lithium & Derivatives 35% world market share†⁰ 1H2013 Revenues *US$92M (8%) 11% of total 1H2013 gross margin* Industrial Chemicals 1H2013 Revenues *US$110M (9%) 8% of total 1H2013 gross margin*
  • 16. 16 Specialty Chemicals: Iodine 35% of Total 1H2013 Gross Margin * Market participation based on SQM 2012 estimates Market supply estimates for Japan include supply from traditional production and recycling in Japan Iodine Niche Market Main Uses • SQM is the leading iodine producer in the world • Global Demand: CAGR 2002-2012: 4% • Additional capacity from Chilean competitors started production in 2012, aiming to reach projected capacity in 2013 • X-Ray Contrast Media • LCD • Pharmaceuticals • Iodophors • Approximately 40% of uses related to human health and nutrition Specialty BusinessWorld Leadership Growth Opportunities 16 SQM 34% Japan 31% Others Chile 24% Others Recycling 5% USA 4% Others 2% 2012 Market Size Estimates: ~31 kMT*
  • 17. 17 Specialty Chemicals: Lithium 11% of Total 1H2013 Gross Margin *SQM estimates: Lithium chemicals market Specialty BusinessWorld Leadership Growth Opportunities Lithium Market Main Uses • SQM is the leading lithium chemical producer in the world • Global demand: CAGR (2002- 2012): ~ 8%. Expected growth for 2013: 5 -10% • Market seeing new supply added in 2013 • Global lithium chemical demand has increased over 25% between 2010-2012, with batteries being the primary demand driver • Battery technology historically been the demand driver. •Batteries (over 41%) • Glass • Lubricating Greases • Glazes/Frits Li2CO3 17 SQM 35% China 10% Talison 22% Others Chile 19% FMC 11% Others 3%
  • 18. 18 Lithium & SQM: Growth Opportunities • Current lithium carbonate plant capacity 48,000 MT/year • We believe SQM is one of the lowest cost producer in the world • New supply is expected from Australia & China during 2013 Lithium & Electric Cars: Outlook • Total production of e-cars (HEV-PHEV-EV) using lithium-ion batteries (LIB) is expected to reach 1.5-3.0 million (2015), 5.0-10.0 million (2020) • Total lithium demand is expected to reach 250- 300 KMT-LCE (2020) Specialty Chemicals: Lithium 11% of Total 1H2013 Gross Margin *SQM estimates: Lithium chemicals market Specialty BusinessWorld Leadership Growth Opportunities 18 0 2.000 4.000 6.000 40 60 80 100 120 140 2009 2010 2011 2012 2013E LithiumAveragePriceUS$/ton TH.MT World Lithium Chemicals Market*
  • 19. 19 Solar Salts: New demand for industrial nitrates for thermal energy storage in solar power plants means increasing our nitrate consumption • Mixture of 60% sodium nitrate and 40% potassium nitrate • Main projects: ACS Cobra-Sener, Aries, Rocketdyne, Abengoa, SAMCA, Solar Reserves • 50 MW → ~30,000 MT of salts • 2013 sales expected to decrease to around 70,000 MT due to a delay of most projects as a result of the financial situation in Europe Specialty Chemicals: Industrial 8% of Total 1H2013 Gross Margin Traditional Industrial Chemical applications include: metal treatment, water treatment, pyrotechnics, explosives, glass manufacturing, among others Specialty BusinessWorld Leadership Growth Opportunities 19
  • 20. 20 Overview Fertilizers Specialty Chemicals Financial Information Agenda Photo: SQM offices in Santiago
  • 21. 21 1. Capacity expansion for potassium- based products in the Salar de Atacama 2. Preparing water supply for a potential iodine and nitrates expansion in first region, with increased plant efficiencies and higher quality products 3. Optimization railroad system, other projects aimed at improving yields and reducing costs Capital Expenditure Program Approximately US$400 million for 2013 Specialty BusinessWorld Leadership Growth Opportunities 21
  • 22. 0 500 1.000 1.500 2.000 2.500 3.000 2008 2009 2010* 2011* 2012* 1H12 1H13 US$Billion Revenues* 0 100 200 300 400 500 600 700 2008 2009 2010 2011 2012 1H12 1H13 US$Million Net Income* 22 Financial Performance * 2008 figures prepared according to Chilean GAAP; 2009-2013 figures are based on IFRS numbers. Specialty BusinessWorld Leadership Growth Opportunities 22
  • 23. 23 Financial Performance* NFD: interest bearing debt net of cash and cash equivalents, considering the effects of derivatives * 2008 figures prepared according to Chilean GAAP; 2009-2013 figures are based on IFRS numbers. Specialty BusinessWorld Leadership Growth Opportunities 23 42% 41% 38% 45% 46% 38% 2008 2009 2010 2011 2012 1H13 EBITDA/Revenues 0.45 1.16 0.85 0.79 0.83 0.91 0 0,5 1 1,5 2 2,5 3 2008 2009 2010 2011 2012 1H13 Net Financial Debt / Adjusted EBITDA (LTM)*
  • 24. 24 Key Conclusions Business flexibility according to market conditions • Largest global producer, lowest cost producer, market growth. • Specialty Plant Nutrition • Iodine • Lithium • Solar Salts • Growth opportunities and a low cost producer. • Potassium • Industrial Chemicals • Solid financial position • Focused on long-term growth 24 Specialty BusinessWorld Leadership Growth Opportunities 24

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