PotashCorp
Enhancing Our
Competitive Position
December 2013

PotashCorp.com
Forward-looking Statements
This presentation contains forward-looking statements or forward-looking information (forward-l...
Objectives
Enhance our competitive position in all three nutrients
• Aim is to be a low cost delivered supplier to all key...
Workforce Changes
Reduction Primarily in Potash and Phosphate
Employee Count
7,000
6,000

5,914

570

455
20

5,000

4,869...
Potash
Enhancing Our Competitive Position
Optimizing Potash Production Portfolio; Well Positioned to Meet Anticipated Demand
Mill...
Enhancing Our Competitive Position
Cost Improvement Through Optimization of Production at Lower-Cost Facilities
Cash Cost ...
Enhancing Our Competitive Position
PotashCorp’s Strong Competitive Position Expected to Improve
Potash Industry Site Cost ...
Enhancing Our Competitive Position
PotashCorp Retains Operational Flexibility; Greatest Volume Growth Potential

Million T...
Enhancing Our Competitive Position
Anticipate Global Potash Operating Rate in 2014 Will Approach 90 percent

Global Potash...
Phosphate
Enhancing Our Competitive Position
Optimizing P2O5 Production Portfolio; Well Positioned to Meet Customer Needs
Production...
Enhancing Our Competitive Position
Optimizing Production Profile and Product Mix
Gross Margin Improvement (Estimate) – Pho...
Financial
Financial Impact
Anticipate One-time Cash Charge in Fourth-Quarter 2013
Estimated One-time Cash Charge*
US$ - Millions
100...
PotashCorp’s Capital Spending* Profile
Announced Changes Have Small Incremental Benefit to Capex Estimates
US$ Millions
2,...
Thank you
There’s more online:
PotashCorp.com
Visit us online

Facebook.com/PotashCorp
Find us on Facebook

Twitter.com/Po...
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PotashCorp - Enhancing Our Competitive Position - December, 2013

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PotashCorp - Enhancing Our Competitive Position - December, 2013

  1. 1. PotashCorp Enhancing Our Competitive Position December 2013 PotashCorp.com
  2. 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 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; 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; changes in competitive pressures, including pricing pressures; adverse or uncertain economic conditions 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 with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; changes in currency and exchange rates; unexpected geological or environmental conditions, including water inflows; imprecision in reserve 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 risks associated with our investments; changes in, and the effects of, government policies and regulations; security risks related to our information technology systems; 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 “ForwardLooking 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 presentation 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.
  3. 3. Objectives Enhance our competitive position in all three nutrients • Aim is to be a low cost delivered supplier to all key markets we serve • Optimize operations by focusing on our most efficient facilities and aligning workforce levels and operational capability with expected production profile Retaining operational flexibility to capture growth opportunities • Continue to focus on meeting customer needs; anticipate no disruption to our potash customers given built-in flexibility to meet expected demand levels and product requirements • Expansion construction is expected to be finalized to support approximately 17 million tonnes; operational capability will be staffed and ramped up each year according to expected market conditions • In phosphate, focus on improving efficiency and utilizing product mix flexibility to optimize gross margin; anticipate no disruption to customers given our ability to adjust production of end products
  4. 4. Workforce Changes Reduction Primarily in Potash and Phosphate Employee Count 7,000 6,000 5,914 570 455 20 5,000 4,869 4,000 3,000 Total reduction of approximately 1,050 employees or 18% of company-wide workforce 2,000 1,000 0 Current Level (October 31, 2013) Potash* * Includes estimate for corporate services Phosphate* Nitrogen New Level
  5. 5. Potash
  6. 6. Enhancing Our Competitive Position Optimizing Potash Production Portfolio; Well Positioned to Meet Anticipated Demand Million Tonnes (KCl) 20 18 • Focus on production at lower cost facilities while simultaneously balancing our customers’ expected product needs • 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 while accelerating development of lower-cost Picadilly mine; build inventory through first quarter of 2014 to help satisfy near-term customer needs Constructed Capability* Inventory Operational Capability** 16 14 12 10 8 6 4 2 0 2013 2014E 2015E 2016E * Reflects estimated achievable production level based on constructed capacity, assuming operations are fully staffed and ramped up. ** Reflects estimated achievable production level based on current staffing levels and operational readiness. Source: PotashCorp • Expansion spending nearly complete • Finalize construction (nearly 95 percent spent by end of 2013) to support approximately 17 million tonnes; operational capability will be ramped up according to market conditions
  7. 7. Enhancing Our Competitive Position Cost Improvement Through Optimization of Production at Lower-Cost Facilities Cash Cost of Production (Estimate) – Potash US$ Per Tonne 120 Annualized Improvement**: ~$15-$20 per tonne 110 100 Annualized Improvement**: ~$20-$30 per tonne 90 80 70 60 50 2013E Cash Cost* 2014E Cash Cost 2016 Cash Cost Target * Based on October 24, 2013 guidance. ** As compared to 2013 levels (not adjusted for inflation); target assumes successful ramp-up of expansions at lower-cost facilities. Source: PotashCorp
  8. 8. Enhancing Our Competitive Position PotashCorp’s Strong Competitive Position Expected to Improve Potash Industry Site Cost Profile* (Pre-announcement) Potash Industry Site Cost Profile* (Post-announcement)*** US$ Per Tonne (FOB Mine**) POT (SK) US$ Per Tonne (FOB Mine**) POT (NB) POT (SK) POT (NB) * 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. ** Competitive position dependent on end-market destination. *** Post announcement includes impact of PotashCorp’s announced changes for 2014 (upper end of range) and 2016 target (lower end of range). Source: CRU, Public Filings, PotashCorp
  9. 9. Enhancing Our Competitive Position PotashCorp Retains Operational Flexibility; Greatest Volume Growth Potential Million Tonnes KCl 2013E Production 2014 Operational Capability* 2016F Constructed Capability** PotashCorp’s 2014 operational capability* plus inventory position estimated to be over 10 million tonnes. PotashCorp Other North America*** FSU*** Other*** 0 5 10 15 20 25 * Reflects estimated achievable production level based on current staffing levels and operational readiness. ** Reflects estimated achievable production level based on constructed capacity, assuming operations are fully staffed and ramped up. *** PotashCorp’s estimate of production and constructed capability by region (based on publically available data). Source: Fertecon, CRU, IFA, PotashCorp
  10. 10. Enhancing Our Competitive Position Anticipate Global Potash Operating Rate in 2014 Will Approach 90 percent Global Potash Operating Rate* 100 95 90 Estimated Rate Post-Announcement 85 Historical Average (20 year) Estimated Rate Pre-Announcement 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 55-58 MMT. Source: Fertecon, CRU, PotashCorp
  11. 11. Phosphate
  12. 12. Enhancing Our Competitive Position Optimizing P2O5 Production Portfolio; Well Positioned to Meet Customer Needs Production - Million Tonnes (P2O5) 2.5 Aurora White Springs Geismar 2.0 1.5 1.0 0.5 0.0 2013E Source: PotashCorp 2014E 2015E • Focus on improving efficiency and utilizing product mix flexibility to maximize gross margin • Close Suwannee River chemical plant – one of two plants at White Springs • 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 on end products • Reduce workforce levels at Aurora to improve efficiency
  13. 13. Enhancing Our Competitive Position Optimizing Production Profile and Product Mix Gross Margin Improvement (Estimate) – Phosphate US$ Per P205 Tonne 20 Annualized Estimated Improvement: $10-$15 per tonne 15 10 5 0 2015E* Gross Margin Improvement * As compared to 2013 levels (not adjusted for inflation) Source: PotashCorp
  14. 14. Financial
  15. 15. Financial Impact Anticipate One-time Cash Charge in Fourth-Quarter 2013 Estimated One-time Cash Charge* US$ - Millions 100 Total One-time Cost Estimate*: ~$70M 80 60 40 20 0 Potash Phosphate Nitrogen * Charges expected to be recorded in fourth-quarter 2013; currently reviewing the carrying value of our affected assets and a writedown, if required, will be incorporated into our fourth quarter results Source: PotashCorp
  16. 16. PotashCorp’s Capital Spending* Profile Announced Changes Have Small Incremental Benefit to Capex Estimates US$ Millions 2,500 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 * Excluding capitalized interest and major repairs and maintenance Source: PotashCorp 2013E 2014E 2015E 2016E
  17. 17. 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

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