RBC Capital Markets Global Mining & Materials Conference

RBC Capital Markets Global Mining & Materials Conference June 19, 2013 William J. Doyle President and CEO Forward-looking Statements This presentati...
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RBC Capital Markets Global Mining & Materials Conference June 19, 2013 William J. Doyle President and CEO

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. incorrect 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, exchange rates and the decisions of taxing authorities, all of 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 Forward Looking Statements” Statements and “Item Item 1A – Risk Factors” Factors and in our other filings with the US Securities and Exchange Commission and the Canadian provincial securities commissions. Forwardlooking statements are given only as at the date of this release and the company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Slide#1

% of Global Capacity*

PotashCorp Profile A Global Crop Nutrient Company

Global Position % of Total Gross Margin (2012)

Potash

Nitrogen

Phosphate

20%

2%

5%

#1

#3

#3

57%

29%

14%

* Based on nameplate capacity at year-end 2012, which may exceed operational capability (estimated annual achievable production level)

Sinofert APC ICL Potash Phosphate (Mining/Processing) Nitrogen Investments

SQM

Slide#2

Source: Fertecon; CRU; Blue, Johnson & Associates; PotashCorp

RBC Capital Markets Global Mining & Materials Conference 1

PotashCorp Profile Unique Potash Position Drives Earnings Growth PotashCorp Gross Margin

PotashCorp Per-tonne Gross Margin Percentage of Net Sales (2012)

Gross Margin - US$ Billions 60 6.0

70% 60%

64%

Potash

Nitrogen

Phosphate

5.0

50%

4.0

40%

43% 3.0

30% 2.0

20%

22% 1.0

10%

0.0

0% Potash

Nitrogen

Phosphate

02 03 04 05 06 07 08 09 10 11 12 13F

10-Year Growth: +1,000% * 2013F as at April 25, 2013

Slide#3

Source: PotashCorp

Agricultural Market Update

RBC Capital Markets Global Mining & Materials Conference 2

World Grain and Oilseed Supply/Demand Need for Historically Large Production Increase to Avoid Additional Shortfall

Million Tonnes Consumption p

2 500 2,500

2013 Production Growth Rate Scenarios

Production

2,400

8.3% (> 4X Historical Growth Rate) 6% (~ 3X Historical Growth Rate)

2,300

4% (~ 2X Historical Growth Rate)

2,200 2,100 2,000 1,900 1,800 1 700 1,700 1,600 2001

2003

2005

2007

2009

2011

2013F

8.3% production growth rate scenario is based on USDA’s June 2013 forecast (assumes large acreage increase and record yields) 2013F refers to the 2013/14 crop year.

Source: USDA, PotashCorp

Crop and Fertilizer Price Relationship Significant Economic Incentive for Increased Fertilizer Usage

Price Index (2007 Average = 100) 300

Crop Price Index* Index

Fertilizer Price Index** Index

Jan-09

Jan-11

250 200 150 100 50 0 Jan-07

Jan-08

Jan-10

Jan-12

Jan-13

* 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, 2013

Slide#6

Source: Bloomberg, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 3

Fertilizer Market Update Potash Update

World Potash Shipments Slower Demand Periods Have Historically Been Followed by Robust Growth

POT Sales Volume CAGR: 7%

Million Tonnes KCl 60

5.3% CAGR

50 40

6.5% CAGR

30 POT Sales Volume CAGR: 15% 20 10 0 1993

1995

1997

1999

2001

2003

2005

2007

2009

2011 2013F

Slide#8

Source: Fertecon, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 4

Potash Shipments to Key Regions Excluding India Strong Growth in Key Regions

Million Tonnes KCl 45

Latin America

China

2009

2010

Other Asia

North America

40 35 30 25 20 15 10 5 0 2008

2011

2012

2013F

Slide#9

Source: Potafertz, Fertecon, CRU, IFA, IPNI, USDOC, AAPFCO, Industry Publications, PotashCorp

World Potash Demand Consumption Expected to Drive 2013 Shipments Estimated Shipments by Region** (million tonnes) Million Tonnes KCl

R i Region

58 56

2012

2013F

China

10.6

~11.5

India

3.5

~4.0

Other Asia

7.5

~8.3

Latin America

9.5

~10.2

54 52 50 48 46

2012

China

India

Other Latin North Other Asia America America

North America

7.9

~9.5

Other

12.0

~12.5 12.5

Total

51.0

55-57

2013F*

* 2013F based on midpoint of estimated global shipment range ** Estimates per PotashCorp

Slide#10

Source: Fertecon, CRU, Industry Publications, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 5

World Potash Shipments Expect Key Offshore Regions To Drive Future Demand Growth

Million Tonnes KCl 80

~3

~5

70

74

~12

60 54

50 40

41

30 20 10 0 2000

2010

Asia

Latin America

Other

2020F

Slide#11

Source: Fertecon, CRU, Industry Publications, PotashCorp

China Potash Market Profile Strong Historical Growth Trends; Significant Future Needs Potash Fertilizer Consumption

Potash Use on Corn* Scenarios Million Tonnes KCl

Percentage - CAGR 18%

5

16% 4

14% 12%

3

10% 8%

2

6% 4%

1

2% 0% 20022012

20022007

19932012

19932007

19622012

19622007

0 9.5 to 1**

5 to 1

3 to 1

2 to 1

N to K Application Ratio * Corn represents approximately 10% of China’s current potash consumption; Significant growth potential exists on other crops. * *Current practice

Slide#12

Source: Fertecon, IFA, USDA, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 6

India Potash Market Profile Despite Recent Challenges, Significant Long-term Growth Potential Potash Fertilizer Consumption

Potash Consumption Scenarios N to K Ratio

Percentage – CAGR 10

12%

India - 2009/10 N to K Ratio

9 10%

8 7

8%

6 6%

5 4

4%

3 2

2%

1 0% 20022012

20022007

19932012

19932007

19622012

19622007

0

3 MMT

4 MMT

5 MMT

6 MMT

7 MMT

8 MMT

Slide#13

Source: Fertecon, IFA, PotashCorp

Indonesia and Malaysia Potash Market Profile Strong Consumption Growth Trends Expected to Continue Potash Consumption

Palm Oil Production Million Tonnes

Percentage - CAGR 14%

60

12%

50

10%

Indonesia

Malaysia

40

8% 30 6% 20

4%

10

2%

0

0% 20022012

20022007

19932012

19932007

19622012

19622007

2001

2004

2007

2010

2013F 2016F 2019F

Slide#14

Source: Fertecon, IFA, USDA, Food and Agricultural Policy Research Institute, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 7

Brazil Potash Market Profile Strong Historical Growth Trends; Increased Acreage Expected to Drive Future Needs Potash Fertilizer Consumption

Planted Area Million Hectares

Percentage - CAGR 70

12%

Soybeans

Corn

Sugarcane

60

10%

50 8% 40 6% 30 4%

20

2%

10

0% 20022012

20022007

19932012

19932007

19622012

19622007

0 1970

1980

1990

2000

2010

2020F

Slide#15

Source: Fertecon, IFA, PotashCorp

The PotashCorp Advantage: Positioned to Deliver Superior Performance

RBC Capital Markets Global Mining & Materials Conference 8

PotashCorp’s Opportunity Positioned to Respond to Expected Potash Demand Growth Percentage of New Operational Capability (2012-2016F)*

Growth in Global Fertilizer Consumption (IFA) Estimated Annual Increase (2012-2016) 4.0%

42% 3.5%

3.0%

2.7%

PotashCorp

2.0%

Rest of World

Percentage of Global Operational Capability (2016F)* 1.3%

1.0%

23%

0.0% Potash

Nitrogen

Phosphate

* Based on public filings and PotashCorp’s estimates of global operational capability

Slide#17

Source: Fertecon, CRU, IFA, Company Reports, PotashCorp

PotashCorp’s Opportunity Anticipate Increasing Canpotex Entitlement and New Brunswick Capacity Percentage of Canpotex Entitlement

New Brunswick Sales Opportunity**

(First-half 2013) Million Tonnes KCl

~48%

2.0 1.8 1.6 1.4

PotashCorp

Other Canpotex Members

Percentage of Canpotex Entitlement (2016F)*

1.2 1.0 0.8 0.6 0.4

~56%

0.2 0.0 Current Operational Capability

* Based on public filings of expected project completion timing and capacity increase; percentage of Canpotex entitlement based on PotashCorp’s estimates of Canpotex entitlement runs for completed projects.

Anticipated Operational Capability

** New Brunswick sales are sold through PCS Sales. Utilization of new capacity will be dependant on market conditions.

Slide#18

Source: Company Reports, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 9

PotashCorp’s Opportunity Offshore Incremental Sales Growth Potential Significant

Million Tonnes KCl

Million Tonnes KCl 4.5

Canpotex Allocation Change*

4.0

+4.2MMT

Canpotex Sales Growth**

1.2

New Brunswick Incremental Sales

+1.0MMT

1.0

3.5 +3.0MMT

3.0

+0.8MMT

0.8 2.9MMT

2.5 2.0

+2.0MMT

1.5

1.0MMT

1.0

+0.8MMT

05 0.5

0.8MMT

0.0

Scenario One Canpotex @10MMT

+0.6MMT

0.6

1.9MMT

+0.4MMT

0.4 0.2

1.0MMT

1 1MMT 1.1MMT

1 3MMT 1.3MMT

Scenario Two Scenario Three Scenario Four Canpotex @12MMT

Canpotex @14MMT

0.0

Scenario One NB @ 40%*

Canpotex @16MMT

* Canpotex total sales * 8% entitlement change (56% of Canpotex by 2016)

Scenario Two Scenario Three Scenario Four NB @ 60%*

NB @ 100%*

NB @ 80%*

* Based on % of incremental operational capability (1 million tonnes by 2015)

** Incremental Canpotex sales * current entitlement (48%)

Slide#19

Source: PotashCorp

PotashCorp’s Opportunity Higher-Cost, Low-Return Greenfield Potash Projects Could Be Deferred Estimated Return on Brownfield vs Greenfield

Estimated Capital Cost

Internal Rate of Return (IRR) - Percentage

US$ per Tonne 3 500 3,500

40%

Greenfield G fi ld (I (Including l di iinfrastructure f t t and d reserve costs) t ) Greenfield (Excluding infrastructure and reserve costs)

3,000

1,2,4

Estimated E ti t d PotashCorp P t hC Brownfield B fi ld IRR 3 Estimated Greenfield IRR (Excluding infrastructure and reserve) Estimated Greenfield IRR (Including infrastructure and reserve) 3

30%

2,500 2,000

20% 1,500 1,000

10%

500 0 POT Projects Completed

POT Projects in 1,2 Progress

SK Greenfield

3

Negative Return

0% $300/tonne

$400/tonne

$500/tonne

Netback Scenarios

1

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.

Slide#20

Source: AMEC, Company Reports, PotashCorp

RBC Capital Markets Global Mining & Materials Conference 10

IFA Potash Operational Capability Outlook Significant Project Delays and Deferrals Over the Past Twelve Months

Million Tonnes KCl Equivalent 90

IFA Forecast as of May 2013

IFA Forecast as of May 2012

85 8 million tonnes

80 75 70 65 60 55 50 2012

2013F

2014F

2015F

2016F

IFA derives operational capability by multiplying capacity with the highest historical achievable operating rate.

Slide#21

Source: IFA

PotashCorp’s Opportunity PotashCorp’s CAPEX Spending Largely Complete; Competitors Facing Rising Costs Competitor Greenfield Projects1

PotashCorp Potash Projects Estimated Capital Spending* Completed

Remaining

Billions - US$ 20.0 18.0

14%

16.0 14.0 129% Increase

12.0 10.0 8.0 6.0 4.0 86%

2.0 0.0

2

Original Estimate

Current Estimate 3

* As at April 24, 2013 1

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 developer

3

Estimate based on publically available comments in presentations or transcripts from current project developer

Slide#22

Source: PotashCorp, Company Reports

RBC Capital Markets Global Mining & Materials Conference 11

PotashCorp Nitrogen Profile New Ammonia Capacity Adds Margin Growth Potential Ammonia Capacity*

2013 YTD Nitrogen Product Mix (Sales Volume)

Million Tonnes Ammonia

Urea

Solutions/NA/AN

4.5

Trinidad

Augusta

Lima

Geismar

4.0

Incremental GM of approximately ~$130 million

3.5 3.0

36% 43%

2.5 2.0 1.5 1.0 05 0.5

21%

0.0 2012

2013F

* All estimated capacity amounts as at beginning of year

$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

Slide#23

Source: PotashCorp

PotashCorp Phosphate Profile Industrial and Feed Products Enhance Stability in Phosphate Phosphate Product Mix (Sales Volume)

PotashCorp Average Realized Sales Price US$/tonne Fertilizer

800

Feed & Industrial

Feed & Industrial

Fertilizer

100% %

700 80% 600 500

60%

400 40%

300 200

20%

100 0 Q2-09

Q1-10

Q4-10

Q3-11

Q2-12

Q1-13

0% PotashCorp*

Mosaic**

* Based on 2013 YTD sales volumes ** Mosaic’s percentage based on feed sales volume relative to total phosphate sales volume as publicly disclosed for the most recent four fiscal quarters

Slide#24

Source: PotashCorp, Company Reports

RBC Capital Markets Global Mining & Materials Conference 12

Cash Flow Opportunity

PotashCorp’s Opportunity Strong Cash Flow + Reduced Capital Spending = Greater Financial Flexibility PotashCorp Capital Spending**

Annual Cash Provided by Operating Activities*

US$ Millions

US$ Millions 4,000 3,500

Cash Provided by Operating Activities Capital Spending

4,000 3,500

3,000

3,000

2,500

2,500

2,000

2,000

1,500

1,500

1,000

1,000

500

500

0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * As we adopted International Financial Reporting Standards (IFRS) with effect from January 1, 2010; 2003 to 2009 information is presented on a previous Canadian Generally Accepted Accounting Principals (GAAP) basis. Accordingly, information for 2003 to 2009 may not be comparable to 2010 , 2011 and 2012.

0

2006

2007

2008

2009

2010

2011

2012 2013F 2014F 2015F

** Excluding capitalized interest, major repairs and maintenance and Lima expansion

Slide#26

Source: PotashCorp

RBC Capital Markets Global Mining & Materials Conference 13

PotashCorp’s Opportunity Utilizing Strong Cash Flow to Enhance Long-term Shareholder Returns Opportunity Capital (10-year total) = $8.1B

Dividend* per Share – US$

24% Return

$0.40 $0 35 $0.35

$0.35 $0.30

5-year Average Cash Flow Return 1,2 (2008-2012)

$0.28 $0.28

Share Repurchases (since 1999) = $6.3B $0.25

60% Increase

$0.21 $0.21

$0.20 $0.15 $0.10 $0.05

in Current Share Price2 above average repurchase price

$0.14 $0.14

Equity Investments 3 (since 1998) = $2.0B

$0.07 $0.07 $0.07 $0.07

384% Increase

$0.03**

$0.00 Q4-10

Q2-11

Q4-11

Q2-12

Q4-12

Change in Market Value of Investments Since Acquisition2

Q2-13

* Dividends declared each quarter ** $0.10 per share dividend adjusted for 3 for 1 stock split; rounded to nearest cent.

1 See 2 All

reconciliation and description of certain non-IFRS measures at www.potashcorp.com figures as at June 10, 2013 acquisition cost for SQM, APC, Sinofert and ICL

3 Total

Slide#27

Source: PotashCorp

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