Transcript
PotashCorp.com
Q1 2016 Conference CallApril 28, 2016
Forward-looking Statements
Slide #2
Performance
First-Quarter 2016 Highlights
• Earnings of $0.09 per share1; including:
- Notable non-cash charges in phosphate of $0.03 per share
- New Brunswick severance charges of $0.03 per share
• Market value of investments approximately $4 billion, or $5 per PotashCorp share2
• Expect global potash shipments of 59-61 million tonnes
1 All references to per-share amounts pertain to diluted net income per share2 As of market close on April 27, 2016
Source: PotashCorp
Slide #4
Lower Prices Primary Contributor to Weaker Gross Margin
Quarterly Gross Margin Comparison
Q1 2015
Potash Nitrogen Phosphate Q1 2016
0
150
300
450
600
750$667
$234-$340
-$74 -$19
Gross Margin - US$ Millions
Source: PotashCorp
Slide #5
Outlook
Jan-1
5
Feb-1
5
Mar-1
5
Apr-15
May-1
5
Jun-1
5Ju
l-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-1
5
Jan-1
6
Feb-1
6
Mar-16
Apr-16
50
75
100
125 Crop Price Index* Fertilizer Price Index**
* Based on corn, soybean and wheat prices (weighted by global consumption).
** Based on urea, DAP and KCl prices (weighted by global consumption).
Price Index (January 2015 Average = 100)
Crop and Fertilizer Price IndexFertilizer Represents Even Greater Value for Farmers
Source: Bloomberg, Fertilizer Week
Decline in fertilizer prices relative to
crop prices presents opportunity for
farmers
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
E20
16F
0
10
20
30
40
50
60
70 Shipments Shipment Range ConsumptionMillion Tonnes KCl
World Potash Consumption and Shipments
Source: Fertecon, CRU, IFA, Industry Publications, PotashCorp
Potash Consumption Growth; CAGR of ~2.75 Percent (2000-2016F)
China India Other Asia
Latin America
North America
0
2
4
6
8
10
12
14
16
18
2015E 2016F*
Crop Economics and Agronomic Need Expected to Support Strong Demand
Potash Market Outlook
Source: CRU, Katana India, Potafertz, PotashCorp, TFI
Slide #9
Highlights (2016F)Potash Shipments (million tonnes)
* As at April 28, 2016; represents midpoint of guidance range
Guidance
2016 Guidance*
Second Quarter
• Earnings per share: $0.15-$0.25
Full Year
• Earnings per share: $0.60-$0.80
• Potash sales volumes: 8.3-8.8 million tonnes
• Potash gross margin: $0.5-$0.7B
• Nitrogen and phosphate gross margin: $0.6-$0.8B
• Capital expenditures1: $0.7-$0.8B
*Guidance as at April 28, 20161Does not include capitalized interest
Source: PotashCorp
Slide #11
2016 Guidance*
Full Year
• Effective tax rate: 25-27 percent
• Provincial mining and other taxes1: 24-27 percent of total potash gross margin
• Selling and administrative expenses: $235-$245M
• Finance costs: $210-$220M
• Income from offshore equity investments2: $120-$140M
• Annual FX Assumption: CDN$1.34 per US$
• Annual EPS sensitivity to FX: US$ strengthens vs. CDN$ by $0.02 = +$0.01 to EPS
* Guidance as at April 28, 20161 As a percentage of potash gross margin, excluding New Brunswick severance costs2 Represents share of earnings in equity-accounted investees and dividend income from available-for-sale investments
Source: PotashCorp
Slide #12
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