bmo capital markets, 2016 farm to market conference
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CONFIDENTIAL AND PROPRIETARY
Any use of this material without OCP’s specific permission is strictly prohibited
0
BMO Capital Markets, 2016 Farm to Market Conference
May 19th 2016
OCP
Safe Harbor Statement
This presentation has been prepared by OCP S.A. (“OCP”) strictly for discussion purposes, and contains certain statements that are, or may be
deemed to be, “forward-looking statements” within the meaning of the safe harbor provisions set forth in the U.S. Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited to, liabilities, strategic, industrial, commercial plans and expected future financial
and operating results such as revenue growth and earnings. They are based on the current beliefs, expectations and assumptions of OCP’s
management as of the date on which they are made in connection with past and/or future financial results, and are subject to significant
uncertainties and risks, which OCP shall not be held liable for. These risks and uncertainties include, but are not limited to, risks and uncertainties
arising from the future success of current and strategic plans and future financial and operating results and reserves; changes in such plans and
results; any difficulty that OCP may experience with the realization of benefits and anticipated levels of capital expenditures for the year of 2016 and
beyond; the current and future volatility in the credit markets and future market conditions; OCP’s strategy in connection with customer retention,
growth, product development and market position; industry trends; volatility in commodity prices; changes in foreign currency, interest and
exchange rates; international trade risks; changes in government policy and developments in judicial or administrative proceedings in jurisdictions
which OCP is subject to; changes in environmental and other governmental regulation, including regulatory investigations and proceedings; any
natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of OCP’s operating systems, structures or
equipment; the effectiveness of OCP’s processes for managing its strategic priorities; and OCP’s belief that it has sufficient cash and liquidity and/or
available debt capacity to fund future financial operations and strategic business investments. Actual results may differ from those set forth in the
forward-looking statements contained in this presentation, and OCP undertakes no obligation to publicly update any of its forward-looking
statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
This presentation includes financial information which, for ease of presentation, has been translated into U.S. Dollars, and these translated
figures have not been audited. For the purpose of such translated figures, OCP used the following exchange rate table, which sets forth the year
average and year-end USD/MAD exchange rates for the following periods:
USD/MAD
déc-15 déc-14
Period End 9.9008 9.0419
Average 9.7627 8.4072
1
OCP: Global Leadership
#1 Producer of Phosphate in all its forms
Large and Quality Reserve Base
Low Cost Position in Phosphate Rock and
Phosphate-based Fertilizers
Distinctive Integrated Model Enabling Flexible
Production Management Across the
Phosphate Value Chain
Diversified Regional Exposure and Balanced
International Footprint
Experience Gained in Over 90+ Years of
Phosphate Production
Strong Industry Fundamentals
Global
Producer
Global Trade
Market Share
Phosphate Rock #1 29%
Phosphoric Acid #1 54%
Phosphate-based Fertilizers #2 16%
OCP by Numbers
Leadership Positions
2
In US$bn 2014 2015
Phosphate Rock revenues 1.2 1.3
Phosphoric Acid revenues 1.0 1.2
Phosphate-based Fertilizers revenues 2.2 2.0
Other 0.5 0.4
Group revenues 4.9 4.9
EBITDA 1.4 1.8
EBITDA Margin % 28% 37%
Source: Company information, IFA, USGS
Expertise from a near century of phosphate production
Start of mining
operations in
Khouribga
Launch of the Jorf
Lasfar chemical
platform
19201921
1932
1965
1976
1980
1984
2010
2011Acquisition of
Phosboucraa
2013
Launch of
Youssoufia site
Launch of
Benguerir site
Launch of capital
expenditure
program
Opening of rep.
offices in Brazil and
Argentina
2008
2014
JV with Jacobs
Engineering
JV with DuPont
de Nemours
Creation of OCP as a Moroccan State
office
Launch of the Safi
chemical platform
2015
3
Source: OCP
Creation
of OCP AfricaLaunch of
Slurry Pipeline
Credit ratings /
Inaugural bond
issuance
Heringer : 10%
stake
acquisition
Exclusive access to largest phosphate reserves globally
4
Global Phosphate Rock Reserve Estimates (bn tons)
___________________________Source: USGS, January 2016
Exclusive access approximately 75% of currently known global phosphate reserves
50bn tons of
economically
exploitable phosphate
reserves are:
Equivalent to
several hundred
years of global
consumption at
current demand
levels
Estimates by USGS
United States
1.1
Peru
0.8 Brazil
0.3
Algeria
2.2
South Africa
1.5
KSA
0.2
Jordan
1.3 Egypt
1,2
Israel
0.1
Syria
1.8Iraq
0.4
Russia
1.3
China
3.7
Australia
1,0
Global
Reserves
69
Morocco
50
5
Morocco (Khouribga)
Phosphate Rock Export Cash Costs1
Cash cost – Site CostUS$ per metric tonnes
Price band of past 3 years
Source: CRU 20151 Including only exporting producers & Excluding Chinese producers
Low cost position supports profitability throughout
cycles: Phosphate Rock
6
Fertilizer Production Cash Costs (DAP)
Cash cost – Site CostUS$ per metric tonnes of products
Source: CRU 2015
Price band of past 3 years
OCP - Jorf Lasfar
Low cost position supports profitability throughout
cycles: Fertilizers
Segment Mining Chemicals
Value Chain Integration
2014 Global Trade
Volumes Market Share
Rock
29%
Phosphoric Acid1 Fertilizers
54% 16%
7
Source: IFA, Company information and publicly available data of peers
Strategic presence across entire phosphate value chain
8
Diversified portfolio and geographic exposure
Revenue by Product1
Phosphate Rock29,4%
Phosphoric Acid
26,1%
Phosphate-based
Fertilizers44,5%
___________________________Source: Company information.Note: 2015 average MAD / USD exchange rate: 9.76271. Based on 2015 revenue, excludes contribution from Other segment, which comprises resale of sulfur and other ancillary products.2. Which represents 32.8% for export sales
Export sales by Geography
Sales by Customer in 2014
Rock
49 customers
31 countries
47 customers
21 countries
126 customers
54 countries
Acid Fertilizers
2015 Total Revenue US$ 4,891 m
Asia & Oceania27,2%
South America15,6%
Europe32,7%
North America13,4%
Africa11,2%
9%
5%
5%
5%
3%
3%
3%
3%
2%2%
Others~60%
Top 10
clients ~33%2
TEXT
Phosphate Market: Opportunities & Challenges
Industry underpinned by sustainable long-term trends
10
___________________________Source: FAO, IFA.
Available Arable Land per Capita is Declining
0,23
0,210,20
0,190,18
0,0
0,1
0,2
0,3
2010 2020E 2030E 2040E 2050E
0
2 000
4 000
6 000
8 000
10 000
Mt
World crop
production in
2050
7,505
Expansion of
arable land
Crop rotationWorld crop
production in
2005-2007
Increase in
yields (fertilizers,
mechanization,
GMOs, irrigation,
etc.)
+77%
+14%+9%
Agricultural Production Expected to Rise
Through Yield Growth
Grain production evolution by 2050 (Mt)
80% increase in global crop production required within next 40 years
Agricultural yield improvement through the use of fertilizers is the major
driver to address the imbalance between food demand and supply
Africa is expected to be the new frontier for agriculture, and a big
consumer of fertilizer in the future
Demand growth for Phosphate Fertilizers by 2028:
+10.5 Mt P2O5 (IFA/Argus FMB)
OCP additional capacity expansion up to 2025: 6.8 Mt P2O5
4,094
P2O5 Demand should increase ~4 MT in 2019 and ~11
Mt in 2029M
ed
ium
Te
rm
2014
-20
19
Lo
ng
Te
rm
2014 -
2029
Processed phosphate demand evolution
(Mt P2O5)
OCP share in demand evolution
(Mt P2O5)
42,9
30
35
40
45
50
55 54.1
+11.2
1.6%
20292014
2,6
1,4
1,5
3,5
2,2
5,6
4,9
Other
Europe
Africa
Delta 14-29
11.2
OCP
Known add.
capacityIndia
Latin America
10.5
India
42,9
30
35
40
45
50
2014
+4.1
1.8%
2019
Conservative
scenario
2019
Argus
48.9
2.5%
47.0
1,6
0,6
1,8
3,4
OCP
Known add.
capacity
Additional Capacity by
2019
5.2
India
Other
Delta 14-19
4.1
1.1
0.4
Latin America
Africa
Europe0.4
Source: Argus fertilizer outlook 2029, IFA, include all processed phosphate.
11
OCP add. Capacity by
2029
Specific factors to drive recovery in Indian demand
Growing demand for food led by increasing population
size and rising purchasing power
Continuous government support to Indian Farmers and
promotion of balanced fertilization should be supportive
for P&K consumption
Acid has a structural presence in India due
to existing production capacity
It will remain critical for India as a
negotiation tool vs. key DAP suppliers
(China and Maaden)
Product flexibility enables OCP to remain a
key supplier in India
OCP has secured a strong position in acid
thanks to its partnerships
OCP can avoid price competition in DAP
through acid (less competition)
Acid contributes to OCP’s leadership in
India
Indian growth to recover quickly after subsidy reforms …OCP has built a strong position thanks to its product flexibility
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
Evolution of Indian P2O5 demand
(MT P2O5)
+6%py
+5%py
OCP1,0
JIFCO0,3
ICS0,2
PCS0,2
TIFERT0,1
Others0,2
India’s P2O5 imports
(2015, MT P2O5)
India’s acid imports
(2015, MT P2O5)
7.3
1.9
Rock
34%
DAP
40%
Acid
26%
Conclusion
Source: DoF, CRU, OCP India office
12
INDIA: OCP poised to capture recovering demand
16 days
9-12 days
Geographical situation
Diversified product portfolio
Local presence along with
distribution and logistics
partnership
4
5
6
7
8
Latin America Phosphates Fertilizers consumption
(in MT P2O5)
Steady increase in demand following 2015
slowdown in Brazil. Expectations for better
farmer economics to support strong
consumption fundamentals
2013
2.3
2012
2.0
2011 2015
1.1
2014
1.7
1.4
OCP fertilizers’ sales in Latin America (in MT)
Reduced OCP exports
reflect prevailing market
conditions and
geographical arbitrage
opportunities.
13
LatAm agriculture needs more phosphate-based fertilizer
products…And OCP is well positioned to meet Latin American needs
Source: IFA, CRU, OCP
Latin America: Major growth market proximate to OCP
711 826627
413
175 243329
309
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015
Rock Fertilizers
Evolution of P2O5 consumption in North America OCP is well positioned to supply the US market
Corn, soybeans and wheat are the major crops produced in the
US
US P2O5 consumption is expected to increase by 1% by 2020
Consumption is becoming increasingly reliant on imports, to
compensate for the decrease in US production (along with lower
US exports)
Specific factors will drive US demand and imports
Since 2012, OCP has doubled its fertilizer exports as it transitions
from phos. rock to fertilizer shipments
OCP enjoys access to the US market within 13 days at a highly
competitive freight (vs. Russia in 20 days, and China in 33
days)
OCP is the major exporter with a 35% MS in imports
Export volumes are locked in through contracts with
distributors/producers (PCS, Agrium, Innophos, Koch..)
Supply of various fertilizer products such as specialty fertilizers
and feed phosphates
OCP has competitive advantages to reach the market
OCP sales to NA
(kT P2O5)
0500
1 0001 5002 0002 5003 0003 5004 0004 500
US P2O5 consumption evolution
Local Production Imports
CAGR 0.8% CAGR 1.0%CAGR -0.5%kT P2O5
Consumption
Source: CRU, USDA, OCP Analysis1 Fertilizers include DAP, MAP, TSP and NP-S. Production is based on available data from CRU i.e. DAP, MAP and TSP
14
USA: Well positioned to serve North America
Europe presents growth opportunitiesOCP maintains a sustainable and competitive
position in Europe thanks to its assets
4 820
3 335
5 070
5 318
3 000
3 500
4 000
4 500
5 000
5 500
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Phosphate Fertilizer Consumption (kt P2O5) Europe is an attractive market
Europe relies heavily on P2O5 imports (excl.
Russia & Finland)
Europe imports all categories of phosphate
products (rock, acid & fertilizers)
Europe is a fragmented region which provides
higher netbacks compared to RoW
OCP benefits from competitive advantages:
Flexibility & competitive time-to-market
(small-sized parcel deliveries requirements)
Competitive freight & no import duty (unlike
Russia, US, China & Saudi Arabia)
Ability to comply with high quality fertilizer
requirements in Europe (AFCOME,
REACH,…)
Europe accounted for 27% of OCP 2015’s
turnover
Partnership with Prayon: a global leader in
technical Phosphate & specialities
OCP is tied-up with key regional players
(Fertiberia, Borealis…)
OCP30%
Other70%
OCP market share
Rock47%
Acid20%
Fert.33%
P2O5 imports (Mt)
4.6
Source: CRU outlook 2016
15
EUROPE: A high yield region for OCP
…For which OCP is uniquely positioned
298
647
994
2013 2014 2015
> x3
Fertilizer exports to Sub-Saharan Africa
(kt product)
Africa is poised for the next green revolution…
2,32,2
2,12,0
1,91,81,8
0,0
0,5
1,0
1,5
2,0
2,5
20162015 202020182017 20192014
+4%
Conservative consumption forecasts (CRU)
(kt P2O5)
This is a conservative estimate and OCP believes the real potential is much higher. Indeed Africa applies1 ~6 kg
P2O5/Ha, 6 times lower than RoW (33 Kg P2O5/Ha) AND holds almost 60% of world’s uncultivated arable land2
Source: CRU, OCP1 IFA consumption & FAO arable lands2 Mckinsey 2010 report « What’s driving Africa’s growth »
16
AFRICA: First mover advantage across the continent
2011 2012 2013 2014 2015
Feeds NP-S NPK Micronutrients Water Soluble Fertilizers
New product development allows OCP to:
• Diversify its product portfolio
• Improve profitability
• Penetrate new markets
0
140
393
796
Take-off
Diversification ~ x9
Share in FOB Fert.
revenue 0% 2% 5%13%
# New products9
1321
0
24%
28
1,193
NP-S
NP 20-20-0
NPS 13-45-5S
NPS 19-38-7S
standard
NPS 19-38-7S Amine
NPS 12-46-7S
NPS 12-48-5S
NPK
NPK 16-11-20
NPK 17-16-12
NPK 10-20-10-6S
NPK 12-24-12
NPK 14-24-12
NPK 15-15-15
NPK 10-14-16
Micronutriments
NPK 10-10-10-6S-0.1B-
0.5Zn
NPK 14-18-18-6S-1B
NPK 14-23-14-5S-1B
NPK 15-15-15-6S-1B
NPK 15-15-15-10S
NPK 16-9-24-2MgO
NPS 12-40-7S 0.5Zn TAP
NPS 12-46-1Zn
NPS 13-45-5S 1Zn
NPS 13-45-5S 1Zn TAP
NPS 19-38_7S 0,1Zn
MAP 11-51-1Zn
Feeds
DCP
MDCP
Engrais solubles
MAP 11-62
28 new formulas in 5 yearsOCP sales of new finished products (Kt product)
Source: OCP
17
Specialty products underpin OCP’s resilience
Text
OCP’s Unique Strategy
19
CAPACITY LEADERSHIP COST LEADERSHIP
1
INDUSTRIAL & COMMERCIAL FLEXIBILITY
2
3
Strategy based on three distinct pillars
Tripling Fertilizer CapacityMeaningful Cost Reduction
Investment program overview
Mine Ports / Logistics
Doubling Mining Capacity
3 new mines: additional capacity of ~26 MT of rock
4 new beneficiation plants, 3 in Khouribga, and one at Gantour total
capacity of ~57 MT of rock
Slurry pipelines:
• Khouribga – Jorf Lasfar (operational)
• Gantour – Safi (upcoming)
Efficient logistical integration from mining to downstream
Development of world class integrated chemical platforms
Additional 6.8mt P2O5 integrated new fertilizer units in a modular manner along with common support infrastructure
Expansion of logistical infrastructure (raw materials, storage, port, utilities…)
Integrated Phosphate hubsSlurry Pipeline3 new Mines & 4 new beneficiation plants
Chemical
FertilizersTransportation
Increased scale across the value chain will strengthen OCP’s strategic position as the global leader in the market
___________________________Source: Company information.
20
4.76.06.6
11.812.0
0.0
4.54.64.8
9.7
3.04.7
6.68.0
11.8
2017
2014
2010
Capex plan and capacity evolutionOCP reinforces its position in the global fertilizer
market (MT 1)
Source: OCP, Integer, CRU
1 Major player for each country
21
AFC
Unit 3
Unit 2
Unit 4
2012 2013 2014 2015 2016 2017 2018
Unit 4
Unit 3
Unit 2
Unit 1
12 Mt
9 Mt
10 Mt
11 Mt
Capacity expansion to strengthen long-term position
OCP’s focus and key takeaways
Global leader in a
long-term growing
industry
Resilient financial
performance and
well-defined
growth strategy
A sound financial
policy
#1 in phosphate rock and phosphoric acid; #2 in phosphate-based fertilizers
Low cost position with exclusive access to the largest rock reserves globally
Integrated business model and balanced regional portfolio increases resilience with
respect to seasonal and regional supply / demand fluctuations
Favourable long term growth outlook underpinned by strong market fundamentals
Diversification towards downstream fertilizers has reduced earnings volatility
Modular expansion program to maintain strategic presence across the phosphate value
chain
Focus on partnerships in key markets to strengthen geographic positioning
Healthy balance sheet – leverage below target of 2.5x Net Debt to EBITDA
Significant undrawn committed lines and cash are available as additional liquidity
resources
Well defined dividend policy based on profitability
22
Scale effect Production
optimization
Production
flexibility
Improved Cash Cost
position
___________________________Source: Company information.
Text
APPENDIX
36%
27%
23%
25%
14%
15%
7%
2%
14%
23%
8%
8%
2014
2015
South America Europe North America East Asia & Oceania Africa South Asia & Middle East
DAP price
$/T FOB
Acid exports
kT P2O5
+34$
(2015)
Acid contract negotiation over 6 months (instead of 3)
limited the impact of rupee devaluation (MGA price is
equivalent to a DAP price of $520/T)
India began to replenish its fertilizer
inventories, which were at an all time
low in 4Q14
0
50
100
150
200
250
300
350
400
450
500
340
360
380
400
420
440
460
480
500
520
540
Jan-14 Feb-14 Mar-14 May-14 Jun-14 Jul-14 Sep-14 Oct-14 Dec-14 Jan-15 Mar-15 Apr-15 May-15 Jul-15 Aug-15 Sep-15 Nov-15 Dec-15
OCP acid exports to Asia Fertilizers exports DAP FOB Morocco DAP FOB Tampa
DAP price1 evolution and OCP monthly exports of processed phosphates
OCP’s yearly fertilizer export mix
Source: CRU, OCP1 Arithmetic average of the Minimum and Maximum Weekly Prices
24
Commercial & industrial flexibility underpinned 2015
results
261 411
305
479469
541321
377
Q1
Q2
Q3
Q4
2 015
1,809
2 014
1,356
+33%
1,046 1,137
1,320 1,326
1,375 1,355
1,187 1,073
-1%
Q1
Q2
Q3
Q4
2 015
4,891
2 014
4,929
28%
37%EBITDA Margin
In US$m In US$m
1,094
1,425
+30%
2 015 2 014
In US$m
873
1,266
+23%
2 015 2 014
+18%
In US$m
Revenues EBITDA
EBIT Adjusted Cash Flow from Operating Activities1
1 Adjusted for the transfer of OCP’s internal pension fund
25
OCP’s 2015 financial results
___________________________Source: Company information.
Average:
$0.6bn
2015 gross debt = US$ 5.2bn
US$bn
0,5 0,4
0,3 0,2
0,2 0,2 0,1 0,2
0,2
2,8
0,9
0,7
0,7
2015 2016 2017 2018 2019 2020 2021 2022 >2022
Bank Debt amortization Domestic bond
International bond Cash and cash equivalents
Current financial assets Undrawn credit line
Debt Profile Snapshot¹ ² Liquidity Snapshot and Debt Maturity Schedule
Bank loans38%
Domestic bond issue4%
International bond issue53%
Finance lease liabilities
3%
Sovereign-guaranteed bank
loans1%
Other1%
1 As at 31 December 2015, “Other” includes current financial debts, bank overdraft and accrued interests2 USD/MAD exchange rates as follows: 31/12/2015 9.916
26
OCP’s conservative debt management
___________________________Source: Company information.
20
40
60
80
100
120
140
janv.-14 avr.-14 juil.-14 oct.-14 févr.-15 mai-15 août-15 déc.-15
Steel Fuel Iron Corn Soybean Phosphate rock FOB Morocco
Changes in prices since Jan 2014Base 100
Source: CRU, Reuters
Commodity prices
+40%
+20%
0%
-20%
-40%
-60%
-80%
HIGHER RESILIENCE FOR PHOSPHATE COMPARED TO OTHER
COMMODITIES
27
PHOSPHATE ALSO OUTPERFORMED OTHER NUTRIENTS
28
Source: CRU, P-value is equivalent to the Commercial Gross Margin (CGM) = DAP Fob Morocco prices minus Raw material costs (Sulphur
and Ammonia)
Nutrient values (base 100 in Jan 2014)
107
61
93
20
40
60
80
100
120
140
Jan-14 Apr-14 Jul-14 Oct-14 Feb-15 May-15 Aug-15 Dec-15
P-value Urea Potash
CHINESE SUPPLY: REDUCED COMPETITIVENESS TO DRIVE
CONTRACTION IN DAP/MAP EXPORTS, AS IS THE CASE FOR
UREA
Chinese urea exports decreased due to
lower international prices…
… high production costs in phosphate has already and will pursue
driving down exports
297 156 149
508
827
443 96 22
42
389
589
316
0
200
400
600
800
1000
1200
1400
1600
2011 2012 2013 2014 2015 2016
Milliers
1Q DAP/MAP exports (kT)
Jan-Feb March
DAP production cash cost (USD/T)
400
300
200
100
0
500
Other DAP plants
Chinese plants
Production costs have
risen steadily, driven by
increasing labour,
logistic, energy costs,
and extraction of low
grade rock.
The impact on exports is
immediate (-46% in
Jan-Feb export) and
several production cuts
within marginal & non-
marginal producers.
(March estimation based
on Jan-Feb variation)
Source: CFMW (monthly exports), CRU: Urea prilled FOB China
Source: GTIS
Source: CRU, OCP Analysis
100
150
200
250
300
350
-
500
1 000
1 500
2 000
2 500
Urea export and pr i ce sens i t iv i ty
Export Urea Prilled FOB China
2014 2015
Urea exports started to decrease on y-o-y as from
prices decline in july’15
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