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OCP FIRST HALF 2014 EARNINGS CONFERENCE CALL PRESENTATION SEPTEMBER 15 TH 2014
OCP
FIRST HALF 2014 EARNINGS CONFERENCE CALL
PRESENTATION
SEPTEMBER 15 TH 2014
SAFE HARBOR STATEMENT
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 second half of year 2014 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 OCP’s financial statements which are produced in Moroccan Dirhams (the local currency). For ease of presentation, financial information included in this presentation is 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 Dirham/U.S. Dollar exchange rates for the following periods:

June 2014

June 2013

December

2013

Period End

Average

8.2091

8.5393

8.1516

8.2414

8.4623

8.1861

2

periods: June 2014 June 2013 December 2013 Period End Average 8.2091 8.5393 8.1516 8.2414 8.4623 8.1861
MAJOR HIGHLIGHTS OF FIRST HALF 2014 Phosphate, key element for life.
MAJOR HIGHLIGHTS OF FIRST HALF 2014
Phosphate,
key element for life.
Executed effectively on all key elements of OCP’s growth strategy

Executed effectively on all key elements of OCP’s growth strategy

Utilized industrial flexibility and commercial agility to optimize revenue capture

Utilized industrial flexibility and commercial agility to optimize revenue capture

Realized record high fertiliser sales volumes

Realized record high fertiliser sales volumes

Continued to build scale through organic and external initiatives

Continued to build scale through organic and external initiatives

Maintained cost leadership; initial benefits from start up of slurry pipeline

Maintained cost leadership; initial benefits from start up of slurry pipeline

 
Continued execution of Capex plan on time and within budget

Continued execution of Capex plan on time and within budget

Progressively recovered from adverse weather conditions in Q1

Progressively recovered from adverse weather conditions in Q1

3

execution of Capex plan on time and within budget Progressively recovered from adverse weather conditions in
POSITIONED FOR LONG TERM GROWTH 1 2 CAPACITYCAPACITY LEADERSHIPLEADERSHIP COSTCOST LEADERSHIPLEADERSHIP A unique
POSITIONED FOR LONG TERM GROWTH
1
2
CAPACITYCAPACITY LEADERSHIPLEADERSHIP
COSTCOST LEADERSHIPLEADERSHIP
A unique strategy
3
INDUSTRIAL &
INDUSTRIAL &
COMMERCIAL FLEXIBILITY
COMMERCIAL FLEXIBILITY
4
4
STRONG FUNDAMENTALS BUT 11TH HOUR PURCHASING BEHAVIOR DRIVES PRICE VOLATILITY DAP Price Evolution DAP Price
STRONG FUNDAMENTALS BUT 11TH HOUR PURCHASING
BEHAVIOR DRIVES PRICE VOLATILITY
DAP Price Evolution
DAP Price Evolution
$/T
FOB Tampa
590
FOB Morocco
CFR India
Slower offtakes due to
end of Spring season and
purchasing deferral in
following seasons
540
490
440
390
Generalized deferral
purchasing behavior
leading to buyers rush,
worsened afterwards by
supply difficulties caused
by Atlantic swell
End of Northern
Hemisphere season and
late start of Indian
season
340
Source: CRU, OCP
and late start of Indian season 340 Source: CRU, OCP 5 Commercial agility and industrial flexibility

5

Commercial agility and industrial flexibility allowing OCP to capture pricing upsides

season 340 Source: CRU, OCP 5 Commercial agility and industrial flexibility allowing OCP to capture pricing
OCP BUILDING SCALE AND STRENGTHENING MARKET POSITION
OCP BUILDING SCALE AND STRENGTHENING MARKET
POSITION

North America:

PCS Agreement

MARKET POSITION North America: PCS Agreement • Expanding OCP’s distribution channels for fertilizer

Expanding OCP’s distribution channels for fertilizer products in North America

Cooperate with PCS on ammonia sourcing from North America and the Caribbean

South America:

Partnership with Heringer

and the Caribbean South America: Partnership with Heringer • Equity stake of approximately 10% in Heringer

Equity stake of approximately 10% in Heringer Fertilizantes, a major Brazilian fertilizer producer

Strategic partnership to better serve customers in the region and improve OCP positioning

Distribution consolidation context in the region

Heringer accounts for ~17% market shares in the distribution in Brazil, operating in 21 blending units for a total capacity of 6.2 million tons

Africa:

Stronger market penetration

of 6.2 million tons Africa: Stronger market penetration • Key growth market • Development of product

Key growth market

Development of product portfolio tailored to the region

Support the development of local distributors

6
6
RECORD HIGH FERTILISER EXPORTS IN H1 2014
RECORD HIGH FERTILISER EXPORTS IN H1 2014
H1 Fertilisers export volumes (kt product) 2,483 2,349 2,300 New 334 43 80 2,001 products
H1 Fertilisers export volumes
(kt product)
2,483
2,349
2,300
New
334
43 80
2,001
products
H1 Sales volume
to Africa
1,531
(kt product)
18
315
164
1,201 1,054
2 306
2 220
2 149
DAP/MAP/TSP
2 001
696
2013 2014
1 513
1 201
1 054
696
2007
2008
2009
2010
2011
2012
2013
2014

7

220 2 149 DAP/MAP/TSP 2 001 696 2013 2014 1 513 1 201 1 054 696
FINANCIAL RESULTS OVERVIEW Key component of global food security
FINANCIAL RESULTS OVERVIEW
Key component
of global food
security
First half revenue amounted to US$ 2.4 billion

First half revenue amounted to US$ 2.4 billion

First half EBITDA amounted to US$ 563 million

First half EBITDA amounted to US$ 563 million

Cash flow related to operating activities amounted to US$ 612 million

Cash flow related to operating activities amounted to US$ 612 million

Investment program initiated by OCP in 2008 continued at a steady pace with US$ 1.1

Investment program initiated by OCP in 2008 continued at a steady pace with US$ 1.1 billion spent in H1 2014

First global bond offering, raising US$bn 1.25 of 10-year notes and US$600 million of 30-year

First global bond offering, raising US$bn 1.25 of 10-year notes and US$600 million of 30-year notes

Accounts are presented in IFRS

8

bond offering, raising US$bn 1.25 of 10-year notes and US$600 million of 30-year notes Accounts are
REVENUE BREAKDOWN H1 2014 Revenue by Product
REVENUE BREAKDOWN
H1 2014 Revenue by Product

In US$m

2,437

2,350 Rock 739 613 -126 429 Acid 458 -29 101 Fertilisers 984 1,085 Others 256
2,350
Rock
739
613
-126
429
Acid
458
-29
101
Fertilisers
984
1,085
Others
256
223
H1 2013
Rock
Acid
Fertilisers
Others
H1 2014

1 JFC V (Ex-BMP JV)’s ownership changed from 50% to 100% in 2014

9

Others 10% Rock; 26% Fertilisers Acid 46% 18%
Others
10%
Rock; 26%
Fertilisers
Acid
46%
18%

Rock : lower rock sales mainly due to change of consolidation scope 1

Acid : lower acid revenue due to lower global phosphoric acid prices, partially offset by an increase in volumes

Fertilisers : higher fertilisers revenues thanks to increased sales volumes and change of consolidation scope 1 despite negative price effect

revenues thanks to increased sales volumes and change of consolidation scope 1 despite negative price effect
SALES VOLUMES ANALYSIS Sales volumes 1 - KT
SALES VOLUMES ANALYSIS
Sales volumes 1 - KT

Rock

+9% 6,488 5,935 Fertilisers +9% 2,680 Acid 2,455 +15% 1,015 884 H1 2013 H1 2014
+9%
6,488
5,935
Fertilisers
+9%
2,680
Acid
2,455
+15%
1,015
884
H1 2013
H1 2014
H1 2013
H1 2014
H1 2013
H1 2014

Increased sales volume in Rock due to an increase in exports

Increased Acid sales volume mainly due to higher demand in South Asia

Increased Fertiliser sales volume mainly due to higher demand of DAP in Europe and Oceania, and higher deliveries of NPK/NPS to Africa

and Oceania, and higher deliveries of NPK/NPS to Africa 1 OCP exports and home deliveries to

1 OCP exports and home deliveries to all its affiliates.

10

KEY FINANCIAL FIGURES Half year EBITDA bridge In US$m
KEY FINANCIAL FIGURES
Half year EBITDA bridge
In US$m
87 14 12 17 83 67 623 563 June 2013 Revenue Sulfur Ammonia Other Personnel
87
14
12
17
83
67
623
563
June 2013
Revenue
Sulfur
Ammonia
Other
Personnel
Other
June 2014
consumed
expenses
purchases

In US$m

H1 2014

H1 2013

In US$m

H1 2014

H1 2013

Revenue

2,350

2,437

Equity

6,657

5,778

Gross Margin

1,516

1,623

Debt

4,492

2,209

%

of net sales

65%

67%

Net financial debt

2,295

-259

EBITDA

 

563

623

Debt/Equity

0.67

0.38

%

of net sales

24%

26%

EBIT

 

442

533

Operating profit

 

395

515

Financial profit

-

23

26

Financial profit - 23 26

Profit for the period

 

292

434

 

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CASH FLOW HIGHLIGHTS AND LEVERAGE
CASH FLOW HIGHLIGHTS AND LEVERAGE

Net Financial Debt

(0.21x) 1.06x 1.89x In US$m In US$m Cash flows 2,295 612 3 1,131 1,298 810
(0.21x)
1.06x
1.89x
In US$m
In US$m
Cash flows
2,295
612
3
1,131
1,298
810
893
605
Opening
Cash flows
Cash flows
Cash flows
Change
Closing cash
cash
related to
related to
related to
-259
operating
investing
financing
605
activities
activities
activities

12

June 2013

Dec 2013

June 2014

activities activities activities 12 June 2013 Dec 2013 June 2014 Net financial debt / EBITDA (

Net financial debt / EBITDA ( based on 2013 EBITDA)

activities activities activities 12 June 2013 Dec 2013 June 2014 Net financial debt / EBITDA (
CAPEX BREAKDOWN Capex Breakdown
CAPEX BREAKDOWN
Capex Breakdown

In US$m

In US$m

3 000 2 500 840 2 000 1 500 543 1 000 1,600 642 40
3
000
2
500
840
2
000
1
500
543
1
000
1,600
642
40
500
932
642
518
9
14
11
1
0
3 000 2 500 861 2 000 1 500 1 590 552 141 1 000
3
000
2
500
861
2
000
1
500
1 590
552
141
1
000
937
281
500
1 020
410
0

2011

2012

2013

H1 2014

2011

2012

2013

H1 2014

1 020 410 0 2011 2012 2013 H1 2014 2011 2012 2013 H1 2014 Mining Chemicals

Mining

Chemicals410 0 2011 2012 2013 H1 2014 2011 2012 2013 H1 2014 Mining support Industriel expansion

2012 2013 H1 2014 2011 2012 2013 H1 2014 Mining Chemicals support Industriel expansion capex other

support

2013 H1 2014 2011 2012 2013 H1 2014 Mining Chemicals support Industriel expansion capex other Details

Industriel expansion capex

H1 2014 Mining Chemicals support Industriel expansion capex other Details for H1 2014 13 7% 5%

other

Details for H1 2014

13

7% 5%

Other

88%

Industrial : Developmentcapex other Details for H1 2014 13 7% 5% Other 88% Industrial : Maintenance DEVELOPMENT •

Industrial : Maintenancefor H1 2014 13 7% 5% Other 88% Industrial : Development DEVELOPMENT • ODI ( new

DEVELOPMENT

ODI ( new granulation unit) (177 M$)

ODI 2 Project ( 150 M$)

ODI 3 Project ( 111 M$)

Engineering and carrying out washing plant of El Halassa (82 M$)

Adaptation of the existing plant and equipment to process pulp ( 63 M$)

ODI 4 Project ( 49 M$)

Port Jorf Lasfar project ( 39 M$)

existing plant and equipment to process pulp ( 63 M$) • ODI 4 Project ( 49
OCP EXPANDING ITS CAPACITY AND LOWERING ITS PRODUCTION COSTS COSTCOST LEADERSHIPLEADERSHIP CAPACITYCAPACITY
OCP EXPANDING ITS CAPACITY AND LOWERING ITS
PRODUCTION COSTS
COSTCOST LEADERSHIPLEADERSHIP
CAPACITYCAPACITY LEADERSHIPLEADERSHIP
Quantity of Phosphate rock transported by Pipeline (Mt) 2,9 0,6 0,3 1H14 End July 14
Quantity of Phosphate rock
transported by Pipeline (Mt)
2,9
0,6
0,3
1H14
End July 14
2014 Total

14

Jorf Lasfar additional Phosacid capacity New Line E of 450 kt P 2 O 5
Jorf Lasfar additional Phosacid
capacity
New Line E of 450 kt P 2 O 5
successfully started on May
2014
Full capacity ramp-up
achieved within 3 weeks
Ramp-up in beneficiation
capacity at Khouribga mine
SUMMARY AND MARKET OUTLOOK
SUMMARY AND MARKET OUTLOOK
Solid performance in H1 demonstrated OCP’s commercial and industrial agility and cost leadership

Solid performance in H1 demonstrated OCP’s commercial and industrial agility and cost leadership

Industry forecasts of improved year-over-year pricing and demand in H2 2014

Industry forecasts of improved year-over-year pricing and demand in H2 2014

Additionally, OCP’s H2 results should benefit from:

New supply agreements in North America and Brazil New 6-month Phosacid agreement in India Increased sales to Africa

Phosacid agreement in India Increased sales to Africa Consequently, OCP’s H2 2014 revenues and EBITDA

Consequently, OCP’s H2 2014 revenues and EBITDA performance is expected to outpace that of H1;

Consequently, OCP’s H2 2014 revenues and EBITDA performance is expected to outpace that of H1; and 2014 revenues and EBITDA to exceed 2013 levels

15

revenues and EBITDA performance is expected to outpace that of H1; and 2014 revenues and EBITDA