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FULL YEAR AND FOURTH QUARTER 2018 EARNINGS CONFERENCE CALL PRESENTATION
MARCH 25TH, 2019
CONFIDENTIAL AND PROPRIETARYAny use of this material without OCP’s specific permission is strictly prohibited
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 2019 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) and presented in IFRS. 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:
2
USD/MAD
2018 : KEY TAKEAWAYS
Efficiencies increasing cost competitiveness
Industry leading margins
Significant growth amid production discipline
Investment grade leverage ratio
Moved ahead with strategic initiatives to drive future growth
Significant growth amid production discipline
3
DELIVERING ON OUR INVESTMENT PROGRAM SUPPORTED GROWTH
ACROSS THE VALUE CHAIN
1,4 1,3 1,3 1,3 1,1 0,9 1,11,5 1,7 1,8 1,8 1,8 1,6 1,5 1,7 1,9
2,4 2,42,8
3,7
7,4
3,2
5,3
6,57,0
5,75,4
4,84,1
5,35,9
1991 19941988 1995 20021989 1990 1993 20051992 1996 20071997 1998 1999 2000 2001 2003 2004 2006 20092008 2010 2011 20132012 2014 2015 2016 2017 2018
OCP’S REVENUES (US$ BN)
PORT EXTENTION
200730 MT
201850 MT
MT MT eq DAP
200726 MT
201838 MT
TRANSPORTATIONROCK FERTILIZER
Doubling Khouribga’scapacity
Tripling capacity
30
44
2007 2018
+14 MT
4,0
12,0
8,0
2007 2018
X3
THE NEXT PHASE PROACTIVELY ADDRESSES GROWING DEMAND FOR
CUSTOMIZED PRODUCTS…
FERTILIZER CAPACITY EXPANSION: +12 TO 13MT THROUGH 2030
ROCK CAPACITY EXPANSION: +22 MT THROUGH 2030
4
158
3
4
0,75
203020182007 NorthernAxis
0,25
JVOCP-
Fertinagro
JVOCP-
Fertinagro
2021 Central Axis
1
Southern Axis
International development
(Africa, India)
3-4
12
15
24-25
2018-2021: ~+3MT 2021-2030: ~+9 to 10MT
30
66
14
11
20302024-252007 2018
4
2022
7
2026-30
6
…STRENGHTENING THE UPSTREAM AND DEVELOPING THE FARMER-
CENTRIC DOWNSTREAM
7
Cost-competitive capacity expansion
Farmer-centric fertilizer solutions
Innovation, Science & Digital as key enablers
Local production units
Integrated platforms
Customized Fertilizers
Specialty Fertilizers
Services
R&D, Innovation Digital
NorthernAxis
Center Axis
Southern Axis
AnalyticsTalents & Skills
Nutrient values (base 100 in Jan 2013)
Sources: CRU, P-value is equivalent to the Commercial Gross Margin (CGM) = DAP Fob Morocco prices minus Raw material costs (Sulfur and Ammonia).
9
Phosphate resilience vs. other nutrients
STRONG PHOSPHATE FUNDAMENTALS
60
70
80
90
100
110
120
Jan-1
5
Apr-
15
Jul-
15
Oct-
15
Jan-1
6
Apr-
16
Jul-
16
Oct-
16
Jan-1
7
Apr-
17
Jul-
17
Oct-
17
Jan-1
8
Apr-
18
Jul-
18
Oct-
18
Jan-1
9
DAP affordability index
Lower affordability in 2018 - But still affordable
100
111117
85 85
99
20
40
60
80
100
120
2013 2014 2015 2016 2017 2018
P-value Urea Potash
DAP affordability Index (base 100 in Jan 2015)
Sources: CRU, DAP affordability is a ratio between DAP average FOB prices (Tampa, North Africa, Saudi and Baltic) and the crop prices index (weighted average crop prices).
Av. 2018 ~70Av. 2017
~61
Less a
fford
ab
leM
ore a
fford
ab
le
10
REFLECTED IN PHOSPHATE FERTILIZERS SUPPLY /DEMAND Evolu
tion
of
DA
P &
Su
lfu
rp
ric
e(in
US
$/
ton
)
Fertilizers market characterized by rising prices:
Supply increased but less than expected
Overall demand was driven by Asia and the US, offsetting the decline in Europe and Africa
Higher production costs were mainly driven by rising sulfur prices
Sources: CRU, OCP Analysis
Price DAP/MAP OCP
($/T)
Realized 2017 Realized 2018
349 417
Market conditions in 2018
60
110
160
210
260
310
360
280
300
320
340
360
380
400
420
440
460
480
DAP FOB Tampa ($/T FOB) Annual Avge. For DAP Sulfur Prices
11
SULFUR PRICES WERE PARTICULARLY VOLATILE IN 2018
Sources: CRU, OCP Analysis
Evolution of Sulfur and Ammonia prices in 2017-2018
In US$/ton
Sulfur
0
50
100
150
200
250
300
350
30
45
60
75
90
105
120
135
150
165
180
195
210
jan-17 april-18april-17 jul-17 oct-17 jan-18 jul-18 oct-18 jan-2019
2017 2018
AmmoniaSimilar trend as in
2017
Price run-up due to the delay of new Sulfur capacities
and low availability of Russian supplies
Sulfur FOB Middle East Ammonia FOB Baltic
Sources: GTIS, OCP12
MAP/DAP/TSP/NPK imports (MT)
P-fertilizers in Sub-Saharan (MT)
P-fertilisers imports (MT)
DAP/MAP/TSP importsin MT
(10%)
DAP imports in MT
GROWING DEMAND IN 2018 FROM INDIA AND THE US MORE THAN
OFFSET LOWER IMPORTS FROM AFRICA AND EUROPE
7.3 7.3
2017 2018
+1%
3.83.1
2017 2018
3.82.9
2017 2018
2.13.2
2017 2018
-17%
-25%
+47%
4.16.2
2017 2018
+51%
(MT product)
Sources: Estimates OCP, Companies websites, GTIS, CRU
13
DAP/MAP/NPS Phosphate Fertilizers trade Incremental Changes FY 2018
0.8
1.5
ON THE SUPPLY SIDE, IMPACT OF ADDITIONAL CAPACITIES WAS OFFSET
BY CLOSURES
0.9
0.2
Plant City closure
0.3
1.5
Ma’aden Total Additional Exports
OthersOCP Chinese exports
Lower than the expected demand
14
THANKS TO ITS INDUSTRIAL FLEXIBILITY AND COMMERCIAL AGILITY,
OCP HAS OPTIMIZED ITS ACHIEVEMENTS IN 2018
Industr
ialFle
xib
ility
(Export
Acid
/fert
iliz
ers
in 2
018)
Com
merc
ial agility
(Bre
akdow
n o
f exp. fe
rtiliz
er)
Source: OCP
Fertilizers(Mt Products)
Acid(Mt P2O5)
22%
31%
24%
18%
23%
27%
16%
0
6%
15%
19%
2018
2017
+ ~1MT + 0.5 MT
AfricaNorth Am.AsiaEurope South Am.
0,4
0,5 0,50,6
1,7
2,7
2,0
1,8
0,0
0,5
1,0
1,5
2,0
2,5
3,0
-
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
Q1 2018 Q2 2018 Q3 2018 Q4 2018
Softer prices in 1H
amidst lower costs &
high inventories
Likely recovery in 2H
Sliding Raw material
prices
Expected growth across all regions amidst lower grains stock-to-use ratios
o Continued consumption growth in India, US and Brazilo Recovery on Europe & Africa
High inventories in India & US as deferred supply from 2018 might weigh on the S/D in those particular regions
Additional Capacities from OCP, Maaden, Egypt and Turkey to be partially offset by capacities closures in Canada
China avails for exports remains a wild card
Softening Raw materialso Expected lower ammonia prices due to additional
capacities (Ramp-up in US, Russia & Indonesia)o Softening sulfur prices on the back of additional
capacities in Saudi Arabia & China and enhanced avails from Russia
Dem
an
dS
up
ply
Feed
sto
ck
15
MARKET DYNAMICS IN 2019
REVENUES
17
EBITDA
EBIT
1,136 1,0621,194 1,7941,352
1,5411,332
1,5505,013
5,947
FY 2017 FY 2018
Q4
Q3
Q2
Q1
+19%
333 273262 588438
5112804461,313
1,819
FY 2017 FY 2018
Q4
Q3
Q2
Q1
+39% 26.2% 30.6%
In US$m
FINANCIAL SNAPSHOT
189 142122 375283
38295
327689
1,226
FY 2017 FY 2018
Q4
Q3
Q2
Q1
+78%
933
1,151
FY 2017 FY 2018
+23%
CAPITAL EXPENDITURES
26% 31%
EBITDA Margin
Revenue breakdown in 2018
Notes: 1include revenue from freight & revenue from Joint Ventures activities 18
$5.9bn
Rock 18%
Acid 18%
Fertilizers 55%
Others1
9%
ROCK
ACID
751 1,044
56 237
FY 2017 Volume Price FY 2018
+39%
2,710 3,242 5 528
FY 2017 Volume Price FY 2018
+20%
FERTILIZERS
REVENUE BREAKDOWN BY SEGMENT
1,060 1,054 14 -20
FY 2017 Volume Price FY 2018
-1%
In US$m
Note: 1include revenue from stock sold, taxes expenses, FX effects, and other charges19
1
EBITDA EVOLUTION: ~$1.8bn IN 2018 DRIVEN BY STRONG REVENUES
AND COST EFFICIENCIES
1,313
1,819
932
82
-345-48
-115
EBITDA FY
2017
Revenue Raw materials
costs
Energy & water
costs
Maintenance,
repairs &
external
expenses
Others EBITDA FY
2018
+39%
In US$m
20
Debt Profile Snapshot¹;² Debt Maturity Schedule
Source: OCP
1. As at 31 December 2018, “Other” includes current financial debts, bank overdraft and accrued interests
2. USD/MAD exchange rates of 9.5655 as of 31/12/2018
3. Other notably includes Sovereign guaranteed bank loan, Domestic bond, Finance lease liabilities
Bank
loans37%
Domestic
hybrid bond15%
Internat.
bond
39%
Other³
9%
0.6 0,6 0,50,4
0,3 0,20,1 0,1
1,3
1,0
0,6
1,0
2019 2021 2023 2025
Domestic Hybrid bond
Internat. bond
Bank Debt
Net financial Debt & leverage
LIQUIDITY SNAPSHOT & LEVERAGE
4.7
3.7
3.58x
2.02x
FY 2017 FY 2018
-22%
In US$m