Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Investor Presentation (September 2024)
30 slides from Cf Industries's investor presentation, Sep 16, 2024
Slide 1: Investor Presentation September 2024
Investor Presentation September 2024 NYSE: CF
Slide 2: Safe harbor statement
Safe harbor statement All statements in this presentation by CF Industries Holdings, Inc. (together with its subsidiaries, the “Company”), other th an those relating to historical facts, are forward - looking statements. Forward - looking statements can generally be identified by their use of terms
Slide 3: Note regarding non-GAAP financial measures
Note regarding non - GAAP financial measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management be lieves that EBITDA, adjusted EBITDA, adjusted EBITDA margin, net debt/adjusted EBITDA, free cash flow, and free cash flow to a
Slide 4: CF Industries built for the long-term
4 CF Industries built for the long - term 0.17 RIR (1) Industry leading safety 2,700 employees worldwide “We believe operational excellence, outstanding safety and resulting high asset utilization, is a hallmark of the CF Industries team.” - TONY WILL, CEO & PRESIDENT CF LISTED NYSE Publicly traded
Slide 5: Our Mission, Vision, and Strategy
5 Our mission is to feed and fuel the world sustainably Our Mission, Vision, and Strategy
Slide 6: Pathways to grow shareholder value
6 Evaluate accretive acquisitions Margin enhancing projects Share repurchases and quarterly dividends Low - carbon ammonia production growth Pathways to grow shareholder value Creating substantial value for long - term shareholders Return capital to shareholders Inorganic growth opportunities Invest
Slide 7: CF Industries' evolution to world's largest ammonia producer
7 CF Industries’ evolution to world’s largest ammonia producer Founded as Central Farmers Fertilizer (agricultural cooperative) IPO, listed on NYSE Acquisition of Terra Industries doubled production capacity North America capacity increased by 25% (expansion at Donaldsonville & Port Neal) Strategic
Slide 8: CF's manufacturing process
8 CF’s manufacturing process Natural gas N 2 Air H 2 Ammonia 82%N 18% H 2 Ammonia 82%N Ammonia Nitrate 34%N UAN 28 - 32%N Granular Urea 46%N U rea Liquor 47%N Nitric Acid 22%N O 2 CO 2 CO 2 is byproduct of ammonia process, captured & reused to produce urea Inputs Intermediates Products Haber – Bosch
Slide 9: Why invest in CF Industries?
9 Advantaged production and distribution network Strong operational excellence Proven track record of shareholder return Clean energy transition unlocks growth Why invest in CF Industries?
Slide 10: Advantaged production and distribution network
10 Advantaged production and distribution network Production capacity exceeding ~10 million tons of ammonia per year Advantaged North American Production Network 8 North American production sites strategically located to serve customers Ability to serve Corn Belt via barge, rail, truck, and pipeline
Slide 11: Global Energy Price 2023-2025F
11 Global Energy Price 2023 - 2025F (1) Estimated ex - works costs based on annualized costs including settled feedstock prices through July 2024 and from August 2024 to December 2024 based on forward curve and projections as of August 24, 2024 (2) North American production assumed to be 37.2 MMBtu
Slide 12: Positive global nitrogen supply-demand dynamics
12 2019 2020 2021 2022 2023 2024F Positive global nitrogen supply - demand dynamics Sources: Industry Publications, CRU Urea Market Outlook as of June 2024, CF Analysis India Urea Imports 7.4 MMT 5 - 6 MMT 2019 2020 2021 2022 2023 2024F China Urea Exports Million metric tons 4.3 MMT 2 - 3 MMT 2019 2
Slide 13: Strong operational excellence and capacity utilization
13 97% 87% 5 years ending 2023 5 - year rolling avg. percent of capacity CF’s 10% greater capacity utilization yields an additional ~0.9 million tons of ammonia annually from same assets compared to peers (5) CF North America (3) North America Excl. CF (4) (1) 12 - month rolling average recordable i
Slide 14: Financial Highlights: Q2 2024
14 Industry leading operational excellence drives cash generation Financial Highlights: Q2 2024 (1) See appendix for reconciliation of adjusted EBITDA to the most directly comparable GAAP measure (2) Last twelve months share repurchases and dividends through June 30, 2024 (3) See appendix for reconc
Slide 15: Creating value by increasing nitrogen participation per share
15 8.2 8.2 7.0 (2) 6.0 (1) Production Capacity millions (nutrient tons) Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding 17 30 39 45 2010 2015 2020 1H24 Creating value by increasing nitrogen participation per share Million Shares Outstanding (3) Since 2010: Increased production capacity
Slide 16: CF total shareholder return continuously outperforms
16 CF total shareholder return continuously outperforms 9% 53% 80% 104% -30% -10% 10% 30% 50% 70% 90% 110% 130% 1-Year 3-Year 5-Year 10-Year CF Peer Avg S&P 500 Materials Notes: • One, three, five and ten years through June 30, 2024 • Nutrien’s returns are calculated using weighted returns of Agrium
Slide 17: Strong financial performance enhances cash flow generation
17 Strong financial performance enhances cash flow generation Average 2019 - 2023 Net Debt/Adj. EBITDA (2) 43% 22% CF Peer Avg 37% 16% CF Peer Avg 0.7 1.2 CF Peer Avg Cash from Operations/Net Sales 4% 8% CF Peer Avg Note • Peer group is comprised of Nutrien, Yara International and Mosaic. See append
Slide 18: Our committed goals to decarbonize our network
18 Scope 3 Scope 1 & 2 Scope 1 Our committed goals to decarbonize our network Reduce Scope 1 CO 2 - equivalent emissions by 25% per ton of product by 2030 Reduce Scope 3 emissions by 10% by 2030 Achieve net - zero Scope 1 and 2 carbon emissions by 2050 These goals align with our long - standing comm
Slide 19: CF has a unique role in addressing critical needs
19 CF Industries has a unique role to play in addressing some of the world's most critical needs Food to feed a growing population Traditional Nitrogen Uses Agriculture - Nitrogen is a non - discretionary input to maintain high yields in corn, wheat, sugar and cotton - Spot market pricing - Accounts
Slide 20: CF positioned to serve traditional applications and new demand sources
20 CF positioned to serve traditional applications and new demand sources with low - carbon ammonia Opportunity to strengthen our existing business and provide significant growth Low - carbon Ethanol for SAF Consumer Packaged Goods Low - carbon fertilizers European CBAM Industrials Low - carbon ammo
Slide 21: Executing strategic initiatives to meet growing low-carbon ammonia demand
21 Executing strategic initiatives to meet growing low - carbon ammonia demand Low - carbon Ammonia Production Growth Clean Ammonia Industry Demand Milestones Reduce Upstream Methane Leakage Green Ammonia Carbon Capture and Sequestration Partnering with ExxonMobil for CCS - Donaldsonville start - up
Slide 22: Low-carbon ammonia drives near-term margin opportunities
22 Low - carbon ammonia drives near - term margin opportunities United States 45Q tax credit for CCS (First 12 years from project startup) Enforced in 2026 for all imported nitrogen (Carbon Border Adjustment Mechanism) $100M+ projected free cash flow per year (1) Starting mid - 2025 North America ta
Slide 23: Uniquely positioned to continue creating long-term shareholder value
23 Advantaged production and distribution network Strong operational excellence Proven track record of shareholder return Clean energy transition unlocks growth Uniquely positioned to continue creating significant long - term shareholder value
Slide 24: Appendix
CF Appendix
Slide 25: Financial results – second quarter and first half 2024
Financial results – second quarter and first half 2024 1H 2023 1H 2024 Q2 2023 Q2 2024 In millions, except percentages, per MMBtu and EPS $ 3,787 $ 3,042 $ 1,775 $ 1,572 Net sales 1,667 1,088 804 679 Gross margin 44.0 % 35.8 % 45.3 % 43.2 % - As a percentage of net sales $ 1,087 $ 614 $ 527 $ 420 Ne
Slide 26: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA
Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA 26 1H 2023 1H 2024 Q2 2023 Q2 2024 In millions $ 1,256 $ 744 $ 606 $ 506 Net earnings (169) (130) (79) (86) Less: Net earnings attributable to noncontrolling interest 1,087 614 527 420 Net earnings attributable to common stockh
Slide 27: Non-GAAP: reconciliation of net earnings to EBITDA, continued
Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued 27 FY 2022 FY 2023 Q2 2024 LTM In millions $ 3,937 $ 1,838 $ 1,326 Net earnings (591) (313) (274) Less: Net earnings attributable to noncontrolling interest 3,346 1,525 1,052 Net earnings attributable to common stock
Slide 28: Non-GAAP: reconciliation of net earnings to EBITDA, continued
Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued 28 FY 2019 FY 2020 FY 2021 In millions $ 646 $ 432 $ 1,260 Net earnings (153) (115) (343) Less: Net earnings attributable to noncontrolling interest 493 317 917 Net earnings attributable to common stockholders 217 16
Slide 29: Non-GAAP: reconciliation of cash from operations to free cash flow
Non - GAAP: reconciliation of cash from operations to free cash flow and free cash flow to adjusted EBITDA conversion Q2 2024 LTM FY 2023 FY 2022 FY 2021 FY 2020 FY 2019 In millions, except percentages, share price, and ratios interest dollars (3) $ 2,018 $ 2,757 $ 3,855 $ 2,873 $ 1,231 $ 1,505 Cash
Slide 30: Reconciliation of peer average vs CF (2019–2023) financial metrics
30 Reconciliation of peer average vs CF (2019 – 2023 ) financial metrics Note: • Peer group is comprised of Nutrien, Yara International, and Mosaic. The peer average column represents the calculated average s o f the peer group constituents • For the peer group, the financial metrics represent the a
CF Industries Holdings — Investor Presentation (September 2024) on 6ix