Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — FY2020 Earnings Presentation
19 slides from Cf Industries's earnings presentation, Feb 18, 2021
Slide 1: 2020 Fourth Quarter and Full Year Financial Results
1 1 2017 Third Quarter Financial Results November 1, 2017 NYSE: CF 2020 Fourth Quarter and Full Year Financial Results February 17, 2021 NYSE: CF
Slide 2: Safe harbor statement
2 Safe harbor statement All statements in this communication by CF Industries Holdings, Inc. (together with its subsidiaries, the “Company”), other t han those relating to historical facts, are forward - looking statements. Forward - looking statements can generally be identified by their use of ter
Slide 3: Note regarding non-GAAP financial measures
3 Note regarding non - GAAP financial measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Managemen t b elieves that EBITDA, adjusted EBITDA, free cash flow, free cash flow to adjusted EBITDA conversion, and free cash flow yield
Slide 4: Full year and fourth quarter highlights
4 2020 Free Cash Flow (2) $ 748 M Full year and fourth quarter highlights (1) See appendix for reconciliation of EBITDA and adjusted EBITDA (2) Represents cash provided by operating activities (cash from operations) less capital expenditures less distributions to nonco ntr olling interest; see appen
Slide 5: Outstanding safety drives production, sales volume consistency
5 Outstanding safety drives production, sales volume consistency 0.0 1.0 2.0 3.0 4.0 5.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Recordable Incident Rate Total injuries per 200,000 work hours 0 5,000 10,000 15,000 20,000 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 TTM
Slide 6: CF Industries ammonia production versus North American peers
6 (1) Data taken from the December 22, 2020 CRU Ammonia Database (2) Represents CF Industries historical North American production and CRU’s capacity estimates for CF Industries (3) Calculated by removing CF Industries’ annual reported production and capacity from the CRU data for all North American
Slide 7: Full year and fourth quarter results
7 Full year and fourth quarter results Sales Volume (product tons) Net Sales Net Sales Sales Volume (product tons) 19.5 M 2019 20.3 M 2020 5.0 M 2019 5.5 M 2020 $4.6 B 2019 $4.1 B 2020 $1.0 B 2019 $1.1 B 2020 • Average selling prices for Q4 2020 were lower than Q4 2019 due to increased global supply
Slide 8: Financial results – fourth quarter and full year 2020
8 Financial results – fourth quarter and full year 2020 I n millions, except percentages, per MMBtu and EPS Q4 20 20 Q4 201 9 Full year 20 20 Full year 2019 Net sales $ 1,102 $ 1,049 $ 4,124 $ 4,590 Gross margin 180 227 801 1,174 - As percent age of net sales 16.3 % 21.6 % 19.4 % 25.6 % Net earnings
Slide 9: CF Industries is the most efficient converter of EBITDA into cash
9 (1) Market value of equity (market cap) is calculated as shares outstanding as of the end of each respective period (except OCI N .V. is as of December 31, 2019) multiplied by the closing share price of each company on February 16, 2021; see appendix for the calculation of market cap (2) Represent
Slide 10: CF Industries continues to offer free cash flow yield well above peer average
10 1.3% 3.8% 4.3% 9.1% 7.7% OCI NTR MOS YAR CF CF Industries continues to offer investors free cash flow yield well above peer group average EV / Adj. EBITDA (2)(3) FCF Yield (1) (1) Represents LTM free cash flow divided by market value of equity (market cap) as of February 16, 2021; LTM free cash f
Slide 11: Capital management
11 Capital management • $100 million investment to develop an initial green ammonia project at Donaldsonville expected to be commissioned in 2023 • Developing carbon sequestration and carbon abatement projects across the network Clean energy initiative Capital structure and allocation • Committed to
Slide 12: CF Industries EBITDA sensitivity table
12 (1) Based on 2019 sales volumes of approximately 19.5 million product tons, 2019 gas consumption of 344 million MMBtus, 2020 nitrogen product s ale s price relationships. Changes in product prices and gas costs were not applied to the CHS minority interest or industrial contracts where CF Industr
Slide 13: Positive nitrogen outlook in 2021
13 Global supply and demand Positive n itrogen o utlook in 2021 Industry fundamentals Nitrogen market outlook • Higher commodity crop futures prices and substantially higher energy prices in Asia and Europe have driven strong global nitrogen demand and lower global nitrogen operating rates at the st
Slide 14: Natural gas spreads have widened, steepening the cost curve
14 Natural gas spreads have widened, steepening the cost curve, compressing European and Asian margins and operating rates (1 ) Advantage per tonne based on annualized costs including settled feedstock prices through January 2021 and February to December 2021 based on forw ar d curve and projections
Slide 15: India and Brazil have consistent long-term demand growth
15 0 2 4 6 8 10 12 2010 2012 2014 2016 2018 2020 0 1 2 3 4 5 6 7 8 2010 2012 2014 2016 2018 2020 India and Brazil have consistent long - term demand growth, which has led to rising import demand (1) Brazil domestic production in 2020 is comprised solely of 2019 inventory carryover Source: CRU Urea M
Slide 16: Numerous initiatives underway in support of clean energy
16 CF Industries has numerous initiatives underway in support of clean energy initiatives Ammonia as a fuel Developing numerous carbon capture and sequestration (CCS) projects near CF production facilities In discussions for supplying ammonia as marine fuel and for global power generation Evaluating
Slide 17: TILX 500928
TILX 500928 LD LT160500 LB 72800 KG LT WT 125500 LB 56900 KG
Slide 18: Reconciliation of net earnings to EBITDA and adj. EBITDA
18 Non - GAAP: reconciliation of net earnings to EBITDA and adj. EBITDA In millions Q4 20 20 Q4 2019 FY 20 20 FY 2019 Net earnings $ 119 $ 94 $ 432 $ 646 Less: Net earnings attributable to noncontrolling interest (32) (39) (115) (153) Net earnings attributable to common stockholders 87 55 317 493 In
Slide 19: Reconciliation of LTM cash from operations to free cash flow and yield
19 Non - GAAP: reconciliation of LTM cash from operations to free cash flow and free cash flow yield In millions , except percentages , share price, and ratios CF Yara Mosaic Nutrien OCI Cash provided by operating activities (1) $ 1,231 $ 2,047 $ 1,622 $ 2,964 $ 393 C apital expenditures (309) (739)
CF Industries Holdings — FY2020 Earnings Presentation on 6ix