Cf Industries Holdings, Inc. · NYSE:CF

Cf Industries — Q4 2022 Earnings Presentation

21 slides from Cf Industries's earnings presentation, Feb 15, 2023

  1. Slide 1: 2022 Fourth Quarter and Full Year Financial Results

    2022 Fourth Quarter and Full Year Financial Results February 15, 2023 NYSE: CF

  2. 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 than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such

  3. 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 believes that EBITDA, adjusted EBITDA, free cash flow, free cash flow to adjusted EBITDA conversion and free cash flow yield, which

  4. Slide 4: Record results driven by strong operational performance and wide energy spreads in 2022

    Record results driven by strong operational performance and wide energy spreads in 2022 Returned $1.65 billion to shareholders Net earnings Net earnings per through share repurchases and diluted share dividends $3.35 B $917 M $16.38 $4.24 FY 2022 FY 2021 FY 2022 FY 2021 $3 billion share repurchase

  5. Slide 5: Financial results – fourth quarter and FY 2022

    Financial results – fourth quarter and FY 2022 In millions, except percentages, per MMBtu and Q4 2022 Q4 2021 FY 2022 FY 2021 EPS Net sales $ 2,608 $ 2,540 $ 11,186 $ 6,538 Gross margin 1,256 1,155 5,861 2,387 - As a percentage of net sales 48.2% 45.5% 52.4% 36.5% Net earnings attributable to 3,346

  6. Slide 6: Strong free cash flow metrics show undervalued equity

    Strong free cash flow metrics show undervalued equity Free Cash Flow Yield(1) 19.6%(3) Excl. Canada/US tax matter $491M 2018-2022 average yield 16.7% 14.7% 9.7% 8.9% 9.0% 2018 2019 2020 2021 2022 FCF/Adj EBITDA conversion(2) % 67% 57% 55% 79% 47% (3) 56% Attractive free cash flow yield and free cash

  7. Slide 7: Capacity growth coupled with share repurchases continue to drive nitrogen participation per share…

    Capacity growth coupled with share repurchases continue to drive nitrogen participation per share… CF Industries’ Nitrogen Volumes and Shares Outstanding as of Year-end 2009 – 2022 Nitrogen per share CAGR: 10.8% Annual Nitrogen Equivalent Tons per 1,000 Shares Outstanding Million Shares Outstanding

  8. Slide 8: …resulting in ~3x free cash flow participation since 2011

    …resulting in ~3x free cash flow participation since 2011 CF Industries’ Free Cash Flow and Shares Outstanding as of Year-end Annual Free Cash Flow (millions) Shares Outstanding (millions) Canada/US tax matter $4,000 $491M 400 350 $3,000 300 $2,000 250 $1,000 200 150 $0 100 -$1,000 50 -$2,000 0 2009

  9. Slide 9: Low stocks-to-use ratios drive higher grain values; stocks expected to require two or more growing seasons to replenish

    Low stocks-to-use ratios drive higher grain values; stocks expected to require two or more growing seasons to replenish Global Coarse Grains Stocks-to-Use Ratio Global Oilseeds Stocks-to-Use Ratio vs vs Corn Futures Prices(1) Soybean Futures Prices Percent USD per Bushel Percent USD per Bushel 16.0%

  10. Slide 10: Energy forward spreads support North American margin advantage in 2023 compared to Europe and Asian producers

    Energy forward spreads support North American margin advantage in 2023 compared to Europe and Asian producers Global Energy Price 2020-2023F North American Production Margin Advantage(1) USD/MMBtu USD/tonne 100 1,600 Ammonia(2) Urea 90 1,400 80 JKM natural gas 1,200 70 TTF natural gas Chinese anthra

  11. Slide 11: Chinese urea export constraints continue to limit volumes available for trade

    Chinese urea export constraints continue to limit volumes available for trade Chinese Urea Exports Million metric tons (MMT) 7 6 5 Estimated 2-3MMT Sep-Dec 4 3 2 Jan-Aug 1 0 2017 2018 2019 2020 2021 2022 2023E Sources: Industry Publications, CF analysis, 2023E CF estimate 11

  12. Slide 12: Resilient import demand in India and Brazil, lower volumes in developing countries in 2022

    Resilient import demand in India and Brazil, lower volumes in developing countries in 2022 India Imports Brazil Imports Million metric tons Million metric tons 12 12 10 +36% 10 (6)% 8 8 6 6 4 4 2 2 0 0 2013 2015 2017 2019 2021 2013 2015 2017 2019 2021 Rest of Asia(1) Imports Rest of Latin America(2)

  13. Slide 13: Capital management

    Capital management  Committed to maintaining investment grade ratings through the cycle Capital structure and  Repurchased ~14.9 million shares for $1.35 billion during 2022 allocation  Company expects to fund blue/green ammonia projects with cash on hand  CF Industries’ Board of Directors autho

  14. Slide 14: Tight global supply/demand balance into 2025

    Tight global supply/demand balance into 2025  Global nitrogen supply/demand balance to remain tight into 2025 due to agriculture-led demand and forward energy curves that point to challenging production economics for producers in Global nitrogen Europe and Asia price dynamics  Global nitrogen dema

  15. Slide 15: Decarbonization

    Significant progress to support our commitment to a Clean Energy Economy 2023 2024 2025 2027 Initiated Purchased 2.2 billion Decarbonization cubic feet of natural gas certified by MiQ Engineering Expected activities project progress completion Donaldsonville green ammonia Engineering Early 2025 acti

  16. Slide 16: Outstanding safety performance drives industry leading production capacity utilization

    Outstanding safety performance drives industry leading production capacity utilization Total Recordable Incident Rate North American Ammonia Percent of Capacity Utilization (1) 5-Year Rolling Avg. Percent of Capacity Total injuries per 200,000 work hours 100% CF North 4.5 America (2) 98% 97% 96% 96%

  17. Slide 17: Appendix

    Appendix

  18. Slide 18: CF Industries Adjusted EBITDA sensitivity table

    CF Industries Adjusted EBITDA sensitivity table Table illustrates the CF Industries business model across a broad range of industry conditions EBITDA Sensitivity to Natural Gas and Urea Prices(1) $ billions CF Realized Natural Gas Cost ($/MMBtu) 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00 $300 $2.2

  19. Slide 19: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA

    Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA In millions Q4 2022 Q4 2021 FY 2022 FY 2021 Net earnings $ 1,009 $ 859 $ 3,937 $ 1,260 Less: Net earnings attributable to noncontrolling interest (149) (154) (591) (343) Net earnings attributable to common stockholders 860 705 3,

  20. Slide 20: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued

    Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued In millions FY 2020 FY 2019 FY 2018 Net earnings $ 432 $ 646 $ 428 Less: Net earnings attributable to noncontrolling interests (115) (153) (138) Net earnings attributable to common stockholders 317 493 290 Interest exp

  21. Slide 21: Non-GAAP: reconciliation of cash from operations to free cash flow and free cash flow yield

    Non-GAAP: reconciliation of cash from operations to free cash flow and free cash flow yield In millions, except percentages, share price, and ratios FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Cash provided by operating activities $ 1,497 $ 1,505 $ 1,231 $ 2,873 $ 3,855 (4) Capital expenditures (422) (4

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