Sociedad Quimica Y Minera De Chile Sa Pfd Series A · BCS:SQM_A
Sociedad Quimica Y Minera De Chile Sa Pfd Series A — Chemical & Mining Co of Chile — Investor Day (September 2022)
37 slides from Sociedad Quimica Y Minera De Chile Sa Pfd Series A's investor day presentation, Sep 15, 2022
Slide 1: Investor Day September 15, 2022, NYSE
Investor Day September 15, 2022, NYSE 4
Slide 2: Agenda
Agenda 1. SQM Today and Tomorrow Ricardo Ramos, CEO 2. Strong Financial Position to Support Growth Gerardo Illanes , CFO 3. Chile Constituional Reform Patricio Navia , NYU Professor 4. Q&A 5
Slide 3: Today's Speakers
Today s Speakers Ricardo Ramos CEO Gerardo Illanes CFO Patricio Navia NYU Professor 6
Slide 4: Ricardo Ramos, CEO
Ricardo Ramos, CEO Mr. Ramos holds a degree in industrial engineering from Pontificia Universidad Catdlica de Chile. He joined SQM in 1989 as an advisor in the Finance Department, In 1991, he was transferred to the Sales Department, where he was in charge of the coordination between operations and s
Slide 5: SQM Today and Tomorrow
SQM TODAY AND TOMORROW INVESTOR DAY - SQM 8
Slide 6: SQM Products for better life: Plant Nutrition and Solar Salts
SQM Products for better life INVESTOR DAY - SQM 9 Specialty Plant Nutrition Water soluble Increase productivity improve quality Does not contaminate groundwater lakes and rivers E fficient thermal storage P ower generation day and night Solar Salts
Slide 7: SQM Products for better life: Iodine and Lithium
SQM Products for better life INVESTOR DAY - SQM 10 Iodine Uses for human health X - Ray Contrast Media E lectromobility Z ero pollution E nvironmental standard Lithium
Slide 8: SQM Operation Tour
SQM Operation Tour INVESTOR DAY - SQM 11
Slide 9: Sustainability is our commitment
S ustainability is our c ommitment INVESTOR DAY - SQM 12 E mission reduction Carbon neutral in Lithium, Potassium Chloride and Iodine by 2030, and in all our products by 2040. W aste reduction 50% by 2025 40% by 2030 and 65% by 2040. R eduction of continental water consumption Reduce 50% by 2030. Re
Slide 10: SQM Significant increase in results
SQM Significant increase in results INVESTOR DAY - SQM 13
Slide 11: Short term outlook
SQM Short term outlook INVESTOR DAY - SQM 14 • The war in Ukraine has affected: • the production of fertilizers in Europe • the export of potassium chloride from Belarus and Russia • is affecting economic activity mainly in Europe • II half Specialty Plant Nutrients prices relatively stable • sales
Slide 12: Short term outlook: Iodine and Lithium
SQM Short term outlook INVESTOR DAY - SQM 15 • Iodine: • Better prices and higher volumes expected in second half 2022 compared to the first half • Lithium: • Prices expected in third quarter 2022 similar to the second quarter • Fourth quarter prices...difficult to predict...we expect similar prices
Slide 13: Iodine and Nitrates
SQM Iodine and Nitrates INVESTOR DAY - SQM 16 Orcoma Project Greenfield 2.5 - > 5.0k MT Iodine 200 - > 500k MT Nitrates Production: 2Q2025 Nueva Victoria Sea Water 700 l/s Increased yields Production: 2H2025 Pampa Blanca 1.3k MT Iodine 100k MT Nitrates Production: 2H2023 • Increase in the capacity t
Slide 14: Lithium market outlook
SQM Lithium market outlook INVESTOR DAY - SQM 17 Lithium demand: • 2022: aprox. 750k MT + 40% EV ’s penetration : ~14% • 2023: 20% - 23% increase LCE • 2025: 1.2 – 1.6 million MT LCE. • 2030: 2.3 – 3.3 million MT LCE EV ’s penetration: ~47% • Predicting supply is much more difficult than predictin
Slide 15: Lithium 2023
SQM Lithium 2023 INVESTOR DAY - SQM 18 • 210k MT of LCE: • 180k MT in Chile and • 30k MT in China (from lithium sulfate) • Lithium Hydroxide in Chile from 22k to 37k MT (3Q2023) • Start of production of concentrated spodumene JV Australia (4Q2023): 350k MT per year • SQM plant in China (Sichuan) 20k
Slide 16: Lithium 2024
SQM Lithium 2024 INVESTOR DAY - SQM 19 • 240k MT of LCE: • 210k MT in Chile and • 30k MT in China (from lithium sulfate) • Advancing geology work in Australia and potential M&A • Start of production of Lithium Hydroxide JV Australia (4Q2024): 50k MT • Capex 2022 - 2024 in Chile close to US$1 billion
Slide 17: SQM Salar Futuro
SQM SALAR FUTURO INVESTOR DAY - SQM 20
Slide 18: Salar Futuro
SQM S alar Futuro INVESTOR DAY - SQM 21 • SQM celebrated 25 years producing lithium in the Salar de Atacama • The lithium produced by SQM is one of the economic activities that contributes most to Chile in percentage terms and is the best example of a successful Public - Private partnership • Contri
Slide 19: Salar Futuro: Sustainability Plan
SQM S alar Futuro INVESTOR DAY - SQM 22 • SQM announced a Sustainability Plan that, among other aspects, included a voluntary commitment to lower brine extraction in the Salar de Atacama on an annual basis. This implies reducing extraction from approximately 1,700 l/s to levels of 822 l/s by 2030 •
Slide 20: Salar Futuro: technological advances
SQM S alar Futuro INVESTOR DAY - SQM 23 • The permanent R&D work that SQM has carried out for decades allows us to continue advancing in the search of initiatives aimed at making extraordinary environmental and social contributions • Today, we are in a position to propose adding four main technologi
Slide 21: Salar Futuro: water balance
SQM S alar Futuro INVESTOR DAY - SQM 24 • This disruptive proposal will allow delivering exactly the same amount of total water that is consumed and evaporated from the system (Basin + Salar ), thus generating a totally neutral long - term water balance Water Water Basin Water
Slide 22: Salar Futuro: production and investment
SQM S alar Futuro INVESTOR DAY - SQM 25 • The Salar Futuro Project, in its initial analysis, considers maintaining the voluntary reduction target of a total extraction of 822 l/s brines per year, which corresponds to 50% of the authorized average pumping by 2030 • Even with the significantly lower u
Slide 23: Salar Futuro: development hub in northern Chile
SQM S alar Futuro INVESTOR DAY - SQM 26 • Parallel to the aforementioned technological changes, SQM is committed to creating a development hub in the north of Chile, for which we expect to invest more than US$700 million in various value - added initiatives, even producing battery components in the
Slide 24: Salar Futuro: opportunity and CORFO contract
SQM S alar Futuro INVESTOR DAY - SQM 27 • Today we are facing the unique opportunity to propose disruptive alternatives for processes and technologies that further increase the environmental advantage of lithium production in the Salar de Atacama. We believe it is essential to start early and take i
Slide 25: Salar Futuro: public-private cooperation project
SQM S alar Futuro INVESTOR DAY - SQM 28 The Salar Futuro Project must become the main Public - Private cooperation project in Chile, generating an example of long - term sustainable development
Slide 26: Gerardo Illanes, CFO
Gerardo Illanes, CFO INVESTOR DAY - SQM 29
Slide 27: Strong Financial Position to Support Growth
STRONG FINANCIAL POSITION TO SUPPORT GROWTH INVESTOR DAY - SQM 30
Slide 28: CORFO contract: payment structure
CORFO contract: payment structure INVESTOR DAY - SQM 31 Li 2 CO 3 LiOH KCl US$/MT % US$/MT % US$/MT %
Slide 29: CORFO contract: payment timing
CORFO contract: payment timing There is a 3 to 4 - month lag between when CORFO payments are processed and the revenue from those sales is recognized in SQM’s income statement . INVESTOR DAY - SQM 32 Production Export Import Distribution Sale to end customer +/ - 2 months +/ - 2 months - Lease payme
Slide 30: CORFO contract: payment timing (exports and sales)
CORFO contract: payment timing INVESTOR DAY - SQM 33 Exports ( kMT ) Sales ( kMT ) Delta ( kMT ) 2021 Q3 28 22 6 2021 Q4 42 31 11 2022 Q1 30 38 - 8 2022 Q2 53 34 19
Slide 31: CORFO Payment Structure and Lithium Cost Impact
CORFO Payment Structure and Lithium Cost Impact INVESTOR DAY - SQM 34
Slide 32: Q2 Financials: Year over year
Q2 Financials : Year over year INVESTOR DAY - SQM 35 186 1,297 871 83 53 54 15 ( 1 ) 2Q2021 Lithium SPN Iodine Potassium Industrial Chemicals Others 2Q2022 Gross Profit Contribution 2Q2022/2Q2021 US$ million Variations Average Price Sales Volumes Lithium ↑701% ↑~41% Iodine ↑~58% ↓~11% SPN ↑~96% ↓~22
Slide 33: Q2 Financials: Strong financial position
0 1 2 3 4 Q1 - 2021 Q2 - 2021 Q3 -2021 Q4 - 2021 Q1 - 2022 Q2 - 2022 Months in AR 0.0 2.0 4.0 6.0 8.0 Q1 - 2021 Q2 - 2021 Q3 -2021 Q4 - 2021 Q1 - 2022 Q2 - 2022 Current ratio -0.5 0.0 0.5 1.0 1.5 Q1 - 2021 Q2 - 2021 Q3 -2021 Q4 - 2021 Q1 - 2022 Q2 - 2022 NFD / EBITDA 0.0 0.5 1.0 1.5 2.0 Q1 - 2021 Q2
Slide 34: Q2 Financials: Dividend Policy
• Net income YTD Q2 = $US1,655 million • 2022 YTD Q2 Interim dividend = $US1,324 million INVESTOR DAY - SQM 37 Dividend Payout (% of Annual Net Income) 100% 80% 60% (a) 2.5 2.0 1.5 ≤ 0.8 0.9 1.0 If none of the above parameters are met, dividend payout would be 50% of 2022 net income ƵƌƌĞŶƚ ƐƐĞ
Slide 35: Patricio Navia, NYU Professor
Patricio Navia, NYU Professor INVESTOR DAY - SQM 38
Slide 36: Chile Constitutional Reform
CHILE CONSTITUTIONAL REFORM INVESTOR DAY - SQM 39
Slide 37: Q&A / Signatures
Q&A INVESTOR DAY - SQM 40 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CHEMICAL AND MINING COMPANY OF CHILE INC. (Registrant) Date: September 15, 20
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