Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q1 2020 Earnings Presentation
18 slides from Cf Industries's earnings presentation, May 7, 2020
Slide 1: 2020 First Quarter Financial Results
1 1 2017 Third Quarter Financial Results November 1, 2017 NYSE: CF 2020 First Quarter Financial Results May 6, 2020 NYSE: CF
Slide 2: Safe harbor statement
2 Safe harbor s tatement 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 te
Slide 3: Note regarding non-GAAP financial measures
3 Note regarding n on - GAAP f inancial m easures 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 yi
Slide 4: CF response to spread of COVID - successful to date
4 CF response to spread of COVID - 19 successful to date Leadership planning and policies Sales and supply chain Manufacturing and distribution • Implemented new company - wide corporate travel restrictions to both CDC and non - CDC recognized countries • Non - essential employee work from home prog
Slide 5: CF response to spread of COVID - communications and engagement
5 CF response to spread of COVID - 19 successful to date Communications and e ngagement Giving Employee well - being • V irtual town hall meetings for the entire enterprise; provided updates on the business and an opportunity for employees to ask questions • Surveyed employees to understand percepti
Slide 6: Outstanding production, sales and safety track record
6 Outstanding production, sales and safety track record 0.0 1.0 2.0 3.0 4.0 5.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q2020 Total Recordable Incident Rate Total injuries per 200,000 work hours 0 5,000 10,000 15,000 20,000 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 TTM Total Product Sa
Slide 7: First quarter 2020 results
7 First quarter 2020 results (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 noncontrolling interest; see appendix for reconciliation of free cash flow • Firs
Slide 8: Financial results - first quarter 2020
8 Financial results - first quarter 2020 I n millions, except percentages, per MMBtu and EPS Q1 20 20 Q1 201 9 Net sales $ 971 $ 1,001 Gross margin 204 220 - As percent age of net sales 21.0 % 22.0 % Net earnings attributable to common stockholders (1) $ 68 $ 90 Net earnings per diluted share 0.31 0
Slide 9: CF continues to generate significant free cash flow
9 (1) Market capitalization is calculated as shares outstanding as of the end of each respective period multiplied by the closing s har e price of each company on May 4, 2020; see appendix for the calculation of market capitalization (2) Represents c ash p rovided by operating a ctivities (cash from
Slide 10: CF offers investors industry best free cash flow yield
10 5.7 5.5 7.7 8.7 8.1 0 2 4 6 8 10 16.2% 8.1% 5.7% 8.0% 0.1% 0% 2% 4% 6% 8% 10% 12% 14% 16% CF YAR MOS NTR OCI CF offers investors industry best free cash flow yield CF YAR MOS NTR OCI EV / Adj. EBITDA (2)(3) FCF Yield (1) LTM 4Q19 LTM 4Q19 (1) Represents LTM free cash flow divided by market value
Slide 11: Capital Management
11 Capital Management • The Company repurchased approximately 2.6 million shares for $100 million during the first quarter of 2020 • Since the share repurchase authorization was announced in February 2019, the Company has repurchased approximately 10.2 million shares for $437 million Capital allocat
Slide 12: Nitrogen production capacity and share count
12 2.6 6.0 (1) 6.0 6.1 6.6 (2) 6.6 7.0 (3) 8.1 (4) 8.1 8.2 (5) 8.2 8.2 All N production numbers based on year - end figures per 10 - K filings (1) Beginning in 2010 includes capacity from Terra Industries acquisition (2) Beginning in 2013 includes incremental 34% of Medicine Hat production to reflec
Slide 13: Global production, COVID impact and market outlook
13 Global production Outlook COVID - 19 impact Market Outlook • A nnounced outages include nitrogen facilities in India and France • New nitrogen capacity under construction may experience labor and equipment issues that delay project completion and commissioning • Nitrogen demand for industrial app
Slide 14: CF production cost remains advantaged due to energy cost differentials
14 CF production cost remains advantaged due to energy cost differentials (1) North American production assumed to be 37.2 MMBtu per tonne of ammonia for feedstock and fuel, European production assumed at 37.8 MMBtu per tonne for feedstock and fuel, Chinese production assumed to be 1.2 tonnes of coa
Slide 15: Appendix
15 Appendix
Slide 16: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA
16 Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA In millions Q1 20 20 Q1 2019 LTM Q1 2020 Net earnings $ 91 $ 118 $ 619 Less: Net earnings attributable to noncontrolling interest (23) (28) (148) Net earnings attributable to common stockholders 68 90 471 Interest expense –
Slide 17: Non-GAAP: reconciliation of LTM cash from operations to free cash flow
17 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) $ 1,491 $ 1,845 $ 1,461 $ 3,654 $ 338 C apital expenditures (391) (1,01
Slide 18: CF EBITDA sensitivity table
18 (1) Based on 2019 adjusted EBITDA of $ 1,610 million, sales volumes of approximately 19.5 million product tons, gas consumption of 344 million MMBtus, and nitrogen product sales price relationships. Changes in product prices and gas costs were not applied to the CHS minority interest or industria
CF Industries Holdings — Q1 2020 Earnings Presentation on 6ix