Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Investor Presentation (September 2023)
29 slides from Cf Industries's investor presentation, Sep 15, 2023
Slide 1: Investor Presentation September 2023
Investor Presentation September 2023 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). Managemen t believes that EBITDA, adjusted EBITDA, free cash flow, free cash flow to adjusted EBITDA conversion and free cash flow yield, wh
Slide 4: Company Overview
CF Company Overview
Slide 5: CF provides long-term investment growth opportunity
5 CF provides long - term investment growth opportunity Clean energy transition unlocks new demand Advantaged production and distribution network Strong operational excellence Proven track record of shareholder return (1) Source of data: December 16, 2022 CRU Ammonia Database (2) Last twelve months
Slide 6: CF Industries overview
6 CF Industries overview World’s Largest Producer of Ammonia Leading Logistics and Distribution Capabilities The CF Team CF Industries is the world’s largest producer of ammonia, operating 15 ammonia plants in the United States and Canada Average annual gross ammonia production capacity 9.0 - 9.5 mi
Slide 7: Leading asset base positioned to supply North American low-carbon ammonia globally
7 Leading asset base positioned to supply North American low - carbon ammonia globally CF has the world’s largest and most integrated ammonia production and distribution network CF nitrogen complex CF owned distribution facility NuStar Pipeline Ammonia Export Capability Yazoo City 0.5 Donaldsonville
Slide 8: North American Production Margin Advantage
8 The data and information provided by Wood Mackenzie should not be interpreted as advice and you should not rely on it for any pu rpose. You may not copy or use this data and information except as expressly permitted by Wood Mackenzie in writing. To the fullest extent permitted by law, Wood Mackenz
Slide 9: Ammonia capacity utilization versus North American peers
9 (1) Source of data: December 16, 2022 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 amm
Slide 10: Decarbonization is central to our strategy
Decarbonization is central to our strategy
Slide 11: We provide clean energy to feed and fuel the world sustainably
11 We provide clean energy to feed and fuel the world sustainably Our Mission, Vision, and Strategy
Slide 12: Our strategic priorities are focused on clean energy avenues of growth
12 Our strategic priorities are focused on clean energy avenues of growth NH3 Production Expansion NH3 Demand Stimulation Low Carbon H2 Production Low Carbon Solutions CF Industries’ strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy while fulfilling
Slide 13: Partnering with global leaders in CCS, power generation and maritime shipping
13 Proposed Joint Venture with Mitsui & Co. for a greenfield blue ammonia plant Ascension Parish, LA CCS Project with ExxonMobil Donaldsonville Complex, Louisiana CCS Project (announced) Yazoo City Complex, Mississippi HALO Hydrogen Hub Verdigris complex, Oklahoma SE Alberta Hydrogen Task Force Medi
Slide 14: Environmental goals consistent with our strategy
14 Environmental goals consistent with our strategy
Slide 15: Significant initiatives underway to meet our targets
15 Significant initiatives underway to meet our targets… Organic Growth Clean Energy Demand Expected project completion Purchased 2.2 billion cubic feet of natural gas certified by MiQ Donaldsonville green ammonia Electrolyzer being installed Completed Donaldsonville blue ammonia Engineering activit
Slide 16: Enabling CF to exceed our 2030 target intensity goal
16 …Enabling CF to exceed our 2030 target intensity goal Reduce CO 2 e emissions by 25% per product ton by 2030 Note: Emissions intensity: annual GHG emissions (tonnes CO 2 e)/annual gross ammonia production (metric tons) (1) Expansion plants at Donaldsonville and Port Neal (2) The transaction remai
Slide 17: Expanding our blue ammonia network through acquisition of Waggaman
17 Expanding our blue ammonia network through acquisition of Waggaman, LA ammonia production and implementing CCS $16.38 FY 2022 $4.24 FY 2021 CF Industries to purchase ammonia production complex located in Waggaman, LA from Incitec Pivot for $1.675 billion, subject to adjustment - $425 million of p
Slide 18: 45Q tax credit makes blue ammonia significantly lower cost
18 45Q tax credit makes blue ammonia in US significantly lower cost than conventional ammonia (1) Gray ammonia production costs based on Henry Hub cost of $3.00 at 33 MMBtu (2) Cost comparison excludes capital recovery of dehydration and compression units Illustrative cash cost of blue ammonia Donal
Slide 19: Capital management strategy focused on growing shareholder participation in free cash flow
Capital management strategy focused on growing shareholder participation in our free cash flow *Last twelve months of share repurchases and dividends through June 30, 2023 Emphasis on opportunistic share repurchases Commenced a $3 billion share repurchase program, which was authorized by the Board i
Slide 20: Ammonia production capacity and share count history
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 8.2 7.9 (6) 7.9 8.6 (8) 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
Slide 21: Financial Highlights
CF Financial Highlights
Slide 22: Strong first half operational performance, robust demand underpin solid results
Strong first half operational performance, robust demand underpin solid results (1) Last twelve months of share repurchases and dividends through June 30, 2023 (2) See appendix for reconciliations of EBITDA and adjusted EBITDA to the most directly comparable GAAP measures (3) Includes the impact of
Slide 23: Equity appears undervalued on free cash flow yield and EV/Adj. EBITDA basis
8.7 8.6 6.0 2.9 3.3 2019 2020 2021 2022 Q2 2023 LTM 2019 - 2022 average ratio EV/Adj. EBITDA (2)(3) Equity appears undervalued on free cash flow yield and EV/Adj. EBITDA basis 8.9% 9.0% 14.7% 16.7% 15.8% 2019 2020 2021 2022 Q2 2023 LTM 2019 - 2022 average yield Free Cash Flow Yield (1) (1) Represent
Slide 24: Appendix
CF Appendix
Slide 25: 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 $50/ton urea realized movement implies ~$700M change in Adjusted EBITDA on an annual basis (1) Based on 2022 sales volumes of approximately 18.3 million prod
Slide 26: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA
26 Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA IN MILLIONS Q2 2023 Q2 2022 1H 2023 1H 2022 Net earnings $606 $1,339 $1,256 $2,390 Less: Net earnings attributable to noncontrolling interest (79) (174) (169) (342) Net earnings attributable to common stockholders 527 1,165
Slide 27: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued
27 Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued IN MILLIONS Q2 2023 LTM FY 2022 FY 2021 Net earnings $ 2,803 $ 3,937 $ 1,260 Less: Net earnings attributable to noncontrolling interest (418) (591) (343) Net earnings attributable to common stockholders 2,385 3,34
Slide 28: Non-GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued
28 Non - GAAP: reconciliation of net earnings to EBITDA and adjusted EBITDA, continued I N MILLIONS FY 2020 FY 2019 Net earnings $ 432 $ 646 Less: Net earnings attributable to noncontrolling interests (115) (153) Net earnings attributable to common stockholders 317 493 Interest expense – net 161 217
Slide 29: Free cash flow reconciliation and footnotes
(1) For FY 2022 and Q2 2023 LTM, includes the impact of $491M of tax and interest payments made in the second half of 2022 related to a dispute between Canadian and U.S. tax authorities dating back to the early 2000s; For FY 2022, cash provided by operating activities, free cash flow, free cash flow
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