Itafos Inc · TSXV:IFOS
Itafos — Investor Presentation (February 2022)
32 slides from Itafos's investor presentation, February 2022
Slide 1: Corporate Presentation
Corporate Presentation February 2022
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION (“FLI”) This presentation contains FLI within the meaning of applicable Canadian securities legislation regarding future events or the future performance of Itafos (the “Company”). Except for statements of historical fact relating to the Company, information co
Slide 3: Executive summary
Executive summary Itafos Inc. (the “Company”) is a phosphate and specialty fertilizer products company - Primary focus in North America - Principal asset is Conda, a vertically integrated phosphate fertilizer business in Idaho strategically positioned in a premium agricultural region - Owner of ad
Slide 4: Table of contents
Table of contents I Company overview II Industry overview III Key investment highlights IV Operational overview V Financial overview 4
Slide 5: Company overview
© Company overview ITAF@®S
Slide 6: Itafos is a phosphate and specialty fertilizer company
Itafos is a phosphate and specialty fertilizer company Business Businessoverview overview Consolidated operational and financial highlights Owner of Conda, a vertically integrated phosphate Q3 2021 9M 2021 LTM 9/30/21 fertilizer business in Idaho Sales – Located in a premium agricultural region of
Slide 7: Conda represents 7% of US phosphate market with 606kst per year production and sales capacity
Conda represents 7% of US phosphate market with 606kst per year production and sales capacity Business overview Conda site Vertically integrated phosphate mine and Overview fertilizer business Location Idaho, US Ownership 100% Status Operating for 30+ years Through mid-2026 (existing mines) with Min
Slide 8: Operational flexibility offers multiple options to deliver P2O5 value to market
Operational flexibility offers multiple options to deliver P2O5 value to market Key highlights Sales by customer size ($mm)(2) Conda’s products are sold into the North American fertilizer markets 6.3% Conda partners with leading crop services companies 15.0% that have the trust of the grower mar
Slide 9: Industry overview
ru) Industry overview ITAF@®S
Slide 10: Long-term fertilizer demand growth is driven by the global food story
Long-term fertilizer demand growth is driven by the global food story World Global Population Deliveries andofCereals Phosphates Production Key Highlights P2O5 (Millions Short Tons) As the world population grows to 8.5bn and more people 55 are lifted out of poverty, food production needs to increa
Slide 11: World grain and oilseeds stock-to-use percentage is projected to drop to the lowest level
World grain and oilseeds stock-to-use percentage is projected to drop to the lowest level since 2003/04 World Less China Grain and Oilseed Stocks Indexes of Leading Crop Prices Mil Tonnes Pct of Use Monthly Average of Daily Close of Front Month Futures Contract (2000=100) 475 21% 400 375 450 20% 350
Slide 12: Elevated new crop prices coincide with higher fertilizer prices for all nutrients
Elevated New crop prices coincide with higher fertilizer prices for all nutrients New Crop Corn Prices New Crop Soybean Prices New Crop HRW Wheat Prices Daily close of the December contract Daily close of the November contract Daily close of the July contract June 1 of prior year to December 1 of ex
Slide 13: Key investment highlights
III Key investment highlights 13
Slide 14: Key investment highlights
Key investment highlights 1 North American phosphate producer strategically positioned in premium agricultural market Strong end market tailwinds support meaningful growth trajectory in short and 2 mid-term 3 Phosphate is an attractive market, with high barriers to entry Fully contracted MAP product
Slide 15: Conda is strategically positioned in premium agricultural region
1 Conda is strategically positioned in premium agricultural region, one of two key producers west of the Mississippi River Highly technical farming Specialty Ag (canola, wheat) (fruits & veg, (REPURPOSED) perennials) 16% Pocatello Western Cornbelt very intense farming Itafos Rock (corn, soybeans) Sp
Slide 16: Demand growth is outpacing the start up of new capacity driving phosphate prices
2 Demand growth is outpacing the start up of new capacity driving phosphate prices to the highest levels since 2008 Phosphate Prices Phosphate prices to their highest levels in more than a decade, driven by the following: DAP NOLA ($ Short Ton) Depletion of channel inventories worldwide 750 700
Slide 17: Phosphate is an attractive market given its exposure to fertilizers demand growth and higher barrier to entry
3 Phosphate is an attractive market given its exposure to fertilizers demand growth and its higher barrier to entry Main phosphates applications Key highlights Feed & The main application of phosphate is fertilizers (87%), with also applications for animal Industrials nutrition and a range of indu
Slide 18: Fully contracted MAP production with investment grade off-taker
4 Fully contracted MAP production with investment grade off-taker along with contracted ammonia and sulfuric acid supply MAP offtake agreement 100% of Conda’s MAP is sold through a long-term offtake agreement with Nutrien - Current term through 12/31/23; renewable by mutual agreement one year prio
Slide 19: Disciplined financial policies, prioritization of liquidity and capital-lite strategy
5 Disciplined financial policies, prioritization of liquidity and shift towards a capital-lite strategy focused on cash flow generation Improved phosphate fertilizer market pricing and strong operational track record supporting strong Conda cash flow generation Maintain sufficient cash and debt
Slide 20: Proven management team with strong bench of operators
6 Proven management team with strong bench of operators David Delaney Director, Chief Executive Officer 30+ years of experience in leadership roles within the fertilizer and agricultural sectors Previously served as CCO at Farmer’s Business Network Inc., Strategic Advisor for Paine & Partners, L
Slide 21: Operational overview
@ Operational overview ITAF@®S 21
Slide 22: Inaugural ESG report published in November 2021
Inaugural ESG report published in November 2021 “We are pleased to publish our inaugural ESG report. Through this publication, we set a baseline for our corporate-wide ESG initiatives and establish a framework to measure our ESG goals and performance moving forward” G. David Delaney, CEO 22
Slide 23: Conda Mineral Reserves and Mineral Resources overview
Conda Mineral Reserves and Mineral Resources overview Rasmussen Valley/Lanes Creek Item Tons (Mst) Grade (%) P2O5 (Mst) Mineral Reserves 14.4 26.6% 3.8 Measured and Indicated Mineral Resources (including Mineral Reserves)(1) 17.9 26.6% 4.8 Inferred Mineral Resources 0.2 25.7% 0.1 H1/NDR Item Tons (M
Slide 24: Conda mine life
Conda mine life Mine(1) Phase 2022 2023 2024 2025 2026 Rasmussen Valley Mining Permitting Drilling and Mineral Reserve definition H1/NDR Development Mining Mine location Key highlights Completed NI 43-101 technical report in 2019 Existing mines - Concluded mine life through mid-2026 from existing
Slide 25: Conda EBITDA optimization initiatives
Conda EBITDA optimization initiatives MAP+ HFSA MgO Reduction Production and sales of Production and sales of Reduction of magnesium MAP enhanced with 25kst per year of oxide (“MgO”) in phosphate micronutrients hydrofluorosilicic acid rock while optimizing New product line caters to (“HFSA”)
Slide 26: Evaluating strategic alternatives for non-North American assets
Evaluating strategic alternatives for non-North American assets The Company’s non-North American assets include(1): - Arraias, a vertically integrated phosphate fertilizer business in Brazil - Farim, a phosphate mine project in Guinea-Bissau - Santana, phosphate mine rights in Brazil - Araxá, rare
Slide 27: Financial overview
Cv) Financial overview ITAF@®S 27
Slide 28: Annual consolidated historical financial performance
Annual consolidated historical financial performance Revenues Adjusted EBITDA(1) ($ in millions) $372 ($ in millions) DAP NOLA $339 $395 $307 $312 $515 ($/st) (2) $302 $41 $100 $26 $260 $5 $372 $299 $31 $277 $256 $15 ($3) FY2018A FY2019A FY2020A LTM 9/30/21 FY2018A FY2019A FY2020A LTM 9/30/21 Conda
Slide 29: Annual consolidated historical financial performance (cont'd)
Annual consolidated historical financial performance (cont’d) Consolidated historical financial performance LTM ($ in millio ns unless o therwise indicated) 2018A 2019A 2020A 9/30/2021A Production volumes (st) Conda 597,093 634,874 569,322 600,362 Arraias 100,061 217,300 5,503 – Production volumes (
Slide 30: Annual consolidated historical financial performance (cont'd)
Annual consolidated historical financial performance (cont’d) Consolidated historical financial performance LTM ($ in millio ns unless o therwise indicated) 2018A 2019A 2020A 9/30/2021A Maintenance Capex Conda $39 $26 $8 $22 Arraias – $4 – – Farim – – – Corporate – – $0 $0 (1) Development & Explorat
Slide 31: Quarterly consolidated historical financial performance
Quarterly consolidated historical financial performance Revenues Adjusted EBITDA(1) ($ in millions) ($ in millions) $103 $103 DAP NOLA $273 $272 $336 $368 $498 $574 $621 ($/st) (2) $90 $75 $75 $62 0 4 $48 0 103 103 $41 0 90 $34 71 75 62 $21 48 $11 ($1) ($0) $5 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Slide 32: 2021 guidance
2021 guidance 9M 2021 Q4 2021 FY 2021 Metric Actual Projection(2) Projection(2) Adjusted EBITDA(1) $95mm $25-35mm $120-130mm Maintenance capex(1) $20mm $3-6mm $23-26mm Growth capex(1) $8mm $5-7mm $13-15mm Free cash flow(1) $42mm $18-28mm $60-70mm The Company’s revised guidance was issued on Novemb