OCP FIRST HALF 2014 EARNINGS CONFERENCE CALL
PRESENTATION
SEPTEMBER 15TH 2014
SAFE HARBOR STATEMENT
This presentation has been prepared by OCP S.A. (OCP) strictly for discussion purposes, and contains certain statements that are, or may be
deemed to be, forward-looking statements within the meaning of the safe harbor provisions set forth in the U.S. Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited to, liabilities, strategic, industrial, commercial plans and expected future financial
and operating results such as revenue growth and earnings. They are based on the current beliefs, expectations and assumptions of OCPs
management as of the date on which they are made in connection with past and/or future financial results, and are subject to significant
uncertainties and risks, which OCP shall not be held liable for. These risks and uncertainties include, but are not limited to, risks and uncertainties
arising from the future success of current and strategic plans and future financial and operating results and reserves; changes in such plans and
results; any difficulty that OCP may experience with the realization of benefits and anticipated levels of capital expenditures for the second half of
year 2014 and beyond; the current and future volatility in the credit markets and future market conditions; OCPs strategy in connection with
customer retention, growth, product development and market position; industry trends; volatility in commodity prices; changes in foreign currency,
interest and exchange rates; international trade risks; changes in government policy and developments in judicial or administrative proceedings in
jurisdictions which OCP is subject to; changes in environmental and other governmental regulation, including regulatory investigations and
proceedings; any natural events such as severe weather, fires, floods and earthquakes or man-made or other disruptions of OCPs operating
systems, structures or equipment; the effectiveness of OCPs processes for managing its strategic priorities; and OCPs belief that it has sufficient
cash and liquidity and/or available debt capacity to fund future financial operations and strategic business investments. Actual results may differ
from those set forth in the forward-looking statements contained in this presentation, and OCP undertakes no obligation to publicly update any of its
forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future
developments or otherwise.
This presentation includes OCPs financial statements which are produced in Moroccan Dirhams (the local currency). For ease of presentation,
financial information included in this presentation is translated into U.S. Dollars, and these translated figures have not been audited. For the
purpose of such translated figures, OCP used the following exchange rate table, which sets forth the year average and year-end Dirham/U.S. Dollar
exchange rates for the following periods:
2
June 2014 June 2013 December
2013
Period End 8.2091 8.5393 8.1516
Average 8.2414 8.4623 8.1861
MAJOR HIGHLIGHTS OF FIRST HALF 2014
Executed effectively on all key elements of OCPs growth strategy
Progressively recovered from adverse weather conditions in Q1
Maintained cost leadership; initial benefits from start up of slurry pipeline
Continued to build scale through organic and external initiatives
Utilized industrial flexibility and commercial agility to optimize revenue capture
3
Continued execution of Capex plan on time and within budget
Phosphate, key element for life.
Realized record high fertiliser sales volumes
POSITIONED FOR LONG TERM GROWTH
A unique strategy
CAPACITY LEADERSHIPCAPACITY LEADERSHIP
1
COST LEADERSHIPCOST LEADERSHIP
2
INDUSTRIAL & COMMERCIAL FLEXIBILITY
INDUSTRIAL & COMMERCIAL FLEXIBILITY
3
4
STRONG FUNDAMENTALS BUT 11TH HOUR PURCHASING
BEHAVIOR DRIVES PRICE VOLATILITY
5
DAP Price Evolution
340
390
440
490
540
590FOB Tampa
FOB Morocco
CFR India
DAP Price Evolution
Source: CRU, OCP
$/T
Generalized deferral purchasing behavior
leading to buyers rush, worsened afterwards by supply difficulties caused
by Atlantic swell
Slower offtakes due to end of Spring season and
purchasing deferral in following seasons
End of Northern Hemisphere season and
late start of Indian season
Commercial agility and industrial flexibility allowing OCP to capture pricing upsides
OCP BUILDING SCALE AND STRENGTHENING MARKET
POSITION
North America:
PCS Agreement
South America:
Partnership with Heringer
Africa:
Stronger market penetration
Expanding OCPs distribution channels for fertilizer products in North America
Cooperate with PCS on ammonia sourcing from North America and the Caribbean
Equity stake of approximately 10% in Heringer Fertilizantes, a major Brazilian fertilizer producer
Strategic partnership to better serve customers in the region and improve OCP positioning
Distribution consolidation context in the region Heringer accounts for ~17% market shares in the distribution in Brazil,
operating in 21 blending units for a total capacity of 6.2 million tons
Key growth market Development of product portfolio tailored to the region Support the development of local distributors
6
1 2011 054
696
1 513
2 001
2 306 2 220 2 149
18
4380 334
2007 2008 2009 2010 2011 2012 2013 2014
RECORD HIGH FERTILISER EXPORTS IN H1 2014
New products
1,2011,054
696
1,531
2,001
2,3492,300
2,483
DAP/MAP/TSP
7
H1 Sales volume to Africa
(kt product)
2013 2014
315
164
H1 Fertilisers export volumes (kt product)
FINANCIAL RESULTS OVERVIEW
Cash flow related to operating activities amounted to US$ 612 million
Investment program initiated by OCP in 2008 continued at a steady pace with US$ 1.1 billion spent in H1 2014
First half EBITDA amounted to US$ 563 million
8
Key component of global food security
Accounts are presented in IFRS
First half revenue amounted to US$ 2.4 billion
First global bond offering, raising US$bn 1.25 of 10-year notes and US$600 million of 30-year notes
256 223
101
984
429458
613739
2,437
H1 2014
1,085
2,350
Others
-33
Others
Fertilisers
Acid
Rock
FertilisersAcid
-29
Rock
-126
H1 2013
Rock : lower rock sales mainly due to change of consolidation scope1
In US$m
Rock; 26%
Acid18%
Fertilisers46%
Others10%
REVENUE BREAKDOWN
9
Fertilisers : higher fertilisers revenues thanksto increased sales volumes and change ofconsolidation scope1 despite negative priceeffect
Acid : lower acid revenue due to lower globalphosphoric acid prices, partially offset by anincrease in volumes
H1 2014 Revenue by Product
1 JFC V (Ex-BMP JV)s ownership changed from 50% to 100% in 2014
SALES VOLUMES ANALYSIS
Increased sales volume in Rock due to an increase in exports
Increased Acid sales volume mainly due to higher demand in South Asia
10
884
+9%
+15%
H1 2014
+9%
2,455
H1 2014
2,680
H1 2013H1 2014
1,015
H1 2013
6,488
H1 2013
5,935
Rock
Acid
Fertilisers
Sales volumes 1 - KT
Increased Fertiliser sales volume mainly due to higher demand of DAP in Europe and Oceania, and higher deliveries of NPK/NPS to Africa
1 OCP exports and home deliveries to all its affiliates.
KEY FINANCIAL FIGURES
Half year EBITDA bridge
623
8767
563
83
June 2014
12
OtherPersonnel expenses
Other consumed purchases
Ammonia
14
Sulfur
17
RevenueJune 2013
11
In US$m
In US$m H1 2014 H1 2013
Equity 6,657 5,778
Debt 4,492 2,209
Net financial debt 2,295 -259
Debt/Equity 0.67 0.38
In US$m H1 2014 H1 2013
Revenue 2,350 2,437
Gross Margin 1,516 1,623
% of net sales 65% 67%
EBITDA 563 623
% of net sales 24% 26%
EBIT 442 533
Operating profit 395 515
Financial profit - 23 26
Profit for the period 292 434
CASH FLOW HIGHLIGHTS AND LEVERAGE
12
Net financial debt / EBITDA ( based on 2013 EBITDA)
Net Financial Debt
June 2013 Dec 2013 June 2014
-259
1,298
2,295
(0.21x) 1.06x 1.89xIn US$m
605
612
810 893605
Closing cashChange
3
Cash flows related to financing activities
Cash flows related to investing activities
1,131
Cash flows related to operating activities
Opening cash
Cash flows
In US$m
CAPEX BREAKDOWN
13
Capex BreakdownIn US$m
642932
1,600
518
40
543
840
642
0
500
1 000
1 500
2 000
2 500
3 000
2011 2012 2013 H1 2014
Mining Chemicals support
149 11 1
In US$m
5%
88%
7%
Other
Industrial : Development
Industrial : Maintenance
DEVELOPMENT
ODI ( new granulation unit) (177 M$)
ODI 2 Project ( 150 M$)
ODI 3 Project ( 111 M$)
Engineering and carrying out washing plant of El Halassa (82 M$)
Adaptation of the existing plant and equipment to process pulp ( 63 M$)
ODI 4 Project ( 49 M$)
Port Jorf Lasfar project ( 39 M$)
Details for H1 2014
410
937
1 590
1 020281
552
861
141
0
500
1 000
1 500
2 000
2 500
3 000
2011 2012 2013 H1 2014
Industriel expansion capex other
OCP EXPANDING ITS CAPACITY AND LOWERING ITS
PRODUCTION COSTS
14
Quantity of Phosphate rock transported by Pipeline (Mt)
0,30,6
2,9
1H14 End July 14 2014 Total
COST LEADERSHIPCOST LEADERSHIP CAPACITY LEADERSHIPCAPACITY LEADERSHIP
Jorf Lasfar additional Phosacidcapacity
New Line E of 450 kt P2O5 successfully started on May 2014
Full capacity ramp-up achieved within 3 weeks
Ramp-up in beneficiation capacity at Khouribga mine
SUMMARY AND MARKET OUTLOOK
15
Solid performance in H1 demonstrated OCPs commercial and industrial agility and cost leadership
Additionally, OCPs H2 results should benefit from: New supply agreements in North America and Brazil New 6-month Phosacid agreement in India Increased sales to Africa
Industry forecasts of improved year-over-year pricing and demand in H2 2014
Consequently, OCPs H2 2014 revenues and EBITDA performance is expected to outpace that of H1; and 2014 revenues and EBITDA to exceed 2013 levels