September 2013
Important Notice Statements in this presentation concerning the Company’s business outlook or future economic performances, anticipated profitability, revenues, expenses, or other financial items, anticipated cost synergies and product or service line growth, together with other statements that are not historical facts, are “forward -looking statements” as that term is defined under Federal Securities Laws. Any forward-looking statements are estimates, reflecting the best judgment of SQM based on currently available information and involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Risks, uncertainties, and factors that could affect the accuracy of such forward-looking statements are identified in the public filing made with the Securities and Exchange Commission, and forward-looking statements should be considered in light of those factors. 2
Agenda Overview Fertilizers Specialty Chemicals Financial Information Photo: Evaporation Pond - Salar de Atacama, from which we produce potassium & lithium products 3
SQM at a Glance • World Leader in Specialty Businesses : Potassium Nitrate, Iodine, lithium & Solar Salts • Global Company: Based in Santiago, Chile with sales in more than 100 countries and offices in 20 countries. • Strong Financial Profile Revenue LTM: US$ 2.4 Billion EBITDA† LTM: US$ 1.0 Billion EBITDA Margin LTM: ~ 42% • Highest liquidity in Chile Listed on the Santiago Stock Exchange, and the NYSE since 1993 Most liquid Chilean ADR on the NYSE in 2012 One of the five most liquid companies traded in the Chilean Stock Market in 2012 • Responsible growth † EBITDA: gross profit – SGA + depreciation & amortization World Leadership Specialty Business Growth Opportunities 4 4
SQM at a Glance SQM: The world’s largest producer of lithium, iodine, potassium nitrate and solar salts Fertilizers Specialty Chemicals Potassium Specialty Plant Iodine Lithium Industrial Nutrients Chemicals 22% 24% 35% 11% 8% % of Contribution to SQM Consolidated Gross Profit for the first half of 2013 World Leadership Specialty Business Growth Opportunities 5 5
Unique Natural Resources Caliche Ore Salar Brines Potassium Nitrates Potassium Iodine Iodine Lithium World Leadership Specialty Business Growth Opportunities 6 6
Operational Synergies and a low-cost structure Operational synergies and low-cost structure • Similar processes and industrial technologies are Iodine used across our operations: solar ponds, evaporation, salt harvesting, crystalllizing, drying, among others Nitrates Caliche • Raw materials are used in the production of Ore several different products, reducing costs significantly Potassium • Specialty Plant Nutrients, Potassium Chloride and nitrate Industrial Chemicals volumes create logistics efficiencies Salar Brines Potassium Commercial flexibility according to market conditions chloride • Nitrates in different qualities are used for industrial applications or for the fertilizer Potassium industry sulfate • Potassium can be sold as potassium chloride or used as raw material in the production of Lithium potassium nitrate • Potassium chloride/sulfate allocation World Leadership Specialty Business Growth Opportunities 7
Agenda Overview Fertilizers Specialty Chemicals Financial Information Photo: Potassium Nitrate Plant in Coya Sur 8
Fertilizers: Uniquely Positioned Specialty Plant Potassium Nutrition 1H2013 Revenues* US$317M (27%) 46% world market share KNO 3 † 1H2013 Revenues* US$379M (32%) 22% of total 1H2013 gross margin* 24% of total 1H2013 gross margin* †Market share figures are based on SQM 2012 estimates. *Figures are based on IFRS World Leadership Specialty Business Growth Opportunities 9 9
Fertilizers: Specialty Plant Nutrition 24% of Total 1H2013 Gross Margin Main uses: Premium crops* Potassium Nitrate Niche Market Demand Drivers Others • • Chlorine free High cost of land 9% Vegetables • • 41% Fully water soluble Water scarcity Industrial Crops • • 100% Natural origin Demand for premium 28% crops • Fast absorption • North America and European vegetable and tomato markets *SQM estimates 2012 Fruits 22% Modern Agricultural Techniques World Leadership Specialty Business Growth Opportunities 10 10
Fertilizers: Specialty Plant Nutrition 24% of Total 1H2013 Gross Margin SQM & SPN: World Leader • Completion of new potassium nitrate facility in Coya Sur (300,000 tons/year) • Developed distribution network: Proximity to customers allows for us to meet changing needs and new market tendencies • Largest Producer: 46% World Market Share* Other producers: Haifa, Kemapco • Prices are expected to decrease in 2013 as a result of the new potash price environment * Figures are based on 2012 SQM estimates. World Leadership Specialty Business Growth Opportunities 11 11
Fertilizers: Potassium 22% of Total 1H2013 Gross Margin Potassium Chloride Market Demand Drivers • • Commodity Fertilizer Main Uses: • Fruits/Vegetables • Market expected to grow in • Corn 2013 compared to 2012 • Rice • Largest Global Producers : • Demand growth still • Potash Corp being seen in Brazil • Uralkali • Population Growth • Global crop supply pressure should have a positive impact • Farmer economics & on fertilizer prices yield optimization • Remain vigilant in the potassium market in light of recent announcements by Uralkali World Leadership Specialty Business Growth Opportunities 12 12
Fertilizers: Potassium 22% of Total 1H2013 Gross Margin SQM & Potassium: Growth Opportunities SQM Production Volumes MOP + SOP • Expansion of potassium-based products: 2000 • Installed capacity of approximately 1600 2 million MT in 2012 Th. MT 1200 • 2013 production volumes to be similar 800 to 2012 • Effective capacity expected to be 400 approximately 2.3 million MT by the end 0 2006 2007 2008 2009 2010 2011 2012 2013E of 2014 Year • Three main products of potassium that exist in market today: SQM is the only company that produces all three products • Internal development of production technologies has allowed for a better utilization of natural resources and for higher • MOP is potassium chloride (KCl), also known as potash • SOP is potassium sulfate (K 2 SO 4 ) yields through increased efficiencies World Leadership Specialty Business Growth Opportunities 13 13
Agenda Overview Fertilizers Specialty Chemicals Financial Information Photo: Salar de Atacama 14
Specialty Chemicals: World Leadership Industrial Chemicals Iodine & Derivatives Lithium & Derivatives 34% world market share† 1H2013 Revenues *US$110M 35% world market share†⁰ (9%) 1H2013 Revenues* US$255M (21%) 1H2013 Revenues *US$92M (8%) 8% of total 1H2013 gross margin* 11% of total 1H2013 gross margin* 35% of total 1H2013 gross margin* †Market share figures are based on 2012 SQM estimates ⁰ Considering the lithium chemicals market, excluding concentrated minerals *Figures are based on IFRS World Leadership Specialty Business Growth Opportunities 15 15
Specialty Chemicals: Iodine 35% of Total 1H2013 Gross Margin 2012 Market Size Estimates: ~31 Iodine kMT* Niche Market Main Uses • • Others 2% SQM is the leading iodine X-Ray Contrast Media • producer in the world LCD USA 4% SQM 34% • Pharmaceuticals Others Recycling 5% • • Global Demand: CAGR Iodophors Others Chile 2002-2012: 4% 24% • Approximately 40% of • Additional capacity from uses related to human Chilean competitors health and nutrition started production in Japan 31% 2012, aiming to reach projected capacity in * Market participation based on SQM 2012 estimates 2013 Market supply estimates for Japan include supply from traditional production and recycling in Japan World Leadership Specialty Business Growth Opportunities 16 16
Specialty Chemicals: Lithium 11% of Total 1H2013 Gross Margin Lithium Others 3% FMC 11% Market Main Uses • • Battery technology historically SQM 35% SQM is the leading lithium chemical producer in the been the demand driver. Others Chile • Batteries (over 41%) 19% world • Glass • • Lubricating Greases Global demand: CAGR (2002- • Glazes/Frits 2012): ~ 8%. Expected growth for 2013: 5 -10% China 10% Talison 22% • Market seeing new supply added in 2013 *SQM estimates: Lithium chemicals market • Global lithium chemical Li 2 CO 3 demand has increased over 25% between 2010-2012, with batteries being the primary demand driver World Leadership Specialty Business Growth Opportunities 17 17
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