Innophos’ Established Competitive Strengths
Provide a Unique Business Advantage
® | Largest and broadest specialty phosphates producer in North America, with #1 or #2 position in all product lines. |
® | Diversified end markets provide steady demand growth and industry dynamics support earnings growth. |
® | Proprietary process technologies allow IPHS to tailor products to customer needs, providing a platform for growth. |
® | Near term de-leveraging, cost structure improvement, productivity increases and excellent free cash flow support a strengthening financial position. |
® | High industry capacity utilization creates favorable supply-demand balance; sustainable profit potential for Innophos. |
® | High capital costs and logistics limit risks of imports/new capacity. |
® | A stable customer base, relationships that span many decades. |
® | Position in niche markets produces better margins and pricing power. |
® | Broad demand for IPHS phosphates in a wide variety of end products. |
® | Applications in a broad range of niche markets require specialized and proprietary process technology. |
® | Specialization provides a platform for growth and profitability; targeting high growth niche areas and developing new applications for phosphate products. |
® | Technical support: IPHS works with customers to develop solutions to meet very specific needs. |
Innophos’ Immediate Sustainable Goal:De-Lever
® | Focus is on de-leveraging through simultaneous earnings growth and debt paydown. |
® | The de-leveraging stage of an LBO drives increasing equity value as one de-risks the company. |
® | $21 Million Debt payments in 2007…continued net debt reduction in 2008. |
Market Outlook - 2008
® | High world demand for fertilizers is affecting Innophos’ key raw materials; costs are rapidly increasing. |
® | Innophos buys its key raw materials under long term contracts with pricing formulas. These contracts help to buffer short term raw material cost changes. |
® | Innophos is responding to higher raw material costs by raising prices to its customers. |
® | Demand is strong, shortage of specialty phosphate supply, market is accepting price increases. |
® | During 2008 Innophos therefore anticipates getting benefit of higher market selling prices, without feeling immediate full impact of market raw material cost increases. |
In Summary…
® | Largest and broadest specialty phosphates producer in North America, with #1 or #2 position in all product lines. |
® | Diversified end markets provide steady demand growth and industry dynamics support earnings growth. |
® | Proprietary process technologies allow IPHS to tailor products to customer needs, providing a platform for growth. |
® | Near term de-leveraging, cost structure improvement, productivity increases and excellent free cash flow support a strengthening financial position. |