March 2013 Important Notice Statements in this presentation - PowerPoint PPT Presentation

March 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 over 20 offices on 6 continents • Strong Financial Profile  2012 Revenue: US$ 2.4 Billion (+13%)  2012 EBITDA†: US$ 1.1 Billion  2012 EBITDA Margin: > 46%  Revenue growth: > 69 % since 2009 • 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: Proud to be the world’s largest producer of lithium, iodine, potassium nitrate and solar salts Fertilizers Specialty Chemicals Potassium Specialty Plant Iodine Lithium Industrial Nutrients Chemicals 24%* 21%* 35%* 11%* 8%* * Contribution to SQM Consolidated Gross Profit of 2012 World Leadership Specialty Business Growth Opportunities 5 5

Unique Natural Resources Caliche Ore Salar Brines Potassium Nitrates Potassium Iodine Iodine Lithium NaNO 3 + KCl = KNO 3 + NaCl (salt) Sodium nitrate + Potassium chloride = Potassium nitrate + Sodium chloride World Leadership Specialty Business Growth Opportunities 6 6

Agenda Overview Fertilizers Specialty Chemicals Financial Information Photo: Potassium Nitrate Plant in Coya Sur 7

Fertilizers: Uniquely Positioned Specialty Plant Potassium Nutrition 2012 Revenues* US$605M (25%) 46% world market share KNO 3 † 2012 Revenues* US$675M (28%) 24% of total 2012 gross margin* 21% of total 2012 gross margin* †Market share figures are based on 2012 SQM estimates. *Figures are based on IFRS World Leadership Specialty Business Growth Opportunities 8 8

Fertilizers: Specialty Plant Nutrition 21% of Total 2012 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 9 9

Fertilizers: Specialty Plant Nutrition 21% of Total 2012 Gross Margin SQM & SPN: World Leader World Potassium Nitrate Market* SQM Avg. Price for SPN business line 1.000 1.000 • Completion of new potassium nitrate facility 800 in Coya Sur (300,000 tons/year) 600 Th MT 800 • Developed distribution network: Proximity to 400 customers allows for us to meet changing 200 needs and new market tendencies 0 600 2009 2010 2011 2012 • Largest Producer: 46% World Market Share Year 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. Market estimates do not include imports/exports from China World Leadership Specialty Business Growth Opportunities 10 10

Fertilizers: Potassium 24% of Total 2012 Gross Margin Mercado MOP Potassium Chloride 60 600 Market Demand Drivers Precio FOB Vancouver US$/ton ** 50 500 • • Commodity Fertilizer Main Uses: millones de TM 40 400 • Fruits/Vegetables • 30 300 ~50 million ton market • Corn (2012) 20 200 • Rice 10 100 • Largest Global Producers : • Demand growth still 0 0 • Potash Corp being seen in Brazil 2009 2010 2011 2012 • Uralkali Año • Population Growth • *SQM estimates Global crop supply **Price as of December for respective years pressure should have a • Farmer economics & positive impact on yield optimization fertilizer prices • Contracts with China for the first half of 2013 closed at $70 under prices seen in 2012 World Leadership Specialty Business Growth Opportunities 11 11

Fertilizers: Potassium 24% of Total 2012 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 • 2014 effective capacity expected to be 400 between 2.2 – 2.3 million MT 0 2006 2007 2008 2009 2010 2011 2012 2013E Year • Three main sources of potassium that exist in market today: SQM is the only company that produces all three sources • Internal development of production technologies has allowed for a better utilization of natural resources and for higher yields through increased efficiencies • MOP is potassium chloride (KCl), also known as potash • SOP is potassium sulfate (K 2 SO 4 ) World Leadership Specialty Business Growth Opportunities 12 12

Agenda Overview Fertilizers Specialty Chemicals Financial Information Photo: Salar de Atacama 13

Specialty Chemicals: World Leadership Industrial Chemicals Iodine & Derivatives Lithium & Derivatives 34% world market share† 2012 Revenues *US$245M (10%) 35% world market share†⁰ 2012 Revenues* US$578M (24%) 2012 Revenues *US$222M (9%) 8% of total 2012 gross margin* 11% of total 2012 gross margin* 35% of total 2012 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 14 14

Specialty Chemicals: Iodine 35% of Total 2012 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 15 15

Specialty Chemicals: Iodine 35% of Total 2012 Gross Margin Iodine Market* SQM & Iodine: World Leader 35 55 50 30 • Current Capacity 12,500 MT Iodine BL Price US$/kg 45 40 TThousand MT 25 35 20 30 • Future demand growth expected to 25 15 maintain a positive trend 20 10 15 10 5 • Significant Price Growth 2010-2012 5 0 0 2008 2009 2010 2011 2012 Year *SQM estimates World Leadership Specialty Business Growth Opportunities 16 16

Specialty Chemicals: Lithium 11% of Total 2012 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% China 10% Talison 22% • Expected growth for 2012: ~ 9% *SQM estimates: Lithium chemicals market • Global lithium chemical demand has increased over Li 2 CO 3 25% between 2010-2012, with batteries being the primary demand driver World Leadership Specialty Business Growth Opportunities 17 17