Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Investor Presentation (November 2016)
24 slides from Mosaic Company (the)'s investor presentation, Nov 14, 2016
Slide 1: The Mosaic Company Fourth Quarter 2016
The Mosaic Company Fourth Quarter 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Wa’ad Al Shamal Phosphate Company (also known as MWSPC) and other proposed or pend
Slide 3: Market Update
Market Update
Slide 4: Agriculture: Declining Farm Income
Agriculture: Declining Farm Income Source: USDA 4 • Net Cash Income is the sum of crop and livestock receipts, direct government payments and other farm-related income (e.g. custom harvesting services), minus cash expenses, including rent. • This metric is used to benchmark the short term financial
Slide 5: Crop Nutrient Affordability a Significant Tailwind for Farmers
Crop Nutrient Affordability a Significant Tailwind for Farmers Based on actual market prices Less A ffordable M ore A ffordable 5 0.40 0.60 0.80 1.00 1.20 1.40 1.60 05 06 07 08 09 10 11 12 13 14 15 16 Plant Nutrient Affordability Plant Nutrient Price Index / Crop Price Index Affordability Metric Ave
Slide 6: Positive Potash Developments
Positive Potash Developments Solid on-farm demand Destocking of channel inventories Optimization of operations 6 175 200 225 250 275 300 325 350 375 400 425 Jan-14 Jul-14 Dec-14 Jul-15 Dec-15 Jun-16 $ Tonne Source: Argus FMB Potash Prices fob NOLA c&f Brazil
Slide 7: Lower Projected NA Producer Inventories
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2015/16 2016/17 Mil Tons KCl North American MOP Stocks MIN MAX Range (09/10-15/16) 2015/16 2016/17F 7-Yr Olympic Average Source: IPNI and Mosaic Lower Projected NA
Slide 8: Expect Rebound in Global Shipments in 2017
Expect Rebound in Global Shipments in 2017 8 25 30 35 40 45 50 55 60 65 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16E17F Global Potash ShipmentsMil Tonnes KCl Source: Company Reports, CRU and Mosaic 61-63 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Slide 9: DAP Margins Turn Up in Q3
DAP Margins Turn Up in Q3 9 200 225 250 275 300 325 350 Jan-14 Jul-14 Dec-14 Jul-15 Dec-15 Jun-16 $ Tonne DAP Benchmark Stripping Margin Calculated from Published Weekly Spot Prices Source: Argus FMB 300 325 350 375 400 425 450 475 500 525 550 Jan-14 Jul-14 Dec-14 Jul-15 Dec-15 Jun-16 $ Tonne DAP/MA
Slide 10: Positive Demand Outlook
Positive Demand Outlook 10 66-68 30 35 40 45 50 55 60 65 70 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16E 17F Global Phosphate ShipmentsMMT Product DAP/MAP/NPS/TSP Source: CRU and Mosaic 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16E17F Latin America le
Slide 11: Expected China Capacity Rationalization
Expected China Capacity Rationalization 11 “The country’s phosphate fertilizer capacity will be controlled at 22 million tpy (P2O5) by 2020, and some outdated plants will be phased out in the 2016-2020 period, eliminating 3 million tpy capacity, according to Ideas for Development of the Phosphate Fe
Slide 12: Mosaic's Performance
Mosaic’s Performance
Slide 13: Meaningful Steps to Create Long Term Value
Meaningful Steps to Create Long Term Value 13 Brazi l • Anticipated H2 Improvement starting to materialize. • Actions taken allowed to capitalize on improvement. • Brazil centered growth strategy paying off.
Slide 14: Mosaic: History of Innovation
Mosaic: History of Innovation Source: Mosaic 14 TTM Q3 2016 means the trailing twelve months from September 30, 2016 0% 5% 10% 15% 20% 25% ‐ 500 1,000 1,500 2,000 2,500 2011 2012 2013 2014 2015 TTM Q3 2016 T h o u s a n d T o n n e s MicroEssentials® sales volume MicroEssentials® % of phosphate prod
Slide 15: Mosaic Phosphates: Operational Excellence
Mosaic Phosphates: Operational Excellence Source: Mosaic 15 TTM Q3 2016 means the trailing twelve months from September 30, 2016 $41 $0 $10 $20 $30 $40 $50 2011 2012 2013 2014 2015 TTM Q3 2016 D o l l a r s / T o n n e Mining Cash Costs/Tonne of Phosphate Rock
Slide 16: Potash: Optimizing Value
$136 $133 $112 $94 $95 $‐ $20 $40 $60 $80 $100 $120 $140 2012 2013 2014 2015 TTM Q3 2016 MOP Cash Cost Per Production Tonne Potash: Optimizing Value Source: Mosaic 1 1 Excluding realized mark‐to‐market gains and losses * MOP production costs are reflective of actual costs during the period. These co
Slide 17: Controlling Operating Expenses
Controlling Operating Expenses 17 $394 $382 $361 $230 $200 $250 $300 $350 $400 $450 2013 2014 2015 2016F $330 $315 Guidance range $ Millions SG&A YTD Q3 SG&A: lowest in 9 years, despite adding CF phosphates and ADM Distribution
Slide 18: Investment in Ma'aden and Capital Spending
$900 $800 $800 $‐ $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2013 2014 2015 2016F 2017E 2018E 2019E Sustaining Capex Growth Capex Total Capex Investment in Ma'aden And Capital Spending 18 $ Millions Down ~50% From Peak
Slide 19: Visible H2 Improvement
Visible H2 Improvement 19 $0.73 $(0.03) $0.11 $0.14 $0.06 $0.41 ‐$0.10 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 Q1'16 Q2'16 Q3'16 Earnings Per Share Adjusted Earnings Per Share *Additional discussion of adjusted earnings per share, including reconciliations to earnings per share for the
Slide 20: Appendix
Appendix
Slide 21: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (November 1, 2016) Muriate of Potash Million Tonnes (KCl) 2015 Nov Low 2016F Nov High 2016F Nov Low 2017F Nov High 2017F Comments China 15.9 13.0 13.3 13.7 14.2 While still projecting a sharp drop in shipments this year due to the delayed settlement of 2016
Slide 22: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (November 1, 2016) Source: CRU and Mosaic. Numbers may not sum to total due to rounding. * NPS products included in this analysis are those with a combined N and P2O5 nutrient content of 45 units or greater. Million Tonnes DAP/MAP/NPS*/TSP 2015 Nov Low 2
Slide 23: Potash: Supply Reductions and Curtailments
Potash: Supply Reductions and Curtailments* Producer Reduced / Closed 2014-2018 Capacity (in tonnes) Mosaic Hersey Carlsbad MOP Colonsay re‐scale 100K 500K 800K Potash Corp New Brunswick 1,800K Uralkali Solikamsk 2 50% of 2,400K ICL Boulby MOP 900K Intrepid Carlsbad East & West MOP 700K TOTAL ~7 MM
Slide 24: Source Disclosure
Source Disclosure Slide 16, Closure Sources: Press release, "The Mosaic Company Reports Third Quarter 2013 Results", November 5, 2013 Press release, "The Mosaic Company Reports Second Quarter 2014 Results", July 31, 2014 Press release, "PotashCorp Reports 2015 Third‐Quarter Earnings of $0.34 per Sha