Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q2 2015 Earnings Presentation
28 slides from Mosaic Company (the)'s earnings presentation, Aug 4, 2015
Slide 1: The Mosaic Company Earnings Conference Call – Second Quarter 2015
The Mosaic Company Earnings Conference Call – Second Quarter 2015 August 4, 2015 Jim Prokopanko, President and Chief Executive Officer Joc O’Rourke, Executive Vice President and Chief Operating Officer Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Inves
Slide 2: Safe Harbor Statement
Safe Harbor Statement Click to edit Master title style 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
Slide 3: Second Quarter Financial Highlights
Second QuarterClick Financial to editHighlights Master title style Net Sales Operating Earnings Phosphates $730 International $1,385 Distribution $259 $259 Potash $637 $8 $2.5 billion $510 million $1.08 diluted earnings per share • Includes $0.03 positive impact of notable items $583 million in
Slide 4: Visible Strategic Progress
Visible Strategic Progress Q2 2013 EPS vs. Q2 2015 $1.80 $1.60 $0.16 $0.16 $1.40 $0.06 $0.21 $1.20 $0.43 $0.06 $0.17 $1.00 $0.80 $0.60 $1.01 $1.08 $0.40 $0.20 $0.00 Q2 2013 P Volume K Cash SG&A Share P Price K Price All Other* Q2 2015 Cost/mt Count Benefit of Mosaic’s Strategic Initiatives: $0.60/sh
Slide 5: Expect Farm Economics to Stabilize
Expect Farm Economics to Stabilize New Crop Corn Price US$ BU Daily Close Dec '15 Contract 4.70 4.50 Probability of a third- 4.30 in-a-row outsized 4.10 crop is diminishing. 3.90 3.70 3.50 Source: CME Grain and Oilseed prices recovered and stabilized. US$ BU El Niño still poses a New Crop Soyb
Slide 6: Good Start to 2015
Good Start to 2015 Brazil India China North America 2015 H1 Normal Delayed Visible Actively spring demand demand shipping Key season Real increase against High Ample contract Points beginning volatility monsoon Credit inventories program 6 Source: Mosaic
Slide 7: Financial Results Review
Financial Results Review
Slide 8: Phosphates Segment Highlights
Phosphates Segment Highlights $ In millions, except DAP price Q2 2015 Q1 2015 Q2 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $1,385 $1,172 $1,333 300 Gross margin $296 $222 $271 250 Percent of net sales 21% 19% 20% 200 Operating earnings $259 $190 $219 150 Sales volumes 2.8 2.3 2.6 100 NA
Slide 9: Potash Segment Highlights
Potash Segment Highlights $ In millions, except MOP price Q2 2015 Q1 2015 Q2 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $730 $653 $762 300 Gross margin $295 $242 $226 250 Percent of net sales 40% 37% 30% 200 Operating earnings $259 $204 $189 150 100 Sales volumes 2.3 2.0 2.5 50 Productio
Slide 10: International Distribution Segment Highlights
International Distribution Segment Highlights $ In millions, except Blends price Q2 2015 Q1 2015 Q2 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $637 $439 $542 50 Gross margin $29 $21 $34 40 Percent of net sales 4% 5% 6% 30 Operating earnings $8 $3 $16 20 Sales volumes 1.5 1.0 1.2 10 Margi
Slide 11: Balance Sheet and Capital Update
Balance Sheet and Capital Update Ending Outstanding Share Count 500 90 million fewer 447 shares 425 426 426 Million Shares 400 368 357 300 FY11 FY12 FY13 SP13 CY14 Q2 CY15 Cash* : $3.9B Cash*: $2.2B Debt**: $800M Debt**: $3.8B *Cash & cash equivalents **Total debt including short and long term debt
Slide 12: Financial Guidance Summary
Financial Guidance Click Summary to edit Master title style Phosphates 2015 Q3 Sales volumes 2.1 to 2.4 million tonnes Q3 DAP selling price $435 to $455 per tonne Q3 Gross margin rate Low 20 percent Q3 Operating rate Mid 80 percent Full year sales volumes 9.5 to 10 million tonnes International Distr
Slide 13: Financial Guidance Summary
Financial Guidance Click Summary to edit Master title style Potash 2015 Q3 Sales volumes 1.6 to 2.0 million tonnes Q3 MOP selling price $260 to $280 per tonne Q3 Gross margin rate Low 20 percent range Q3 Operating rate Mid 60 percent Full year sales volumes 8.2 to 8.6 million tonnes Full year Canadi
Slide 14: Ma'aden Joint Venture Progress
Ma’aden Joint Venture Progress Main Substation / Ammonia Plant DAP Process Building Ammonia Heat Exchangers DAP Conveying
Slide 15: Second Half Outlook
Second Half Outlook
Slide 16: North America: Expect Good Fall Season
North America: Expect Good Fall Season Plant Nutrient Affordability Plant Nutrient Price Index / Crop Price Index 1.75 Source: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic 1.50 1.25 1.00 0.75 0.50 05 06 07 08 09 10 11 12 13 14 15 Affordability Metric Average 2 16
Slide 17: India & China: Factors to Watch
India & China: Factors Click to edit to Watch Master title style China: • GDP • Soybean imports • Phosphate exports India: • Monsoon • Rupee 17 17
Slide 18: Brazil: Credit + Stable Soybean Prices = Strong H2
Brazil: Credit + Stable Soybean Prices = Strong H2 Farm Credit History Soybean Prices BRL billion USD/Bu Real/Bu 200 16% 18 36 180 14% 16 32 160 60 14 28 12% 140 24 12 24 120 20 10% 10 20 100 19 8% 8 16 80 6% 60 133 128 6 12 116 4% 40 94 4 8 20 2% 2 4 0 0% 05 06 07 08 09 10 11 12 13 14 15 2012/13 20
Slide 19: Thank You
Thank You The Mosaic Company Earnings Conference Call – Second Quarter 2015 August 4, 2015
Slide 20: Appendix
Appendix
Slide 21: Raw Material Cost Detail
Raw Material Cost Detail Q2 2015 Percent Ammonia ($/tonnes) Realized in COGS $417 Average Purchase Price $462 Sulfur ($/ton) Realized in COGS $161 Average Purchase Price $154 Phosphate rock (realized in COGS) ('000 tonnes) U.S. mined rock 4,480 91% Purchased Miski Mayo Rock 366 7% Other Purchased Ro
Slide 22: Phosphate Raw Material Trends
Phosphate Raw Material Trends Ammonia Sulfur ($/tonne) ($/tonne) 700 200 600 175 150 500 125 400 100 300 75 200 50 100 25 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014 2014 2015 2015 2015F 2013 2013 2014 2014 2014 2014 2015 2015 2015F 2 Realized Costs Market Pric
Slide 23: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers(a) 2015 Q2 % Impact on 2015 Q2 Pre-Tax Change Margin % Segment EPS Impact Actual Impact Actual Margin Marketing MOP Price ($/tonne)(b) $280 $50 40% 15% $110 $0.25 Potash Volume 2.3 0.5 40% 13% $96 $0.22 (million tonnes) DAP Price ($/tonne) $450 $50 21% 10% $139 $0
Slide 24: Potash Supply and Demand
Potash Supply and Demand Million Tonnes Global Potash Capacity, Production and Operating Rate Op Rate KCl Source: Company Reports, Fertecon, CRU and Mosaic 90 100% 80 95% 70 90% 85% 60 80% 50 75% 40 70% 30 65% 20 60% 10 55% 0 50% 00 02 04 06 08 10 12 14 16F 18F 20F Capacity Production Op Rate 24
Slide 25: Market Update: North America
Market Update: North America Million North America MOP Shipments Million North America DAP/MAP/ME/TSP Tonnes Tonnes Shipments KCl 5.3 4.6 4.6 4.6 4.5 4.2 4.4 4.2 2014 2015 2014 2015F 2014 2015 2014 2015F Jan-Jun Jul-Dec Jan-Jun Jul-Dec Source: Mosaic Estimates 25
Slide 26: Market Update: China
Market Update: China Million China MOP Imports Million China DAP/MAP/TSP Exports Tonnes Tonnes KCl 5.3 5.7 4.2 4.7 3.9 3.8 4.3 2.4 2014 2015 2014 2015F 2014 2015 2014 2015F Jan-Jun Jul-Dec Jan-Jun Jul-Dec Source: Mosaic Estimates 2 26
Slide 27: Market Update: India
Market Update: India Million India MOP Imports Million India DAP Imports Tonnes Tonnes KCl 3.2 3.0 2.8 2.8 2.7 1.6 1.8 1.0 2014 2015 2014 2015F 2014 2015 2014 2015F Jan-Jun Jul-Dec Jan-Jun Jul-Dec Source: Mosaic Estimates 2 27
Slide 28: Market Update: Brazil
Market Update: Brazil Million Brazil MOP Imports Million Brazil DAP/MAP/ME/TSP Imports Tonnes Tonnes KCl 4.6 4.5 3.2 4.3 3.7 2.7 2.6 2.2 2014 2015 2014 2015F 2014 2015 2014 2015F Jan-Jun Jul-Dec Jan-Jun Jul-Dec Source: Mosaic Estimates 2 28