Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Q3 FY2013 Earnings Presentation
17 slides from Mosaic Company (the)'s earnings presentation, Apr 3, 2013
Slide 1: The Mosaic Company Earnings Conference Call – 3rd Quarter Fiscal 2013
The Mosaic Company Earnings Conference Call – 3rd Quarter Fiscal 2013 March 28, 2013 Jim Prokopanko, President and Chief Executive Officer Larry Stranghoener, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation 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 future financial and operating results. Such statements are based upon the current
Slide 3: Third Quarter Financial Highlights
Third Quarter Financial Highlights 0 0 $1,502 $758 $216 $197 $0.81 Reported EPS $0.88* Adjusted, excluding notable items $2.2 billion $419 million * See reconciliation on page 17 Net Sales Phosphates Potash Operating Earnings
Slide 4: Commodity Prices Likely to Remain Elevated
Commodity Prices Likely to Remain Elevated Considerations • Pent up demand with 2012 US Corn exports down 52% year over year • The likely case builds back one-half of the inventory drawdown this year • Long-term outlook remains strongly positive Mil Tonnes World Grain & Oilseed Stocks Source: USDA a
Slide 5: 2013 K Shipments on Track with Forecasts
2013 K Shipments on Track with Forecasts 2013 Potash Shipments • Better than expected baseload demand from China and India: • China imports of ~4.5 mmt in FH • India imports of 4.0- 4.5 mmt in CY 2013 • Positive prospects in nearly all other regions 55-57 12E 13F Mil Tonnes KCl World Potash Shipment
Slide 6: 2013 P Shipments on Track with Forecasts
2013 P Shipments on Track with Forecasts 2013 Phosphate Shipments • Strong Western Hemisphere demand with rising prices • India not back in the market until end of fiscal 63-65 12E13F Mil Tonnes DAP/MAP/MES/TSP Source: Fertecon and Mosaic Global Phosphate Product Shipments
Slide 7: Ma'aden Joint Venture
Ma’aden Joint Venture • Aligns with our growth strategy • Attractive returns on invested capital • Low-cost producer • Logistically advantaged to Asian countries • Opportunity to participate in future projects • Diversifies sources of phosphate rock
Slide 8: Financial Results Review
Financial Results Review
Slide 9: Unchanged Capital Priorities
Unchanged Capital Priorities Maintain Investment Grade Rating Improve Balance Sheet Structure Less cash More debt Ample capacity for share repurchases Use of Cash: Priorities Finance Organic Growth & Maintain Dividend Strategic Investments Additional Returns to Shareholders Class A share resolution
Slide 10: Financial Guidance Summary
Financial Guidance Summary Category Guidance – Fiscal 2013 Potash Q4 Sales volume 2.3 – 2.6 million tonnes Q4 MOP selling price $350 - $380 per tonne Q4 Operating rate above 85 percent Q4 Gross margin rate in range of - 45% Phosphates Q4 Sales volume 2.6 - 2.9 million tonnes Q4 DAP selling price $47
Slide 11: Mosaic
Mosaic
Slide 12: Third Quarter Financial Performance
Third Quarter Financial Performance In millions, except per share amounts Three Months Ended February 28, 2013 February 29, 2012 Net Sales $2,241 $2,190 Gross Margin $568 $522 % of net sales 25% 24% Net Earnings $345 $273 % of net sales 15% 13% Diluted EPS $0.81 $0.64 Effective Tax Rate 24.0% 24.5%
Slide 13: Potash Segment Highlights
Potash Segment Highlights In millions, except MOP price Q3 FY13 Q2 FY13 Q3 FY12 Net sales $758 $780 $553 Gross Margin $308 $355 $270 Percent of net sales 41% 46% 49% Operating earnings $216 $316 $234 Sales volumes 1.8 1.5 1.1 Production volume 2.0 1.8 1.8 Production operating rate 78% 76% 79% Avg MO
Slide 14: Phosphates Segment Highlights
Phosphates Segment Highlights In millions, except DAP price Q3 FY13 Q2 FY13 Q3 FY12 Net sales $1,502 $1,762 $1,652 Gross Margin $266 $318 $259 Percent of net sales 18% 18% 16% Operating earnings $197 $245 $190 Sales volumes 2.6 3.0 2.6 NA production volume (a) 2.1 2.1 2.0 Finished product operating
Slide 15: Raw Material Cost Detail
Raw Material Cost Detail Mosaic is currently implementing a new inventory valuation system. After implementation, Mosaic expects to include this information in its performance data disclosures. Q3 FY13 Percent Ammonia ($/MT) Realized in COGS $540 Average Purchase Price $663 Sulfur ($/LT) Realized in
Slide 16: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers (a) FY13 Q3 Actual Change FY13 Q3 Margin % Actual % Impact on Segment Margin Pre-Tax Impact EPS Impact Marketing MOP Price ($/tonne) (b) $385 $50 40.7% 10.6% $80 $0.14 Potash Volume (million tonnes) 1.8 0.5 40.7% 16.9% $128 $0.23 DAP Price ($/tonne) $496 $50 17.7%
Slide 17: Adjusted Earnings Reconciliation
Adjusted Earnings Reconciliation Reconciliation of Net Income Attributable to Mosaic to Non-GAAP Adjusted Net Income Attributable to Mosaic and Earnings per Share Three months ended February 28, 2013 (in millions, except per share amounts) Net earnings attributable to Mosaic as reported 344.6 Pre-ta