Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Investor Day (November 2020)
24 slides from Mosaic Company (the)'s investor day presentation, Nov 9, 2020
Slide 1: Analyst Presentation: Chapter 2 - Mosaic Fertilizantes
The Mosaic Company Analyst Presentation: Chapter 2 Mosaic Fertilizantes Date: November 9, 2020
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This release contains forward-look ing statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about proposed or pending future transactions or strategi
Slide 3: Mosaic's Strategic Priorities
Mosaic’s Strategic Priorities North America Drive Functional Transformation Collaboration and Efficiency Uncover and pursue new opportunities to improve the profitability and Rethink and re-engineer outdated and inefficient processes, and competitiveness of our Potash and Phosphates businesses conti
Slide 4: Drive Functional Collaboration and Efficiency
Drive Functional Collaboration and Efficiency September 18, 2020 North America Transformation South America Today Growth Engine Grow and Strengthen Our Product Portfolio December 10, 2020 Act Responsibly February 25, 2021 Optimize Operating Assets and Capital Management 4
Slide 5: Importance of Agriculture to Brazil
Importance of Agriculture to Brazil Brazil’s Trade Balance Brazil’s Global Position by Commodity USD billion. As of 2019 As of 2019 100 Brazil’s Brazil’s Global Global Fertilizer 80 Commodity Production Exports Production Exports demand Rank Rank 60 40 Soybean 37% 1st 51% 1st 44% 20 Corn 9% 3rd 9% 2
Slide 6: Brazil: A Large, Growing Agricultural Market
Brazil: A Large, Growing Agricultural Market Grains Production 269 million tonnes 258 5.05% 238 242 228 CAGR 208 194 187 184 163 166 144 149 132 135 123 119 115 123 100 97 66 67 63 Planted Area 2.88% 58 61 62 CAGR 57 58 millions of hectares 17 17 54 14 16 49 50 51 12 13 15 47 48 47 48 47 12 46 11 44
Slide 7: Farm Economics Encourage Growth
Farm Economics Encourage Growth Barter Ratio Number of 60kg soybean bags/ 1 tonne of fertilizer 22 LESS affordable to farmers Brazil’s Agribusiness Revenue 20 BRL billion 18 16 450 Crops 14 400 Livestock 12 350 10 MORE affordable to farmers 300 8 Jan-18 Sep-18 May-19 Jan-20 Sep-20 250 200 Soy Profit
Slide 8: Leading to Strong Fertilizer Market
Leading to Strong Fertilizer Market Historical Brazilian Fertilizer Demand Million tonnes 38 36 36 34 34 32 31 30 30 28 25 25 23 23 22 23 21 20 4.26% 19 18 CAGR 16 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Potash and phosphate are key n
Slide 9: Fertilizer Demand by Brazilian State
Fertilizer Demand by Brazilian State Mosaic Fertilizantes Leadership 69% of in-country Phosphate production Only Potash producer in Brazil 24% of Brazilian market access(1) (1)Excludes Paraguay and Animal Feed
Slide 10: Fertilizer Demand by Brazilian State
Fertilizer Demand by Brazilian State Mosaic Fertilizantes Leadership 69% of in-country Phosphate production Only Potash producer in Brazil 24% of Brazilian market access(1) (1)Excludes Paraguay and Animal Feed
Slide 11: Mosaic Fertilizantes Brazil
Mosaic Fertilizantes Brazil Brazil’s Fertilizers Market Structure 5% Local Producers (B2B) 20% 55% END Blenders (B2C) USER Overseas Supplier 75% 40% Dealers Mosaic Fertilizantes Production (B2B) Distribution (B2C) (as of 2019) Fertilizer Animal Feed Gypsum Fertilizer Sales Volume 2.2 million tonnes
Slide 12: Brazilian Competitors with Distribution
Brazilian Competitors with Distribution Total Shipments Player Blend Facilities in Brazil (B2B+B2C) Market Access (1) (1) 16 8.5 24% Yara 24 9.8 27% Fertipar 18 6.9 19% Eurochem-FTO* 8 3.3 9% (2) (2) (2) Heringer** 9 0.7 2% Others 6.9 19% (+100 players) (1)Excludes Paraguay and Animal Feed (2)Hering
Slide 13: Grow Distribution
Grow Distribution Grow Faster Than the Market Double Platform for bestFertilizer 5-Year practicesMarket Growth CAGR ~2%(1) MicroEssentials Volume to back 5-year office CAGR target: 5% to 10% Distribution 2 million tonnes Build Maximize Pursue Digital Markets Asset Capacity Opportunities (1) Source:
Slide 14: Transform Production
Transform Production Selective investment to strengthen core assets, with focus on cash generation Increased efficiency through appropriate investment Develop co-products markets 14
Slide 15: Transformation: Continuous Improvement
Transformation: Continuous Improvement Mosaic Fertilizantes has been successfully using a formalized transformation process across the business over the past three years. Ideas Validation Planning Execution Measure Transformation 1.0 THOUSANDS HUNDREDS ~$330mm in benefits of ideas of ideas executed
Slide 16: Mosaic Fertilizantes Transformation Progress
Mosaic Fertilizantes Transformation Progress Transformation 1.0 Transformation 2.0 Adjusted EBITDA growth, in $mm Adjusted EBITDA growth, in $mm Target: $275mm by 2020 Baseline: 2017 Target: $200mm by 2022 Baseline: 2019 $200 $200 $150 $120 $100 $330 $200 $200 $275 $150 $50 $120 $158 $100 $100 $50 2
Slide 17: Key Initiatives in Progress
Key Initiatives in Progress Operations Operations Operations Operations Concentrates Mine Optimization Predictive Fleet and Diesel Process Control Mass Recovery Maintenance Management • Increase production and • Increase mass recovery and • Reduce downtime and • System improvements and new efficienc
Slide 18: Key Initiatives in Progress
Key Initiatives in Progress Commercial Commercial Commercial Commercial Price Optimization Digital Customer Trucks 4.0 New Product/Markets Project Strategy • Utilizing a suite of tools to • Lead generation (new • Improve truck waiting time • Develop BaSiCa product, which improve margins through quot
Slide 19: Phosphate Rock Cost
Phosphate Rock Cost Phosphate Mining ($ in mm) 2020 2021 2022 2023 Transformation EBITDA impact $34 $45 $56 $56 Other initiatives EBITDA impact - $8 $9 $12 Transformation Capex $12 $22 $11 - Other initiatives Capex - $9 $9 $7 Phosphate Rock Costs R$ 335 2019 R$ 330 Cash Cost per Tonne (R$) 3Q2020 R$
Slide 20: Phosphate Conversion Cost
Phosphate Conversion Cost Phosphate Conversion ($ in mm) 2020 2021 2022 2023 Transformation EBITDA impact $50 $67 $84 $84 Other initiatives EBITDA impact - $1 $2 $2 Transformation Capex $17 $5 $11 - Other initiatives Capex - $4 $4 $3 Phosphate Conversion Costs R$ 360 R$ 340 R$ 320 2019 3Q2020 Cash C
Slide 21: Combined Adjusted EBITDA Growth
Combined Adjusted EBITDA(1) Growth $ in millions Adjusted EBITDA(1) Benefits from Identified Initiatives* $400 $350 $300 Others $250 ~$220 ~$230 Distribution Growth $200 ~$160 Transformation 2.0 - Others $150 ~$100 $100 Transformation 2.0 - Operations $50 Transformation 2.0 - Commercial $0 2020 2021
Slide 22: ESG and Issues Management
ESG and Issues Management COVID-19: Emergency health and food relief to 80+ communities Ensuring tailings dams exceed new state and federal dam regulations ESG agenda reflecting Mosaic’s global priorities, with strong focus on Diversity Community investment in Food, Water, Education and Local Develo
Slide 23: Adjusted EBITDA Growth
Adjusted EBITDA* Growth $ in millions Expected Increase in EBITDA* from Identified Initiatives $1,000 $900 $800 ~$700 $700 ~$600 $600 $500 ~$440 Mosaic Fertilizantes $400 North America $300 ~$275(2) $200 $100 $0 2020 2021 2022 2023 Growth CapEx ($ mm) 2021 2022 2023 North America(1) $215 $115 $70 Mo
Slide 24: Questions?
QUESTIONS?