Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q2 2017 Earnings Presentation
19 slides from Mosaic Company (the)'s earnings presentation, Aug 1, 2017
Slide 1: Earnings Conference Call – Second Quarter 2017
The Mosaic Company Earnings Conference Call – Second Quarter 2017 Joc O’Rourke, President and Chief Executive Officer Presenters: Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations Date: August 1, 2017
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking Statements 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 our proposed acquisition of the global phosphate and p
Slide 3: Executive Summary
Executive Summary Vale Fertilizantes Visible Cost and Integration Planning Capital Controls On Track Managing the Gradual Recovery in Business to Potash and Maximize Long Term Phosphate Markets Opportunity MOSAIC CONFIDENTIAL 3
Slide 4: Focused on Items in Our Control
Focused on Items in Our Control 1 ▪ Ahead of schedule on meaningful cost reduction program: Cost • Q2’17 MOP cash production costs of $77, including $14 of cash brine management expenses* Reduction • Q2’17 SG&A at $71 million, down sequentially and year over year 2 ▪ Additional $50 million reduction
Slide 5: Financial Results Review
Financial Results Review MOSAIC CONFIDENTIAL 5
Slide 6: Phosphates Results and Guidance
Phosphates Results and Guidance Second Quarter 2017 Results Guidance Phosphates Q3 2017 2.3M 2.6M 2.6M Volumes Q3 Sales Volumes 2.2 to 2.5 million tonnes Q3 DAP Selling Price $310 to $330 per tonne $320 $336 $340 Price Q3 Gross Margin Rate 7 to 9 percent Q3 Operating Rate Mid 80 percent 8% Full Year
Slide 7: CF Ammonia Contract Update
CF Ammonia Contract Update MOSAIC CONFIDENTIAL 7
Slide 8: China Phosphate Exports: Higher Level of Uncertainty
China Phosphate Exports: Higher Level of Uncertainty Million Tonnes • Exports up YTD China DAP/MAP/TSP Exports • Continue to Expect 12 a Decline in 2017 11 10 9 8 7 6 5 4 10 11 12 13 14 15 16 17E Source: China Customs, Mosaic Actual High Forecast Low Forecast MOSAIC CONFIDENTIAL 8
Slide 9: Potash Results and Guidance
Potash Results and Guidance Second Quarter 2017 Results Guidance 2.0M 2.2M 2.3M Potash Q3 2017 Volumes Q3 Sales Volumes 1.9 to 2.2 million tonnes Q3 MOP Selling Price $165 to $180 per tonne $170 $179 $185 Q3 Gross Margin Rate 15 to 18 percent Price Q3 Operating Rate Low 80 percent* ~20% 23% Full Yea
Slide 10: International Distribution Results and Guidance
International Distribution Results and Guidance Second Quarter 2017 Results Guidance International Distribution Q3 2017 1.4M 1.6M 1.7M Volumes Q3 Sales Volumes 2.3 to 2.6 million tonnes Q3 Gross Margin per Tonne Low $20* Margin/Tonne ~$20 $24 Full Year Sales Volumes 6.75 to 7.25 million tonnes Guida
Slide 11: Other Full-Year Guidance
Other Full-Year Guidance Consolidated Full-Year 2017 Total SG&A $295 to $310 million Capital Expenditures $800 million to $850 million Effective Tax Rate Zero to Slightly Negative Potash 2017 Full Year Canadian Resources Taxes $90 to $110 million Full Year Brine Management Costs $150 to $160 million
Slide 12: Ma'aden Joint Venture Update
Ma’aden Joint Venture Update Ammonia Plant Ammonia Plant Sulfuric Acid Plant Beneficiation Plant MOSAIC CONFIDENTIAL 12
Slide 13: Closing Remarks and Appendix
Closing Remarks and Appendix MOSAIC CONFIDENTIAL 13
Slide 14: Global Potash and Phosphate Shipments
Global Potash and Phosphate Shipments Million Tonnes KCl Global Potash Shipments Million Tonnes Global Phosphate Shipments DAP/MAP/NPS/TSP 70 63.5 - 65.5 75 68 - 70 65 62.8 70 67.5 60 65 55 60 50 55 50 45 45 40 40 35 35 30 30 25 25 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E 18F 00 01 02
Slide 15: Raw Material Cost Detail
Raw Material Cost Detail Second Percent Quarter 2017 Ammonia Realized in COGS $373 ($/Tonne) Average Purchase Price $308 Sulfur Realized in COGS $90 ($/Tonne) Average Purchase Price $70 U.S. mined rock 4,126 92% Phosphate Purchased Miski Mayo Rock 268 6% Rock Other Purchased Rock 93 2% (realized in
Slide 16: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers(a) 2017 Q2 % Impact on 2017 Q2 Pre-Tax Quarterly Change Margin % Segment Actual Impact EPS Impact Actual Margin Marketing MOP Price ($/tonne)(b) $179 $50 23% 23% $110 $0.33 Potash Volume (thousand tonnes) 2,191 500 23% 11% $49 $0.15 DAP Price ($/tonne) $336 $50 8%
Slide 17: Phosphate Raw Material Trends
Phosphate Raw Material Trends Ammonia Sulfur ($/tonne) ($/tonne) 500 175 450 150 400 350 125 300 100 250 200 75 150 50 100 25 50 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sulfur Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2015 2016 2016 2016 2016 2017 2017 2017F (long 2015 2015 2016 2016 2016 2016 2017 2017 2017F ton)(p)
Slide 18: Global Potash Shipment Forecasts by Region (August 1, 2017)
Global Potash Shipment Forecasts by Region (August 1, 2017) Muriate of Potash Low High Million Tonnes (KCl) 2015 2016 2017E 2018F 2018F Comments Shipments are projected to recover to 15.6 mmt in 2017 (7.5 mmt production plus 8.1 mmt net imports). After spiking to 9.2 mmt in 2015, imports plunged to
Slide 19: Global Phosphate Shipment Forecasts by Region (August 1, 2017)
Global Phosphate Shipment Forecasts by Region (August 1, 2017) DAP / MAP / NPS* / TSP Low High (Million Tonnes) 2015 2016 2017F 2018F 2018F Comments Shipments are expected to stabilize at a little over 18 mmt in 2017, with a strong domestic pull expected this fall with domestic prices lower year-ove