Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Piper Jaffray Global Agriculture Symposium 2016
23 slides from Mosaic Company (the)'s conference presentation, Aug 2, 2016
Slide 1: State of the Fertilizer Industry
1 State of the Fertilizer Industry Piper Jaffray Global Agriculture Symposium Minneapolis, MN August 2, 2016 Andy Jung Director, Market and Strategic Analysis The Mosaic Company
Slide 2: Safe Harbor
2 Safe Harbor 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 pending futu
Slide 3: Topics and Take-Aways
3 Topics and Take-Aways The Mosaic Company Agricultural Observations and Outlook - Near term: Pressure on grain prices in classic weather market - But no crash expected and the long term food story remains intact Plant Nutrient Observations and Outlook - Phosphate • Cautious sentiment in 1H 20
Slide 4: The Mosaic Company
4 The Mosaic Company
Slide 5: Overview of The Mosaic Company
5 Overview of The Mosaic Company Mosaic helps the world grow the food it needs by mining phosphorus (P) and potassium (K) minerals and refining these ores into plant nutrient products that are essential for global agriculture. In big round numbers, our North American operations typically dig, pump,
Slide 6: Phosphate Operations
6 Phosphate Operations U.S. Phosphate Operations Offshore Phosphate Operations 35% equity stake in Bayovar phosphate rock mine in Peru 25% equity stake in Ma’aden II mine and chemical complex under development in Saudi Arabia 53%47% Phosphate Sales 2012-15 North America Offshore
Slide 7: North American Potash Operations
7 North American Potash Operations 46% 54% Potash Sales 2012-15 North America Offshore
Slide 8: Mosaic International Distribution: ADM Acquisition
8 Mosaic International Distribution ADM Acquisition ADM Acquisition Strategic Rationale • Mosaic is largest P&K producer and Brazil is the fastest growing P&K market • Provides downstream market access/pull through for our North American P&K operations • Accelerates our strategy to expand distribu
Slide 9: Agricultural Observations and Outlook
9 Agricultural Observations and Outlook
Slide 10: Wild swings in agricultural commodity markets
10 Wild swings in agricultural commodity markets… Key crop prices declined rapidly during the last six weeks - World wheat supplies are ample - Timely rainfall across U.S. Midwest and non-threatening forecasts pressure corn and soybean prices • The 2016 Dec corn contract closed at $3.43 bu on July
Slide 11: As managed funds switch their outlook
11 … As managed funds switch their outlook Funds built large net long positions during the first half of 2016, following a disappointing South American harvest and fears of a La Niña weather impact on North America. - Corn net long was built to over 252,000 contracts on June 14. - Soybean net long
Slide 12: Phosphate and Potash Fertilizer Market Observations & Outlook
12 Phosphate and Potash Fertilizer Market Observations & Outlook
Slide 13: NPKs remain affordable and generate high ROIs
13 NPKs remain affordable and generate high ROIs Our plant nutrient affordability metric indicates that plant nutrients are very affordable The metric measured just .47 during the second week of June, the lowest level seen in our records dating to 2005 The metric registered .58 at the end of J
Slide 14: Demand Prospects, an example: Strong Dollar Advantage Brazil
14 Demand Prospects, an example: Strong Dollar ► Advantage Brazil Despite the strengthening of the real (July MTD 3.28/US$ vs. 4.05 in January), local currency prices of soybeans, sugar and coffee are at or near record levels today. This underpins recent upward revisions in total plant nutrient shi
Slide 15: Phosphates: Cautious sentiment in 1H 2016, positive demand prospects
15 Phosphates: Cautious sentiment persists in 1H 2016, but positive demand prospects in 2H and into 2017 Modest rebound in shipments in 2016… …before posting a more pronounced recovery in 2017 - Moderate prices - Strong uptake in India stemming from current good monsoon and above average reservoi
Slide 16: So Why Does the Market Feel 'Loose' in 2016?
16 So Why Does the Market Feel ‘Loose’ in 2016? Fewer Plant Closures and Unplanned Outages Map of world with highlighted countries describing facility restart GCT (Tunisia) rock production disruptions (~250k) Syrian war causes rock, and thus TSP disruptions (~150k) ICL (Israel) fire on superphos.
Slide 17: Solid medium term demand drivers and forecasts
17 Solid medium term demand drivers and forecasts Global shipments increased 3.9 mmt from 2010 to 2015 led by China, Brazil and SE Asia, but the growth was front-loaded during this period India was a major drag on global demand growth, but expected to be a major driver over the next 5 years Sh
Slide 18: Stable supply/demand balance
18 Stable (or perhaps a tightening) supply/demand balance China accounted for all of the net increase in phosphate supplies since 1995 China is embarking on permanent closure of some uncompetitive capacity - Possibility of a much more significant contraction in capacity, with the latest ideas ou
Slide 19: Potash: Caution on China contract delays, demand rebound forecast in 2017
19 Potash: Caution stoked by delays to the China contract settlement, but demand rebound forecast in 2017 We have left unchanged our shipment estimates for 2016 and tabled preliminary forecasts for moderate growth 2017 MOP shipments are forecast to total 61 to 63 million tonnes next year, led by
Slide 20: Acceleration of MOP imports expected in Brazil in 2H
20 Acceleration of MOP imports expected in Brazil in 2H 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 15 16F17F Mil Tonnes Brazil MOP Import Demand Source: CRU and Mosaic DAP 264 300 -12% 325 -19% MAP 1,228 1,149 7% 886 39% TSP 314 370 -15% 426 -26% Total
Slide 21: Solid medium term demand drivers and forecasts
21 Solid medium term demand drivers and forecasts Global shipments have increased 7.2 mmt from 2010 to 2015 Growth led by China and Brazil, with help from other regions India was a major drag on global K demand, but expected to be a positive driver over the next 5 years Shipments projected t
Slide 22: Stable supply/demand balance going forward
22 Stable supply/demand balance going forward 2016 sees a contraction of global potash capacity as the industry adjusts to new market conditions New greenfield plants are still expected to come on stream later in the decade, but few (if any) projects not already under construction appear likely
Slide 23: Thank You!
23 State of the Fertilizer Industry Piper Jaffray Global Agriculture Symposium Minneapolis, MN August 2, 2016 Andy Jung Director, Market and Strategic Analysis The Mosaic Company Thank You!
Mosaic — Piper Jaffray Global Agriculture Symposium 2016 on 6ix