Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q3 2015 Earnings Presentation
20 slides from Mosaic Company (the)'s earnings presentation, Nov 3, 2015
Slide 1: Earnings Conference Call – Third Quarter 2015
The Mosaic Company Earnings Conference Call – Third Quarter 2015 November 3, 2015 Joc O’Rourke, President and Chief Executive Officer Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 the Ma’aden joint venture), the a
Slide 3: Inherent Seasonality and Cyclicality
Inherent Seasonality and Cyclicality Mosaic’s Actions: Controlling costs and executing well Effectively allocating capital Maintaining leadership and discipline Macro Environment: Challenges across geographies FX headwinds Import tariffs Cyclicality presents opportunities Positive Secu
Slide 4: Visible Strategic Progress
Visible Strategic Progress $0.70 Q3 2014 vs. Q3 2015 Adjusted EPS $0.65 $0.03 $0.04 $0.02 $0.60 $0.02 $0.03 $0.55 $0.50 $0.56 Benefit of Mosaic’s $0.62 $0.45 Strategic Initiatives: $0.10/share $0.40 $0.35 2014 Q3 Adjusted K Costs International SG&A Share Count All Other 2015 Q3 Adjusted EPS Distribu
Slide 5: Financial Results Review
Financial Results Review
Slide 6: Phosphates Segment Highlights
Phosphates Segment Highlights $ In millions, except DAP price Q3 2015 Q2 2015 Q3 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $1,032 $1,385 $1,133 300 Gross margin $199 $296 $236 250 Percent of net sales 19% 21% 21% 200 Operating earnings $157 $259 $188 150 Sales volumes 2.1 2.8 2.2 100 NA
Slide 7: Potash Segment Highlights
Potash Segment Highlights $ In millions, except MOP price Q3 2015 Q2 2015 Q3 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $492 $730 $593 100 Gross margin $97 $295 $154 80 Percent of net sales 20% 40% 26% 60 Operating earnings $66 $259 $69 40 Sales volumes 1.6 2.3 1.8 20 Production volume 1
Slide 8: International Distribution Segment Highlights
International Distribution Segment Highlights $ In millions, except Blends price Q3 2015 Q2 2015 Q3 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $825 $637 $684 250 Gross margin $61 $29 $51 200 Percent of net sales 7% 4% 7% 150 Operating earnings $44 $8 $30 100 Sales volumes 2.0 1.5 1.4 50
Slide 9: Meaningful Share Repurchases; Unchanged Capital Priorities
Meaningful Share Repurchases; Unchanged Capital Priorities ($ in billions) Capital Allocation: Three Year Summary* 18% 40% Lower Share Price = 13% Higher Bar for Total: 29% Investments $11.6 Billion Maintenance Organic Growth Investment Commitments Return to Shareholders (dividends & repurchases) *
Slide 10: Financial Guidance Summary
Financial Guidance Summary Phosphates 2015 Q4 Sales volumes 1.9 to 2.2 million tonnes Q4 DAP selling price $410 to $440 per tonne Q4 Gross margin rate High Teens Q4 Operating rate Around 80 percent International Distribution 2015 Q4 Sales volumes 1.3 to 1.6 million tonnes Q4 Gross margin per tonne $
Slide 11: Financial Guidance Summary
Financial Guidance Summary Potash 2015 Q4 Sales volumes 1.8 to 2.1 million tonnes Q4 MOP selling price $235 to $255 per tonne Q4 Gross margin rate Mid 20 percent range Q4 Operating rate Around 70 percent Full year Canadian Resources Taxes and Royalties $265 to $295 million Full year brine management
Slide 12: Manageable Outlook for Potash; Compelling Phosphates Dynamics
Manageable Outlook for Potash; Compelling Phosphates Dynamics MMT Product Global Phosphate Shipments Global Potash Shipments Mil Tonnes KCl DAP/MAP/NPS/TSP 66-68 61-63 70 65 Source: CRU and Mosaic 65.5 Source: CRU and Mosaic 59.1 65 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 00 01 02 03 04 05 06 0
Slide 13: Closing Commentary
Closing Commentary
Slide 14: Compelling Free Cash Flow Growth Even at Today's Nutrient Prices
Compelling Free Cash Flow Growth Even at Today’s Nutrient Prices Free cash flow* positive even at current low prices Benefits of investments expected to drive meaningful growth in 2017 Significant upside leverage to higher prices • Free cash flow reconciliation in the appendix. 14
Slide 15: Thank You
Thank You The Mosaic Company Earnings Conference Call – Third Quarter 2015 November 3, 2015
Slide 16: Appendix
Appendix
Slide 17: Raw Material Cost Detail
Raw Material Cost Detail Q3 2015 Percent Ammonia ($/tonnes) Realized in COGS $418 Average Purchase Price $448 Sulfur ($/ton) Realized in COGS $151 Average Purchase Price $152 Phosphate rock (realized in COGS) ('000 tonnes) U.S. mined rock 3,427 95% Purchased Miski Mayo Rock 154 4% Other Purchased Ro
Slide 18: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers(a) 2015 Q3 % Impact on 2015 Q3 Pre-Tax Change Margin % Segment EPS Impact Actual Impact Actual Margin Marketing MOP Price ($/tonne)(b) $265 $50 20% 15% $74 $0.17 Potash Volume (thousand tonnes) 1,626 500 20% 14% $71 $0.17 DAP Price ($/tonne) $451 $50 19% 10% $102
Slide 19: Phosphate Raw Material Trends
Phosphate Raw Material Trends Ammonia Sulfur ($/tonne) ($/tonne) 700 175 600 150 500 125 400 100 300 75 200 50 100 25 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2014 2014 2014 2015 2015 2015 2015F 2013 2014 2014 2014 2014 2015 2015 2015 2015F Realized Costs Market Prices Rea
Slide 20: Reconciliation: Adjusted EPS and Free Cash Flow
Reconciliation: Adjusted EPS and Free Cash Flow In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company has presented adjusted earnings per share and free cash flow, each of which is a non-GAAP financial measure. Generally, a