Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Investor Presentation (November 2014)
25 slides from Mosaic Company (the)'s investor presentation, Nov 10, 2014
Slide 1: Why Now? Why Mosaic?
Why Now? Why Mosaic? November 2014 The Mosaic Company
Slide 2: Forward-looking statements
Click to edit Master title style 2 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 Northern Promise Joint Venture, the acquisition and assumption of cer
Slide 3: Investment Thesis
Click to edit Master title style 3 • In this cyclical industry, the positive secular trends continue. • Long-term value creation is predicated on effective capital deployment. • Capital deployment near the trough of the cycle maximizes value creation: – Depressed investment values – Increasing lever
Slide 4: Why Now?
Why Now?
Slide 5: Long-term Attractive Secular Trends
5 Long-term Attractive Secular Trends 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 775 800 825 850 875 900 925 950 975 80 85 90 95 00 05 10 15 20 25 30 MT Ha Mil Ha World Harvested Area and Average Yield Actual Area Forecast Area Actual Yield Required Yield 1980-10 Yield Trend Source: USDA and Mosai
Slide 6: Near-term Grain and Oilseed Stocks
Near-term Grain and Oilseed Stocks 6 Wide range of potential outcomes for 2015 606 579 494 407 469 462 426 438 513 570 549 537 521 586 626 15% 18% 20% 23% 25% 28% 30% 350 400 450 500 550 600 650 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E 15F Million Tonnes World Grain & Oilseed Stocks USDA Mosaic
Slide 7: Uncertainty in G&O Supply = Agriculture is Cyclical
7 0 1 2 3 4 5 6 7 8 9 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 $ BU Corn Price Daily Close of Front Month Futures Contract Source: CME, CBOT Year Uncertainty in G&O Supply = Agriculture is Cyclical
Slide 8: Valuations are Cyclical
8 $- $20 $40 $60 $80 $100 $120 $140 $160 MOS Source: Mosaic Valuations are Cyclical Bubble
Slide 9: Why Mosaic?
Why Mosaic? —E Mes
Slide 10: Phosphates: Scale and Strong Cost Position
Phosphates: Scale and Strong Cost Position Largest and lowest quartile producer M os aic F L M os aic L A 0 50 100 150 200 250 300 350 400 450 500 550 600 0 5 10 15 20 25 30 35 40 US$/Tonne Million Tonnes 2014 DAP Industry Cost Curve fob Port Source: CRU and Mosaic 10 Top 10 Phosphate Producers in 2
Slide 11: Potash: Scale and Improving Cost Position
Based on 2013 production K 2 O production based on M OP, SOP, and KM S production Source: Com pany reports, IFA, CRU, Fertecon and M osaic 0.0 2.0 4.0 6.0 8.0 Uralkali Mosaic PotashCorp Belaruskali K+ S Israel Chemical Qinghai Salt Lake Agrium APC Vale Million Nutrient Tonnes Potash: Scale and Impro
Slide 12: Consistent Strategy; Consistent Execution
Click to edit Master title style 12 Consistent Strategy; Consistent Execution + =
Slide 13: Pulling All The Levers
Pulling All The Levers 13 Volume x Margin = Value Grow by optimizing: • Operations • Production Mix • Product Mix Grow through: • Brownfield Potash Expansions • Strategic investments: • CF Phosphates • Ma’aden • ADM
Slide 14: Phosphate Growth Investments
14 Phosphate Growth Investments MicroEssentials DAP/MAP
Slide 15: Phosphates: Investing for Growth
Phosphates: Investing for Growth 15 $913 $1,568 $145 $200 $60 $165 $85 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 2013 Gross Margin Ma'aden CF Phosphate business ADM distribution business Raw materials (CF NH3, debottle, sulfur) MicroEssentials growth 2018 Gross Margin Forecast Phosp
Slide 16: Potash: Investing for Growth
Potash: Investing for Growth 16 $1,104 $1,579 $65 $115 $295 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2013 Gross Margin Cost Savings Optimization of assets Growing volumes 2018 Gross Margin Forecast Potash Gross Margin Impact Million $ Source: Mosaic * Assumptions in the appendix. Su
Slide 17: Sum of the Parts
Sum of the Parts 17 $2,017 $3,167 $655 $475 $20 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 $3,200 $3,400 2013 Gross Margin Phosphates Initiatives Potash Initiatives Corporate Cost Savings 2018 Gross Margin Forecast Gross Margin Impact Source: Mosaic Million $ * Assumptions in the appendix. Sub
Slide 18: Increasing Leverage to the Upcycle
Click to edit Master title style 18 10.7 12.2 7.4 8.9 2.3 3.5 0 5 10 15 20 25 30 2013 2018 Forecast Finished Product Operating Capacity Potash Phosphates MicroEssentials® Million Tonnes Increasing Leverage to the Upcycle Source: Mosaic * Assumptions in the appendix. Subject to risks and uncertaintie
Slide 19: Including Capital Return to Shareholders
19 Including Capital Return to Shareholders Returned nearly $3 billion to shareholder in 2014 through dividends and repurchases. Repurchased $2.6 billion year-to-date as of October 27, 2014 $3 billion in cash and cash equivalents as of the end of Q3’2014 Includes $1 billion committed to ADM
Slide 20: Future Capacity per Share: Volume
20 11 25 4 34 23 6 35 0 10 20 30 40 50 60 70 80 O p e rati n g Ca p a cit y T o n n e s p e r 1 0 0 0 s h a re s Capacity per Share Share Repurchases 2013 2018 Forecast Phosphate Capacity Increase Potash Capacity Increase * * Assumptions in the appendix. Based on current BOD authorization, not inclu
Slide 21: Future Gross Margin per Share: Volume and Rate
21 Source: Mosaic $4.7 $1.7 $1.1 $1.5 $9.0 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 2013 Phosphates Potash Share Repurchase / Corporate * 2018 Forecast Future Gross Margin per Share: Volume and Rate +91% 91% upside excluding any cyclical improvement • Assumptions in the appendix. Based on current BOD autho
Slide 22: Analyst Day 2015 – March
22 Analyst Day 2015 – March 30 - 31 The Mosaic Company
Slide 23: Assumptions
Phosphates: Ma’aden JV contribution embedded in gross margin, actual reporting is as an equity investment under U.S. GAAP. ADM business includes an incremental, 2 million tonnes of blended product plus synergies. Raw material savings based on increased NH3 manufacturing based on de-bottlenecki
Slide 24: Global Phosphate Shipment Forecasts by Region
24 Global Phosphate Shipment Forecasts by Region Million Tonnes DAP/MAP/TSP 2013 Oct Low 2014E Oct High 2014E Jul Low 2015E Jul High 2015E Oct Low 2015F Oct High 2015F Comments China 21.5 21.8 22.0 21.6 21.9 21.8 22.1 Moderate growth forecast for 2014 is unchanged. Forecast for 2015 revised higher d
Slide 25: Global Potash Shipment Forecasts by Region
25 Global Potash Shipment Forecasts by Region Muriate of Potash Million Tonnes (KCl) 2013 Oct Low 2014E Oct High 2014E July Low 2015F July High 2015F Oct Low 2015F Oct High 2015F Comments China 11.0 12.0 12.1 12.3 12.6 12.4 12.6 Shipments are projected to total more than 12.0 mmt in 2014 and ~12.5 m