Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q2 2018 Earnings Presentation
21 slides from Mosaic Company (the)'s earnings presentation, Aug 7, 2018
Slide 1: Earnings Conference Call – Second Quarter 2018
The Mosaic Company Earnings Conference Call – Second Quarter 2018 Joc O’Rourke, President and Chief Executive Officer Presenters: Laura Gagnon, Vice President Investor Relations Date: August 7, 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation 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 anticipated benefits and synergies of our acquisition of the global phosp
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted gross margins, adjusted earnings per share. For important information regarding the non-GAAP measures we present, see “Non-GAAP Financial Measures” in our August 6,
Slide 4: Executive Summary
Executive Summary Raising full year guidance: adjusted EBITDA(1) to $1.80 - 1.95 billion; adjusted EPS(1) to $1.45 - $1.80 ▪ Second quarter adjusted EBITDA(1) of $461 million and first half 2018 of $833 million Strong Cash ▪ Second quarter adjusted EPS(1) of $0.40 and first half 2018 of $0.60 Flow a
Slide 5: Improving Market Conditions: Phosphates
Improving Market Conditions: Phosphates Benchmark DAP Stripping Margin MMT Product Global Phosphate Shipments $ Tonne Calculated from Published Weekly Spot Prices DAP/MAP/NPS/TSP 70-72 350 73 Source: CRU and Mosaic 70.0 70 325 68 300 65 275 63 250 60 225 58 Source: Argus 200 55 Jan-14 Jan-15 Jan-16
Slide 6: Improving Market Conditions: Potash
Improving Market Conditions: Potash Potash Prices $ Tonne KCl Global Potash Shipments Million Tonnes KCl 475 70 67-69 450 Source: IFA, CRU and Mosaic 66.9 425 68 400 65 375 63 350 60 325 300 58 275 55 250 53 225 Source: Argus 200 50 175 48 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 10 11 12 13 14 15 16 17 1
Slide 7: Q2 2018 Results Overview
Q2 2018 Results Overview Finished Product Commentary and Highlights: • Phosphates: • Phosphates: Volume − 2.3 million tonnes − Blended rock costs below $60 per tonne Finished • Potash: − Florida cash costs of mined rock at $36 per tonne Product − 2.4 million tonnes − Adjusted gross margin negatively
Slide 8: Mosaic Fertilizantes Transformation on Track
Mosaic Fertilizantes Transformation on Track Mosaic Fertilizantes Transformation Actions taken in H1’18 Categories P&L Impact (US$ M) $300 expected to generate solidy over $100M of run-rate value Operations $19M $250 Commercial $14M $200 Procurement $6M $150 Supply Chain $10M $100 Organization $7M $
Slide 9: Mosaic Fertilizantes: Well Positioned
Mosaic Fertilizantes: Well Positioned Brazil Plant Nutrient Use 2015-17 Average Nitrogen Million Tonnes Soybean Production 28% Potash 130 39% 120 110 100 90 P&K 80 Phosphate accounts for 70 Source: ANDA 33% ~2/3rds of all 60 Brazil 50 U.S. Plant Nutrient Use Nutrient Use 40 2014/15-16/17 Average 30
Slide 10: Mosaic: Deleveraging Progress
Mosaic: Deleveraging Progress Short And Long Term Debt (in millions) $5,300 $5,200 $5,100 $5,000 $4,900 $4,800 $4,700 $4,600 $4,500 $4,400 $4,300 2017 Q1'18 Q2'18 End 2020 Target Achieved ~$500 million debt pay down targeted for 2018 by August 1 *See Additional Detail in the Appendix 10
Slide 11: Capital Allocation Philosophy
Capital Allocation Philosophy 11
Slide 12: Appendix
Appendix 12
Slide 13: Mosaic: Deleveraging Progress
Mosaic: Deleveraging Progress Dollars in Millions Dec 2017 Mar 2018 Jun 2018 Short‐term debt $ 6 $ 72 $ 20 Long‐term debt (including current portion) 5,222 5,074 4,798 * Net cash & cash equivalents 2,154 659 835 * Net debt 3,074 4,487 3,983 Net debt to adjusted EBITDA(1) 2.5 2.6 2.2 Calculation to a
Slide 14: Full Year 2018 Guidance
Full Year 2018 Guidance Consolidated Full-Year Guidance 2018 Adjusted EBITDA(1) $1.80 to $1.95 billion Adjusted Earnings Per Share(1) $1.45 to $1.80* Total SG&A $325 to $350 million Capital Expenditures $900 million to $1.1 billion *Reflects an increase of 34 million shares (to 386 million shares) a
Slide 15: Full Year 2018 Assumptions
Full Year 2018 Assumptions Consolidated Full-Year Assumptions 2018 Effective Tax Rate Mid 20% range Phosphates Sales Volume (mm tonnes*) 8.3 – 8.9 Potash Sales Volume (mm tonnes**) 8.3 – 8.9 Mosaic Fertilizantes Sales Volume (mm tonnes*) 8.7 – 9.5 * Tonnes = finished product tonnes ** Full year sale
Slide 16: Third Quarter 2018 Expectations
Third Quarter 2018 Expectations Third Quarter Expectations 2018 Phosphates Sales Volume (mm tonnes) 2.1 – 2.4 Phosphates Adjusted Gross Margin(1) / Tonne $75 - $85 Potash Sales Volume (mm tonnes) 2.2 - 2.5 Potash Adjusted Gross Margin(1) / Tonne $55 - $65 Mosaic Fertilizantes Sales Volume (mm tonnes
Slide 17: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (August 2018) Source: IFA, CRU and Mosaic DAP / MAP / NPS* / Low High (Numbers may not sum to total due to rounding) TSP (Million Tonnes) 2016 2017R 2018F 2019F 2019F Comments We have downgraded our forecast for 2018 by nearly 1.0 mmt, given our most rec
Slide 18: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (August 2018) Source: IFA, CRU and Mosaic Muriate of Potash Low High (Numbers may not sum to total due to rounding) Million Tonnes (KCl) 2016 2017R 2018F 2019F 2019F Comments Shipments are projected to rebound to 15.4 mmt in 2018 (~7.5 mmt production plus ~
Slide 19: China Phosphate Exports
China Phosphate Exports Source: IFA, CRU and Mosaic (Numbers may not sum to total due to rounding) Million Tonnes China Phosphate Exports China Phosphate Exports 12 1000 Tonnes Jan-Jun Source: China Customsc 3,000 10 2,500 8 2,000 6 1,500 4 1,000 2 500 0 0 10 11 12 13 14 15 16 17 2015 2016 2017 2018
Slide 20: Vale Fertilizantes Earn Out Example
Vale Fertilizantes Earn Out Example 2018 EARNOUT CALCULATION PER SHAREHOLDERS PURCHASE AGREEMENT US:BRL FX Rate MAP CFR Brazil Price 2018 Average FX Rate* 3.49 2018 Average MAP Price* 428 Target Average FX Rate 4.05 Target Average MAP Price 410 Difference (0.56) Difference 18 Denominator 0.05 Denomi
Slide 21: Sensitivity Table: Estimated Full Year Impacts
Sensitivity Table: Estimated Full Year Impacts ($ in millions) Impacts to PL: Adjusted EBITDA ∆(1) Adjusted EPS ∆(1) Average MOP Price --> $10/mt $85 $0.14 Average DAP Stripping Margin --> $10/mt $85 $0.17 Potash Sales Volume --> 100k mt $11 $0.02 Phosphates Sales Volume --> 100k mt $10 $0.02 Canadi