Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — Investor Presentation (July 2013)
32 slides from Mosaic Company (the)'s investor presentation, Jul 29, 2013
Slide 1: The Mosaic Company Investor Presentation Third Calendar Quarter, 2013
The Mosaic Company Investor Presentation Third Calendar Quarter, 2013 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor 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 future financial and operating results. Such statements are based upon
Slide 3: Investment Highlights
Investment Highlights Well positioned to benefit from projected positive long term fundamentals Largest combined phosphate and potash player in the world High quality assets Scale Geographically diverse Leading position in premium products Strong financial track record Robust operating cash flows Cl
Slide 4: The Food Story Remains Compelling
The Food Story Remains Compelling Considerations • Pent up demand with 2012/13 US Corn exports down 54% year-to-date • The likely case builds back one-half of the inventory drawdown this year • Agricultural commodity prices likely to remain elevated in 2013/14 12/13F Mil Tonnes World Grain & Oilseed
Slide 5: Mosaic's Role in Feeding the World
Mosaic’s Role in Feeding the World Need to Improve Yield Population Growth Long-Term Sustainability Limited arable land Optimum use of crop nutrients is essential to growing the food the world needs today and tomorrow Crop nutrients directly account for 40 to 60 percent of crop yields World populati
Slide 6: Focused on Phosphate & Potash
Focused on Phosphate & Potash Agriculture Crop Nutrition Phosphate & Potash Mosaic is in great position to be the world’s leading crop nutrition company • Attractive sector • Best business within agriculture • Most compelling nutrients
Slide 7: Top Global Potash Producer
Top 4 Global Potash Producer Estimated long-term growth 2.5 to 3.5 percent Potash: The Regulator Obtained through underground or solution mining 80 percent of reserves in Canada and Russia Over a century of reserves 10.7 million tonnes of operational capacity One of the largest potash producers in t
Slide 8: The Leading Global Phosphates Producer
The Leading Global Phosphates Producer Estimated long-term growth 2.5 to 3.0 percent Phosphate: The Energizer Sedimentary and igneous formations Large economically viable reserves: North Africa, Western China, Central Florida and Russia Largest producer of concentrated phosphate crop nutrients with
Slide 9: A Global Presence
A Global Presence • Ship product to approximately 40 countries • Member of Canpotex and PhosChem export associations • Balance seasonal demand to improve operating efficiency • Market intelligence to improve decision making Mines and Chemical plants in stable geopolitical regions Global distribution
Slide 10: MicroEssentials Growth
MicroEssentials ® Growth Source: Mosaic North America Brazil MicroEssentials ® Share of Phosphate Sales (Fiscal Year) 1.7% 3.3% 5.5% 6.9% 9.3% >10% 0% 2% 4% 6% 8% 10% 12% 0.7% 0.7% 1.7% 4.0% 5.0% >6% 0% 1% 2% 3% 4% 5% 6% 7%
Slide 11: Operating Cash Flow vs. Investments
Operating Cash Flow vs. Investments $ In Billions CAPITAL EXPENDITURES AND NET OPERATING CASH FLOW
Slide 12: Investing for Growth
Investing for Growth The company expects to generate appropriate risk-adjusted returns for each investment. * Not fully approved investments Calendar year $ in billions $0.0 $0.5 $1.0 $1.5 Potash Mines Ma'aden JV Ammonia Plant* International & Supply Chain*
Slide 13: Surplus Cash & Capacity
Surplus Cash & Capacity $2 billion of Excess Cash $3 billion of Debt Capacity Share Repurchases ARO Escrow Strategic Investments *See additional detail on reconciliation at back of slides
Slide 14: Our Strategic Priorities
Our Strategic Priorities People Growth Market Access Innovation Total Shareholder Return
Slide 15: 2013 – A Year of Success! Accomplishments
2013 – A Year of Success! Accomplishments New safety record Potash expansions on track on budget Benefits of tolling agreement reversion Northern Promise JV (Saudi Arabia) Continued MicroEssentials momentum South Fort Meade productivity AEIS – a stepping stone to new permits Strategic review complet
Slide 16: Strategic Priority: Shareholder Value
Strategic Priority: Shareholder Value Execute our strategy Deliver strong value Return capital to shareholders Our TSR goal: Top 3 among 10 global crop nutrient peers
Slide 17: Supplemental Mosaic Information
Supplemental Mosaic Information
Slide 18: Potash Segment Highlights
Potash Segment Highlights In millions, except MOP price Q4 FY13 Q3 FY13 Q4 FY12 Net sales $1,031 $758 $1,037 Gross Margin $489 $308 $514 Percent of net sales 47% 41% 50% Operating earnings $445 $216 $464 Sales volumes 2.6 1.8 2.0 Production volume 2.5 2.0 1.9 Production operating rate 95% 78% 85% Av
Slide 19: Phosphates Segment Highlights
Phosphates Segment Highlights In millions, except DAP price Q4 FY13 Q3 FY13 Q4 FY12 Net sales $1,670 $1,502 $1,789 Gross Margin $290 $266 $322 Percent of net sales 17% 18% 18% Operating earnings $198 $197 $224 Sales volumes 2.9 2.6 2.9 NA production volume 2.1 2.1 2.1 Finished product operating rate
Slide 20: Category Guidance – Calendar Q3 2013 (Potash)
Category Guidance – Calendar Q3 2013 Financial Guidance Summary Potash Q3 Sales volume 1.8 – 2.1 million tonnes Q3 MOP selling price $330 - per tonne Q3 Gross margin rate in the mid to high 30 percent range Q3 Operating rate below 75 percent Turnaround days Curtailing production at the Colonsay mine
Slide 21: Category Guidance – Calendar Q3 2013 (Phosphates, Corporate)
Category Guidance – Calendar Q3 2013 Financial Guidance Summary Phosphates Q3 Sales volume 2.9 – 3.3 million tonnes Q3 DAP selling price $430 - $465 per tonne Q3 Operating rate in the mid 80 percent range Q3 Gross margin rate to be flat with last quarter Corporate Total SG&A – Q3CY13 $95 - 105 milli
Slide 22: Potash Expansion
Potash Expansion • Expansions on time, on budget • Postpone indefinitely remaining two million tonne expansions FISCAL YEAR CUMULATIVE CAPACITY ADDITIONS MILLION TONNES CONSTRUCTION IN PROGRESS REVERSION OF TOLLING AGREEMENT EXISTING AND CONSTRUCTION COMPLETE
Slide 23: Market Data and Outlook
Market Data and Outlook
Slide 24: The Food Story by the Numbers
The Food Story by the Numbers The Food Story by the Numbers Long Term Grain and Oilseed Demand Farmers will need to harvest record area and reap ever increasing yields in order for global grain and oilseed supply to keep pace with projected demand • Steady and predictable demand growth • Population
Slide 25: Crop Nutrient Affordability Near Record Levels
Crop Nutrient Affordability Near Record Levels Considerations • Revenue per acre matters! • Strong farm income even with lower commodity prices • Near record crop nutrient affordability 0.50 0.75 1.00 1.25 1.50 1.75 Plant Nutrient Affordability Plant Nutrient Price Index / Crop Price Index Affordabi
Slide 26: North America
North America Fears of large drought-related declines prove unfounded Outstanding fall and spring application seasons Outstanding North American shipments Source: Mosaic Estimates
Slide 27: Brazil
Brazil Record Brazilian shipments and P&K import forecasts for 2013 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 12E 13F Mil Tonnes Brazil Processed Phosphate Import Demand TSP MAP/MES DAP Source: Fertecon, ANDA and Mosaic 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 12E 13F Mil Tonnes KCl Brazil Muriate of Potas
Slide 28: India Subsidy Changes Stunt P&K Demand Growth
India Subsidy Changes Stunt P&K Demand Growth • Indian Nutrient Based Subsidy program increased the farm price of: - MOP by 280% - DAP by 160% - But left the price of urea flat • Subsidy changes cause a serious nutrient imbalance - Over application of N - Under application of P&K - Target N-P-K rati
Slide 29: P: Will supply keep pace with demand?
P: Will supply keep pace with demand? Long Term Prospects • Positive demand outlook - 2.3%-3.1% CAGR - Most likely scenario: Shipments increase from 58 mmt in 2010 to 75 mmt in 2020 • New capacity outpaces demand growth in near term - Demand growth stunted by India - China builds its last plants - M
Slide 30: K: Will demand keep pace with supply?
K: Will demand keep pace with supply? Long Term Prospects • Positive demand outlook - 3.3%-3.4% CAGR - Most likely scenario: MOP shipments increase from 53 mmt in 2010 to 71 mmt in 2020 • Significant new capacity this decade (most likely scenario) : - MOP operational capacity increases from 60 mmt i
Slide 31: Mosaic
Mosaic
Slide 32: Selected Non-GAAP Financial Measures and Reconciliations
Selected Non-GAAP Financial Measures and Reconciliations FY12 FY11 FY10 FY09 FY08 As of May 31, 2012 US$ Millions US$ Millions Net earnings 1,930 $ 2,515 $ $ 2,350 $ 2,083 $ + Interest (income) expense, net (19) + Income tax expense (benefit) + Depreciation, depletion & amortization EBITDA 3,130 $ 3