Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — FY2018 Earnings Presentation
22 slides from Mosaic Company (the)'s earnings presentation, Feb 26, 2019
Slide 1: Earnings Conference Call – Fourth Quarter & Full Year 2018
The Mosaic Company Earnings Conference Call – Fourth Quarter & Full Year 2018 Joc O’Rourke, President and Chief Executive Officer Presenters: Clint Freeland, Senior Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations Date: February 26, 2019
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 February
Slide 4: Strong Quarter & Full Year Results
Strong Quarter & Full Year Results $ in million, except per share 4Q 2018 4Q 2017 Diluted Earnings Per Share (EPS) $0.29 $(1.23) Adjusted diluted EPS(1) $0.77 $0.34 Net Income $112 $(431) Adjusted EBITDA(1) $590 $366 $ in million, except per share Full Year 2018 Full Year 2017 Diluted Earnings Per S
Slide 5: Executive Summary
Executive Summary Accomplishments at all of our businesses were behind our strong 2018 performance and are expected to drive continued growth in 2019. ▪ Delivered $227 million in operating earnings and $410 million in adjusted EBITDA(1) in 2018. Mosaic Fertilizantes ▪ Expect to reach our $275 millio
Slide 6: Balanced Supply & Demand in 2019
Balanced Supply & Demand in 2019 Benchmark DAP Stripping Margin $ Tonne Calculated from Published Weekly Spot Prices $ Tonne KCI Potash Prices 350 475 450 325 425 400 375 300 350 325 275 300 275 250 250 225 225 200 Source: Argus 175 Source: Argus 200 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-14
Slide 7: Mosaic Fertilizantes Transformation Progress
Mosaic Fertilizantes Transformation Progress $ in millions Cumulative Synergy Capture By Quarter 2018-2019 $300 $3 ($ in millions except per tonne) 2018 2017 Sales Volumes (mm tonnes) 9.13 6.02 $250 $14M Pro Forma Sales Volumes 9.3 $200 $29 Operating Earnings $227 $6M $63 $150 $275 Pro Forma Operati
Slide 8: Phosphates
Phosphates ($ in millions except per tonne) 2018 2017 Sales Volumes(2) (mm tonnes) 8.4* 9.5 *reflects idling of Plant City Operating Earnings $415 $192 Adjusted EBITDA(1) $872 $555 Q4 Sales Volumes (mm tonnes) 1.9* 2.5 Q4 Gross Margin $ / Tonne $81 $53 For the fourth quarter 2018: • Blended rock cos
Slide 9: Potash
Potash ($ in millions except per tonne) 2018 2017 Sales Volumes (mm tonnes) 8.8* 8.6 Operating Earnings $454 $281 Adjusted EBITDA(1) $805 $581 Q4 Sales Volumes (mm tonnes) 2.3 2.2 Q4 Gross Margin $ / Tonne $88 $51 • MOP cash costs of production were $72 / tonne in the quarter, down from $87 / tonne
Slide 10: Visible Cost Controls
Visible Cost Controls $ Per Tonne Selling, General & Administrative Expenses 20 18 Includes acquisition of 16 Vale Fertilizantes operations as of 14 January 8, 2018. 12 10 8 2013 2014 2015 2016 2017 2018 *Tonnes do not include the intra-segment volume eliminations, which are negative impacting SG&A/
Slide 11: Full Year 2019 Guidance
Full Year 2019 Guidance Consolidated Full-Year Guidance 2019 Adjusted EBITDA(1)(2) $2.2 to $2.4 billion Adjusted Earnings Per Share(1) $2.10 to $2.50 Adjusted EBITDA(1) Trends 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2016 2017 2018 2019 (1)See Non-GAAP Financial Measures for additional information (2) The defini
Slide 12: Available Capital
Available Capital Consolidated Full-Year Estimates 2019 Adjusted EBITDA(1) $2.2 to $2.4 billion Less: Cash Interest Expense ~$160 million Cash Taxes ~$60 million Sustaining Capital ~$720 million Available $1.26 to $1.46 billion 2019 Capital Plan Common Stock Dividend $0.20 / share up from $0.10 / sh
Slide 13: Appendix
Appendix 13
Slide 14: Full Year 2019 Modeling Assumptions
Full Year 2019 Modeling Assumptions Full-Year Assumptions 2019 DD&A ~$950 million Brine Management Costs ~$140 million Total SG&A ~$350 million Effective Tax Rate Low to mid 20’s % BRL to USD Average Exchange Rate 3.7 Phosphates Sales Volume (mm tonnes*) 8.6 – 9.0 Potash Sales Volume (mm tonnes*) 9.
Slide 15: First Quarter 2019 Modeling Assumptions
First Quarter 2019 Modeling Assumptions First Quarter Expectations 2019 Phosphates Sales Volume (mm tonnes) 1.6 – 1.9 Phosphates Adjusted Gross Margin(1) / Tonne $40 - $50 Potash Sales Volume (mm tonnes) 1.7 - 2.0 Potash Adjusted Gross Margin(1) / Tonne $90 - $100 Mosaic Fertilizantes Sales Volume (
Slide 16: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (February 2019) Source: IFA, CRU and Mosaic Muriate of Potash Low High (Numbers may not sum to total due to rounding) Million Tonnes (KCl) 2017R 2018E 2019F 2019F Comments Shipments came in below expectations in 2018 due to a late start to winter stockpilin
Slide 17: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (February 2019) Source: IFA, CRU and Mosaic DAP / MAP / NPS* / TSP Low High (Numbers may not sum to total due to rounding) (Million Tonnes) 2017R 2018E 2019F 2019F Comments Our 2018 estimate has been revised lower by 600,000 tonnes after a very slow star
Slide 18: Vale Fertilizantes Earn Out Example
Vale Fertilizantes Earn Out Example • Average FX rate is calculated using the weekly PTAX dollar buy and sell rate as published by the Central Bank of Brazil. • 2019 Target Average FX rate is 3.75 • Average MAP price is calculated using the weekly MAP C&F Brazil price as published by CRU. • 2019 Tar
Slide 19: Sensitivity Table: Estimated Full Year Impacts
Sensitivity Table: Estimated Full Year Impacts Impacts to PL: ($ in millions) Adjusted EBITDA Δ(1) Adjusted EPS Δ(1) Average MOP Price --> $10/mt $94 $0.14 Average DAP Stripping Margin --> $10/mt $90 $0.17 Potash Sales Volume --> 100k mt $14 $0.02 Phosphates Sales Volume --> 100k mt $12 $0.02 Canadi
Slide 20: Brazilian Tailings Dams
Brazilian Tailings Dams Height CRI(1) Mine Site Dam ID Construction Method* Our Mosaic Fertilizantes operations in Brazil include 11 tailings dams. With the (m) (Risk) exception of the B1B4 dam at our Araxá mine, all have current certificates of stability B1 35 Low Downstream issued by external cons
Slide 21: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Consolidated Earnings (in millions) 2018 2017 2016 Consolidated net earnings attributable to Mosaic $470 $(107) $298 Less: Consolidated net interest expense, net $(166) $(138) $(112) Plus: Consolidated depreciation, depletion and $884 $665 $711 amortization Plus:
Slide 22: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Mosaic Fertilizantes Earnings (in millions) 2018 2017 2017 Proforma Operating earnings $227 $63 $(35) Plus: Depreciation, depletion and 158 17 137 amortization Plus: Foreign exchange gain (loss) (85) (22) (27) Plus: Other income (expense) (1) (4) (16) Less: Earnin