Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Investor Day (September 2020)
27 slides from Mosaic Company (the)'s investor day presentation, Sep 18, 2020
Slide 1: Analyst Presentation: Chapter 1 – North American Operations
The Mosaic Company Analyst Presentation: Chapter 1 North American Operations Date: September 18, 2020
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This release contains forward-look ing statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about proposed or pending future transactions or strategi
Slide 3: Transformational Performance
Transformational Performance • Operating costs are down; productivity is up • Functions are more efficient and effective • Strong financial foundation • Fortified position in key agricultural regions Socially Responsible
Slide 4: Mosaic's Strategic Priorities
Mosaic’s Strategic Priorities North America Drive Functional Transformation Collaboration and Efficiency Uncover and pursue new opportunities to improve the profitability and Rethink and re-engineer outdated and inefficient processes, and competitiveness of our Potash and Phosphates businesses conti
Slide 5: Drive Functional Collaboration and Efficiency
Drive Functional Collaboration and Efficiency September 18, 2020 North America Transformation South America November 10, 2020 Growth Engine Grow and Strengthen Our Product Portfolio December 2020 Act Responsibly February 2021 Optimize Operating Assets and Capital Management 5
Slide 6: 2023 Operating Driver Targets
2023 Operating Driver Targets TTM 2021 2023 6/30/20 target target Potash Phosphates Cash cost of U.S. mined rock ($/tonne) (1) $38 $39 $34 Cash costs of conversion ($/tonne) (1) $64 $56 $51 Cash costs of production (excluding brine) – MOP ($/tonne) (1) $68 $62 $49 Cash brine management costs ($ in m
Slide 7: Transformation: Continuous Improvement
Transformation: Continuous Improvement Mosaic has been successfully using a formalized transformation process across the business for over five years. Ideas Validation Planning Execution Measure THOUSANDS HUNDREDS $1B+ of ideas of ideas executed in benefits Transformation remains critical to reach 2
Slide 8: Expect Strong Fall and Spring in North America
Expect Strong Fall and Spring in North America Fertilizer costs down from prior years Current crop prices attractive Corn: costs / acre $150 $100 $50 $0 2018 2019 2020 MAP MOP NH3 Soybeans: costs / acre $60 $40 $20 Source: CME $0 2018 2019 2020 MAP MOP NH3 • Using retail process via DTN as of 8/14/2
Slide 9: Mosaic's Strategic Priorities
Mosaic’s Strategic Priorities North America Drive Functional Transformation Collaboration and Efficiency Uncover and pursue new opportunities to improve the profitability and Rethink and re-engineer outdated and inefficient processes, and competitiveness of our Potash and Phosphates businesses conti
Slide 10: North American Supply Chain Overview: Over $1 billion in annual expenditures
North American Supply Chain Overview: Over $1 billion in annual expenditures 10
Slide 11: Mosaic Supply Chain – Integrated Operations
Mosaic Supply Chain – Integrated Operations ✓ Yard and Transportation Management Systems Connect the Create Visibility ✓ Inventory sensors and measurements Unconnected ✓ Tactical Planning & Execution Years 1-2 ✓ Railcar Fleet Optimization Advanced Decision Making / ✓ Transportation Loading/Freight O
Slide 12: Vision for Integrated Supply Chain Operations
Vision for Integrated Supply Chain Operations Improve efficiency and sustainability through better decision making • Centralized supply chain operations center • Fully automated and digitized supply chain performance management systems • Fully integrated logistics control centers with full visibilit
Slide 13: Shared Service Center
Shared Service Center Savings are imbedded in business unit cost targets and corporate level SG&A target. Leverage Platform for knowledge from Improved quality best practices establishing and consistency back office Brazil Shared at lower cost Solutions Center Continuous Low costs to Facilitates imp
Slide 14: Mosaic's Strategic Priorities
Mosaic’s Strategic Priorities North America Drive Functional Transformation Collaboration and Efficiency Uncover and pursue new opportunities to improve the profitability and Rethink and re-engineer outdated and inefficient processes, and competitiveness of our Potash and Phosphates businesses conti
Slide 15: North America Business Unit Transformation and NextGen
North America Business Unit Transformation and NextGen Transformation NextGen is our label for technology driven, is continuous revolutionary change. improvement, The mining revolution focuses on automation, tele-remote evolutionary change. and full autonomous operation and process equipment through
Slide 16: Potash Cost Improvement
Potash Cost Improvement Potash ($ in mm) 2021 2022 2023 K3 Brine management EBITDA* impact $50 $100 $100 Next-Gen mining EBITDA* impact $0 $10 $25 Colonsay idling EBITDA* impact $100 $100 $100 Growth Capital Spending - K3 $190 $80 $55 Growth capital spending - Opportunity $10 $5 $5 Potash MOP Costs
Slide 17: K3 Project & Transition Milestone Overview
K3 Project & Transition Milestone Overview K3-K2 Belt/North K3 Fully Operational First 4-Rotor K3-K1 Belt South Headframe Hoist/Shaft Operational Operational Operational (Dec. 2023) Operational Q3 2019 Q4 2020 Q1 2022 Dec. 2023 2018 2019 2020 2021 2022 2023 Decommissioning Baseline K1 Mine Completes
Slide 18: K3 Second Headframe
K3 Second Headframe Photo credit: Kevin Weedmark, The World-Spectator 18
Slide 19: MOP Fixed Costs and Cost / tonne sensitivity
MOP Fixed Costs and Cost / tonne sensitivity MOP Fixed Cash Cost Progression $500 Assumptions for 2023 Target $450 $400 2023 Cash $ mm Costs $350 $300 Fixed $300 $250 Variable $105 $200 Tonnes 8.3 mm $150 CAD/USD .76 $100 $50 $0 2015 2016 2017 2018 2019 2023 19
Slide 20: Phosphate Mining
Phosphate Mining Phosphate Mining ($ in mm) 2021 2022 2023 Transformation EBITDA* impact $35 $10 $30 NextGen Mining EBITDA* impact $5 $25 $30 Miski Mayo Initiatives EBITDA* impact $5 $10 $15 Growth capital spending $5 $10 $0 Reserve Expansion Capital Spending $50 $40 $210 $53.0 Florida Mined Rock Co
Slide 21: Integrated Operations Center – Florida Mining
Integrated Operations Center – Florida Mining 21
Slide 22: Phosphate Concentrates
Phosphate Concentrates Phosphate Conversion ($ in mm) 2021 2022 2023 Transformation EBITDA* impact $60 $55 $60 NextGen Concentrates EBITDA* impact $5 $20 $40 Growth capital spending $10 $20 $10 $90 Phosphates Conversion Costs $88 New Definition $86 Full Cost per Tonne $84 2019 $82 $80 2Q20 $78 $76 $
Slide 23: P Conversion Cost / Tonne Sensitivity
P Conversion Cost / Tonne Sensitivity Assumptions for Dry Tonnes Dry Product / Tonne of P2O5 2023 Target 3.5 2023 Cash 3.0 $ mm 3.0 Costs 2.5 Fixed $430 2.5 2.4 2.2 2.1 Variable $55 2.0 2.0 1.9 Dry Tonnes 9.4 mm 1.5 P2O5 Tonnes 4.36 mm 1.0 Mosaic typically granulates all 0.5 phosphoric acid, but the
Slide 24: North America Business Unit Sources of Adjusted EBITDA Growth
North America Business Unit Sources of Adjusted EBITDA* Growth Integration NextGen Initiatives Esterhazy K3 Transition Supply Chain Optimization Transformation * See non GAAP financial measures 24
Slide 25: Adjusted EBITDA Growth
Adjusted EBITDA Growth $ in millions Expected Increase in EBITDA* from Identified Initiatives $600 $500 ~$480 $400 ~$375 Phosphates $300 ~$280 Potash ~$225 Integration $200 Supply Chain $100 $0 2020 2021 2022 2023 Growth CapEx ($ mm) 2021 2022 2023 Phosphates Growth $15 $30 $10 Potash Growth – K3 $1
Slide 26: Questions?
Questions? 26
Slide 27: Unit Cash Cost Definitions
Unit Cash Cost Definitions Phosphates Cash cost of U.S. mined rock - Total production costs plus COGS functional support costs less depreciation/depletion, asset retirement obligation (ARO) expenses, idle expenses, and turnaround costs divided by rock production volume in the period. Cash costs of c