Slide 1: Citi's 2018 Basic Materials Conference
Joc O’Rourke President and CEO Citi’s 2018 Basic Materials Conference November 27, 2018 1
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 earnings per share. For important information regarding the non-GAAP measures we present, see “Non-GAAP Financial Measures” in the appendix of this deck, in our Nov
Slide 4: High Quality Asset Portfolio
High Quality Asset Portfolio Largest global finished phosphate and potash producer #1 Phosphate capacity of 16 million tonnes #4 Potash capacity of 11 million tonnes #1 Premium fertilizer producer Distribution assets in key markets Global potash sales through Canpotex Phosphate Production Potash Pro
Slide 5: Focused on The Americas
Focused on The Americas Home base in North America: 74% of 2017 NA phosphate production In a 10 mm tonne phosphate market: MicroEssential sales of 1.6 mmt(1) Total phosphate fertilizer sales of 4.5 mmt(1) 39% of 2017 NA MOP production Leading position in Brazil: Solidified through 2018 acquisition o
Slide 6: Executing Our Strategy
Executing Our Strategy By transforming business operations, lowering costs and increasing leverage to improving markets, Mosaic is well positioned to generate strong shareholder returns. We Help the World Grow the Food it Needs.
Slide 7: Five Years of Transformation
Five Years of Transformation Esterhazy K3: Growing Asset Optimization: MicroEssentials and Lower costs permanent cost other premium Lower risk structure declines products Improving free cash flow Mosaic Fertilizantes: Focus on lowering Repositioned Balance Growth through acquisition SG&A Sheet post
Slide 8: Focused on Reducing Costs
Focused on Reducing Costs $ Per Tonne Selling, General & Administrative Expenses 20 18 16 14 12 10 8 2013 2014 2015 2016 2017 2018F
Slide 9: Progress in Phosphates
Progress in Phosphates U.S. Mined Rock Costs Conversion Costs $45 $80 $40 $70 $35 $60 $30 2014 2015 2016 2017 Q3 YTD $50 2018 2014 2015 2016 2017 Q3 YTD 2018 Cash Production Costs Cash Conversion Costs * Phosphate cash conversion costs are reflective of actual costs, excluding realized mark-to-marke
Slide 10: Progress in Potash
Progress in Potash $ Per Tonne $130 $110 $90 $70 $50 2013 2014 2015 2016 2017 Q3 YTD 2018 MOP Cash Production Costs* Brine Cash Costs *MOP cash production costs are reflective of actual costs during the quarter, excluding CRT and realized mark-to-market gains and losses. These costs are captured in
Slide 11: Esterhazy K3: Substantial Cash Flow Benefits
Esterhazy K3: Substantial Cash Flow Benefits Completion of K3 allows MOS to eliminate Esterhazy brine management expense and growth capital spend, improving free cash flow by a total of ~$400 million. K2 Primary Mining Stops K3-K2 K1 Primary Belt/North Mining Stops Hoist/Shaft Q4 Operating Operation
Slide 12: Production Costs
Lower Operating Costs with K3 Completion $300.00 Potash Cash Cost Reduction $250.00 $200.00 2013 Production Costs $150.00 2018 $100.00 2024 $50.00 $‐ $‐ $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00 Cash Costs Including royalties, excluding resource taxes
Slide 13: Growing & Transforming Mosaic Fertilizantes
Growing & Transforming Mosaic Fertilizantes Cumulative Synergy Capture Categories P&L Impact (US$ M) By Quarter 2018 $140 Operations $19M 37M $120 Commercial $14M $ 42M $100 Procurement $ 14M $6M $80 Supply Chain $ 15M $10M $60 $102M $40 $7M Organization $ 20M $20 $34M $22M Cost to Achieve $ 26M $1
Slide 14: Growing Premium Products
Growing Premium Products MicroEssentials® Sales History and Projected Growth 3,500 35% 3,000 30% Thousand Tonnes 2,500 25% 2,000 20% 1,500 15% 1,000 10% 500 5% - 0% 2013 2014 2015 2016 2018F MicroEssentials® sales volume MicroEssentials® of total phosphate sales volumes 14
Slide 15: Increased Leverage to Markets
Increased Leverage to Markets 15
Slide 16: 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 350 73 70-72 Source: CRU and Mosaic 70 69.9 325 68 300 65 275 63 250 60 225 58 Source: Argus 55 200 10 11 12 13 14 15 16
Slide 17: Improving Market Conditions: Potash
Improving Market Conditions: Potash Potash Prices Global Potash Shipments $ Tonne KCl Mil Tonnes KCl 475 70 67-69 450 67.0 68 Source: IFA, CRU and Mosaic 425 400 65 375 63 350 325 60 300 58 275 55 250 225 53 Source: Argus 200 50 175 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 48 10 11 12 13 14 15 16 17 18E 1
Slide 18: Strong Year-to-Date Results & Guidance
Strong Year-to-Date Results & Guidance Earnings YTD Sept. 2018 Diluted Earnings Per Share (EPS) $0.93 Adjusted EPS(1) $1.35 Net Income $358 million Adjusted EBITDA(1) $1.4 billion Consolidated Full-Year Guidance 2018 Adjusted EBITDA(1) $1.90 to $2.00 billion Adjusted Earnings Per Share(1) $1.80 to $
Slide 19: Reaching our Leverage Targets
Reaching our Leverage Targets ($ in billions) 2018 Total Balance Sheet Debt(1) @ 9/30/2018 $4.610 Estimated Operating Leases(2) $0.627 Total Debt $5.237 Cash and Cash Equivalents $1.030 Net Debt $4.207 Adjusted EBITDA(3) using midpoint of guidance $1.950 Net Debt to Adjusted EBITDA 2.2 (1) Total Bal
Slide 20: Capital Allocation Philosophy
Capital Allocation Philosophy 20
Slide 21: Questions?
Questions? 21
Slide 22: Appendix
Appendix 22
Slide 23: Reconciliations of non GAAP measures
Reconciliations of non GAAP measures Consolidated Earnings (in millions, except per share amounts) YTD Sept. 2018 Diluted net earnings per share $ 0.93 Notable items impact on earnings per share(1) $ (0.42) Adjusted diluted net earnings per share $ 1.35 Diluted weighted average number of shares outs
Slide 24: Reconciliations of non GAAP measures
Reconciliations of non GAAP measures Mosaic Fertilizantes Earnings (in millions) YTD Sept. 2018 Operating earnings $ 144 Plus: Depreciation, depletion and amortization $ 110 Plus: Foreign exchange loss $ (83) Plus: Other expense $(2) Less: Earnings from consolidated noncontrolling interests $1 EBITD