Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q3 2018 Earnings Presentation
21 slides from Mosaic Company (the)'s earnings presentation, Nov 6, 2018
Slide 1: Earnings Conference Call – Third Quarter 2018
The Mosaic Company Earnings Conference Call – Third Quarter 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: November 6, 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 November
Slide 4: Executive Summary
Executive Summary Raising full year guidance: adjusted EBITDA(1) to $1.90 - 2.00 billion; adjusted EPS(1) to $1.80 - $2.00 Raised Mosaic Fertilizantes 2018 synergy capture to $140 - $160 million, net of costs ▪ Third quarter net earnings were $247 million and adjusted EBITDA(1) was $606 million; nin
Slide 5: Mosaic Fertilizantes Transformation Progress
Mosaic Fertilizantes Transformation Progress Cumulative Synergy Capture Categories P&L Impact (US$ 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 $
Slide 6: Improving Market Conditions: Phosphates
Improving Market Conditions: Phosphates Benchmark DAP Stripping Margin MMT Product Global Phosphate Shipments $ Tonne DAP/MAP/NPS/TSP Calculated from Published Weekly Spot Prices 350 73 70-72 Source: CRU and Mosaic 70 69.9 325 68 300 65 275 63 250 60 225 58 Source: Argus 200 Jan-14 Jan-15 Jan-16 Jan
Slide 7: Phosphates Transformation
Phosphates Transformation ($ in millions except per tonne) 2018 2017 YTD Sales Volumes (mm tonnes) 6.5* 7.0 *reflects idling of Plant City YTD Operating Earnings $346 $135 YTD Adjusted EBITDA(1) $653 $373 Q3 Sales Volumes (mm tonnes) 2.2 2.1 Gross Margin $ / Tonne $80 $32 • Blended rock costs at $57
Slide 8: Improving Market Conditions: Potash
Improving Market Conditions: Potash $ Tonne KCl Potash Prices Mil Tonnes KCl Global Potash Shipments 475 70 67-69 450 68 67.0 Source: IFA, CRU and Mosaic 425 65 400 375 63 350 60 325 58 300 275 55 250 53 225 Source: Argus 50 200 175 48 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 10 11 12 13 14 15 16 17 18E 1
Slide 9: Potash Transformation
Potash Transformation ($ in millions except per tonne) 2018 2017 YTD Sales Volumes (mm tonnes) 6.5 6.4 YTD Operating Earnings $318 $198 YTD Adjusted EBITDA(1) $549 $426 Q3 Sales Volumes (mm tonnes) 2.4 2.2 Gross Margin $ / Tonne $66 $44 • MOP cash costs of production at $79 tonne, essentially flat w
Slide 10: Strong Third Quarter Results
Strong Third Quarter Results $ in million, except per share 3Q 2018 Year to Date Diluted Earnings Per Share (EPS) $0.64 $0.93 Adjusted EPS(1) $0.75 $1.35 Net Income $247 $358 Adjusted EBITDA(1) $606 $1,400 Driving Free Cash Flow ($ in millions) Beginning Cash Balance (6/30/2018) $1,035 + Cash Flow f
Slide 11: Leading to Increased EBITDA and EPS Guidance
Leading to Increased EBITDA and EPS Guidance Consolidated Full-Year Guidance 2018 Adjusted EBITDA(1) $1.90 to $2.00 billion Adjusted Earnings Per Share(1) $1.80 to $2.00* Key Assumptions: • Continued market strength and normal seasonality • Acceleration of synergy realization at Mosaic Fertilizantes
Slide 12: Reaching our Balance Sheet Targets
Reaching our Balance Sheet Targets ($ 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* *Sensit
Slide 13: Capital Allocation Philosophy
Capital Allocation Philosophy 13
Slide 14: Appendix
Appendix 14
Slide 15: Full Year 2018 Guidance and Assumptions
Full Year 2018 Guidance and Assumptions Consolidated Full-Year Guidance 2018 Adjusted EBITDA(1) $1.90 to $2.00 billion Adjusted Earnings Per Share(1) $1.80 to $2.00* Total SG&A $325 to $350 million Capital Expenditures $900 million to $1.1 billion *Reflects an increase of 34 million shares (to 386 m
Slide 16: Fourth Quarter 2018 Expectations
Fourth Quarter 2018 Expectations Fourth Quarter Expectations 2018 Phosphates Sales Volume (mm tonnes) 1.7 - 2.0 Phosphates Adjusted Gross Margin(1) / Tonne $65 - $75 Potash Sales Volume (mm tonnes) 2.2 - 2.5 Potash Adjusted Gross Margin(1) / Tonne $80 - $90 Mosaic Fertilizantes Sales Volume (mm tonn
Slide 17: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (November 2018) 17
Slide 18: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (November 2018) * NPS products included in this analysis are those with a combined N and P2O5 nutrient content of 45 units or greater. 18
Slide 19: China Phosphate Exports
China Phosphate Exports Mil Tonnes China Phosphate Exports Mil Tonnes China Phosphate Exports 12 DAP/MAP/TSP Rolling 12-Month Total 12.0 10 11.5 8 11.0 6 10.5 10.0 4 9.5 2 9.0 0 8.5 10 11 12 13 14 15 16 17 18F 8.0 DAP MAP TSP Jan 15 Jan 16 Jan 17 Sep 17 Sep 18 China Phosphate Exports 1000 Tonnes Jan
Slide 20: Vale Fertilizantes Earn Out Example
Vale Fertilizantes Earn Out Example 2018 EARN‐OUT CALCULATION PER SHAREHOLDERS PURCHASE AGREEMENT US:BRL FX Rate MAP CFR Brazil Price 2018 Average FX Rate* 3.61 2018 Average MAP Price* 434 Target Average FX Rate 4.05 Target Average MAP Price 410 Difference (0.44) Difference 24 Denominator 0.05 Denom
Slide 21: Sensitivity Table: Estimated Full Year Impacts
Sensitivity Table: Estimated Full Year Impacts Impacts to PL: ($ in millions) Adjusted EBITDA ∆(1) Adjusted EPS ∆(1) Average MOP Price --> $10/mt $89 $0.14 Average DAP Stripping Margin --> $10/mt $84 $0.17 Potash Sales Volume --> 100k mt $12 $0.02 Phosphates Sales Volume --> 100k mt $11 $0.02 Canadi