Slide 1: The Mosaic Company – 2010 Citi Basic Materials Conference
Exhibit 99.1 The Mosaic Company 2010 Citi Basic Materials Conference December 1, 2010 Larry Stranghoener Executive Vice President and Chief Financial Officer
Slide 2: Opening remarks
Good morning everyone. I’m delighted to have the opportunity to speak with you today about Mosaic, the outstanding long-term outlook for the crop nutrient industry and our strong market position in both potash and phosphate. We’d like to thank PJ Juvekar for coverage of the sector and sponsoring thi
Slide 3: Safe Harbor Statement
Safe Harbor Statement 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 the current
Slide 4: Forward-looking statements reminder
Before I proceed, I would like to remind you that our presentation contains forward-looking statements. The statements include, but are not limited to, statements about future financial and operating results. They are based upon management’s beliefs and expectations as of today’s date, December 1, 2
Slide 5: Introduction
Introduction • Mosaic is the leading P&K company in the world – Potash growth through expansions – Largest integrated phosphate producer – low cost and geographic advantage • Crop nutrient markets extremely tight due to a variety of supply and demand factors • Healthy farmer economics support contin
Slide 6: Overview of strategy and topics
This morning I will first review Mosaic’s strategy. We are very upbeat about the long term fundamentals of our business and continue to position ourselves for the growth of this sector. To meet this growth we are undertaking major expansion projects in our potash business and strengthening the cost
Slide 7: Strategic Overview
Strategic Overview As a global leader in crop nutrients, Mosaic is positioned to benefit from attractive long term agricultural fundamentals: Potash – grow volume – Brownfield expansion program Phosphates – grow value – Leverage scale and geographic location – Extend phosphate reserves Global distri
Slide 8: Focus on shareholder value creation
At Mosaic, our focus is on shareholder value creation, driven by the attractive fundamentals of our business. Our mission is to help the world grow the food it needs. We run our business with a long term view – and this view is compelling! We are executing well on our strategy. In Potash, we are gro
Slide 9: Leader in Potash and Phosphate
Leader in Potash and Phosphate WORLD’S LARGEST P&K COMPANIES Mosaic PotashCorp Belaruskali Israel Chemicals OCP K+S Silvinit K2O Uralkali P2O5 GCT Yuntianhua 0 1 2 3 4 5 6 7 8 9 MILLION TONNES PRODUCTION, 3 YEAR AVERAGE Source: IFA, company reports and Mosaic estimate 5
Slide 10: Leading producer of potash and phosphate
As the leading producer of potash and phosphate, there is no company better positioned to capture the growth in crop nutrient markets. Farmers need to plant record areas and harvest ever increasing yields to meet the world’s accelerating appetite for grains and oilseeds. That implies strong growth i
Slide 11: A Leading Global Potash Producer
A Leading Global Potash Producer World capacity MURIATE OF POTASH CAPACITY approximates 74 million MILLION TONNES KCL tonnes (all potash PotashCorp products) Mosaic Belaruskali Mosaic FY10 MOP Silvinit production share ICL – 12% Global Uralkali – 38% North America K+S Qinghai World scale & efficient
Slide 12: Potash market share
First, let’s talk about potash. Mosaic is one of the world’s top producers of potash with an estimated 12% of global market share. Potash is produced in only 12 countries in the world, and agricultural giants such as China, India and Brazil depend on imports.
Slide 13: Potash – Grow Volume
Potash – Grow Volume Projected additional annual capacity of 5.1 million tonnes Multiple projects spanning a decade Reversion of 1.3 million tonnes currently produced for a third party under a tolling agreement expected soon 7
Slide 14: Potash demand growth and expansions
The world will need substantially more potash this decade. In the long-term, we forecast demand growth of 3.5 – 4% per year. We believe the best way to meet long term demand growth is through brownfield expansions at existing mine sites. Our ongoing expansions in Canada are expected to increase annu
Slide 15: Potash Capacity Expansions
Potash Capacity Expansions ESTIMATED CONSTRUCTION INVESTMENT CAPACITY COMPLETION PROJECTED CAPACITY ($ IN BILLIONS) (MILLION TONNES) (FISCAL YEAR) MILLION TONNES IN PROCESS 18 Belle Plaine 0.5 0.6 2012 16 Colonsay 0.7 0.7 2014 14 Esterhazy 2.0 1.8 2011-17 12 FUTURE 10 Belle Plaine 1.4 2016-19 8 Colo
Slide 16: Expansion program progress
Our expansion program consists of nearly a dozen separate, multi-year projects at our three Canadian mines. We have made good progress on a number of these projects and we can adjust the pace of these projects in response to supply/demand dynamics. We expect this additional capacity to begin coming
Slide 17: Competitive Cost Structure
Competitive Cost Structure MOP PRODUCTION COST CURVE Flat cost curve COST PER TONNE Expansions to decrease our per unit costs Mosaic average 60 MILLION TONNES MOP MOP Delivered US Cornbelt weighted average cost as of June 30, 2009, excludes Canadian resource taxes and royalties for all Canadian pota
Slide 18: Flat potash cost curve
The global potash industry has a relatively flat cost curve. This chart shows estimated cost per tonne for all major potash producers. Mosaic’s potash cost structure is competitive and will improve as our expansions come on line. The expected increase in sales and production volumes will leverage th
Slide 19: Rebounding Potash Demand
Rebounding Potash Demand Positive potash market WORLD MOP DEMAND fundamentals: MILLION TONNES 60 Two step recovery underway 50 Lean inventories 40 Healthy farmer economics 30 Expect 2011 global 20 shipments of 52 to 55 million tonnes 10 0 00 01 02 03 04 05 06 07 08 09 10F 11F CALENDAR YEAR Source: F
Slide 20: Potash demand recovery and prices
Turning to demand, market sentiment has finally caught up to the fundamentals. After a significant drop in demand during 2009, the potash market is in the midst of a two step recovery. We project global MOP shipments to rebound sharply this year and then take another giant step up in 2011. Producers
Slide 21: World's Largest Phosphate Producer
World’s Largest Phosphate Producer World capacity FINISHED PHOSPHATE CAPACITY MILLION TONNES approximates 80 million Mosaic tonnes (DAP/MAP/TSP) YTH Mosaic FY10 phosphate OCP production share Kailin – 13% Global IFFCO PhosAgro – 56% North America Wengfu World scale & efficient GCT Crop Nutrients ope
Slide 22: Largest phosphate producer and low cost
Now, let’s move to phosphate. Mosaic produces more phosphate crop nutrient and animal feed products than any other company in the world by a wide margin. We rank among the lowest cost producers in the industry today due to: •The tight vertical integration of our phosphate rock mining and processing
Slide 23: Phosphates – Grow Value
Phosphates – Grow Value Leverage scale and location – Low cost producer – Cost advantaged sulfur, competitive ammonia – Procurement leverage Operational excellence – Maintenance practices – Capital deployment – Energy use and co-generation capacity – Improve coordination of sales and operations plan
Slide 24: Three strategic priorities for Phosphates
In order to strengthen our competitive advantage, we are focusing on three strategic priorities for our Phosphates business: First, we are working on several initiatives to leverage our scale and geographic location. We have a strong competitive position due to low rock and conversion costs as well
Slide 25: Low Cost Producer
Low Cost Producer DAP PRODUCTION COST CURVE Low cost producer COST PER TONNE Significant economies of scale Focus on operational excellence Mosaic average 20 MILLION TONNES DAP DAP FOB plant/port weighted average cost as of July 31, 2010 Source: Mosaic 13
Slide 26: Phosphate scale and cost efficiencies
But it’s not just about being the largest. The size and scale of our phosphate business produces significant cost efficiencies. We have one of the lowest cost positions in the phosphate industry and we plan to maintain this position with our continued focus on operational excellence.
Slide 27: Record Phosphate Demand
Record Phosphate Demand WORLD PROCESSED PHOSPHATE DEMAND MILLION TONNES Positive phosphate market fundamentals: Strong demand Lean inventories Healthy farmer economics Expect 2011 global shipments of 57 to 59 million tonnes CALENDAR YEAR Source: Fertecon and Mosaic 14
Slide 28: Phosphate market fundamentals
Phosphate fundamentals are constructive and we expect the phosphate market to remain snug for several years. We expect strong demand coupled with supply uncertainties to keep this market tight during the remainder of this fertilizer year. Large shipments to both domestic and offshore destinations ha
Slide 29: A Global Distribution Network
A Global Distribution Network TRADE FLOW MAP VOLUME IN TONNES* Mosaic personnel located in key global markets Visibility to the entire value chain Our distribution capability helps balance seasonal demand * Three year average, all products. Includes estimated Mosaic share of Canpotex sales 15
Slide 30: Distribution network without peer
Mosaic also has a distribution network without peer in our industry – allowing us to move our products where and when needed, efficiently and cost-effectively. Our industry leading North American distribution capabilities are bolstered by strong networks in prime Asian and Latin American growth regi
Slide 31: Solid Financial Position
Solid Financial Position TOTAL CASH AND CASH EQUIVALENTS LESS DEBT* $ IN BILLIONS 2 1 - (1) (2) (3) 2006 2007 2008 2009 2010 FISCAL YEAR * See appendix for reconciliation of Cash and Cash Equivalents less Debt 16
Slide 32: Capital allocation strategy
As we have noted, our overall strategy is to capitalize on attractive long-term agriculture fundamentals by investing in and reengineering our potash and phosphate businesses. Through the ups and downs of the markets we serve, we have created long-term value through sound capital allocation decision
Slide 33: Market Outlook
Market Outlook WORLD GRAIN AND OILSEED PRODUCTION AND USE BILLION TONNES Disappointing global harvests 2.8 Strong agricultural 2.6 commodity prices 2.4 Need to re-stock crop 2.2 nutrients in the distribution pipeline and 2.0 many farm fields 1.8 00/01 02/03 04/05 06/07 08/09 10/11F Production Use CR
Slide 34: Grain and oilseed production and use
Let me finish with a few thoughts on the market outlook. As you can see, grain and oilseed use has grown slowly, but consistently. History has proven that economic slowdowns don’t have a large negative impact on food consumption –people need to eat regardless of the economic climate. The most recent
Slide 35: Stocks Remain at Low Levels
Stocks Remain at Low Levels WORLD GRAIN AND OILSEED STOCKS MILLION TONNES DAYS OF USE Days of use remains at 700 120 low levels 600 100 Stocks still not at secure 500 80 levels 400 60 2011 new crop prices 300 40 signaling farmers to 200 expand planted area and 20 100 intensify cropping 0 0 practices
Slide 36: Low global grain stocks
Dramatic improvement in production has not translated into improving stocks. World grain and oilseed stocks continue to remain at low levels. We believe global grain and oilseed stocks still are not at levels secure enough to withstand weather or other shocks over a period of time. Corn looks especi
Slide 37: Farmer Economics
Farmer Economics Farmer profitability remains at CROP NUTRIENT COST – CORN IN IOWA healthy levels: BUSHELS OF CORN PER ACRE 50 Grain prices high relative to historical prices 40 Input costs well below their 30 highs 20 41 Similar conditions for 37 31 29 cotton, rice and palm oil 10 22 20 16 China, B
Slide 38: Farm profitability remains healthy
Farm profitability remains at healthy levels. Grain prices are at relatively high levels compared to historical prices. At the same time, farmer input costs have fallen from their high levels of 2008 and 2009. This has allowed farmers to remain profitable. The graph shows the number of bushels of co
Slide 39: Demand is Back!
Demand is Back! Adequate and balanced WORLD NUTRIENT USE MILLION TONNES soil fertility a high priority 200 180 Recent commodity price 160 rallies led to increased 140 nutrient demand 120 100 Projected long-term 80 growth rates: 60 40 – Phosphate: 2.5% - 20 3.0% 0 – Potash: 3.5% - 4.0% 00 01 02 03 04
Slide 40: Nutrient use rebound
Following a drop in 2008 and 2009, nutrient use has significantly rebounded this year. The science of agronomy and plant production has not changed – plants need balanced nutrition to develop properly. Every plant and crop harvested removes vital and necessary nutrients from the soil. These nutrient
Slide 41: Key Points
Key Points Potash brownfield expansions on track to add five million tonnes additional capacity Largest integrated phosphate producer – low cost, geographic advantage and expanding reserves Confluence of supply and demand factors keeping crop nutrient markets extremely tight Healthy farmer economics
Slide 42: Recap of key points
Let me recap with a few key points. First, expected potash demand growth requires that we continue to expand our production capacity. Second, we are the largest integrated phosphate producer in the world. We have very low production costs, we have advantage access to raw materials through our locati
Slide 43: Thank you
Thank you
Slide 44: Questions
Thank you for your time today. Now, I will be glad to answer any questions you may have.
Slide 45: Reconciliation of Cash and Cash Equivalents less Debt
Appendix Reconciliation of Cash and Cash Equivalents less Debt Cash and Cash Short-Term Current Long-Term Net (Debt) Period Ended Equivalents Debt Maturities Debt Total Debt Cash 2006 173.3 152.8 69.3 2,388.1 2,610.2 (2,436.9) 2007 420.6 138.6 403.8 1,818.1 2,360.5 (1,939.9) 2008 1,960.7 133.1 43.3