Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q4 2014 Earnings Presentation
21 slides from Mosaic Company (the)'s earnings presentation, Feb 11, 2015
Slide 1: Earnings Conference Call – Fourth Quarter and Full Year 2014
The Mosaic Company Earnings Conference Call – Fourth Quarter and Full Year 2014 February 11, 2015 Jim Prokopanko, President and Chief Executive Officer Rich Mack, Executive Vice President and Chief Financial Officer Laura Gagnon, Vice President Investor Relations
Slide 2: Safe Harbor Statement
Safe Harbor Statement Click to edit Master title style This document 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 Wa’ad Al Shamal Phosphate Company (also known as
Slide 3: Key Messages
Key MessagesClick to edit Master title style ▪ A strong finish to 2014 ▪ Results reflect leverage to upside ▪ Strategic initiatives on track 3
Slide 4: Fourth Quarter Financial Highlights
Fourth QuarterClick to edit Financial Master title style Highlights Net Sales Operating Earnings Phosphates Potash $763 $184 $1,611 $206 $2.4 billion $365 million • $0.97 diluted earnings per share Includes $0.10 positive impact of notable items • $382 million in cash from operations 4
Slide 5: Strong Demand Persists
Strong Demand Persists MMT Product Global Phosphate Shipments DAP/ MAP/ MES/ TSP 70 Source: CRU and Mosaic 64.5-66.5 P&K Demand 65 60 Industry finished 2014 with 55 record potash and phosphate 50 shipments. 45 Lean producer inventories. 40 35 Expect solid fundamentals in 30 2015. 00 01 02 03 0
Slide 6: Phosphate Price History
Phosphate Price History $/mt Tampa DAP Prices 570 520 470 420 Mosaic acquires CF Industries’ phosphate business 370 Mosaic announces phosphate production curtailment 320 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Source: Multiple Weekly Publications DAP - fob Tampa 2 6
Slide 7: Strategic Accomplishments
Strategic Accomplishments Completed in fourth quarter 2014: Successful proving run at Colonsay: Exceeded expected capacity increase by over 40% New Canpotex entitlement 40.6%, up from 38.8% CF Industries’ phosphate integration completed: Realizing full targeted synergies Closed ADM acqui
Slide 8: Progress on Ma'aden Joint Venture
Ammonia Substation Building Progress on Ma’aden Joint Venture 8
Slide 9: Financial Results Review
Financial Results Review
Slide 10: Phosphates Segment Highlights
Phosphates Segment Highlights $ In millions, except DAP price Q4 2014 Q3 2014 Q4 2013 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $1,611 $1,658 $1,556 300 Gross margin $286 $294 $188 250 Percent of net sales 18% 18% 12% 200 Operating earnings $184 $239 $96 150 Sales volumes 3.3 3.3 3.4 100 NA
Slide 11: Potash Segment Highlights
Potash Segment Highlights $ In millions, except MOP price Q4 2014 Q3 2014 Q4 2013 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $763 $593 $652 250 Gross margin $304 $131 $134 200 Percent of net sales 40% 22% 21% 150 Operating earnings $206 $46 $88 100 Sales volumes 2.3 1.8 1.9 50 Production volu
Slide 12: Balance Sheet and Capital Update
Balance Sheet and Capital Update $3.5 Transformed Balance $3.0 Sheet: $2.5 Returned $3.2B in 2014 In Billions $2.0 $47 per ~$190 million remaining Share $2.8 $1.5 under current share $1.0 repurchase authorization $0.5 as of February 6, 2015 $0.4 $0.0 2008 2009 2010 2011 2012 2013 2014 Committe
Slide 13: New Segment Reporting Update
New Segment Reporting Update Current Future International Potash Phosphates Potash Phosphates Distribution Corporate Corporate Process: Expected Outcomes/Benefits: Historical financials first part of Increased transparency March Improved peer benchmarking Q1’15 Guidance under old structure Ease
Slide 14: Financial Guidance
Financial Guidance Click Summary to edit Master title style Phosphates Guidance – 2015 Q1 Sales volume 2.8 to 3.1 million tonnes Q1 DAP selling price $440 to $465 per tonne Q1 Gross margin rate in the mid-teens Q1 Operating rate in the 80 to 85 percent range Potash Guidance – 2015 Q1 Sales volume 2.
Slide 15: Financial Guidance
Financial Guidance Click Summary to edit Master title style Guidance – 2015 Total SG&A $360 - $380 million Capital Expenditures and Equity $1.1 - $1.4 billion Investments Effective Tax Rate Low to mid 20 percent range Phosphates Sales Volumes 14.5 to 15.0 million tonnes Potash Sales Volumes 8.5 to 9
Slide 16: Helping the World Grow the Food it Needs
Helping the World Grow the Food it Needs
Slide 17: Raw Material Cost Detail
Raw Material Cost Detail Q4 2014 Percent Ammonia ($/tonnes) Realized in COGS $544 Average Purchase Price $627 Sulfur ($/ton) Realized in COGS $154 Average Purchase Price $146 Phosphate rock (realized in COGS) ('000 tonnes) U.S. mined rock 3,839 93% Purchased Miski Mayo Rock 236 6% Other Purchased Ro
Slide 18: Phosphate Raw Material Trends
Phosphate Raw Material Trends Ammonia Sulfur ($/tonne) ($/tonne) $700 $200 $175 $600 $150 $500 $125 $400 $100 $300 $75 $200 $50 $100 $25 $- $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 2014 2014 2014 2014 2015F 2013 2013 2013 2013 2014 2014 2014 2014 2015F 1 2 Realize
Slide 19: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers(a) 2014 Q4 % Impact on 2014 Q4 Pre-Tax Change Margin % Segment EPS Impact Actual Impact Actual Margin Marketing MOP Price ($/tonne)(b) $295 $50 40% 14% $110 $0.21 Potash Volume 2.3 0.5 40% 13% $98 $0.19 (million tonnes) DAP Price ($/tonne) $448 $50 18% 8% $134 $0.
Slide 20: Global Phosphate Shipment Forecasts by Region (February 2015)
Global Phosphate Shipment Forecasts by Region (February 2015) Oct Oct Feb Feb Source: CRU and Mosaic. Million Tonnes Low High Low High Numbers may not sum to total due to rounding. DAP/MAP/TSP 2013R 2014E 2015F 2015F 2015F 2015F Comments Large but flat shipments in 2014. Forecast for 2015 China 21.5
Slide 21: Global Potash Shipment Forecasts by Region (February 6, 2015)
Global Potash Shipment Forecasts by Region (February 6, 2015) Oct Oct Feb Feb Source: CRU and Mosaic. Numbers may not sum to total due to rounding. Muriate of Potash Low High Low High Million Tonnes (KCl) 2013R 2014E 2015F 2015F 2015F 2015F Comments Shipments surged 2.8 mmt last year (+1.0 mmt produ