Compass Minerals Intl Inc · NYSE:CMP
Compass Minerals Intl — Compass Minerals — Q3 2021 Earnings Presentation
27 slides from Compass Minerals Intl's earnings presentation, Nov 16, 2021
Slide 1: Third-Quarter & Fiscal 2021 Business Update
THIRD-QUARTER & FISCAL 2021 BUSINESS UPDATE // 11.15.21
Slide 2: Forward-Looking Statements and Other Disclaimers
FORWARD-LOOKING STATEMENTS AND OTHER DISCLAIMERS This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company’s lithium resource development and fire retardant business
Slide 3: Fiscal 2021 Results
FISCAL 2021 RESULTS ~$79M ~$175M Operating Earnings Adjusted EBITDA1 ~21% ~$163M Adjusted EBITDA1 Cash Flow from Operations2 Margin • Consolidated revenue for fiscal 2021 up 20% versus the comparable 2020 period on strong sales volumes across both Salt and Plant Nutrition segments • Tapered producti
Slide 4: Unique and Sustainable Core Business
UNIQUE AND SUSTAINABLE CORE BUSINESS ADVANTAGED ASSETS • Goderich mine: World’s largest underground salt mine • Winsford mine: U.K.’s largest dedicated rock salt mine Compass Minerals economic moat • Great Salt Lake sustainable solar evaporation facility: Western provides for competitive advantages
Slide 5: Strategic Priorities
STRATEGIC PRIORITIES BUILD SUSTAINABLE CULTURE > Drive Zero Harm imperative for our people and environment > Increase employee engagement and build execution muscle These priorities support Compass DELIVER ON COMMITMENTS Minerals’ Core Purpose to help keep people safe, feed the world > Meet then exc
Slide 6: Delivering on Our Strategic Commitments
DELIVERING ON OUR STRATEGIC COMMITMENTS Optimized Asset Improved Labor Reduced Outstanding Development of Portfolio Relations Debt to Enhance Organic Growth Financial Flexibility Opportunities • Completed sale of North • Ratified five-year collective bargaining • Reduced debt • Pursuing lithium reso
Slide 7: Sustainable and Domestic Lithium
SUSTAINABLE AND DOMESTIC LITHIUM • Earlier this year, we identified a lithium brine resource of approximately 2.4 million metric tons lithium carbonate equivalent at our active Ogden solar evaporation site • Announced successful third-party conversion testing to battery-grade lithium hydroxide of su
Slide 8: Fortress Leverages Existing Production
FORTRESS LEVERAGES EXISTING PRODUCTION • North America represents ~60-70% of the global LTR market • Ogden facility is strategically located near primary wildfire regions in the U.S. • Target customers include federal and state agencies, utilities, insurance companies, commercial and residential Lon
Slide 9: Balanced Capital Allocation Framework
BALANCED CAPITAL ALLOCATION FRAMEWORK • New Goderich mine plan development expected to increase efficiency and lower SUSTAIN AND long-term cost structure IMPROVE OPERATIONS • Cote Blanche barge dock upgrade anticipated to improve safety, logistics and efficiency • Expect to enter the commercial mark
Slide 10: Dividend Structure Aligns with Market and Supports Enhanced Growth Prospects
DIVIDEND STRUCTURE ALIGNS WITH MARKET AND SUPPORTS ENHANCED GROWTH PROSPECTS 5 Dividend Yield (%) Payout Ratio (%) 100 4.5 90 IMPROVED CAPITAL ALLOCATION 4.47% 4 80 • New dividend structure allows 3.5 70 reinvestment of capital in high-growth Dividend yield (%) opportunities that are anticipated to
Slide 11: Focus on Sustainability and Safety
FOCUS ON SUSTAINABILITY AND SAFETY Additional information can be found in the 2020 ESG report available on the company website HIGHLIGHTS FROM OUR 2020 ESG REPORT1 FRESHWATER TOTAL CASE EMPLOYEE TRAINING SCOPE 3 INTENSITY INCIDENT RATE AND DEVELOPMENT EMISSIONS 13% 16% 13% 6% Our Core Values, Corpor
Slide 12: Third-Quarter and Fiscal 2021 Results
THIRD-QUARTER AND FISCAL 2021 RESULTS
Slide 13: Third-Quarter and Fiscal 2021 Consolidated Results
THIRD-QUARTER AND FISCAL 2021 CONSOLIDATED RESULTS Consolidated Results 3Q21 FY21 Commentary Revenue vs. comparable 2020 period +21% +20% • Fiscal 2021 up 20% versus comparable 2020 period on strong sales volumes across both Salt and Plant Nutrition segments Operating earnings vs. -81% +5% comparabl
Slide 14: Third-Quarter and Fiscal 2021 Salt Segment
THIRD-QUARTER AND FISCAL 2021 SALT SEGMENT Salt Segment Results Prior Sales Volumes 3Q21 3Q20 %Δ FY21 %Δ (in thousands of short tons) ($ in millions) Period1 7,091 Revenue $159.5 $141.2 +13% $671.1 $550.9 22% 1,327 1,419 Operating earnings $22.4 $26.2 -15% $133.2 $116.5 14% 5,330 Operating margin 14
Slide 15: Third-Quarter and Fiscal 2021 Plant Nutrition Segment
THIRD-QUARTER AND FISCAL 2021 PLANT NUTRITION SEGMENT Plant Nutrition Segment Prior Sales Volumes 3Q21 3Q20 %Δ FY21 %Δ (in thousands of short tons) Results ($ in millions) Period1 Revenue $49.3 $30.8 +60% $156.8 $137.2 14% 261 238 Operating earnings -$0.2 $1.1 -118% $5.8 $12.0 -52% Operating margin
Slide 16: Balance Sheet Strength
BALANCE SHEET STRENGTH REDUCED DEBT ~30% FROM YEAR-END 2020 TO $935M1 Liquidity Outstanding Debt (in millions) $1,500 ~$21 million of cash on hand and more than $219 million of $227 $219 $1,200 Outstanding Debt total liquidity2 $900 $162 $164 • $300 million Revolving Senior Secured Credit Facility $
Slide 17: First-Half Fiscal 2022 Outlook
FIRST-HALF FISCAL 2022 OUTLOOK1 Salt Plant Nutrition 1H FY22 Revenue $675M $725M $85M $110M 1H FY22 EBITDA $145M $170M $25M $35M • Assuming average winter weather activity, strong Salt segment revenue growth expected for the first half of FY22 compared to the prior period • Flat pricing and elevated
Slide 18: Fiscal 2022 Guidance
FISCAL 2022 GUIDANCE1 Key Metrics for continuing operations (in millions of dollars unless otherwise noted) Segment Outlook Low High Salt segment sales volumes 12.5 13.2 (in millions of tons) Plant Nutrition segment sales volumes 280 320 (in thousands of tons) Consolidated and Corporate Outlook Low
Slide 19: Appendix
= Compass Minerals APPENDIX
Slide 20: Presentation of Results
PRESENTATION OF RESULTS As previously disclosed, in March 2021, our board of directors approved the divestiture of the company’s South America businesses and its North America micronutrient business as part of the company’s broader asset optimization strategy. Collectively, the results of these busi
Slide 21: Paving the Way for Long-Term Success
PAVING THE WAY FOR LONG-TERM SUCCESS LONG-TERM GODERICH MINE Five-year mining panels designed to be shuttered before ILLUSTRATION requiring long-term maintenance New bypass roadways key features include: FUTURE MINING • Reduced travel time from shafts to working faces DISTRICT • Designed for the lon
Slide 22: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Reconciliation for EBITDA and Adjusted EBITDA (unaudited, in millions) Three months ended Nine months ended Sept. 30, Sept. 30, 2021 2020 2021 2020 Net (loss) earnings from continuing operations $ (4.6) $ (4.9) $ 20.9 $ 27.9 Interest expense 13.6 15.2 44.3 47.2
Slide 23: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Salt Segment Performance (in millions, except for sales volumes and prices per short ton) Three months ended Nine months ended Sept. 30, Sept. 30, 2021 2020 2021 2020 Sales $ 159.5 $ 141.2 $ 671.1 $ 550.9 Operating earnings $ 22.4 $ 26.2 $ 133.2 $ 116.5 Operati
Slide 24: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Reconciliation for Salt Segment EBITDA (unaudited, in millions) Three months ended Nine months ended Sept. 30, Sept. 30, 2021 2020 2021 2020 Reported GAAP segment operating earnings $ 22.4 $ 26.2 $ 133.2 $ 116.5 Depreciation, depletion and amortization 17.7 17.
Slide 25: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Plant Nutrition Segment Performance (dollars in millions, except for prices per short ton) Three months ended Nine months ended Sept. 30, Sept. 30, 2021 2020 2021 2020 Sales $ 49.3 $ 30.8 $ 156.8 $ 137.2 Operating earnings $ (0.2) $ 1.1 $ 5.8 $ 12.0 Operating m
Slide 26: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Reconciliation for Plant Nutrition Segment EBITDA (unaudited, in millions) Three months ended Nine months ended Sept. 30, Sept. 30, 2021 2020 2021 2020 Reported GAAP segment operating earnings $ (0.2) $ 1.1 $ 5.8 $ 12.0 Depreciation, depletion and amortization
Slide 27: Reconciliation of Non-GAAP Information
RECONCILIATION OF NON-GAAP INFORMATION Reconciliation for Adjusted Free Cash Flow (unaudited, in millions) Nine months ended Sept. 30, 2021 2020 Cash Flow From Operations $ 162.7 $ 188.5 Capital Spending (71.8) (62.9) Free Cash Flow $ 90.9 $ 125.6 One-time Cash Tax Refund (9.0) (55.0) Adjusted Free