Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q4 2015 Earnings Presentation
28 slides from Mosaic Company (the)'s earnings presentation, Feb 11, 2016
Slide 1: Earnings Conference Call – Fourth Quarter 2015
The Mosaic Company Earnings Conference Call – Fourth Quarter 2015 February 11, 2016 Joc O’Rourke, 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 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 the Ma’aden joint venture) and ot
Slide 3: Challenging Environment; Agricultural Commodities Less Impacted
Challenging Environment; Agricultural Commodities Less Impacted Index Market Commodity Prices 2014 Q1=100 120 110 100 90 80 70 60 50 40 Source: CRB 30 2014 2015 2016 Oil WTI Iron Ore Corn Based on actual market prices 3
Slide 4: Potash: Currency Swings Exacerbating Price Movement
Potash: Currency Swings Exacerbating Price Movement Bringing costs of production down …… …… and costs for customers up. Canada 4.5 Brazil 0.90 ‐17% 4.0 +49% 0.85 3.5 0.80 3.0 0.75 2.5 0.70 2.0 Russia China 0.022 6.6 ‐18% +5% 0.020 6.5 0.018 6.4 0.016 6.3 0.014 6.2 0.012 6.1 Belarussia India 0.10 68.
Slide 5: Crop Nutrient Affordability a Significant Tailwind for Farmers
Crop Nutrient Affordability a Significant Tailwind for Farmers Plant Nutrient Affordability 1.75 Plant Nutrient Price Index / Crop Price Index Source: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic 1.50 1.25 1.00 0.75 0.50 05 06 07 08 09 10 11 12 13 14 15 16 Affordability Metric Average (2010‐
Slide 6: Challenges Lead to Strength
Challenges Lead to Strength Impact on Mosaic: Cyclicality presents opportunities Resilient business: • Effective cost control • Prudent balance sheet management Agriculture different from hard commodities Positive Secular Trend Underpins Long‐Term Demand Growth 6
Slide 7: 2015 Highlights
2015 Highlights 2015 EPS up 4 percent over last year $1.1 billion in share repurchases and dividends Lowest SG&A in six years Esterhazy K3 shaft on time, on budget CF and ADM acquisitions fully integrated Sulfur melter commissioned MicroEssentials® expansion on track Ma’aden JV expec
Slide 8: Financial Results Review
Financial Results Review
Slide 9: Phosphates: Unchanged Positive Outlook
Phosphates: Unchanged Positive Outlook Impact of seasonal weakness and raw materials lag $500 25% $450 $400 20% $350 $300 15% $250 $200 10% $150 $100 5% $50 $‐ 0% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016F Q2‐Q4 2016F Avg. GM % GM % Range Realized DAP Price DAP Strippin
Slide 10: Phosphates Guidance
Phosphates Guidance Phosphates 2016 Q1 Sales Volumes 1.8 to 2.2 million tonnes Q1 DAP Selling Price $350 to $370 per tonne Q1 Gross Margin Rate Around 10 percent Q1 Operating Rate 70 to 80 percent Full Year Sales Volumes 9 to 10 million tonnes Global Shipments 65 to 67 million tonnes 10
Slide 11: Potash: Optimizing Value
Potash: Optimizing Value Includes impact of production shutdowns $300 $160 $290 $140 $120 Average MOP Price/MT $280 Gross Margin/MT $100 $270 $80 $260 $60 $250 $40 $240 $20 $230 $‐ Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 GM/mt Average MOP Price/mt Maintaining profitability de
Slide 12: Potash Guidance
Potash Guidance Potash 2016 Q1 Sales Volumes 1.5 to 1.9 million tonnes Q1 MOP Selling Price $200 to $230 per tonne Q1 Gross Margin Rate Low to mid 20 percent Q1 Operating Rate 70 to 80 percent range Full Year Sales Volumes 7.5 to 8.5 million tonnes Global Shipments 58 to 60 million tonnes 12
Slide 13: International Distribution: Weak Real a Positive for Brazil Agriculture
International Distribution: Weak Real a Positive for Brazil Agriculture Soybean Prices US$ Bu Reais$ Bu 18 36 16 32 Brazil: Credit + Stable Soybean Prices = 14 28 12 24 Strong H2 10 20 8 16 6 12 4 8 2 4 09 10 11 12 13 14 15 USD Bu Brazilian Reais Bu Soybean Prices Monthly Average of CBOT Daily Nearb
Slide 14: International Distribution Guidance
International Distribution Guidance International Distribution 2016 Q1 Sales Volumes 1.0 to 1.2 million tonnes Q1 Gross Margin per Tonne Approximately $10 per tonne Full Year Sales Volumes 6 to 7 million tonnes 14
Slide 15: Full-Year Guidance Summary
Full-Year Guidance Summary Potash 2016 Full-Year Canadian Resources Taxes and Royalties $180 to $220 million Full-Year Brine Management Costs $160 to $180 million Consolidated Full-Year 2016 Total SG&A $350 to $370 million Capital Expenditures and Equity Investments $1.2 to $1.4 billion Effective Ta
Slide 16: Closing Commentary
Closing Commentary
Slide 17: Strong Cash Generation Through Cycle
Strong Cash Generation Through Cycle $5.80 $525 Operating Cash /Weighted Average Diluted Share $5.60 $450 $5.40 $375 Average MOP price $5.20 $300 $5.00 $225 $4.80 $150 $4.60 $75 $4.40 $0 2012 2013 2014 2015 Net cash provided by operating activities per weighted average diluted share Average MOP pric
Slide 18: Thank You
Thank You The Mosaic Company Earnings Conference Call – Fourth Quarter 2015 February 11, 2016
Slide 19: Appendix
Appendix
Slide 20: Phosphates Segment Highlights
Phosphates Segment Highlights $ In millions, except DAP price Q4 2015 Q3 2015 Q4 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $1,031 $1,032 $1,212 300 Gross margin $121 $199 $231 250 Percent of net sales 12% 19% 19% 200 Operating earnings $47 $157 $157 150 Sales volumes 2.2 2.1 2.4 100 Pro
Slide 21: Potash Segment Highlights
Potash Segment Highlights $ In millions, except MOP price Q4 2015 Q3 2015 Q4 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $572 $492 $763 250 Gross margin $155 $97 $327 200 Percent of net sales 27% 20% 43% 150 Gross margin (excluding CRT)* $211 $156 $375 100 Percent of net sales* 37% 32% 49
Slide 22: International Distribution Segment Highlights
International Distribution Segment Highlights $ In millions, except Blends price Q4 2015 Q3 2015 Q4 2014 OPERATING EARNINGS BRIDGE $ IN MILLIONS Net sales $605 $825 $516 150 Gross margin $38 $61 $41 Percent of net sales 6% 7% 8% 100 Operating earnings $14 $44 $22 50 Sales volumes 1.5 2.0 1.1 Margin
Slide 23: Raw Material Cost Detail
Raw Material Cost Detail Q4 2015 Percent Ammonia ($/tonnes) Realized in COGS $404 Average Purchase Price $413 Sulfur ($/ton) Realized in COGS $146 Average Purchase Price $133 Phosphate rock (realized in COGS) ('000 tonnes) U.S. mined rock 3,572 91% Purchased Miski Mayo Rock 340 9% Other Purchased Ro
Slide 24: Earnings Sensitivity to Key Drivers
Earnings Sensitivity to Key Drivers(a) 2015 Q4 % Impact on 2015 Q4 Pre-Tax Change Margin % Segment EPS Impact Actual Impact Actual Margin Marketing MOP Price ($/tonne)(b) $254 $50 27% 13% $74 $0.18 Potash Volume (thousand tonnes) 1,931 500 27% 16% $89 $0.22 DAP Price ($/tonne) $410 $50 12% 11% $111
Slide 25: Phosphate Raw Material Trends
Phosphate Raw Material Trends Ammonia Sulfur ($/tonne) ($/tonne) 700 175 600 150 500 125 400 100 300 75 200 50 100 25 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2014 2014 2014 2015 2015 2015 2015 2016F 2014 2014 2014 2014 2015 2015 2015 2015 2016F 1 2 Realized Costs Market Prices
Slide 26: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (February 11, 2016) Nov Nov Feb Feb Source: CRU and Mosaic. Numbers may not sum to total due to rounding. Million Tonnes Low High Low High DAP/MAP/NPS*/TSP 2014R 2015E 2016F 2016F 2016F 2016F Comments Shipments of high analysis products declined last yea
Slide 27: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (February 11, 2016) Source: CRU and Mosaic. Nov Nov Feb Feb Numbers may not sum to total due to rounding. Muriate of Potash Feb Low High Low High Million Tonnes (KCl) 2014 2015E 2016F 2016F 2016F 2016F Comments Implied shipments surged 2.0 mmt to 15.8 mmt i
Slide 28: Reconciliations: Adjusted EPS and Potash Gross Margin, Excluding CRT
Reconciliations: Adjusted EPS and Potash Gross Margin, Excluding CRT In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company has presented gross margin excluding Canadian resource taxes ("CRT") for Potash and adjusted diluted