Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — The Mosaic Company — Q1 2019 Earnings Presentation
23 slides from Mosaic Company (the)'s earnings presentation, May 7, 2019
Slide 1: Earnings Conference Call – First Quarter 2019
The Mosaic Company Earnings Conference Call – First Quarter 2019 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: May 7, 2019
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 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 May 6, 2019 earni
Slide 4: Brazilian Tailings Dam Update
Brazilian Tailings Dam Update We believe we can meet our customers needs with existing Brazilian rock and product inventory, Peruvian rock and Florida produced MAP. Mine Date Idled Return to Full Operations Tapira April 12, 2019 3Q 2019 Catalao April 12, 2019 2Q 2019 Araxa March 27, 2019 3Q 2019 The
Slide 5: Mosaic Fertilizantes
Mosaic Fertilizantes 1. We have a well-defined plan of action to address the new regulations 2. We are making good progress, and expect all mines to be fully operational by the end of this year 3. We are -- and plan to continue to -- meet our customers’ needs, leveraging our global, integrated capab
Slide 6: Strong Operations Mitigate Seasonal Softness
Strong Operations Mitigate Seasonal Softness $ in million, except per share 1Q 2019 1Q 2018 Diluted Earnings Per Share (EPS) $0.34 $0.11 Adjusted diluted EPS(1) $0.25 $0.20 Net Income $131 $42 Adjusted EBITDA(1) $430 $399 Guidance Update Full Year 2019 Adjusted EBITDA $2.0 - $2.3 billion Adjusted di
Slide 7: Supply & Demand in 2019: Balanced to Tightening
Supply & Demand in 2019: Balanced to Tightening Benchmark DAP Stripping Margin $ Tonne Calculated from Published Weekly Spot Prices $ Tonne KCI Potash Prices 350 475 450 325 425 400 375 300 350 325 275 300 275 250 250 225 225 200 Source: Argus 175 Source: Argus 200 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Slide 8: Potash
Potash ($ in millions except per tonne) 1Q 2019 1Q 2018 2Q 2019f Sales Volumes (mm tonnes) 1.86 1.69* 2.3 – 2.6 Gross Margin $ / Tonne $100 $61 Adjusted Gross Margin $ / Tonne(1) $100 $64 $70 - $80 Operating Earnings $176 $92 Adjusted EBITDA(1) $256 $174 Full Year Volume (mm tonnes) 9.0 to 9.4 • MOP
Slide 9: Phosphates
Phosphates ($ in millions except per tonne) 1Q 2019 1Q 2018 2Q 2019f Sales Volumes (mm tonnes*) 1.79 1.95 2.3 – 2.6 Gross Margin $ / Tonne $31 $49 Adjusted Gross Margin $ / Tonne(1) $36 $57 $40 - $50 Operating Earnings $44 $78 Adjusted EBITDA(1) $168 $198 Full Year Volume (mm tonnes*) 8.6 to 9.0 • C
Slide 10: Mosaic Fertilizantes
Mosaic Fertilizantes ($ in millions except per tonne) 1Q 2019 1Q 2018 2Q 2019f Sales Volumes (mm tonnes*) 1.53 1.58 2.0 – 2.3 Gross Margin $ / Tonne $34 $37 Adjusted Gross Margin $ / Tonne(1) $34 $37 $15 - $25 Operating Earnings $27 $13 Adjusted EBITDA(1) $62 $68 Full Year Volume (mm tonnes*) 9.4 to
Slide 11: Fertilizantes Phosphates Operating Driver Targets
Operating Driver Targets 2018 1Q 19 2021 actual 4Qtr Ave target Cash cost of mined rock ($/tonne) $38 $41 $39 Phosphates Cash costs of conversions ($/tonne) $63 $63 $56 Sales of MicroEssentials (mm tonnes) 2.9 2.9 3.7 Average MicroEssentials margin, premium to MAP ($/tonne)(1) $43 $46 $40 - $50 Pota
Slide 12: Seasonal Working Capital Impact to Cash
Seasonal Working Capital Impact to Cash $ in million $600 $400 $200 $0 -$200 -$400 -$600 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 12
Slide 13: Financial Guidance
Financial Guidance Consolidated Full-Year Estimates 2019 Adjusted EPS(1) $1.50 to $2.00 Adjusted EBITDA(1) $2.0 to $2.3 billion Less: Cash Interest Expense ~$170 million Cash Taxes ~$75 million Sustaining Capital ~$720 million Available $1.04 to $1.34 billion 2019 Capital Plan Common Stock Dividend
Slide 14: Appendix
Appendix 14
Slide 15: Full Year 2019 Modeling Assumptions
Full Year 2019 Modeling Assumptions Full-Year Assumptions 2019 DD&A ~$950 million Brine Management Costs ~$140 million Total SG&A ~$350 million Effective Tax Rate Mid to High 20’s % BRL to USD Average Exchange Rate 3.7 Phosphates Sales Volume (mm tonnes*) 8.6 – 9.0 Potash Sales Volume (mm tonnes*) 9
Slide 16: Second Quarter 2019 Modeling Assumptions
Second Quarter 2019 Modeling Assumptions Second Quarter Expectations 2019 Phosphates Sales Volume (mm tonnes*) 2.3 – 2.6 Phosphates Adjusted Gross Margin(1) / Tonne $40 - $50 Potash Sales Volume (mm tonnes*) 2.3 - 2.6 Potash Adjusted Gross Margin(1) / Tonne $70 - $80 Mosaic Fertilizantes Sales Volum
Slide 17: Global Potash Shipment Forecasts by Region
Global Potash Shipment Forecasts by Region (May 2019) Source: IFA, CRU and Mosaic Muriate of Potash Low High (Numbers may not sum to total due to rounding) Million Tonnes (KCl) 2017R 2018E 2019F 2019F Comments The spring season, while not yet complete, appears likely to underperform expectations, at
Slide 18: Global Phosphate Shipment Forecasts by Region
Global Phosphate Shipment Forecasts by Region (May 2019) Source: IFA, CRU and Mosaic DAP / MAP / NPS* / TSP Low High (Numbers may not sum to total due to rounding) (Million Tonnes) 2017R 2018E 2019F 2019F Comments Our 2019 estimate is unchanged, as we continue to believe that the rate of decline in
Slide 19: Sensitivity Table: Estimated Full Year Impacts
Sensitivity Table: Estimated Full Year Impacts Impacts to PL: ($ in millions) Adjusted EBITDA Δ(1) Adjusted EPS Δ(1) Average MOP Price --> $10/mt $93 $0.13 Average DAP Stripping Margin --> $10/mt $88 $0.17 Potash Sales Volume --> 100k mt $15 $0.02 Phosphates Sales Volume --> 100k mt $9 $0.02 Canadia
Slide 20: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Consolidated Earnings (in millions) 1Q 2019 1Q 2018 Consolidated net earnings attributable to Mosaic $131 $42 Less: Consolidated interest expense, net $(47) $(49) Plus: Consolidated depreciation, depletion and $218 $217 amortization Plus: Accretion expense $15 $12
Slide 21: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Phosphates Earnings (in millions) 1Q 2019 1Q 2018 Operating earnings $44 $78 Plus: Depreciation, depletion and amortization $103 $99 Plus: Accretion expense $12 $9 Plus: Foreign exchange gain (loss) $2 $4 Plus: Other income (expense) $1 $(5) Plus: Equity in net ea
Slide 22: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Potash Earnings (in millions) 1Q 2019 1Q 2018 Operating earnings $176 $92 Plus: Depreciation, depletion and amortization $78 $76 Plus: Accretion expense $1 $1 Plus: Foreign exchange gain (loss) $37 $(30) Plus: Other income (expense) $1 $0 Plus: Notable items $(37)
Slide 23: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures Mosaic Fertilizantes Earnings (in millions) 1Q 2019 1Q 2018 Operating earnings $27 $13 Plus: Depreciation, depletion and amortization $32 $37 Plus: Accretion expense $2 $2 Plus: Foreign exchange gain (loss) $(9) $(5) Plus: Other income (expense) $(2) $0 Plus: Nota