Compass Minerals Intl Inc · NYSE:CMP
Compass Minerals Intl — Compass Minerals — Stifel 2018 Cross Sector Insight Conference
25 slides from Compass Minerals Intl's conference presentation, Jun 12, 2018
Slide 1: Stifel 2018 Cross Sector Insight Conference
N Stifel 2018 Cross Sector Insight Conference June 12, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, including without limitation statements about the company; market growth and fundamentals; global trends; its strategy, including its ability to grow and maximize assets; upside potential; cost savings and initiatives; Goderich stri
Slide 3: Compass Minerals: A Diversified Global Minerals Company
Compass Minerals: A Diversified Global Minerals Company FINANCIAL HIGHLIGHTS 2017 SALES = $1.4 BILLION CORE PRODUCTS KEY MARKETS • Salt • Highway deicing in Plant Salt North America and Nutrition • Plant Nutrients the U.K. • Magnesium Chloride • Specialty and commodity agriculture • Chemical Solutio
Slide 4: Our Markets: Focused on Essential and Growing Needs
Our Markets: Focused on Essential and Growing Needs • Highway and residential deicing • Water treatment for clean water Global Trends • De-dusting and road stabilization Life Expectancy Population 75 KEEPING PEOPLE SAFE 70 65 60 55 +37% GLOBAL LIFE EXPENTANCY 8B FEEDING ENRICHING 50 THE WORLD LIVES
Slide 5: Our Strategy: Maximizing Our Asset Base to Drive Growth
Our Strategy: Maximizing Our Asset Base to Drive Growth • Investments in place at key assets - Goderich Mine: shaft relining and new mining technology Improving production - Ogden: expanded production capability • Focus on commercial improvements - Salt business: incremental geographic Building expa
Slide 6: Our Salt Business is Well-Positioned in Unique Commodity Industry
Our Salt Business is Well-Positioned in Unique Commodity Industry • Salt is a commodity with unique attributes - Recession-resistant and non-cyclical Deicing - Relatively low cost to end-users 2017 Salt Consumer non-deicing - Largely regional markets with natural Sales barriers to entry $769M Indust
Slide 7: Our Salt Business Has Strong Fundamental Attributes
Our Salt Business Has Strong Fundamental Attributes Superior Assets • Scale of rock salt mines enables production efficiencies • High-quality, low-cost salt and magnesium chloride assets Logistical Advantages • Convenient access to water transportation • Deep-water port at Goderich • Extensive depot
Slide 8: Our Salt Business Has a Resilient History
Our Salt Business Has a Resilient History Salt Segment Sales Reflect Snow Activity Salt Segment Operating Earnings: (tons, in thousands) 226 Significant Upside Potential 14,000 204 189 186 12,000 170 175 175 153 150 160 169 (in millions) 143 134 10,000 127 $218.9 111 8,000 92 6,000 4,000 2,000 $140.
Slide 9: Salt Strategy Focused on Asset Maximization and Efficiency
Salt Strategy Focused on Asset Maximization and Efficiency • Approximately $40 million in ongoing salt business cost savings actioned - Upgrades and efficiency programs at Goderich Mine Continuous mining and continuous haulage equipment installed in 4Q17; ramp-up continues Relining two of three
Slide 10: Well-Positioned for Growth and Margin Expansion from Current Levels
Well-Positioned for Growth and Margin Expansion from Current Levels Salt Segment Key considerations for growth: Operating Margin Outlook • A return to average winter weather 30.0% • Driving incremental volume growth across all salt businesses 25.0% • Benefit of ~$40 million in annualized 20.0% savin
Slide 11: Our Specialty Plant Nutrition Business: Providing Efficient Solutions for Sustainable Agriculture
Our Specialty Plant Nutrition Business: Providing Efficient Solutions for Sustainable Agriculture To meet the global need for sustainably produced food 2017 Plant Specialty plant nutrient inputs help farmers Nutrition Sales maximize the genetic potential of their crops $585M Compass Minerals is deli
Slide 12: Our Plant Nutrition Business Has Strong Foothold in Key Agriculture Areas
Our Plant Nutrition Business Has Strong Foothold in Key Agriculture Areas Locations advantaged to serve key agriculture markets in Western Hemisphere Compass Minerals’ North American Crop Mix • SOP production well-positioned Tree nuts to serve specialty crops 30% 25% Vegetables Fruits • Access to ke
Slide 13: Well-Positioned to Lead Specialty Plant Nutrition Category
Well-Positioned to Lead Specialty Plant Nutrition Category COMMODITY SPECIALTY K SPECIALTY PLANT NUTRITION FERTILIZER Coated Fertilizer Slow Seed N P K SOP, SOPM& KTS Release - NPK Blends Solubles Foliars Treatment Adjuvants Biologicals Nutrien Nutrien Mosaic Haifa Chemical SQM Yara COMPASS MINERALS
Slide 14: Robust Specialty Plant Nutrition Market Growth Expected in the World's Key Ag Markets
Robust Specialty Plant Nutrition Market Growth Expected in the World’s Key Ag Markets ESTIMATED MARKET SIZE IN NORTH AMERICA ESTIMATED MARKET SIZE IN BRAZIL Specialty K Micronutrients Micronutrients & Solubles Expect 20-25M new ESTIMATED MARKET ESTIMATED MARKET hectares ESTIMATED GROWTH GROWTH comin
Slide 15: Keys to Driving Plant Nutrition Growth and Earnings
Keys to Driving Plant Nutrition Growth and Earnings Operating Margin* Outlook • Ramp up SOP sales from recently commissioned assets at Ogden, Utah, 20.0% facility • Increase presence throughout North 15.0% American agriculture retail and distribution networks • Leverage R&D in North and South 10.0%
Slide 16: 2017 Successes Set Stage for Anticipated Growth
2017 Successes Set Stage for Anticipated Growth 2017 key achievements • Opened innovation center in Stilwell, Kansas, and Iracemopolis, Sao Paulo, Brazil • Launched ProAcquaTM products in the U.S. • Launched five new products in Brazil • Grew direct-to-grower sales in Brazil by 16% vs. 2016 results
Slide 17: Free Cash Flow and Leverage Ratio Improvements Expected
Free Cash Flow and Leverage Ratio Improvements Expected • Most major capex projects complete Free Cash Flow* and Leverage Ratio - 2017 capex declined 46% from 2015 Expected to Improve (in millions) peak spending of $218M - Expect to manage capex to near 2015 2016 2017 2018E 2019E 2020E maintenance l
Slide 18: Compass Minerals Poised to Deliver Greater Shareholder Value
Compass Minerals Poised to Deliver Greater Shareholder Value • Balance between salt and plant nutrition businesses increasing - Diversifies earnings stream and reduces winter weather variability - Enhances growth profile • Expect to pay down debt significantly in both 2019 and 2020 • Focused on exec
Slide 19: Appendix
Compass Minerals:
Slide 20: Full-Year 2018 EPS and 2Q18 Outlook
Full-Year 2018 EPS and 2Q18 Outlook (As of May 1, 2018) FULL-YEAR 2018 EPS – $2.75 to $3.25 Corporate Items Outlook Commentary Corporate and other expense ~$59M Continued efforts to minimize costs Interest expense ~$57M Rising interest expense on floating rate debt Depreciation, depletion and ~$140M
Slide 21: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Reconciliation for EBITDA and Adjusted EBITDA (unaudited) (in millions) 12 months ended December 31, 2017 Net earnings $ 42.7 Interest expense 52.9 Income tax expense 60.0 Depreciation, depletion and amortization 122.2 EBITDA $ 277.8 Restructuring charges 4.3 O
Slide 22: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Reconciliation for Salt Segment EBITDA (unaudited) (in millions) 12 months ended December 31, 2017 Segment GAAP operating earnings $ 138.0 Restructuring charge 2.0 Adjusted operating earnings $ 140.0 Segment sales 769.2 Adjusted segment EBITDA margin 18.2% Reco
Slide 23: Reconciliation for Salt Segment Adjusted Operating Earnings
Reconciliation for Salt Segment Adjusted Operating Earnings (unaudited) (in millions) 2005 2006 2007 2008 2009 2010 2011 Operating earnings $138.0 $114.4 $138.7 $191.7 $232.4 $206.0 $184.7 Estimated losses incurred from - - - - - - 16.4 tornado net of recoveries1 Adjusted operating earnings $138.0 $
Slide 24: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Reconciliation for Plant Nutrition North America and South America Combined Adjusted Operating Earnings and Margin (unaudited) (in millions) 2016 2017 Reported GAAP Plant Nutrition North America segment operating earnings $ 21.1 $27.2 Reported GAAP Plant Nutrit
Slide 25: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Reconciliation for Free Cash Flow (unaudited) (in millions) 2015 2016 2017 Cash flow from operations $ 137.9 $ 167.3 $ 146.9 Capital expenditures 217.6 182.2 114.1 Free cash flow ($ 79.7) ($ 14.9) $ 32.8 25
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