Compass Minerals Intl Inc · NYSE:CMP
Compass Minerals Intl — Compass Minerals — BMO 2018 Farm-to-Market Conference
31 slides from Compass Minerals Intl's conference presentation, May 16, 2018
Slide 1: BMO 2018 Farm-to-Market Conference
N BMO 2018 Farm-to-Market Conference May 16, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, including without limitation statements about the company; growth of its businesses; its growth strategy, including its ability to deliver growth, shareholder value and better shareholder returns; strengthen safety culture, engageme
Slide 3: A Leader in Strong, Diverse Markets With Unique Asset Base
A Leader in Strong, Diverse Markets With Unique Asset Base • A leading supplier of deicing salt products 2017 SALES = $1.4 BILLION in North America and the U.K. • Advantaged rock salt mining assets - World’s largest salt mine strategically Salt located on deep-water port in Canada Plant Nutrition -
Slide 4: Our Growth Strategy
Our Growth Strategy OBJECTIVE APPROACH EXPECTED OUTCOME Strengthen safety culture, workforce engagement A high performance Consistently deliver and asset longevity company with sustainable growth growth and Increase balance between opportunities and shareholder value two businesses significantly imp
Slide 5: Strategy Progress Made; Short-Term Headwinds Abating
Strategy Progress Made; Short-Term Headwinds Abating Capital Expenditures Declining • Most major capex projects complete $250 (in millions) - Expected to drive improved efficiency across both North American businesses $200 and increased SOP production capability $150 $100 • Balance between salt and
Slide 6: Salt Business Overview
Salt Business Overview
Slide 7: Our Salt Business: Advantaged Assets Serving Broad-Based, Non-Cyclical Markets
Our Salt Business: Advantaged Assets Serving Broad-Based, Non-Cyclical Markets • Salt is an essential mineral with thousands of applications and a diverse customer base - Recession-resistant and non-cyclical - Relatively low cost to end-users - Largely regional markets with natural barriers 2017 Sal
Slide 8: Key Assets Offer Important Advantages
Key Assets Offer Important Advantages • Goderich, Ontario, and Cote Blanche, Louisiana, rock salt mines - Serve highway and consumer deicing uses and chemical production - Possess important logistical advantages - Goderich additional advantages include size and deep water port on Lake Huron • Ogden
Slide 9: Strategic Focus on Efficiency, Asset Reliability and Commercial Excellence
Strategic Focus on Efficiency, Asset Reliability and Commercial Excellence • 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 Relini
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: Plant Nutrition Business Overview
Plant Nutrition Business Overview
Slide 12: Long-Term Trends Continue to Support Demand for Advanced Agriculture
Long-Term Trends Continue to Support Demand for Advanced Agriculture GROWING LIMITED CLIMATE POPULATION ARABLE LAND SHOCK (billions) (arable hectares per person) Global Estimated to 10 Arable land population 0.3 result in 17% per person 9 projected to decrease in to decline approach agriculture 8 9.
Slide 13: Specialty Plant Nutrients Help Close the Yield Gap
Specialty Plant Nutrients Help Close the “Yield Gap” U.S. Soy Yield Gap • The yield gap for crops is driven by many 160 key factors 140 - Adverse climate 120 ~87 Bushels/Acre 100 bu/acre - Lack of rainfall 80 - Sub-optimal genetics 60 - Poor plant fertility 40 20 - Poor soil health 0 - Pressure from
Slide 14: Today's Genetics and Trait Packages are Demanding
Today’s Genetics and Trait Packages are Demanding Justus von Liebig’s Advanced seed “Law of the technology requires Minimum” published more nutrient in 1873 investment • Growers investing in “If one growth NPK but overlooking factor/nutrient is deficient, micronutrient needs plant growth is limited,
Slide 15: Specialty Plant Nutrients Explained
Specialty Plant Nutrients Explained What are specialty plant nutrients? Why we like this category in the ag sector • Important nutritional components required • Lower volume, higher margin differentiated for plant health and maximum production products • Support the 4Rs of nutrient stewardship • Hig
Slide 16: Compass Minerals: Well-Positioned to Lead Specialty Plant Nutrition Category
Compass Minerals: 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 Mosaic Haifa Chemical SQM Yara COMPAS
Slide 17: Our Core Geographic Presence Today
Our Core Geographic Presence Today 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 key agricultural Other, including 10% 15%
Slide 18: 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 19: Diversified Crops Insulate From Commodity Row Crops
Diversified Crops Insulate From Commodity Row Crops Soybeans Strawberries Almonds U.S. acres ~90M ~60K ~1.1M Input costs/acre $473 $67,674 $6,241 Fertilizer cost /acre $41 $688 $490 No. of field passes 5 16 7 Net return/acre $67 $30,325 $9,309 Protassium+® Compass Minerals Wolf Trax™ ProAcqua™ Wolf
Slide 20: Capacity in Place to Capture Continued Growth
Capacity in Place to Capture Continued Growth • Ogden-focused investments key to strengthening SOP business in 2017 Sales Volume and Production Capacity Summary North America - Reliability and efficiency of pond-only SOP production increased - Increased capability to convert muriate of potash MOP to
Slide 21: Enhanced Commercialization Capabilities in North America
Enhanced Commercialization Capabilities in North America Keys to success: • Focusing on differentiated agronomic benefits of SOP to increase market penetration 79% of the 58 independently published potato trials from 1945 to 2015 showed • Expanding commercialization SOP provided improvement over MOP
Slide 22: Driving Value Through Direct-to-Grower Distribution in Brazil
Driving Value Through Direct-to-Grower Distribution in Brazil • Consultative sales force backed by agronomic research and proven innovation capabilities • 180+ sales associates with ~30 agronomists that reach over 4,400 large farmers in central Brazil Cerrados • Focused on value-added product sales
Slide 23: A Differentiated Approach to Product Innovation
A Differentiated Approach to Product Innovation Leverage 70 multidisciplinary scientists and two innovation centers Utilize a data-driven advancement and product launch strategy North America Innovation Center Realize pipeline acceleration from counter-season testing Targeted project approach based
Slide 24: Innovation for Future Growth
Innovation for Future Growth 30 Active Pipeline Projects in 2018 for North and South America Discovery – PHASE 1 Phase 2-3 Phase 4-LAUNCH 14 11 5 Wolf Trax 2.0 Sunscreen Biotic Stress Mitigation Nutrient Enhanced Seed Treatments SulfurMag 24
Slide 25: Our Data-Driven Approach Leads to Success in the Field
Our Data-Driven Approach Leads to Success in the Field • Supera Nutritional System in Brazil based on • 2017 Corn Field Trial Results – nutritional package of proprietary Compass Minerals seed treatment impact on corn yield through products has demonstrated superior results early season root develop
Slide 26: Strategic Partnerships Enhance Differentiation and Drive Innovation
Strategic Partnerships Enhance Differentiation and Drive Innovation Biologicals EMBRAPA Brazil › In-licensing collaborations › Co-development of nutritional › Breadth of strains and coating technology stabilization technologies › Expect to launch in Fall 2018 › Compatibility and viability with plant
Slide 27: 2017 Successes Set Stage for Growth
2017 Successes Set Stage for Growth 2017 key achievements • Opened innovation center in Overland Park, Kansas, and Iracemopolis, Sao Paulo, Brazil • Launched ProAcquaTM in the U.S. • Launched five new products in Brazil 2017 Plant Nutrition Sales • Grew direct-to-grower sales in Brazil by 16% vs. $5
Slide 28: Appendix
Compass Minerals:
Slide 29: 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 30: 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 31: 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 Depreciation, depletion and amortization 55.0 Segment EBITDA $ 193.0 Restructuring charges 2.0 Adjusted segment EBITDA $ 1
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