P R O S P E R I T Y T H R O U G H I N V E S T M E N T IN VESTOR PR ESEN TATION F E B R U A R Y 2 2 - 2 3 , 2 0 1 7
FORWA R D - LOOK IN G STATEMEN TS This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about introducing Produquímica products into North America, capital spending and capital projects; the company’s ability to develop best -in-class safety, ensure asset longevity, drive efficiency, build on its base, achieve more balanced business, improve its strategies and maximize potential; SOP pricing; the highway deicing industry; and the company’s outlook for the first half of 2017 and the full year of 2017, including its expectations regarding earnings per share (“EPS”), volumes, average selling prices, operating earnings margin, corporate and other expense, interest expense, capital expenditures, depreciation, depletion and amortization and tax rates. The company uses words such as “may,” “would,” “could,” “should,” “will,” “likely,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “forecast,” “outlook,” “project,” “estimate” and similar expressions suggesting future outcomes or events to identify forward-looking statements or forward-looking information. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors, including without limitation (i) weather conditions, (ii) the impact of competition on the sales of our products, (iii) the inability to fund necessary capital expenditures or successfully complete capital projects, (iv) foreign exchange rates, (v) increasing costs or a lack of availability of transportation services, and (vi) the ability to integrate acquired businesses and realize anticipated benefits from acquisitions. For further information on these and other risks and uncertainties that may affect the company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s Annual Report on Form 10 -K for the year ended December 31, 2016 and its Quarterly Report on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2016 filed or to be filed with the SEC. The company undertakes no obligation to update any forward-looking statements made in this presentation to reflect future events or developments. Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties. 2
A LEA D ER IN STR ON G, D IVER SE MA R K ETS W ITH U N IQU E A SSET B A SE • A leading supplier of deicing products 2 0 1 6 S A L E S = $ 1 . 1 B I L L I O N in North America and the U.K. • Advantaged rock salt mining assets - World’s largest North American mine Salt strategically located on deep-water port and Plant Nutrition largest dedicated salt mine in the U.K. • A key producer of high-quality salt for consumers and industry in North America • A growing specialty plant nutrition 2016 adjusted EBITDA* business - The largest sulfate of potash (SOP) $275 million specialty fertilizer producer in the Western Hemisphere 2016 adjusted - A micronutrient business based on patented technology EBITDA* margin - Acquired Brazilian specialty plant nutrition 24% company Produquímica Indústria e Comércio (Produquímica) in October 2016 *Non-GAAP measure. See appendix for reconciliation. 3
OU R SA LT B U SIN ESS • Highway deicing - Rock salt and other deicers sold to municipal, county and state/provincial governments - Rock salt sold to chemical producers • Consumer and industrial - A broad range of non-seasonal packaged and bulk products Salt Production Locations Water conditioning Great Britain Primary highway deicing markets Animal nutrition Underground salt mining Many industrial applications, including food Mechanical evaporation - Packaged deicers Solar evaporation Packaging plant Basic, blended and premium products • Advantaged assets 2 0 1 6 S a l t S e g m e n t S a l e s - Goderich, Ontario b y P r o d u c t World’s largest rock salt mine Size and geology enable mining efficiencies Deep-water port and distribution network support efficient shipping Highway Deicing - Winsford, Cheshire, U.K. U.K.’s largest dedicated rock salt mine Consumer & Geology and environment support storage Industrial businesses 4
SA LT: STR ON G FIN A N C IA L ATTR IB U TES D ESPITE W EATH ER VA R IA B ILITY Salt Segment 2016 Snapshot Superior Assets (in millions) • Geology of rock salt mines enables production efficiencies Sales $812 • High-quality, low-cost salt and magnesium EBITDA* $247 chloride assets EBITDA* margin 31% Logistical Advantages • Convenient access to water transportation Salt Segment Price & Volume • Deep-water port at Goderich Average Sales Price Snowfall Events** Short Tons Sold • Extensive depot network (Dollars per ton) (Thousands of tons) $90 16,000 Insulated Markets $80 14,000 • Transportation costs limit imports $70 12,000 • Significant barriers to entry $60 226 10,000 189 186 Strong Deicing Portfolio $50 175 150 160 169 8,000 143 134 $40 • Vertically integrated raw-materials for 111 6,000 specialty products 93 $30 • Low-cost rock salt advantage in packaged 4,000 $20 deicing products 2,000 $10 $0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *Non-GAAP measure. See appendix for reconciliation. **The sum of days with one or more inches (~2.5 cm) of snow in 11 selected U.S. and Canadian cities in 5 CMP’s service area, as reported by the NOAA National Weather Service, Environment Canada.
B U ILD IN G A LEA D IN G SPEC IA LTY PLA N T N U TR ITION B U SIN ESS Largest producer of SOP in Western hemisphere Purchased Wolf Trax in 2014, leader in dry dispersible powder micronutrients Plant Nutrition 2016 Snapshot* (Pro forma, in millions) Sales $560 Expanded into Brazil with Adjusted EBITDA** $125 acquisition of Produquímica Adjusted EBITDA** margin 22% 2 0 1 6 P l a n t N u t r i t i o n S a l e s b y S e g m e n t Now two segments: Plant Nutrition North America Plant Nutrition North America Plant Nutrition South America Plant Nutrition South America *Includes unaudited amounts for full-year Plant Nutrition North America and the three months ended December 31, 2016 for Plant Nutrition South 6 America combined with pro forma revenue and EBITDA from Produquimica for nine-months ending September 30, 2016 See slide 20. **Non-GAAP measure. See appendix for reconciliation.
VA LU E TO EN D - U SER S D R IVES SPEC IA LTY PLA N T N U TR IEN T D EMA N D • SOP improves the economics of Chloride Sensitivity growing many high-value and chloride-sensitive crops High Low - Strengthens root systems - Increase nutrient uptake Tree nuts Avocado Potatoes - Increase total yield and yield quality Citrus Lettuce Alfalfa - Provides plant-ready sulfur, an Tobacco Grapes Tomato important nutrient for crop yield, quality Strawberries Other berries and marketability 50% to 60% of Compass Minerals SOP sales • Micronutrients and other specialty plant nutrients promote: - Stronger, larger roots - More consistent early-stage growth - Better stress tolerance - Enhanced color and flowering 7
COMPASS MINERALS COMPETITIVE A D VA N TA GE IN PR EMIU M POTA SSIU M Wynyard, SOP Production Sites • Only North American SOP producer Saskatchewan - Unique asset at Ogden with low-cost solar evaporation SOP production Fruit, Potatoes Can expand production by adding muriate of potash (MOP) Fruit, Ogden, UT Vegetables, • Fruit, Vegetables, Historically hold 70% to 80% of North Nuts, Turf Turf American SOP market - Turf, Logistically favorable to key high-value Tobacco specialty crop markets • Import competition from Europe and North American SOP Consumption* South America Tree nuts - Can vary depending upon foreign exchange 25% 30% rates, fuel costs and MOP price Vegetables - About 50% of global SOP production uses Fruits 15% high-cost chemical conversion process that Other, including begins with MOP 30% turf and horticulture *Annual consumption based on company estimates. 8
M I C R O N U T R I E N T S : K E Y E L E M E N T S F O R P L AN T H E ALT H • Essential minerals that maximize Cu B the health of all crops • Highly fragmented market in North America and Brazil Mg S • Nutrient-deficient soil profile in Mn Zn Brazil requires comprehensive plant nutrient mix to ensure yield N K - Brazilian growers increasingly turn to technology-driven solutions - P Specialty product application rates Ni Co growing at higher rate than NPK fertilizers Ca Cl Mo 9
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