Core Viewpoint - The Mosaic Company (MOS) has seen a 10.8% increase in its shares over the past three months, outperforming the Zacks Fertilizers industry's 3.9% rise, driven by healthy demand for phosphate and potash, high-return investments, and cost structure improvements [1] Group 1: Demand Factors - There is strong global demand for grains and oilseeds, which is expected to continue driving fertilizer demand due to improved farmer affordability and crop prices [2] - In North America, favorable conditions such as strong yields and the need to replenish soil nutrients are contributing to a positive demand environment for fertilizers [2] - Brazil's fertilizer demand is anticipated to be supported by healthy grower economics and low inventory levels, while India is expected to see increased demand due to pent-up purchases [2] Group 2: Cost Management - The company is implementing cost-reduction strategies aimed at improving its operating cost structure, with a target of achieving $150 million in run-rate cost reductions by the end of 2025 [3] Group 3: Investment and Capacity Expansion - MOS is focused on high-return investments with moderate capital expenditures, including the completion of an 800,000-ton MicroEssentials capacity conversion, which is expected to increase volumes by 25% in 2025 [4] - The Esterhazy Hydrofloat project will add 400,000 tons in milling capacity, expected to be completed by mid-2025, with a ramp-up by the end of the year [4] - A new blending and distribution center in Palmeirante, Brazil, is also set to be completed by mid-2025, projected to increase overall sales by one million tons [4]

Company Overview - Mosaic is headquartered in Tampa and operates in the Basic Materials sector, specifically as a fertilizer maker [3] - The stock has experienced a price change of 11.8% since the beginning of the year [3] Dividend Information - Mosaic currently pays a dividend of $0.22 per share, resulting in a dividend yield of 3.2%, which is higher than the Fertilizers industry's yield of 2.72% and the S&P 500's yield of 1.57% [3] - The annualized dividend of $0.88 has increased by 4.8% from the previous year, with an average annual increase of 47.70% over the last 5 years [4] - The company's current payout ratio is 42%, indicating that it pays out 42% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Mosaic's earnings in 2025 is projected at $2.13 per share, reflecting a year-over-year earnings growth rate of 7.58% [5] Investment Perspective - Mosaic is considered a compelling investment opportunity due to its strong dividend performance and current Zacks Rank of 3 (Hold) [7]

Core Insights - The Mosaic Company Foundation has re-launched as The Mosaic Company Foundation for Sustainable Food Systems, focusing on sustainable agricultural practices in the U.S., India, and Brazil [1][2] - The Foundation aims to support resilient farmers and enhance agricultural self-sufficiency to feed over 9 billion people [2] - The Foundation has invested nearly $50 million in sustainable food systems initiatives [2] U.S. Initiatives - In the U.S., the Foundation emphasizes 4R Nutrient Stewardship, which aims to improve nutrient use efficiency across ten million acres [8] - The Foundation collaborates with organizations like Ducks Unlimited to provide farmers with tools and resources for improving soil health and maximizing yields [4][8] India Initiatives - The Krishi Jyoti program in India has benefited over 760,000 people, resulting in a 35% yield increase for key crops [8] - The Foundation plans to expand its efforts in India, increasing family farm participation in its projects by 15% [3] Brazil Initiatives - In Brazil, family farms involved in The Villages Project have seen yield increases of up to 175%, with half of these farms led by women [8] - The Foundation aims to expand The Villages Project's reach to more smallholder family farmers critical for food security [5] Partnerships and Collaboration - The Foundation collaborates with various partners, including The Nature Conservancy and the S M Sehgal Foundation, to drive innovation and community-driven solutions [2][4] - The partnership with Instituto Mosaic in Brazil focuses on enhancing the impact of sustainable agricultural practices [5]

Core Viewpoint - The Mosaic Company (MOS) is benefiting from strong demand for phosphate and potash, high-return investments, and cost structure improvements despite challenges from declining fertilizer prices [1]. Industry Demand - Global demand for grains and oilseeds remains high, with favorable farmer economics driving fertilizer demand due to strong crop prices and affordable inputs [2][3]. - In North America, strong yields and the need to replenish soil nutrients are creating a favorable environment for fertilizer demand [3]. - Brazil's fertilizer demand is expected to be supported by healthy grower economics and low inventory levels, while India is anticipated to see increased demand due to pent-up purchases [3]. Cost Management and Investments - The company is implementing cost-reduction strategies aimed at achieving $150 million in run-rate cost reductions by the end of 2025 [4]. - MOS is focused on high-return investments with moderate capital expenditures, including the completion of an 800,000-ton MicroEssentials capacity conversion and the Esterhazy Hydrofloat project, which will add 400,000 tons in milling capacity by mid-2025 [5]. Market Conditions - Weak fertilizer prices are expected to impact MOS's sales and margins, with net sales declining nearly 11% year over year to $2,815.9 million in the fourth quarter [6]. - Phosphate markets are projected to remain tight due to ongoing supply limitations and rising demand, while potash markets are expected to improve in the short to medium term due to output cuts from major producers [7]. Competitor Insights - Nutrien anticipates potash sales volumes between 13.6-14.4 million tons for 2025, while CF Industries expects a positive global supply-demand balance due to below-normal inventories [8][9]. - Intrepid Potash plans to enhance its potash production in 2025, focusing on operational efficiencies and cost controls [10].

Production and Capacity - In 2024, the company produced approximately 2.9 million tonnes of phosphoric acid, accounting for about 6% of estimated global annual production and 53% of estimated North American annual output[29]. - The company has a production capacity of approximately 4.5 million tonnes of phosphoric acid per year, representing about 7% of world annual capacity and 60% of North American annual capacity[29]. - The company produced approximately 6.3 million tonnes of concentrated phosphate crop nutrients in 2024, accounting for approximately 66% of estimated North American annual production[31]. - The company’s Florida phosphate rock mines produced approximately 8.9 million tonnes in 2024, representing about 47% of estimated North American annual production[32]. - The company’s U.S. Phosphates operations have a combined annual capacity of 17.2 million tonnes across four mines in North America[32]. - The potash segment has an annualized operational capacity of 11.5 million tonnes, accounting for approximately 14% of world annual capacity and 41% of North American annual operational capacity[48]. - In 2024, potash production totaled 8.8 million tonnes, representing about 12% of estimated world annual production and 35% of estimated North American annual production[48]. - The Brazilian phosphate operations have a production capacity of approximately 1.1 million tonnes of P2O5 per year, with 2024 production totaling approximately 1.0 million tonnes, representing about 89% of Brazilian annual output[57]. - In 2024, Mosaic Fertilizantes produced approximately 2.6 million tonnes of concentrated phosphate crop nutrients, accounting for approximately 48% of estimated Brazilian annual production[61]. Financial Performance and Investments - The company repurchased 7,944,507 shares of Common Stock for approximately $235.4 million at an average purchase price of $29.63[22]. - The company entered into an agreement with Saudi Arabian Mining Company to exchange its 25% ownership of the Ma'aden Wa'ad al Shamal Phosphate Company for 111,012,433 shares of Ma'aden, valued at approximately $1.5 billion, resulting in a pre-tax gain of approximately $0.5 billion[22]. - The company paid approximately $22.1 million in royalties and resource taxes to the Brazilian government for phosphate and potash production in 2024[64]. - In 2024, the company paid royalties of approximately $6.8 million related to the leasing of potash assets and mining rights for Taquari[71]. - The company invested $16.7 million in community initiatives in 2023, with preliminary data indicating over $12 million in investments for 2024[107]. Raw Material Consumption - The company consumed approximately 1.0 million tonnes of ammonia during 2024, with production of one tonne of DAP requiring approximately 0.23 tonnes of ammonia[37]. - The company purchased approximately 3.0 million long tons of sulfur during 2024, which is a key raw material for producing phosphate crop nutrients[35]. - Natural gas usage for potash production totaled 17.2 million MM BTU in 2024, with the Belle Plaine solution mine accounting for approximately 80% of total natural gas requirements[53]. Land and Resource Management - The company has land holdings totaling over 368,000 acres in Florida, providing access to phosphate rock reserves and optimizing the value of its land assets[43]. - The company owns over 34,000 hectares of land across multiple Brazilian states, which supports its phosphate and potash production and fertilizer distribution[72]. - The company has a 62% ownership interest in Fospar, which produces approximately 0.5 million tonnes of SSP per year and operates a deep-water port in Paranagua, Brazil[55]. - The company owns approximately 1% of the Tiplam terminal in Santos, São Paulo, ensuring unloading priority for ammonia and capacity for rock, sulfur, and crop nutrients[68]. Employee and Community Engagement - As of December 31, 2024, the company had a total of 13,765 employees, including 10,454 salaried and 3,311 hourly employees[101]. - Approximately 15% of hourly employees in the U.S. and Canada are covered under collective bargaining agreements that expire in 2025[105]. - The company aims for zero harm to people and zero environmental incidents, implementing a structured approach to manage safety risks[105]. - The company has set global 2030 representation goals to foster a more inclusive workplace and is actively working on initiatives to achieve these goals[107]. - The company has a commitment to employee development, offering training events and educational reimbursement programs to support skill acquisition[107]. - The company has a total of eight collective bargaining agreements with unions covering certain hourly employees in the U.S. and Canada[105]. - The company is focused on creating a diverse and inclusive workplace, with ongoing education as a cornerstone of its strategy[107]. Market and Sales Performance - Mosaic Fertilizantes sold approximately 9.0 million tonnes of crop nutrient products in 2024, accounting for approximately 18% of fertilizer shipments in Brazil[56]. - In 2024, the India and China operations purchased 25,233 tonnes of phosphate-based products and 1,077,567 tonnes of potash products, enhancing market access[73]. - The company sold approximately 325,000 tonnes of blends and distributed another 850,000 tonnes of phosphate and potash crop nutrients in China in 2024[74]. - The company’s entitlement percentage of Canpotex decreased from 36.2% to 34.5% in 2024 due to lower shipments caused by electrical equipment issues[81]. Innovation and Technology - The Mosaic Biosciences platform reached 9 million acres of coverage in key markets in 2024, doubling from the previous year[87]. - The company continued to enhance its internal analytical capabilities for assessing pay equity, revealing 0.4% outliers without adequate justifications[108]. Competitive Position - The company is the world's second largest producer of concentrated phosphate and the largest miner of phosphate rock in the U.S., providing a significant cost advantage[90]. - The company produces ammonia at its Faustina, Louisiana plant, meeting approximately one third of its total ammonia needs in North America[91]. - The company’s potash cost structure is competitive and expected to improve as it completes its potash expansion projects[95].

Group 1: SanDisk Corp (SNDK) - SanDisk stock was down 2.9% at $48.15 after Morgan Stanley initiated coverage with an "overweight" rating and a price target of $84 [2] - Morgan Stanley predicts a significant upside for SanDisk, forecasting a potential rally of 90% over the next 12 months [2] - SanDisk has experienced a decline of 4.4% over the last week since going public on February 24, following a spin-off from Western Digital [2] Group 2: Mosaic Co (MOS) - Mosaic stock was up 3.9% at $24.85 after JP Morgan Securities upgraded the stock from "neutral" to "overweight" [3] - The upgrade was based on a favorable pricing outlook for Mosaic's key fertilizer categories, with expectations of rising prices through 2025 [3] - Despite a fourth-quarter earnings miss, Mosaic remains just above breakeven year-to-date [3]

Financial Data and Key Metrics Changes - Fourth-quarter net income was $169 million, with adjusted EBITDA at $594 million, reflecting strong phosphate prices and solid potash performance despite low prices [9][10][14] - The company experienced a $390 million foreign exchange loss in the fourth quarter due to the depreciation of the Brazilian real and Canadian dollar [36][38] - Adjusted EBITDA for the Mosaic Fertilizantes segment was $82 million, but underlying performance was estimated at around $120 million after accounting for foreign exchange losses [40][41] Business Line Data and Key Metrics Changes - In potash, the Esterhazy complex continues to generate strong cash flow, with the Belle Plaine potash mine achieving a 100% operating rate and record production in 2024 [10][11] - Phosphate supply remains tight with strong demand, leading to elevated prices and stripping margins [13][14] - The Brazilian segment showed strong underlying performance with healthy margins and a distribution margin at the high end of the annual normalized range [17][18] Market Data and Key Metrics Changes - Global corn demand is expected to lower the stocks-to-use ratio, leading to rising corn prices, while soybean prices have also improved [23][24] - Potash demand is expected to remain strong, particularly in Malaysia and Indonesia, with Chinese demand solid after record shipments in previous years [27][28] - Supply constraints are anticipated in potash markets due to production cuts from major producers in China and uncertainties in Laos [28][29] Company Strategy and Development Direction - The company is focusing on shedding non-core assets and reallocating capital for better returns, with several deals already announced [19][20] - Investments are being made in core business areas, including a new blending plant in Brazil and the growth of Mosaic Biosciences, which doubled revenues in 2024 [21][22] - The company is committed to improving operational performance and cost control, targeting $150 million in cost reductions [32][45] Management's Comments on Operating Environment and Future Outlook - Management expects constructive agriculture and fertilizer fundamentals in 2025, with positive market dynamics ahead [8][48] - The company is optimistic about its operational performance and financial foundation, positioning itself well to benefit from strong market conditions [48][49] - Management acknowledged challenges from geopolitical factors and foreign exchange impacts but remains confident in the underlying business performance [12][36] Other Important Information - The company will discontinue monthly price and volume releases due to feedback indicating they were not particularly helpful [47] - The upcoming Analyst Day on March 18th will provide further insights into the company's strategies and performance [21][46] Q&A Session Summary Question: Impact of phosphate production sacrifices in 2024 - Management confirmed that approximately 700,000 tons were sacrificed due to extraordinary events, affecting production guidance for 2025 [50][52] Question: Future asset monetization opportunities - Management is reviewing all assets for acceptable returns, with ongoing processes for potential divestitures, including Carlsbad [59][62] Question: Global phosphate shipment outlook - Management indicated that supply-side limitations are constraining demand growth for phosphates, maintaining high stripping margins [67][70] Question: Potash production capacity and demand - Management noted limited upside on maximum production due to operational constraints and supply chain issues [78][80] Question: CapEx and working capital management - Management expressed a target to reduce sustaining CapEx and indicated that working capital will increase due to growth in production volumes [84][89] Question: Cost savings from Fertilizantes - Management confirmed that the remaining cost savings will primarily come from phosphates and potash, with additional savings expected from operational improvements [92][98] Question: Credit risk management in Brazil - Management has shifted focus to lower-risk customers and mega farmers to mitigate credit risks in Brazil [106][107] Question: Tariff impacts on potash pricing - Management stated that any potential tariffs would likely be borne by downstream customers, but affordability remains a key factor for demand [109][110]

The Mosaic Company Fourth Quarter 2024 Results February 27, 2025 2 Fourth Quarter 2024 Performance | CONSOLIDATED | | | OPERATING | | | NET | | ADJUSTED (1) | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | REVENUES | | | EARNINGS | | | INCOME | | EBITDA | | | $2,816M | | | $100M | | | $169M | | $594M | | | PHOSPHATE | | | | | POTASH | | | MOSAIC FERTILIZANTES | | | Net | Operating | Adjusted(1) | | Net | Operating | Adjusted(1) | Net Revenues | Operating Earnings | Adjusted(1) EBITDA | | ...

Core Insights - The Mosaic Company reported a significant decline in net income for Q4 2024, with net income at $169 million or 53 cents per share, down from $365.3 million or $1.06 per share in the same quarter last year [1][7] - Adjusted earnings per share were 45 cents, missing the Zacks Consensus Estimate of 53 cents [1][2] - Net sales for the quarter decreased by approximately 10.6% year over year to $2,815.9 million, also missing the Zacks Consensus Estimate of $2,929.4 million [2] Segment Performance - Potash segment net sales were $557 million, down around 26.5% from $758 million in the prior-year quarter, but exceeded the estimate of $518.5 million. Sales volumes were 2.2 million tons, down 15.4% year over year, missing the estimate of 2.3 million tons. The segment's gross margin fell to $55 per ton from $99 per ton [3] - Phosphate division net sales increased by 8.8% to $1,165 million from $1,070 million in the prior-year period, surpassing the estimate of $1,157.8 million. Sales volumes totaled 1.62 million tons, up 2.5% year over year, but lagged behind the estimate of 1.7 million tons. The gross margin decreased to $85 per ton from $88 per ton [4] - Mosaic Fertilizantes segment net sales were approximately $1,088 million, down about 8.7% year over year, but exceeded the estimate of $1,141.3 million. Sales volume rose 3.7% to 2.2 million tons, with a gross margin of $46 per ton, up from $44 per ton in the prior-year quarter [5] Financial Overview - At the end of the quarter, Mosaic had cash and cash equivalents of $273 million, down 21.8% year over year. Long-term debt increased by 3.1% to $3,332.3 million. Net cash provided by operating activities declined nearly 59.2% year over year to $219.3 million [6] - For the full year 2024, Mosaic recorded a net income of $174.9 million or 55 cents per share, down from $1,164.9 million or $3.50 per share a year ago. The company's adjusted EBITDA for the same period was $2.2 billion, with total revenues of $11.1 billion, down 18.9% year over year [7] Market Outlook - The phosphate markets are expected to remain tight due to ongoing supply limitations and rising demand for fertilizers, fuel, and industrial uses. China's phosphate export outlook is positive for the long term, driven by domestic consumption and industrial needs [8] - Potash markets are anticipated to improve in the short to medium term, influenced by output cuts from major producers in Russia, Belarus, and China, along with challenges to planned expansions in Laos. The potential impact of tariffs on Canadian potash exports to the U.S. remains uncertain, but could lead to higher prices and additional costs for U.S. farmers [9] Stock Performance - Shares of Mosaic have declined by 19.5% over the past year, compared to a 6% decline in the industry [10]

Core Insights - Mosaic reported revenue of $2.82 billion for the quarter ended December 2024, a decrease of 10.6% year-over-year, with EPS at $0.45 compared to $0.71 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $2.93 billion, resulting in a surprise of -3.87%, while the EPS also missed the consensus estimate of $0.53 by -15.09% [1] Financial Performance - Mosaic's stock has returned -12.1% over the past month, contrasting with the Zacks S&P 500 composite's -2.2% change, and currently holds a Zacks Rank 3 (Hold) [3] - Net Sales for Phosphates were reported at $1.17 billion, slightly below the $1.20 billion average estimate, reflecting an 8.9% year-over-year increase [4] - Net Sales for Mosaic Fertilizantes were $1.09 billion, compared to the $1.17 billion average estimate, indicating an 8.7% year-over-year decline [4] - Net Sales for Potash were $557 million, slightly above the average estimate of $551.75 million, but showed a significant year-over-year decrease of 26.5% [4] Key Metrics - The average finished product selling price for Potash was $249, exceeding the five-analyst average estimate of $242.70 [4] - Phosphates sales volumes for total finished products were 1,622 KTon, below the estimated 1,647.52 KTon [4] - Realized costs for Phosphates blended rock were $87 per Ton, higher than the four-analyst average estimate of $83 per Ton [4] - The average finished product selling price for Mosaic Fertilizantes was $486, significantly lower than the estimated $552.56 [4]