compass minerals business...

June 2020

Compass Minerals Business Overview

Forward-Looking Statements

Certain statements in this presentation, including without limitation statements about the company’s value drivers, including its

ability to improve execution and generate benefits; margin improvements; Goderich Mine success, including ability of mine plan to

increase efficiency, decrease maintenance needs and provide optionality and its design features; ability of Plant Nutrition business

to provide efficient solutions and accelerate growth; acres to be planted; product sales outlook; 2020 strategic priorities; enterprise

optimization initiatives, including its expected benefits; securitization facility; free cash flow; leverage ratio; the company’s outlook

for the second quarter of 2020 and full-year 2020, including revenue, EBITDA, sales volumes, corporate and other expense, interest

expense, depreciation, depletion and amortization, capital expenditures and tax rate; EBITDA margin; pricing; earnings; costs are

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements

are those that predict or describe future events or trends and that do not relate solely to historical matters. We use 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) any impact of the COVID-19 pandemic, (ii) weather conditions, (iii) pressure on prices and impact from competitive

products, (iv) foreign exchange rates and the cost and availability of transportation for the distribution of the company’s products, (v)

any inability by the company to successfully implement its strategic priorities or its cost saving or enterprise optimization initiatives,

and (vi) the outcome of the company’s strategic evaluation of the Plant Nutrition South America business. 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, 2019 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 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.

Value Drivers

Who We Are

• Diversified essential minerals company built on advantaged assets

- Difficult to replicate and strategically located

- Products focused on meeting essential needs of end-users

• Leading supplier of highway deicing products in North America and U.K.

- Attractive, non-cyclical business

• Leading SOP producer and supplier in North America

- Focused on specialty crops

• Strong position in specialty plant nutrition in Americas with leading position in Brazil

- Robust direct-to-grower sales channel in Brazil, providing innovative nutritional solutions to increase yields

3

Compass Minerals at a Glance

• Strong margin profile and cash

generation history

• Strong management team geared to

improve operational and commercial

execution

• Enterprise-wide optimization effort

underway and expected to generate

positive benefit in 2020

• Disciplined approach to internal

capital allocation

Water treatment and

industrial uses in Brazil

Highway deicing in North

America and U.K.

Compass Minerals: An Essential, Diversified

Global Minerals Company

4* Non-GAAP measure. See appendix for reconciliation.

Salt and

Magnesium

Chloride

Plant

Nutrients

Chemical

Solutions

Specialty and semi-

specialty in North and

South America

Consumer and industrial end

uses in North America

Total Sales

$1.5 BILLION

1Q20TTM Financial Highlights

Adjusted EBITDA*

$324 millionAdjusted EBITDA* Margin

22%

1Q20TTM GROSS SALES BY MARKET

Plant Nutrition

35%Deicing

39%

Consumer & Industrial

26%

1Q20 Highlights

5

Cash on Hand(as of 3/31/2020)

$228.6 M

1Q20 EPS

$0.80 vs.

EBITDA*

33%

Year-over-Year Growth in:

Operating Earnings

15%

Cash Flow from

Operations of

78%vs. 1Q19

~$110 M

1Q19 EPS

$0.22

*Earnings before interest, taxes, depreciation and amortization and adjusted for special items. See appendix for reconciliations.

Our Salt Business

6

• Unique attributes

- Recession-resistant and non-cyclical

- Relatively low cost to end-users

- Largely regional markets with natural

barriers to entry

• Compass Minerals is well-positioned

in North American and U.K. markets

Our Salt Business: Well-Positioned in

Unique Commodity Industry

7

Deicing

Consumer non-deicing

Industrial

Chemical

7

Primary served highway deicing markets

Adjacent market growth potential

* Non-GAAP measure. See appendix for reconciliation.

Salt Production Locations

Underground salt mining

Mechanical evaporation

Solar evaporation

Packaging plant

1Q20TTM

Salt Sales

$871M

Salt Segment 1Q20TTM Snapshot (in millions)

Sales $871

EBITDA* $236

Adjusted EBITDA* margin 27%

Strong Fundamental Attributes of Our Salt

Business

• Scale of rock salt mines enables production efficiencies

• High-quality, lower-cost salt and magnesium chloride assets

Superior Assets

• Convenient access to water transportation

• Deep-water port at Goderich mine

• Extensive depot network

Logistical Advantages

• Transportation costs limit imports

• Largely regional markets with natural barriers to entry

Insulated Markets

• Vertically integrated raw materials for specialty products

• Lower-cost rock salt advantage in packaged deicing products

Strong Deicing Portfolio

8

$43

$84

$0

$15

$30

$45

$60

$75

$90

Average Selling Price ($ per ton)

Salt: A Resilient History With Margin

Improvement Underway

9

Salt Segment Sales Reflect Snow Activity

153

204

92

175

226

150160169

111

189186

143134127

163177

134

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Sales Volume Estimated Snow Days*

Steady Price Improvement Despite Winter Variability

+4% CAGR

*The sum of days with one or more inches (~2.5 cm) of snow in 11 selected U.S. and

Canadian cities in Compass Minerals’ service area, as reported by the NOAA National

Weather Service, Environment Canada.

**Non-GAAP measure. See appendix for data and reconciliation.

(tons, in thousands)

10.8

% 15.4

%

17.1

%

22.1

%

19.8

%

24.8

%

OPERATING MARGIN

EBITDA** MARGIN

1Q18 1Q19 1Q2013.5

% 20.0

%

19.3

%

26.1

%

OPERATING MARGIN

EBITDA** MARGIN

2018 2019 2020 Target Margin Range

Progress Toward Margin Improvement

Paving the Way for Long-Term Success at

Goderich Mine

• Long-term mine plan

implementation underway

• Expected to increase efficiency

of mining systems, decrease

maintenance needs of previously

mined space and provide greater

optionality to address potential

variability in geology and

deposit quality

• Key features include:

- Built-for-purpose roadways to

mining area which are designed

for 50-year life span, have lower

ceilings and require less scaling

- Five-year panels designed to be

shuttered with minimal long-term

maintenance

10

Note: Not to scale, for illustrative purposes only.

Long-Term Goderich Mine Illustration

Improved Execution Lifting Salt

Segment Earnings

• Strong increases in average

selling prices in North American

highway deicing drove

1Q20TTM top-line growth

despite 5% reduction in sales

volumes

• Improved production results at

North American salt mines also

contributing to increased

profitability

- Goderich production tons up

32% on 1Q20TTM basis

- Cote Blanche achieved full-year

2019 production target despite

23 outage days related to

hurricane event and safety

incident

11

Adjusted

EBITDA*

29%

1Q20 TTM vs. 1Q19 TTM :

24%


Revenue

Operating

Earnings

3%

Our Plant Nutrition Business

12

Our Plant Nutrition Business: Providing

Efficient Solutions for Sustainable Agriculture

13

Specialty plant nutrients help farmers

maximize the genetic potential of their crops

AMERICAS FOCUSED

Compass Minerals has unique and

focused specialty plant nutrition

portfolio and capability in the

Western Hemisphere

To meet the global need for sustainably

produced food

Plant Nutrition North America

Plant Nutrition South America Agriculture

Plant Nutrition South America Chemical Solutions

1Q20TTM

Plant Nutrition Sales $620M

Total Plant Nutrition 1Q20TTM Snapshot (in millions)

Sales $ 620

EBITDA* $ 138

EBITDA* margin 22%

* Non-GAAP measure. See appendix for reconciliation.

• #1 producer and marketer of sulfate of

potash (SOP)

• Leading micronutrients platform

• Focused innovation and product

development capabilities

14

Inorganic

Salts

What is Specialty Plant Nutrition?

C H O

N P K

Ca Mg S

Bio-

stimulants

N P K

Chelates

Oxides

Adjuvants

Microbes

Co

mp

ass

Min

era

ls

Biologicals

Nutritional and biological potential enhancers

Stress relief and fortification

Diverse molecular structures and nutritional

formulations

Provided in minute dosages (g/Ha or ml/Ha)

Specialty NPK blends

Building blocks of the plant system

Provided in large dosages (kg/Ha or % of dry

matter)

Micronutrients

Catalyzers of biological processes

Provided in minute dosages (g/Ha or ppm of dry

matter)

Secondary nutrients

Building blocks of the plant system

Provided in large dosages (kg/Ha or % of dry

matter)

Adjuvants

Chemistries to optimize tank mix compatibility

and active ingredient effectiveness

Macro fertilizers

Building blocks of the plant system (commodities)

Provided in large dosages (Tons/Ha or % of dry matter)

Base of the NPK fertilizer industry

Naturally available elements

Structural elements

Provided by nature and generally not subject to shortages

14

15

The Importance of Specialty Plant Nutrition

and the Yield Gap

Contributors to “The Yield Gap”

Adverse Climate

Lack of Rainfall

Sub-Optimal Genetics

Poor Plant Fertility

Poor Soil Health

Weed Pressure

Insect Pressure

Disease Pressure

Yield Gap – Average Bushels per Acre is

Substantially Below Yield Winner

~85 bu/ac

$850/ac

140

53

133

51

020406080

100120140160

Yield Winner National Average

Bushels

/Acre

US BRZ

542

176

0

100

200

300

400

500

600

Yield Winner National AverageB

ushels

/Acre

~366 bu/ac

$1,281/ac

Soy*

Corn*

Advanced seed technology requires

more nutrient investment

• Growers are investing in NPK but

overlooking micronutrient needs

• The right specialty nutrition at the right

time and rate maximizes the potential ROI

for every seed

• The “Law of the Minimum” states that

performance is rate limited by the most

limited nutrient

• Important to ensure micronutrients are not

neglected

15* Sources: USDA; National Corn Growers Association; American Soybean Association; Brazilian

Soybean Strategic Committee

Seed

Treatment

Coated Fertilizer Slow

Release - NPK Blends Solubles Foliars Biologicals

COMMODITY

FERTILIZER

N P K

SPECIALTY PLANT NUTRITIONSPECIALTY K

SOP, SOPM & KTS,

KNO3

Plant Nutrition Market Landscape

16

ICL

Haifa Chemical

SQM

Nutrien

COMPASS MINERALS

Koch

Stoller

Mosaic

Yara

Koch

High Volume / Low

Margin

Moderate

MarginLow Volume / High Margin

16

K+S

Global Market Size ~$160 BILLION

9%

3%18%

41%

20%

9%

Specialty Fruits,

Nuts and Vegetables

Our Core Geographic Presence Today

Locations advantaged to

serve key agriculture

markets in Western

Hemisphere

• SOP production well-positioned

to serve specialty crops

• Access to key agricultural

markets in Brazil

• Brazil sites accessible to ports

• Locations serve producers of

corn, soybeans, coffee, tree

nuts, oranges, sugarcane and

other specialty crops

• R&D facilities in North and

South America

17

Plant Nutrition Production Locations

Agriculture production facility

Water Treatment & Chemicals production facility

Research & development facility

Toll Manufacturing Providers

30% 25%

15%

20%

10%

Compass Minerals’ North

American Crop Mix

Other, including

turf and horticulture

Tree nuts

Vegetables

Fruits

Cereals and

Other Row Crops

Sugarcane

Corn

Compass Minerals’ South

American Crop Mix

Coffee and Cocoa

Soybeans

Sources: FAO, USDA, Compass Minerals estimates.

Corn, Soybean and

other Row Crops

17

Leading Producer of High-Value SOP in

the Americas

18

• Only North American SOP producer and largest in the Americas

- Unique asset at Ogden with low-cost solar evaporation SOP production with ~325,000 tons annual capacity

Unique capability to expand annual production by ~200,000 tons by adding muriate of potash (MOP)

- Typically hold 70% to 80% of North American SOP market

Import competition primarily from Europe and South America

About 50% of global SOP production uses high-cost chemical conversion process that begins with MOP

• SOP improves the economics of growing many high-value and chloride-sensitive crops

- Strengthens root systems

- Increase nutrient uptake

- Increase total yield and yield quality

- Provides plant-ready sulfur, an important nutrient supporting crop yield, quality and marketability

18

~60% of Compass Minerals SOP sales

Tree nuts

Citrus

Tobacco

Strawberries

High Low

Avocado

Lettuce

Grapes

Other berries

Potatoes

Alfalfa

Tomato

Crop Chloride Sensitivity

Diversified End-Market Insulate From

Commodity Row Crops

Soybeans Strawberries Almonds

U.S. acres ~90M ~60K ~1.25M

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

Compass Minerals

product fit

Rocket Seeds™

Wolf Trax™

ProAcqua®

Abundance Organic

Protassium+®

Wolf Trax™

ProAcqua®

Abundance Organic

Protassium+®

Wolf Trax™

ProAcqua®

Abundance Organic

19Sources: Estimated Cost of Crop Production in Iowa, Iowa State University Extension and Outreach (2018); 2017 Farm Budgets, University of Illinois FarmDocDaily;

University of California Agriculture and Natural Resources Cooperative Extension and Agricultural Issues Center.

Go-to-Market Approach Tailored to Accelerate

Growth

Plant Nutrition South America Plant Nutrition North America

• Comprehensive commercial strategy allows

access to all farmers in Brazil

• Direct reach to over 4,300 farmers in

Cerrados region

• Large farms averaging 8,000 hectares

• Utilize distributors in southern Brazil

• Broad experience across diverse crop offerings

• Strong account management team with long-

standing relationships with leading distributors

• Diverse, experienced sales force

• Broad portfolio that enables systems-selling

approach

• Cross-selling two Brazil brand families in North

America today

• Capable of both product and equipment solutions

20

Regional sales rep and manager

count by concentration

> 20

10 to 20

< 10

21

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017 2018 2019

Products

launched before

2013

Importance of New Product Launches in Direct-

to-Grower Sales Channel in Brazil

Focused Innovation

Pipeline with 31 projects

in 2019 14 11

Phase 1 – Discovery Phases 2-3 Phase 4 –Launch

6

• Stage-gate R&D process and prioritization

methodology promotes projects that

increase internal ROI

• Customer intimacy with on-the-ground sales

force raises hit rate with new product

introductions

• Dual-hemisphere research accelerates

development and increases go-to-market

opportunities

• Track record of success with 16 new product

lines introduced since 2017 in North and

South America%

of P

lant N

utr

itio

n S

outh

Am

erica A

gro

sale

s b

y pro

duct in

troduction

Products

launched in 2013

and later

Innovation Pipeline Focused on Specialty

Plant Nutrition

21

Attractive, Complementary Chemical

Solutions Business in Brazil

22

• Water treatment products for municipal

and industrial clients to treat waste

water and control odor

- Products include polymers, coagulants,

flocculants and green sand

- Growth market given current status of

Brazil’s water and waste treatment

infrastructure

- Shared production facilities with

agriculture products

• Specialty chemicals for industrial

customers, including oil and gas,

mining, pulp and paper and others

- Products include caustic soda, chlorine

products and others

• Business provides steady sales

volumes throughout the year

22

Plant Nutrition South America

Revenue Profile

Agro ~77%

Chemical Solutions

~23%

Plant Nutrition South America Sales Volumes by Quarter(in thousands of tons)

0

50

100

1Q 2Q 3Q 4Q

2017 2018 2019

Strong Start to 2020 With Demand Recovery in

Both North and South America

0

100

200

300

400

1Q Full Year

2018 2019 2020

23

Sales Volumes (in thousands, short tons)

Plant Nutrition North America Plant Nutrition South America

• Improved grower economics and fertilizer affordability boosted agriculture product sales

• Rest-of-year outlook remains strong for agriculture product sales due to robust grower economics

Sales Volumes (in thousands, short tons)

• Sales volumes up 68% vs. prior year on strong SOP and micronutrient demand

• Favorable application and planting conditions compared to prior year

• Substantial increase in row crop acres expected to be planted in North America versus 2019

0

20

40

60

80

100

120

140

160

180

1Q18 1Q19 1Q20

Chemical Solutions Agriculture

0

100

200

300

400

500

600

700

800

900

FY18 FY19 FY20E

Our Path Forward

24

25

Key 2020 Strategic Priorities

25

Strategic Assessment

Deliver on Commitments

Build Sustainable Culture

• Seeking to unlock true value of our assets which we

believe have strong, attractive market positions

• Temporarily suspending strategic review of Plant

Nutrition South America business

- Strong start to the year reinforces our view of its value

proposition

• Meet then exceed customer expectations, even in this

challenging time

• Continue operational improvements at mines and plants

• Full commitment to enterprise-wide optimization effort

• Enhance balance sheet flexibility

• Drive Zero Harm imperative for our people and the

environment

• Increase employee engagement and build execution

muscle

Enterprise-Wide Optimization Implementation

Continues

• Bottom-up process used to identify

improvement opportunities in key focus

areas

- More than 1,200 initiatives identified and

more than 500 business cases defined

- Centralized support structure established

to ensure execution milestones are

delivered

- Employee culture and engagement a key

component to success

• Some benefits expected in 2020,

ramping up through 2022

26

Operations

Expected Benefit by Value Stream

2020E 2021E 2022E

Value Ramp of Benefits

Operations

Logistics

Strategic sourcing

Commercial

Working capital

Increase production with

greater efficiency

Leverage transportation footprint

across businesses

Partner with key supplies to

more effectively source globally

Improve customer experience

Improve order-to-cash

processes

Focus Areas

$879

$270

$21

$23

$75

$40

Thereafter

2024

2023

2022

2021

2020

DEBT MATURITIES BY YEAR

Strong Liquidity Position with

Limited Near-Term Maturities

• $110 million of cash on hand

and $340 million of total liquidity

at end of 1Q20

• No large debt maturities until

2024

• Planning for A/R securitization

facility to further enhance

liquidity in 2020 and 2021

• Expect FCF range from $120

million to $150 million

• Anticipate ending 2020 with

adjusted net-debt-to-EBITDA

leverage ratio of ~3.9x

(in millions, as of March 31, 2020)

27

$175

$130

$175

$225 to $250

$2

$52

$102

$152

$202

$252

$302

2017 2018 2019 2020E

Total Year-End Liquidity(in millions)

Appendix

28

Highway Deicing Industry in

North America

Government-directed Selling Process

Overview

• Each government issues a Request for

Quotation (RFQ) for blind, sealed bids

- RFQs are typically issued between April

and October

- Each government’s RFQ specifies a

volume or volume range, a bid due date

and a bid open date

• All bids are made public on the bid-open

date

- Creates a transparent process

• Contract is awarded to the lowest bidder

- Negotiation and relationship building are

prohibited

• Contract is for a 12-month period …

sometimes longer

- Price cannot change during 12-month

contract period

30

Bid Award Timeline Shapes Strategy

• Timing is different for each customer

• Compass Minerals evaluates each bid result and adjusts strategy accordingly

• Thousands of bids are prepared each year

Sun Mon Tue Wed Thur Fri Sat

1 2 3 4 5 6 7

8Govt. A RFQ

issued10 11 12 13 14

15 16 17 18 19 20 21

22 Govt. A Bids due 24Govt. B RFQ

issued

Govt. A Bids

awarded27 28

29 30 1 2 3 4 5

6 7 8 Govt. B Bids due/ 10Govt. C RFQ

issued12

13Govt. B Bids

awarded15 16 17 18 19

20 21 22 23 24 Govt. C Bids due 26

27 28Govt. C Bids

awarded30 31 1 2

Illustration of Bid Timeline

31

The Government-directed Process

Prohibits Price Negotiation

• Bid requests usually include

several delivery points

• Amount requested often

reflects prior-winter snow

activity

• Most U.S. customers

guarantee a minimum

purchase and require

maximum delivery

• Suppliers’ bid prices include

delivery

• Contracts are awarded on a

delivery-point by delivery-

point basis

• Sets price for entire winter

season

Illustration of a Government Bid Request*

Delivery

Location

Requested

Quantity

Guaranteed

Minimum

Purchase

Required

Delivery

Capability

Percentage

Range

Dover 2000 1700 2300 85% - 115%

Fairview 6500 5200 7800 80% - 120%

Franklin 175 122.5 210 70% - 120%

Greenville 10,075 8,060 12,090 80% - 120%

Hudson 350 262.5 455 75% - 130%

Illustration of a Government Bid Award*

Delivery

Location

Requested

Quantity

Illustration of

Winning

Bid*

Illustration of

Bid Winner*

Dover 2000 $50.00 Competitor A

Fairview 6500 $53.50 Competitor A

Franklin 175 $54.50 Competitor B

Greenville 10,075 $57.35 Competitor C

Hudson 350 $51.00 Competitor D

* For illustration purposes only. This is not an actual bid request.

32

Actual Sales Occur Months Later

• Deliveries begin in late fall and end in

early spring

• Typically, governments keep only enough rock salt on

hand for two or three applications

- Highway deicing salt is too bulky for most governments to

store in large quantities

• Governments reorder as their supply is used

- Supplies are shipped from the nearest depot

- Each delivery creates a new sales transaction

• After mild winters, suppliers have most of the extra

supply

- Very little inventory is held by the customer

33

Historical Compass Minerals North American

Bid Season Results

34

*The sum of days with one or more inches (~2.5 cm) of snow in 11 selected U.S. and Canadian cities in Compass

Minerals’ service area, as reported by the NOAA National Weather Service, Environment Canada.

For more information, please see the company’s investor relations site at www.compassminerals.com.

Winter ending 1QReported Snow

Events*

Average Awarded Bid Price for

Upcoming Winter

Average Realized Price Highway

Deicing Reported in Following 4Q-

1Q

2007 126 5% 13.0%

2008 201 20% 8.3%

2009 179 8% 13.3%

2010 150 0% 4.7%

2011 204 3% -0.4%

2012 89 -2% -1.4%

2013 144 -3% -3.6%

2014 220 25% 21.6%

2015 161 -7% -9.8%

2016 101 -7% -7.8%

2017 120 -4% 1.2%

2018 175 18% 12.9%

2019 167 8% 11.0%

2020 134 TBD TBD

• Bid results just one piece of actual price realization. Additional factors include

regional snow fall variations and relative mix of non-deicing bulk salt sales to

chemical customers

http://www.compassminerals.com/

Logistics is a Competitive Strength

35

Mines

Depots

1Q20 Financial Results and Outlook

(as of May 5, 2020)

36

1Q20 EBITDA* Growth in All Three

Segments

37

Salt SegmentPlant Nutrition North America


$52

$68$57

$72

Operating earnings

EBITDA*

1Q19 1Q20

-$2.6

$2.9

$0.3

$5.2

Operating earnings

EBITDA*

1Q19 1Q20

• Mild winter reduced 1Q20 sales volumes and revenue vs. prior year

• Strong pricing for North America highway deicing pushed earnings higher vs. prior year

• Production rates at North America mines remained strong

Last-twelve-months Goderich mine production up 32% vs. LTM 1Q19

• Sales volumes up 68% vs. prior year on strong SOP and micronutrient demand

• Favorable application and planting conditions compared to prior year

• Substantial increase in row crop acres expected to be planted in North America versus 2019

• Improved grower economics and fertilizer affordability boosted agriculture product sales

• Rest-of-year outlook remains strong for agriculture product sales due to robust grower economics

• Solid quarter for chemical solutions business driven by demand for chlor-alkali and water treatment products

-$1.6

$10.0

$5.2

$15.7

Operating earnings

EBITDA*

1Q19 1Q20


(In millions of U.S. dollars)

2Q20 EBITDA

2Q20 Outlook

(as of May 5, 2020)

• Salt segment 2Q20 revenue expected to increase modestly on improved pricing vs.

prior year while EBITDA margin expected to be impacted by short-term increase in

per-unit cost

• Plant Nutrition North America segment expected to deliver similar revenue and

EBITDA to 2Q19 due to anticipated strong pull-forward of sales volumes in 1Q20

• Plant Nutrition South America expected to deliver similar revenue to 1Q19 but

increased earnings anticipated due to improved product sales mix and lower logistics

and per-unit cost

- Much stronger performance expected in local currency with top-line growth of approximately

20% and EBITDA growth of more than 75%

38

SaltPlant Nutrition

North AmericaPlant Nutrition

South America

2Q20 Revenue $110M $125M

$35M$28M

$45M

$13M $18M

$55M $75M

$8M $12M

$85M

2020 Full-Year Guidance Items

(as of May 5, 2020)

39

Key Metrics(in millions of dollars unless otherwise noted)

Current(as of May 5, 2020)

Prior

Segment Outlook Low High Low High

Salt Segment sales volumes (in millions of tons)

10.7 11.1 11.0 11.5

Plant Nutrition North America

Segment sales volumes (in thousands of tons) 340 365 340 380


Segment sales volumes (in thousands of tons) 800 900 unchanged

Consolidated and Corporate Outlook Low High Low High

Consolidated EBITDA $330 $370 $350 $400

Corporate and other expense* $50 $55 unchanged

Interest expense $77 $80 unchanged

Depreciation, depletion and amortization $135 $138 unchanged

Capital expenditures $100 $110 unchanged

Effective tax rate ~30% unchanged

*Excludes non-cash items of depreciation, amortization and stock-based compensation.

Non-GAAP Reconciliations

40

Reconciliation of Non-GAAP Information

41

Reconciliation for EBITDA and Adjusted EBITDA (unaudited)(in millions)

Twelve months ended

March 31, 2020

Net earnings $ 82.5

Interest expense 71.2

Income tax expense28.9

Depreciation, depletion and amortization136.0

EBITDA318.6

Adjustments to EBITDA

Stock-based compensation – non cash 7.6

Executive transition costs(1)

2.3

Logistics impact from flooding(2)

2.8

Other expense (income), net(3)

(7.3)

Adjusted EBITDA $ 324.0

Total revenue $ 1,500.7

Adjusted EBITDA margin 21.6%

(1) The company incurred severance and other costs related to executive transition.

(2) The Company incurred additional logistics costs related to Mississippi River flooding.

(3) Primarily includes interest income and foreign exchange gains and losses.


42

Reconciliation for Salt Segment EBITDA (unaudited)(in millions)

Twelve months ended Mar. 31

2020 2019

Segment GAAP operating earnings $ 172.6 $ 133.9

Depreciation, depletion and amortization 59.7 56.8

Segment EBITDA $ 232.3 $ 190.7

Adjustments to EBITDA

Executive transition costs(1) 1.3 -

Logistics impact from flooding(2) 2.8 -

Adjusted EBITDA $ 236.4 $ 190.7

Segment sales $ 870.9 $ 848.6

Segment EBITDA margin 27.1% 22.5%


43

Reconciliation for Plant Nutrition North America and South America Combined

Segment EBITDA (unaudited)(in millions)

12 months ended

March 31, 2020

Segment GAAP operating earnings $ 72.2

Depreciation, depletion and amortization

Earnings in equity method investee

65.2

0.7

Segment EBITDA $ 138.1

Segment sales 619.8

Segment EBITDA margin 22.3%

44

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

tornado net of recoveries1 - - - - - - 16.4

Adjusted operating earnings $138.0 $114.4 $138.7 $191.7 $232.4 $206.0 $201.1

1) In August 2011, the company’s rock salt mine and evaporated salt plant in Goderich, Ontario, sustained damage from a tornado. The amount reported is

management’s estimate of the impact on the period’s net earnings from losses caused by the tornado that had not yet been recovered through insurance.

The estimate of pre-tax losses of $16.4 million in 2011 and $21.4 million in 2012 primarily includes lost sales volumes, higher per-unit production costs

and higher costs to serve customers – including purchased products and logistical inefficiencies – realized in the period.

2) In the fourth quarter of 2013, the company recorded a reserve of $4.7 million related to a ruling against the company from a 2010 labor matter.

3) In the third quarter of 2014, the company reported a gain from an insurance settlement relating to damage sustained by the company as a result of a

tornado that struck the company’s rock salt mine and evaporated salt plant in Goderich, Ontario.

2012 2013 2014 2015 2016 2017 2018

Operating earnings $126.0 $181.3 $291.4 $215.2 $200.6 $138.0 $115.7

Estimated losses incurred from

tornado net of recoveries1 21.4 - - - - - -

Estimated cost of legal ruling2 - 4.7 - - - - -

Insurance settlement3 - - (82.3) - - - -

Restructuring charge - - - - - 2.0 -

Adjusted operating earnings $147.4 $186.0 $209.1 $215.2 $200.6 $140.0 $115.7



45

Reconciliation for Free Cash Flow(unaudited, in millions)

1Q19 1Q20

Cash Flow From Operations $128 $229

Capital Spending (22) (25)

Free Cash Flow $107 $204

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