INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty...

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PROSPERITY THROUGH INVESTMENT INVESTOR PRESENTATION FEBRUARY 22-23, 2017

Transcript of INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty...

Page 1: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

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

I N V E S TO R P R E S E N TAT I O N

F E B R U A R Y 2 2 - 2 3 , 2 0 1 7

Page 2: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

F O RWA R D - L O O K I N G S TAT E M E N T S

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.

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Page 3: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

Salt

Plant Nutrition

A L E A D E R I N S T R O N G , D I V E R S E

M A R K E T S W I T H U N I Q U E A S S E T B A S E

• A leading supplier of deicing products

in North America and the U.K.

• Advantaged rock salt mining assets

- World’s largest North American mine

strategically located on deep-water port and

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

business

- The largest sulfate of potash (SOP)

specialty fertilizer producer in the Western

Hemisphere

- A micronutrient business based on patented

technology

- Acquired Brazilian specialty plant nutrition

company Produquímica Indústria e

Comércio (Produquímica) in October 2016

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2016 adjusted EBITDA*

2 0 1 6 S A L E S = $ 1 . 1 B I L L I O N

$275 million

2016 adjusted

EBITDA* margin

24%

*Non-GAAP measure. See appendix for reconciliation.

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O U R S A LT B U S I N E S S

• 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

Water conditioning

Animal nutrition

Many industrial applications, including food

- Packaged deicers

Basic, blended and premium products

• Advantaged assets - Goderich, Ontario

World’s largest rock salt mine

Size and geology enable mining efficiencies

Deep-water port and distribution network support efficient shipping

- Winsford, Cheshire, U.K.

U.K.’s largest dedicated rock salt mine

Geology and environment support storage businesses

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Great Britain

Salt Production Locations

Primary highway deicing markets

Underground salt mining

Mechanical evaporation

Solar evaporation

Packaging plant

Highway Deicing

Consumer &Industrial

2 0 1 6 S a l t S e g m e n t S a l e s

b y P r o d u c t

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0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

93

175

226

150 160

169

111

189 186

143 134

5

Salt Segment Price & Volume

Short Tons Sold Snowfall Events** Average Sales Price

(Dollars per ton)

*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

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

S A LT: S T R O N G F I N A N C I A L AT T R I B U T E S

D E S P I T E W E AT H E R VA R I A B I L I T Y

• Geology of rock salt mines enables production efficiencies

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

Superior Assets

• Convenient access to water transportation

• Deep-water port at Goderich

• Extensive depot network

Logistical Advantages

• Transportation costs limit imports

• Significant barriers to entry

Insulated Markets

• Vertically integrated raw-materials for specialty products

• Low-cost rock salt advantage in packaged deicing products

Strong Deicing Portfolio

Salt Segment 2016 Snapshot

(in millions)

Sales $812

EBITDA* $247

EBITDA* margin 31%

(Thousands of tons)

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B U I L D I N G A L E A D I N G S P E C I A LT Y

P L A N T N U T R I T I O N B U S I N E S S

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Plant Nutrition 2016 Snapshot* (Pro forma, in millions)

Sales $560

Adjusted EBITDA** $125

Adjusted EBITDA** margin 22%

*Includes unaudited amounts for full-year Plant Nutrition North America and the three months ended December 31, 2016 for Plant Nutrition South

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.

Purchased Wolf Trax in 2014, leader in dry dispersible powder

micronutrients

Expanded into Brazil with acquisition of Produquímica

Largest producer of SOP in Western hemisphere

Plant NutritionNorth America

Plant NutritionSouth America

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 South America

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VA L U E TO E N D - U S E R S D R I V E S

S P E C I A LT Y P L A N T N U T R I E N T D E M A N D

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• 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 for crop yield, quality

and marketability

• Micronutrients and other specialty

plant nutrients promote:

- Stronger, larger roots

- More consistent early-stage growth

- Better stress tolerance

- Enhanced color and flowering

50% to 60% of Compass Minerals SOP sales

Tree nuts

Citrus

Tobacco

Strawberries

High Low

Avocado

Lettuce

Grapes

Other berries

Potatoes

Alfalfa

Tomato

Chloride Sensitivity

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SOP Production Sites

Ogden, UT

Wynyard,

Saskatchewan

C O M PA S S M I N E R A L S C O M P E T I T I V E

A D VA N TA G E I N P R E M I U M P O TA S S I U M

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Fruit,

Potatoes

Fruit,

Vegetables,

Nuts, Turf Fruit, Vegetables,

Turf

Turf,

Tobacco

30% 25%

15%

30%

North American SOP Consumption*

Other, including

turf and horticulture

Tree nuts

Vegetables

Fruits

*Annual consumption based on company estimates.

• Only North American SOP producer

- Unique asset at Ogden with low-cost solar evaporation SOP production

Can expand production by adding muriate of potash (MOP)

• Historically hold 70% to 80% of North American SOP market

- Logistically favorable to key high-value specialty crop markets

• Import competition from Europe and South America

- Can vary depending upon foreign exchange rates, fuel costs and MOP price

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

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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

the health of all crops

• Highly fragmented market in North

America and Brazil

• Nutrient-deficient soil profile in

Brazil requires comprehensive

plant nutrient mix to ensure yield

- Brazilian growers increasingly turn

to technology-driven solutions

- Specialty product application rates

growing at higher rate than

NPK fertilizers

9

Cu B

Cl Mo

Ni

Zn

Co

Mn

Mg S

Ca

N K

P

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P L A N T N U T R I T I O N S O U T H A M E R I C A :

AT T R A C T I V E P R O D U C T P O R T F O L I O

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Agriculture

Agriculture = 73% of 2016 revenue

*Includes new products introduced since 2010.

**Source: Company estimates.

Chemical

Solutions

• Soil nutrients: micronutrients,

secondary nutrients and other

supplements

• Technology products: controlled

and slow release formulations

• Nutritional supplements for cattle

poultry and dairy cows

Chemical solutions = 27% of 2016 revenue

• Caustic soda and chlorine for

municipal and industrial clients to

treat waste water

• Process chemicals for industrial

customers, including oil and gas,

mining, pulp and paper and others

Almost ½ of

Brazil’s population

lacks access to

sewage systems**

Less than 40% of

sewage in Brazil

currently treated**

AGRICULTURE

PRODUCT SALES

~65% DIRECTLY TO

FARMS

50% of 2016 agriculture

revenue from

NEW PRODUCTS*

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E X PA N D E D P L A N T N U T R I T I O N

B U S I N E S S O F F E R S M O R E B A L A N C E

• Completing Produquímica acquisition is a key step to becoming a global leader in specialty plant nutrition

- Expands product portfolio

- Diversifies geographic footprint and served markets

- Enhances research and development capabilities

- Establishes new reporting segment, Plant Nutrition South America

• Brazil’s plant nutrition strength balances weaker fundamentals in the U.S. in 2016

- Strong U.S. currency benefits Brazilian farm income while challenges U.S. commodity prices

• Expect to begin introducing Produquímica products into North American markets over next 12 months

11

11

33

334

1447

Number of Product Categories Number of SKUs

59%

41%

78%

22%

Salt

After PDQ Acquisition

Revenue by Business

2015 Pro Forma 2016

Plant Nutrition

Before PDQ Acquisition

Page 12: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

N E A R I N G C O M P L E T I O N O F M A J O R

C A P I TA L P R O J E C T S

• Peak period of capital spending complete

- Expect approximately 25% reduction in

capex for 2017 vs. 2016

• Goderich mine: continued commissioning

of additional continuous miners

- Expect to be complete by end of 2017

- Anticipate $30 million in annual cost

savings once fully implemented

• Goderich Mine: one shaft lining complete

- Second expected to be complete in 2018

• Ogden: new SOP compaction plant

expected to be commissioned in 1Q17

• Ogden: new expanded crystallizer in SOP

facility expected to be commissioned mid-

year 2017

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$0

$40

$80

$120

$160

$200

2016 2017 2018

Base MOB Plant Nutrition South America

Special MOB Investment Capital

~25%

($ in millions)

2016-2018 Capital Plan

~25%

Page 13: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

P L AT F O R M F O R G R O W T H

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BUILD ON ESSENTIAL

MINERALS BASE;

ACHIEVE MORE

BALANCED BUSINESS

DEVELOP BEST-IN-CLASS

SAFETY; ENSURE

LONGEVITY OF KEY

ASSETS

DRIVE EFFICIENCY

THROUGHOUT OPERATIONS

STRENGTHEN GROW

IMPROVE IMPROVE GO-TO-MARKET

STRATEGIES; MAXIMIZE

MARGIN POTENTIAL

Page 14: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

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

2017 OUTLOOK

( A S O F F E B R U A RY 8 , 2 0 1 7 )

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W I N T E R W E AT H E R R E T U R N E D T O S O M E

K E Y N O R T H AM E R I C A N M AR K E T S

• Stronger snow events in 4Q16 vs. prior year

- Snow events tracked by company in 11 key cites were up 194% vs. very mild 4Q15

- Regional variances in weather with most snow occurring in northern markets

Average to below-average winter weather in central and southern U.S. markets and the U.K.

• Profitability remained robust despite mild winter impact on volumes and price throughout 2016

- Lower per-unit logistics costs

- Improved profitability in consumer and industrial business

- Improvements offset partially by higher production cost in 4Q16 due to lower operating rates at salt mines and unplanned downtime at Goderich mine

15

17.9% 19.7% 20.8%

25.3% 24.7%

2012 2013 2014 2015 2016

Salt Segment Adjusted Operating Margin**

42.2

17

50

10 Year Avg

2015

2016

4th Quarter Snow Events*

*The number of snow events in 11 cities in Compass Minerals’ primary North American deicing region compared with the 10-year average number of snow events, which is the

mean number of snow events for the periods ended in the 2015-2016 season. For more information, please see the Investor Resources section of the company’s investor

relations site at www.compassminerals.com

**Non-GAAP measure. See appendix for reconciliations.

Page 16: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

P L A N T N U T R I T I O N : S T R O N G F I N I S H TO

2 0 1 6 I N N O R T H A M E R I C A A N D B R A Z I L

• Demand in North America sparked by

increased affordability

- 4Q16 sales volumes increased 53%

vs. 4Q15

- 2016 SOP imports down 28% from

2015; pricing remains stable but

competitive

• Brazil plant nutrition market maintained

strength

- 2016 sales volumes increased 9% from

prior year

- Supported by strong crop economics

and good growing conditions

16

20

40

60

80

100

$0

$150

$300

$450

$600

$750

1Q16 2Q16 3Q16 4Q16

Average price per ton Sales volumes

2015 2016

-28%

SOP Pricing Stabilizing

SOP Imports into North America*

*Source: Compass Minerals research; Datamyne.

Tons in thousands

Page 17: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

1 H 1 7 A N D F Y 1 7 O U T L O O K ( A S O F F E B . 8 , 2 0 1 7 )

2017 OUTLOOK:

FULL YEAR EPS - $3.20 to $3.70

Salt Segment 1H17 FY17

Volumes 6.1 million to 6.5 million tons 11.8 million to 12.6 million tons

Average Selling Price (per ton) $66 to $70

Operating Earnings Margin 16% to 18%

Plant Nutrition North America Segment

Volumes 145,000 to 165,000 tons 300,000 to 330,000 tons

Average Selling Price (per ton) $615 to $645

Operating Earnings Margin 11% to 13%

Plant Nutrition South America Segment

Volumes 360,000 to 390,000 tons 800,000 to 1.1 million tons

Average Selling Price (per ton) $380 to $410

Operating Earnings Margin break-even

Corporate

Corporate and Other Expense ~$60 million

Interest Expense ~$52 million

Capital Expenditures $125 million to $140 million

Depreciation, depletion and amortization ~$125 million

Effective Tax Rate ~28%

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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

APPENDIX

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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

PLANT NUTRITION SOUTH AMERICA

SUPPLEMENTAL INFORMATION

Page 20: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

P R O F O R M A Q U A R T E R LY 2 0 1 6 P L A N T

N U T R I T I O N S O U T H A M E R I C A R E S U LT S *

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Three months ended

(US$, in millions except foreign exchange rate) March 31,

2016

June 30,

2016

September 30,

2016

December 31,

2016 Segment sales $ 61.3 $ 71.8 $ 110.1 $ 113.5

Sales excluding shipping and handling 57.8 68.1 104.9 107.2

Operating earnings 2.9 6.1 21.7 8.0

Operating margin 4.7% 8.5% 19.7% 7.0%

Adjusted operating earnings** 2.9 6.1 21.7 16.4

Adjusted operating margin** 4.7% 8.5% 19.7% 14.4%

EBITDA** 7.4 10.8 26.3 13.3

EBITDA margin** 12.1% 15.0% 23.9% 11.7%

Adjusted EBITDA** 7.7 11.1 26.6 21.7

Adjusted EBITDA margin** 12.5% 15.5% 24.2% 19.1%

Sales volumes (in thousands of tons)

Agriculture 67 101 169 122

Chemical solutions 88 86 83 72

Total sales volume 155 187 252 194

Average selling price (per ton)

Agriculture $555 $474 $518 $713

Chemical solutions $272 $281 $269 $372

Total Plant Nutrition South America $394 $385 $436 $587

Assumed US$-to-R$ per quarter 3.59 3.59 3.59 3.27

*Three months ended March 31, June 30, and September 30, 2016 are unaudited, pro forma amounts for the historical results of Produquímica. These

amounts assume Compass Minerals acquired Produquímica on January 1, 2016, and include the effects of acquisition accounting for those periods.

**Non-GAAP measure. See reconciliation section of presentation.

Page 21: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

Product

Soy

Coffee

Sugar

Orange

Corn

Meat

Exports

#2

#1

#1

#1

#2

#1

Production

#2

#1

#1

#1

#3

#3

Source: USDA, FAO

62

161 121 107

157 112

48 43 38 23 36

328 108

99 88

12

26

36 33 33 26 12

Arable Land Unavailable Arable Land Available

B R A Z I L A G R I C U LT U R E F U N D A M E N TA L S

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Brazil’s Leading Position in

Key Products (2014/2015)

Source: 2015 estimates from FAO, Embrapa, Conab, MAPA

Abundant Land Available

for Cultivation (in hectar millions)

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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

HIGHWAY DEICING INDUSTRY IN

NORTH AMERICA

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G O V E R N M E N T- D I R E C T E D S E L L I N G

P R O C E S S O V E RV I E W

• 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

• 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

Page 24: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

B I D AWA R D T I M E L I N E S H A P E S

S T R AT E G Y

Sun Mon Tue Wed Thur Fri Sat

1 2 3 4 5 6 7

8 Govt. A RFQ

issued 10 11 12 13 14

15 16 17 18 19 20 21

22 Govt. A Bids

due/opened 24

Govt. B RFQ

issued

Govt. A Bids

awarded 27 28

29 30 1 2 3 4 5

6 7 8 Govt. B Bids

due/opened 10

Govt. C RFQ

issued 12

13 Govt. B Bids

awarded 15 16 17 18 19

20 21 22 23 24 Govt. C Bids

due/opened 26

27 28 Govt. C Bids

awarded 30 31 1 2

Illustration of Bid Timeline

24

• Timing is different for each government customer

• Compass Minerals evaluates bid results and adjusts strategy accordingly

• Compass Minerals prepares thousands of bids

Page 25: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

T H E G O V E R N M E N T- D I R E C T E D P R O C E S S

P R O H I B I T S P R I C E N E G O T I AT I O N

• Bid requests usually include

several delivery points

• 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 2,000 1,700 2,300 85% - 115%

Fairview 6,500 5,200 7,800 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 2,000 $50.00 Competitor A

Fairview 6,500 $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.

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A C T U A L S A L E S O C C U R M O N T H S

L AT E R

26

• 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

Page 27: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

11 9 8 10

2.4

4.3 3.6

4.2

0

2

4

6

8

10

12

14

16

Compass Minerals* K+S** Cargill All Others

S T R O N G P O S I T I O N I N A C O M P E T I T I V E

I N D U S T RY

27 SOURCE: Roskill Information Services 2015 information and company estimates.

* Reflects Goderich mine at 8.0 million tons of current capacity, not its 9.0 million-ton potential capacity.

** Also imports salt from South America and the Bahamas.

Rock Salt Evaporated Salt

North American salt production capacity in millions of tons

Page 28: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

L O G I S T I C S I S A C O M P E T I T I V E

S T R E N G T H

28

Mines

Depots

Page 29: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

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

NON-GAAP FINANCIAL

RECONCILIATIONS

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Page 30: INVESTOR PRESENTATION...American SOP market - Logistically favorable to key high-value specialty crop markets • Import competition from Europe and South America - Can vary depending

R E C O N C I L I AT I O N O F N O N - G A A P

I N F O R M AT I O N

30

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

12 months ended December, 31 2016

Revenue $ 1,138.0

Net earnings 162.7

Interest expense 34.1

Income tax expense 34.6

Depreciation, depletion and amortization 90.3

EBITDA $ 321.7

Adjustments to EBITDA

Gain from remeasurement of equity method investment (59.3)

Business acquisition-related items(1) 8.4

Indefinite-lived intangible asset impairment 3.1

Other income, net(2) 1.1

Adjusted EBITDA $ 275.0

Adjusted EBITDA margin 24%

(1) Primarily includes additional expense recognized from the sale of finished goods inventory, which had its cost basis increased to fair value as a

result of the acquisition of Produquímica.

(2) Primarily includes interest income and foreign exchange gains and losses. The 12 months ended December 31, 2016, include a charge of $3.0

million related to the refinancing of the company’s debt.

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

12 months ended December 31, 2016

Segment sales $ 811.9

Segment operating earnings 200.6

Depreciation, depletion and amortization 46.7

Segment EBITDA $ 247.3

EBITDA margin 30.5%

Reconciliation for Salt Segment Adjusted Operating Earnings (unaudited) (in millions)

12 months ended December 31,

2012 2013 2014 2015 2016

Segment sales $ 703.4 $ 920.5 $ 1,002.6 $ 849.0 $ 811.9

Segment operating earnings 126.0 181.3 291.4 215.2 200.6

Gain from insurance settlement(1) - - (82.4) - -

Adjusted segment operating

earnings $ 126.0 $ 181.3 $ 209.0 $ 215.2 $ 200.6

Adjusted segment operating margin 17.9% 19.7% 20.8% 25.3% 24.7%

(1) 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.

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Reconciliation for 2016 Plant Nutrition North America and Plant Nutrition South America EBITDA

(unaudited) (in millions)

Plant Nutrition North

America Segment

Pro Forma Plant Nutrition

South America Segment(1)

Pro Forma

Combined Plant

Nutrition(1)

Segment sales $ 203.0 $ 356.7 $ 559.7

Segment operating earnings 21.1 38.7 59.8

Depreciation, depletion and amortization 33.4 18.8 52.2

EBITDA $ 54.5 $ 57.5 $ 112.3

Adjustments to EBITDA:

Indefinite-lived intangible asset impairment 3.1 - 3.1

Earnings in equity investee - 1.2 1.2

Business acquisition-related items(2))\\ - 8.4 8.4

Adjusted Segment EBITDA $ 57.6 $ 67.1 $ 125.0

Adjusted Segment EBITDA Margin 28.4% 18.8% 22.3%

(1) Nine months ended September 30, 2016 are pro forma results, assuming Compass Minerals acquired Produquímica on January 1,

2016 and include the effects of acquisition accounting for those periods.

(2) Primarily includes additional expense recognized from the sale of finished goods inventory, which had its cost basis increased to fair

value as a result of the acquisition of Produquímica.

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Reconciliation for Plant Nutrition South America Segment Adjusted Operating Earnings (unaudited) (1)

(in millions)

Three months ended

March 31,

2016

June 30,

2016

September 30,

2016

December 31,

2016

Reported GAAP segment operating earnings $ 2.9 $ 6.1 $ 21.7 $ 8.0

Business acquisition-related items(2) - - - 8.4

Segment adjusted operating earnings $ 2.9 $ 6.1 $ 21.7 $ 16.4

Segment sales 61.3 71.8 110.1 113.5

Segment adjusted operating margin 4.7% 8.5% 19.7% 14.4%

(1) Three months ended March 31, June 30, and September 30,2016 are unaudited, pro forma amounts for the historical results of Produquímica.

These amounts assume Compass Minerals acquired Produquímica on January 1, 2016, and include the effects of acquisition accounting for

those periods.

(2) Primarily includes additional expense recognized from the sale of finished goods inventory, which had its cost basis increased to fair value as a

result of the acquisition of Produquímica.

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Reconciliation for Plant Nutrition South America EBITDA (unaudited) (1)

(in millions)

Three months ended

March 31,

2016

June 30,

2016

September 30,

2016

December 31,

2016

Plant nutrition S.A. segment GAAP operating earnings $ 2.9 $ 6.1 $ 21.7 $ 8.0

Depreciation, depletion and amortization 4.5 4.7 4.6 5.0

Segment EBITDA $ 7.4 $ 10.8 $ 26.3 $ 13.0

Earnings in equity method investee 0.3 0.3 0.3 0.3

Business acquisition-related items(2) - - - 8.4

Adjusted segment EBITDA $ 7.7 $ 11.1 $ 26.6 $ 21.7

Segment sales 61.3 71.8 110.1 113.5

Adjusted segment EBITDA margin 12.5% 15.5% 24.2% 19.1%

(1) Three months ended March 31, June 30 and September 30, 2016 are unaudited, pro forma amounts for the historical results of Produquímica.

These amounts assume Compass Minerals acquired Produquímica on January 1, 2016, and include the effects of acquisition accounting for

those periods.

(2) Primarily includes additional expense recognized from the sale of finished goods inventory, which had its cost basis increased to fair value as a

result of the acquisition of Produquímica.