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N On Strategy 2017 Annual Report DEAR SHAREHOLDERS, In 2014, we presented a strategic vision for long-term sustainable growth at Compass Minerals. This plan featured a significant investment of more than $500 million in our key assets and a commitment to expanding our plant nutrition business in order to diversify our earnings and position us to serve the increasing global need for innovative products that support sustainable agriculture. Although we have faced headwinds, we made important progress and remain on course with our strategic vision. We are beginning to see the initial benefits of the investments we’ve made, and with our employees’ focus on high performance and execution, we believe we are well-positioned to meet and exceed our long-term operational and financial goals. FINANCIAL YEAR-IN-REVIEW While consolidated revenue grew 20 percent in 2017, weaker results in our salt business reduced our total operating and net earnings. Because of back-to-back mild winters in 2016 and 2017, both our highway deicing and consumer deicing businesses faced reduced demand in 2017. This, in turn, led us to reduce operating rates throughout our mines for a second year, which had a negative impact on operating costs, and ultimately on our profitability. Our plant nutrition business, now expanded to include North and South America, provided a beneficial offset to the decline in our salt business earnings. Even with the decline in 2017 earnings, we continued investing in our business, specifically completing the installation of continuous mining and continuous haulage equipment at our Goderich rock salt mine and commissioning the new and expanded sulfate of potash (SOP) production equipment at our Utah facility. Of the major projects we announced in 2014, only the mine shaft relining project at Goderich remains to be completed. DIVIDENDS PER SHARE 2015 $2.64 2016 $2.78 2017 $2.88 Further, we continued to provide direct returns to our shareholders through our dividend. We increased our dividend rate for 2017 and paid almost $100 million directly to our shareholders. We continue to believe that our dividend is an important part of our value proposition to shareholders. ADVANCING OUR SALT MINING PROCESSES A key to the long-term sustainability of our salt business is achieving increased efficiency from our mining and production assets. Along with the various operational excellence initiatives throughout our operations, the transition to continuous mining and continuous haulage at our Goderich mine is critical to these efforts. In the last quarter of 2017, we celebrated an important achievement when we ended our use of drilling and blasting at this mine. We expect the shift to continuous mining and continuous haulage to reduce our mining costs by approximately $30 million annually beginning in 2019 and to meaningfully improve the TAKING THE NEXT STEPS carbon footprint and safety profile of this mine. As we look to 2018 and beyond, we understand that This more efficient mining process allows us to achieving sustainable growth and delivering stronger drastically reduce the use of diesel equipment returns for shareholders requires building and underground which, is both a safety and an maintaining a high performance organization. environmental improvement for our employees. Our people ultimately are responsible for driving results and are a key focus of our management team. Once we are operating these systems at designed Our increased attention on diversity and inclusion, as rates, we will have greater flexibility to ramp our well as training and development, has resulted in the production levels up or down to address market creation of employee resource groups, which we call demands and become the low-cost producer in LINK (Leading, Inspiring, Networking and Knowing) North America. Furthermore, as we complete the groups. In 2017, we established a Women’s LINK and shaft relining project, which will allow us access to an Emerging Leaders LINK. These efforts serve to additional hoisting capacity, we expect to be able strengthen our culture of high performance. to supply additional deicing salt necessary to keep roadways safe for travel during snowy and icy We also believe in accountability and transparency, conditions after severe winters. which is why we further deepened our commitment to sustainability in 2017 by introducing a set of A GROWING PLANT NUTRITION BUSINESS environmental targets. These targets not only serve to Our strategy to build a balanced company with minimize our environmental impacts, they also help growth potential by expanding our specialty plant drive increased efficiency and innovation throughout nutrition business demonstrated its value this year. our organization. This was the first year we enjoyed a full year of contribution from our Plant Nutrition South America ENERGY INTENSITY segment, which delivered $375 million in revenue Reduce by at least 4% and $49 million in operating earnings in 2017. This contribution provided a significant offset to GHG EMISSIONS INTENSITY the year-over-year decline in salt earnings. Scope 1 intensity: Reduce by at least 7% Both our Plant Nutrition North America and South Scope 1+2 intensity: America segments grew earnings in 2017, which we 2020 Reduce by at least 8% are pleased to report given the pressure on farmer ENVIRONMENTAL TARGETS economics in North America and Brazil. We attribute FRESH WATER INTENSITY this growth to our attractive portfolio of specialty Reduce by 5% and semi-specialty products that provide solutions to growers’ needs for yield-enhancing nutrients. With the foundation we now have in place built on our We believe that the opportunities to expand our people, our strengthened assets and our expanded relevancy with growers, distributors and retailers plant nutrition business, I believe we have greater in both North America and Brazil are immense. earnings potential at Compass Minerals than we’ve This year in North America we introduced a new ever had. This is a testament to our team remaining product line of highly soluble micronutrients focused on our strategy, despite challenging market developed by our Brazilian team called ProAcqua™. fundamentals and operational conditions. As a result, In addition, we are cross-selling our Wolf Trax™ I am confident we can deliver more value creation and dry dispersible powder micronutrients into Brazil higher returns for shareholders in the years to come. and see increasing interest from distribution customers who recognize the value proposition of this unique technology. We are also working diligently to advance next generation products that address our customers’ Fran J. Malecha evolving needs. To this end, in 2017 we opened our President and Chief Executive Officer North American Innovation Center. In conjunction with March 6, 2018 our research and development resources in Brazil, we have a unique opportunity for collaborating in terms of both product development and manufacturing. FINANCIAL RESULTS (dollars in millions except per-share data) 2015 2016 2017 SALES $1,098.7 $1,138.0 $1,364.4 OPERATING EARNINGS $221.4 $174.6 $159.2 ADJUSTED OPERATING EARNINGS* $221.4 $186.1 $163.5 ADJUSTED OPERATING EARNINGS MARGIN* 20% 16% 12% NET EARNINGS $159.2 $162.7 $42.7 NET EARNINGS $159.2 $ 111. 2 $93.3 EXCLUDING SPECIAL ITEMS* DILUTED EARNINGS PER SHARE $4.69 $4.79 $1.25 DILUTED EARNINGS PER SHARE $4.69 $3.27 $2.75 EXCLUDING SPECIAL ITEMS* CASH FLOW FROM OPERATIONS $137.9 $167.3 $146.9 *Non-GAAP measures. A reconciliation to GAAP measures are provided on the last page. CASH FLOW FROM OPERATIONS (dollars in millions) $167.3 $146.9 $137.9 $ 2015 2016 2017 At Compass Minerals, we believe the safety of our INJURY SEVERITY INDEX IMPROVING employees and our operations is paramount. We also recognize that our safety metrics are a leading indicator of our progress towards overall operational 2015 20 excellence. This has been an important year for us as we worked to continue improving our safety culture and incorporating our Brazilian operations into our 2016 11 safety and environmental management systems. Through diligence and a focus on mitigating significant risks, we achieved improvements in several 2017 6 areas. Our 2017 Total Case Injury Rate declined 36% from 2016 results. In addition, the severity of injury cases our employees experienced continued to decline in 2017. 2017 GROSS SALES BY MARKET 35% 35% PLANT DEICING NUTRITION 29% CONSUMER & INDUSTRIAL Compass Minerals is working to become the global leader in specialty plant nutrition by building a diversified portfolio of sustainable, holistic agronomic solutions. By maximizing our current product portfolio, innovating and collaborating, we can accelerate the development of high-value, yield-protecting plant nutrition products. Our 2016 purchase of Produquímica and the opening of two Innovation Centers in 2017 have provided us a robust pipeline of products in development and strong research and commercial teams delivering innovation solutions for our retail and grower customers. STRONG HISTORY OF PRODUCT DEVELOPMENT WITH ROBUST PIPELINE Wolf Trax™ 2.0 Protassium+® Targeted Nutrax Seed Treatment Liquid Protassium+® ProAcqua™ – North America Soluble Portfolio DISCOVERY PHASE 1 PHASE 2 PHASE 3 PHASE 4 LAUNCH Five New Product Launches In 2017 Sulfurmag Biological Stress Mitigation Enhanced Delivery Sulfur North America Crop Sunscreen South America R&D CAPABILITIES BY REGION North America South America Capabilities Formulation Seed-applied Product development Basic manufacturing research Growth chamber Greenhouse & field trials Lab & field scientists 20 53 55% of 2017 Plant Nutrition South America’s revenue came from sales of products introduced in the last five years. United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-K (MARK ONE) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 001-31921 Compass Minerals International, Inc.