Built for Resilience
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BUILT FOR RESILIENCE 2020 ANNUAL REPORT DEAR FELLOW SHAREHOLDERS, Compass Minerals is a company built for resilience. Our In 2020, our society experienced a year of unprecedented valued employees, essential products, advantaged assets challenges. The devastating health and economic impacts and sustainable operations provide a strong foundation for of the COVID-19 pandemic, heightened awareness around our company — a foundation that I believe keeps us steady issues of racial injustice and deep political divisions during times of adversity and upon which we can build in together changed the landscape of how we work, interact times of opportunity. As president and CEO, I am pleased and communicate. Such challenges test our resilience, but to share with you Compass Minerals’ 2020 Annual Report to they also underscore the necessity of building a business reflect back on our past year and provide a view into where with a strong foundation and an eye toward long-term, we are going in the future. sustainable growth. Dedication to that mindset is what empowered Compass Minerals to maintain focus on the safety and well-being of our people, meet our customers’ needs and continue 2020 FINANCIAL SUMMARY to build a more agile and sustainable company through our enterprise-wide optimization efforts. In addition to the aforementioned crises, in 2020 our business was faced in TOTAL CASH FLOW FROM the markets we serve with a mild winter that weakened COMPANY SALES OPERATIONS demand for deicing solutions, as well as a compressed $1.4B $175M planting season that delayed demand for specialty plant nutrients. Yet through each challenge, we have ADJUSTED NUMBER OF demonstrated resilience and our steadfast commitment to EBITDA* EMPLOYEES our shareholders, customers and communities. $289M 3,000+ Four hurricanes impacted our Cote Blanche mine in 2020, and yet in each instance we were able to secure our 2020 GROSS SALES BY SEGMENT facilities, safely evacuate and quickly resume operations to make up for lost time. Operational discipline also fueled a record-setting monthly performance in the fourth quarter of SALT 2020 at our Goderich mine since completing the transition to continuous mining and haulage practices. Despite the effects PLANT NUTRITION on growing seasons of extreme weather, including wildfires NORTH AMERICA and drought, our Plant Nutrition business was able to stay agile in meeting fourth-quarter customer demand and make PLANT NUTRITION up ground for both our North and South America segments. SOUTH AMERICA *Non-GAAP measures. A reconciliation to GAAP measures are provided on the last page. My priorities remain the same: building a sustainable culture, safely delivering on our commitments and continuously assessing opportunities to drive efficiency though our highly advantaged asset base. These priorities support Compass Minerals’ core purpose to help keep people safe, feed the world and enrich lives, every day. Looking forward to 2021, I believe Compass Minerals remains well-positioned for success. My priorities remain the same: building a sustainable culture, safely delivering on our commitments and continuously assessing opportunities to drive efficiency though our highly advantaged asset base. These priorities support Compass Minerals’ core purpose to help keep people safe, feed the world and enrich lives, every day. In the pages ahead, we provide more detail on our response to COVID-19, specific aspects of our business and how our resilience in 2020 underscores our position for long-term success. For now, I would like to highlight the dedication of our employees and the steadfast resolve they showed in a year that upended lives in ways once unimaginable. Our people are the core strength of Compass Minerals and are integral to our success. We have no greater asset as a company, and it is with them in mind that I am confident in our ability to deliver sustainable value to all stakeholders in the years to come. Kevin S. Crutchfield President and CEO Feb. 26, 2021 COMPASS MINERALS • 2020 ANNUAL REPORT Compass Minerals’ ability to swiftly respond to the pandemic was guided by a longstanding commitment to our Zero VALUED EMPLOYEES Harm culture, which we view as a foundational element to our sustainability as an organization. We are resolute The health and safety of our employees is the number one in our commitment to ensure safe work conditions and priority of Compass Minerals. This is something we view as a a safety-focused culture that drives progress toward an leading indicator of operational success. injury- and incident-free workplace. Our Total Case Incident When the COVID-19 pandemic expanded across the globe in Rate (TCIR), a calculation of work-related injuries per 100 the spring of 2020, we quickly convened a cross-functional full-time workers during a one-year period, showed a 16% Crisis Management Team to ensure that employees were improvement from 2019 and a 53% improvement over a protected, while simultaneously enabling the continuation five-year period. of our essential business operations. Actions taken included, In addition to safety, Compass Minerals is committed to but were not limited to: fostering a sustainable employee culture. In 2020, we • Implementing staggered shift times and restricting conducted an Organizational Health Index (OHI) survey to crew sizes at operations to enable and encourage gauge progress against our 2019 OHI survey results. We social distancing had a strong result with a 90% participation rate among our employees. • Installing thermal scanners at sites for pre-shift temperature screenings As part of our enterprise-wide optimization, this comprehensive employee engagement assessment • Providing additional personal protective equipment identified areas of improvement that are critical to building a (PPE) for all employees and requiring mask healthier organization through targeted changes to the way usage at all sites we work. We believe the identified areas are fundamental to driving long-term sustainable growth. Since launching these • Implementing increased professional sanitation efforts in 2019, the 2020 OHI survey demonstrated how of offices and common areas within our facilities impactful our efforts have been, with our overall OHI score organization-wide more than doubling in that one-year period. • Providing ongoing confidential support to employees Further, in 2020 Compass Minerals created the new role for anxiety related to this, or other personal challenges, of vice president of diversity, inclusion and belonging. through our Employee Assistance Program This role oversees Compass Minerals’ global strategic Due to these efforts, our business has experienced limited approach to ensure company policies and practices and a impacts to date related to the ongoing pandemic. We workforce culture that fosters diversity, inclusion, equity continue to collaborate proactively with our workforce, and belonging. These efforts reflect our commitment to customers, suppliers and logistics partners to prevent investing in our employees as a core asset that is critical to any material disruption to our production or distribution our long-term success. networks. To learn more about specific actions and policies, see our COVID-19 Response on our company website. 2020 TOTAL CASE INCIDENT RATE 4 3.25 3 2.31 1.70 1.83 2 1.53 1 0 2016 2017 2018 2019 2020 ENTERPRISE-WIDE OPTIMIZATION In 2020, we continued to implement our enterprise-wide optimization effort, a bottom-up process designed to empower and leverage the knowledge and creativity of our workforce, as well as to review comprehensively all our operations and businesses to identify value- generating opportunities. This effort is focused on five broad value streams: operations, commercial, logistics, procurement and working capital. Our employees have been key to the successful implementation of our enterprise-wide optimization efforts, and as we continue to execute on the many projects throughout these value streams, we expect to fundamentally improve the earnings potential of Compass Minerals. While the benefits of the initiatives are ultimately tied to market fundamentals of which we do not exercise complete control, our near-term plan is to continue working diligently to mitigate such external factors where we can. our enterprise-wide optimization efforts. Over the course of the year, we were able to achieve a reduction in our per-unit ESSENTIAL logistics costs and product cash cost, compared to 2019. At our mine in Goderich, Ontario, Canada, we experienced PRODUCTS a record year of performance in 2020 since converting to continuous mining. We believe we have not yet reached the Our products help keep roads safe and the economy in mine’s full operational potential, which puts us on a strong motion during winter weather conditions; enhance footing as we look forward. agricultural productivity and quality from planting to Despite our mine in Cote Blanche, Louisiana, being impacted harvesting seasons; contribute to human and animal by four successive hurricanes over the course of 2020, it was nutrition needs; improve water quality; and are a required nevertheless able to demonstrate strong performance year- ingredient in a variety of chemical and industrial over-year. While the storms caused some lost production products and processes. days, the preparations made by our team to protect the site and the safety of our employees allowed production SALT to resume efficiently and effectively after each extreme weather event. As a result, we were able to