# Mosaic (MOS) Financial Model Free Excel 3-statement financial model and company analysis for Mosaic. - Canonical: https://finamodel.com/companies/mosaic - Industry: Chemicals - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/MOS.xlsx ## Model Purpose This model provides a comprehensive three-statement forecast and valuation framework to determine the intrinsic equity value of The Mosaic Company, enabling an equity research analyst to assess whether the stock is mispriced relative to the cyclical mid-cycle earnings power of its global fertilizer operations. ## Company Overview The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. The company mines, processes, and distributes fertilizers that are essential inputs for global agriculture, operating primarily in North America and Brazil. Business segments: * **Mosaic Fertilizantes**: Approximately 40% of revenue. Includes the Brazilian production and distribution operations acquired from Vale, producing and selling phosphate, potash, and whole-crop nutrient products. * **Phosphates**: Approximately 38% of revenue. Includes mines and processing plants in Florida and Louisiana, producing diammonium phosphate (DAP) and monoammonium phosphate (MAP). * **Potash**: Approximately 22% of revenue. Includes potash mines in Saskatchewan (Esterhazy, Belle Plaine, Colonsay) and New Mexico, producing muriate of potash (MOP). Key geographies: * Brazil (largest single market due to the Fertilizantes segment) * North America (United States and Canada) * Rest of World (India, China, and other agricultural markets) Business model type: Asset-heavy, commodity-driven manufacturing and mining. The business is highly cyclical and dependent on global crop prices, farmer economics, and raw material input costs (ammonia, sulfur). Competitive position: Mosaic is the largest producer of finished concentrated phosphates in the world and one of the top three global potash producers. It holds a dominant market share in Brazil's fertilizer production and distribution following the Vale Fertilizantes acquisition. Key competitors include Nutrien, CF Industries, and OCP Group. Recent major events: The company recently completed a multi-year transition to the Esterhazy K3 potash mine, making it the world's largest potash mine and significantly lowering cash costs. In late 2024 and 2025, Mosaic executed a $250 million cost-saving programme, divested non-core assets (including the Carlsbad facility), and rapidly scaled its high-margin Mosaic Biosciences platform. ## Revenue Deep Dive **Phosphates** * **Revenue driver formula**: Phosphate Sales Volumes (million tonnes) x Average Realised Price per Tonne (DAP FOB plant basis). * **Historical growth rate**: Highly volatile due to commodity pricing; revenues fluctuated between $4.5 billion and $6.0 billion over the last 3 years. * **Key growth levers and headwinds**: Driven by global grain stocks-to-use ratios, Chinese export quotas on DAP/MAP, and raw material costs (ammonia and sulfur). Weather events (hurricanes in Florida) frequently disrupt production volumes. * **Pricing dynamics**: Spot market commodity pricing. Prices are highly sensitive to global supply shocks and agricultural commodity prices (corn, soybeans). * **Revenue recognition notes**: Recognised upon transfer of control, typically when products are shipped or delivered to the customer. * **Seasonality**: Strongest in the Northern Hemisphere spring planting season (Q1 and Q2) and autumn application season (Q4). **Potash** * **Revenue driver formula**: Potash Sales Volumes (million tonnes) x Average Realised Price per Tonne (MOP FOB mine basis). * **Historical growth rate**: Cyclical; revenues ranged from $2.4 billion to $3.2 billion recently, driven entirely by price swings rather than volume growth. * **Key growth levers and headwinds**: Driven by global potash demand, sanctions on Belarusian and Russian potash, and Canadian rail/port logistics. * **Pricing dynamics**: Spot and contract pricing. A significant portion of international sales is handled through Canpotex (a joint venture with Nutrien), which negotiates large contracts with buyers in China and India. * **Revenue recognition notes**: Recognised upon transfer of control. Canpotex sales are recognised when the product is loaded onto vessels. * **Seasonality**: Similar to phosphates, aligned with global planting seasons, though Canpotex contract settlements can cause lumpy quarterly realisations. **Mosaic Fertilizantes** * **Revenue driver formula**: Fertilizantes Sales Volumes (million tonnes) x Average Realised Price per Tonne (in Brazil). * **Historical growth rate**: Ranged from $4.4 billion to $5.7 billion over the last 3 years, heavily influenced by the Brazilian Real exchange rate and local agricultural demand. * **Key growth levers and headwinds**: Expansion of the Matopiba and Cerrado agricultural regions in Brazil. Headwinds include foreign exchange volatility and reliance on imported raw materials. * **Pricing dynamics**: Local Brazilian spot pricing, heavily influenced by import parity prices and the BRL/USD exchange rate. * **Revenue recognition notes**: Recognised upon delivery to local farmers and distributors in Brazil. * **Seasonality**: Peaks in Q3 and Q4 ahead of the South American summer crop planting season (soybeans and corn). ## Cost Structure ### Variable Costs / COGS * **Line-by-line breakdown**: Raw materials (ammonia, sulfur, natural gas), mining costs (labour, electricity, fuel), royalties and resource taxes (Canadian potash), freight and logistics, and depreciation/depletion of mining assets. * **Gross margin range**: 14% to 25% over the last 5 years, averaging around 18%. * **Key input costs and commodity exposures**: Ammonia and sulfur are massive input costs for the Phosphates segment. Natural gas is a key energy input. * **How COGS scales with revenue**: Highly operating leveraged. Mining fixed costs are high; when fertilizer prices rise, margins expand rapidly because the cost to extract a tonne of rock remains relatively stable. ### Operating Expenses * **R&D**: Minimal as a percentage of revenue (less than 1%), focused primarily on the emerging Mosaic Biosciences platform and crop nutrition efficiency. * **SG&A**: Typically runs between $470 million and $500 million annually. Largely headcount-driven, corporate overhead, and IT systems. * **Depreciation & Amortisation**: Approximately $1.1 billion to $1.2 billion annually. Heavily weighted towards tangible mining assets and processing facilities. * **Stock-Based Compensation**: Relatively low, typical for industrial/mining companies (less than 1% of revenue). * **Restructuring / one-time charges**: Frequent in recent years due to the closure of older shafts (Esterhazy K1/K2) and the integration of Vale Fertilizantes. ### Margin Profile * **Gross margin**: 14% to 25%. * **EBITDA margin**: 15% to 25% (Adjusted EBITDA was approximately 20% in 2025). * **Operating margin**: 6% to 15%. * **Net margin**: 1% to 10% (highly volatile due to non-cash impairment charges and foreign exchange impacts). * **Margin trend**: Stabilising around 20% EBITDA margins following the completion of the K3 mine transition and a $250 million structural cost reduction programme. ## Balance Sheet Structure * **Total assets**: Approximately $22 billion to $24 billion. * **Key asset categories**: Property, Plant, and Equipment (PP&E) is the largest component, followed by inventory and receivables. * **Goodwill & intangibles**: Approximately 10% to 15% of total assets, stemming primarily from the Vale Fertilizantes acquisition. * **Working capital profile**: * **Days Sales Outstanding (DSO)**: 30 to 40 days. * **Days Inventory Outstanding (DIO)**: 60 to 80 days (inventory builds are common ahead of planting seasons). * **Days Payable Outstanding (DPO)**: 40 to 50 days. * **Net working capital as % of revenue**: 10% to 15%. * **Is working capital positive or negative?**: Positive. The company requires significant working capital to build inventory ahead of application seasons, which can be a major use of cash in inflationary environments. * **PP&E**: Consists of active mines, processing plants, and logistics infrastructure. Useful lives range from 3 to 40 years. Depletion of mineral reserves is calculated on a units-of-production basis. * **Right-of-use assets / operating leases**: Material but manageable, primarily related to railcars, vessels, and warehouse facilities. ## Capital Expenditure & Investment * **Capex as % of revenue**: 10% to 12% (approximately $1.2 billion to $1.5 billion annually). * **Maintenance capex vs. growth capex**: Roughly 60% maintenance (including asset retirement obligations and environmental spend) and 40% growth/efficiency. * **Major capex programmes underway or planned**: Expansion of phosphate processing in Brazil, automation of the K3 potash mine, and development of the Mosaic Biosciences platform. * **Capitalised software / development costs**: Immaterial compared to heavy machinery and mine development. * **M&A pattern**: Occasional transformational acquisitions (e.g., Vale Fertilizantes) followed by long periods of integration and organic optimisation. * **Typical acquisition multiple paid**: 6x to 8x mid-cycle EBITDA for fertilizer assets. ## Debt & Capital Structure * **Total debt**: Approximately $4.5 billion to $4.6 billion. Net debt is approximately $4.1 billion. * **Debt/EBITDA ratio**: Target is below 1.5x through the cycle, though it can spike above 2.0x during cyclical troughs. * **Credit rating**: Investment grade (Baa2/BBB-). * **Key debt instruments**: Unsecured senior notes (bonds) with staggered maturities, and a revolving credit facility for seasonal working capital needs. * **Maturity profile**: Well-laddered. The company recently issued 3-year and 5-year notes to retire short-term commercial paper. * **Interest rate profile**: Predominantly fixed-rate bonds. Weighted average cost of debt is approximately 4.5% to 5.5%. * **Covenants**: Standard investment-grade covenants; no restrictive financial maintenance covenants on the bonds, but the revolver requires a maximum debt-to-capital ratio. * **Share repurchase programme**: Highly active. The company targets returning 75% of free cash flow to shareholders and has repurchased over 10% of outstanding shares since 2023. * **Dividend policy**: Regular common dividend (currently $0.22 per quarter or $0.88 annually), supplemented by special dividends or buybacks when cash flow permits. ## Cash Flow Characteristics * **Operating cash flow conversion**: Highly variable. Working capital swings can consume nearly $1 billion in cash during periods of rising commodity prices. * **Free cash flow margin**: 0% to 10%. Free cash flow was near zero or slightly negative in 2025 due to a $960 million working capital build and high capex. * **Major non-cash items**: Depreciation, depletion, and amortisation ($1.1 billion to $1.2 billion), deferred income taxes, and unrealised mark-to-market losses on derivatives. * **Working capital cash flow impact**: A massive driver of year-to-year cash flow variance. Inventory valuation changes and receivables timing dictate OCF. * **Capex intensity**: High. The business requires $1.2 billion+ annually just to sustain operations and meet environmental obligations. * **Cash tax rate vs. GAAP effective tax rate**: Cash tax rate is typically in the mid-to-high 20s percentage range, closely tracking the adjusted effective tax rate. ## Sheet Structure 1. **Assumptions**: Hardcoded inputs for macroeconomic drivers, fertilizer prices, segment volumes, cost inflation, and capital allocation targets. 2. **Scenarios**: Toggle for Peak, Mid-Cycle, and Trough commodity pricing environments. 3. **Revenue_Build**: Volume and price forecasts broken out strictly by the three reported segments (Phosphates, Potash, Mosaic Fertilizantes). 4. **COGS_and_Opex**: Detailed build of production costs, royalties, Canadian resource taxes, SG&A, and D&A. 5. **Income_Statement**: Consolidated P&L mirroring the 10-K format down to Net Income and EPS. 6. **Working_Capital**: Schedules for Accounts Receivable, Inventories, and Accounts Payable based on days outstanding metrics. 7. **PP&E_and_Capex**: Roll-forward of gross PP&E, accumulated depreciation, and capital expenditures. 8. **Debt_Schedule**: Tranche-by-tranche debt roll-forward, interest expense calculation, and commercial paper balances. 9. **Balance_Sheet**: Consolidated assets, liabilities, and shareholders' equity. 10. **Cash_Flow**: Indirect method cash flow statement bridging Net Income to Free Cash Flow. 11. **Valuation**: Discounted Cash Flow (DCF) and EV/EBITDA multiple valuation based on mid-cycle earnings power. ## Key Financial Relationships 1. Phosphates Revenue = Phosphates Sales Volumes x DAP FOB Plant Price 2. Potash Revenue = Potash Sales Volumes x MOP FOB Mine Price 3. Mosaic Fertilizantes Revenue = Fertilizantes Sales Volumes x Fertilizantes Average Realised Price 4. Consolidated Net Sales = Phosphates Revenue + Potash Revenue + Mosaic Fertilizantes Revenue + Corporate/Other Revenue 5. Phosphates Gross Margin = Phosphates Revenue - (Phosphates Sales Volumes x Phosphates Cash Conversion Cost per Tonne) - Phosphates D&A 6. Potash Gross Margin = Potash Revenue - (Potash Sales Volumes x Potash Cash Production Cost per Tonne) - Canadian Resource Taxes and Royalties - Potash D&A 7. Consolidated Adjusted EBITDA = Net Income + Interest Expense + Income Tax Expense + D&A + Notable Items (Restructuring/Impairments) 8. Accounts Receivable = (Consolidated Net Sales / 365) x DSO 9. Inventory = (Consolidated COGS / 365) x DIO 10. Accounts Payable = (Consolidated COGS / 365) x DPO 11. Net Interest Expense = (Average Total Debt x Weighted Average Interest Rate) - Interest Income on Cash 12. Free Cash Flow = Cash Flow from Operations - Capital Expenditures ## Cross-Sheet Dependencies * The **Assumptions** sheet dictates the pricing and volume inputs on the **Revenue_Build** sheet. * The **Revenue_Build** and **COGS_and_Opex** sheets feed directly into the **Income_Statement** to calculate operating earnings. * The **Income_Statement** provides Net Income to the **Cash_Flow** sheet and Retained Earnings to the **Balance_Sheet**. * The **Working_Capital** sheet calculates the change in NWC, which is a critical deduction on the **Cash_Flow** sheet. * The **PP&E_and_Capex** sheet calculates D&A, which feeds the **Income_Statement** (as an expense) and the **Cash_Flow** sheet (as a non-cash add-back). * The **Debt_Schedule** relies on the ending cash balance from the **Cash_Flow** sheet to determine if the revolving credit facility needs to be drawn. This creates a circular reference between Interest Expense on the **Income_Statement**, Net Income, Cash Flow, and Debt balances. ## Sign Convention * Revenues, volumes, and prices are entered and displayed as positive numbers. * Expenses (COGS, SG&A, Interest, Taxes) are entered as positive numbers in the assumptions but subtracted in the Income Statement formulas. * On the Cash Flow statement, cash inflows (e.g., Net Income, D&A add-back, increase in payables) are positive. Cash outflows (e.g., Capex, increase in inventory, dividends paid) are negative. * Balance sheet assets, liabilities, and equity are all positive numbers. ## Things Most Likely to Go Wrong * Failing to account for the Canadian Resource Tax and royalties in the Potash segment, which scale non-linearly with profitability and are separate from standard corporate income taxes. * Underestimating the massive working capital swings. A $100 per tonne increase in fertilizer prices will require hundreds of millions in additional inventory funding, temporarily crushing free cash flow. * Treating the Mosaic Fertilizantes segment as a pure production business. It is largely a distribution and blending business with lower percentage margins but high volume, heavily influenced by the BRL/USD exchange rate. * Ignoring the impact of Canpotex. Potash sales volumes can be lumpy depending on when Canpotex signs major contracts with China and India. * Miscalculating maintenance capex. Asset retirement obligations (ARO) and environmental remediation are significant cash costs that must be modelled alongside traditional PP&E capex. * Double-counting D&A. Mosaic reports segment Gross Margin *after* D&A. The model must carefully add back D&A to reach Adjusted EBITDA. * Extrapolating peak commodity prices. Fertilizer prices revert to the marginal cost of production. Modelling a DCF on peak 2022 prices will result in a wildly inflated valuation. * Forgetting the seasonal cash flow profile. Q1 and Q3 are typically working capital build quarters, while Q2 and Q4 are cash generation quarters. ## Validation Checks * Consolidated Adjusted EBITDA margin should cycle between 15% and 25%. Flag if it exceeds 30% in the terminal year. * Capex should not fall below $1.2 billion annually; the asset base requires this level of sustaining capital. * Net Debt to EBITDA should remain below 2.0x in mid-cycle scenarios to align with management's stated financial policy. * Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period. * Cash tax rate should remain in the 25% to 29% range. * Potash cash production costs should remain in the $70 to $80 per tonne range, reflecting the efficiency of the K3 mine. * Free Cash Flow conversion (FCF / Adjusted EBITDA) should average 30% to 40% through the cycle, adjusting for working capital noise. * Dividend payout plus share repurchases should roughly equal 75% of Free Cash Flow over a multi-year period. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Phosphates Sales Volume | 7.4 | Million Tonnes | Midpoint of 2025 management guidance (7.2 - 7.6m) | | DAP FOB Plant Price | 605 | $/Tonne | Midpoint of Q1 2025 guidance ($595 - $615) | | Potash Sales Volume | 8.9 | Million Tonnes | Midpoint of 2025 management guidance (8.7 - 9.1m) | | MOP FOB Mine Price | 210 | $/Tonne | Midpoint of Q1 2025 guidance ($200 - $220) | | Mosaic Fertilizantes Volume | 10.4 | Million Tonnes | Midpoint of 2025 guidance (10.0 - 10.8m) | | SG&A Expense | 485 | $ Millions | Midpoint of 2025 guidance ($470 - $500m) | | D&A Expense | 1150 | $ Millions | Midpoint of 2025 guidance ($1.1 - $1.2B) | | Net Interest Expense | 190 | $ Millions | Midpoint of 2025 guidance ($180 - $200m) | | Effective Tax Rate | 28.0 | % | Management guidance of "High 20s %" | | Capital Expenditures | 1360 | $ Millions | Actual 2025 capex, scaling to $1.5B in 2026 | | Days Sales Outstanding (DSO) | 35 | Days | Historical average based on recent balance sheets | | Days Inventory Outstanding (DIO) | 70 | Days | Historical average, accounting for seasonal builds | | Days Payable Outstanding (DPO) | 45 | Days | Historical average | | Target Capital Return | 75.0 | % of FCF | Management's stated capital allocation framework | | WACC | 9.5 | % | Standard cost of capital for cyclical mining/chemicals | | Terminal Growth Rate | 2.0 | % | Aligned with long-term global agricultural demand | ## Data Sources & Benchmarks * **SEC EDGAR**: Source for the 10-K, 10-Q, and 8-K filings (specifically the Q4 2025 earnings release and 2025 Form 10-K). * **Investor Relations**: Mosaic's quarterly earnings presentations and the 2025 Investor Day materials. * **Key Peers**: Nutrien Ltd. (NTR), CF Industries (CF), Intrepid Potash (IPI). * **Industry Data**: Green Markets (Bloomberg), Argus Media, and CRU Group for spot fertilizer pricing and global supply/demand balances. * **Consensus Estimates**: FactSet or Bloomberg for forward-looking commodity price curves and analyst EBITDA estimates. ## Sources * The Mosaic Company Q4 2025 Earnings Release and Financial Supplement (February 24, 2026) * The Mosaic Company Q4 2024 Earnings Release (February 27, 2025) * The Mosaic Company 2024 Form 10-K * Quartr Earnings Summaries for MOS (2025 and 2026) * Seeking Alpha Equity Research on The Mosaic Company --- ## Frequently asked questions ### What does The Mosaic Company (MOS) do? The Mosaic Company is a leading global producer and marketer of concentrated phosphate and potash crop nutrients. It mines, processes, and distributes essential fertilizers primarily in North America and Brazil for global agriculture. ### What are the main revenue drivers for Mosaic's Phosphates segment? Revenue in Mosaic's Phosphates segment is primarily driven by sales volumes and the average realized price per tonne of products like DAP and MAP. These are influenced by global grain stocks, Chinese export quotas, and raw material costs such as ammonia and sulfur. ### What is a key capital expenditure assumption in the financial model for The Mosaic Company? A key assumption for The Mosaic Company's financial model is capital expenditure as a percentage of revenue, estimated at approximately 10.99%. This annual spend is typically split with about 60% allocated to maintenance, including environmental costs, and 40% to growth and efficiency projects. ### What is the primary purpose of the financial model for The Mosaic Company? The financial model for The Mosaic Company aims to provide a comprehensive forecast and valuation framework to determine the intrinsic equity value of the company. It allows equity research analysts to assess if the stock is mispriced relative to the cyclical mid-cycle earnings power of its global fertilizer operations. ### Is an Excel financial model available for The Mosaic Company (MOS)? Yes, a downloadable Excel financial model is available for The Mosaic Company (MOS). This model provides a detailed three-statement forecast and valuation framework for analysis, covering a forecast horizon from FY2026 to FY2030. ### How does working capital impact The Mosaic Company's operations? The Mosaic Company has a positive working capital profile, requiring significant capital to build inventory ahead of planting seasons. This can be a major use of cash, especially in inflationary environments, as the company maintains 60 to 80 days of inventory. 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