The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients worldwide. The company operates through three segments: Phosphates, Potash, and International Distribution. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant, as well as fluorosilicic acid for water fluoridation. In addition, it provides nitrogen-based crop nutrients and animal feed ingredients, and other ancillary services; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to wholesale distributors, retail chains, cooperatives, independent retailers, and national accounts. The Mosaic Company was founded in 2004 and is headquartered in Plymouth, Minnesota.
Business Analysis of Mosaic
The Basic Materials Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Mosaic compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Mosaic to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Mosaic with an interactive chart.
- Revenue Growth: Mosaic reported a revenue growth of -19.5% year-on-year during 2016. Chemicals Industry grew at -4.1% in the same period
- COGS share of Revenues: As a percentage of revenue, Mosaic spent 88.7% of its total revenues on COGS. Chemicals industry average (COGS share of revenue) in the same period was 70.2%
- R&D share of Revenues: Mosaic R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Mosaic spent 4.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Chemicals industry average SG&A spending in the same period was 13.0%
- Inventory share of Revenues: As a percentage of revenue, Mosaic spent 19.4% of its total revenues on Inventories. Chemicals industry average Inventory spending in the same period was 14.6%
- Accounts Payable share of Revenues: As a percentage of revenue, Mosaic invested 6.6% of its total revenues on Accounts Payable (A/P) Chemicals industry average Accounts Payable investment in the same period was 12.6%
- Accounts Receivable share of Revenues: As a percentage of revenue, Mosaic invested 8.8% of its total revenues on Accounts Receivable (A/R). Chemicals industry average Accounts Receivable investment in the same period was 16.8%
- PP&E share of Revenues: As a percentage of revenue, Mosaic invested 128.4% of its total revenues on Property, Plants, and Equipments (PP&E). Chemicals industry average PPE investment in the same period was 52.9%
- Intangibles share of Revenues: As a percentage of revenue, Mosaic invested 22.8% of its total revenues on Intangibles. Chemicals industry average Intangibles investment in the same period was 31.4%
- Net Margins: Mosaic Net Margins in the year 2016 were 4.2%. Chemicals industry average Net Margins in the same period were 8.1%
Sector and Industry Association of Mosaic
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Mosaic is associated with Basic Materials Sector and Chemicals Industry.
Basic Materials sector is comprised of the following industries: Metal Mining; Coal Mining; Chemicals. The definitions for each of the industries is as follows:
- Metal Mining industry includes companies primarily engaged in mining, developing mines, or exploring for precious metals such as Gold, Silver, Platinum and base metals such as Iron, Copper, Aluminum, Lead, and Zinc. It also includes companies that manufacture alloys such as steel.
- Coal Mining industry includes companies engaged in the exploration for and/or mining of coal.
- Chemicals industry includes companies that produce and/or distribute commodity and specialty chemicals. The companies manufacture three general classes of products: (1) basic chemicals, such as acids, alkalies, salts, and organic chemicals; (2) chemical products to be used in further manufacture, such as synthetic fibers, plastics materials, dry colors, and pigments; and (3) finished chemical products to be used as materials or supplies in other industries, such as paints, fertilizers, and explosives.
Industry Ranking of Mosaic
With $7.2 billion revenues, Mosaic ranked number 12 of all the companies in the US Chemicals industry. There were a total of 66 public companies in the US Chemicals industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Chemicals industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.