Slide 1: Q2 2023 Results Presentation
Q2 2023 Results Presentation August 2, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking Statements Certain statements and other information included in this presentation, including within "Update to Mid-Cycle Scenario" and "Outlook", constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statem
Slide 3: Non-IFRS Financial Measures
Forward Looking Statements Non-IFRS Financial Measures This presentation contains certain non-IFRS financial measures and non-IFRS ratios, including adjusted EBITDA (consolidated), adjusted net earnings per share, adjusted EBITDA (consolidated) and adjusted net earnings per share guidance, Retail ad
Slide 4: Financial Highlights
Financial Highlights “Nutrien’s results have been impacted by unprecedented volatility in global crop input markets over the last 18 months. We continue to see demand strengthen in our key markets, in particular North America, however the process of recovery has been more uneven in offshore markets.
Slide 5: Strategic Actions
Strategic Actions “We are announcing a number of strategic actions to reduce our controllable costs and enhance free cash flow in 2023 and beyond. This includes an indefinite pause of our potash ramp up and suspension of work on our Geismar clean ammonia project. These actions, along with other oper
Slide 6: 2023 second quarter and first half represented the 2nd highest earnings
2023 second quarter and first half represented the 2nd highest earnings total for both respective periods Three Months Ended June 30 Six Months Ended June 30 2023 2022 2021 2023 2022 2021 Adjusted EBITDA Retail $1,067 $1,427 $1,097 $1,033 $1,667 $1,206 Potash $654 $2,027 $495 $1,330 $3,433 $875 Nitr
Slide 7: Retail Results – Q2 and YTD 2023
Retail Results – Q2 and YTD 2023 Gross Margin US$ Millions Crop Nutrients • Decreased in both periods primarily due to lower selling prices across all regions compared to the 1 exceptionally strong periods in 2022 • Sales volumes increased over the same periods on higher planted acreage and normaliz
Slide 8: Potash Results – Q2 2023
Potash Results – Q2 2023 Gross Margin US$ Millions Lower net realized selling prices • Decline in benchmark prices $2,269 Lower sales volumes • Reduced shipments to customers in Asia • North America highest second $656 quarter on record 1 Lower COGS (excl. D&A) Q2'22 Net Realized Sales COGS D&A in Q
Slide 9: Potash Results – Q2 2023 YTD
Potash Results – Q2 2023 YTD Gross Margin US$ Millions Lower net realized selling prices • Decline in benchmark prices $3,814 Lower sales volumes • Reduced shipments to customers in Asia • Record first half Canpotex sales $1,353 volumes to Brazil Higher COGS (excl. D&A) Q2'22 YTD Net Realized Sales
Slide 10: Nitrogen Results – Q2 2023
Nitrogen Results – Q2 2023 Gross Margin Lower net realized selling prices US$ Millions • Weaker benchmark prices resulting from lower energy $1,058 prices in key nitrogen producing regions Higher sales volumes • Increased demand for nitrates and sulfates $399 • Strong spring seasonal demand for urea
Slide 11: Nitrogen Results – Q2 2023 YTD
Nitrogen Results – Q2 2023 YTD Gross Margin Lower net realized selling prices US$ Millions • Weaker benchmark prices resulting from lower energy $1,918 prices in key nitrogen producing regions Higher sales volumes • Increased demand for nitrates $940 and sulfates • Strong spring seasonal demand for
Slide 12: 2023 Financial Guidance
2023 Financial Guidance 2023 Guidance Ranges1,2 as of Assumptions August 2, 2023 May 10, 2023 (billions of US dollars, except as otherwise noted) Retail adjusted EBITDA guidance was lowered primarily to Low High Low High reflect incremental pressure on crop input margins in South America and the imp
Slide 13: Balanced approach to capital allocation through the cycle
Balanced approach to capital allocation through the cycle 2023 Capital Allocation Historical Capital Allocation (2018-2022) US$ Billions Percent Lease Payments1 Sustaining, Mine $4.4B - $4.9B ~$0.4B Completed Acquisitions3 Development & Dividends Paid Pre-Stripping ~$1.1B Investing Capital1 20% 24%
Slide 14: Update to Mid-Cycle Scenario
Update to Mid-Cycle Scenario 14
Slide 15: Structural factors supportive of higher average fertilizer prices
We believe structural factors are supportive of higher average fertilizer prices through the next cycle US Corn Futures TTF Natural Gas Futures Chemical Engineering Plant Cost Index US$/bu US$/MMBtu Index 10-Year Avg.1 Forward Curve2 10-Year Avg.1 Forward Curve2 10-Year Avg.1 Year End Index2 5.30 5.
Slide 16: Expect higher future mid-cycle fertilizer prices
Expect higher future mid-cycle fertilizer prices US Midwest Potash Rolling 10-Yr Average1 NOLA Urea Rolling 10-Yr Average1 Tampa Ammonia Rolling 10-Yr Average1 US$/stShort Ton US$/Short Ton US$/Tonne 500 400 600 Trendline Trendline Trendline 350 500 400 300 400 300 250 200 300 200 150 200 100 100 10
Slide 17: Expect long-term potash demand in line with historical growth rates
Expect long-term potash demand in line with historical growth rates Global Potash Demand Millions of Tonnes KCl 80 Forecast Low Range 70 Forecast High Range • Historical periods of 60 below trend demand have been followed by 50 years of strong demand growth 40 • Nutrien’s projected potash demand by
Slide 18: Update to Nutrien mid-cycle adjusted EBITDA scenario
Update to Nutrien mid-cycle adjusted EBITDA scenario Adjusted EBITDA1 US$ Billions Mid-Cycle Scenarios3 Key Assumption Changes 12.2 Potash • Indefinitely paused ramp-up of annual 9.2 production capability to 18Mmt 7.1 7.5 Nitrogen 6.7 • Suspended work on 1.2Mmt Geismar clean ammonia project, deferri
Slide 19: Market Outlook
Market Outlook 19
Slide 20: Global corn yields below trend, pressuring grain stocks-to-use
Global corn yields have been below trend in recent years putting pressure on global grain stocks-to-use Global Corn Yield1 Global Grain Stocks-to-Use Ratio1 Bushels per Acre Percent 18.0 100 17.8 17.4 17.4 16.8 90 16.5 80 15.2 15.1 2022-23 14.7 Second lowest 14.4 70 vs Trend 60 50 00/01 04/05 08/09
Slide 21: Supply challenges have supported crop futures prices
Supply challenges have supported crop futures prices and provide incentive for growers to boost production Corn Avg. Realized Price Soybean Avg. Realized Price US$/bushel US$/bushel $6.89 $6.60 $14.40 $14.20 $13.82 $6.00 $13.00 $13.30 $5.30 $10.80 $4.46 $4.53 $10.10 $8.95 $9.47 $9.33 $8.48 $8.57 $3.
Slide 22: Crop prices remain elevated while fertilizer costs have eased
22 Crop prices remain elevated while fertilizer costs have eased, supporting healthy grower margins Key Crop Grower Cash Margins1 US Corn Cash Selling Price & Costs3 Local Currency Margin/Acre US$/bu US Corn US Soybeans US Wheat US Cotton CAN Canola BRZ Soybeans 2 $8.00 700 5,000 4,500 $7.00 600 4,0
Slide 23: Demand strengthening in key markets, uneven offshore recovery
Continue to see demand strengthen in our key markets, in particular North America, however the process of recovery has been more uneven in offshore markets Selected Fertilizer Prices Fertilizer Market Drivers US$ per Unit • Potash prices weakened through Q2’23, driven by continued 1,200 Brazil (Gran
Slide 24: Expect increased potash demand in North America and Brazil in 2023
Expect increased potash demand in North America and Brazil in 2023 Potash Demand Millions of Tonnes KCl 20 15 10 5 0 19 20 21 22 23F 19 20 21 22 23F 19 20 21 22 23F 19 20 21 22 23F 19 20 21 22 23F 19 20 21 22 23F India Other Asia North America Latin America China Other 2022 2.4Mmt 8.9Mmt 8.4Mmt 14.3
Slide 25: Potash Production in Selected Regions
Potash Production in Selected Regions Potash Production in Selected Regions1 Millions of Tonnes KCl 18 2021 2022 2023F Production Range 15 12 9 6 3 0 Nutrien Other Canada Russia Belarus Europe Middle East China 25 1. Production changes differ from our expectations of operational capability changes.
Slide 26: Nitrogen supply from key regions remains constrained
Nitrogen supply from key regions remains constrained Russian Ammonia Exports European Nitrogen Capacity1,2 Million Tonnes Million Tonnes 5 20 Online Capacity Curtailed Capacity 4 15 3 10 2 5 1 0 0 3 2020 2021 2022E 2023F Ammonia Urea (Gross) AN & CAN UAN 1. Capacity curtailments are point in time as
Slide 27: Volatile European natural gas prices have led to regional curtailments
Volatile European natural gas prices have led to regional curtailments and impacted downstream nitrogen fertilizer production Ammonia Production Costs1 & Key Ammonia Prices2 Units shown in legend $3,000 Implied Cost of European Ammonia Production (US$/mt) NW Europe Ammonia (US$/mt CFR) $2,500 Tampa
Slide 28: Expect higher Chinese exports compared to 2022
Expect higher Chinese exports compared to 2022 but still well below historical levels China DAP/MAP Exports China Urea Exports Millions of Tonnes Millions of Tonnes 12 6 Full Year Exports Total Year Avg Full Year Exports Total Year Avg 10 Annual Avg Annual Avg 2017-2021 2017-2021 ~4.5 Mmt ~9.2 Mmt 8
Slide 29: Non-IFRS Financial Measures
Non-IFRS Financial Measures Retail Cash Operating Coverage Ratio Potash Controllable Cash Cost of Product Manufactured per Tonne (millions of US dollars, except as otherw ise noted) Q2 20231 2022 2021 (millions of US dollars, except as otherw ise noted) Q2 2023 YTD 2022 2021 Selling expenses 3,393 3
Slide 30: Thank You!
Thank You! For further information, please visit: www.nutrien.com facebook.com/nutrienltd linkedin.com/company/nutrien youtube.com/nutrien @nutrienltd