Investor Presentation · Nutrien 2018 Highlights 4 2) Increased annual synergy target to $600...
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Investor Presentation January 2019
Transcript of Investor Presentation · Nutrien 2018 Highlights 4 2) Increased annual synergy target to $600...
Investor PresentationJanuary 2019
Forward Looking Statements
Certain statements and other information included in this presentation constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable
securities laws (such statements are often accompanied by words such as "anticipate", “forecast”, "expect", "believe", "may", "will", "should", "estimate", "intend" or other similar words). Certain statements
in this presentation, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to: Nutrien's 2019 annual guidance, including
expectations regarding our EBITDA and adjusted EBITDA (both consolidated and by segment); expectations regarding dividends per share and other shareholder returns in 2019; capital spending
expectations for 2019 and beyond; expectations regarding performance of our business segments in 2019; our market outlook for 2019, including potash, nitrogen and phosphate outlook and including
anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix, prices and margin;
expectations regarding completion of previously announced expansion projects (including timing and volumes of production associated therewith) and acquisitions and divestitures; and the expected
synergies associated with the merger of Agrium and PotashCorp, including timing thereof. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which
are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.
All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this
document. Although Nutrien believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place
an undue reliance on these assumptions and such forward-looking statements. The additional key assumptions that have been made include, among other things, assumptions with respect to Nutrien's
ability to successfully integrate and realize the anticipated benefits of its already completed (including the merger of Agrium and PotashCorp) and future acquisitions, and that we will be able to implement
our standards, controls, procedures and policies at any acquired businesses to realize the expected synergies; that future business, regulatory and industry conditions will be within the parameters expected
by Nutrien, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability and cost of labor and interest, exchange and effective tax rates; the completion of
our expansion projects on schedule, as planned and on budget; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2019 and in the future; the
adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions
and divestitures and negotiate acceptable terms; ability to maintain investment grade rating and achieve our performance targets; the receipt, on time, of all necessary permits, utilities and project approvals
with respect to our expansion projects and that we will have the resources necessary to meet the projects’ approach.
Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business
conditions; the failure to successfully integrate and realize the expected synergies associated with the merger of Agrium and PotashCorp, including within the expected timeframe; weather conditions,
including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our products; governmental and regulatory
requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the
interpretation thereof; political risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism; the occurrence of a major environmental or safety incident; innovation
and security risks related to our systems; the inability to find suitable buyers for our equity positions and counterparty and transaction risk associated therewith; regional natural gas supply restrictions;
counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; gas supply interruptions at our Egyptian and Argentinian facilities; any significant impairment of the carrying value
of certain assets; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work
stoppages; and other risk factors detailed from time to time in Agrium, PotashCorp and Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the
United States, including those disclosed in Nutrien’s business acquisition report dated February 20, 2018, related to the merger of Agrium and PotashCorp. The purpose of our expected adjusted
consolidated EBITDA and EBITDA by segment guidance range is to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other
purposes.
Non-IFRS Financial Measures Advisory
We consider net earnings from continuing operations before finance costs, income tax (recovery) expense and depreciation and amortization ("EBITDA"), adjusted net earnings per share, Nutrien combined
2017 historical information, adjusted EBITDA, potash adjusted EBITDA, cash cost of product manufactured and other measures deriving from such non-IFRS measures, all of which are non-IFRS financial
measures, to provide useful information to both management and investors in measuring our financial performance and financial condition. Refer to the disclosure under the heading “Selected Non-IFRS
Financial Measures and Reconciliations and Supplemental Information” included in our news release dated November 5, 2018 announcing our third quarter 2018 results, as filed on SEDAR at
www.sedar.com and EDGAR at www.sec.gov under our corporate profile, for a reconciliation of these non-IFRS measures to the most directly comparable measures calculated in accordance with IFRS
and for a further discussion of how these measures are calculated and their usefulness to users including management. Non-IFRS financial measures are not recognized measures under IFRS and our
method of calculation may not be comparable to that of other companies. These non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance
prepared in accordance with IFRS. The purpose of our adjusted annual earnings per share and adjusted EBITDA guidance ranges is to assist readers in understanding our expected and targeted financial
results, and this information may not be appropriate for other purposes.
Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as may be required under applicable
U.S. federal securities laws or applicable Canadian securities legislation.
2
January 24, 2019Note: All dollar amounts are stated in US dollars throughout the presentation unless otherwise noted.
Nutrien Has a Unique Global Footprint and Well Positioned Assets
3
LEGEND:
RETAIL
POTASH
NITROGEN
PHOSPHATE
ESN®
GRANULATION
LOVELAND PRODUCTS AND AFFILIATED FACILITIES
AGRICHEM
INVESTMENTS AND JV’S
OFFICES
South AmericaNorth American Integrated Footprint
Australia
>26MmtCombined sales tonnes of potash,
nitrogen, phosphate & sulfate1
$600MExpected annual
synergies by end of 2019
$1.72Annual dividend
per share2
~1,600Retail locations in 7 countries
~50MNumber of shares
that may be acquired under
NCIB expiring on Feb 22/2019
NOTE: European distribution and our ownership stakes in Sinofert and the MOPCO nitrogen facility are not included on these maps.
1 2017 sales volume excluding sales tonnes from Conda and North Bend.
2 Based on Nutrien quarterly dividend declared December 14, 2018. Future dividends subject to board discretion. Source: Nutrien
January 24, 2019
Nutrien 2018 Highlights 4
2) Increased annual synergy target to $600 million (+20%)
1) Higher earnings across all business units
3) Received $5.2 billion in net proceeds from equity divestitures
4) Returned ~$2.8 billion in cash to shareholders through dividends
and share buybacks
5) Continued to grow Retail business and launched digital platform
6) Increased potash sales by ~1 million tonnes
Strong performance on strategic and financial priorities in 2018
January 24, 2019
~33%
~25%~7%
~35%
Diversified Portfolio Provides Stability and Multiple Avenues for Growth
5
Retail
Phosphate
and Sulfate Nitrogen
Potash
2017 Adjusted Combined
EBITDA Split1
1 This is a Non-IFRS measure and/or the historical combined results of PotashCorp and Agrium. See the Forward Looking Statement and “Select Non-IFRS Financial Measures and Reconciliations and
Supplemental Information” in Nutrien’s Q3 2018 news release.
2 Based on the mid-point of Nutrien’s adjusted EBITDA guidance range as of November 5, 2018.
2018F Adjusted EBITDA GrowthUS$ Billions
Significant earnings growth expected across all business units in 2018
January 24, 2019
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2018FPotash2017 Phos &
Other
Retail Nitrogen
~33-40%
2
Source: Nutrien
Significant Opportunity to Grow the Company and Return Cash to Shareholders
6
Merger Synergies
$600 Millionannual run-rate synergies
expected to be achieved by end
of 2019
Crop Nutrient
Leverage
~$650 Million increase in EBITDA from a
$25/mt improvement in prices
Retail Stability
$50-$140 Million expected Retail EBITDA
growth per year
Equity Proceeds
$5.2 Billionnet proceeds from divestitures
received in 2018
Return Cash to
Shareholders(~$2.6B expected
cash returned in
2018)
Invest in
Growth(Focus on growing Retail,
opportunistic Wholesale
expansion)
Protect
Balance Sheet(Strong investment
grade rating BBB/Baa2)
Capital Priorities
Expect to have $6-8 billion in cash to redeploy over the next 3 years
1 Through NCIB and dividends.
Invest in
Growth(Focus on growing Retail,
opportunistic Wholesale expansion)
Return Cash
to Shareholders(~$2.8B cash
returned in 2018)1
Protect
Balance Sheet(Strong investment
grade rating BBB/Baa2)
January 24, 2019
Source: Nutrien
Market Fundamentals and Performance
INVESTOR PRESENTATION January 24, 2019
Cash Grower Margins 8
US Corn US Soybeans US Wheat US Cotton CAN Canola BRZ Soybeans
Cash Grower Margins1
Local Currency Margin/Acre
1 2016-2017 margins are based on average realized cash crop prices and estimated average fertilizer costs; 2018F margins are based on new crop 2018 futures prices less estimated basis and
estimated average retail fertilizer prices; 2019F margins are based on new crop 2019 futures prices less estimated bases and estimated spot retail fertilizer prices; Brazilian grower margins are based
on IMEA cost of production and price estimates for Mato Grosso.
0
100
200
300
400
0
500
1,000
1,500
2,000
Source: USDA, Green Markets, CME Group, IMEA, Nutrien
January 24, 2019
Crop margins are mixed but overall remain supportive of input demand
Consistent growth in EBITDA margins achieved through Operational Excellence
initiatives including proprietary product growth and footprint optimization
Retail: Long Term Growth of Margins and Earnings 9
$769
$951 $986$1,119
$1,033 $1,091 $1,1457.5%
8.3% 8.3%
8.6%8.5%
9.3%9.5%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
5%
6%
7%
8%
9%
10%
11%
2011 2012 2013 2014 2015 2016 2017 2018F
EBITDA Retail EBITDA Margin
1
$1.2-1.3B
Retail EBITDA MarginPercent
Retail EBITDA
Millions
January 24, 20191 Based on Nutrien’s adjusted EBITDA guidance range as of November 5, 2018.
Source: Nutrien
Retail: Multiple Avenues to Deliver Strong Earnings Growth
10
TUCK-IN/ROLL UP
Continue to acquire farm centers across North America and Australia
PROPRIETARY PRODUCT
Increase our proprietaryproduct offerings & sales
AG CREDIT FINANCE
Expand the credit & finance businessearnings, retain & attract new customers
BRAZILIAN AG-RETAIL
Build the retail business, leveraging ourproven strengths and experience
DIGITAL PLATFORM
Deliver a world-class integrated platformthat supports growers ease of business
Grow
Build
Expand
Increase
Deliver
Nutrien
Ag Solutions
Strategy
January 24, 2019
70%
75%
80%
85%
90%
95%
100%
Relatively Tight Potash Supply & Demand
0
10
20
30
40
50
60
70
80
Demand*
Operational Capability
Global Potash S&DMillion Tonnes KCl
Global Utilization Rate1
Percent
Expect demand growth and capacity closures to offset capacity additions;
operating rates expected to be at or above historical average
11
January 24, 20191 Based on estimated operational capability. Forecast utilization rate range based on high and low demand forecast.
* Demand growth range based on 20 year CAGR (2002 to 2022) of 2.8 to 3.0 percent. 5-year forecast range of 2.3 to 3.3 percent.Source: CRU, Fertecon, IFA, Nutrien
Potash: World’s Largest Producer; Lower-Cost Operations
$0
$20
$40
$60
$80
$100
2014 2015 2016 2017 2018F
10.8Mmt
12.2Mmt
12.5-13.0Mmt
~5Mmt
2016 2017 2018F ProductionCapability
~5 Mmt of incremental production capability in Saskatchewan that we can bring on
with limited capital as global demand grows
Potash Production1
Million Tonnes KCl
Combined1Cash-related Cost of Goods Sold2
US$/Tonne
1 This is a Non-IFRS measure and/or the historical combined results of PotashCorp and Agrium. See the Forward Looking Statement and “Select Non-IFRS Financial Measures and Reconciliations and
Supplemental Information” in Nutrien’s Q3 2018 news release.
2 Refers to total cost of goods sold less depreciation and amortization.
3 Assuming full ramp up of Saskatchewan mines.
12
3
Source: Nutrien
January 24, 2019
Potash: Significant Leverage to Improving Prices, Higher Volumes and Lower Costs
January 24, 2019
13
Potash Adjusted EBITDA (Full Year) US$ Millions
9.2 10.2
Q3 2017 YTD Q3 2018 YTD
+1.0 Mmt
$200
Q3 2018 YTDQ3 2017 YTD
$173
+16%
$58$64
Q3 2017 YTD Q3 2018 YTD
-9%
Sales VolumesMillion Tonnes
Net Selling PriceUS$/MT
2017
$1,550
2018F
$1,083
+43%
1
Cash Cost of
Product
ManufacturedUS$/MT
2
1 Based on the mid-point of Nutrien’s adjusted potash EBITDA guidance range as of November 5, 2018.
2 Cost of product manufactured is a non-IFRS measure. Refer to Selected Non-IFRS Financial Measures and Reconciliations and Supplemental Information in Nutrien’s Q3 2018 news release.
Source: Nutrien
Tightening Global Nitrogen Supply & Demand
Global Nitrogen S&DMillion Tonnes Nitrogen
70%
75%
80%
85%
90%
95%
100%
0
20
40
60
80
100
120
140
160
180 Demand* Operational Capability
Global Utilization Rate1
Percent
January 24, 2019
14
1 Based on estimated operational capability.
* Demand growth based on 20 year CAGR (2002 to 2022) of 2 percent.
Source: CRU, Nutrien
Relatively stable capacity utilization in 2019 followed by rapid tightening
January 24, 2019
15
Nitrogen EBITDA (Full Year)US$ Millions
Q3 2018 YTDQ3 2017 YTD
86% 93%
+7 %
Q3 2017 YTD Q3 2018 YTD
$222 $232
+5%
Q3 2017 YTD Q3 2018 YTD
$73$78
-6%
NH3 Operating
Rate3
Percent
Net Selling PriceUS$/MT
Urea Cash Cost of
Product
ManufacturedUS$/MT
2017 2018F
$812
$1,200
+48%
1
1 Based on the mid-point of Nutrien’s nitrogen EBITDA guidance range as of November 5, 2018.
2 Cost of product manufactured is a non-IFRS measure. Refer to Selected Non-IFRS Financial Measures and Reconciliations and Supplemental Information in Nutrien’s Q3 2018 news release.
Excludes cost of natural gas and steam.
3 Excludes Joffre and Trinidad.
Nitrogen: Significant Leverage to Higher Prices, Low Cost Gas and Operational Efficiencies
2
Source: Nutrien
Strategy and Opportunities
INVESTOR PRESENTATION January 24, 2019
Executing on Our Strategic Priorities 17
• Achieved $401M of run-rate synergies as at September
30, 2018, expect $500M by end of 2018 and $600M by
the end of 2019
• Completed regulatory required divestment of ICL, SQM
and APC for $5.2 Billion
• Strong Retail proprietary products performance and
acquisition execution
• Launched integrated digital platform for growers
• Acquired >50 locations with >$30M of EBITDA (Q3 YTD)
• Increased quarterly dividend 7.5% to $0.43/share1
• Completed $1.7B 5% NCIB: Avg cost per share of $51.62
Extended the program for additional 3% in DecemberShareholder
Returns
Growth
Initiatives
Integration &
Synergies
2018 Achievements
January 24, 20191 Based on Nutrien’s quarterly dividend declared on November 5, 2018.
Source: Nutrien
Accelerated capture of merger synergies and increased target
Significant Value Creation from Merger Synergies
$81
$401
$69
$119
$59
$142$199
$500$81
$41
$8
$150
$200
$100
$150 $600
Distribution/Optimization
ProductionOptimization
Procurement SG&Aand Other
2019 TargetEOY
(Revised)
2019 TotalTarget EOY
(Original)
Achieved annual run-rate synergy as at September 30, 2018
Balance of annual run-rate synergy target
1
++
Annual Run-Rate SynergiesUS$ Millions
18
January 24, 20191 Other includes synergies related to administrative functions which may not appear in Selling, General & Admin (SG&A) in the financial statements..
+20%
Source: Nutrien
0
2
4
6
8
10
12
2018E 2018E + Full Synergies @ 8 yr Avg. Nutrient Prices @ Replacement Cost Nutrient Prices
$4.0 – $4.2B
EBITDA
$6.5 – $7.0B
EBITDA
$10 – $11B
EBITDA
Proceeds of
~5.0B
expected
from equity
stake sales
Significant Upside Potential for Free Cash Flow per Share
19
1 2
2018E Sustaining Capex
Incremental EBITDA
Potential mid-cycle free cash flow per share provides tremendous near & long-
term opportunity for shareholders
Nutrien EBITDA & FCF Sensitivity to Nutrient Price IncreasesUS$ Billions
~$3
FCF/sh4
~$8.00
FCF/sh4
3
~$13.00
FCF/sh4
January 24, 2019
Source: Nutrien
1 Assumes synergies of $600MM per year by end of 2019.
2 Assumes 2018 sales volumes at Average of 7-Year (2011 – 2017) prices for: US Cornbelt MOP ($437/mt), Tampa DAP ($482/mt.) and NOLA urea ($361/mt).
3 Replacement cost nutrient prices assumed are: US Cornbelt MOP ($600/mt), Tampa DAP ($540/mt) and NOLA Urea ($480/mt).
4 Free Cash Flow defined as: Cash flow from continuing operations before net changes in non-cash working capital less sustaining capital. Assumes 612M shares issued and outstanding.
Benefit from Equity Stake Sales and Expected Fourth-Quarter Seasonal Cash Inflow
NTR Net Debt/Adjusted EBITDARatio
Expect significant decline in net debt with equity
sales and seasonal cash flow; maintained strong
investment grade rating
Projected net debt to EBITDA ratio below 2
times following equity sales
NTR Net Debt1
US$ Billions
1 Net debt is the total of short-term debt and long-term debt less cash and cash equivalents. This is a non-IFRS financial measure.
2 Adjusted EBITDA represents a twelve-month rolling period. This is a Non-IFRS measure and/or the historical combined results of PotashCorp and Agrium. See the Forward Looking Statement and
“Select Non-IFRS Financial Measures and Reconciliations and Supplemental Information” in Nutrien’s Q3 2018 news release.
3 Based on the mid-point of Nutrien’s annual adjusted EBITDA guidance range as of November 5, 2018.
20
Q3 2018 Q4 2018F
0
2
4
6
8
10
12
Q3 2018 Q4 2018F
0
1
2
3
4
January 24, 2019
2 3
Estimated
range
Source: Nutrien
Estimated
range
Significant Return of Cash to Shareholders in 2018
NTR Cash Returned to ShareholdersUS$ Billions
Returning $2.8B to shareholders in 2018; opportunity to grow returns through the cycle
Dividend YieldPercent
2017 2018F
0.0
0.5
1.0
1.5
2.0
2.5
3.0 Dividends Paid Shares repurchased
NTR Peers
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
3
January 24, 2019
21
1 This is a Non-IFRS measure and/or the historical combined results of PotashCorp and Agrium. See the Forward Looking Statement and “Select Non-IFRS Financial Measures and Reconciliations and
Supplemental Information” in Nutrien’s Q3 2018 news release.
2 Dividend yield based upon NTR share price at close of market January 11, 2019 and the declared $0.43/share quarterly dividend on an annual basis.
3 Peer average is based upon the simple average of the annualized dividend yields for MOS, CF, CVR, IPI, SQM, APOT, YAR, K+S, ICL and Sinofert at January 12, 2019.
1 2
Source: Factset, Nutrien
Nutrien Providing Industry Leading Returns to Shareholders
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
NTR CF MOS
22
1 Shareholder returns based on dividends paid and share repurchased YTD 2018 as of Sept 30 financial statements for NTR and peers. Market capitalization as of market close January 11, 2019
Returning $2.8B to shareholders in 2018;
our ability to grow shareholder returns through the cycle is unmatched
Shareholder Returns/Market Capitalization1
Percent
January 24, 2019
Source: Factset, Nutrien
Nutrien Provides Unique Investment Opportunity in the Agriculture Sector
23
Leading position in both retail/distribution (stable & growing earnings base) and
crop nutrient production
Unmatched upside to a recovery in crop nutrient markets -
$25/mt improvement in nutrient prices expected to generate ~$650M in EBITDA
Clear line of sight on expected $600M in annual operating synergies;
$401M run rate achieved as at September 30, 2018
Significant free cash flow expected to provide opportunity for meaningful
shareholder returns: $2.8 billion returned in 2018
January 24, 2019
Source: Nutrien
Appendix
INVESTOR PRESENTATION January 24, 2019
Nutrien Retail Provides Full Solutions Offering to the Grower
25
Billions invested to ensure on time delivery & highest level of
service, advice & technology solutions
Bulk Fertilizer Distribution
• >3.5MMt of storage capacity globally
• Custom blending at many locations
• Unmatched product availability and timeliness
• >1,300 storage and distribution sites across
North America
Seed Solutions
• On-site seed treatment and bulk handling
• Access to a wide selection of brands &
genetics without bias
Application Services
• We apply fertilizer & crop protection products on ~60% of our U.S. customer acreage
• 10th largest rolling stock in the U.S.
Crop Protection Products
• Bulk product handling and blending – can be delivered within hours
• >10,000 products to protect >200 crops• >99% of sales are branded products• ~25% of sales are high-margin proprietary
products
Complete Advice & Services
• ~3,300 agronomists and crop advisers• Extensive collective expertise & training• Financial Services and lending
Innovation and Technology
• Launched integrated digital platform in 2018• Access to leading edge new technology• Backward integration with emerging
technology companies
January 24, 2019
Source: Nutrien
Retail: A Leading Agricultural Solutions Provider
Gross Margin (2017)Billions
Crop Nutrients 29%
Crop Protection 40%
Seed 11%
Services/Other 16%
$2.9B
Crop inputs & services for over 50
different crops
Corn, 24%
Wheat, 17%
Soybean, 16%
Canola, 9%
Cotton, 7%
Perm. Crops, 8%
Veg, 5%
All Other, 14%
Providing everything growers need to
maximize yields – 3,300 crop advisors
Broad Crop Diversity Complete Ag Solutions Offering
Merchandise 4%
Proprietary Products
Consistent growth platform of higher
margin products valued by growers
1 Excludes Dalgety animal health products.
Gross Margin1 (2017)Millions
Revenue by CropPercent
-
100
200
300
400
500
600
700
2012 2013 2014 2015 2016 2017
Proprietary Seed
Proprietary Nutrional Products
Proprietary Crop Protection Products
26
January 24, 2019
Source: Nutrien
Retail Network Optimization – Tuck-ins, Targeted Builds & Closures
27
1 Does not include revenue from equity positions in joint ventures.
2011 2012 2013 2014 2015 2016 2017YTD
Nov’18Total
# of Locations Acquired 33 59 22 32 26 76 44 ~50 342
Annual Sales1
(U.S. millions)$210 $477 $128 $192 $190 $500+ ~$300 ~$360 >$2,500
Annual EBITDA (U.S. millions) (Year 1)
$27 $49 $12 $32 $20 ~$35 ~$23 ~$30 >$230
166
233 255
325
401
541
606
699
-80
20
120
220
320
420
520
620
720
2010 2011 2012 2013 2014 2015 2016 2017
Cumulative Store Closures U.S. Canada Australia South America
22
70
76
Tuck-in Acquisitions
Cumulative Global Store Closures
& Consolidations
38 Major ‘Hub’ Locations Across
the U.S.
January 24, 2019
Source: Nutrien
Retail: Multiple Levers Driving EBITDA Growth 28
$75
$75
$75
North America,
53%
International, 47%
Retail EBITDA Growth DriversPercent (2012-2017)
Retail EBITDA Growth by RegionPercent (2012-2017)
Acquisitions, ~40%
Organic Growth, ~30%
Optimization, ~30%
January 24, 2019
Retail Earnings Growth Drivers
1. Acquisitions/greenfield in existing markets & Brazilian growth potential (Agrichem)
2. Continued expansion of proprietary product lines & digital ag capabilities
3. Optimization/Cost reduction - optimize footprint and leverage procurement scale
Source: Nutrien
Significant Room for Further U.S. Retail Consolidation
Agrium, 17%
Helena, 7%
Significant market
share held by
independent
retailers in the U.S.
Our share in other
key regions is ~30%
Growmark, 5%
Wilbur-Ellis, 4%
Pinnacle, 4%
CHS, 3%
Simplot Retail, 2%
Independents, 26%
Co-ops, 30%
Nutrien, 19%
Helena, 7%
Over 19% market share with only 10% of the facilities
29
January 24, 2019
Source: CropLife, Nutrien
Crop Nutrient Production: Large and Diverse Asset Base
30
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Potash Nitrogen Phosphate &Sulfate
Potash
NitrogenUS 64%
Canada19%
Offshore17%
North America
39%
Offshore61%
, 0 , 0
Phosphate
& SulfateUS 50%
Canada34%
Offshore17%
Total Combined Sales Volumes1 (2017)Million Tonnes
Geographic Combined Sales Volumes1 (2017)Percent
1 This is a Non-IFRS measure and/or the historical combined results of PotashCorp and Agrium. See the Forward Looking Statement and “Select Non-IFRS Financial Measures and Reconciliations
and Supplemental Information” in Nutrien’s Q3 2018 news release. Refers to manufactured product only.
January 24, 2019
Nutrien is the largest crop nutrient producer in the world, with 29 potash,
nitrogen and phosphate facilities in North and South America.
Source: Nutrien
Prices declined in late 2018 as
raw material prices and
seasonal demand declined,
but liquid fertilizers and
purified acid prices remain
firm
Suppliers are well-committed
into 2019 as demand
continues to be strong in key
markets and inventories in
markets such as Brazil ended
2018 at low levels
Selected Fertilizer Prices
Global Crop Nutrient Prices
2019
Drivers
Potash Nitrogen
Prices declined in early 2019
due to seasonally slow
demand, however strong US
demand and limited new
capacity is expected to be
supportive in 2019
Phosphate
2017
31
2018
January 24, 2019
150
200
250
300
350
400
450
Sep Nov MarMarNovSepJulMayMarJanNov MaySepJulMayJan Mar JanJan Jul
DAP - FOB Tampa ($/mt)Potash - CFR Brazil ($/mt)
Urea – New Orleans Barge FOB ($/mt)
2016
Source: Fertilizer Week, Nutrien
2019
Global Potash Shipments by RegionMillion Tonnes KCl
Record Global Potash Demand Projected in 2018
0
5
10
15
20
15 16 17 18F 15 16 17 18F 15 16 17 18F 15 16 17 18F 15 16 17 18F 15 16 17 18F
2018
Hig
hlig
hts
Previous Record:
6.3mmt (2010)
Previous Record:
10.1mmt (2017)
Previous Record:
11.1mmt (1997)
Previous Record:
12.2mmt (2017)
Previous Record:
15.8mmt (2015)Previous Record:
13.7mmt (1997)
32
Global demand is expected to reach a record 66-67 million mt
India Other Asia North America Latin America China Other
10.0 – 10.5Mmt
• Demand supported
by record palm oil
production and
robust crop
economics for a wide
range of key crops
4.5 – 5.0Mmt
• Expect modest
demand growth in
line with positive
consumption trends
despite reduced
subsidy rates for
2018/19 FY
10.0 – 10.5Mmt
• Steady demand
supported by strong
affordability and
significant removal
of nutrients following
consecutive large
harvests
12.5 – 13.0Mmt
• Improved crop
economics and
acreage growth in
nutrient deficient
regions has
supported strong
potash demand
15.5 – 16.0Mmt
• Strong consumption
trends supported by
affordability and a
shift to more
potassium-intensive
crops like fruits and
vegetables
12.5 – 13.0Mmt
• Good affordability
and growing demand
for NPK fertilizers,
including in Africa,
are expected to
boost potash
demand
January 24, 2019
Source: CRU, Fertecon, IFA, Nutrien
Global Potash Producer Sales
North American producers are expected to fill the void left by lower 2018
production in the rest of the world
Global Potash Producer Sales ChangesMillion Tonnes KCl
60
61
62
63
64
65
66
67
68
South
America
2017
Producer
Sales
North
America
2018E
Producer
Sales
FSU Asia Europe Middle
East
January 24, 2019
33
Source: CRU, Fertecon, Company Reports, Nutrien
Favorable Potash Market Fundamentals
3
4
Highest growth rate of the primary
crop nutrients
Nutrien, 23%
Other Top 5 Producers, 50%
All Other Producers, 27%
Long development times and high
capital costs
$0
$1,000
$2,000
$3,000
0
10
20
30
40
50
60
70
Top 5
Producers,
73%
$2,700
$2,300
7 to 10 years
construction &
ramp up
Global Potash Consumption
Million Tonnes KClGlobal Potash Capacity1
% Share (2017)Greenfield Capital Intensity
Cost per Tonne2 (US$)
1 Based on nameplate capacity, which may exceed operational capability.
2 Estimates for a conventional 2-million-tonne mine in Saskatchewan.
Range
34
Concentration of high-quality deposits
January 24, 2019
Source: AMEC, CRU, Fertecon, IFA, Nutrien
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
2
4
6
8
10
12
14
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018F
Combined Sales Volumes Gross Margin % of Net Sales
Nutrien potash margins supported by lower delivered cost position and
favorable market characteristics
Potash: Historically Strong Margins and Volume Growth Throughout the Nutrient Cycle
Sales Volume1 Gross Margin2
Million Tonnes KCl Percent
4
1 Based on combined historical sales for Agrium and PotashCorp for 1998 to 2017.
2 Historical potash gross margin as a percentage of net sales based on legacy PotashCorp financial information.
3 Based on estimated annual achievable production in Saskatchewan; assuming fully staffed operations.
4 2018F represents guidance range of 12.5 to 13 million tonnes as of November 5, 2018.
~ 5 Mmt of incremental
production capability3
35
January 24, 2019
Source: Nutrien
$0
$100
$200
$300
$400
Other Cost Gas Cost
Nitrogen: Nutrien Has Low Cost Nitrogen Assets With Regional Advantages
Urea Cash Cost & Price ComparisonUS$/Tonne
Nutrien Manufactured Nitrogen ProfileMillion Tonnes (2017)
Nutrien’s diverse nitrogen assets expected to generate exceptional
margins in almost any market conditions
2018 PNW Urea Price
2018 NOLA Urea Price
* Western Canadian cash cost is shown as FOB.
3.4 2.2
2.6
2.5
3.9
2.4
0.7
Product Sales Ammonia Capacity
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Solutions
& Nitrates
Urea
Ammonia
US
Canada
Trinidad
Equity
Investments
36
January 24, 2019
Source: CRU, Fertecon, Argus, Nutrien
37
U.S. Offshore Nitrogen Imports
0
2
4
6
8
10
12
14
1980s 1990s 2000s 2015 2016 2017 2018E
Urea NH3 UAN
US Offshore Nitrogen ImportsMillion Tonnes Product
The US remains a significant net importer of all three major nitrogen products
37
January 24, 2019
Source: BJA, USDOC, TFI, Nutrien
European Natural Gas Costs Support Nitrogen Prices 38
0
1
2
3
4
5
6
7
8
9
10
Jan
-15
Ma
r-15
Ma
y-1
5
Jul-
15
Sep-1
5
Nov-1
5
Jan
-16
Ma
r-16
Ma
y-1
6
Jul-
16
Sep-1
6
Nov-1
6
Jan
-17
Ma
r-17
Ma
y-1
7
Jul-
17
Sep-1
7
Nov-1
7
Jan
-18
Ma
r-18
Ma
y-1
8
Jul-
18
Sep-1
8
Nov-1
8
Henry Hub AECO European Hub
Natural Gas PricesUS$/MMBtu
High European natural gas prices support marginal nitrogen costs and prices;
Relatively low NA natural gas costs and increased nitrogen prices support Nutrien margins
January 24, 2019
Source: Fertecon, Nutrien
Tight Chinese Urea Supplies Reduce Exports
Chinese Urea ExportsMillion Tonnes
8.3
13.6 13.8
8.9
4.7
2019F2018E2013 20172014 20162015
2.32.0-3.0
-36%
-47%
-51%
China’s
Urea
Capacity
Closures(Million Tonnes)
Chinese
Port Urea
Inventories(Million Tonnes)
(January)
Chinese exports increased seasonally in late 2018, but inventories remain low
0.42 0.46
20192017 2018
1.10
39
0
1
2
3
4
2018F2013 20172014 2015 2016
January 24, 2019
Source: CRU, Fertecon, Profercy Nutrien
Expect Improvement in Global Phosphate Supply & Demand Over the Medium Term
1 Based on estimated operational capability.
Global Phosphate Operational Capability & DemandMillion Tonnes P2O5
70%
75%
80%
85%
90%
95%
100%
Global Utilization Rate1
Percent
0
10
20
30
40
50
60Demand Operational Capability
Low operating rates in China projected to balance the market in the short-term;
demand growth projected to exceed capacity additions from 2020-forward
January 24, 2019
40
Source: CRU, Nutrien
Thank you!
INVESTOR PRESENTATION
For further information please visit Nutrien’s website at: www.nutrien.com
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January 24, 2019
