Nutrien reports second quarter 2024 results and announces Chief Financial Officer transition

• Second quarter results supported by increased crop input margins, strong global potash demand, higher fertilizer operating rates and lower operating costs.

• Mark Thompson appointed Executive Vice President and Chief Financial Officer effective August 26, 2024.

All amounts are in US dollars, except as otherwise noted

Nutrien Ltd. (TSX and NYSE: NTR) announced its second quarter 2024 results, with net earnings of $392 million ($0.78 diluted net earnings per share). Second quarter 2024 adjusted EBITDA 1 was $2.2 billion and adjusted net earnings per share¹ was $2.34.

″Nutrien benefited from improved Retail margins, higher fertilizer sales volumes and lower operating costs in the first-half of 2024. Crop input demand remains strong, and we raised our full-year outlook for global potash demand due to healthy engagement in all key markets,″ commented Ken Seitz, Nutrien’s President and CEO.

″Our upstream production assets and downstream Retail businesses in North America and Australia have performed well in 2024. In Brazil, we continue to see challenges and are accelerating a margin improvement plan that is focused on further reducing operating costs and rationalizing our footprint to optimize cash flow,″ added Mr. Seitz.

Highlights²:

• Generated net earnings of $557 million and adjusted EBITDA of $3.3 billion in the first half of 2024. Adjusted EBITDA was down from the same period in 2023 primarily due to lower fertilizer net selling prices. This was partially offset by increased Nutrien Ag Solutions (″Retail″) earnings, higher Potash sales volumes, and lower natural gas costs.

  
  

• Retail adjusted EBITDA increased to $1.2 billion in the first half of 2024 supported by strong grower demand and a normalization of product margins in North America. Full-year 2024 Retail adjusted EBITDA guidance lowered due primarily to ongoing market instability in Brazil as well as the impact of delayed planting in North America in the second quarter.

  
  

• Potash adjusted EBITDA declined to $1.0 billion in the first half of 2024 due to lower net selling prices, which more than offset higher sales volumes and lower operating costs. Full-year 2024 Potash sales volume guidance raised due to record first half sales volumes and the expectation for strong global demand in the second half of 2024.

  
  

• Nitrogen adjusted EBITDA decreased to $1.1 billion in the first half of 2024 due to lower net selling prices, which more than offset lower natural gas costs. Ammonia production increased in the first half, driven by improved reliability and less turnaround activity.

  
  

• Accelerating a margin improvement plan in Brazil, including the curtailment of 3 fertilizer blenders and closure of 21 selling locations in the second quarter of 2024. Recognized a $335 million non-cash impairment of Nutrien's Retail – Brazil assets due to ongoing market instability and more moderate margin expectations. Incurred a loss on foreign currency derivatives of approximately $220 million in Brazil.³

  
  

• Previously announced that Nutrien is no longer pursuing the Geismar Clean Ammonia project and recognized a $195 million non-cash impairment of assets related to this project.

1. This is a non-GAAP financial measure. See the ″Non-GAAP Financial Measures″ section.

2. The discussion of highlights set out on this page is a comparison of the results for the three and six months ended June 30, 2024 to the results for the three and six months ended June 30, 2023, unless otherwise noted.

3. For further information see the Corporate and Others and Eliminations, and Controls and Procedures sections of the Management’s Discussion and Analysis, and Note 6 to the unaudited Interim Condensed Consolidated Financial Statements as at and for the three and six months ended June 30, 2024.

Chief Financial Officer Transition:

Nutrien also announces the appointment of Mark Thompson as Executive Vice President and Chief Financial Officer, effective August 26, 2024. In alignment with Nutrien's succession plan, Mr. Thompson succeeds Pedro Farah, who will remain with Nutrien in an advisory capacity until his departure on December 31, 2024.

″Mark’s impressive track record of execution, along with his proven financial and strategic acumen provides the unique ability to succeed in this position on day one. He brings in-depth knowledge of our business that will support the advancement of our strategic actions to enhance quality of earnings and cash flow,″ said Mr. Seitz. ″On behalf of the Nutrien team, I would also like to thank Pedro for his service and commitment to Nutrien over the last five years.″

″I’ve had the privilege to serve in leadership roles across the company and firmly believe in the opportunities afforded by Nutrien’s strong competitive advantages and world-class asset base to deliver long-term shareholder value,″ said Mr. Thompson. ″I look forward to continuing to partner with Ken and our executive leadership team on the disciplined execution of our strategy and drive a focused approach to capital allocation.

Mr. Thompson has been with the Company since 2011, currently serving as Executive Vice President and Chief Commercial Officer. Prior to his current position he held numerous executive and senior leadership roles across the company, including Chief Strategy & Sustainability Officer, Chief Corporate Development & Strategy Officer, and Vice President of Business Development for Nutrien’s Retail business. He earned his Bachelor of Commerce (Finance) and Bachelor of Arts degrees from the University of Saskatchewan and holds the Chartered Financial Analyst (CFA) designation.

Market Outlook and Guidance

Agriculture and Retail Markets

• Favorable growing conditions have created an expectation for record US corn and soybean yields and pressured crop prices. Despite lower crop prices, demand for crop inputs in North America is expected to remain strong in the third quarter of 2024 as growers aim to maintain optimal plant health and yield potential. Nutrien anticipates that good affordability for potash and nitrogen will support fall application rates in 2024.

  
  

• Brazilian crop prices and prospective grower margins have improved from levels earlier this year supported by a weaker currency. Brazilian soybean area is expected to increase by one to three percent in the upcoming planting season and fertilizer demand is projected to be approximately 46 million tonnes in 2024, in line with historical record levels.

  
  

• Australian moisture conditions vary regionally but remain supportive of crop input demand as trend yields are expected.

Crop Nutrient Markets

• Global potash demand in the first half of 2024 was supported by favorable consumption trends in most markets and low channel inventories in North America and Southeast Asia. The settlement of contracts with China and India in July is expected to support demand in standard grade markets in the second half of 2024, while uptake on the summer fill program in North America has been strong. As a result, Nutrien has raised its 2024 full-year global potash shipment forecast to 69 to 72 million tonnes and expect a relatively balanced market in the second half of 2024.

  
  

• Global nitrogen markets are being supported by steady demand and continued supply challenges in key producing regions. Chinese urea export restrictions have been extended into the second half of 2024 and natural gas-related supply reductions could continue to impact nitrogen operating rates in Egypt and Trinidad. US nitrogen inventories were estimated to be below average levels entering the second half of 2024, contributing to strong engagement on the summer fill programs.

  
  

• Phosphate fertilizer prices are being supported by tight global supply due to Chinese export restrictions, low channel inventories in North America and seasonal demand in Brazil and India. Nutrien anticipates some impact on demand for phosphate fertilizer in the second half of 2024 as affordability levels have declined compared to potash and nitrogen.

Financial and Operational Guidance

• Retail adjusted EBITDA guidance was lowered to $1.5 to $1.7 billion due primarily to ongoing market instability in Brazil as well as the impact of delayed planting in North America in the second quarter.

  
  

• Potash sales volume guidance was increased to 13.2 to 13.8 million tonnes due to expectations for higher global demand in 2024. The range reflects the potential for a relatively short duration Canadian rail strike in the second half.

  
  

• Nitrogen sales volume guidance was narrowed to 10.7 to 11.1 million tonnes as Nutrien continues to expect higher operating rates at its North American and Trinidad plants and growth in sales of upgraded products such as urea and nitrogen solutions.

  
  

• Phosphate sales volume guidance was lowered to 2.5 to 2.6 million tonnes reflecting extended turnaround activity and delayed mine equipment moves.

  
  

• Finance costs guidance was lowered to $0.7 to $0.8 million due to a lower expected average short-term debt balance.

All guidance numbers, including those noted above are outlined in the table below. Refer to page 65 of Nutrien’s 2023 Annual Report for related assumptions and sensitivities.

Consolidated Results

Net earnings decreased in the second quarter and first half of 2024 compared to the same periods in 2023, primarily due to lower fertilizer net selling prices and a loss on foreign currency derivatives. Adjusted EBITDA decreased over the same periods primarily due to lower fertilizer net selling prices, partially offset by increased Retail earnings, higher offshore Potash sales volumes, and lower natural gas costs.

Segment Results

The discussion of segment results set out on the following pages is a comparison of the results for the three and six months ended June 30, 2024 to the results for the three and six months ended June 30, 2023, unless otherwise noted.

Nutrien Ag Solutions (″Retail″)

• Retail adjusted EBITDA increased in the second quarter and first half of 2024, supported by strong grower demand and a normalization of product margins in North America. Nutrien recognized a $335 million non-cash impairment of its Retail – Brazil assets in the second quarter of 2024 due to ongoing market instability and more moderate margin expectations. During the same period in 2023, Nutrien recognized a $465 million non-cash impairment primarily to goodwill relating to its Retail – South America assets.

• Crop nutrients sales decreased in the second quarter and first half of 2024 due to lower selling prices. Gross margin increased over both periods due to higher per-tonne margins, including proprietary crop nutritional and biostimulant product lines. Lower second quarter sales volumes were the result of wet weather that delayed planting and impacted fertilizer applications in North America.

  
  

• Crop protection products sales were lower in the second quarter and first half of 2024 primarily due to lower selling prices across all geographies and delayed applications in North America. Gross margin for the second quarter and first half of 2024 increased from the comparable periods in 2023, which was impacted by the sell through of higher cost inventory.

  
  

• Seed sales for the second quarter and first half of 2024 were consistent with the comparable periods in the prior year while gross margin increased driven by an increase in proprietary products gross margins and the timing of supplier programs.

  
  

• Nutrien Financial sales and gross margin increased in the second quarter and first half of 2024 due to higher financing offering rates and expanded program participation from growers in the US and Australia.

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