Nutrien Ltd. Q4 FY2024 earnings call

• Nutrien has a world-class asset base and resilient business model. In 2024, progress was made toward 2026 performance targets. Upstream: Increased fertilizer sales volumes, sold record potash volumes, progressed nitrogen brownfield expansions, and mined 35% of potash ore tonnes using automation. Midstream: Enhanced distribution capabilities with a new potash terminal in the U.S. corn belt. Downstream: Increased retail product margins, improved Brazil performance, accelerated $200 million annual cost savings to 2025, and optimized capital spending by reducing total expenditures by $450 million compared to 2023.

Nutrien's segment performance in 2024: Retail adjusted EBITDA totaled $1.7 billion, up 16% from the prior year. Potash delivered adjusted EBITDA of $1.8 billion, down from the prior year due to lower net selling prices. Nitrogen segment generated adjusted EBITDA of $1.9 billion, relatively flat to the prior year. Phosphate generated adjusted EBITDA of $384 million, down from the prior year primarily due to lower production.

• Potash sales volume guidance: 13.6 million to 14.4 million tonnes, accounting for tariff uncertainty. - Nitrogen sales volume guidance: 10.7 million to 11.2 million tonnes, with expectations of reliability improvements. - Phosphate sales volume guidance: 2.35 million to 2.55 million tonnes, reflecting production changes. - Retail adjusted EBITDA guidance: $1.65 billion to $1.85 billion. - Capital expenditures guidance: $2 billion to $2.1 billion in 2025, with focus on targeted growth investments.

• Tariff risk affecting potash and nitrogen, with potential impact on U.S. farmers. - Geopolitical uncertainties related to potash supply from regions like Belarus and Russia. - Weather and market conditions impacting fertilizer sales volumes. - Currency headwinds in the retail business.

Q: Can you talk through how you think about tariff risk for nitrogen, potash and retail?

A: Ken Seitz discussed that tariffs on potash are a concern, with the cost likely passed to U.S. farmers, and mechanisms in place to handle tariffs.

Q: Your comments on improving Brazil results are quite encouraging. Can you drill down further?

A: Ken Seitz mentioned cost reductions, head count reduction, idling lenders, closing unproductive locations, and doubling down on proprietary products in Brazil.

Q: Wondering if you could just talk a little bit about the potash market. What impact would an end to the war in Ukraine have?

A: Ken Seitz stated that potash prices are now meeting supply at the right side of the cost curve, and the impact of FSU production depends on lifting of sanctions, which is uncertain.

Q: Your Henry Hub gas forecast between $3.25 and $3.50. How does recent gas price surge impact this?

A: Trevor Williams said North American prices were stronger due to extreme weather, but expected normalization by year end.

Q: I was looking at your fact books and the number of selling locations for retail. Can you comment?

A: Ken Seitz explained that it's about network optimization, consolidating less productive locations into modern, efficient facilities to better serve growers.