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Nutrien Reports Fourth Quarter and Full-Year 2023 Results

Fourth quarter results reflect strong fertilizer market fundamentals in North America. Expect increased fertilizer sales volumes and growth in Retail earnings in 2024.

All amounts are in US dollars except as otherwise noted

Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth quarter 2023 results, with net earnings of $176 million ($0.35 diluted net earnings per share). Fourth quarter 2023 adjusted net earnings per share1 was $0.37 and adjusted EBITDA1 was $1.1 billion.

“We saw a continuation of strong fertilizer market fundamentals in North America during the fourth quarter driven by improved affordability, an extended fall application season and low channel inventories. Utilizing the strengths of our integrated business, we achieved record fourth-quarter potash deliveries, increased crop nutrient sales volumes across our global Retail network and generated strong cash flow from operations,” commented Ken Seitz, Nutrien’s President and CEO.

“As we look ahead to 2024, we expect to deliver higher fertilizer sales volumes and Retail earnings, supported by increased crop input market stability and demand. We continue to prioritize strategic initiatives that enhance our capability to serve growers in our core markets, maintain the low-cost position and reliability of our assets, and position the Company for growth,” added Mr. Seitz.

Highlights2:

  • Generated net earnings of $1.3 billion ($2.53 diluted net earnings per share) and adjusted EBITDA1 of $6.1 billion ($4.44 adjusted net earnings per share1) in 2023, down from the record levels achieved in 2022. Adjusted EBITDA declined primarily due to lower net realized selling prices across all segments and lower Nutrien Ag Solutions (“Retail”) earnings. Cash provided by operating activities totaled $5.1 billion in 2023, representing 84 percent of adjusted EBITDA.
  • Retail adjusted EBITDA of $1.5 billion in 2023 decreased primarily due to lower gross margin for both crop nutrients and crop protection products, as we sold through high-cost inventory. Crop nutrient sales volumes increased as growers returned to more normalized application rates to replenish nutrients in the soil. We continued to grow our proprietary nutritional and biostimulant sales and margins through differentiated product offerings and expanded manufacturing capacity.
  • Potash full year 2023 adjusted EBITDA declined to $2.4 billion due to lower net realized selling prices. We delivered record fourth quarter potash sales volumes driven by strong demand in North America and increased offshore sales.
  • Nitrogen full year 2023 adjusted EBITDA decreased to $1.9 billion due to lower net realized selling prices for all major nitrogen products, which more than offset lower natural gas costs and higher sales volumes.
  • In the fourth quarter of 2023, we recognized a $76 million non-cash impairment in our Nitrogen segment relating to our Trinidad property, plant and equipment due to a new natural gas contract and the resulting outlook for higher expected natural gas costs and constrained near-term availability. We expect improved natural gas availability in Trinidad as the development of additional gas fields is anticipated to add new supply starting in 2026.
  • Returned $2.1 billion to shareholders in 2023 through dividends and share repurchases. Nutrien’s Board of Directors approved an increase in the quarterly dividend to $0.54 per share. Nutrien continues to target a stable and growing dividend with our dividend per share increasing by 35 percent since the beginning of 2018. Nutrien’s Board of Directors also approved the purchase of up to 5 percent of Nutrien’s outstanding common shares over a twelve-month period through a normal course issuer bid (“NCIB”). The NCIB is subject to acceptance by the Toronto Stock Exchange.

1.

These are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section for further information.

2.

Our discussion of highlights set out on this page is a comparison of the results for the twelve months ended December 31, 2023 to the results for the twelve months ended December 31, 2022, unless otherwise noted.

Market Outlook and Guidance

Agriculture and Retail

  • Global grain stocks-to-use ratios remain historically low going into the 2024 growing season as tightening supplies of wheat and rice have offset increased corn supplies in the US and Brazil. We expect weather and geopolitical issues will continue to impact grain and oilseed production, exports and inventory levels.
  • Crop prices have declined from historically high levels in 2022, but lower crop input prices have resulted in improved demand, evidenced by the strong North American fall application season in 2023. We expect US corn plantings to range from 91 to 92 million acres in 2024 and soybean plantings to range from 87 to 88 million acres.
  • In Brazil, dry weather during the summer crop growing season and lower corn prices could result in lower corn area in 2024. Brazilian growers are expected to continue to expand soybean acreage, which we anticipate will support the need for strong fertilizer imports in the second and third quarters of 2024.
  • In Australia, growers have benefited from multiple years of above-average yields and fundamentals remain supportive entering 2024. Timely precipitation led to higher-than-expected winter crop production, however if the El Niño weather pattern continues, it could pose a risk for the 2024 growing season.

Crop Nutrient Markets

  • Global potash demand was strong through the second half of 2023, and we estimate full-year shipments were between 67 to 68 million tonnes. The increase was supported by strong consumption and increased imports in key markets such as North America, China and Brazil.
  • We expect global potash demand will continue to recover towards trend levels in 2024 with full-year shipments projected between 68 to 71 million tonnes. We anticipate a relatively balanced global market with incremental supply from producers in Canada, Russia, Belarus and Laos.
  • We are seeing strong potash demand ahead of the North American spring application season as channel inventories were tight to start the year. Potash demand in Southeast Asia is expected to increase significantly in 2024 due to much lower inventory levels compared to the prior year and favorable economics for key crops such as oil palm and rice. We expect lower potash imports from China compared to the record levels in 2023 but for demand to remain at historically high levels driven by increased consumption.
  • We expect nitrogen supply constraints to persist in 2024, including limited Russian ammonia exports, reduced European operating rates and Chinese urea export restrictions. North American natural gas prices remain highly competitive compared to Europe and Asia, and we expect Henry Hub natural gas prices to average approximately $2.50 per MMBtu for the year.
  • The US nitrogen supply and demand balance is projected to be tight ahead of the spring application season, as nitrogen fertilizer net imports in the first half of the 2023/2024 fertilizer year were down an estimated 55 percent compared to the three-year average. Global industrial nitrogen demand remains a risk in 2024 as industrial production, most notably in Europe and Asia, has yet to rebound to historical levels.
  • Phosphate fertilizer markets have remained relatively strong in the first quarter of 2024, particularly in North America where channel inventories were low entering the year. We expect Chinese phosphate exports to be similar to 2023 levels and tight stocks in India to support demand ahead of their key planting season.

Financial Guidance

We have revised our guidance practice in 2024 to provide forward looking estimates on those metrics that we believe are of value to our shareholders and are less impacted by fertilizer commodity prices. We continue to provide guidance for Retail adjusted EBITDA, fertilizer sales volumes and other key financial modeling metrics as well as fertilizer pricing sensitivities.

  • Retail adjusted EBITDA guidance of $1.65 to $1.85 billion assumes increased gross margins in all major product lines compared to 2023. We anticipate that crop nutrient gross margin will be supported by higher sales volumes and per-tonne margins, in particular compared to the compressed levels in the first half of the prior year. We expect a recovery in Brazilian crop protection margins in the second half of 2024.
  • Potash sales volume guidance of 13.0 to 13.8 million tonnes assumes demand growth in offshore markets and a return to more normal Canpotex port operations in 2024. In North America, we expect increased first quarter sales volumes compared to the prior year due to strong customer engagement to refill depleted inventories.
  • Nitrogen sales volume guidance of 10.6 to 11.2 million tonnes assumes higher operating rates at our US and Trinidad plants compared to 2023. Phosphate sales volume guidance of 2.6 to 2.8 million tonnes assumes improved operating rates compared to the prior year.
  • Total capital expenditures of $2.2 to $2.3 billion are expected to be below the prior year. This total includes approximately $500 million in investing capital expenditures focused on proprietary products, network optimization and digital capabilities in Retail, mine automation projects in Potash, and low-cost brownfield expansions in Nitrogen.

All guidance numbers, including those noted above are outlined in the table below. In addition, set forth below are anticipated fertilizer pricing and natural gas price sensitivities relating to adjusted EBITDA (consolidated) and adjusted net earnings per share.

 

 

 

2024 Guidance Ranges 1 as of February 21, 2024

 

 

(billions of US dollars, except as otherwise noted)

Low

 

High

 

2023 Actual

Retail adjusted EBITDA

1.65

 

1.85

 

1.5

Potash sales volumes (million tonnes) 2

13.0

 

13.8

 

13.2

Nitrogen sales volumes (million tonnes) 2

10.6

 

11.2

 

10.4

Phosphate sales volumes (million tonnes) 2

2.6

 

2.8

 

2.6

Depreciation and amortization

2.2

 

2.3

 

2.2

Finance costs

0.75

 

0.85

 

0.8

Effective tax rate on adjusted earnings (%)

24.0

 

26.0

 

28.0

Capital expenditures 3

2.2

 

2.3

 

2.7

1 See the "Forward-Looking Statements" section.

2 Manufactured product only.

3 Comprised of sustaining capital expenditures, investing capital expenditures and mine development and pre-stripping capital expenditures which are supplementary financial measures. See the "Other Financial Measures" section.

2024 Annual Sensitivities 1

Effect on

(millions of US dollars, except EPS amounts)

Adjusted EBITDA

Adjusted EPS 4

$25/tonne change in net realized potash selling prices

± 270

± 0.40

$25/tonne change in net realized ammonia selling prices 2

± 40

± 0.05

$25/tonne change in net realized urea and ESN® selling prices

± 80

± 0.10

$25/tonne change in net realized solutions, nitrates and sulfates selling prices

± 130

± 0.20

$1/MMBtu change in NYMEX natural gas price 3

± 190

± 0.30

1 See the “Forward-Looking Statements” section.

2 Includes related impact on natural gas costs in Trinidad, which is linked to benchmark ammonia pricing.

3 Nitrogen related impact.

 

 

4 Assumes 496 million shares outstanding for all earnings per share ("EPS") sensitivities.

Consolidated Results

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

Sales

5,664

 

 

7,533

 

 

(25

)

 

29,056

 

 

37,884

 

 

(23

)

Freight, transportation and distribution

260

 

 

244

 

 

7

 

 

974

 

 

872

 

 

12

 

Cost of goods sold

3,636

 

 

4,383

 

 

(17

)

 

19,608

 

 

21,588

 

 

(9

)

Gross margin

1,768

 

 

2,906

 

 

(39

)

 

8,474

 

 

15,424

 

 

(45

)

Expenses

1,475

 

 

1,247

 

 

18

 

 

5,729

 

 

4,615

 

 

24

 

Net earnings

176

 

 

1,118

 

 

(84

)

 

1,282

 

 

7,687

 

 

(83

)

Adjusted EBITDA 1

1,075

 

 

2,095

 

 

(49

)

 

6,058

 

 

12,170

 

 

(50

)

Diluted net earnings per share

0.35

 

 

2.15

 

 

(84

)

 

2.53

 

 

14.18

 

 

(82

)

Adjusted net earnings per share 1

0.37

 

 

2.02

 

 

(82

)

 

4.44

 

 

13.19

 

 

(66

)

Cash provided by operating activities

4,150

 

 

4,736

 

 

(12

)

 

5,066

 

 

8,110

 

 

(38

)

Cash used in investing activities

(733

)

 

(1,222

)

 

(40

)

 

(2,958

)

 

(2,901

)

 

2

 

Cash used for dividends and share repurchases 2

(262

)

 

(1,465

)

 

(82

)

 

(2,079

)

 

(5,551

)

 

(63

)

1 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.

2 This is a supplementary financial measure. See the "Other Financial Measures" section.

Net earnings and adjusted EBITDA decreased in the fourth quarter and full year of 2023 compared to the same periods in 2022, mainly due to lower net realized selling prices across all segments and lower Retail earnings. This was partially offset by decreased cost of goods sold from lower natural gas and royalty costs, lower provincial mining taxes, higher sales volumes for Retail crop nutrients and increased Potash and Nitrogen sales volumes. For the full year of 2023, we recorded non-cash impairment of assets of $774 million in aggregate primarily related to Retail – South America goodwill and Nitrogen and Phosphate property, plant and equipment, resulting in lower net earnings. For the full year of 2022, we recorded a non-cash impairment reversal of an aggregate of $780 million related to our Phosphate assets. The decrease in cash provided by operating activities in the fourth quarter and full-year 2023 compared to the same periods in 2022 was primarily due to lower earnings across all segments.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three and twelve months ended December 31, 2023 to the results for the three and twelve months ended December 31, 2022, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

2022

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients

1,808

 

 

2,320

 

 

(22

)

 

346

 

 

349

 

 

(1

)

 

19

 

15

Crop protection products

960

 

 

981

 

 

(2

)

 

333

 

 

413

 

 

(19

)

 

35

 

42

Seed

202

 

 

251

 

 

(20

)

 

36

 

 

46

 

 

(22

)

 

18

 

18

Merchandise

251

 

 

264

 

 

(5

)

 

41

 

 

41

 

 

 

 

16

 

16

Nutrien Financial

70

 

 

62

 

 

13

 

 

70

 

 

62

 

 

13

 

 

100

 

100

Services and other

236

 

 

237

 

 

 

 

188

 

 

194

 

 

(3

)

 

80

 

82

Nutrien Financial elimination 1

(25

)

 

(28

)

 

(11

)

 

(25

)

 

(28

)

 

(11

)

 

100

 

100

 

3,502

 

 

4,087

 

 

(14

)

 

989

 

 

1,077

 

 

(8

)

 

28

 

26

Cost of goods sold

2,513

 

 

3,010

 

 

(17

)

 

 

 

 

 

 

 

 

 

 

 

Gross margin

989

 

 

1,077

 

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

Expenses 2

973

 

 

888

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before finance costs and taxes ("EBIT")

16

 

 

189

 

 

(92

)

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

201

 

 

202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

217

 

 

391

 

 

(45

)

 

 

 

 

 

 

 

 

 

 

 

Adjustments 3

12

 

 

 

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

229

 

 

391

 

 

(41

)

 

 

 

 

 

 

 

 

 

 

 

1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.

2 Includes selling expenses of $841 million (2022 – $836 million).

3 See Note 2 to the unaudited condensed consolidated financial statements.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

 

2023

 

2022

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients

8,379

 

 

10,060

 

 

(17

)

 

1,378

 

 

1,766

 

 

(22

)

 

16

 

18

Crop protection products

6,750

 

 

7,067

 

 

(4

)

 

1,553

 

 

1,936

 

 

(20

)

 

23

 

27

Seed

2,295

 

 

2,112

 

 

9

 

 

427

 

 

428

 

 

 

 

19

 

20

Merchandise

1,001

 

 

1,019

 

 

(2

)

 

172

 

 

174

 

 

(1

)

 

17

 

17

Nutrien Financial

322

 

 

267

 

 

21

 

 

322

 

 

267

 

 

21

 

 

100

 

100

Services and other

927

 

 

966

 

 

(4

)

 

710

 

 

749

 

 

(5

)

 

77

 

78

Nutrien Financial elimination

(132

)

 

(141

)

 

(6

)

 

(132

)

 

(141

)

 

(6

)

 

100

 

100

 

19,542

 

 

21,350

 

 

(8

)

 

4,430

 

 

5,179

 

 

(14

)

 

23

 

24

Cost of goods sold

15,112

 

 

16,171

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

Gross margin

4,430

 

 

5,179

 

 

(14

)

 

 

 

 

 

 

 

 

 

 

 

Expenses 1,2

4,215

 

 

3,621

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

215

 

 

1,558

 

 

(86

)

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

759

 

 

752

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

974

 

 

2,310

 

 

(58

)

 

 

 

 

 

 

 

 

 

 

 

Adjustments 2

485

 

 

(17

)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

1,459

 

 

2,293

 

 

(36

)

 

 

 

 

 

 

 

 

 

 

 

1 Includes selling expenses of $3,375 million (2022 – $3,392 million).

2 Includes non-cash impairment of assets of $465 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.

  • Retail adjusted EBITDA decreased in the fourth quarter of 2023 primarily due to lower gross margin for crop protection products and higher expenses. For the full year, adjusted EBITDA was lower mostly due to lower gross margin for both crop nutrients and crop protection products. Included within expenses for the full year of 2023, we recognized a $465 million non-cash impairment primarily related to goodwill of our South American Retail assets. The impairment was mainly due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates.
  • Crop nutrients sales and gross margin decreased in the fourth quarter and full year of 2023 due to lower selling prices across all regions compared to the strong comparable periods in 2022. Sales volumes increased for both the fourth quarter and full year as growers returned to more normalized application rates to replenish nutrients in the soil. Full year sales and gross margin of our proprietary nutritional and biostimulant product lines increased compared to 2022 levels as we continued to expand our differentiated product offering and manufacturing capacity.
  • Crop protection products sales and gross margin were lower in the fourth quarter and full year of 2023 primarily due to decreased selling prices compared to the historically strong comparable periods in 2022. This was partially offset by higher fourth quarter sales in North America as growers returned to more normalized buying behaviors. Gross margin in 2023 was also impacted by the selling through of high-cost inventory, which in the fourth quarter was primarily related to South America.
  • Seed sales and gross margin decreased in the fourth quarter of 2023 due to lower soybean sales volumes and competitive market prices in South America. Full-year sales increased primarily due to increased corn sales in the US, while gross margin saw little change compared to the prior year.
  • Nutrien Financial sales increased in the fourth quarter and full year of 2023 due to higher utilization of our financing offerings in the US and Australia compared to the same periods in 2022.

Potash

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

372

 

536

 

(31

)

 

1,089

 

959

 

14

 

342

 

560

 

(39

)

Offshore

404

 

841

 

(52

)

 

2,214

 

1,659

 

33

 

182

 

506

 

(64

)

 

776

 

1,377

 

(44

)

 

3,303

 

2,618

 

26

 

235

 

526

 

(55

)

Cost of goods sold

349

 

310

 

13

 

 

 

 

 

 

 

 

106

 

118

 

(10

)

Gross margin – total

427

 

1,067

 

(60

)

 

 

 

 

 

 

 

129

 

408

 

(68

)

Expenses 1

82

 

198

 

(59

)

 

Depreciation and amortization

 

36

 

34

 

6

 

EBIT

345

 

869

 

(60

)

 

Gross margin excluding depreciation

 

 

 

 

 

 

Depreciation and amortization

118

 

89

 

33

 

 

and amortization – manufactured 2

165

 

442

 

(63

)

EBITDA / Adjusted EBITDA

463

 

958

 

(52

)

 

Potash controllable cash cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

product manufactured 2

 

56

 

65

 

(14

)

1 Includes provincial mining taxes of $79 million (2022 – $190 million).

2 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

1,683

 

2,485

 

(32

)

 

4,843

 

3,729

 

30

 

 

348

 

667

 

(48

)

Offshore

2,076

 

5,414

 

(62

)

 

8,373

 

8,808

 

(5

)

 

248

 

615

 

(60

)

 

3,759

 

7,899

 

(52

)

 

13,216

 

12,537

 

5

 

 

284

 

630

 

(55

)

Cost of goods sold

1,396

 

1,400

 

 

 

 

 

 

 

 

 

 

105

 

112

 

(6

)

Gross margin – total

2,363

 

6,499

 

(64

)

 

 

 

 

 

 

 

 

179

 

518

 

(65

)

Expenses ¹

422

 

1,173

 

(64

)

 

Depreciation and amortization

 

 

35

 

35

 

 

EBIT

1,941

 

5,326

 

(64

)

 

Gross margin excluding depreciation

 

 

 

 

 

 

 

Depreciation and amortization

463

 

443

 

5

 

 

and amortization – manufactured

 

214

 

553

 

(61

)

EBITDA / Adjusted EBITDA

2,404

 

5,769

 

(58

)

 

Potash controllable cash cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

product manufactured

 

 

58

 

58

 

 

1 Includes provincial mining taxes of $398 million (2022 – $1,149 million).

  • Potash adjusted EBITDA declined in the fourth quarter and full year of 2023 due to lower net realized selling prices, which more than offset higher North American sales volumes and lower provincial mining taxes and royalties. We increased granular potash production in the fourth quarter to meet customer demand and reduced our controllable cash cost of product manufactured to $56 per tonne.
  • Sales volumes in North America were higher in the fourth quarter and full year of 2023 due to lower channel inventory and increased grower demand supported by an extended fall application window and improved affordability. Offshore sales volumes were higher in the fourth quarter compared to the same period in the prior year driven by stronger demand in Brazil and China. Full-year offshore sales volumes were lower compared to the record levels in 2022 primarily due to logistical challenges at Canpotex’s West Coast port facilities and reduced shipments to customers in India and Southeast Asia.
  • Net realized selling price decreased in the fourth quarter and full year of 2023 compared to the historically strong periods in 2022, due to a decline in benchmark prices and higher costs related to logistical challenges at Canpotex’s West Coast port facilities.
  • Cost of goods sold per tonne decreased in the fourth quarter and full year of 2023 mainly due to lower royalties. Fourth quarter costs were also lower due to the timing of turnaround activity.

Canpotex Sales by Market

(percentage of sales volumes, except as

Three Months Ended December 31

 

Twelve Months Ended December 31

otherwise noted)

2023

2022

Change

 

 

2023

2022

Change

 

Latin America

32

28

4

 

 

47

34

13

 

Other Asian markets 1

28

35

(7

)

 

28

34

(6

)

Other markets

10

10

 

 

11

10

1

 

China

19

16

3

 

 

9

14

(5

)

India

11

11

 

 

5

8

(3

)

 

100

100

 

 

 

100

100

 

 

1 All Asian markets except China and India.

Nitrogen

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ammonia

271

 

689

 

(61

)

 

651

 

776

 

(16

)

 

416

 

887

 

(53

)

Urea and ESN® 1

316

 

510

 

(38

)

 

739

 

764

 

(3

)

 

428

 

666

 

(36

)

Solutions, nitrates and sulfates

290

 

389

 

(25

)

 

1,344

 

1,056

 

27

 

 

215

 

368

 

(42

)

 

877

 

1,588

 

(45

)

 

2,734

 

2,596

 

5

 

 

321

 

611

 

(47

)

Cost of goods sold 1

595

 

892

 

(33

)

 

 

 

 

 

 

 

 

218

 

343

 

(36

)

Gross margin – manufactured

282

 

696

 

(59

)

 

 

 

 

 

 

 

 

103

 

268

 

(62

)

Gross margin – other 1,2

3

 

3

 

 

 

Depreciation and amortization 1

 

53

 

60

 

(12

)

Gross margin – total

285

 

699

 

(59

)

 

Gross margin excluding depreciation

 

 

 

 

 

 

 

Expenses 3,4

116

 

13

 

792

 

 

and amortization – manufactured 5

 

156

 

328

 

(52

)

EBIT

169

 

686

 

(75

)

 

Ammonia controllable cash cost of

 

 

 

 

 

 

 

Depreciation and amortization

146

 

155

 

(6

)

 

product manufactured 5

 

59

 

57

 

4

 

EBITDA

315

 

841

 

(63

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 4

76

 

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

391

 

841

 

(54

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Certain immaterial 2022 figures have been reclassified.

2 Includes other nitrogen and purchased products and comprises net sales of $79 million (2022 – $204 million) less cost of goods sold of $76 million (2022 – $201 million).

3 Includes (loss) earnings from equity-accounted investees of $(1) million (2022 – $41 million).

4 Includes a non-cash impairment of assets of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.

5 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

 

2022

 

% Change

 

 

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ammonia

1,144

 

 

2,641

 

 

(57

)

 

2,436

 

2,715

 

(10

)

 

469

 

973

 

(52

)

Urea and ESN® 1

1,499

 

 

2,134

 

 

(30

)

 

3,125

 

3,014

 

4

 

 

480

 

708

 

(32

)

Solutions, nitrates and sulfates

1,187

 

 

1,829

 

 

(35

)

 

4,862

 

4,551

 

7

 

 

244

 

402

 

(39

)

 

3,830

 

 

6,604

 

 

(42

)

 

10,423

 

10,280

 

1

 

 

367

 

642

 

(43

)

Cost of goods sold 1

2,435

 

 

3,370

 

 

(28

)

 

 

 

 

 

 

 

 

233

 

327

 

(29

)

Gross margin – manufactured

1,395

 

 

3,234

 

 

(57

)

 

 

 

 

 

 

 

 

134

 

315

 

(57

)

Gross margin – other 1,2

(16

)

 

47

 

 

n/m

 

 

Depreciation and amortization

 

55

 

54

 

2

 

Gross margin – total

1,379

 

 

3,281

 

 

(58

)

 

Gross margin excluding depreciation

 

 

 

 

 

 

 

Expenses (income) 3,4

97

 

 

(92

)

 

n/m

 

 

and amortization – manufactured

 

189

 

369

 

(49

)

EBIT

1,282

 

 

3,373

 

 

(62

)

 

Ammonia controllable cash cost of

 

 

 

 

 

 

 

Depreciation and amortization

572

 

 

558

 

 

3

 

 

product manufactured

 

60

 

59

 

2

 

EBITDA

1,854

 

 

3,931

 

 

(53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 4

76

 

 

 

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

1,930

 

 

3,931

 

 

(51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Certain immaterial 2022 figures have been reclassified.

2 Includes other nitrogen and purchased products and comprises net sales of $377 million (2022 – $929 million) less cost of goods sold of $393 million

(2022 – $882 million).

3 Includes earnings from equity-accounted investees of $90 million (2022 – $233 million).

4 Includes a non-cash impairment of assets of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.

  • Nitrogen adjusted EBITDA was lower in the fourth quarter and full year of 2023 due to lower net realized selling prices for all major nitrogen products, which more than offset lower natural gas costs and higher sales volumes. Our fourth quarter ammonia operating rate increased to 91 percent1 compared to 83 percent in the same period in 2022 primarily due to improved reliability and the absence of major weather-related unplanned outages. We recognized a $76 million non-cash impairment of our Trinidad property, plant and equipment during the fourth quarter due to a new natural gas contract and the resulting outlook for higher expected natural gas costs and constrained near-term availability. We expect improved natural gas availability in Trinidad as the development of additional gas fields is anticipated to add new supply starting in 2026.
  • Sales volumes were higher in the fourth quarter and full year of 2023 primarily due to higher UAN production and sales, partially offset by lower ammonia availability mainly due to production outages at our plants in Trinidad.
  • Net realized selling price was lower in the fourth quarter and full year of 2023 for all major nitrogen products primarily due to weaker benchmark prices resulting from lower energy prices in key nitrogen producing regions.
  • Cost of goods sold per tonne decreased in the fourth quarter and full year of 2023 due to lower natural gas costs. Ammonia controllable cash cost of product manufactured per tonne increased in 2023 mainly due to the impact of lower ammonia production.

1 Excludes Trinidad and Joffre.

Natural Gas Prices in Cost of Production

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(US dollars per MMBtu, except as otherwise noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

Overall natural gas cost excluding realized derivative impact

3.35

 

 

7.49

 

 

(55

)

 

3.51

 

 

7.82

 

 

(55

)

Realized derivative impact

(0.05

)

 

(0.05

)

 

 

 

(0.02

)

 

(0.05

)

 

(60

)

Overall natural gas cost

3.30

 

 

7.44

 

 

(56

)

 

3.49

 

 

7.77

 

 

(55

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average NYMEX

2.88

 

 

6.26

 

 

(54

)

 

2.74

 

 

6.64

 

 

(59

)

Average AECO

1.94

 

 

4.11

 

 

(53

)

 

2.17

 

 

4.28

 

 

(49

)

  • Natural gas prices in our cost of production decreased in the fourth quarter and full year of 2023 as a result of lower North American natural gas index prices and decreased natural gas costs in Trinidad, where our natural gas prices are linked to ammonia benchmark prices.

Phosphate

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

2022

 

% Change

 

 

2023

 

2022

% Change

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

322

 

274

 

 

18

 

 

579

 

391

 

48

 

557

 

700

 

(20

)

Industrial and feed

150

 

155

 

 

(3

)

 

174

 

140

 

24

 

860

 

1,107

 

(22

)

 

472

 

429

 

 

10

 

 

753

 

531

 

42

 

627

 

807

 

(22

)

Cost of goods sold

402

 

405

 

 

(1

)

 

 

 

 

 

 

 

535

 

762

 

(30

)

Gross margin – manufactured

70

 

24

 

 

192

 

 

 

 

 

 

 

 

92

 

45

 

104

 

Gross margin – other 1

 

(8

)

 

(100

)

 

Depreciation and amortization

108

 

109

 

(1

)

Gross margin – total

70

 

16

 

 

338

 

 

Gross margin excluding depreciation

 

 

 

 

 

 

Expenses

21

 

46

 

 

(54

)

 

and amortization – manufactured 2

200

 

154

 

30

 

EBIT

49

 

(30

)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

81

 

58

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA / Adjusted EBITDA

130

 

28

 

 

364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes other phosphate and purchased products and comprises net sales of $61 million (2022 – $72 million) less cost of goods sold of $61 million

(2022 – $80 million).

2 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2023

 

 

2022

 

% Change

 

 

2023

 

2022

% Change

 

 

2023

 

2022

% Change

 

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

1,085

 

 

1,367

 

 

(21

)

 

1,912

 

1,696

 

13

 

 

568

 

806

 

(30

)

Industrial and feed

645

 

 

706

 

 

(9

)

 

639

 

682

 

(6

)

 

1,010

 

1,035

 

(2

)

 

1,730

 

 

2,073

 

 

(17

)

 

2,551

 

2,378

 

7

 

 

678

 

872

 

(22

)

Cost of goods sold

1,487

 

 

1,562

 

 

(5

)

 

 

 

 

 

 

 

 

583

 

657

 

(11

)

Gross margin – manufactured

243

 

 

511

 

 

(52

)

 

 

 

 

 

 

 

 

95

 

215

 

(56

)

Gross margin – other 1

(10

)

 

(18

)

 

(44

)

 

Depreciation and amortization

 

115

 

79

 

46

 

Gross margin – total

233

 

 

493

 

 

(53

)

 

Gross margin excluding depreciation

 

 

 

 

 

 

 

Expenses (income) ²

290

 

 

(693

)

 

n/m

 

 

and amortization – manufactured

 

210

 

294

 

(29

)

EBIT

(57

)

 

1,186

 

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

294

 

 

188

 

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

237

 

 

1,374

 

 

(83

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 2

233

 

 

(780

)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

470

 

 

594

 

 

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes other phosphate and purchased products and comprises net sales of $263 million (2022 – $304 million) less cost of goods sold of $273 million

(2022 – $322 million).

2 Includes non-cash impairment of assets of $233 million (2022 - reversal of non-cash impairment of assets of $780 million). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.

  • Phosphate adjusted EBITDA increased in the fourth quarter of 2023 primarily due to lower sulfur and ammonia input costs, partially offset by lower net realized selling prices. Full-year 2023 adjusted EBITDA was lower compared to the prior year mainly due to lower net realized selling prices for fertilizer products, partially offset by lower ammonia and sulfur input costs. Included in the expenses for the full year of 2023, we recognized a $233 million non-cash impairment of our White Springs property, plant and equipment, while we had non-cash impairment reversals of our Phosphate assets of $780 million for the full year of 2022.
  • Sales volumes increased in the fourth quarter and full year of 2023 mostly due to higher phosphate fertilizer demand, with the full year being partially offset by lower first-half production impacting our industrial and feed sales. Production increased in the fourth quarter and full-year 2023 largely due to improved reliability at our Aurora plant.
  • Net realized selling price decreased in the fourth quarter and full year of 2023 primarily due to lower fertilizer net realized selling prices and lower industrial and feed net realized selling prices which reflect the typical lag in price realizations relative to spot fertilizer prices.
  • Cost of goods sold per tonne decreased in the fourth quarter and full year of 2023 mainly due to lower ammonia and sulfur costs, partially offset by higher depreciation from reversal of non-cash impairment of assets in 2022.

Corporate and Others

(millions of US dollars, except as otherwise

Three Months Ended December 31

 

Twelve Months Ended December 31

noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

Selling expense (recovery)

7

 

 

5

 

 

40

 

 

 

 

(1

)

 

n/m

 

General and administrative expenses

104

 

 

99

 

 

5

 

 

364

 

 

326

 

 

12

 

Share-based compensation (recovery) expense

(7

)

 

(59

)

 

(88

)

 

(14

)

 

63

 

 

n/m

 

Other expenses

161

 

 

67

 

 

140

 

 

348

 

 

227

 

 

53

 

EBIT

(265

)

 

(112

)

 

137

 

 

(698

)

 

(615

)

 

13

 

Depreciation and amortization

19

 

 

16

 

 

19

 

 

81

 

 

71

 

 

14

 

EBITDA

(246

)

 

(96

)

 

156

 

 

(617

)

 

(544

)

 

13

 

Adjustments 1

129

 

 

(84

)

 

n/m

 

 

350

 

 

146

 

 

140

 

Adjusted EBITDA

(117

)

 

(180

)

 

(35

)

 

(267

)

 

(398

)

 

(33

)

1 See Note 2 to the unaudited condensed consolidated financial statements.

  • General and administrative expenses were higher in the full year of 2023 primarily due to higher staffing costs and higher depreciation and amortization expense.
  • Share-based compensation was a recovery in the fourth quarter and full year of 2023 due to a decrease in the fair value of share-based awards outstanding relative to the comparable periods in 2022. The fair value takes into consideration several factors such as our share price movement, our performance relative to our peer group and return on our invested capital.
  • Other expenses were higher in the fourth quarter and full year of 2023 compared to the same periods in 2022 due to the following:
    • Higher expense for asset retirement obligations and accrued environmental costs related to our non-operating sites due to changes in closure cost estimates.
    • $92 million loss on Blue Chip Swaps through trade transactions to remit cash from Argentina in the second quarter of 2023. The loss is a result of the significant divergence between the Blue Chip Swap market exchange rate and the official Argentinian Central Bank rate.
    • Higher foreign exchange losses primarily from our Retail – South America region.
    • The above expenses were partially offset by an $80 million gain recognized in the first quarter of 2023 from amendments due to design plan changes to our other post-retirement benefit plans.

Eliminations

  • Eliminations are not part of the Corporate and Others segment. The elimination of gross margin between operating segments was $3 million for the fourth quarter of 2023 compared to a recovery of $47 million in the same period of 2022. For the full year of 2023, there was a recovery of $69 million compared to an elimination of $28 million in the same period in 2022. These variances are due to the timing of release of intersegment inventories held by our Retail segment.

Finance Costs, Income Taxes and Other Comprehensive Income (Loss)

(millions of US dollars, except as otherwise

Three Months Ended December 31

 

Twelve Months Ended December 31

noted)

2023

 

 

2022

 

 

% Change

 

 

2023

 

 

2022

 

 

% Change

 

Finance costs

213

 

 

188

 

 

13

 

 

793

 

 

563

 

 

41

 

Income tax (recovery) expense

(96

)

 

353

 

 

n/m

 

 

670

 

 

2,559

 

 

(74

)

Actual effective tax rate including discrete items (%)

(120

)

 

24

 

 

n/m

 

 

34

 

 

25

 

 

9

 

Other comprehensive income (loss)

97

 

 

119

 

 

(18

)

 

81

 

 

(177

)

 

n/m

 

  • Finance costs were higher in the fourth quarter and full year of 2023 compared to the same periods in 2022 primarily due to higher interest rates and higher average long-term debt balances.
  • Income tax (recovery) expense was lower in the fourth quarter and full year of 2023 primarily as a result of lower earnings compared to the same periods in 2022. The full year of 2023 expense and effective tax rate reflect a $134 million income tax recovery due to changes to our tax declarations in Switzerland (“Swiss Tax Reform adjustment”) and a $101 million income tax expense due to a change in recognition of deferred tax assets in our Retail - South America region. The 2023 effective tax rates also include the impact of our losses in Retail – South America, wherein we did not recognize a corresponding deferred tax asset as it did not meet the accounting criteria for asset recognition.
  • Other comprehensive income (loss) was primarily driven by changes in the currency translation of our Retail foreign operations primarily due to improvements of Canadian and Australian currencies relative to the US dollar for the fourth quarter and full year of 2023. For the fourth quarter and full year of 2023, we recognized actuarial gains on our defined benefit plans compared to losses on the comparative periods driven by changes in our financial and demographic assumptions and performance of our plan assets.

Forward-Looking Statements

Certain statements and other information included in this document, including within the “Market Outlook and Guidance” section, 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”, “project”, “intend” or other similar words). All statements in this document, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to: Nutrien's business strategies, plans, prospects and opportunities; Nutrien's 2024 full-year guidance, including expectations regarding Retail adjusted EBITDA, Potash sales volumes, Nitrogen sales volumes, Phosphate sales volumes, depreciation and amortization, finance costs, effective tax rate on adjusted earnings and capital expenditures; our projections to generate strong cash from operations; expectations regarding our capital allocation intentions and strategies; our ability to advance strategic initiatives and high value growth investments, including expectations regarding our ability to serve growers, maintain a low-cost position of fertilizer production assets and increase free cash flow; capital spending expectations for 2024 and beyond, including spending related to advancement of proprietary products, network optimization and digital capabilities in Retail, automation in Potash mining, and brownfield expansions in Nitrogen; expectations regarding our ability to generate free cash flow and return capital to our shareholders, including our expectations regarding stable and growing dividends; expectations regarding Retail inventory levels in North America; expectations regarding performance of our operating segments in 2024, including increased fertilizer sales volumes and growth in Retail earnings; our operating segment market outlooks and our expectations for market conditions and fundamentals in 2024 and beyond, and the anticipated supply and demand for our products and services, expected market, industry and growing conditions with respect to crop nutrient application rates, planted acres, grower crop investment, crop mix, including the need to replenish soil nutrient levels, production volumes and expenses, shipments, natural gas costs and availability, consumption, prices, operating rates and the impact of seasonality, import and export volumes, economic sanctions and restrictions, operating rates, inventories, crop development and natural gas curtailments; the expected impacts and timing of new supply from additional gas fields in Trinidad; the resulting outlook of higher expected natural gas costs and lower near-term availability from the new natural gas contract related to our Trinidad property, plant and equipment in our Nitrogen segment; the negotiation of sales contracts; timing and impacts of plant turnarounds; acquisitions and divestitures and the anticipated benefits thereof; and expectations in connection with our ability to deliver long-term returns to shareholders. 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 we believe that these assumptions are reasonable, having regard to our experience and our perception of historical trends, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place undue reliance on these assumptions and such forward-looking statements. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. The additional key assumptions that have been made include, among other things, assumptions with respect to: our ability to successfully implement our business strategies, growth and capital allocation investments and initiatives that we will conduct our operations and achieve results of operations as anticipated; our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions and divestitures, and that we will be able to implement our standards, controls, procedures and policies in respect of any acquired businesses and to realize the expected synergies on the anticipated timeline or at all; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, expenses, margins, demand, supply, product availability, shipments, consumption, weather conditions, including the current El Niño weather pattern, supplier agreements, availability, inventory levels, exports, crop development and cost of labor and interest, exchange and effective tax rates; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2024 and in the future; assumptions related to our assessment of recoverable amount estimates of our assets, including in relation to our Retail - South America group of CGUs goodwill and intangible asset impairment and the impairment of our Nitrogen and Phosphate property, plant and equipment; assumptions with respect to the timing and benefits of additional gas fields in Trinidad; assumptions with respect to our intention to complete share repurchases under our normal course issuer bid programs, including Toronto Stock Exchange approval, the funding of such share repurchases, existing and future market conditions, including with respect to the price of our common shares, and compliance with respect to applicable limitations under securities laws and regulations and stock exchange policies and the ability to fund our dividends at the current level; our expectations regarding the impacts, direct and indirect, of certain geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East on, among other things, global supply and demand, including for crop nutrients, energy and commodity prices, global interest rates, supply chains and the global macroeconomic environment, including inflation; 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; our ability to maintain investment grade ratings and achieve our performance targets; and our ability to successfully negotiate sales and other contracts.

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; failure to achieve expected results of our business strategy, capital allocation initiatives or results of operations; failure to complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; seasonality; climate change and weather conditions, including the current El Niño weather pattern, 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 (including tariffs, trade restrictions and climate change initiatives), 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 cybersecurity risks related to our systems, including our costs of addressing or mitigating such risks; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities or challenges related to our major facilities that are out of our control; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; the risk that rising interest rates and/or deteriorated business operating results may result in the further impairment of assets or goodwill attributed to certain of our cash generating units; 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; geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East, and their potential impact on, among other things, global market conditions and supply and demand, including for crop nutrients, energy and commodity prices, interest rates, supply chains and the global economy generally; our ability to execute on our strategies related to environmental, social and governance matters, and achieve related expectations, targets and commitments; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States.

The purpose of our Retail adjusted EBITDA, sales volumes, depreciation and amortization, finance costs, effective tax rate on adjusted earnings and capital expenditures guidance ranges are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

The forward-looking statements in this document are made as of the date hereof and 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 Canadian securities legislation or applicable US federal securities laws.

Terms and Definitions

For the definitions of certain financial and non-financial terms used in this document, as well as a list of abbreviated company names and sources, see the “Terms & Definitions” section of our 2022 Annual Report. All references to per share amounts pertain to diluted net earnings (loss) per share, “n/m” indicates information that is not meaningful, and all financial amounts are stated in millions of US dollars, unless otherwise noted.

About Nutrien

Nutrien is a leading provider of crop inputs and services, helping to safely and sustainably feed a growing world. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our integrated business and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.

More information about Nutrien can be found at www.nutrien.com.

Selected financial data for download can be found in our data tool at www.nutrien.com/investors/interactive-datatool

Such data is not incorporated by reference herein.

Nutrien will host a Conference Call on Thursday, February 22, 2024 at 10:00 a.m. Eastern Time.

Telephone conference dial-in numbers:

  • From Canada and the US 1-888-886-7786
  • International 1-416-764-8658
  • No access code required. Please dial in 15 minutes prior to ensure you are placed on the call in a timely manner.

Live Audio Webcast: Visit https://www.nutrien.com/investors/events/2023-q4-earnings-conference-call

Appendix A – Selected Additional Financial Data

Selected Retail Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2023

 

 

2022

 

 

2023

 

2022

Proprietary products gross margin (millions of US dollars)

 

 

 

 

 

 

 

Crop nutrients

44

 

 

55

 

 

391

 

370

Crop protection products

27

 

 

58

 

 

461

 

675

Seed

(3

)

 

(7

)

 

168

 

166

Merchandise

3

 

 

5

 

 

11

 

12

All products

71

 

 

111

 

 

1,031

 

1,223

Proprietary products margin as a percentage of product line margin (%)

 

 

 

 

 

 

 

Crop nutrients

12

 

 

16

 

 

28

 

21

Crop protection products

10

 

 

14

 

 

30

 

35

Seed

(9

)

 

(7

)

 

39

 

39

Merchandise

6

 

 

11

 

 

6

 

7

All products

8

 

 

11

 

 

23

 

24

Crop nutrients sales volumes (tonnes – thousands)

 

 

 

 

 

 

 

North America

2,073

 

 

1,819

 

 

8,985

 

8,106

International

790

 

 

675

 

 

3,647

 

3,407

Total

2,863

 

 

2,494

 

 

12,632

 

11,513

Crop nutrients selling price per tonne

 

 

 

 

 

 

 

North America

620

 

 

942

 

 

697

 

916

International

661

 

 

896

 

 

581

 

774

Total

631

 

 

930

 

 

663

 

874

Crop nutrients gross margin per tonne

 

 

 

 

 

 

 

North America

118

 

 

151

 

 

127

 

182

International

127

 

 

108

 

 

65

 

86

Total

120

 

 

139

 

 

109

 

153

Financial performance measures

2023

 

2022

Retail adjusted EBITDA margin (%) 1, 2

7

 

11

Retail adjusted EBITDA per US selling location (thousands of US dollars) 1, 2, 3

1,394

 

1,923

Retail adjusted average working capital to sales (%) 1, 4

19

 

17

Retail adjusted average working capital to sales excluding Nutrien Financial (%) 1, 4

1

 

2

Nutrien Financial adjusted net interest margin (%) 1, 4

5.2

 

6.8

Retail cash operating coverage ratio (%) 1, 4

68

 

55

1 Rolling four quarters ended December 31, 2023 and 2022.

2 These are supplementary financial measures. See the "Other Financial Measures" section.

3 Excluding acquisitions.

4 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.

Nutrien Financial

As at December 31, 2023

As at

December

31, 2022

(millions of US dollars)

Current

<31 Days

Past Due

31–90 Days

Past Due

>90 Days

Past Due

Gross Receivables

Allowance 1

Net Receivables

Net Receivables

North America

1,736

327

89

94

2,246

(40

)

2,206

2,007

International

560

56

22

59

697

(10

)

687

662

Nutrien Financial receivables

2,296

383

111

153

2,943

(50

)

2,893

2,669

1 Bad debt expense on the above receivables for the twelve months ended December 31, 2023 was $35 million (2022 – $10 million) in the Retail segment.

Selected Nitrogen Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2023

 

2022

 

2023

 

2022

Sales volumes (tonnes – thousands)

 

 

 

 

 

 

 

Fertilizer 1

1,648

 

1,467

 

6,067

 

5,628

Industrial and feed

1,086

 

1,129

 

4,356

 

4,652

Net sales (millions of US dollars)

 

 

 

 

 

 

 

Fertilizer 1

533

 

901

 

2,450

 

3,726

Industrial and feed

344

 

687

 

1,380

 

2,878

Net selling price per tonne

 

 

 

 

 

 

 

Fertilizer 1

323

 

614

 

404

 

662

Industrial and feed

317

 

608

 

317

 

619

1 Certain immaterial 2022 figures have been reclassified.

 

 

 

 

 

 

 

Production Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2023

 

2022

 

2023

 

2022

Potash production (Product tonnes – thousands)

3,386

 

2,941

 

12,998

 

13,007

Potash shutdown weeks 1

 

3

 

5

 

18

Ammonia production – total 2

1,362

 

1,400

 

5,357

 

5,759

Ammonia production – adjusted 2, 3

1,022

 

920

 

3,902

 

3,935

Ammonia operating rate (%) 3

91

 

83

 

88

 

90

P2O5 production (P2O5 tonnes – thousands)

380

 

288

 

1,406

 

1,351

P2O5 operating rate (%)

89

 

67

 

83

 

79

1 Represents weeks of full production shutdown, including inventory adjustments and unplanned events, excluding the impact of any periods of reduced operating rates, planned routine annual maintenance shutdowns and announced workforce reductions.

2 All figures are provided on a gross production basis in thousands of product tonnes.

3 Excludes Trinidad and Joffre.

Appendix B – Non-GAAP Financial Measures

We use both International Financial Reporting Standards (“IFRS”) measures and certain non-GAAP financial measures to assess performance. Non-GAAP financial measures are financial measures disclosed by the Company that (a) depict historical or expected future financial performance, financial position or cash flow of the Company, (b) with respect to their composition, exclude amounts that are included in, or include amounts that are excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the Company, (c) are not disclosed in the financial statements of the Company and (d) are not a ratio, fraction, percentage or similar representation. Non-GAAP ratios are financial measures disclosed by the Company that are in the form of a ratio, fraction, percentage or similar representation that has a non-GAAP financial measure as one or more of its components, and that are not disclosed in the financial statements of the Company.

These non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS and, therefore, are unlikely to be comparable to similar financial measures presented by other companies. Management believes these non-GAAP financial measures and non-GAAP ratios provide transparent and useful supplemental information to help investors evaluate our financial performance, financial condition and liquidity using the same measures as management. These non-GAAP financial measures and non-GAAP ratios should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

The following section outlines our non-GAAP financial measures and non-GAAP ratios, their compositions, and why management uses each measure. It also includes reconciliations to the most directly comparable IFRS measures. Except as otherwise described herein, our non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable. As additional non-recurring or unusual items arise in the future, we generally exclude these items in our calculations.

Adjusted EBITDA (Consolidated)

Most directly comparable IFRS financial measure: Net earnings (loss).

Definition: Adjusted EBITDA is calculated as net earnings (loss) before finance costs, income taxes, depreciation and amortization, share-based compensation and certain foreign exchange gain/loss (net of related derivatives). We also adjust this measure for the following other income and expenses that are excluded when management evaluates the performance of our day-to-day operations: integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses, gain or loss on disposal of certain businesses and investments, asset retirement obligations (“ARO”) and accrued environmental costs (“ERL”) related to our non-operating sites, and loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps). In 2023, we amended our calculation of adjusted EBITDA to adjust for the asset retirement obligations and accrued environmental costs related to our non-operating sites and the loss on remitting cash from certain foreign jurisdictions. We do not consider these to be part of our day-to-day operations. There were no similar income and expense in the comparative periods.

Why we use the measure and why it is useful to investors: It is not impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations. It provides a measure of our ability to service debt and to meet other payment obligations and as a component of employee remuneration calculations.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars)

2023

 

 

2022

 

 

2023

 

 

2022

 

Net earnings

176

 

 

1,118

 

 

1,282

 

 

7,687

 

Finance costs

213

 

 

188

 

 

793

 

 

563

 

Income tax (recovery) expense

(96

)

 

353

 

 

670

 

 

2,559

 

Depreciation and amortization

565

 

 

520

 

 

2,169

 

 

2,012

 

EBITDA 1

858

 

 

2,179

 

 

4,914

 

 

12,821

 

Adjustments:

 

 

 

 

 

 

 

Integration and restructuring related costs

20

 

 

11

 

 

49

 

 

46

 

Share-based compensation (recovery) expense

(7

)

 

(59

)

 

(14

)

 

63

 

Impairment (reversal of impairment) of assets

76

 

 

 

 

774

 

 

(780

)

ARO/ERL expense for non-operating sites

142

 

 

 

 

152

 

 

 

Foreign exchange (gain) loss, net of related derivatives

(14

)

 

(36

)

 

91

 

 

31

 

Loss on Blue Chip Swaps

 

 

 

 

92

 

 

 

Gain on disposal of investment

 

 

 

 

 

 

(19

)

COVID-19 related expenses ²

 

 

 

 

 

 

8

 

Adjusted EBITDA

1,075

 

 

2,095

 

 

6,058

 

 

12,170

 

1 EBITDA is calculated as net earnings before finance costs, income taxes, and depreciation and amortization.

2 COVID-19 related expenses primarily consist of increased cleaning and sanitization costs, the purchase of personal protective equipment, discretionary supplemental employee costs, and costs related to construction delays from access limitations and other government restrictions.

Adjusted Net Earnings and Adjusted Net Earnings Per Share

Most directly comparable IFRS financial measure: Net earnings (loss) and diluted net earnings (loss) per share.

Definition: Adjusted net earnings and related per share information are calculated as net earnings (loss) before share-based compensation and certain foreign exchange gain/loss (net of related derivatives), net of tax. We also adjust this measure for the following other income and expenses (net of tax) that are excluded when management evaluates the performance of our day-to-day operations: certain integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses (including those recorded under finance costs), gain or loss on disposal of certain businesses and investments, gain or loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting, asset retirement obligations and accrued environmental costs related to our non-operating sites, loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps), change in recognition of tax losses and deductible temporary differences related to impairments and certain changes to tax declarations in Switzerland (“Swiss Tax Reform adjustment") resulting in an income tax recovery from the recognition of a deferred tax asset. In 2023, we amended our calculation of adjusted net earnings and adjusted net earnings per share to adjust for the asset retirement obligations and accrued environmental costs related to our non-operating sites, the loss on remitting cash from certain foreign jurisdictions, the change in recognition of Retail – South America tax losses and deductible temporary differences and the Swiss Tax Reform adjustment. We do not consider these to be part of our day-to-day operations. There were no similar income and expense in the comparative periods. We generally apply the annual forecasted effective tax rate to our adjustments during the year, and at year-end, we apply the actual effective tax rate. Prior to December 31, 2023, we applied a specific tax rate for material adjustments. Effective December 31, 2023, we applied a tax rate specific to each adjustment.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations and is used as a component of employee remuneration calculations.

 

Three Months Ended

December 31, 2023

 

Twelve Months Ended

December 31, 2023

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

 

 

Per

 

(millions of US dollars, except as otherwise

Increases

 

 

 

 

 

Diluted

 

 

Increases

 

 

 

 

 

Diluted

 

noted)

(Decreases)

 

 

Post-Tax

 

 

Share

 

 

(Decreases)

 

 

Post-Tax

 

 

Share

 

Net earnings attributable to equity holders of Nutrien

 

 

 

172

 

 

0.35

 

 

 

 

 

1,258

 

 

2.53

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation recovery

(7

)

 

(5

)

 

(0.01

)

 

(14

)

 

(11

)

 

(0.02

)

Foreign exchange (gain) loss, net of related derivatives

(14

)

 

(16

)

 

(0.03

)

 

91

 

 

83

 

 

0.17

 

Integration and restructuring related costs

20

 

 

16

 

 

0.03

 

 

49

 

 

40

 

 

0.08

 

Impairment of assets

76

 

 

49

 

 

0.10

 

 

774

 

 

702

 

 

1.42

 

ARO/ERL expense for non-operating sites

142

 

 

102

 

 

0.20

 

 

152

 

 

110

 

 

0.22

 

Loss on Blue Chip Swaps

 

 

 

 

 

 

92

 

 

92

 

 

0.18

 

Swiss Tax Reform adjustment

(134

)

 

(134

)

 

(0.27

)

 

(134

)

 

(134

)

 

(0.27

)

Change in recognition of deferred tax assets

 

 

 

 

 

 

66

 

 

66

 

 

0.13

 

Adjusted net earnings

 

 

 

184

 

 

0.37

 

 

 

 

 

2,206

 

 

4.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31, 2022

 

Twelve Months Ended

December 31, 2022

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

 

 

Per

 

(millions of US dollars, except as otherwise

Increases

 

 

 

 

 

Diluted

 

 

Increases

 

 

 

 

 

Diluted

 

noted)

(Decreases)

 

 

Post-Tax

 

 

Share

 

 

(Decreases)

 

 

Post-Tax

 

 

Share

 

Net earnings attributable to equity holders of Nutrien

 

 

 

1,112

 

 

2.15

 

 

 

 

 

7,660

 

 

14.18

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation (recovery) expense

(59

)

 

(45

)

 

(0.09

)

 

63

 

 

47

 

 

0.10

 

Foreign exchange (gain) loss, net of related derivatives

(36

)

 

(27

)

 

(0.05

)

 

31

 

 

23

 

 

0.05

 

Integration and restructuring related costs

11

 

 

8

 

 

0.01

 

 

46

 

 

35

 

 

0.06

 

Reversal of impairment of assets

 

 

 

 

 

 

(780

)

 

(619

)

 

(1.15

)

COVID-19 related expenses

 

 

 

 

 

 

8

 

 

6

 

 

0.01

 

Gain on disposal of investment

 

 

 

 

 

 

(19

)

 

(14

)

 

(0.03

)

Gain on settlement of discontinued hedge accounting derivative

 

 

 

 

 

 

(18

)

 

(14

)

 

(0.03

)

Adjusted net earnings

 

 

 

1,048

 

 

2.02

 

 

 

 

 

7,124

 

 

13.19

 

Gross Margin Excluding Depreciation and Amortization Per Tonne – Manufactured

Most directly comparable IFRS financial measure: Gross margin.

Definition: Gross margin per tonne less depreciation and amortization per tonne for manufactured products. Reconciliations are provided in the “Segment Results” section.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations, which excludes the effects of items that primarily reflect the impact of long-term investment and financing decisions.

Potash Controllable Cash Cost of Product Manufactured (“COPM”) Per Tonne

Most directly comparable IFRS financial measure: Cost of goods sold (“COGS”) for the Potash segment.

Definition: Total Potash COGS excluding depreciation and amortization expense included in COPM, royalties, natural gas costs and carbon taxes, change in inventory, and other adjustments, divided by potash production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Potash controllable cash COPM excludes the effects of production from other periods and the impacts of our long-term investment decisions, supporting a focus on the performance of our day-to-day operations. Potash controllable cash COPM also excludes royalties and natural gas costs and carbon taxes, which management does not consider controllable, as they are primarily driven by regulatory and market conditions.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2023

 

 

2022

 

 

2023

 

 

2022

 

Total COGS – Potash

349

 

 

310

 

 

1,396

 

 

1,400

 

Change in inventory

7

 

 

38

 

 

(40

)

 

58

 

Other adjustments 1

(7

)

 

(12

)

 

(26

)

 

(41

)

COPM

349

 

 

336

 

 

1,330

 

 

1,417

 

Depreciation and amortization in COPM

(124

)

 

(89

)

 

(427

)

 

(406

)

Royalties in COPM

(23

)

 

(40

)

 

(100

)

 

(190

)

Natural gas costs and carbon taxes in COPM

(12

)

 

(17

)

 

(46

)

 

(62

)

Controllable cash COPM

190

 

 

190

 

 

757

 

 

759

 

Production tonnes (tonnes – thousands)

3,386

 

 

2,941

 

 

12,998

 

 

13,007

 

Potash controllable cash COPM per tonne

56

 

 

65

 

 

58

 

 

58

 

1 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

Ammonia Controllable Cash COPM Per Tonne

Most directly comparable IFRS financial measure: Total manufactured COGS for the Nitrogen segment.

Definition: Total Nitrogen COGS excluding depreciation and amortization expense included in COGS, cash COGS for products other than ammonia, other adjustments, and natural gas and steam costs, divided by net ammonia production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Ammonia controllable cash COPM excludes the effects of production from other periods, the costs of natural gas and steam, and long-term investment decisions, supporting a focus on the performance of our day-to-day operations.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2023

 

 

2022

 

 

2023

 

 

2022

 

Total Manufactured COGS – Nitrogen 1

595

 

 

892

 

 

2,435

 

 

3,370

 

Total Other COGS – Nitrogen 1

76

 

 

201

 

 

393

 

 

882

 

Total COGS – Nitrogen

671

 

 

1,093

 

 

2,828

 

 

4,252

 

Depreciation and amortization in COGS

(123

)

 

(131

)

 

(474

)

 

(465

)

Cash COGS for products other than ammonia

(367

)

 

(648

)

 

(1,693

)

 

(2,560

)

Ammonia

 

 

 

 

 

 

 

Total cash COGS before other adjustments

181

 

 

314

 

 

661

 

 

1,227

 

Other adjustments 2

(76

)

 

(65

)

 

(222

)

 

(210

)

Total cash COPM

105

 

 

249

 

 

439

 

 

1,017

 

Natural gas and steam costs in COPM

(73

)

 

(212

)

 

(304

)

 

(855

)

Controllable cash COPM

32

 

 

37

 

 

135

 

 

162

 

Production tonnes (net tonnes 3 – thousands)

564

 

 

655

 

 

2,276

 

 

2,754

 

Ammonia controllable cash COPM per tonne

59

 

 

57

 

 

60

 

 

59

 

1 Certain immaterial 2022 figures have been reclassified.

2 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

3 Ammonia tonnes available for sale, as not upgraded to other nitrogen products.

Retail Adjusted Average Working Capital to Sales and Retail Adjusted Average Working Capital to Sales Excluding Nutrien Financial

Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the sales and working capital of certain acquisitions during the first year following the acquisition. We also look at this metric excluding Nutrien Financial revenue and working capital.

Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A lower or higher percentage represents increased or decreased efficiency, respectively. The metric excluding Nutrien Financial shows the impact that the working capital of Nutrien Financial has on the ratio.

 

Rolling four quarters ended December 31, 2023

(millions of US dollars, except as otherwise noted)

Q1 2023

 

 

Q2 2023

 

 

Q3 2023

 

 

Q4 2023

 

 

Average/Total

Current assets

13,000

 

 

11,983

 

 

10,398

 

 

10,498

 

 

 

Current liabilities

(8,980

)

 

(8,246

)

 

(5,228

)

 

(8,210

)

 

 

Working capital

4,020

 

 

3,737

 

 

5,170

 

 

2,288

 

 

3,804

Working capital from certain recent acquisitions

 

 

 

 

 

 

 

 

 

Adjusted working capital

4,020

 

 

3,737

 

 

5,170

 

 

2,288

 

 

3,804

Nutrien Financial working capital

(2,283

)

 

(4,716

)

 

(4,353

)

 

(2,893

)

 

 

Adjusted working capital excluding Nutrien Financial

1,737

 

 

(979

)

 

817

 

 

(605

)

 

243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

3,422

 

 

9,128

 

 

3,490

 

 

3,502

 

 

 

Sales from certain recent acquisitions

 

 

 

 

 

 

 

 

 

Adjusted sales

3,422

 

 

9,128

 

 

3,490

 

 

3,502

 

 

19,542

Nutrien Financial revenue

(57

)

 

(122

)

 

(73

)

 

(70

)

 

 

Adjusted sales excluding Nutrien Financial

3,365

 

 

9,006

 

 

3,417

 

 

3,432

 

 

19,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

 

 

 

 

 

 

 

 

 

 

 

19

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

 

 

 

 

1

 

Rolling four quarters ended December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

 

Q2 2022

 

 

Q3 2022

 

 

Q4 2022

 

 

Average/Total

Current assets

12,392

 

 

12,487

 

 

11,262

 

 

11,668

 

 

 

Current liabilities

(9,223

)

 

(9,177

)

 

(5,889

)

 

(8,708

)

 

 

Working capital

3,169

 

 

3,310

 

 

5,373

 

 

2,960

 

 

3,703

Working capital from certain recent acquisitions

 

 

 

 

 

 

 

 

 

Adjusted working capital

3,169

 

 

3,310

 

 

5,373

 

 

2,960

 

 

3,703

Nutrien Financial working capital

(2,274

)

 

(4,404

)

 

(3,898

)

 

(2,669

)

 

 

Adjusted working capital excluding Nutrien Financial

895

 

 

(1,094

)

 

1,475

 

 

291

 

 

392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

3,861

 

 

9,422

 

 

3,980

 

 

4,087

 

 

 

Sales from certain recent acquisitions

 

 

 

 

 

 

 

 

 

Adjusted sales

3,861

 

 

9,422

 

 

3,980

 

 

4,087

 

 

21,350

Nutrien Financial revenue

(49

)

 

(91

)

 

(65

)

 

(62

)

 

 

Adjusted sales excluding Nutrien Financial

3,812

 

 

9,331

 

 

3,915

 

 

4,025

 

 

21,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

 

 

 

 

 

 

 

 

 

 

 

17

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

 

 

 

 

2

Nutrien Financial Adjusted Net Interest Margin

Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial net receivables outstanding for the last four rolling quarters.

Why we use the measure and why it is useful to investors: Used by credit rating agencies and others to evaluate the financial performance of Nutrien Financial.

 

Rolling four quarters ended December 31, 2023

(millions of US dollars, except as otherwise noted)

Q1 2023

 

 

Q2 2023

 

 

Q3 2023

 

 

Q4 2023

 

 

Total/Average

Nutrien Financial revenue

57

 

 

122

 

 

73

 

 

70

 

 

 

Deemed interest expense 1

(20

)

 

(39

)

 

(41

)

 

(36

)

 

 

Net interest

37

 

 

83

 

 

32

 

 

34

 

 

186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial net receivables

2,283

 

 

4,716

 

 

4,353

 

 

2,893

 

 

3,561

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

 

 

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

 

Q2 2022

 

 

Q3 2022

 

 

Q4 2022

 

 

Total/Average

Nutrien Financial revenue

49

 

 

91

 

 

65

 

 

62

 

 

 

Deemed interest expense 1

(6

)

 

(12

)

 

(12

)

 

(11

)

 

 

Net interest

43

 

 

79

 

 

53

 

 

51

 

 

226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial net receivables

2,274

 

 

4,404

 

 

3,898

 

 

2,669

 

 

3,311

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

 

 

 

 

6.8

1 Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.

Retail Cash Operating Coverage Ratio

Definition: Retail selling, general and administrative, and other expenses (income), excluding depreciation and amortization expense, divided by Retail gross margin excluding depreciation and amortization expense in cost of goods sold, for the last four rolling quarters.

Why we use the measure and why it is useful to investors: To understand the costs and underlying economics of our Retail operations and to assess our Retail operating performance and ability to generate free cash flow.

 

Rolling four quarters ended December 31, 2023

(millions of US dollars, except as otherwise noted)

Q1 2023

 

 

Q2 2023

 

 

Q3 2023

 

 

Q4 2023

 

 

Total

 

Selling expenses

765

 

 

971

 

 

798

 

 

841

 

 

3,375

 

General and administrative expenses

50

 

 

55

 

 

57

 

 

55

 

 

217

 

Other expenses

15

 

 

29

 

 

37

 

 

77

 

 

158

 

Operating expenses

830

 

 

1,055

 

 

892

 

 

973

 

 

3,750

 

Depreciation and amortization in operating expenses

(179

)

 

(185

)

 

(186

)

 

(199

)

 

(749

)

Operating expenses excluding depreciation and amortization

651

 

 

870

 

 

706

 

 

774

 

 

3,001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

615

 

 

1,931

 

 

895

 

 

989

 

 

4,430

 

Depreciation and amortization in cost of goods sold

2

 

 

3

 

 

3

 

 

2

 

 

10

 

Gross margin excluding depreciation and amortization

617

 

 

1,934

 

 

898

 

 

991

 

 

4,440

 

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

 

 

 

 

68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

 

Q2 2022

 

 

Q3 2022

 

 

Q4 2022

 

 

Total

 

Selling expenses

722

 

 

1,013

 

 

821

 

 

836

 

 

3,392

 

General and administrative expenses

45

 

 

54

 

 

50

 

 

51

 

 

200

 

Other expenses (income)

(12

)

 

21

 

 

19

 

 

1

 

 

29

 

Operating expenses

755

 

 

1,088

 

 

890

 

 

888

 

 

3,621

 

Depreciation and amortization in operating expenses

(167

)

 

(171

)

 

(204

)

 

(198

)

 

(740

)

Operating expenses excluding depreciation and amortization

588

 

 

917

 

 

686

 

 

690

 

 

2,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

845

 

 

2,340

 

 

917

 

 

1,077

 

 

5,179

 

Depreciation and amortization in cost of goods sold

2

 

 

4

 

 

2

 

 

4

 

 

12

 

Gross margin excluding depreciation and amortization

847

 

 

2,344

 

 

919

 

 

1,081

 

 

5,191

 

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

 

 

 

 

55

Appendix C – Other Financial Measures

Supplementary Financial Measures

Supplementary financial measures are financial measures disclosed by the Company that (a) are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company, (b) are not disclosed in the financial statements of the Company, (c) are not non-GAAP financial measures, and (d) are not non-GAAP ratios.

The following section provides an explanation of the composition of those supplementary financial measures if not previously provided.

Retail adjusted EBITDA margin: Retail adjusted EBITDA divided by Retail sales for the last four rolling quarters.

Sustaining capital expenditures: Represents capital expenditures that are required to sustain operations at existing levels and include major repairs and maintenance and plant turnarounds.

Investing capital expenditures: Represents capital expenditures related to significant expansions of current operations or to create cost savings (synergies). Investing capital expenditures excludes capital outlays for business acquisitions and equity-accounted investees.

Mine development and pre-stripping capital expenditures: Represents capital expenditures that are required for activities to open new areas underground and/or develop a mine or ore body to allow for future production mining and activities required to prepare and/or access the ore, i.e., removal of an overburden that allows access to the ore.

Retail adjusted EBITDA per US selling location: Calculated as total Retail US adjusted EBITDA for the last four rolling quarters, representing the organic EBITDA component, which excludes acquisitions in those quarters, divided by the number of US locations that have generated sales in the last four rolling quarters, adjusted for acquired locations in those quarters.

Cash used for dividends and share repurchases (shareholder returns): Calculated as dividends paid to Nutrien’s shareholders plus repurchase of common shares as reflected in the unaudited condensed consolidated statements of cash flows. This measure is useful as it represents return of capital to shareholders.

Condensed Consolidated Financial Statements

Unaudited in millions of US dollars except as otherwise noted

Condensed Consolidated Statements of Earnings

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31

 

December 31

 

Note

2023

 

 

2022

 

 

2023

 

 

2022

 

SALES

2

5,664

 

 

7,533

 

 

29,056

 

 

37,884

 

Freight, transportation and distribution

 

260

 

 

244

 

 

974

 

 

872

 

Cost of goods sold

 

3,636

 

 

4,383

 

 

19,608

 

 

21,588

 

GROSS MARGIN

 

1,768

 

 

2,906

 

 

8,474

 

 

15,424

 

Selling expenses

 

849

 

 

844

 

 

3,397

 

 

3,414

 

General and administrative expenses

 

173

 

 

162

 

 

626

 

 

565

 

Provincial mining taxes

 

79

 

 

190

 

 

398

 

 

1,149

 

Share-based compensation (recovery) expense

 

(7

)

 

(59

)

 

(14

)

 

63

 

Impairment (reversal of impairment) of assets

3

76

 

 

 

 

774

 

 

(780

)

Other expenses

4

305

 

 

110

 

 

548

 

 

204

 

EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES

293

 

 

1,659

 

 

2,745

 

 

10,809

 

Finance costs

 

213

 

 

188

 

 

793

 

 

563

 

EARNINGS BEFORE INCOME TAXES

 

80

 

 

1,471

 

 

1,952

 

 

10,246

 

Income tax (recovery) expense

5

(96

)

 

353

 

 

670

 

 

2,559

 

NET EARNINGS

 

176

 

 

1,118

 

 

1,282

 

 

7,687

 

Attributable to

 

 

 

 

 

 

 

 

Equity holders of Nutrien

 

172

 

 

1,112

 

 

1,258

 

 

7,660

 

Non-controlling interest

 

4

 

 

6

 

 

24

 

 

27

 

NET EARNINGS

 

176

 

 

1,118

 

 

1,282

 

 

7,687

 

 

 

 

 

 

 

 

 

 

NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS")

Basic

 

0.35

 

 

2.15

 

 

2.53

 

 

14.22

 

Diluted

 

0.35

 

 

2.15

 

 

2.53

 

 

14.18

 

Weighted average shares outstanding for basic EPS

 

494,545,000

 

 

516,810,000

 

 

496,381,000

 

 

538,475,000

 

Weighted average shares outstanding for diluted EPS

 

494,878,000

 

 

517,964,000

 

 

496,994,000

 

 

540,010,000

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income

 

Three Months Ended

 

Twelve Months Ended

 

December 31

 

December 31

(Net of related income taxes)

2023

 

 

2022

 

2023

 

 

2022

 

NET EARNINGS

176

 

 

1,118

 

1,282

 

 

7,687

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

Items that will not be reclassified to net earnings:

 

 

 

 

 

 

 

Net actuarial (loss) gain on defined benefit plans

(14

)

 

22

 

(17

)

 

83

 

Net fair value (loss) gain on investments

(1

)

 

17

 

4

 

 

(44

)

Items that have been or may be subsequently reclassified to net earnings:

 

 

 

 

 

 

 

Gain (loss) on currency translation of foreign operations

103

 

 

73

 

89

 

 

(199

)

Other

9

 

 

7

 

5

 

 

(17

)

OTHER COMPREHENSIVE INCOME (LOSS)

97

 

 

119

 

81

 

 

(177

)

COMPREHENSIVE INCOME

273

 

 

1,237

 

1,363

 

 

7,510

 

Attributable to

 

 

 

 

 

 

 

Equity holders of Nutrien

268

 

 

1,230

 

1,338

 

 

7,484

 

Non-controlling interest

5

 

 

7

 

25

 

 

26

 

COMPREHENSIVE INCOME

273

 

 

1,237

 

1,363

 

 

7,510

 

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Cash Flows

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31

 

December 31

 

Note

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

Note 1

 

 

 

 

Note 1

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Net earnings

 

176

 

 

1,118

 

 

1,282

 

 

7,687

 

Adjustments for:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

565

 

 

520

 

 

2,169

 

 

2,012

 

Share-based compensation (recovery) expense

 

(7

)

 

(59

)

 

(14

)

 

63

 

Impairment (reversal of impairment) of assets

3

76

 

 

 

 

774

 

 

(780

)

(Recovery of) provision for deferred income tax

 

(169

)

 

30

 

 

7

 

 

182

 

Net distributed (undistributed) earnings of equity-accounted investees

 

5

 

 

(42

)

 

117

 

 

(181

)

Gain on amendments to other post-retirement pension plans

 

 

 

 

 

(80

)

 

 

Loss on Blue Chip Swaps

4

 

 

 

 

92

 

 

 

Long-term income tax receivables and payables

 

24

 

 

72

 

 

(65

)

 

273

 

Other long-term assets, liabilities and miscellaneous

 

153

 

 

(29

)

 

277

 

 

2

 

Cash from operations before working capital changes

 

823

 

 

1,610

 

 

4,559

 

 

9,258

 

Changes in non-cash operating working capital:

 

 

 

 

 

 

 

 

 

 

Receivables

 

2,370

 

 

2,683

 

 

879

 

 

(919

)

Inventories and prepaid expenses and other current assets

 

(1,990

)

 

(1,841

)

 

1,376

 

 

(1,167

)

Payables and accrued charges

 

2,947

 

 

2,284

 

 

(1,748

)

 

938

 

CASH PROVIDED BY OPERATING ACTIVITIES

 

4,150

 

 

4,736

 

 

5,066

 

 

8,110

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Capital expenditures 1

 

(781

)

 

(986

)

 

(2,671

)

 

(2,475

)

Business acquisitions, net of cash acquired

 

(37

)

 

(329

)

 

(153

)

 

(407

)

Proceeds from sales of Blue Chip Swaps, net of purchases

4

 

 

 

 

(92

)

 

 

Net changes in non-cash working capital

 

46

 

 

33

 

 

(22

)

 

(44

)

Other

 

39

 

 

60

 

 

(20

)

 

25

 

CASH USED IN INVESTING ACTIVITIES

 

(733

)

 

(1,222

)

 

(2,958

)

 

(2,901

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

(Repayment of) proceeds from short-term debt, net

 

(2,671

)

 

(2,338

)

 

(458

)

 

529

 

Proceeds from long-term debt

 

 

 

1,004

 

 

1,500

 

 

1,045

 

Repayment of long-term debt

 

(13

)

 

(511

)

 

(648

)

 

(561

)

Repayment of principal portion of lease liabilities

 

(97

)

 

(85

)

 

(375

)

 

(341

)

Dividends paid to Nutrien's shareholders

6

(262

)

 

(251

)

 

(1,032

)

 

(1,031

)

Repurchase of common shares

6

 

 

(1,214

)

 

(1,047

)

 

(4,520

)

Issuance of common shares

 

1

 

 

 

 

33

 

 

168

 

Other

 

 

 

(17

)

 

(34

)

 

(20

)

CASH USED IN FINANCING ACTIVITIES

 

(3,042

)

 

(3,412

)

 

(2,061

)

 

(4,731

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH

 

EQUIVALENTS

 

12

 

 

(24

)

 

(7

)

 

(76

)

INCREASE IN CASH AND CASH EQUIVALENTS

 

387

 

 

78

 

 

40

 

 

402

 

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

 

554

 

 

823

 

 

901

 

 

499

 

CASH AND CASH EQUIVALENTS – END OF PERIOD

 

941

 

 

901

 

 

941

 

 

901

 

Cash and cash equivalents is composed of:

 

 

 

 

 

 

 

 

 

 

Cash

 

909

 

 

775

 

 

909

 

 

775

 

Short-term investments

 

32

 

 

126

 

 

32

 

 

126

 

 

 

941

 

 

901

 

 

941

 

 

901

 

SUPPLEMENTAL CASH FLOWS INFORMATION

 

 

 

 

 

 

 

 

 

 

Interest paid