Strong Execution and Improved Market Conditions Set up 2021 and Beyond

All amounts are in US dollars except as otherwise noted

SASKATOON, Saskatchewan–(BUSINESS WIRE)–Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth quarter and full year 2020 results, with fourth-quarter net earnings of $316 million ($0.55 diluted earnings per share). Fourth-quarter adjusted net earnings¹ were $0.24 per share and adjusted EBITDA¹ was $768 million.

“Nutrien reported excellent results across our entire business. Our Retail Ag Solutions business delivered a record fourth quarter and we also reported higher potash and nitrogen sales volumes and lower production costs. Agriculture fundamentals began to improve in late 2020 and we are starting to see the benefit to our business from this cyclical recovery,” commented Chuck Magro, Nutrien’s President and CEO.

“We are committed to shareholder returns and again raised our dividend and announced another share buyback program, which emphasizes the strength of Nutrien, notwithstanding a global pandemic. We continually look for ways to improve our business portfolio, including the MOPCO divestment for over half-a-billion dollars, with the intention to reallocate the capital to higher return opportunities to drive shareholder value,” added Mr. Magro.

Highlights:

• Nutrien announced a dividend increase and new share buyback program. The Board of Directors approved an increase in the quarterly dividend to $0.46 per share, our third dividend increase in three years with an annualized payout at $1.84 per share. Nutrien’s Board of Directors also approved the purchase of up to five percent of Nutrien’s outstanding common shares over a one-year period through a normal course issuer bid (NCIB). The NCIB is subject to acceptance by the Toronto Stock Exchange.
• Nutrien generated $1.8 billion in free cash flow¹ in 2020, and $2.4 billion including the improvement to our non-cash operating working capital¹.
• Retail Ag Solutions delivered a 29 percent increase in adjusted EBITDA in the fourth quarter of 2020 compared to the same period in 2019, due to exceptional organic growth and strong fall fertilizer applications in North America. Retail generated 16 percent higher adjusted EBITDA in 2020 compared to 2019 due to double digit organic growth and contributions from acquisitions. 2020 Retail adjusted EBITDA to sales was 9.7 percent on a consolidated basis and 10.6 percent in the US, higher by 0.4 and 0.9 percentage points, respectively, compared to 2019.
  
  Retail Ag Solutions further improved results through supply chain and efficiency efforts including improving the cash operating coverage ratio and lowering Retail adjusted average working capital¹ by nearly $900 million compared to 2019. Adjusted EBITDA per US selling location¹ reached $1.08 million and digital platform sales exceeded $1.2 billion in 2020, more than double our goal of $500 million and over four times 2019 levels.
• Potash adjusted EBITDA in the fourth quarter increased 48 percent compared to the same period in 2019, due to much stronger domestic and offshore sales volumes. 2020 Potash adjusted EBITDA was 25 percent lower than in 2019 due to lower net realized selling prices. Potash sales volumes in 2020 were the second highest on record and Nutrien is fully committed on domestic and offshore sales volumes into April of 2021, despite not shipping volumes to China and India until new sales contracts are negotiated. Potash cash cost of product manufactured¹ was $59 per tonne in 2020, down $4 per tonne from 2019.
• Nitrogen adjusted EBITDA increased 3 percent in the fourth quarter of 2020 compared to the fourth quarter of 2019 primarily due to higher sales volumes. Nitrogen adjusted EBITDA decreased 13 percent in 2020 as higher sales volumes and lower cost of goods sold per tonne were more than offset by lower net realized selling prices. Sales volumes increased by nearly 700,000 tonnes in 2020 driven by higher production resulting from debottlenecking projects and strong operating rates.
• Nutrien closed the sale of its stake in Misr Fertilizers Production Company S.A.E. (“MOPCO”) which includes settlement of related arbitration claims. Total net proceeds received from the transaction in 2020 were $540 million. The investment had contributed approximately $15 million to $20 million to Nutrien’s adjusted EBITDA annually, and carried a book value of approximately $300 million. The cash received is expected to be redeployed to generate higher returns for shareholders.
• Nutrien announced the launch of the agricultural industry’s most comprehensive carbon program, providing end-to-end support for growers to drive improved sustainability, boost yields and provide the opportunity to monetize improved carbon performance at the farm level through carbon credits.
• Nutrien’s 2021 adjusted net earnings per share¹ and adjusted EBITDA¹ guidance is $2.05 to $2.75 per share and $4.0 billion to $4.5 billion, respectively.

1 This financial measure including related guidance, if applicable, is a non-IFRS financial measure. See the “Non-IFRS Financial Measures” section for further information.

Market Outlook

Agriculture and Retail

• Key crop prices continue to be supported by very tight global supply and demand fundamentals, which have increased farm level profitability and boosted grower sentiment. Global crop demand is strong and is aided by record Chinese grain and oilseed imports.
• US major crop planted acreage is expected to increase by approximately 10 million acres in 2021. This increase is expected to lead to much higher crop input demand, particularly for crop nutrients, as prospective fertilizer costs as a proportion of crop revenue are at decade-low levels.
• Record Brazilian crop margins led to higher soybean planting in 2020 and is expected to result in higher year-over-year planted area for Safrinha corn in 2021. We expect this will support strong Brazilian crop input demand in 2021.

Crop Nutrient Markets

• Global potash demand surpassed expectations in late 2020 and we now estimate world potash shipments reached record levels at approximately 68 million tonnes. Potash prices also improved considerably in late 2020, with US Midwest prices up nearly $100 per tonne at the end of 2020 compared to mid-year levels. This demand momentum continues in 2021 supported by favorable crop economics, high potash affordability and limited inventory build in major markets. As a result, we forecast 2021 global potash shipments will be 68 to 70 million tonnes.
• India and China settled a 2021 potash agreement with one supplier, the only major potash supply agreements to date. Canpotex and other major suppliers individually commented that the agreement did not reflect strengthening market conditions.
• North American fall potash applications were very strong in 2020 and channel inventories are low. Spring potash demand continues to be strong and Nutrien has been fully committed on domestic sales into the second quarter of 2021 since early December 2020. Globally, potash inventory levels continue to decrease while crop prices and grower profitability have increased. As a result, Canpotex is fully committed into the second quarter of 2021 and has not placed or allocated any volumes to China nor India since the previous supply contracts expired.
• A rally in global energy prices in early 2021 steepened the nitrogen cost curve, which in addition to strong agricultural and recovering industrial demand, led to higher nitrogen prices. Global ammonia prices are further supported by tightening supply, while urea prices are higher due to solid demand in nearly all key markets. We expect that Chinese urea exports in 2021 will decline to 3 to 5 million tonnes from 5.5 million tonnes in 2020 due to strong domestic demand and higher coal feedstock prices.
• Global phosphate prices have continued to trend higher in early 2021, driven by tight supply and higher input costs.

Financial Outlook and Guidance

Based on market factors detailed above, we are issuing 2021 adjusted net earnings guidance of $2.05 to $2.75 per share and 2021 adjusted EBITDA guidance of $4.0 to $4.5 billion.

All guidance numbers, including those noted above and related sensitivities are outlined in the tables below.

2021 Guidance Ranges 1		Low				High
Adjusted net earnings per share 2	$	2.05			$	2.75
Adjusted EBITDA (billions) 2	$	4.0			$	4.5
Retail Adjusted EBITDA (billions)	$	1.5			$	1.6
Potash Adjusted EBITDA (billions)	$	1.4			$	1.6
Nitrogen Adjusted EBITDA (billions)	$	1.1			$	1.3
Phosphate Adjusted EBITDA (millions)	$	250			$	350
Potash sales tonnes (millions) 3		12.5				13.0
Nitrogen sales tonnes (millions) 3		10.9				11.4
Depreciation and amortization (billions)	$	1.9			$	2.0
Effective tax rate on adjusted earnings		22	%			24	%
Sustaining capital expenditures (billions) 2	$	1.1			$	1.2

	Impact to
		Adjusted			Adjusted
2021 Annual Assumptions & Sensitivities 1		EBITDA			EPS 4
$1/MMBtu change in NYMEX 5	$	155		$	0.21
$25/tonne change in realized potash selling prices	$	260		$	0.35
$25/tonne change in realized ammonia selling prices	$	47		$	0.06
$25/tonne change in realized urea selling prices	$	82		$	0.11
2021 FX Rate CAD to USD		1.29
2021 NYMEX natural gas ($US/MMBtu)		$ 2.80
1 See the “Forward-Looking Statements” section. 2 See the “Non-IFRS Financial Measures” section. 3 Manufactured products only. Nitrogen excludes ESN® and Rainbow products. 4 Assumes 570 million shares outstanding. 5 Nitrogen related impact.

Consolidated Results

	Three Months Ended December 31						Twelve Months Ended December 31
(millions of US dollars)	2020		2019		% Change		2020		2019		% Change
Sales 1	4,052		3,462		17		20,908		20,084		4
Freight, transportation and distribution	202		172		17		855		768		11
Cost of goods sold	2,685		2,256		19		14,814		13,814		7
Gross margin 1	1,165		1,034		13		5,239		5,502		(5)
Expenses 1	762		971		(22)		4,337		3,640		19
Net earnings (loss)	316		(48)		n/m		459		992		(54)
Adjusted EBITDA 2	768		664		16		3,667		4,025		(9)
Free cash flow (“FCF”) 2	196		138		42		1,830		2,157		(15)
FCF including changes in non-cash operating working
capital 2	2,370		2,068		15		2,404		2,647		(9)
1 Certain immaterial figures have been reclassified for the three months and year ended December 31, 2019. 2 See the “Non-IFRS Financial Measures” section.

Net earnings increased in the fourth quarter of 2020 compared to the same period in 2019 due to improved operating results, the gain associated with the MOPCO transaction and the impact of impairments in the fourth quarter of 2019. Net earnings in 2020 were lower than 2019 due to lower realized crop nutrient prices and the non-cash impairment of assets largely related to our Phosphate operations in the third quarter of 2020. Adjusted EBITDA increased in the fourth quarter of 2020 compared to the same period in 2019 due to strong Retail earnings growth and higher potash sales volumes. Adjusted EBITDA decreased in the full year 2020 compared to 2019 primarily due to lower crop nutrient prices that more than offset strong Retail organic growth, earnings contributions from acquisitions and greater operational efficiencies. The COVID-19 pandemic had limited impact on our results during the periods.

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, 2020 to the results for the three and twelve months ended December 31, 2019, respectively, unless otherwise noted. In the third quarter of 2020, we revised the measure with which we evaluate our segments from EBITDA to adjusted EBITDA. Adjusted EBITDA provides a better indication of the segments performance as it excludes the impact of impairments and other costs that are centrally managed by our corporate function. We have presented adjusted EBITDA for the comparative periods.

Retail

	Three Months Ended December 31
(millions of US dollars, except	Dollars						Gross Margin						Gross Margin (%)
as otherwise noted)	2020		2019		% Change		2020		2019		% Change		2020		2019
Sales
Crop nutrients	1,108		907		22		236		186		27		21		21
Crop protection products	828		635		30		343		281		22		41		44
Seed	152		99		54		58		60		(3)		38		61
Merchandise	240		211		14		41		44		(7)		17		21
Nutrien Financial	37		–		n/m		37		–		n/m		100		n/m
Services and other 1	290		339		(14)		207		185		12		71		55
Nutrien Financial elimination 2	(37)		–		n/m		(37)		–		n/m		100		n/m
	2,618		2,191		19		885		756		17		34		35
Cost of goods sold	1,733		1,435		21
Gross margin	885		756		17
Expenses 1,3	768		687		12
Earnings before finance
costs and taxes (“EBIT”)	117		69		70
Depreciation and amortization	180		162		11
EBITDA / Adjusted EBITDA	297		231		29
1 Certain immaterial figures have been reclassified for the three months ended December 31, 2019. 2 Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches. 3 Includes selling expenses of $727 million (2019 – $668 million).

	Twelve Months Ended December 31
(millions of US dollars, except	Dollars						Gross Margin						Gross Margin (%)
as otherwise noted)	2020		2019		% Change		2020		2019		% Change		2020		2019
Sales
Crop nutrients	5,200		4,989		4		1,130		1,032		9		22		21
Crop protection products	5,602		4,983		12		1,303		1,173		11		23		24
Seed	1,790		1,712		5		363		336		8		20		20
Merchandise	943		598		58		157		109		44		17		18
Nutrien Financial	129		–		n/m		129		–		n/m		100		n/m
Services and other 1	1,241		1,000		24		774		651		19		62		65
Nutrien Financial elimination 2	(120)		–		n/m		(120)		–		n/m		100		n/m
	14,785		13,282		11		3,736		3,301		13		25		25
Cost of goods sold	11,049		9,981		11
Gross margin	3,736		3,301		13
Expenses 1,3	2,974		2,665		12
EBIT	762		636		20
Depreciation and amortization	668		595		12
EBITDA / Adjusted EBITDA	1,430		1,231		16
1 Certain immaterial figures have been reclassified for the year ended December 31, 2019. 2 Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches. 3 Includes selling expenses of $2,795 million (2019 – $2,484 million).

• Adjusted EBITDA increased in the fourth quarter of 2020 compared to the same period in 2019 due to stronger sales and firm margins, with much higher gross margin for crop nutrients, crop protection products and services and other. Adjusted EBITDA in 2020 increased by nearly $200 million compared to 2019 from a combination of organic and acquisition-related growth.
  
  Selling expenses as a percent of sales decreased in the fourth quarter and were stable in 2020 compared to the same periods in 2019 due to ongoing efficiency initiatives and despite higher depreciation and amortization.
  
• Crop nutrients sales were higher in the fourth quarter and full year of 2020 relative to the same periods in 2019 due to 27 percent and 15 percent higher sales volumes respectively, that more than offset the impact of lower selling prices per tonne. Fourth quarter sales increased due to strong fall applications in the US and our expansion in South America. Gross margin percentage was stable in the fourth quarter of 2020 but increased for the full year of 2020 due to a larger proportion of higher-margin proprietary product sales in the year.
• Crop protection products sales in the fourth quarter and full year 2020 were higher compared to the same periods in 2019 due to strong market share growth in all key regions. Gross margin percentage decreased in the fourth quarter due to regional mix, which was partially offset by stronger US proprietary product results. US gross margin percentage increased nearly 3 percentage points in the fourth quarter of 2020 relative to the same period in 2019. Gross margin percentage was similar year-over-year, decreasing only 0.3 percentage points compared to 2019. US gross margin percentage was 25 percent, higher by one percentage point over 2019.
• Seed sales in the fourth quarter and full year 2020 increased relative to the same periods last year due to contributions from the Tec Agro Group and Agrosema Comercial Agricola Ltda. acquisitions in Brazil and higher sales in Australia. Gross margin percentage decreased in the fourth quarter of 2020 compared to the same period in 2019 due to regional mix and the timing of US supplier and customer programs. Gross margin percentage in the full year 2020 was consistent with the prior year, as a one percentage point gain in the US was offset by the lower rates in Australia caused by seed mix changes.
• Merchandise sales increased in the fourth quarter and full year of 2020 due to strong demand growth, primarily in Australia and the US. Gross margin percentage decreased in both periods relative to 2019 due to a higher mix of lower-margin product sales in Australia.
• Nutrien Financial is reported for the first full year of operations for the Nutrien Financial business. Revenue is primarily earned through interest and service fees that are charged to our Retail branches or directly to customers.
• Services and other sales were lower in the fourth quarter of 2020 compared to the same quarter in 2019 due to the timing of livestock related sales in Australia, which more than offset significantly higher application services in North and South America. Gross margin and gross margin percentage in the fourth quarter of 2020 were up significantly year-over-year primarily due to strong demand for US application services. Sales and gross margin were significantly higher in 2020 than in 2019 due to strong growth in demand for services in Australia and North America.

Potash

	Three Months Ended December 31
(millions of US dollars, except	Dollars						Tonnes (thousands)						Average per Tonne
as otherwise noted)	2020		2019	% Change			2020		2019	% Change			2020		2019	% Change
Manufactured product
Net sales
North America	199		146		36		1,041		651		60		192		226		(15)
Offshore	251		204		23		1,613		1,234		31		156		164		(5)
	450		350		29		2,654		1,885		41		170		186		(9)
Cost of goods sold	305		211		45								116		112		4
Gross margin – manufactured	145		139		4								54		74		(27)
Gross margin – other 1	–		–		–		Depreciation and amortization						46		35		31
Gross margin – total	145		139		4		Gross margin excluding depreciation and amortization – manufactured 3
Expenses 2	49		56		(13)								100		109		(8)
EBIT	96		83		16		Potash cash cost of product manufactured 3
Depreciation and amortization	123		66		86								71		82		(13)
EBITDA	219		149		47
Impairment of assets	1		–		n/m
Adjusted EBITDA	220		149		48
1 Includes other potash and purchased products and is comprised of net sales of $Nil (2019 – $Nil) less cost of goods sold of $Nil (2019 – $Nil). 2 Includes provincial mining and other taxes of $40 million (2019 – $50 million). 3 See the “Non-IFRS Financial Measures” section.

	Twelve Months Ended December 31
(millions of US dollars, except	Dollars						Tonnes (thousands)						Average per Tonne
as otherwise noted)	2020		2019	% Change			2020		2019	% Change			2020		2019	% Change
Manufactured product
Net sales
North America	908		978		(7)		4,815		4,040		19		189		242		(22)
Offshore	1,238		1,625		(24)		8,009		7,481		7		155		217		(29)
	2,146		2,603		(18)		12,824		11,521		11		167		226		(26)
Cost of goods sold	1,183		1,103		7								92		96		(4)
Gross margin – manufactured	963		1,500		(36)								75		130		(42)
Gross margin – other 1	–		1		(100)		Depreciation and amortization						35		34		3
Gross margin – total	963		1,501		(36)		Gross margin excluding depreciation and amortization – manufactured
Expenses 2	248		298		(17)								110		164		(33)
EBIT	715		1,203		(41)		Potash cash cost of product manufactured
Depreciation and amortization	452		390		16								59		63		(6)
EBITDA	1,167		1,593		(27)
Impairment of assets	23		–		n/m
Adjusted EBITDA	1,190		1,593		(25)
1 Includes other potash and purchased products and is comprised of net sales of $Nil (2019 – $1 million) less cost of goods sold of $Nil (2019 – $Nil). 2 Includes provincial mining and other taxes of $201 million (2019 – $287 million).

• Adjusted EBITDA increased in the fourth quarter of 2020 compared to the same quarter in 2019, due to higher domestic and offshore sales volumes and lower cost of goods sold per tonne, excluding the impact of depreciation and amortization. Adjusted EBITDA in 2020 decreased compared to 2019 as lower net realized selling prices more than offset positive impacts of significantly higher sales volumes and lower production costs and operating costs.
• Sales volumes in the fourth quarter and full year of 2020 increased relative to the same periods in 2019 due to strong domestic and offshore demand supported by improved global crop prices, increased planted acreage in the US and strong fall application in North America in anticipation of higher planting in 2021.
• Net realized selling price decreased in the fourth quarter and full year of 2020 due to lower year-over-year global benchmark prices.
• Cost of goods sold per tonne increased in the fourth quarter of 2020 due to higher depreciation and amortization related to production mix and the timing of maintenance projects relative to the fourth quarter of 2019. Excluding the impact of depreciation and amortization, cost of goods sold per tonne was lower both in the fourth quarter and full year of 2020 due to production efficiencies and higher production levels. These factors also lowered the potash cash cost of product manufactured in both periods.

Canpotex Sales by Market

(percentage of sales volumes, except as	Three Months Ended December 31				Twelve Months Ended December 31
otherwise noted)	2020	2019	Change		2020	2019	Change
Latin America	31	31	–		32	31	1
Other Asian markets 1	24	27	(3)		25	27	(2)
China	21	17	4		22	22	–
India	17	7	10		14	10	4
Other markets	7	18	(11)		7	10	(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)	2020		2019	% Change			2020		2019	% Change			2020		2019	% Change
Manufactured product
Net sales
Ammonia	157		141		11		730		571		28		216		245		(12)
Urea	230		193		19		853		695		23		270		278		(3)
Solutions, nitrates and
sulfates	168		166		1		1,262		1,096		15		133		152		(13)
	555		500		11		2,845		2,362		20		195		212		(8)
Cost of goods sold	460		404		14								162		171		(5)
Gross margin – manufactured	95		96		(1)								33		41		(20)
Gross margin – other 1	17		11		55		Depreciation and amortization						51		60		(15)
Gross margin – total	112		107		5		Gross margin excluding depreciation and amortization – manufactured
Income 2	(254)		(11)		n/m								84		101		(17)
EBIT	366		118		210		Ammonia controllable cash cost of product manufactured 3
Depreciation and amortization	146		141		4								40		48		(17)
EBITDA	512		259		98
Adjustments 2	(246)		–		n/m
Adjusted EBITDA	266		259		3
1 Includes other nitrogen (including ESN® and Rainbow) and purchased products and is comprised of net sales of $114 million (2019 – $103 million) less cost of goods sold of $97 million (2019 – $92 million). 2 The adjustments consist primarily of the net gain on disposal of investment in MOPCO which was recorded in other income. See Note 2 and Note 3 to the unaudited condensed consolidated financial statements as at and for the three and twelve months ended December 31, 2020. 3 See the “Non-IFRS Financial Measures” section.

	Twelve Months Ended December 31
(millions of US dollars, except	Dollars						Tonnes (thousands)						Average per Tonne
as otherwise noted)	2020		2019	% Change			2020		2019	% Change			2020		2019	% Change
Manufactured product
Net sales
Ammonia	621		743		(16)		2,778		2,971		(6)		224		250		(10)
Urea	933		932		–		3,475		3,037		14		268		307		(13)
Solutions, nitrates and
sulfates	668		706		(5)		4,713		4,262		11		142		166		(14)
	2,222		2,381		(7)		10,966		10,270		7		203		232		(13)
Cost of goods sold	1,804		1,749		3								165		170		(3)
Gross margin – manufactured	418		632		(34)								38		62		(39)
Gross margin – other 1	57		68		(16)		Depreciation and amortization						55		52		6
Gross margin – total	475		700		(32)		Gross margin excluding depreciation and amortization – manufactured
Income 2	(225)		(4)		n/m								93		114		(18)
EBIT	700		704		(1)		Ammonia controllable cash cost of product manufactured
Depreciation and amortization	599		535		12								43		45		(4)
EBITDA	1,299		1,239		5
Adjustments 2	(219)		–		n/m
Adjusted EBITDA	1,080		1,239		(13)
1 Includes other nitrogen (including ESN® and Rainbow) and purchased products and is comprised of net sales of $518 million (2019 – $467 million) less cost of goods sold of $461 million (2019 – $399 million). 2 The adjustments consist primarily of the net gain on disposal of investment in MOPCO which was recorded in other income. See Note 2 and Note 3 to the unaudited condensed consolidated financial statements as at and for the three and twelve months ended December 31, 2020.

Contacts

Investor Relations:
Richard Downey

Vice President, Investor Relations

(403) 225-7357

[email protected]

Tim Mizuno

Director, Investor Relations

(306) 933-8548

Media Relations:
Megan Fielding

Vice President, Brand & Culture Communications

(403) 797-3015

Contact us at: www.nutrien.com

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