Mr. Ken Seitz reports

NUTRIEN REPORTS SECOND QUARTER 2023 RESULTS

Nutrien Ltd. has released its second quarter 2023 results, with net earnings of $448-million (89-cent diluted net earnings per share), which includes non-cash impairments of $465-million primarily related to South American retail goodwill, and $233-million related to phosphate property, plant and equipment. Second quarter 2023 adjusted net earnings per share (1) was $2.53, and adjusted earnings before interest, taxes, depreciation and amortization (1) was $2.5-billion.

"Nutrien's results have been impacted by unprecedented volatility in global crop input markets over the last 18 months. We continue to see demand strengthen in our key markets, in particular North America, however the process of recovery has been more uneven in offshore markets," commented Ken Seitz, Nutrien's president and CEO.

"We are announcing a number of strategic actions to reduce our controllable costs and enhance free cash flow in 2023 and beyond. This includes an indefinite pause of our potash ramp-up and suspension of work on our Geismar clean ammonia project. These actions, along with other operational efficiency initiatives, demonstrate our commitment to disciplined capital allocation and focus on long-term value creation," added Mr. Seitz.

Financial highlights (2):

• Generated net earnings of $1.0-billion ($2.03 diluted net earnings per share) and adjusted EBITDA (1) of $3.9-billion ($3.63 adjusted net earnings per share) in the first half of 2023, down significantly from the record levels achieved in the first half of 2022. This was primarily due to lower net realized fertilizer prices, offshore potash sales volumes and Nutrien Ag Solutions (retail) earnings.
• Retail adjusted EBITDA declined to $1.1-billion in the second quarter primarily due to lower gross margin for crop nutrients and crop protection products. North American crop nutrient sales volumes were up 16 per cent in the second quarter compared with the same period in the prior year and per-tonne margins in the U.S. returned to more normalized levels. Crop protection margins were pressured by lower prices for certain commodity products and the impact of selling through higher cost inventory.
• Potash adjusted EBITDA declined to $654-million in the second quarter as weaker net realized selling prices and lower offshore sales volumes more than offset higher North American sales volumes. Lower demand from customers in Asia was partially offset by increased Canpotex sales volumes to Brazil.
• Nitrogen adjusted EBITDA declined to $569-million in the second quarter due to lower net realized selling prices for all major nitrogen products, which more than offset higher sales volumes and lower gas costs.
• Recognized a $465-million non-cash impairment primarily to goodwill relating to South American retail assets in the second quarter of 2023, mainly due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates. Nutrien also recognized a $233-million non-cash impairment in phosphate relating to White Springs property, plant and equipment due to the volatility of forecasted phosphate margins.
• Repurchased approximately 13.4 million shares year to date as of June 30, 2023, under normal course issuer bid programs, for approximately $1.0-billion. Cash used for dividends and share repurchases in the first half totalled $1.6-billion.
• Full year 2023 adjusted EBITDA and adjusted net earnings per share guidance (1) was revised to $5.5-billion to $6.7-billion and $3.85 to $5.60 per share, respectively.

1. These (and any related guidance, if applicable) are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section for further information.

2. Our discussion of highlights set out on this page is a comparison of the results for the three and six months ended June 30, 2023 to the results for the three and six months ended June 30, 2022, unless otherwise noted.

Strategic actions:

• Indefinitely pausing the ramp-up of annual potash production capability to 18 million tonnes in response to market conditions, following the completion of in-flight projects in the second half of 2023.
• Suspending work on the proposed 1.2-million-tonne Geismar clean ammonia project. This decision is due to an increase in expected capital costs compared with initial estimates, continued uncertainty on the timing of emerging uses for clean ammonia and the prioritization of other capital allocation alternatives.
• Reducing planned capital expenditures across smaller investment projects in the retail business and deferring the timing of capital spend on select nitrogen brownfield projects as the company prioritizes capital and provides flexibility on future allocation alternatives.
• Expecting to lower capital expenditures by approximately $200-million in 2023 and targeting a $100-million reduction in expenses compared with previous estimates. The company now expects total capital expenditures of $2.8-billion in 2023, with further reductions anticipated in 2024.

Market Outlook and Guidance

Agriculture and Retail

• Weather and geopolitical challenges are contributing to tight global grain and oilseed supply and providing support for prices. The US Midwest has experienced some of the driest conditions on record this growing season, which has reduced expected yield potential to below trend. Crop production and export volumes from Ukraine continue to be negatively impacted by the war, with Russia's cancelation of the Black Sea grain deal creating additional supply uncertainty.
• Crop prices have been volatile, but remain historically high, with new crop corn, wheat, and soybean prices 15 to 20 per cent above the ten-year average. Fertilizer affordability has improved significantly compared with the previous year due to the continued strength in crop prices and reduction in fertilizer prices.
• Dry conditions in North America have impacted in-season nitrogen and crop protection applications. Crop development is currently tracking ahead of schedule, which could support an extended fall application window for crop inputs.
• Brazilian grain and oilseed prices were pressured by the record crop size and limitations in logistics and export capacity. However, the demand for Brazilian soybeans is expected to remain robust and higher international prices are expected to support a two to three per cent increase in planted acreage. We believe Brazilian growers have purchased a lower-than-normal proportion of inputs for this time of year, which should support strong demand leading into their spring planting season that starts in September.
• Australian crop production has benefitted from timely precipitation and has been supportive of crop input demand.

Crop Nutrient Markets

• Global potash prices weakened through the second quarter of 2023, driven by continued destocking in offshore markets and the uncertainty created by the delay in the Chinese potash contract. We have seen stronger engagement in offshore spot markets, led by Brazil, following the settlement of the Chinese potash contract in June 2023. We believe channel inventories in North America ended the first half at multi-year lows and are seeing strong demand in the third quarter.
• We project potash exports from Russia to be down 3.0 to 4.0-million tonnes and from Belarus down 4.0 to 5.0-million tonnes compared with 2021 levels. We expect Canadian potash exports will be constrained by logistical challenges primarily due to the strike at the Port of Vancouver and as a result, we have lowered our projected global shipment range for 2023 to between 63 and 65-million tonnes.
• Global urea and nitrate prices have strengthened in the third quarter of 2023 driven by increased demand and supply constraints, including plant turnarounds and reduced Egyptian gas supplies. Ammonia prices have been impacted by lower-than-expected European natural gas prices, weak downstream industrial demand, and reduced imports by phosphate producers. However, we expect ammonia markets to strengthen during the balance of the year due to low global inventories, continued supply constraints, and higher values for other nitrogen products.
• Dry phosphate prices declined throughout the second quarter of 2023, but channel inventories were low to end the North American spring season and demand has strengthened in the second half. Sulfur prices remain historically low compared with finished phosphate prices, which in combination with lower ammonia prices has offset a portion of the price declines.

Financial guidance

• Based on market factors detailed above, the company is revising its full-year 2023 adjusted EBITDA guidance (1) to $5.5-billion to $6.7-billion and full-year 2023 adjusted net earnings guidance (1) to $3.85 to $5.60 per share. It now projects cash provided by operations of $4.4-billion to $4.9-billion, which reflects expectations of lower earnings.
• Retail adjusted EBITDA guidance was lowered primarily to reflect incremental pressure on crop input margins in South America and the impact of dry conditions in North America.
• Potash adjusted EBITDA guidance was lowered due to decreased global potash prices and lower offshore sales volumes, which are impacted by logistical challenges created by the strike at the port of Vancouver and an outage at Canpotex's Portland terminal.
• Nitrogen adjusted EBITDA guidance was revised primarily to reflect lower forecasted ammonia benchmark prices, partially offset by the expectation for lower natural gas prices.

Effective tax rate on adjusted earnings guidance was increased mainly due to the second quarter impacts of the impairments.

1. These (and any related guidance, if applicable) are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section for further information.

Net earnings and adjusted EBITDA decreased in the second quarter and first half of 2023 compared with the same periods in 2022, mainly due to lower net realized selling prices in all segments, weaker offshore potash sales volumes, and lower retail gross margin for crop nutrients and crop protection products. This was partially offset by decreased cost of goods sold from lower natural gas and royalty costs, lower provincial mining taxes, and higher sales volumes in nitrogen and retail crop nutrients. In the second quarter of 2023, the company recorded a non-cash impairment of $465-million primarily related to South American retail goodwill and $233-million related to the White Springs property, plant and equipment, which impacted net earnings. The decrease in cash provided by operating activities in the second quarter and first half compared with the same periods in 2022 was primarily due to lower earnings across all segments.

About Nutrien

Nutrien is the world's largest 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 retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value for all stakeholders by advancing our key environmental, social and governance priorities.

We seek Safe Harbor.