Nutrien Delivers Strong First Quarter Results and Responds to Global Supply Uncertainties

Raising Full-Year Adjusted Net Earnings, Adjusted EBITDA and Potash Sales Volume Guidance

All amounts are in US dollars except as otherwise noted

SASKATOON, Saskatchewan–(BUSINESS WIRE)–Nutrien Ltd. (TSX and NYSE: NTR) announced today its first quarter 2022 results, with net earnings of $1.4 billion ($2.49 diluted net earnings per share). First quarter adjusted net earnings per share¹ were $2.70 and adjusted EBITDA¹ was $2.6 billion.

“Global agriculture and crop input markets are being impacted by a number of unprecedented supply disruptions that have contributed to higher commodity prices and escalated concerns for global food security. The situation emphasizes the need for long-term solutions that support a sustainable increase in global crop production,” commented Ken Seitz, Nutrien’s Interim President and CEO.

“Nutrien is responding by safely increasing potash production and utilizing our global supply chain to provide customers with the crop inputs and services they need for this critical growing season. We expect to generate higher earnings and cash flows in 2022, which provides an opportunity to accelerate our strategic initiatives that we believe will advance sustainable agriculture practices and create long-term value for all our stakeholders. This includes the potential to expand our low-cost fertilizer production capability, enhance our leading global distribution network and proprietary products business, and return additional cash to our shareholders,” added Mr. Seitz.

Highlights:

• Nutrien generated record net earnings² of $1.4 billion and adjusted EBITDA of $2.6 billion in the first quarter of 2022 due to higher realized prices and strong Retail performance, more than offsetting a reduction in fertilizer sales volumes that was primarily due to a delayed start to the planting season in North America.

• Nutrien raised full-year 2022 adjusted EBITDA guidance¹ and adjusted net earnings per share guidance¹ to $14.5 to $16.5 billion and $16.20 to $18.70 per share, respectively. Adjusted net earnings per share guidance includes our plans to allocate a minimum of $2 billion to share repurchases in 2022 on a balanced cadence throughout the year.

• Nutrien Ag Solutions (“Retail”) delivered record first quarter adjusted EBITDA of $240 million, as a result of supportive market conditions in key regions where we operate. Retail sales and gross margin both increased by 30 percent in the first quarter of 2022 and cash operating coverage ratio¹ improved to 57 percent compared to 60 percent for the same period in 2021.

• Potash adjusted EBITDA increased to $1.4 billion due to higher net realized selling prices. North American sales volumes decreased due to a delayed start to the planting season, with offshore volumes increasing as a result of strong global demand. On March 16, 2022, we announced our intention to increase potash production capability by nearly one million tonnes in response to the uncertainty of potash supply from Eastern Europe.

• Nitrogen adjusted EBITDA increased to $995 million in the first quarter of 2022. Higher net realized selling prices more than offset higher natural gas costs and lower sales volumes due to unplanned production outages, along with the delayed start to the planting season in North America.

• Phosphate adjusted EBITDA increased to $239 million in the first quarter of 2022, more than double the same period in 2021 due to higher net realized selling prices.

• Nutrien repurchased approximately 9 million shares year-to-date as of April 29, 2022, under its normal course issuer bids, for a total of approximately $740 million.

Management’s Discussion and Analysis

The following management’s discussion and analysis (“MD&A”) is the responsibility of management and is dated as of May 2, 2022. The Board of Directors (“Board”) of Nutrien carries out its responsibility for review of this disclosure principally through its audit committee, comprised exclusively of independent directors. The audit committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term “Nutrien” refers to Nutrien Ltd. and the terms “we”, “us”, “our”, “Nutrien” and “the Company” refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our Annual Report dated February 17, 2022, which includes our annual audited consolidated financial statements and MD&A, and our Annual Information Form dated February 17, 2022, each for the year ended December 31, 2021, can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. No update is provided to the disclosure in our 2021 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the “SEC”).

This MD&A is based on and should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements as at and for the three months ended March 31, 2022 (“interim financial statements”) based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”, unless otherwise noted. This MD&A contains certain non-IFRS financial measures and ratios and forward-looking statements, which are described in the “Non-IFRS Financial Measures” and the “Forward-Looking Statements” sections, respectively.

Market Outlook and Guidance

Agriculture and Retail

• Global grain and oilseed inventories were well below historical average levels entering 2022 due to strong demand and less than expected supply in recent growing seasons. The Russia and Ukraine conflict has led to further tightening of crop export supplies and heightened global food security concerns. Prices for key crops such as corn, soybean and wheat are 50 to 90 percent above the 10-year average, providing a strong incentive for growers to increase production.

• The US Department of Agriculture (“USDA”) expects combined planted acreage of US corn, soybeans, and cotton could set a record in 2022. Wet and cool weather delayed the start of the North American spring season and could impact planting decisions and the timing of input demand.

• While drought conditions reduced the size of the South American soybean crop, the safrinha corn crop is reported to be in relatively good condition. Prospective corn and soybean margins remain well above historical average levels, and we expect strong demand for crop inputs in 2022.

• Soil moisture conditions are favorable entering the Australian winter planting season as some of the drier areas in Western Australia have received rains and areas that have experienced flooding are not expected to materially change cropping area.

Crop Nutrient Markets

• Russia and Belarus account for approximately 40 percent of global potash production and exports. Financial sanctions and other restrictions imposed on Russia and Belarus have significantly constrained supply with reported potash exports from the region approximately 20 percent lower in the first quarter of 2022 compared to the same period in 2021. As a result, we have reduced our projected range of global potash shipments to between 60 and 65 million tonnes in 2022. We are estimating a wider than normal range of global potash shipments given the level of uncertainty of supply from Russia and Belarus.

• Global nitrogen supplies have tightened due to reduced availability from Russia, the largest global exporter of nitrogen products, as well as the Chinese government restrictions on urea exports. Russian natural gas supply uncertainty has also contributed to very high and volatile natural gas prices in Europe, which has led to reduced nitrogen operating rates in the region. While underlying agricultural and industrial fundamentals support nitrogen demand, tight supplies could constrain demand in markets such as Europe and in some regions of North America. We expect Henry Hub natural gas prices to average between $5.50 to $6.50 per MMBtu in 2022, well below import pricing levels in Europe and Asia.

• Global phosphate supply has been impacted by a reduction in Russian and Chinese DAP and MAP fertilizer exports. Phosphate markets have been further supported by a significant increase in sulfur and ammonia costs.

Financial Guidance

• We are raising our full-year 2022 adjusted EBITDA guidance¹ and full-year 2022 adjusted net earnings per share guidance¹ primarily due to the expectation of higher realized selling prices, increased potash sales volumes and higher Retail crop nutrients and crop protection products gross margins. Adjusted net earnings per share guidance includes our plans to allocate a minimum of $2 billion to share repurchases in 2022 on a balanced cadence throughout the year.

• Nutrien has raised potash sales volume guidance to between 14.5 to 15.1 million tonnes in 2022. This incorporates our announcement on March 16, 2022 of our intention to increase potash production capability by nearly one million tonnes compared to previous expectations, with the majority of additional volume expected to be produced in the second half of 2022.

• Nutrien has lowered nitrogen sales volume guidance to between 10.7 to 11.1 million tonnes in 2022. This reflects the impact of unplanned plant outages that occurred during the first quarter of 2022.

All guidance numbers, including those noted above are outlined in the table below. Refer to page 53 of Nutrien’s 2021 Annual Report for related assumptions and sensitivities.

Consolidated Results

Net earnings and adjusted EBITDA increased significantly in the first quarter compared to the same period in 2021. This was mainly due to higher net realized selling prices from global supply uncertainties across our nutrient businesses. Cash flow used in operating activities decreased in the first quarter of 2022 compared to the same period in 2021 due primarily to higher net earnings.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three months ended March 31, 2022 to the results for the three months ended March 31, 2021, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)

• Adjusted EBITDA increased in the first quarter of 2022 due to higher sales and gross margins across most product categories and regions where we operate. This was supported by strong agriculture fundamentals, higher selling prices and growth in proprietary products sales. Retail cash operating coverage ratio¹ favorably declined to 57 percent in the first quarter of 2022 from 60 percent in the same period in 2021 due to significantly higher gross margin.

• Crop nutrients sales and gross margin increased in the first quarter of 2022 due to higher selling prices. Gross margin per tonne increased compared to the same period in the prior year due to the timing of inventory purchases in a rising price environment. Sales volumes decreased due to a pull forward of sales into the fourth quarter of 2021 and delayed spring field activity in North America, partially offset by strong demand in South America and Australia.

• Crop protection products sales and gross margin increased in the first quarter of 2022 due to higher prices, strong demand and favorable application conditions in Australia. Gross margin increase was supported by the reliability of our supply chain and strategic procurement in a rising price environment.

• Seed sales decreased in the first quarter of 2022 primarily due to delayed North American field activity caused by wet and cool weather. This was partially offset by favorable weather conditions in Australia.

• Merchandise sales increased in the first quarter of 2022 primarily driven by favorable market conditions in Australia, with increased flock and heard sizes along with higher fencing sales due to replacement from the Northeast flood damage.

• Nutrien Financial sales increased in the first quarter of 2022 due to higher utilization and adoption of our programs, minimal credit loss due to strong credit evaluation and collection processes, as well as favorable market conditions driven by strong commodity pricing and government programs for our grower customers.

• Services and other sales increased in the first quarter of 2022 compared to the same period in 2021 due to favorable conditions in Australia, in particular the livestock market with increased cattle prices.

Potash

• Adjusted EBITDA increased in the first quarter of 2022 due to higher net realized selling prices, which more than offset a small reduction in total sales volumes and higher royalties and provincial mining taxes.

• Sales volumes in the first quarter of 2022 decreased as wet and cool weather in North America delayed planting. Offshore sales volumes increased during the quarter due to strong demand, although were impeded by a Canadian Pacific Railway labor strike and weather-related issues that temporarily impacted rail deliveries.

• Net realized selling price increased in the first quarter of 2022 due to strong global demand supported by higher crop prices and supply constraints, in particular related to uncertainty on future supply from Russia and Belarus.

• Cost of goods sold per tonne increased in the first quarter of 2022 primarily due to higher royalties resulting from increased selling prices. We are now reporting potash controllable cash cost of product manufactured per tonne as we believe it is a better indicator of potash costs that management considers to be within its control and not primarily driven by regulatory and market conditions. Controllable cash cost of product manufactured was relatively flat for the first quarter of 2022 compared to the same period last year, as higher production volumes mostly offset higher input costs.

Canpotex Sales by Market

Nitrogen

• Adjusted EBITDA increased in the first quarter of 2022 primarily due to higher net realized selling prices, which more than offset higher natural gas costs and lower volumes.

• Sales volumes decreased in the first quarter of 2022 due to unplanned plant outages that impacted ammonia and urea production, along with the delayed planting in North America.

• Net realized selling price was higher due to higher benchmark prices resulting from the strength in global demand and tight supply, along with higher energy prices in key nitrogen exporting regions.

• Cost of goods sold per tonne increased primarily due to higher natural gas costs and higher raw material costs.

Natural Gas Prices in Cost of Production

• Natural gas prices in our cost of production increased in the first quarter of 2022 as a result of higher North American gas index prices and increased gas costs in Trinidad, where our gas prices are linked to ammonia benchmark prices.

Phosphate

• Adjusted EBITDA increased in the first quarter of 2022 due to higher net realized selling prices, which more than offset higher raw material costs and lower sales volumes.

• Sales volumes decreased particularly in fertilizer, as a wet and cool spring in North America delayed planting.

• Net realized selling price increased in connection with the increase in global benchmark prices. Industrial and feed net selling prices increased to a lesser extent than fertilizer prices due to a lag in price realizations relative to spot prices.

• Cost of goods sold per tonne increased primarily due to significantly higher sulfur and ammonia input costs.

Corporate and Others

Contacts

Investor Relations:
Jeff Holzman

Vice President, Investor Relations

(306) 933-8545

Investors@nutrien.com

Media Relations:
Megan Fielding

Vice President, Brand & Culture Communications

(403) 797-3015

Contact us at: www.nutrien.com

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