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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 thefirst 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.

  • Adjusted EBITDA increased in the fourth quarter of 2020 compared to the same period in 2019 due to significantly higher sales volumes that more than offset lower net realized selling prices. Adjusted EBITDA in the full year 2020 decreased relative to 2019 as lower net realized selling prices were only partially offset by higher sales volumes and lower cost of goods sold per tonne.
  • Sales volumes increased in the fourth quarter and full year of 2020 compared to the same periods in 2019 due to strong fertilizer sales in North America that more than offset lower global industrial demand. Total nitrogen sales in 2020 were the highest on record as a result of recent expansion projects and strong overall operating rates at our North American facilities.
  • Net realized selling price of nitrogen was lower in the fourth quarter and full year 2020 than the same periods in 2019 due to lower global and North American benchmark prices. Fourth quarter 2020 sales commitments were mostly made in the previous quarter, prior to more recent increases in benchmark prices.
  • Cost of goods sold per tonne decreased in the fourth quarter of 2020 as higher production volumes and lower depreciation and amortization per tonne more than offset the impact of higher natural gas costs. Cost of goods sold per tonne in 2020 decreased compared to 2019 due to lower natural gas costs and lower fixed costs, more than offsetting an increase in depreciation and amortization. Ammonia controllable cash cost of product manufactured per tonne declined in the fourth quarter due to increased production volumes, as the comparable period was impacted by turnaround activity at our Trinidad facility.

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)

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

Overall gas cost excluding realized derivative impact

2.71

 

2.46

 

10

 

2.31

 

2.47

 

(6)

Realized derivative impact

0.03

 

0.06

 

(50)

 

0.05

 

0.11

 

(55)

Overall gas cost

2.74

 

2.52

 

9

 

2.36

 

2.58

 

(9)

 

 

 

 

 

 

 

 

 

 

 

 

Average NYMEX

2.66

 

2.50

 

6

 

2.08

 

2.63

 

(21)

Average AECO

2.10

 

1.76

 

19

 

1.68

 

1.22

 

38

  • Gas prices in our cost of production increased in the fourth quarter of 2020 relative to the same period last year, tracking benchmark prices. Lower US gas prices and a lower realized derivative impact in 2020 more than offset higher Canadian gas prices compared to the same period in 2019.

Phosphate

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

180

 

155

 

16

 

466

 

466

 

-

 

387

 

334

 

16

Industrial and feed

100

 

105

 

(5)

 

182

 

181

 

1

 

551

 

581

 

(5)

 

280

 

260

 

8

 

648

 

647

 

-

 

433

 

403

 

7

Cost of goods sold

265

 

255

 

4

 

 

 

 

 

 

 

410

 

395

 

4

Gross margin - manufactured

15

 

5

 

200

 

 

 

 

 

 

 

23

 

8

 

188

Gross margin - other 1

1

 

1

 

-

 

Depreciation and amortization

 

60

 

88

 

(32)

Gross margin - total

16

 

6

 

167

 

Gross margin excluding depreciation and amortization - manufactured

 

 

 

 

 

(Income) Expenses

(8)

 

9

 

n/m

 

83

 

96

 

(14)

EBIT

24

 

(3)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

39

 

57

 

(32)

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

63

 

54

 

17

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of assets

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

63

 

54

 

17

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes other phosphate and purchased products and is comprised of net sales of $40 million (2019 - $27 million) less cost of goods sold of $39 million (2019 - $26 million).

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

671

 

790

 

(15)

 

2,048

 

2,130

 

(4)

 

328

 

371

 

(12)

Industrial and feed

404

 

426

 

(5)

 

733

 

759

 

(3)

 

552

 

561

 

(2)

 

1,075

 

1,216

 

(12)

 

2,781

 

2,889

 

(4)

 

387

 

421

 

(8)

Cost of goods sold

1,044

 

1,218

 

(14)

 

 

 

 

 

 

 

376

 

422

 

(11)

Gross margin - manufactured

31

 

(2)

 

n/m

 

 

 

 

 

 

 

11

 

(1)

 

n/m

Gross margin - other 1

5

 

(3)

 

n/m

 

Depreciation and amortization

 

78

 

82

 

(5)

Gross margin - total

36

 

(5)

 

n/m

 

Gross margin excluding depreciation and amortization - manufactured

 

 

 

 

 

Expenses

791

 

38

 

n/m

 

89

 

81

 

10

EBIT

(755)

 

(43)

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

218

 

237

 

(8)

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

(537)

 

194

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of assets

769

 

-

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

232

 

194

 

20

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes other phosphate and purchased products and is comprised of net sales of $127 million (2019 - $152 million) less cost of goods sold of $122 million (2019 - $155 million).

  • Adjusted EBITDA increased in the fourth quarter of 2020 due to higher net realized selling prices resulting from higher phosphate fertilizer prices compared to the same period in 2019 and a gain on the sale of land in the fourth quarter of 2020. Full year 2020 adjusted EBITDA increased primarily due to lower costs of goods sold per tonne compared to the same periods in 2019.
  • Sales volumes were stable in the fourth quarter of 2020 relative to the same quarter in 2019 as higher sales into the North American fertilizer market were offset by lower phosphoric acid exports that carry a lower margin. Sales volumes in 2020 were lower than in 2019 due to the conversion of the Redwater phosphate facility to ammonium sulfate production in 2019 and a lower phosphate operating rate.
  • Net realized selling price of phosphate fertilizer was higher in the fourth quarter of 2020 than in the fourth quarter of 2019 year following a recovery in global benchmark prices, which was partially offset by lower industrial and feed prices and was impacted by timing lags to benchmark prices. Net realized selling prices in 2020 were lower than in 2019 consistent with lower global benchmark prices.
  • Cost of goods sold per tonne increased in the fourth quarter of 2020 compared to the fourth quarter of 2019 due to higher raw material input costs and lower production volumes that offset lower depreciation and amortization following the non-cash impairment in the third quarter of 2020. Cost of goods sold per tonne was lower in 2020 relative to 2019 due to lower raw material costs, favorable non-cash inventory adjustments and a change in estimate related to an asset retirement obligation recorded in the second quarter of 2020.

Forward-Looking Statements

Certain statements and other information included in this document, including within the "Financial 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”, “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 2021 annual guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (consolidated and by segment); expectations regarding our growth and capital allocation intentions and strategies; capital spending expectations for 2021; expectations regarding performance of our operating segments in 2021, including our operating segment market outlooks and market conditions for 2021, and the anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix, prices and the impact of import and export volumes; expectations regarding repurchases of our common shares, including the timing thereof; the negotiation of sales contracts; the implementation of our carbon program and the benefits to Nutrien and growers therefrom; and acquisitions and divestitures. 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 an 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 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; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability 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 2021 and in the future; our expectations regarding the impacts, direct and indirect, of the COVID-19 pandemic on our business, customers, business partners, employees, supply chain, other stakeholders and the overall economy; 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; our ability to successfully negotiate sales contracts; our ability to successfully implement new initiatives and programs; and our ability to redeploy capital to generate higher returns for shareholders.

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 complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; climate change and weather conditions, 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; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; 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; the COVID-19 pandemic and its resulting effects on economic conditions, restrictions imposed by public health authorities or governments, fiscal and monetary responses by governments and financial institutions and disruptions to global supply chains; 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 expected adjusted net earnings per share and adjusted EBITDA (consolidated and by segment) guidance ranges, as well as our adjusted earnings per share and adjusted EBITDA price and input costs sensitivities 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 and Definitions” section of our 2019 Annual Report dated February 19, 2020. 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 the world's largest provider of crop inputs and services, playing a critical role in helping growers increase food production in a sustainable manner. We produce and distribute 27 million tonnes of potash, nitrogen and phosphate products world-wide. With this capability and our leading agriculture retail network, we are well positioned to supply the needs of our customers. We operate with a long-term view and are committed to working with our stakeholders as we address our economic, environmental and social priorities. The scale and diversity of our integrated portfolio provides a stable earnings base, multiple avenues for growth and the opportunity to return capital to shareholders.

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 18, 2021 at 10:00 am Eastern Time.

Appendix A - Selected Additional Financial Data

Selected Retail measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2020

 

2019

 

2020

 

2019

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

 

 

 

 

 

 

 

Crop nutrients

14

 

15

 

25

 

23

Crop protection products

11

 

8

 

32

 

34

Seed

37

 

11

 

46

 

38

All products

10.8

 

8.2

 

22.9

 

23.3

All products before reclassification 1

11.1

 

8.4

 

23.3

 

23.7

Crop nutrients sales volumes (tonnes - thousands)

 

 

 

 

 

 

 

North America

2,063

 

1,558

 

9,746

 

8,812

International

622

 

559

 

2,986

 

2,236

Total

2,685

 

2,117

 

12,732

 

11,048

Crop nutrients selling price per tonne

 

 

 

 

 

 

 

North America

413

 

436

 

421

 

465

International

413

 

408

 

367

 

398

Total

413

 

428

 

408

 

452

Crop nutrients gross margin per tonne

 

 

 

 

 

 

 

North America

89

 

95

 

99

 

102

International

85

 

68

 

55

 

60

Total

88

 

88

 

89

 

93

1 Adjusted to reflect what the metric would have been prior to a reclassification of certain immaterial figures.

 

 

 

 

 

 

 

 

Financial performance measures

 

 

 

 

2020 Target

 

2020 Actuals

Retail adjusted EBITDA to sales (%) 1

 

 

 

 

10

 

10

Retail adjusted average working capital to sales (%) 1, 2

 

 

 

21

 

15

Retail adjusted average working capital to sales excluding Nutrien Financial (%) 1, 2

 

 

 

5

Retail cash operating coverage ratio (%) 1, 2

 

 

 

 

 

 

61.8

Retail cash operating coverage ratio before reclassification (%) 1, 2, 3

 

 

 

61

 

61.1

Retail normalized comparable store sales (%) 2

 

 

 

 

 

 

6

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

 

1,000

 

1,075

Nutrien Financial net interest margin (%) 1,2

 

 

 

 

 

 

5.3

1 Rolling four quarters ended December 31, 2020.

2 See the "Non-IFRS Financial Measures" section.

3 Adjusted to reflect what the metric would have been prior to a reclassification of certain immaterial figures.

Nutrien Financial

As at December 31, 2020

(millions of US dollars)

Current

<31 days
past due

31-90 days
past due

>90 days
past due

Allowance 1

Total

North America

962

130

44

38

(24)

1,150

International

178

2

16

47

(1)

242

Nutrien Financial receivables 2

1,140

132

60

85

(25)

1,392

1 Bad debt expense on the above receivables was $26 million (2019 - $5 million) in the Retail segment.

2 Includes $1,147 million (2019 - $762 million) of very low risk of default and $270 million (2019 - $64 million) of low risk of default.

Selected Nitrogen measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2020

 

2019

 

2020

 

2019

Sales volumes (tonnes - thousands)

 

 

 

 

 

 

 

Fertilizer

1,740

 

1,350

 

6,750

 

5,554

Industrial and feed

1,105

 

1,012

 

4,216

 

4,716

Net sales (millions of US dollars)

 

 

 

 

 

 

 

Fertilizer

359

 

311

 

1,467

 

1,466

Industrial and feed

196

 

189

 

755

 

915

Net selling price per tonne

 

 

 

 

 

 

 

Fertilizer

206

 

230

 

217

 

264

Industrial and feed

178

 

187

 

179

 

194

Production measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2020

 

2019

 

2020

 

2019

Potash production (Product tonnes - thousands)

2,784

 

1,939

 

12,595

 

11,700

Potash shutdown weeks 1

-

 

28

 

38

 

55

Ammonia production - total 2

1,584

 

1,401

 

6,063

 

6,164

Ammonia production - adjusted 2,3

1,035

 

1,036

 

4,102

 

3,978

Ammonia operating rate (%) 3

94

 

94

 

93

 

91

P2O5 production (P2O5 tonnes - thousands) 4

361

 

390

 

1,444

 

1,514

P2O5 operating rate (%)4

84

 

91

 

85

 

89

1 Represents weeks of full production shutdown, excluding the impact of any periods of reduced operating rates and 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.

4 Excludes Redwater.

Appendix B - Non-IFRS Financial Measures

We use both IFRS and certain non-IFRS financial measures to assess performance. Non-IFRS financial measures are numerical measures of a company’s historical or future financial performance, financial position or cash flow that are not specified, defined or determined under IFRS, and are not presented in our financial statements. Non-IFRS measures either exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure specified, defined or determined under IFRS. In evaluating these measures, investors should consider that the methodology applied in calculating such measures may differ among companies and analysts.

Management believes the non-IFRS financial measures 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-IFRS financial measures 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-IFRS financial measures, their definitions, and why management uses each measure. It includes reconciliations to the most directly comparable IFRS measures. Except as otherwise described herein, our non-IFRS financial measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable. As non-recurring or unusual items arise, we generally exclude these items in our calculation.

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, Merger and related costs, certain acquisition and integration related costs, share-based compensation, impairment of assets, certain foreign exchange gain/loss (net of related derivatives), COVID-19 related expenses, loss on disposal of business and net gain on disposal of investment in MOPCO. In 2020, we amended our calculation of adjusted EBITDA to adjust for the impact of COVID-19 related expenses, loss on disposal of business and net gain on disposal of investment in MOPCO. There were no similar income or expenses in the comparative period. To align with the change in our segment performance measure effective in 2020, we will primarily use adjusted EBITDA going forward as our consolidated performance measure.

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.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars)

2020

 

2019

 

2020

 

2019

Net earnings (loss)

316

 

(48)

 

459

 

992

Finance costs

119

 

141

 

520

 

554

Income tax (recovery) expense

(32)

 

(30)

 

(77)

 

316

Depreciation and amortization

499

 

436

 

1,989

 

1,799

EBITDA

902

 

499

 

2,891

 

3,661

Merger and related costs

-

 

25

 

-

 

82

Acquisition and integration related costs

22

 

16

 

60

 

16

Share-based compensation expense

60

 

9

 

69

 

104

Impairment of assets

1

 

87

 

824

 

120

COVID-19 related expenses

18

 

-

 

48

 

-

Foreign exchange loss, net of related derivatives

15

 

28

 

19

 

42

Loss on disposal of business

-

 

-

 

6

 

-

Net gain on disposal of investment in MOPCO

(250)

 

-

 

(250)

 

-

Adjusted EBITDA

768

 

664

 

3,667

 

4,025

Adjusted EBITDA (Consolidated), Adjusted Net Earnings Per Share and Sustaining Capital Expenditures Guidance

Adjusted EBITDA, adjusted net earnings per share and sustaining capital expenditures guidance are forward-looking non-IFRS financial measures. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with IFRS due to unknown variables and the uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value that may be inherently difficult to determine, without unreasonable efforts. Guidance for adjusted EBITDA and adjusted net earnings per share excludes the impacts of acquisition and integration related costs, share-based compensation, certain foreign exchange gain/loss (net of related derivatives), and COVID-19 related expenses. Guidance for sustaining capital expenditures includes expected expenditures required to sustain operations at existing levels and includes major repairs and maintenance and plant turnarounds.

Adjusted Net Earnings and Adjusted Net Earnings Per Share

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

Definition: Net earnings (loss) before certain acquisition and integration related costs, share-based compensation, certain foreign exchange gain/loss (net of related derivatives), COVID-19 related expenses (including those recorded under finance costs), loss on disposal of business, net gain on disposal of investment in MOPCO and impairment of assets, net of tax. 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. If the effective tax rate is significantly different from our forecasted effective tax rate due to adjustments or discrete tax impacts, we apply a tax rate that excludes those items. For material adjustments, we apply a tax rate specific to the adjustment. In 2020, we amended our calculation of adjusted net loss to adjust for the impact of COVID-19 related expenses, loss on disposal of business and net gain on disposal of investment in MOPCO.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations excluding the effects of non-operating items.

 

Three Months Ended

December 31, 2020

 

Twelve Months Ended

December 31, 2020

 

 

 

 

 

Per

 

 

 

 

 

Per

(millions of US dollars, except as otherwise

Increases

 

 

 

Diluted

 

Increases

 

 

 

Diluted

noted)

(Decreases)

 

Post-Tax

 

Share

 

(Decreases)

 

Post-Tax

 

Share

Net earnings

 

 

316

 

0.55

 

 

 

459

 

0.81

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration related costs

22

 

13

 

0.03

 

60

 

44

 

0.08

Share-based compensation expense

60

 

36

 

0.06

 

69

 

50

 

0.09

Impairment of assets

1

 

1

 

-

 

824

 

657

 

1.15

COVID-19 related expenses

22

 

13

 

0.02

 

67

 

49

 

0.09

Foreign exchange loss, net of related derivatives

15

 

9

 

0.02

 

19

 

14

 

0.02

Loss on disposal of business

-

 

-

 

-

 

6

 

4

 

-

Net gain on disposal of investment in MOPCO

(250)

 

(250)

 

(0.44)

 

(250)

 

(250)

 

(0.44)

Adjusted net earnings

 

 

138

 

0.24

 

 

 

1,027

 

1.80

Free Cash Flow and Free Cash Flow Including Changes in Non-Cash Operating Working Capital

Most directly comparable IFRS financial measure: Cash from operations before working capital changes.

Definition: Cash from operations before working capital changes less sustaining capital expenditures. We also calculate a similar measure that includes changes in non-cash operating working capital.

Why we use the measure and why it is useful to investors: For evaluation of liquidity and financial strength. These are also useful as indicators of our ability to service debt, meet other payment obligations and make strategic investments. These do not represent residual cash flow available for discretionary expenditures.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars)

2020

 

2019

 

2020

 

2019

Cash from operations before working capital changes

604

 

489

 

2,749

 

3,175

Sustaining capital expenditures

(408)

 

(351)

 

(919)

 

(1,018)

Free cash flow

196

 

138

 

1,830

 

2,157

Changes in non-cash operating working capital

2,174

 

1,930

 

574

 

490

Free cash flow including changes in non-cash

operating working capital

2,370

 

2,068

 

2,404

 

2,647

Potash Cash Cost of Product Manufactured (“COPM”)

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

Definition: Potash COGS for the period excluding depreciation and amortization expense and inventory and other adjustments divided by the production tonnes for the period.

Why we use the measure and why it is useful to investors: To assess operational performance. Potash cash COPM excludes the effects of production from other periods 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)

2020

 

2019

 

2020

 

2019

Total COGS - Potash

305

 

211

 

1,183

 

1,103

Change in inventory

18

 

11

 

(10)

 

10

Other adjustments

(7)

 

-

 

(12)

 

(16)

COPM

316

 

222

 

1,161

 

1,097

Depreciation and amortization included in COPM

(119)

 

(63)

 

(424)

 

(355)

Cash COPM

197

 

159

 

737

 

742

Production tonnes (tonnes - thousands)

2,784

 

1,939

 

12,595

 

11,700

Potash cash COPM per tonne

71

 

82

 

59

 

63

Ammonia Controllable Cash COPM

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

Definition: The total of COGS for the Nitrogen segment 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)

2020

 

2019

 

2020

 

2019

Total COGS - Nitrogen

557

 

496

 

2,265

 

2,148

Depreciation and amortization in COGS

(127)

 

(122)

 

(522)

 

(462)

Cash COGS for products other than ammonia

(325)

 

(274)

 

(1,342)

 

(1,226)

Ammonia

 

 

 

 

 

 

 

Total cash COGS before other adjustments

105

 

100

 

401

 

460

Other adjustments 1

(6)

 

(22)

 

(52)

 

(57)

Total cash COPM

99

 

78

 

349

 

403

Natural gas and steam costs

(71)

 

(52)

 

(235)

 

(273)

Controllable cash COPM

28

 

26

 

114

 

130

Production tonnes (net tonnes 2 - thousands)

704

 

544

 

2,649

 

2,887

Ammonia controllable cash COPM per tonne

40

 

48

 

43

 

45

1 Includes changes in inventory balances and other adjustments.

2 Ammonia tonnes available for sale, as not upgraded to other Nitrogen products.

Gross Margin Excluding Depreciation and Amortization Per Tonne - Manufactured

Most directly comparable IFRS financial measure: Gross margin.

Definition: Gross margin from manufactured products per tonne less depreciation and amortization per tonne. 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.

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

Most directly comparable IFRS financial measure: (Current assets minus current liabilities for Retail) divided by Retail sales.

Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the working capital and sales of certain acquisitions (such as Ruralco) during the first year following the acquisition. We amended our calculation to adjust for the sales of certain recently acquired businesses. We also look at this metric excluding the sales and working capital of Nutrien Financial.

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, 2020

(millions of US dollars, except as otherwise noted)

Q1 2020

 

Q2 2020

 

Q3 2020

 

Q4 2020

 

Average/Total

Working capital

2,288

 

2,030

 

3,216

 

1,157

 

 

Working capital from certain recent acquisitions

(108)

 

63

 

-

 

-

 

 

Adjusted working capital

2,180

 

2,093

 

3,216

 

1,157

 

2,162

Nutrien Financial working capital

(795)

 

(2,108)

 

(1,711)

 

(1,392)

 

 

Adjusted working capital excluding Nutrien Financial

1,385

 

(15)

 

1,505

 

(235)

 

660

 

 

 

 

 

 

 

 

 

 

Sales 1

2,661

 

6,764

 

2,742

 

2,618

 

 

Sales from certain recent acquisitions

(348)

 

(338)

 

-

 

-

 

 

Adjusted sales

2,313

 

6,426

 

2,742

 

2,618

 

14,099

Nutrien Financial sales 1

(16)

 

(40)

 

(36)

 

(37)

 

 

Adjusted sales excluding Nutrien Financial

2,297

 

6,386

 

2,706

 

2,581

 

13,970

1 Certain immaterial figures have been reclassified for the first three quarters of 2020.

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

 

 

 

 

 

 

 

15

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

 

 

 

5

Nutrien Financial Net Interest Margin

Most directly comparable IFRS financial measure: Nutrien Financial gross margin divided by average Nutrien Financial receivables.

Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial 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 other users to evaluate financial performance of Nutrien Financial.

 

Rolling four quarters ended December 31, 2020

(millions of US dollars, except as otherwise noted)

Q1 2020

 

Q2 2020

 

Q3 2020

 

Q4 2020

 

Total/Average

Nutrien Financial revenue

16

 

40

 

36

 

37

 

 

Deemed interest expense 1

(5)

 

(15)

 

(15)

 

(14)

 

 

Net interest

11

 

25

 

21

 

23

 

80

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial receivables

795

 

2,108

 

1,711

 

1,392

 

1,502

Nutrien Financial net interest margin (%)

 

 

 

 

 

 

 

 

5.3

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

Most directly comparable IFRS financial measure: Retail operating expenses1 as a percentage of Retail gross margin.

Definition: Retail operating expenses, 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, 2020

(millions of US dollars, except as otherwise noted)

Q1 2020

 

Q2 2020

 

Q3 2020

 

Q4 2020

 

Total

Operating expenses 1,2

689

 

826

 

691

 

768

 

2,974

Depreciation and amortization in operating expenses

(153)

 

(161)

 

(167)

 

(177)

 

(658)

Operating expenses excluding depreciation and amortization

536

 

665

 

524

 

591

 

2,316

 

 

 

 

 

 

 

 

 

 

Gross margin 2

541

 

1,627

 

683

 

885

 

3,736

Depreciation and amortization in cost of goods sold

2

 

2

 

3

 

3

 

10

Gross margin excluding depreciation and amortization

543

 

1,629

 

686

 

888

 

3,746

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

61.8

Cash operating coverage ratio before reclassification (%) 3

 

 

 

 

 

 

 

61.1

1 Includes Retail expenses below gross margin including selling expenses, general and administrative expenses and other (income) expenses.

2 Certain immaterial figures have been reclassified for the first three quarters of 2020.

3 Adjusted to reflect what the metric would have been prior to a reclassification of certain immaterial figures.

Retail Adjusted EBITDA per US Selling Location

Most directly comparable IFRS financial measure: Retail US adjusted EBITDA.

Definition: Total Retail US adjusted EBITDA for the last four rolling quarters, adjusted for 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.

Why we use the measure and why it is useful to investors: To assess our US Retail operating performance. This measure includes locations we have owned for more than 12 months. In the third quarter of 2020, we revised this measure from US EBITDA to US adjusted EBITDA to align with how we evaluate Retail results. There were no changes to this measure as a result of the change.

 

Rolling four quarters ended December 31, 2020

(millions of US dollars, except as otherwise noted)

Q1 2020

 

Q2 2020

 

Q3 2020

 

Q4 2020

 

Total

Adjusted US EBITDA

(44)

 

766

 

86

 

177

 

985

Adjustments for acquisitions

 

 

 

 

 

 

 

 

(5)

Adjusted US EBITDA adjusted for acquisitions

 

 

 

 

 

 

 

 

980

Number of US selling locations adjusted for acquisitions

 

 

 

 

 

 

 

 

912

Adjusted EBITDA per US selling location (thousands of US dollars)

 

 

 

 

 

 

 

1,075

Retail Normalized Comparable Store Sales

Most directly comparable IFRS financial measure: Retail sales from comparable base as a component of total Retail sales.

Definition: Prior year comparable store sales adjusted for published potash, nitrogen and phosphate benchmark prices and foreign exchange rates used in the current year. We retain sales of closed locations in the comparable base if the closed location is in close proximity to an existing location, unless we plan to exit the market area or are unable to economically or logistically serve it. We do not adjust for temporary closures, expansions or renovations of stores.

Why we use the measure and why it is useful to investors: To evaluate sales growth by adjusting for fluctuations in commodity prices and foreign exchange rates. Includes locations we have owned for more than 12 months.

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2020

 

2019

Sales from comparable base

 

 

 

Current period

13,546

 

12,568

Prior period 1

13,282

 

12,520

Comparable store sales (%)

2

 

0

Prior period normalized for benchmark prices and foreign exchange rates 1

12,784

 

12,636

Normalized comparable store sales (%)

6

 

(1)

1 Certain immaterial figures have been reclassified in 2020.

Condensed Consolidated Financial Statements

Unaudited in millions of US Dollars except as otherwise noted

Condensed Consolidated Statements of Earnings (Loss)

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31

 

December 31

 

Note

2020

 

2019

 

2020

 

2019

 

 

 

 

Note 1

 

 

 

Note 1

SALES

2

4,052

 

3,462

 

20,908

 

20,084

Freight, transportation and distribution

 

202

 

172

 

855

 

768

Cost of goods sold

 

2,685

 

2,256

 

14,814

 

13,814

GROSS MARGIN

 

1,165

 

1,034

 

5,239

 

5,502

Selling expenses

 

732

 

670

 

2,813

 

2,505

General and administrative expenses

 

117

 

117

 

429

 

404

Provincial mining and other taxes

 

41

 

39

 

204

 

292

Share-based compensation expense

 

60

 

9

 

69

 

104

Impairment of assets

 

1

 

87

 

824

 

120

Other (income) expenses

3

(189)

 

49

 

(2)

 

215

EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES

403

 

63

 

902

 

1,862

Finance costs

 

119

 

141

 

520

 

554

EARNINGS (LOSS) BEFORE INCOME TAXES

 

284

 

(78)

 

382

 

1,308

Income tax (recovery) expense

 

(32)

 

(30)

 

(77)

 

316

NET EARNINGS (LOSS)

 

316

 

(48)

 

459

 

992

NET EARNINGS (LOSS) PER SHARE ("EPS")

 

 

 

 

 

 

 

 

Basic

 

0.55

 

(0.08)

 

0.81

 

1.70

Diluted

 

0.55

 

(0.08)

 

0.81

 

1.70

Weighted average shares outstanding for basic EPS

 

569,180,000

 

572,916,000

 

569,657,000

 

582,269,000

Weighted average shares outstanding for diluted EPS

 

569,393,000

 

572,916,000

 

569,686,000

 

583,102,000

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income

 

Three Months
Ended

 

Twelve Months
Ended

 

December 31

 

December 31

(Net of related income taxes)

2020

 

2019

 

2020

 

2019

NET EARNINGS (LOSS)

316

 

(48)

 

459

 

992

Other comprehensive income

 

 

 

 

 

 

 

Items that will not be reclassified to net earnings (loss):

 

 

 

 

 

 

 

Net actuarial gain on defined benefit plans

72

 

7

 

75

 

7

Net fair value gain (loss) on investments

18

 

1

 

(7)

 

(25)

Items that have been or may be subsequently reclassified to

net earnings (loss):

 

 

 

 

 

 

 

Gain on currency translation of foreign operations

194

 

83

 

142

 

47

Other

(4)

 

2

 

(16)

 

7

OTHER COMPREHENSIVE INCOME

280

 

93

 

194

 

36

COMPREHENSIVE INCOME

596

 

45

 

653

 

1,028

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Cash Flows

 

Three Months
Ended

 

Twelve Months
Ended

 

December 31

 

December 31

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net earnings (loss)

316

 

(48)

 

459

 

992

Adjustments for:

 

 

 

 

 

 

 

Depreciation and amortization

499

 

436

 

1,989

 

1,799

Share-based compensation expense

60

 

9

 

69

 

104

Impairment of assets

1

 

87

 

824

 

120

Net gain on disposal of investment in Misr Fertilizers Production Company

S.A.E. ("MOPCO")

(250)

 

-

 

(250)

 

-

Provision for (recovery of) deferred income tax

90

 

(1)

 

(9)

 

177

Other long-term assets, liabilities and miscellaneous

(112)

 

6

 

(333)

 

(17)

Cash from operations before working capital changes

604

 

489

 

2,749

 

3,175

Changes in non-cash operating working capital:

 

 

 

 

 

 

 

Receivables

1,600

 

1,363

 

145

 

(64)

Inventories

(1,068)

 

(1,049)

 

85

 

190

Prepaid expenses and other current assets

(946)

 

(1,039)

 

(10)

 

(238)

Payables and accrued charges

2,588

 

2,655

 

354

 

602

CASH PROVIDED BY OPERATING ACTIVITIES

2,778

 

2,419

 

3,323

 

3,665

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Additions to property, plant and equipment

(496)

 

(551)

 

(1,423)

 

(1,728)

Additions to intangible assets

(39)

 

(45)

 

(126)

 

(163)

Business acquisitions, net of cash acquired

(17)

 

(74)

 

(233)

 

(911)

Proceeds from disposal of investment in MOPCO

540

 

-

 

540

 

-

Proceeds from disposal of discontinued operations, net of tax

-

 

-

 

-

 

55

Purchase of investments

(23)

 

(34)

 

(102)

 

(198)

Other

40

 

39

 

140

 

147

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

5

 

(665)

 

(1,204)

 

(2,798)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Transaction costs on long-term debt

-

 

-

 

(15)

 

(29)

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

(1,493)

 

(1,318)

 

(892)

 

216

Proceeds from long-term debt

21

 

-

 

1,541

 

1,510

Repayment of long-term debt

(2)

 

-

 

(509)

 

(1,010)

Repayment of principal portion of lease liabilities

(71)

 

(68)

 

(274)

 

(234)

Dividends paid

(259)

 

(258)

 

(1,030)

 

(1,022)

Repurchase of common shares

-

 

-

 

(160)

 

(1,930)

Issuance of common shares

-

 

2

 

-

 

20

CASH USED IN FINANCING ACTIVITIES

(1,804)

 

(1,642)

 

(1,339)

 

(2,479)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND

CASH EQUIVALENTS

10

 

(9)

 

3

 

(31)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

989

 

103

 

783

 

(1,643)

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

465

 

568

 

671

 

2,314

CASH AND CASH EQUIVALENTS – END OF PERIOD

1,454

 

671

 

1,454

 

671

Cash and cash equivalents comprised of:

 

 

 

 

 

 

 

Cash

1,375

 

532

 

1,375

 

532

Short-term investments

79

 

139

 

79

 

139

 

1,454

 

671

 

1,454

 

671

SUPPLEMENTAL CASH FLOWS INFORMATION

 

 

 

 

 

 

 

Interest paid

164

 

152

 

498

 

505

Income taxes paid

64

 

28

 

156

 

29

Total cash outflow for leases

79

 

92

 

345

 

345

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Changes in Shareholders’ Equity

 

 

 

 

 

 

 

Accumulated Other Comprehensive (Loss) Income ("AOCI")

 

 

 

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial

 

Loss on

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Fair

 

Gain on

 

Currency

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

Value

 

Defined

 

Translation

 

 

 

 

 

 

 

 

 

Common

 

Share

 

Contributed

 

Loss on

 

Benefit

 

of Foreign

 

 

 

Total

 

Retained

 

Total

 

Shares

 

Capital

 

Surplus

 

Investments

 

Plans 1

 

Operations

 

Other

 

AOCI

 

Earnings

 

Equity 2

BALANCE – DECEMBER 31, 2018

608,535,477

 

16,740

 

231

 

(7)

 

-

 

(251)

 

(33)

 

(291)

 

7,745

 

24,425

Net earnings

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

992

 

992

Other comprehensive (loss) income

-

 

-

 

-

 

(25)

 

7

 

47

 

7

 

36

 

-

 

36

Shares repurchased

(36,067,323)

 

(992)

 

-

 

-

 

-

 

-

 

-

 

-

 

(886)

 

(1,878)

Dividends declared

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(754)

 

(754)

Effect of share-based compensation including

issuance of common shares

474,655

 

23

 

17

 

-

 

-

 

-

 

-

 

-

 

-

 

40

Transfer of net loss on sale of investment

-

 

-

 

-

 

3

 

-

 

-

 

-

 

3

 

(3)

 

-

Transfer of net loss on cash flow hedges

-

 

-

 

-

 

-

 

-

 

-

 

8

 

8

 

-

 

8

Transfer of net actuarial gain on defined benefit plans

-

 

-

 

-

 

-

 

(7)

 

-

 

-

 

(7)

 

7

 

-

BALANCE – DECEMBER 31, 2019

572,942,809

 

15,771

 

248

 

(29)

 

-

 

(204)

 

(18)

 

(251)

 

7,101

 

22,869

Net earnings

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

459

 

459

Other comprehensive (loss) income

-

 

-

 

-

 

(7)

 

75

 

142

 

(16)

 

194

 

-

 

194

Shares repurchased

(3,832,580)

 

(105)

 

(55)

 

-

 

-

 

-

 

-

 

-

 

-

 

(160)

Dividends declared

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,029)

 

(1,029)

Effect of share-based compensation including

issuance of common shares

150,177

 

7

 

12

 

-

 

-

 

-

 

-

 

-

 

-

 

19

Transfer of net loss on cash flow hedges

-

 

-

 

-

 

-

 

-

 

-

 

13

 

13

 

-

 

13

Transfer of net actuarial gain on defined benefit plans

-

 

-

 

-

 

-

 

(75)

 

-

 

-

 

(75)

 

75

 

-

BALANCE – DECEMBER 31, 2020

569,260,406

 

15,673

 

205

 

(36)

 

-

 

(62)

 

(21)

 

(119)

 

6,606

 

22,365

1 Any amounts incurred during a period were transferred to retained earnings at each period-end. Therefore, no balance exists at the beginning or end of period.

2 All equity transactions were attributable to common shareholders.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Balance Sheets

 

December 31

 

December 31

As at

2020

 

2019

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

1,454

 

671

Receivables

3,581

 

3,542

Inventories

4,930

 

4,975

Prepaid expenses and other current assets

1,505

 

1,477

 

11,470

 

10,665

Non-current assets

 

 

 

Property, plant and equipment

19,660

 

20,335

Goodwill

12,198

 

11,986

Other intangible assets

2,388

 

2,428

Investments

562

 

821

Other assets

914

 

564

TOTAL ASSETS

47,192

 

46,799

LIABILITIES

 

 

 

Current liabilities

 

 

 

Short-term debt

159

 

976

Current portion of long-term debt

14

 

502

Current portion of lease liabilities

249

 

214

Payables and accrued charges

8,058

 

7,437

 

8,480

 

9,129

Non-current liabilities

 

 

 

Long-term debt

10,047

 

8,553

Lease liabilities

891

 

859

Deferred income tax liabilities

3,149

 

3,145

Pension and other post-retirement benefit liabilities

454

 

433

Asset retirement obligations and accrued environmental costs

1,597

 

1,650

Other non-current liabilities

209

 

161

TOTAL LIABILITIES

24,827

 

23,930

SHAREHOLDERS’ EQUITY

 

 

 

Share capital

15,673

 

15,771

Contributed surplus

205

 

248

Accumulated other comprehensive loss

(119)

 

(251)

Retained earnings

6,606

 

7,101

TOTAL SHAREHOLDERS’ EQUITY

22,365

 

22,869

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

47,192

 

46,799

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Notes to the Condensed Consolidated Financial Statements

As at and for the Three and Twelve Months Ended December 31, 2020

NOTE 1 BASIS OF PRESENTATION

Nutrien Ltd. (collectively with its subsidiaries, known as “Nutrien”, “we”, “us”, “our” or “the Company”) is the world’s largest provider of crop inputs and services. Nutrien plays a critical role in helping growers around the globe increase food production in a sustainable manner.

Our accounting policies are in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The accounting policies and methods of computation used in preparing these unaudited condensed consolidated financial statements are consistent with those used in the preparation of our 2019 annual consolidated financial statements. These unaudited condensed consolidated financial statements include the accounts of Nutrien and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with our 2019 annual consolidated financial statements. Our 2020 annual consolidated financial statements, which are expected to be issued in February 2021, will include additional information under IFRS.

Certain immaterial 2019 figures have been reclassified in the condensed consolidated statements of earnings (loss) and segment information.

In management’s opinion, the unaudited condensed consolidated financial statements include all adjustments necessary to fairly present such information in all material respects.

NOTE 2 SEGMENT INFORMATION

The Company has four reportable operating segments: Retail Ag Solutions (“Retail”), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seed and merchandise, and it provides services directly to growers through a network of farm centers in North America, South America and Australia. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that each produce. Sales reported under our Corporate and Others segment primarily relates to our non-core Canadian business, which was sold in 2020.

In the third quarter of 2020, the Chief Operating Decision Maker changed the measure used to evaluate the performance of our operating segments from net earnings (loss) before finance costs, income taxes, and depreciation and amortization (“EBITDA”) to adjusted EBITDA. Adjusted EBITDA provides a better indication of the segment’s performance as it excludes the impact of impairments and other costs that are centrally managed by our corporate function. Due to the change in the measurement of the segments, we have presented adjusted EBITDA for the comparative periods.

 

 

Three Months Ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

Retail

 

Potash

 

Nitrogen

 

Phosphate

 

and Others

 

Eliminations

 

Consolidated

Sales

– third party

2,608

 

467

 

647

 

318

 

12

 

-

 

4,052

 

– intersegment

10

 

57

 

147

 

56

 

-

 

(270)

 

-

Sales

– total

2,618

 

524

 

794

 

374

 

12

 

(270)

 

4,052

Freight, transportation and distribution

-

 

74

 

125

 

54

 

-

 

(51)

 

202

Net sales

2,618

 

450

 

669

 

320

 

12

 

(219)

 

3,850

Cost of goods sold

1,733

 

305

 

557

 

304

 

11

 

(225)

 

2,685

Gross margin

885

 

145

 

112

 

16

 

1

 

6

 

1,165

Selling expenses

727

 

2

 

8

 

2

 

(7)

 

-

 

732

General and administrative expenses

33

 

2

 

1

 

3

 

78

 

-

 

117

Provincial mining and other taxes

-

 

40

 

-

 

-

 

1

 

-

 

41

Share-based compensation expense

-

 

-

 

-

 

-

 

60

 

-

 

60

Impairment of assets

-

 

1

 

-

 

-

 

-

 

-

 

1

Other expenses (income)

8

 

4

 

(263)

 

(13)

 

75

 

-

 

(189)

Earnings (loss) before finance costs and

income taxes

117

 

96

 

366

 

24

 

(206)

 

6

 

403

Depreciation and amortization

180

 

123

 

146

 

39

 

11

 

-

 

499

EBITDA

297

 

219

 

512

 

63

 

(195)

 

6

 

902

Acquisition and integration related costs

-

 

-

 

4

 

-

 

18

 

-

 

22

Share-based compensation expense

-

 

-

 

-

 

-

 

60

 

-

 

60

Impairment of assets

-

 

1

 

-

 

-

 

-

 

-

 

1

COVID-19 related expenses

-

 

-

 

-

 

-

 

18

 

-

 

18

Foreign exchange loss, net of

related derivatives

-

 

-

 

-

 

-

 

15

 

-

 

15

Net gain on disposal of investment in

MOPCO

-

 

-

 

(250)

 

-

 

-

 

-

 

(250)

Adjusted EBITDA

297

 

220

 

266

 

63

 

(84)

 

6

 

768

Assets – at December 31, 2020

20,526

 

12,032

 

10,612

 

1,462

 

2,983

 

(423)

 

47,192

 

 

Three Months Ended December 31, 2019

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

Retail

 

Potash

 

Nitrogen

 

Phosphate

 

and Others

 

Eliminations

 

Consolidated

Sales

– third party

2,181

 

374

 

575

 

298

 

34

 

-

 

3,462

 

– intersegment

10

 

29

 

125

 

43

 

-

 

(207)

 

-

Sales

– total

2,191

 

403

 

700

 

341

 

34

 

(207)

 

3,462

Freight, transportation and distribution

-

 

53

 

97

 

54

 

-

 

(32)

 

172

Net sales

2,191

 

350

 

603

 

287

 

34

 

(175)

 

3,290

Cost of goods sold

1,435

 

211

 

496

 

281

 

34

 

(201)

 

2,256

Gross margin

756

 

139

 

107

 

6

 

-

 

26

 

1,034

Selling expenses

668

 

2

 

4

 

-

 

(4)

 

-

 

670

General and administrative expenses

30

 

6

 

4

 

4

 

73

 

-

 

117

Provincial mining and other taxes

-

 

50

 

-

 

-

 

(11)

 

-

 

39

Share-based compensation expense

-

 

-

 

-

 

-

 

9

 

-

 

9

Impairment of assets

-

 

-

 

-

 

-

 

87

 

-

 

87

Other (income) expenses

(11)

 

(2)

 

(19)

 

5

 

76

 

-

 

49

Earnings (loss) before finance costs and

income taxes

69

 

83

 

118

 

(3)

 

(230)

 

26

 

63

Depreciation and amortization

162

 

66

 

141

 

57

 

10

 

-

 

436

EBITDA

231

 

149

 

259

 

54

 

(220)

 

26

 

499

Merger and related costs

-

 

-

 

-

 

-

 

25

 

-

 

25

Acquisition and integration related costs

-

 

-

 

-

 

-

 

16

 

-

 

16

Share-based compensation expense

-

 

-

 

-

 

-

 

9

 

-

 

9

Impairment of assets

-

 

-

 

-

 

-

 

87

 

-

 

87

Foreign exchange loss, net of

related derivatives

-

 

-

 

-

 

-

 

28

 

-

 

28

Adjusted EBITDA

231

 

149

 

259

 

54

 

(55)

 

26

 

664

Assets – at December 31, 2019

19,990

 

11,696

 

10,991

 

2,198

 

2,129

 

(205)

 

46,799

 

 

 

Twelve Months Ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

Retail

 

Potash

 

Nitrogen

 

Phosphate

 

and Others

 

Eliminations

 

Consolidated

Sales

– third party

14,748

 

2,265

 

2,572

 

1,241

 

82

 

-

 

20,908

 

– intersegment

37

 

248

 

628

 

202

 

-

 

(1,115)

 

-

Sales

– total

14,785

 

2,513

 

3,200

 

1,443

 

82

 

(1,115)

 

20,908

Freight, transportation and distribution

-

 

367

 

460

 

241

 

-

 

(213)

 

855

Net sales

14,785

 

2,146

 

2,740

 

1,202

 

82

 

(902)

 

20,053

Cost of goods sold

11,049

 

1,183

 

2,265

 

1,166

 

74

 

(923)

 

14,814

Gross margin

3,736

 

963

 

475

 

36

 

8

 

21

 

5,239

Selling expenses

2,795

 

9

 

27

 

6

 

(24)

 

-

 

2,813

General and administrative expenses

135

 

7

 

8

 

10

 

269

 

-

 

429

Provincial mining and other taxes

-

 

201

 

1

 

-

 

2

 

-

 

204

Share-based compensation expense

-

 

-

 

-

 

-

 

69

 

-

 

69

Impairment of assets

-

 

23

 

27

 

769

 

5

 

-

 

824

Other expenses (income)

44

 

8

 

(288)

 

6

 

228

 

-

 

(2)

Earnings (loss) before finance costs and

income taxes

762

 

715

 

700

 

(755)

 

(541)

 

21

 

902

Depreciation and amortization

668

 

452

 

599

 

218

 

52

 

-

 

1,989

EBITDA

1,430

 

1,167

 

1,299

 

(537)

 

(489)

 

21

 

2,891

Acquisition and integration related costs

-

 

-

 

4

 

-

 

56

 

-

 

60

Share-based compensation expense

-

 

-

 

-

 

-

 

69

 

-

 

69

Impairment of assets

-

 

23

 

27

 

769

 

5

 

-

 

824

COVID-19 related expenses

-

 

-

 

-

 

-

 

48

 

-

 

48

Foreign exchange loss, net of

related derivatives

-

 

-

 

-

 

-

 

19

 

-

 

19

Loss on disposal of business

-

 

-

 

-

 

-

 

6

 

-

 

6

Net gain on disposal of investment in