Nutrien Q2 2025 Earnings Report

Nutrien EPS Results

• Actual EPS: $2.65
• Consensus EPS: $2.41
• Beat/Miss: Beat by +$0.24
• One Year Ago EPS: $2.34

Nutrien Revenue Results

• Actual Revenue: $10.30 billion
• Expected Revenue: $10.40 billion
• Beat/Miss: Missed by -$98.58 million
• YoY Revenue Growth: +2.80%

Nutrien Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 10:00AM ET

Nutrien (NYSE:NTR) provides crop inputs and services. The company operates through four segments: Retail, Potash, Nitrogen, and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds, and merchandise products. The Potash segment provides granular and standard potash products. The Nitrogen segment offers ammonia, urea, environmentally smart nitrogen, nitrogen solutions, nitrates, and sulfates. The Phosphate segment provides solid fertilizer, liquid fertilizer, and industrial and feed products. In addition, it provides services directly to growers through a network of farm centers in North America, South America, and Australia. The company is headquartered in Saskatoon, Canada.

Nutrien Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We raised our 2025 full-year potash sales volume guidance to 13.9–14.5 million tonnes, driven by strong first-half orders and summer fill program commitments.
• Positive Sentiment: First-half results included record potash sales volumes and a 98% ammonia utilization rate, boosting adjusted EBITDA by 11% and operating cash flow by 40% year-over-year.
• Positive Sentiment: Retail segment expenses fell by 6% and capital expenditures were 18% lower, putting us ahead of schedule on our $200 million cost savings target for 2025.
• Negative Sentiment: Turnaround maintenance at our Redwater and Borger nitrogen plants in Q3 will reduce ammonia operating rates to around 85% in the second half, potentially affecting segment output.
• Negative Sentiment: Phosphate markets remain tight amid limited supply and Chinese export restrictions, and weaker grower affordability could constrain demand and pressure pricing.

Presentation

[Operator]

Greetings and welcome to Nutrien's twenty twenty five second quarter earnings call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holtzman, Senior Vice President of Investor Relations and FP and A.

[Jeff Holzman, SVP - IR and FP&A at Nutrien]

Thank you, operator. Good morning, and welcome to Nutrien's second quarter twenty twenty five earnings call. As we conduct this call, various statements that we make about future expectations, plans, and prospects contain forward looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward looking information.

[Jeff Holzman, SVP - IR and FP&A at Nutrien]

Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD and A, and annual information form. I will now turn the call over to Ken Seitz, Nutrien's president and CEO, and Mark Thompson, our CFO, for opening comments.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Good morning. Thank you for joining us today as we review our performance in the 2025, progress on our strategic priorities, and the outlook for our business. Our first half results featured record potash sales volumes and nitrogen operating rates, lower expenses, reduced capital expenditures, and increased returns of cash to our shareholders. We raised our 2025 full year guidance for potash sales volumes while maintaining all other operational guidance ranges. At our Investor Day in June 2024, we communicated a pathway to structurally improve our earnings and free cash flow through strategic initiatives across the portfolio.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We also shared key operational and financial targets to measure our progress. Our results through the 2025 demonstrated significant progress towards achieving these goals. Starting with our upstream operating segments, we increased fertilizer sales volumes by more than 400,000 tons compared to the same period last year and realized higher net selling prices. These results highlight the capabilities of our world class operations, extensive distribution network, and strong customer relationships that were built over many decades. We continue to prioritize investments that further strengthen our ability to to cost effectively supply the growing needs of our customers.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

In potash, this includes advancing mine automation projects that enhance efficiency, flexibility, and most importantly, safety benefits at our sites. In the 2025, we mined over 40% of our potash ore using automation. This is within our 40 to 50% target range for 2026. Our nitrogen operations performed exceptionally well in the first half, achieving a 98% ammonia utilization rate. The focus on reliability projects at our nitrogen sites have yielded clear and favorable results.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Further, brownfield debottlenecking efforts are now complete at our Redwater and Geismar plants that will add 150,000 tons of annual production capacity. Within our downstream retail segment, well defined growth opportunities continue to be progressed along with network optimization initiatives that resulted in a 6% reduction in expenses in the first half. As previously communicated, we are ahead of schedule on our company wide $200,000,000 cost savings target and expect to achieve this goal in 2025. Capital expenditures in the 2025 were 18% below the prior year as we optimized capital to sustain safe and reliable operations and progress a set of targeted growth projects. We allocated $786,000,000 to dividends and share repurchases in the first half, representing a 49% increase from the prior year.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

To put this all together, Nutrien generated higher earnings and cash from operations driven by supportive fertilizer market fundamentals and execution of our strategic priorities. We lowered costs and capital expenditures through efforts to simplify and focus our business, and we significantly increased the distribution of cash to shareholders. We believe these actions build upon the strength of our world class asset base and position the company for strong performance into the future. Now turning to the market outlook. Global fertilizer fundamentals have strengthened in 2025, leading to higher benchmark prices across nearly all products.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Potash prices increased at a steady pace since the beginning of the year, driven by trend demand growth that is testing global operating and supply chain capabilities. The settlement of potash contracts with India and China and favorable economics for key crops grown in Southeast Asia is expected to support demand in standard grade markets in the 2025. We had a solid uptake on our potash summer fill program in North America and anticipate stable demand in Brazil. As a result, we have raised our 2025 full year global potash shipment forecast to 73 to 75,000,000 tons. Beyond 2025, we see a constructive outlook for the potash market.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We expect demand growth in line with historical trend levels and limited new capacity additions in the near term. Recent industry announcements further highlight that building new capacity requires significant time and capital and often comes with the risk of delays. Global nitrogen markets are being supported by supply side challenges and strong seasonal demand from markets such as India. Nitrogen prices in The US have been further supported by low domestic inventories and trade flow shifts, which we anticipate continuing in the 2025. Phosphate markets remain tight due to limited supply, including Chinese export restrictions.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We expect global shipments in 2025 will be constrained by supply availability, and a weaker grower affordability for phosphate fertilizer could impact demand. We continue to closely monitor supply and demand developments for ag commodities and farmer sentiment in our key markets. Crop input demand in North America was strong in July as farmers focused on maintaining optimal plant health and yield potential. Based on current projected crop yields, we expect large nutrient removal will support the need to replenish nutrients in the soil. Brazilian soybean acreage is expected to increase by one to 3% in 2025, driven by strong international soybean demand.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Growers in Brazil have been more active purchasing crop inputs in advance of the upcoming spring planting season compared to the prior two years. Overall, we continue to see a solid backdrop for our business in the 2025 and are well positioned to serve our customers. We operate to the most extensive network of assets across the ag value chain and will continue to focus on factors under our control to optimize free cash flow under any market conditions. I will now turn it over to Mark to review our results, full year guidance, and capital allocation priorities in more detail.

[Mark Thompson, EVP & CFO at Nutrien]

Thanks, Ken. As Ken described, our second quarter and first half results highlight strong pace of progress towards our Investor Day targets. Nutrien delivered adjusted EBITDA of $2,500,000,000 in the second quarter, up 11% from the prior year, while cash provided by operating activities rose by 40%. In potash, we generated adjusted EBITDA of $630,000,000 in the second quarter, well above the prior year due to record sales volumes and higher offshore net selling prices. Our North American net selling price was down from the same quarter in 2024, but up $36 per tonne from the 2025 as we benefited from price increases following our winter fill program.

[Mark Thompson, EVP & CFO at Nutrien]

Our first half controllable cash cost of product manufactured was higher than the prior year due to lower planned potash production and increased turnaround costs. However, we continue to track favorably against our goal of maintaining a controllable cash cost that is at or below $60 per tonne. We raised our full year potash sales volume guidance to 13,900,000 to 14,500,000 tonnes due to the strength of first half sales and increased visibility on the second half order book. Canpotex is fully committed for third quarter sales volumes and has a significant order book in place for the fourth quarter. We had a favorable response to our domestic summer fill program and anticipate a similar split between offshore and domestic sales volumes in the third quarter compared to the prior year.

[Mark Thompson, EVP & CFO at Nutrien]

Our nitrogen operating segment generated adjusted EBITDA of $667,000,000 in the second quarter, up from last year due to higher net selling prices and sales volumes. Our nitrogen plants operated very well, achieving a 98% ammonia operating rate in both the quarter and the first half. We have maintenance scheduled at our Redwater and Borger Nitrogen sites starting in the third quarter that will reduce our planned second half ammonia operating rates to around 85. Overall, we anticipate higher year over year operating rates on a full year basis and have maintained our nitrogen sales volumes guidance at 10,700,000 to 11,200,000 tonnes. In phosphate, we generated adjusted EBITDA of $92,000,000 in the second quarter, with higher net selling prices offset by lower sales volumes and higher sulfur input costs.

[Mark Thompson, EVP & CFO at Nutrien]

We completed two successful turnarounds in the second quarter and have operated at higher rates since the completion of this planned maintenance, positioning our phosphate business to deliver increased sales volumes and lower operating costs in the second half of the year. Our downstream retail business delivered adjusted EBITDA of $1,150,000,000 in the second quarter, up 2% from the prior year. We saw strong crop input demand in The US Corn Belt consistent with our previous view that a slower start to field activity in March would be made up in the second quarter. This strength was partially offset by unfavorable crop protection product mix shifts, dry weather in Australia and wet weather in the Southern U. S.

[Mark Thompson, EVP & CFO at Nutrien]

That impacted planted acres. A loss of rice and cotton acres in the South was a primary contributor to the reduction in our proprietary seed sales in the second quarter. We've maintained our full year retail adjusted EBITDA guidance of 1,650,000,000.00 to $1,850,000,000 with the midpoint of the range underpinned by four key items. First, as Ken mentioned, we saw strong North American crop input demand in July and anticipate higher crop nutritional and crop protection purchases in the third quarter compared to the prior year. Second, we assume an open fall season in North America and project fertilizer volumes up approximately five percent compared to last year, which had a shortened application window due to wet weather.

[Mark Thompson, EVP & CFO at Nutrien]

Third, timely rains have improved winter crop planting prospects in Australia, and the outlook for crop input demand looks more favorable for the second half of the year. Finally, our margin improvement plan in Brazil remains on track, and we expect to generate increased year over year earnings through network optimization initiatives. To summarize, we delivered higher earnings and cash flow in the first half of the year, and we see clear momentum for growth on a full year basis, supported by higher upstream fertilizer sales volumes, net selling prices and downstream retail earnings. In terms of capital allocation, our priorities remain consistent. We're focused on initiatives that support the achievement of our 2026 performance targets, optimizing investments in working capital and continuing to review non core assets on our balance sheet, all of which we expect will enhance sources of cash flow over time.

[Mark Thompson, EVP & CFO at Nutrien]

From a uses of cash perspective, we've committed capital to sustain safe and reliable operations and towards a narrow set of growth opportunities that have a strong fit with our strategy, are expected to provide returns in excess of our hurdle rates and have a relatively low degree of execution risk. We have a long track record of providing a stable and growing dividend and intend on enhancing the return of capital to shareholders through more ratable share buybacks through the cycle. We remain disciplined in our approach to maintain a strong balance sheet and prioritize capital towards opportunities that we expect will deliver long term growth in free cash flow per share. I'll now turn it back to Ken.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Thanks, Mark. We have a constructive outlook for our business as global fertilizer market fundamentals have tightened in 2025, supported by strong demand, persistent supply disruptions and project delays. We demonstrated strong operational performance and execution on our strategic priorities in the first half of the year, structurally improving Nutrien's earnings and free cash. We continue to strengthen our highly competitive asset base across the ag value chain and remain committed to disciplined capital allocation to maximize long term value for our shareholders. We would now be happy to take your questions.

[Operator]

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. The first question comes from Chris Parkinson from Wolfe Research. Please go ahead.

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

Thank you so much. In the beginning of the year, there's a little bit of a debate on potash supply being offline and the market and price appreciation be more of a supply driven market. And towards the end of the first half, it became more evident that it was more of a demand driven market. But it seems investors are still on edge given some belief that half on half supply is going to dramatically improve and basically curb upside to prices or even lead to declines. Can you just give us your updated thoughts on those specific dynamics, especially out of the FSU?

[Christopher Parkinson, Managing Director at Wolfe Research, LLC]

And then kind of how that sets up for the 2026 market? Thank you so much.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks, Chris. Yeah. So, you know, talking specifically about potash, if we you know, looking globally, we're seeing very strong demand. We saw a return to trend level demand last year coming out of '22 and '23, and that's certainly the case this year where we've raised our, our expectations for the market to 73 to 75,000,000 tons.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

So that would be, you know, the strongest demand that we've seen in the market. And, you know, we also have confidence that that potash is going to ground because we don't see inventories elevated really in any market around the world. And, actually, in in several cases, we see inventories below average levels. Part of that has to do with the fact that potash is still relatively affordable. It's, know, the most affordable crop nutrient.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And as you say, with that strong demand, it is testing the ability of the market to supply both in terms of mine production, but also the supply chain as well. And so at the intersection of that very strong demand and and what we're seeing on the supply side of the equation, which and you asked about FSU tons, we don't see any material change in FSU tons coming to to the potash market. At the intersection of those things, we see the strengthening that we've seen in the potash price, and we think we're in a in a good spot as it relates to the potash price. And here in the now, you know, we've had our summer fill program, which, we had strong uptake. We're fully committed in North America through q three and are now placing tons in q four at are up $20.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Similarly, in offshore markets, fully committed through Capitex through q three and heavily committed now into q four. So, again, that you know, very strong signpost that for 2025, you know, our 73 to 75,000,000 tonnes and our raised guidance, you know, that we have we're constructive on those things. It is true that we're looking at North America now for the balance of the year. And, obviously, with a very large corn crop that we're seeing in The US and and certainly a large crop in Brazil. We've seen some pressure on on ag commodity prices and farmer grower margins.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

At the same time, here into the third quarter, we have seen strong field activity. We've seen good engagement and strong demand. And, again, that's evidenced by our commitment levels in North America on potash, and certainly we're seeing some strength into the fall in nitrogen as well. So but your question was on potash. Put it all together, Chris.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We're you were constructive on 2025, and then your question about heading into 2026. Again, given where inventory levels are at, where we don't see elevated inventory levels that with with potash being affordable, growers are gonna be looking to replace the, you know, large amount of crop nutrients that are gonna be pulled out of the soil with this big crop.

[Operator]

Your next question comes from Andrew Wong from RBC Capital Markets.

[Andrew Wong, Equity Research Analyst - Fertilizers & Uranium at RBC Capital Markets]

Maybe just touching a little bit on what you just touched on. I think I know your answer on affordability. Like, what's your sense on farmer sentiment and health today, just given some of the recent softness there? And how does that, change in fertilizer affordability impact purchasing? And maybe more specific to just the dynamic between nitrogen, phosphate, and potash because the prices for all three have moved in different directions, which we haven't really seen for a very, very long time.

[Andrew Wong, Equity Research Analyst - Fertilizers & Uranium at RBC Capital Markets]

So how does that impact farmer decisions on what fertilizers to apply? Thank you.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks, Andrew. Yeah. And, certainly, as I mentioned, we are seeing some pressure on it on ag commodity prices, corn, soybeans, and and on grower margins. For for the first half of the year, things kinda played out the way we had expected in in the Corn Belt in the Western US and Canada and Brazil was really the Southern US where it was wet and and Australia where it was dry where, we saw some pressure, and, you know, we're feeling some of that now into the second quarter.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

That said, again, we're seeing strong uptake, in the third quarter and a lot and field activity. And and in Australia, while it was a slow start given a dry, you know, beginning of the planting season for their winter crop, they've gotten some rain in July here, which now we've seen increased activity. But I'll hand it over to Jeff to talk a little bit more about that, and then maybe, Chris, if you wanna talk about those dynamics between n, p, and k, you know, that sort of affordability discussion.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Yeah. Thanks, Ken. And as as you mentioned earlier, I mean, we continue to see very strong engagement from our growers, as we go into the third quarter. You know, if if I'm looking to areas that were not affected by weather in the first half of the year, then we would see most most of those regions have performed basically in line with what we thought. You mentioned the Corn Belt, our Western US business, Canada, and Brazil from that from that standpoint.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

You mentioned the Corn Belt specifically. We saw our tonnage up about 9% for the first half of the year. And as I look going into the third quarter, you know, we see again, we see growers investing dollars to protect their yields right now. And when you get in a low price environment, then growers are gonna really push for for yields in that type of environment, and we see that happening right now from a plant health standpoint and and from a nutritional standpoint.

[Chris Reynolds, EVP & Chief Commercial Officer at Nutrien]

Yeah. Thanks, Jeff. And Andrew, as we think about the domestic market and that balance between NPK, as Ken mentioned, we there is a big crop growing out there that's going to pull a lot of nutrients out of the ground. Our midstream customers are telling us they need to prepare for what they believe is gonna be a good fall application season. This crop is developing well.

[Chris Reynolds, EVP & Chief Commercial Officer at Nutrien]

We do believe that subject to weather, there'll be an open window there for growers to to get out and apply fertilizer in the fall, especially in the Midwest. And as Ken said, potash remains the most affordable nutrient. So what our customers are telling us is they're preparing for for a good fall across NPK. As you've noticed, yeah, these these nutrients have moved in different directions a little bit in terms of pricing, so we'll be watching how that's balanced in the fall. But overall, we're we're getting ready, and our customers are getting ready for a good fall application period.

[Operator]

Your next question comes from Joel Jackson from BMO Capital Markets. Please go ahead.

[Joel Jackson, MD - Equity Research at BMO Capital Markets]

Hi. If I could just harp on the retail demand or fall demand question in North America a little bit more. Like, I know that the biggest determinant I think I know that the biggest determinant of a fall season is just how big the how good the weather is, the open season comments you said, I know that. Okay. So are your comments just really about that?

[Joel Jackson, MD - Equity Research at BMO Capital Markets]

That it looks like the weather's gonna be good and that's the largest determinant of a fall season, not necessarily affordability? That's my first question. Okay. And the second question is just, as you think about, Brazil and retail, you know, how confident are you that you'll be able to shift next year, you know, to getting back to a $50.60, $7,080,000,000 dollar EBITDA run rate versus maybe breakeven this year, and what are the drivers to get there? Thanks.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Good. Well, thank you, Joel. And, you know, I think you've actually articulated that well that heading into the fall here, given the signposts that we're seeing and that we've talked about as it relates to good engagement so far in q three and with certainly, we saw that in July. And the crop that's coming off, that's going to, you know, pull a lot of, again, fertilizer, soil nutrients out of the ground. And and the discussions that we're having with our customers and where inventory levels are at, that given an open application season, yes, we we expect to have a a decent fall, but that's dependent on on weather exactly as you said.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We're expecting fertilizer volumes to be up 5% from last year. You may recall that we had a compressed application season last year. And so, you know, where the crop is at today and some some being harvested as we speak, things are pointing to an open an open fall, and that's good for seeing volumes go to ground. As it relates to Brazil, you know, what I'll say is our Brazil improvement plan is on track. We've talked about the decisions that we've made as it relates to shuttering of of plans.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We've reduced headcount there. Our focus on collections, focus on inventory management, and, and shuttering of blenders. All of those things now contributing for us to get to a sort of a breakeven, somewhat even perhaps positive EBITDA level here in 2025. And we expect that trend to continue into 2026 where, know, you obviously, the market needs to continue to cooperate, but, that we expect that we'll be in the positive next year.

[Operator]

Your next question comes from Ben Isaacson from Scotiabank. Please go ahead.

[Ben Isaacson, MD - Equity Research at Scotiabank]

Thank you very much and good morning. If we move past fall demand and start thinking about 2026, if corn and soy prices hold at about $4 and $10 respectively over the next little while, what are the risks to each of your segments if farmer economics stay where they are in The Americas? How much downside do you think we have in which divisions? And the reason why I'm asking is you talked about potash being affordable, but on the other hand, some would argue that potash is typically a lower ranked crop input. So I'm just trying to triangulate that. Thank you.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thank you for the question, Ben. And, yeah, it's true. We're I'm already starting to think about 2026, and, you know, growers will get this crop off, and they'll be looking to get ready for next year and another another big crop, and we'll see, you know, where corn and soybean prices are at. If but if we go commodity to commodity, again, we see ongoing strength in potash demand in the way it's been grow growing, as as I said earlier, on trend.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Heading it in into 2026, we believe that to be true as well. And it's just step change in demand in places like like China, Southeast Asia with 4,200 ring at palm oil prices and a mandate palm oil, clean fuel mandate of 40% moving from 35, you know, very strong demand in Southeast Asia. We look at Brazil where last year they consumed 47,000,000 tons of fertilizer. This year, it'll be 48,000,000 tons of fertilizer. And and so we can go market to market.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And, of course, North America, again, we see a lot of crop nutrients coming out of the soil. So on the demand side of the equation, we see strength. And then on the supply side, you know, I won't call it challenge, but we have seen project delays, and we have seen the ability of the market to meet these demand levels. And at that intersection, you know, we see where prices are at, and prices are strong. Prices are at a good place right now because, as I said earlier, it's affordable, but at the same time, you know, we we like to see volumes moving to our customers at these levels.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And so we see that carrying into 2026. On nitrogen, we've seen, again, strong demand, and the Indians having difficulty procuring urea while at the same time, Chinese limiting, urea exports and and certainly not getting back to sort of historic average levels out of that part of the world, which has meant strength in urea markets combined with some supply disruptions certainly out of The Middle East. And that would be true for ammonia where we, again, we see a bit of seasonal weakness at the moment, but given some challenges, supply challenges out of Russia and The Middle East and and some of the new project challenges out of Russia and the Gulf Coast, there's been supply issues there as well, and we'll see about European gas pricing as compared to North America where the delta is still 8 or $9. And, you know, again, you know, we we head into 2026, and we expect that those dynamics will persist. You know, I I think we can talk about phosphate.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And, yes, phosphate prices are elevated. We're watching for, you know, a grower reaction to higher prices here into the fall and how that translates into 2026. Again, strong demand, though, for phosphate and supply side issues. So you can go nutrient to nutrient and heading out to 2025 and 2026. We'll see, you know, how the international growers feeling.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We'll see what happens here in North America. But overall, Ben, we feel constructive.

[Operator]

Your next question comes from Vincent Andrews from Morgan Stanley. Please go ahead.

[Vincent Andrews, Managing Director at Morgan Stanley]

Thank you, and good morning, everyone. Wondering if you could talk a little about your own expectations for your potash production going into next year. It sounds like you're anticipating another year of shipment growth for the industry and the commentary for a while now has been that you're looking to take your traditional market share. So what what incremental capacity would you would you look to add into next year?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks, Vincent. And, you know, this year, you you'll you've seen our guidance range, which we've up, so just over 14,000,000 tons at the midpoint. And we would say that we look at the way we've built out, not just our mine production, but now our supply chains and ability to get to customers that you know, we have 15,000,000 tons of installed capacity, although not obviously staffing to those levels because the lead time for staffing is such that we can watch the market and as it evolves, you know, bring on operators to continue to liberate tonnes. That will be the same philosophy for next year where you can expect that as the market grows, and we've talked about this two and a half percent average annual growth rates on trend, which is where we are today, that we will grow with the market, maintain market share.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We will bring on those operators, and we will, we'll produce those trends. You know, again, we have the flexibility with our six mine network. We have made those investments in our supply chain to get to our customers. That gives us, you know, the flexibility to expand tons into this growing market.

[Operator]

Your next question comes from Steve Hansen from Raymond James. Please go ahead.

[Steve Hansen, MD & Equity Analyst - Transportation & Agribusiness at Raymond James Financial]

Yes. Good morning. Thanks for the time. Just a broader question about the portfolio. How do you feel about the portfolio from an optimization standpoint today?

[Steve Hansen, MD & Equity Analyst - Transportation & Agribusiness at Raymond James Financial]

You've gone through a process of divesting a few noncore items here in the South, not not not just recently. You know, is there more to do there on that front in terms of, like, further optimizing or streamlining the core versus noncore? You know, how do you view that as an opportunity, or is it even a priority to say? Thanks.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks for the question, Steve. And, you know, I will say we're probably never done at looking at the portfolio and understanding how to optimize, you know, free cash flow per share and and and return on those assets. Absolutely true that we have done quite a bit of work on that front already, whether it's the process that we're in in ProFertil right now, divesting of our shares in Sinafer, which we've talked about. We've actually gotten some rid of some smaller immaterial assets, some in Italy.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

We've sold a blender in Brazil. I just provide those as examples of us just continuing to to, really be rigorous across the portfolio, insist on insisting on performance, and not in a position today to talk about, you know, further portfolio changes and and how we're going to manage that. But what I can say is, yes, we're absolutely looking at opportunities to continue to upgrade that portfolio in the name of free cash flow per share and a return on those assets.

[Steve Hansen, MD & Equity Analyst - Transportation & Agribusiness at Raymond James Financial]

Appreciate the time.

[Operator]

Thank you. Your next question comes from Jeff Zekauskas from JPMorgan. Please go ahead.

[Jeffrey Zekauskas, Analyst at JP Morgan]

Thanks very much. Your gross profits per ton in North America and crop nutrients is, kind of flat even though the different commodities have performed pretty well. And in general, in your retail segment, you seem to be doing a good job of cutting SG and A costs, but not so much making progress on the gross margin. Is that just weather? Are you satisfied with your general performance?

[Jeffrey Zekauskas, Analyst at JP Morgan]

What are the dynamics around gross profits and s g and a levels?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thank you for the question, Jeff. And, yeah, there's a number of moving parts there. We are pleased with our progress certainly on the cost side of the equation, and, you know, there's more to do there. We know that, and and we expect carrying out through the balance of the year.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

That will be part of the story is ongoing focus and reductions in cost. But maybe I'll hand it over to Jeff to talk more about just margins on on fertilizers and and what we're seeing through the balance of the year.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Yeah. If I if I just walk through the segments, from a from a margin rate perspective, our crop protection margins actually were surprisingly a bit better than we anticipated, coming into this year through the first half, and we think we see an opportunity to expand that a bit more in the second half. If I look at our margins on, on fertilizer, if you look at it from a you look at it from a global basis, we're we are flat year over year, and that takes you gotta take into effect that we strategically made decisions in Brazil to lower our tonnage there and go to a different marketing direct marketing concept versus going through those blenders that we've mentioned several times that we idled. And that brings a lower margin profile, on those tons. I think we're down we we strategically plan to be down about 200,000 tons through the half, and that's basically what we're off from that standpoint.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

And we are in a, you know, as we talked about several times today, we're in a competitive environment. So I'm pleased with where we are today, from a margin perspective. I think as we get an opportunity to get more of our nutritionals into our mix, which, again, we've seen a very strong start in July, I think we'll see that margin per ton pick it up a bit. And then on the seed side, our margin rates on seed are in in line with our expectations as well. That was more of a volume story, but we're continuously working to try to get our margins up.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

You know, we we talk about the second half of the year, and we talk about controlling our controls. And, one aspect of that is is working to continue to expand our margins across all of our crop input sectors.

[Operator]

Your next question comes from Kristen Owen from Oppenheimer. Please go ahead.

[Kristen Owen, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.]

Hi, good morning. Thank you for the question. Somewhat of a double click or follow-up on that prior one. Speaking specifically to this EBITDA bridge for the first half of the year, you've noted the more favorable environment in July. I'm just wondering if there's anything here in this bridge, whether it's crop protection products or maybe even on the expenses that that shifts around in the back half of the year, anything that turns from a bad guy to a good guy?

[Kristen Owen, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.]

Just how to think about that bridge for the for the back half. Thank you.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. I I certainly, at the higher level, it's it's the things we've talked about, but I'll hand it over to Jeff, for that double click.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Yep. For the second half of the year, and I think I mentioned it just a minute ago, control or not control will be at at the top of our list. We also think, again, that we have an opportunity to convert more acres on on our foliar nutritionals, which, which which we really like a lot. We like our portfolio, as it relates to that. A heavy heavy focus on the expense side of things. I think through the first half, we were able to take 6% out.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

We we're gonna we we expect to continue, with that effort in the in the second half of the year. And, again, Ken mentioned Australia. We've got some, you know, we we had a very tough half from a weather perspective there. We see improvements there. We think that's gonna bring us some opportunities on the proprietary side of the business as well as we go into second half of the year.

[Operator]

Your next question comes from Edlain Rodriguez of Mizuho Securities. Please go ahead.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Thank you. Good morning, everyone. I mean, just quick question on potash, Ken. So, I mean, I think comment I have heard somebody say like, what is wrong with potash? As you note, it's surprisingly like the most affordable nutrient, lagging behind both phosphate and nitrogen.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

But seriously, do you prefer being in that position? Or do you want to close the price gap between potash and the other nutrients? And related to that, I I think like last week, we saw a small decline in potash prices in Brazil. I mean, that's like the first drop in almost a year. Does that mean anything to you, or you you just think it's just a blip?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. And then thank you for the question. So, you know, I we again, we're constructive on the potash market, and we we like when potash is affordable for growers. And when it is, we see, you know, record potash demand and consumption. That's what's playing out today.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And and, again, that meeting the supply side of the equation, that intersection clears the market at what has been kind of ten year average historic level potash prices. Those are healthy prices for us, and, again, we're constructive on that. So, you know, heading into the fall here, and we've talked about North America. But but globally, you know, whether it's Southeast Asia and and palm plantations or whether it's step change in China, what we're seeing in in on the macro level in Brazil and, yeah, North American fallout an open fall application season in North America. Like, our volumes are moving.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Our our mines are producing. Our unit cost of production is gonna be below $60. And, and, again, that's that's where we like to be. In Brazil, you know, they're getting ready to plant soybeans here in September. There's been a bit of a seasonal, lull in Brazil.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

That's true. We've seen a bit of softening in in the price, but we expect there's gonna be a lot of volume moving again and going to ground as they plant soybeans in that part of the world. So, overall, Elaine, I I certainly appreciate the question, but, no, we are constructive on where the potash market is today.

[Operator]

Your next question comes from Ariana Milin of CIBC Capital Markets. Please go ahead.

[Ariana Milin, Equity Research Associate at CIBC Capital Markets]

Good morning, and thank you for taking my question. With relatively better pricing for ammonia over upgraded nitrogen products in North America, do you see the potential for a shift to greater ammonia use as a source of nitrogen in the fall?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks for the question, Ariana. That's just no. But, Chris, do you wanna just explain that a bit?

[Chris Reynolds, EVP & Chief Commercial Officer at Nutrien]

Yeah. No. Good morning, Ariana. Thanks for the question. You know, the as we look at that fall, it'll be dependent on how growers are thinking about what they're gonna plant next year.

[Chris Reynolds, EVP & Chief Commercial Officer at Nutrien]

And if they're gonna put ammonia down in the fall, that would mean a commitment to to planting corn. So we'll we'll wait and see. I mean, sometimes these growers make this decision where on the on the combine and and what they're thinking about for next year. But we don't see a material shift in terms of the nitrogen product going down this fall. We think that will be at about average levels.

[Chris Reynolds, EVP & Chief Commercial Officer at Nutrien]

I would say that we are seeing low inventory levels of of UAN right now, and we are thinking that there's gonna be some strength in in that price as we look towards the fall season.

[Operator]

Your next question comes from Matthew Deo of Bank of America. Please go ahead.

[Matthew Deyoe, Senior Equity Research Analyst at Bank of America]

Good morning. Yeah. I apologize if I missed this earlier, but seed sales obviously pretty weak through one h in retail and maybe that's just cotton in the South or whatever. But as you think about or can you provide a little clarity on price volumes there? And then, you know, as we set up, for next year, assuming, more, you know, if it is the South, if weather is more cooperative, do we get a you see expect to get that volume back pretty pretty pretty well, I guess. Hold on. I'll leave it there.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. No, Matt. Thanks for the question. I I think you've said it. We did see some crop mix shifts in that part of the world.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

But, Jeff, do you wanna just dive into that a little bit?

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Yeah. Thanks, Ken. Yeah. The the seed revenue is 100%, around 2 factors. First, we saw significant prevent plant in our Southern region.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Our Southern region is our largest share of seed in, in North America. And, so when you have something like prevent plant, it can have a dramatic effect on, seed revenue. So those acres actually did not get planted. I would expect a 100% of that to return next year. You know, that forecasting that we would have a spring not unlike what we had this last year, which would in that area, was one of the wettest springs in the last 150.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

We also saw crop mix changes, and that's primarily around cotton. And due due to some of the economics around cotton in across the South, we saw a lot of cotton acres. If you're in Texas, a lot of cotton acres converted to sorghum or milo and, which is much less significant from a revenue perspective. We'll have to see year over year what, cotton commodity pricing does. I would anticipate in Texas, we would see some of those acres return, but it's it's it's way too early to predict that right now.

[Operator]

Your next question comes from David Simmons of BNP Paribas. Please go ahead.

[David Symonds, Analyst at Exane BNP Paribas]

Hi, good afternoon. Yes, if I could just come back on Jeff's question. If I look at the average selling price in the crop nutrients segment of retail, it's up 2% year on year, whilst into the third quarter, the potash NOLA benchmark, for example, is up 20% plus year on year. So is there a catch up pricing benefit in in the second half for retail?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Jeff, if you wanna take that?

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

Yeah. And and some of that some of that's reflected from a standpoint of you know, I've said this many times with this many tons as we move to these markets, we have to layer in our purchasing. And so we would have we it or to tail end of the season, we would have been buying into a into a market that was much higher price from that standpoint, and that affects that affects margins as well from that standpoint. We feel like we're we're well positioned going into the fall. We don't think we're overly aggressive, from that standpoint.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

You know, I'm gonna lead back to many of the things that were said here today. We we've talked a lot about having a a really large corn crop. We also have a really large soybean crop and, which removes a lot of nutrients as well. And, so we do see some opportunities. In the back half of the year, you know, we talked about it.

[Jeff Tarsi, EVP & President - Global Retail at Nutrien]

If we get an open if we get an open fall, then, we see an opportunity to move about 5% more volume in that into that market, and we hope we can do it, as well by expanding some margins.

[Operator]

Your next question comes from Lucas Beaumont of UBS Financial. Please go ahead.

[Lucas Beaumont, Director Equity Research Analyst at UBS Group]

Thank you. Good morning. Just going back to potash. So I mean, you've mentioned that you see have seen sort of some challenges in the market meeting the demand level this year from a supplier's perspective. So I think just looking to 2026, if we get another year of normal demand growth, where do you kind of see the supply coming from?

[Lucas Beaumont, Director Equity Research Analyst at UBS Group]

And if you think the market's gonna struggle to meet that and you wanna kind of maybe flex up and take more than your 20% share, when would you kinda need to push the button on those staffing decisions you mentioned? Thanks.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. Thanks for the question, Lucas. And, yes, you know, it continues to be the case that we've seen those FSU tons come back into the market. We've seen some new tons coming out of Laos, although the rate of growth out of those that part of the world has slowed. And we've seen, as we mentioned earlier, project delays that certainly are gonna impact next year and and beyond.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And so, you know, strong demand meeting supply. We'd kinda call the market in balance at the moment or close to being in balance and heading into next year. We've had to have a few other producers that can probably, on the margins, expand production a bit, and, certainly, we would be one of those as well, Lucas. And so, you know, I would say with with what we're intending for next year, which, you know, as I as I mentioned earlier, is is a strategy to maintain market share, grow with the market as it grows, meet the needs of our customers who are growing at that rate as well and and bringing on people to produce accordingly. That that's our plan.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

And, again, we expect to be in a strong market next year given the demand fundamentals and the fact that that supply is right around that demand level, will be right around that demand level, and certainly as project delays, you know, continue to persist.

[Operator]

Your next question comes from Ben Theurer of Barclays. Please go ahead.

[Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank]

Good morning, and thank you very much for taking my question. I wanted to follow-up real quick on capital allocation as we look into it. So you had a significant improvement in terms of free cash flow generation versus a year ago. But at the same time, it feels like there's a little bit of a slowdown the on the share repurchase program. So just want to understand, like, how you think about these purchases in in in regards to, like, just dividend versus investments and and share repurchases. Thank you.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Yeah. And thank you for the question, Ben. No. No slowdown on share repurchases. We've been buying at about the sort of $45,000,000 per month level, and I think for the balance of the year, that's that's a good way to think about it as we as the year has unfolded for us and and certainly as we continue to be quite constructive on how it's unfolding.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

You know, with with respect to sort of the broader philosophy around capital allocation, dividend, and share repurchases, I'll it over to Mark to provide more detail.

[Mark Thompson, EVP & CFO at Nutrien]

Yeah. Thanks, Ken. Good morning, Ben. Maybe just stepping back a bit, reiterate a couple of comments that both Ken and I have made this morning. I think, first and foremost, continue to focus on generating increasing structural sources of cash for the business.

[Mark Thompson, EVP & CFO at Nutrien]

So we continue to see strong operational performance, and that was evident here in the first half for us. So growing underlying earnings across the entire business in line with our investor day targets, we feel like we're making good progress on that. As Ken has also mentioned, and I have as well, continuing to look at a really rigorous approach to working capital optimization and shedding assets in the portfolio that don't generate the types of returns that we want. Over time, we think all of those things will grow cash. More specifically to your question on capital allocation, our priorities are consistent, and they haven't really changed.

[Mark Thompson, EVP & CFO at Nutrien]

So, again, if you look at our, CapEx profile of the year, 2 to 2,100,000,000.0 with, 4 to 500,000,000 of that focused on a very narrow set of growth priorities that we continue to execute against. And more specifically with respect to return of capital, as Ken said, as the philosophy is around share repurchases, really over the past year has been ratable buybacks over time, and we want that to be something that is a staple in our capital allocation framework over time and through cycles. As Ken mentioned, that roughly $45,000,000 per month run rate is something that we see as being sustainable and balanced through the remainder of the year. You mentioned the dividend. With respect to the dividend, the philosophy has also not changed there.

[Mark Thompson, EVP & CFO at Nutrien]

We like the absolute level of the dividend from a cash outlay standpoint, and we believe that as we continue to repurchase the stock of the company, we'll be able to grow dividends per share over time just as we have this year. Amongst all of that, we believe we can continue to strengthen the balance sheet. It continues to be just a disciplined, focused and balanced approach on capital allocation.

[Operator]

Your next question comes from Richard Garta Torena of Wells Fargo. Please go ahead.

[Richard Garchitorena, VP - Equity Research at Wells Fargo Securities]

Great. Thank you. Maybe just wanted to touch on the cost progress you've made, I'd say almost 200,000,000 in cost savings expected this year. Should we expect additional buckets? Do you see further upside potential in that target?

[Richard Garchitorena, VP - Equity Research at Wells Fargo Securities]

How are you thinking about additional cost savings in 'twenty six? Thanks.

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Thank you for the question, Richard. Yes. We had set ourselves a $200,000,000 cost reduction target by 2026, and it's really targeting SG and A. And, you know, thus far, we would say we're gonna certainly achieve that in 2025, so ahead of schedule. And how about half of that coming out of our retail business and about half of it coming out of our corporate s g and a?

[Ken Seitz, President & Chief Executive Officer at Nutrien]

Is there more to be done? The answer to that is also yes. And maybe I'll hand it over to Mark to provide a little more color.

[Mark Thompson, EVP & CFO at Nutrien]

Sure. Thanks, Ken. Good morning. As Ken said, we're beginning to see those expense rationalization activities really show through in our results. As we showed in our earnings presentation, if you look first half over first half, you can see over $100,000,000 or just over $100,000,000 in expense down versus last year in the first half.

[Mark Thompson, EVP & CFO at Nutrien]

So, yeah, I think there's tangible evidence that the efforts that we've made are showing through. And as Ken said, that's really been focused about 50% in the retail business across the rationalization activities we've undertaken in Brazil, closures of underperforming locations in North America, regional consolidation of storefronts and optimization in Australia, and in our corporate functions, just continuing to be disciplined about simplifying and focusing the organization, and that's resulted in SG and A opportunities. So as we continue to move forward, as Ken said, know, we're quite bullish. There's gonna be more opportunities for us as we continue to explore opportunities, and we'll have more to say on that in the future.

[Operator]

There are no further questions at this time. I will now turn the call back to Jeff Holtzman for closing remarks. Please go ahead.

[Jeff Holzman, SVP - IR and FP&A at Nutrien]

Hey. Thank you for joining us today. The investor relations team is available if you have any follow-up questions. Have a great day.

Participants

Executives

• Jeff Holzman, SVP - IR and FP&A
• Ken Seitz, President & Chief Executive Officer
• Mark Thompson, EVP & CFO
• Jeff Tarsi, EVP & President - Global Retail
• Chris Reynolds, EVP & Chief Commercial Officer

Analysts

• Christopher Parkinson, Managing Director at Wolfe Research, LLC
• Andrew Wong, Equity Research Analyst - Fertilizers & Uranium at RBC Capital Markets
• Joel Jackson, MD - Equity Research at BMO Capital Markets
• Ben Isaacson, MD - Equity Research at Scotiabank
• Vincent Andrews, Managing Director at Morgan Stanley
• Steve Hansen, MD & Equity Analyst - Transportation & Agribusiness at Raymond James Financial
• Jeffrey Zekauskas, Analyst at JP Morgan
• Kristen Owen, Executive Director & Senior Analyst at Oppenheimer & Co. Inc.
• Edlain Rodriguez, Equity Analyst at Mizuho Securities
• Ariana Milin, Equity Research Associate at CIBC Capital Markets
• Matthew Deyoe, Senior Equity Research Analyst at Bank of America
• David Symonds, Analyst at Exane BNP Paribas
• Lucas Beaumont, Director Equity Research Analyst at UBS Group
• Benjamin Theurer, Managing Director at Barclays Corporate & Investment Bank
• Richard Garchitorena, VP - Equity Research at Wells Fargo Securities