Nutrien Ltd.

Greetings and welcome to Nutrien's 2023 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow after the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Jeff Halsman, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to Nutrien's Third Quarter 2023 Earnings Call. As we conduct this call, various statements that we make about future expectations, plans, and prospects contain forward-looking information. Certain material assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions are contained in our quarterly report to shareholders as well as our most recent annual report, MD&A, and annual information form filed with Canadian and U.S. Securities Commissions. I will now turn the call over to Ken Seitz, President Dio, and Pedro Farrar, our CFO, for opening comments before we take your questions.

Good morning, everyone, and thank you for joining us today. Nutrien delivered adjusted EBITDA of $1.1 billion in the third quarter and $5 billion through the first nine months of the year, down from the record comparable periods in 2022. We saw a number of positive market developments in the third quarter that are constructive for our business, including strong crop nutrient demand in North America and increased stability in global potash markets. In retail, North American crop nutrient sales volumes were up 5% in the third quarter and 10% on a year-to-date basis as growers were incentivized to maximize crop production. North American crop nutrient margins in the quarter increased by $10 per ton compared to the prior year, supported by improved margins for commodity fertilizers and growth in our proprietary crop nutritional and biostimulant products. These high-value proprietary products contributed nearly $350 million in gross margin through the first nine months of 2023. Crop protection sales in North America were down from the record prior year due to lower prices for certain commodity products and slightly lower sales volumes, a result of dry conditions in the US Midwest. We ended the quarter with North American crop protection inventories down more than $200 million from the prior year, and we will be patient with our approach to restocking inventories. Crop protection inventories in South America remained more elevated, resulting in pressure on prices and margins. Crop nutrient volumes for our South American retail business were up 25% in the third quarter due to improved grower demand and the benefits of our Casa do Adubo acquisition in the fourth quarter of 2022. Nutrient financial sales increased in the third quarter and first nine months of 2023 due to higher utilization of our financing offerings in the US, as well as the recent launch of our digitally enabled financing program in Australia. We are pleased with the uptake of our financing programs and see additional opportunity to drive organic growth for our retail business. In potash, we delivered record sales volumes, totaling 3.9 million tons in the third quarter. North American channel inventories were at multi-year lows entering the second half, and customers secured supply in anticipation of a strong fall application season. We had a very positive response to our summer fill program utilizing the strength of our distribution network to deliver 1.7 million tons to customers in North America. Our potash volumes and net realized prices were impacted by logistical challenges associated with the port strike in Vancouver and an outage at CampaTexas export terminal in Portland. Shipments through Vancouver returned to normal late in the quarter, and we expect the Portland terminal to be operational by the end of the year. We increased granular potash production to meet the surge in domestic demand, and our controllable cash cost declined to $56 per ton in the third quarter, highlighting the advantages of our low-cost six-mine network. Our nitrogen realized prices in the third quarter reflected the reset in benchmark values at the time of summer fill programs. Nitrogen sales volumes declined from the prior year due to production outages at our Trinidad Borger and Geismar plants. We completed two smaller brownfield expansions at our Geismar facility and installed the final of eight N2O abatement projects at our nitrogen sites, which we expect will be a key contributor to reducing our greenhouse gas emissions. Phosphate sales volumes increased in the third quarter due to a strong engagement from phosphate fertilizer customers. We did, however, encounter hurricane-related downtime in our White Springs facility that impacted production volumes and costs. Excluding this downtime, our phosphate plants have operated well following the completion of reliability initiatives in the first half of 2023. Now turning to the market outlook, global grain yields are projected to fall below trend in 2023 for the fourth consecutive year, limiting any meaningful recovery in stocks. New corn crop and soybean prices have incurred some seasonal pressure but remain 10 to 15% above the 10-year average. Fertilizer affordability has improved significantly over the past year, and projected grower cash margins are above historical average levels. Harvest in the U.S. has progressed ahead of average, providing an open window for fall fieldwork. We project U.S. fertilizer demand will be up 5 to 10% in the fourth quarter compared to the prior year. Global potash demand has increased in the second half driven by greater price stability and improved grower affordability, absorbing the gradual increase in Eastern European export volumes. We now forecast global potash shipments in the range of 65 to 67 million tons in 2023. We expect robust agricultural fundamentals and the need to replenish soil nutrient levels will support increased potash consumption in 2024. We project global potash shipments next year in the range of 67 to 71 million tons with the majority of year-over-year growth in Southeast Asia, Latin America, Europe and India. Global ammonia supply has been tight to start the fourth quarter due to outages in Europe and production challenges in other key regions. The area markets are relatively balanced as Chinese export restrictions and strong import demand in India offset weaker seasonal demand in other regions. Geopolitical conflicts have the potential to create additional volatility for global energy prices and nitrogen supply. Most notably, European natural gas prices have increased by 20% over the past month, and nitrogen production in Egypt has reportedly been curtailed due to gas availability. To summarize, agricultural fundamentals remain supportive and we are seeing strong demand for crop nutrients and from our grower customers. Global potash demand has strengthened in the second half of 2023 and we expect this trend will continue into 2024. And we anticipate constraints on global energy and nitrogen supply will continue to provide a positive backdrop for our low-cost nitrogen assets. I will now turn it over to Pedro to review our guidance assumptions and capital allocation plans.