Nutrien Ltd
Materials
North America
Investment summary

Nutrien, one of the largest global fertiliser producers, was formed as a result of the merger between PotashCorp Saskatchewan and Agrium. The company sells over 27mt of potash, phosphates, and nitrogen fertilisers. The retail network includes over 2,000 shops in seven countries. The company gets access to farmers via over 3,400 crop advisors and agronomists. Nutrien's potash capacity of over 20mt is located at six lower-cost potash mines in Saskatchewan. Nutrien is the third-largest nitrogen producer in the world with over 7mt of gross ammonia capacity. The company can produce 11mt of total nitrogen products in the US, Canada, and Trinidad. In the phosphate segment, the company operates two large integrated phosphate mining and processing facilities and four plants in the US. Potash sales volumes are expected in the range of 13.0-13.8mt in 2024 compared to 13.2mt in 2023, nitrogen sales ... Nutrien, one of the largest global fertiliser producers, was formed as a result of the merger between PotashCorp Saskatchewan and Agrium. The company sells over 27mt of potash, phosphates, and nitrogen fertilisers. The retail network includes over 2,000 shops in seven countries. The company gets access to farmers via over 3,400 crop advisors and agronomists. Nutrien's potash capacity of over 20mt is located at six lower-cost potash mines in Saskatchewan. Nutrien is the third-largest nitrogen producer in the world with over 7mt of gross ammonia capacity. The company can produce 11mt of total nitrogen products in the US, Canada, and Trinidad. In the phosphate segment, the company operates two large integrated phosphate mining and processing facilities and four plants in the US. Potash sales volumes are expected in the range of 13.0-13.8mt in 2024 compared to 13.2mt in 2023, nitrogen sales volumes in the range of 10.6-11.2mt vs 10.4mt in 2023, and phosphate sales volumes in the range of 2.6-2.8mt vs 2.6mt a year ago. The higher anticipated volumes suggest low inventories in distribution channels. The company plans to cut capex from $2.7bn in 2023 to $2.2-2.3bn. Nutrien completed mine operation projects in Potash, targeting mid-cycle sales volume scenario of 14-15mt. Nutrien’s nitrogen facilities are upgraded via brownfield projects to reach mid-cycle sales volumes of 11.5-12.0mt. Overall, FY24 guidance looks neutral to positive, with potash and phosphate price levels in Asia remaining key uncertainties.

Details
Ticker
NTR.N
Trading currency
USD
Last close price, (currency)
60.33
Common shares outstanding
494,551,730
Preferred shares
MktCap, (currency) mn
29,833
Target price
54.30
Current opinion
HOLD
Description

Nutrien is a Canada-based company, one of the largest global producers of crop nutrients. The Company operates through four segments: Nutrien Ag Solutions (Retail), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds and merchandise, and it provides services directly to growers through a network of farm centers in North America, South America and Australia. Its Retail business includes Nutrien Ag Solutions and Landmark Retail businesses, which provide agricultural solutions, including nutrients, crop protection products, seed, services and agronomic advice to growers. The Potash, Nitrogen and Phosphate segments are differentiated by... Nutrien is a Canada-based company, one of the largest global producers of crop nutrients. The Company operates through four segments: Nutrien Ag Solutions (Retail), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds and merchandise, and it provides services directly to growers through a network of farm centers in North America, South America and Australia. Its Retail business includes Nutrien Ag Solutions and Landmark Retail businesses, which provide agricultural solutions, including nutrients, crop protection products, seed, services and agronomic advice to growers. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrients contained in the products that it produces. The Company produces and distributes over 27 million tons of potash, nitrogen and phosphate products for agricultural, industrial and feed customers worldwide.

Industry view (TAM)

The global fertiliser market experienced an essential price increase across the product range in 2022 and has seen some correction in 1H23. In 2H23, the demand improved after a period of destocking and under-utilisation. Global fertiliser prices stabilised in 2H23.

Pros
  1. Strong market position due to large own capacities and own retail chain  
  2. Access to final customers in key markets via own retail chain helps to stabilize margin through cycle  
  3. Self-sufficiency in phosphate feedstock and high nitrogen capacity
  4. Dominance in export potash markets due to high scale of export volumes
  5. Large own nitrogen capacities  
  6. Growing fertiliser demand in the medium and long-term, driven by population growth
  7. The company plans to extend its production capabilities in nitroegn and potash
Cons
  1. Exposure to gas and energy cost growth and volatility
  2. Risk of market share reduction in Asia due to geopolitical changes
  3. The potential downside for fertiliser prices once the war conflict in Eastern Europe abates
  4. Cost inflation
  5. The risk of Chinese exports increase in phosphate and nitrogen segments
Risks
  1. Energy price volatility
  2. Weakening demand of farmers due to delayed season, decreasing margin, and other factors
  3. Cost inflation
  4. Geopolitical risks
  5. Risks of potential oversupply from low-cost regions
Historical price chart
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Peer Group (top 5)

Company RIC Market Capitalization, $mn Last reporting year P/E Fwd 1Y P/E Fwd 2Y EV/EBITDA 1Y fwd EV/EBITDA 2Y fwd EV/Revenues 1y fwd EV/Revenues 2y fwd
Nutrien Ltd NTR.N 26,501 2023-12-31 13.4 12.0 6.7 6.6 1.4 1.4
Mosaic Co MOS.N 10,297 2023-12-31 10.6 11.1 5.7 6.1 1.1 1.1
CF Industries Holdings Inc CF.N 15,508 2023-12-31 13.2 13.3 7.7 8.0 3.2 3.1
ICL Group Ltd ICL.TA 6,822 2022-12-31 13.7 11.2 6.6 5.9 1.3 1.2
Yara International ASA YAR.OL 8,110 2023-12-31 12.0 9.6 5.4 5.0 0.7 0.7
K&S AG SDFGn.DE 2,804 2023-12-31 38.1 17.2 3.9 3.2 0.6 0.6
Financials
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Revenue 18,169 19,636 20,084 20,908 27,712 37,884 29,056 30,529 31,905 33,448
Growth 8% 2% 4% 33% 37% -23% 5% 5% 5%
EBITDA 2,412 2,006 3,661 2,891 6,732 12,804 4,914 5,729 5,872 5,991
EBITDA margin 13.3% 10.2% 18.2% 13.8% 24.3% 33.8% 16.9% 18.8% 18.4% 17.9%
Net income 656 -31 992 459 3,179 7,687 1,282 944 1,000 1,022
Net margin 3.6% -0.2% 4.9% 2.2% 11.5% 20.3% 4.4% 3.1% 3.1% 3.1%
Net debt 9,134 6,889 9,360 8,752 8,582 9,281 9,787 8,686 7,893 7,112
MktCap 29,841 29,155 27,593 42,808 30,529 30,529 30,529 30,529 30,529

Historical Multiples

2018 2019 2020 2021 2022 2023 2024 2025 2026
EV/Revenue 1.9 1.9 1.7 1.9 1.1 1.4 1.3 1.2 1.1
EV/EBITDA 18.3 10.5 12.6 7.6 3.1 8.2 6.8 6.5 6.3
P/E -962.6 29.4 60.1 13.5 4.0 23.8 32.3 30.5 29.9
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