Specialist
Former senior director at Nutrien Ltd
Agenda
- High crop prices and impacts to Nutrien (TSE: NTR)
- Demand for fertilisers in China
- Fertiliser sector competitive analysis
- Mixed impacts of the pandemic on Nutrien and tailwinds around agriculture
Questions
1.
Could you highlight the key trends that positively or negatively impacted the agricultural inputs market in 2020?
2.
How do you think importer stockpiling last year impacted fertiliser pricing, amid the sudden shock to supply chains and logistics systems across regions due to coronavirus? Have inventories normalised since?
3.
The UN FAO [Food and Agriculture Organization] Food Price Index reached a six-year high in November 2020 due to logistical bottlenecks and dry weather. How could soybeans reaching USD 13 per bushel affect Nutrien’s earnings?
4.
What would you say are the key advantages Nutrien has over its competitors given the issues growers face? What distinguishes the company to its customers?
5.
Nutrien agreed to sell its stake in Misr Fertilizers Production Co to the Egyptian government for about USD 540m in December 2020. What catalysed that decision? How could this impact Nutrien’s presence in the region?
6.
How would you characterise Nutrien’s relationships with its distributors and customers? How are those relationships evolving?
7.
Nutrien achieved a 13% increase in its adjusted EBITDA for the first nine months of 2020 compared to 2019. Its digital platform accounts for USD 1bn of total sales and 40% of North American sales. Would you say that margin growth was due in part to this customer behaviour shift?
8.
How might the transition to digital channels affect Nutrien’s customer acquisition strategy? Could the platform be valuable to customers globally?
9.
What effect could the US DoC [Department of Commerce] applying tariffs on Moroccan and Russian phosphate imports have on Nutrien and its US business? Might this create a sustained tailwind?
10.
What corn acreage do you expect to be planted in the next season, given the pricing explosion over the last month? Is there any historical context for the pricing behaviour we’re noticing around demand?
11.
Nutrien’s potash sales volumes increased in Q3 2020 YoY, yet its EBITDA contracted by around 19% – it managed to get the cash cost down to about USD 53 per tonne. Do you think these savings are durable? What challenges remain to redeeming some pricing strength?
12.
Could you elaborate on the potash tax in Saskatchewan? What decision-making might happen around this?
13.
Nutrien took a similar EBITDA hit in its nitrogen segment to its potash operations, which was attributed to lower pricing and industrial volumes. What gains could Nutrien realise after closing one of its ammonia plants in Trinidad? How do you think the short-term cost structure will change?
14.
Nutrien stated it doesn’t expect energy price rises to increase nitrogen production costs in key regions until 2023, given the company’s success in reducing (inaudible 24.46) for nitrogen. What are your thoughts on that assessment from the company?
15.
Nutrien’s EBITDA guidance for 2020 is set for (inaudible 26.30) USD 3.7bn (ph 26.32). Do you think the company could hit the higher end of its guidance with crop prices as high as they are? Could the company exceed guidance before the next year (ph 26.39) quarter?
16.
What are your thoughts on potential M&A in the US retail segment and the push in Brazil? How could these factors translate into growth and higher profitability for the segment?
17.
Could you comment on Nutrien’s potash export partnerships, including Canpotex? Do you think these company structures are sustainable?
18.
How much of a tailwind might the devastation of China’s pork industry by African swine fever provide to crop prices? Would you say this factor is already baked into market prices for crops and agricultural inputs?
19.
What’s your outlook on potash pricing? Vancouver Spot is down significantly YoY, so some forecasts are predicting a robust recovery soon. Do you agree with those assessments?
20.
Could you discuss Nutrien’s ESG initiatives around managing its carbon footprint in the agricultural industry?
21.
What are your thoughts on Nutrien’s leadership and how it’s approached business growth over the last couple of years?
22.
What long-term opportunities do you think Nutrien should explore, given 2021 seems to be a promising year for the sector?
23.
Could you highlight any potential challenges to Nutrien’s market share? Would you say there’s any real challenge to its growth strategy in Brazil?
24.
Who would you say are Nutrien’s major market share competitors? What are they competing on? Is it the price or the product offerings?
25.
Is there anything that we’re yet to discuss about Nutrien or the agricultural sector?
26.
How could Nutrien improve the retail business? What approach do you think the company will take around spending and capital deployment?
27.
Do you have any further commentary on Nutrien’s customer relationships? How could the company improve those relationships as it seeks to increase its distribution in South America?
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