Executive Summary / Key Takeaways

• Nutrien is strategically enhancing its integrated agricultural value chain, focusing on operational efficiency, cost optimization, and targeted growth initiatives to drive resilient earnings and free cash flow. This includes achieving its $200 million cost savings target a year early in 2025 and optimizing capital expenditures.
• The company's technological advancements, particularly in potash mine automation (over 40% of ore mined using automation in H1 2025) and nitrogen debottlenecking (adding 150,000 tonnes annual capacity), are key differentiators, contributing to cost leadership and increased production efficiency.
• Nutrien projects a constructive outlook for potash and nitrogen markets in 2025 and beyond, driven by strong global demand, tight supplies, and the affordability of potash, with raised guidance for potash sales volumes to 13.9-14.5 million tonnes.
• The Retail segment is undergoing a significant transformation, with a focus on proprietary products, network optimization, and a successful turnaround in Brazil, aiming for a full-year adjusted EBITDA of $1.65 billion to $1.85 billion.
• Disciplined capital allocation, including a stable and growing dividend and ratable share repurchases (approximately $45 million per month), underscores management's commitment to enhancing shareholder value amidst dynamic market conditions and geopolitical uncertainties.

Nutrien's Integrated Agricultural Powerhouse: A Foundation for Growth

Nutrien Ltd. stands as a global leader in crop inputs and services, deeply embedded in the agricultural value chain. With roots in potash production stretching back approximately 65 years, the company, incorporated in 2017, has built a formidable presence across potash, nitrogen, phosphate, and a vast retail network. This integrated model forms the bedrock of its strategy, enabling Nutrien to offer comprehensive solutions to growers worldwide. The industry landscape in 2025 is characterized by strengthening global fertilizer fundamentals, tight supplies, and evolving demand dynamics, all set against a backdrop of geopolitical events and trade disruptions that introduce volatility.

Nutrien's overarching strategy, articulated at its June 2024 Investor Day, is to structurally improve earnings and free cash flow by 2026. This involves strengthening its core business, optimizing its world-class asset base, and maintaining a disciplined approach to capital allocation. The company's foundational strengths lie in its extensive distribution network, integrated supply chain, and a commitment to low-cost production, which collectively position it competitively in a complex global market. Global grain stocks-to-use ratios remain historically low, providing a supportive environment for agricultural commodities and underpinning strong demand for crop inputs.

Technological Edge: Driving Efficiency and Innovation

Nutrien's commitment to technological differentiation is a cornerstone of its competitive strategy, driving both operational efficiency and product innovation. A prime example is the company's advanced mine automation projects in its potash segment. This core technology enhances efficiency, flexibility, and, critically, safety at its mining sites. In the first half of 2025, over 40% of Nutrien's potash ore was mined using automation, aligning with its ambitious target of 40% to 50% by 2026. This automation contributed to a 7% reduction in potash controllable cash cost per tonne in 2024 and helps the company track favorably against its goal of maintaining costs at or below $60 per tonne. The "so what" for investors is clear: this technological edge translates directly into cost leadership, strengthening Nutrien's competitive moat and improving profitability in its foundational potash business.

Beyond potash, Nutrien is advancing its nitrogen operations through brownfield debottlenecking efforts. These initiatives, now complete at the Redwater and Geismar plants, have added 150,000 tonnes of annual production capacity. Reliability projects across nitrogen sites have also yielded favorable results, with ammonia utilization rates reaching an impressive 98% in the first half of 2025. In its Retail segment, the company is expanding its proprietary products business, a key area of innovation. This includes the introduction of 12 new products in 2025, with plans for up to 20 more in 2026, alongside the launch of the "Infinity" product, a nitrogen enhancement tool. These innovations aim to provide growers with advanced solutions, enhancing Nutrien's market positioning and driving higher-margin sales. Furthermore, Nutrien achieved a 15% reduction in total Scope 1 and 2 GHG emissions intensity in 2024 compared to its 2018 baseline, demonstrating a commitment to sustainability through technological and product mix changes in its nitrogen business. These technological advancements collectively bolster Nutrien's competitive standing, allowing it to increase output, lower costs, and offer differentiated, value-added products to its customers.

Potash: A Foundation of Strength

Nutrien's Potash segment continues to demonstrate robust performance, serving as a critical pillar of the company's profitability. In the second quarter of 2025, the segment reported an adjusted EBITDA of $630 million, a notable increase from the prior year, driven by record sales volumes and higher offshore net selling prices. The North American net selling price, while down from Q2 2024, saw a sequential increase of $36 per tonne from Q1 2025. The company has raised its full-year potash sales volume guidance to a range of 13.9 million to 14.5 million tonnes, reflecting strong first-half sales and increased visibility into the second-half order book. Globally, Nutrien anticipates potash shipments of 73 million to 75 million tonnes for 2025, a testament to strengthening market fundamentals.

The competitive landscape for potash is characterized by strong demand that is testing global operating and supply chain capabilities, coupled with limited new capacity additions in the near term. Nutrien's management believes the market is in balance or close to it, with potash remaining the most affordable crop nutrient, stimulating demand. The company's extensive six-mine network and flexible supply chain, including its partnership in Canpotex, enable it to meet growing demand and maintain its market share, with an installed capacity of 15 million tonnes. While the first-half controllable cash cost of product manufactured was higher year-over-year due to lower planned production and increased turnaround costs, the company remains on track to keep costs at or below $60 per tonne. This cost efficiency, supported by mine automation, is a key competitive advantage against rivals like The Mosaic Company , which also has significant potash operations.

Nitrogen: Optimizing Production Amidst Volatility

The Nitrogen segment delivered an adjusted EBITDA of $667 million in the second quarter of 2025, an increase from the prior year, attributed to higher net selling prices and sales volumes. The segment's operational excellence is evident in its 98% ammonia utilization rate achieved in both Q2 and the first half of 2025. Despite scheduled maintenance at its Redwater and Borger nitrogen sites in Q3 2025, which will temporarily reduce planned second-half ammonia operating rates to around 85%, Nutrien maintains its full-year nitrogen sales volumes guidance at 10.7 million to 11.2 million tonnes.

Global nitrogen markets are supported by supply-side challenges and strong seasonal demand, particularly from India. U.S. nitrogen prices benefit from low domestic inventories and trade flow shifts, a trend expected to continue into the second half of 2025. Nutrien's low-cost nitrogen assets, especially its Western Canadian plants, are geographically advantaged due to lower natural gas costs compared to Henry Hub, providing a competitive edge against peers like CF Industries that are more exposed to Henry Hub volatility. Henry Hub natural gas prices are projected to average between $3.25 and $4.00 per MMBtu in 2025. The company's strategic initiatives aim to increase nitrogen volumes to 11.5 million to 12 million tonnes by 2026, driven by reliability improvements, debottlenecking projects, and enhanced gas utilization in Trinidad. This focus on operational efficiency and strategic capacity expansion positions Nutrien to capitalize on tight global nitrogen markets, where supply disruptions and project delays continue to support firm prices.

Phosphate: Tight Markets and Strategic Adjustments

Nutrien's Phosphate segment generated an adjusted EBITDA of $92 million in the second quarter of 2025. While net selling prices were higher, this was offset by lower sales volumes and increased sulfur input costs. The company completed two successful turnarounds in Q2, which are expected to position the business for increased sales volumes and lower operating costs in the second half of 2025. This follows a first quarter where adjusted EBITDA was $61 million, impacted by lower production volumes and higher input costs.

Phosphate markets remain tight due to limited supply, including ongoing Chinese export restrictions. Global shipments in 2025 are expected to be constrained by supply availability, and there is a potential risk that weaker grower affordability could impact demand. Management acknowledges that phosphate prices are elevated, driven by strong demand and supply-side issues, and expects these strong fundamentals to persist through 2025. The tightening sulfur market, with prices reaching $270 a tonne in Q2 2025, has contributed to higher input costs, though management expects a more normal relationship with phosphate pricing in the second half of the year. While Nutrien faces production challenges in the first half of 2025, the planned turnarounds at its White Springs and Aurora sites are critical for improving reliability and operational rates in the latter half, ensuring the company can meet demand in this supply-constrained market.

Retail: The Direct Link to the Grower

The Retail segment is a cornerstone of Nutrien's integrated strategy, providing a direct connection to growers and offering a diversified revenue stream. In the second quarter of 2025, Retail adjusted EBITDA reached $1.15 billion, a 2% increase from the prior year, primarily driven by strong crop input demand in the U.S. Corn Belt. This performance was achieved despite some headwinds, including unfavorable crop protection product mix shifts, dry weather in Australia, and wet weather in the Southern U.S., which also led to a reduction in proprietary seed sales due to a loss of rice and cotton acres.

Nutrien's full-year Retail adjusted EBITDA guidance is maintained at $1.65 billion to $1.85 billion. The midpoint of this guidance is supported by several key factors: strong North American crop input demand in July, anticipated higher crop nutritional and crop protection purchases in Q3, a projected 5% increase in fall fertilizer volumes in North America (assuming an open fall season), improved winter crop planting prospects in Australia, and the ongoing success of the Brazil margin improvement plan. In Brazil, the improvement plan is on track, involving headcount reductions, inventory management, and the shuttering of blenders, with the goal of achieving breakeven or positive EBITDA in 2025 and continued improvement into 2026. This strategic focus on network optimization and expense reduction led to a 6% reduction in Retail expenses in the first half of 2025. Nutrien's proprietary products business, including plant nutritionals and biologicals, is a key growth driver, with management expecting significant growth from this segment over the next two years. This direct-to-grower model and focus on value-added products provide a competitive advantage against more commodity-focused rivals, fostering stronger customer relationships and offering a more resilient earnings profile.

Financial Fortitude and Disciplined Capital Allocation

Nutrien's financial performance in the first half of 2025 reflects its strategic execution and supportive market fundamentals. The company delivered adjusted EBITDA of $2.5 billion in Q2 2025, an 11% increase from the prior year, with cash provided by operating activities rising by 40%. For the full year 2024, Nutrien reported an adjusted EBITDA of $5.4 billion, demonstrating resilience despite lower fertilizer prices, which were offset by increased downstream retail earnings, higher upstream fertilizer volumes, and lower costs. The company's TTM Gross Profit Margin stands at 29.18%, with an Operating Profit Margin of 10.57% and an EBITDA Margin of 19.22%. Net Profit Margin is 5.25%, and Free Cash Flow per share is $3.51.

Capital allocation remains a core tenet of Nutrien's strategy. Capital expenditures in the first half of 2025 were 18% below the prior year, as the company optimized spending to sustain operations and advance targeted growth projects. The 2025 capital expenditure guidance is optimized to a range of $2.0 billion to $2.1 billion, with $400 million to $500 million earmarked for growth initiatives. Nutrien is ahead of schedule on its company-wide $200 million cost savings target, now expected to be achieved in 2025, a year earlier than planned. This focus on efficiency and cost control is a key driver of free cash flow.

Shareholder returns are a priority, with $786 million allocated to dividends and share repurchases in the first half of 2025, a 49% increase from the prior year. The company maintains a stable and growing dividend, with an annualized payment of approximately $1 billion, supported by significant share count reduction over time. Share repurchases are being conducted on a ratable basis, at approximately $45 million per month, which management views as an attractive use of capital to enhance free cash flow per share. Furthermore, Nutrien continues to optimize its portfolio through divestitures, including the sale of its remaining stake in Sinofert (0297.HK) for $223 million (Q4 2024/Q1 2025) and the recent agreement to sell its 50% equity position in Profertil S.A. for approximately $600 million, announced on September 8, 2025. These actions underscore a disciplined approach to capital management, aimed at maximizing long-term value for shareholders.

Outlook and Key Guidance: A Path to Enhanced Value

Nutrien's outlook for the remainder of 2025 and into 2026 is constructive, underpinned by strengthening global fertilizer market fundamentals and the execution of its strategic priorities. The company has raised its 2025 full-year global potash shipment forecast to 73 million to 75 million tonnes, reflecting robust demand and tight supply. Potash sales volume guidance for Nutrien is 13.9 million to 14.5 million tonnes. Beyond 2025, management anticipates continued demand growth in line with historical trends and limited new capacity additions in the potash market.

For nitrogen, the company maintains its sales volume guidance at 10.7 million to 11.2 million tonnes, expecting higher year-over-year operating rates on a full-year basis. Henry Hub natural gas prices are projected to average between $3.25 and $4.00 per MMBtu in 2025. The Retail segment's full-year adjusted EBITDA guidance remains at $1.65 billion to $1.85 billion, with the midpoint supported by strong North American crop input demand, anticipated higher crop nutritional and crop protection purchases, and an expected 5% increase in fall fertilizer volumes. The Brazil improvement plan is on track to achieve breakeven or positive EBITDA in 2025, with continued recovery expected in 2026. Phosphate is also expected to deliver increased sales volumes and lower operating costs in the second half of 2025 following planned turnarounds.

These projections are supported by strong agricultural fundamentals, including an expected 1% to 3% increase in Brazilian soybean acreage in 2025 and the need to replenish soil nutrients after large harvests. Nutrien's ability to achieve its $200 million cost savings target a year early in 2025 provides additional financial flexibility and demonstrates effective operational management. The company's strategic roadmap, including its technological advancements and disciplined capital allocation, is designed to capitalize on these favorable market conditions and drive sustainable growth in earnings and free cash flow per share.

Addressing Headwinds: Risks and Competitive Responses

While Nutrien's outlook is constructive, the company operates within a dynamic environment that presents several risks and challenges. Pressure on agricultural commodity prices, such as corn and soybeans, can impact farmer margins and, consequently, crop input demand. Weather-related events, including dry conditions in Australia and wet weather in the Southern U.S., have already affected retail sales and proprietary seed volumes. Geopolitical events and trade disruptions, such as potential tariffs on Canadian potash exports to the U.S. or supply challenges out of the FSU and Middle East for nitrogen, introduce uncertainty and can impact supply chains and costs. Nutrien's management, however, believes that the cost of any tariffs on Canadian potash would ultimately be borne by the U.S. farmer.

The competitive landscape is also evolving. In potash, while Nutrien benefits from its scale and low-cost position, the industry faces project delays and operational challenges that can constrain global supply. In nitrogen, while Nutrien's low-cost North American assets are advantaged, the market experiences volatility in natural gas prices and competition from generic crop protection products. Nutrien's strategy to counter these competitive forces includes leveraging its extensive, integrated retail distribution network, which fosters strong customer relationships and allows for bundled offerings that differentiate it from more specialized competitors like The Mosaic Company (MOS) or CF Industries (CF). The company's focus on proprietary products and technological innovation, such as mine automation and nitrogen debottlenecking, enhances its cost leadership and product differentiation. Nutrien's disciplined capital allocation and continuous portfolio optimization, including divestitures of non-core assets, further strengthen its financial resilience and ability to respond to market shifts.

Conclusion

Nutrien Ltd. is executing a compelling investment thesis centered on operational excellence, strategic growth, and disciplined capital management within the essential agricultural inputs sector. The company's integrated business model, spanning potash, nitrogen, phosphate, and a robust retail network, provides a resilient foundation in a dynamic global market. Through significant advancements in potash mine automation and nitrogen production efficiency, coupled with a strong focus on proprietary product innovation, Nutrien is solidifying its cost leadership and expanding its capacity to meet growing global demand.

The outlook for 2025 remains constructive, with raised potash volume guidance and stable projections for nitrogen and retail, underpinned by favorable agricultural fundamentals and effective cost management. Nutrien's commitment to returning capital to shareholders through a stable dividend and ratable share repurchases, alongside strategic divestitures, underscores its disciplined approach to value creation. While geopolitical risks and commodity price volatility persist, Nutrien's strong competitive positioning, driven by its integrated supply chain, technological differentiation, and direct grower relationships, positions the company for sustained earnings and free cash flow growth, making it a compelling consideration for discerning investors.

References

Nutrien's 2025 Second Quarter Earnings Call Transcript.
Nutrien's 2025 First Quarter Earnings Call Transcript.
Nutrien Announces Agreement for Sale of Equity Position in Profertil S.A. (2025-09-08).
TTM Key Metrics (incl. Market Cap & Shares Outstanding) for NTR (from yfinance).