Nutrien Ltd. (NTR) Earnings Call Transcript

Good afternoon. My name is Jeff Holzman, Nutrien's Vice President, Investor Relations. Before the start of today's meeting, we would like to outline the agenda and various procedures and guidelines. In terms of agenda, our Chair, Russ Girling will call the meeting to order and address various preliminary matters. This will be followed by a brief address from Ken Seitz, our President and CEO. The items of business to be voted on will then be moved to be followed by a formal discussion and a brief shareholder question-and-answer session. Registered shareholders and proxyholders of record are now able to submit comments or questions via the messaging platform on your screen, and the electronic ballot for voting is also now available on your screen. You are encouraged to submit any comments or questions and complete your ballot in advance of the Q&A session. Voting will then close, and the Chair will report the voting results. During the formal discussion and Q&A portion of the meeting, comments or questions will be read aloud before being addressed. And the name of the submitting shareholder or proxyholder may be disclosed. Comments or questions that are redundant or are otherwise unduly disruptive to the orderly conduct of the meeting will not be addressed, and questions that are not part of the formal discussion of the meeting's items of business may not be addressed. If during the course of the meeting, we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as possible. Finally, I would like to remind everyone that today's meeting may include forward-looking statements. These statements are given as of today's date and involve risks and uncertainties discussed in our filings with securities regulators. A number of factors and assumptions were applied in the formulation of such statements and actual results could differ materially. For additional information with respect to forward-looking statements, factors and assumptions, we direct you to Nutrien's public filings. I will now turn things over to Russ.

Thank you, Jeff, and good afternoon, and welcome to this Annual Meeting of Nutrien. My name is Russ Girling, and I am Chair of the Board of Directors. Thanks again, Jeff, for outlining today's agenda, procedures and the guidelines. The meeting will now come to order. As Chair of the Board, I will act as Chair of this meeting. In the event that I'm disconnected from the meeting as a result of a technical issue, Mr. Seitz will assume the role of Chair of the meeting. Bob Kirkpatrick, the Corporation's Corporate Secretary, will act as Secretary for this meeting. With the concurrence of the meeting, I appoint Jennifer Oliver of Computershare Investor Services Inc. to act as a scrutineer. I have been informed by the scrutineer that we have shareholders present or represented by proxy who hold a sufficient number of shares to constitute a quorum. I, therefore, declare that there is a quorum at this meeting. The scrutineers' report will be kept by the Secretary with the records of this meeting. This year, Nutrien used notice and access to deliver its annual financial statements and meeting materials. And as a result, the notice of meeting and the proxy -- management proxy circular are accessible on Nutrien's website under Nutrien's profile on SEDAR+ and EDGAR. I've received the affidavits of publication of the record date for this meeting and of the distribution of notice and access notice and the proxy form. I direct that a copy of the notice, together with proof of service be kept by the Secretary with the records of this meeting. I now declare the meeting regularly called and properly constituted for the transaction of business. Ken Seitz, our President and Chief Executive Officer, will now provide a few comments.

Thank you, Russ, and good afternoon, everyone. Nutrien operates the most extensive crop inputs and services ecosystem in the world, reaching through the ag value chain. This includes the largest global fertilizer production business, a distribution network that supports the movement of millions of tonnes of product each year and a downstream retail business that provides access and insights right down to the farmers' field. We believe this network provides distinct advantages to respond faster and more efficiently to the needs of farmers around the world. As we reflect on the past year, I am proud of the progress we made on a number of strategic initiatives that strengthen our business and position the company for future growth. I would like to highlight a few of those achievements. In retail, we continue to develop new and innovative ways to serve the needs of our customers. A great example of this is our proprietary products business that contributes to grow through differentiated product offerings and expanded manufacturing capacity. These high-value products enhance yield and environmental performance for the farmer and support margin growth for Nutrien. Our global proprietary products portfolio contributed $1 billion in gross margin in 2023, and we plan to further expand our capabilities in this area. We established a global commercial organization in late 2022 with a single point of accountability for delivering best-in-class customer service, supply chain efficiencies and margin optimization opportunities across our value chain. The commercial team executed on a number of opportunities that supported fertilizer netbacks in a volatile market environment and record sales volumes to North American customers in the second half of 2023. This included capturing incremental value by delivering record potash volumes through Nutrien Ag Solutions in North America. We operate a low-cost, flexible 6-mine potash network with access to the best geology in the world. In 2023, we increased our annual potash ore tonnes cut using autonomous mining technology by 40%, improving the safety and efficiency of our operations. In nitrogen, we completed a GHG abatement projects in 2023, a multi-year capital program that will be a key contributor to reducing our greenhouse gas emissions. We also completed major maintenance turnarounds at our Geismar and Borger sites that are expected to support increased operating rates going forward. As we look ahead to our priorities for 2024, we continue to focus on initiatives that enhance our ability to serve growers in our core markets, maintain the low-cost position and reliability of our assets and position the company for growth. We are planning for capital expenditures of $2.2 billion to $2.3 billion in 2024, including approximately $500 million of investing capital. Approximately half of this investment capital is for initiatives that support organic growth in our core retail geographies. This includes projects that expand our proprietary products portfolio, drive network optimization and enhance our digital capabilities. The focus in our fertilizer operations is to [ remain ] a low-cost position and drive efficiencies through mine automation and potash and reliability improvements at our nitrogen facilities. We expect to achieve more than 1 million tonnes of annual nitrogen volume growth through the completion of high-return brownfield expansion projects and reliability initiatives over the next few years. Additionally, we have capability to increase our potash sales volumes by 1 million to 2 million tonnes per year compared to 2023 levels as demand for potash grows. Across our business, we continue to build strong relationships with our customers, partners, suppliers and the communities we serve while focusing on initiatives that create long-term value for our shareholders. I invite you to listen to our first quarter 2024 earnings call tomorrow morning at 10:00 a.m. Eastern Time, where we will provide more details on our financial performance and our outlook for the business. I will now turn things back over to Russ.

Thank you, Ken. The next matter on the agenda is the presentation of the comparative consolidated financial statements for the year ended December 31, 2023, and the report of the auditors. In accordance with the Canada Business Corporations Act, the statements are presented to the meeting but no further action is required with respect to them. It is now in order to move today's formal business items. I will move each item, and I have been advised by Mr. Seitz and Mr. Kirkpatrick, both proxyholders in attendance today, that they would be prepared to second each of the motions. I so move accordingly. Unless there are any objections, I will take such motions as seconded and no further action needed. Voting on the applicable of business to come before today's meeting is being conducted by a single electronic ballot that is now available, and voting will close approximately 30 seconds following the conclusion of the formal discussion. Once the voting closes, the scrutineer will tabulate the results of the vote for each matter. All items of business identified in the notice of meeting will now be moved, first, with the election of directors. The management proxy circular sets forth the background of each of the nominees and the qualifications considered in making director nominations. This year, the 12 candidates listed in the management proxy circular will be nominated for election today. We have 1 first-time nominee, Julie Legacy, and the 11 nominees are all elected -- were all elected at Nutrien's 2023 Annual Meeting. Today's meeting marks the retirement of Alice Laberge from the Board of Director, having served as a director of Nutrien and its predecessor since 2003. We sincerely thank Alice for her many contributions and wish her all the best in the future. The proposed nominees for election today are Christopher Burley, Maura Clark, Michael Hennigan, Miranda Hubbs, Raj Kushwaha, Julie Legacy, Consuelo Madre, Keith Martell, Aaron Regent, Ken Seitz, Nelson Silva and me, Russ Girling. Thank you to all the nominees for agreeing to stand for election today. I move to formally nominate as a director each of the proposed nominees. As there are no new nominations in accordance with the advance notice requirements of the company's general bylaws, I declare the nominations closed. I also move to elect each of the 12 named individuals as directors of the corporation. As advised earlier, I will take such motions as seconded. Formal discussion, if any, will take place once all of the items of business identified in the notice of meeting have been moved. The next matter on the agenda is the appointment of the auditors. I move that a resolution be approved reappointing KPMG LLP Chartered Accountants as auditors of the corporation to hold office until the close of the next annual meeting or until a successor is appointed and take such motion as seconded. The next item of business for the meeting today is the consideration and approval of the nonbinding advisory resolution accepting the corporation's approach to executive compensation disclosed in the management proxy circular. I move that such resolution be approved and take such motion as seconded. The motions are now open for formal discussion, and general shareholder questions will now be answered. Jeff, please read any comments or questions that need to be addressed.

There are no comments or questions to be addressed, so I'll turn it back over to Russ.

Discussion of the items of business and our general Q&A is now closed. Accordingly, there are now 30 seconds remaining to complete your ballot. After which, your ballot for -- your ballot will be automatically submitted. As a reminder, you can vote for or the election of each of the 12 director nominees, for or withhold in respect of the appointment of KPMG and for or against the nonbinding advisory resolution regarding Nutrien's approach to executive compensation. Music will now play in the background during this final voting period. [Voting]

Based on the proxy tabulation results provided by the scrutineer regarding the matters to be voted on, with respect to the resolutions regarding the election of each of the individuals nominated as directors, I declare that each of the 12 nominees is elected as a director of the corporation. With respect to the resolution reappointing KPMG LLP as auditors of the corporation, I declare this resolution carried. With respect to the nonbinding advisory resolution accepting the corporation's approach to executive compensation, I declare this motion carried -- this resolution carried. There being no further business, I move that the meeting be terminated and take such motion as seconded, and I declare the motion carried and the meeting terminated. Thank you all very much for taking the time to join our meeting today and your continued support of Nutrien. Have a great day.