In case there's any doubt, this is a USD target. GLTA

September 1, 2022 Company Update

Lunch With CEO, Ken Seitz
Our Conclusion

We hosted NTR’s CEO, Ken Seitz, for a group investor call earlier today.
Overall, the tone of the call was positive with NTR noting strong grower
economics (U.S. corn/soybean margins ~90%/60% above 10-year average),
and F2022 guidance being “possibly conservative” given nitrogen prices are
likely to rise vs. current levels. NTR expects the combination of meaningful
crop, energy and fertilizer supply-side constraints to extend into F2023,
which provides a continued strong backdrop from a crop nutrient pricing
perspective (note, F2023 consensus adj. EBITDA of $12.5B implies an ~20%
Y/Y decline). We maintain our Outperformer rating and $112 price target.

Key Points
2022 Guidance Could Be Conservative / Nitrogen Prices Likely To Rise:
Recall that NTR had trimmed its F2022 guidance (mid-point adj. EBITDA of
$14.0B-$15.5B; consensus $14.85B) along with Q2/22 results to reflect the
impact of lower nitrogen prices and higher gas production costs. But given
the spike in European gas prices to $80-$90/MMBtu, resulting in over 50% of
ammonia (and ~40% of urea) European capacity to be shutdown/curtailed
(as illustrated in Exhibit 1), nitrogen prices are likely to move higher vs.
current levels.

Higher Degree Of Conviction That Potash Markets Will Remain Supply-
Constrained: During Q2/22 reporting, NTR noted that it expects F2023
Russian exports to be down 5%-20% and Belarus shipments to still be down
30%-50% vs. F2021 levels. Based on recent developments, NTR confirmed
that it has a higher degree of conviction in these estimates today (and likely
at the higher end of the range of curtailments). NTR gives a low probability of
Lithuania providing Klaipeda port (historically handled 9Mt-11Mt/year of
potash) access to Belarus, and new Russian port capacity will take years to
build. While Belarus is looking to containerize potash shipments from the St.
Petersburg port, this is extremely challenging to do at any large scale.
Despite slow U.S. summer potash volumes (adding to recent price softness),
demand should pick up ahead for fall application. Further, Brazil still needs
4Mt-5Mt for the balance of the season. China and India port stocks are about
1.75Mt (1.5Mt is strategic reserve) and less than 0.5Mt, respectively. NTR
expects both countries to start contract talks before year-end given low
inventory levels.

Farmer Margins Significantly Above Historical Levels; Fall Application
Season Should Be Strong : NTR noted that U.S. corn and soybean farm
margins are ~90% and ~60% above 10-year average levels, respectively.
The company sees farmers continuing to invest in crop inputs and has not
seen farmers move away from proprietary (higher margin) to generic
products. Crop nutrient inventories for some parts of North America were as
much as 30%-40% higher than normal coming out of the compressed spring
planting season (adding to recent softness in fertilizer pricing). Heading into
U.S. fall application, NTR expects strong volumes, particularly for nitrogen.