Q4 2021 Nutrien Ltd Earnings Call

Speaker 1: Greetings and welcome to Nutrien's fourth quarter.

Greetings greetings and welcome to nutrients fourth quarter.

Speaker 1: earnings call 2021 fourth quarter earnings call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder this conference is being recorded. I would now like to turn the conference over to Jeff Holzman, VP of investor relations.

Earnings call 2021 fourth quarter earnings call at this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded I would now like to turn the conference over to Jeff Hoffman VP of Investor Relations.

Speaker 2: Thank you, operator. Good morning and welcome to nutrients fourth quarter 2021 conference call.

Thank you operator, good morning, and welcome to nutrients fourth quarter of 2021 conference call.

Speaker 2: As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information.

As we conduct this call various statements that we make about future expectations plans and prospects contain forward looking information.

Speaker 2: Certain material assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions are contained in our current quarterly report to shareholders, as well as our most recent annual report, MD&A, an annual information form filed with Canadian and U.S. Securities Commission.

Certain material assumptions were applied in making these conclusions and forecasts. Therefore actual results could differ materially from those contained in our forward looking information additional information.

Information about these factors and assumptions are contained in our current quarterly report to shareholders as well as our most recent annual report MD&A and annual information form filed with Canadian and U S Securities Commission.

Speaker 2: I will now turn the call over to Ken Seitz, Interim President and CEO , and Pedro Farah, our CFO , for open comments before we take your questions.

I will now turn the call over to Ken Seitz interim President and CEO and Pedro Farah, our CFO for opening comments before we take your questions.

Thanks, Jeff.

Speaker 3: Good morning and welcome to Nutrients 4th Quarter Earnings Call. I look forward to recapping our 2021 results or outlook for the business in 2022 and how we are positioning the company to deliver superior long-term value for our shareholders.

Good morning, and welcome to nutrients fourth quarter earnings call I look forward to recapping, our 2021 results or outlook for the business in 2022, and how we are positioning the company to deliver superior long term value for our shareholders.

Speaker 3: 2021 was truly an extraordinary year. As the world continues to navigate through challenges related to the COVID-19 pandemic, supply chain disruptions, heightened concerns over global food security and the impacts of climate.

2021 was truly an extraordinary year as the world's continued to navigate through challenges challenges related to the COVID-19 pandemic supply chain disruptions heightened concerns over global food security and the impacts of climate change.

Speaker 3: Our strong performance this past year demonstrated that nutrient can positively address these challenges and deliver sustainable solutions that benefit all of our stakeholders.

Our strong performance this past year demonstrated that nutrient can positively address these challenges and delivered sustainable solutions that benefit all of our stakeholders.

Speaker 3: I'm proud to report that we achieved an all-time best safety performance in 2021 with no fatalities or life-voltering injuries.

I am proud to report that we achieved an all time best safety performance in 2021 with no fatalities or life altering injuries.

Speaker 3: To our employees listening today, a heartfelt thank you. Your commitment to safety and our culture of care has a meaningful impact on the well-being of all our colleagues at Nutrient and the communities where we live and operate. Now turning to our final.

To our employees listening today, a heartfelt. Thank you your commitment to safety and our culture of care is a meat has a meaningful impact on the well being of all our colleagues at nutrients in the communities, where we live and operate.

Now turning to our financial results and outlook.

Speaker 3: Adjusted ebids are nearly doubled to 7.1 billion in 2021, and we generated cash flow from operating activities of 3.9 billion.

Adjusted EBITDA nearly doubled to $7 1 billion in 2021, and we generated cash flow from operating activities of $3 9 billion.

Speaker 3: This performance was underpinned by the strong execution of our teams.

This performance was underpinned by the strong execution of our teams.

Speaker 3: Competitive advantages of our integrated business model and the benefit of a robust market fundamental.

Competitive advantages of our integrated business model and the benefit of a robust market fundamentals.

Speaker 3: Nutri-and-Ax solutions delivered record-adjusted EBITDA of more than 1.9 billion with strong earnings growth in each of our core geographies.

Nutrient AG solutions delivered record adjusted EBITDA of more than $1 9 billion with strong earnings growth in each of our core geographies.

Speaker 3: We continue to strengthen our direct relationship with the grower through the reliability of our supply chain, delivery of innovative products, expanded digital capabilities, and sustainability solutions.

We continued to strengthen our direct relationship with the grower through the reliability of our supply chain delivery of innovative products expanded digital capabilities and sustainability solutions.

Speaker 3: Our ability to deliver on each of these strategic initiatives was a major contributor to our robust organic growth in 2021.

Our ability to deliver on each of these strategic initiatives was a major contributor to our robust organic growth in 2021.

Speaker 3: Gross margin from our proprietary products increased by more than 20% in 2021, and now exceeds $1 billion.

Gross margin from our proprietary products increased by more than 20% in 2021, and now exceeds $1 billion.

Speaker 3: Retail business sold record fertilizer volumes due to favorable market conditions and the strength of our global network

Our retail business sold record fertilizer volumes due to favorable market conditions and the strength of our global network.

Speaker 3: North American digital platforms, shells reached 2.1 billion, and we are building out our digital agronomy tools to support the delivery of long-term, sustainable agriculture solutions for our customers.

North American digital platform sales reached $2 1 billion and we are building out our digital agronomy tools to support the delivery of long term sustainable agriculture solutions for our customers.

Speaker 3: We also expanded our network through the completion of 14 retail acquisitions.

We also expanded our network through the completion of 14 retail acquisitions.

Speaker 3: We continue to diversify our earnings outside of North America with a focus on growing our business in Brazil.

We continue to diversify our earnings outside of North America with a focus on growing our business in Brazil.

Speaker 3: More than one-third of our retail earnings now reside outside of the US, and we expect that share will continue to grow over the next five years.

More than one third of our retail earnings now reside outside of the U S and we expect that share will continue to grow over the next five years.

Speaker 3: Our POT-Achve business delivered 2.7 billion in adjusted EVA ducts supported by higher realized prices and record sales volume.

Our potash business delivered $2 7 billion and adjusted EBITDA supported by higher realized prices and record sales volumes.

Speaker 3: We safely and efficiently increase production by nearly 1 million times, which represents a small portion of our low cost available production capacity.

We safely and efficiently increased production by nearly 1 million tonnes, which represents a small portion of our low cost available production capacity.

Speaker 3: We utilize the strength of our North American distribution system to increase volumes in the domestic market and cap detectives ability to access foreign marine terminals on the west and east coast with critical to ensuring a reliable supply of Fodash to our offshore coast.

We utilized the strength of our North American distribution system to increase volumes in the domestic market and Canpotex is ability to access foreign marine terminals on the west and East coast was critical to ensuring a reliable supply of potash so our offshore customers.

Speaker 3: In nitrogen, we generated adjusted evade of 2.3 billion supported by higher prices and the advantage to position of our assets.

In nitrogen we generated adjusted EBITDA of $2 3 billion supported by higher prices ended the advantaged position of our assets.

Speaker 3: The nitrogen team completed two large plant turnarounds and phase one of our low cost brown field expansions, delivering these projects on time and on budget.

The nitrogen team completed two large planned turnarounds and phase one of our low cost brownfield expansions delivering these projects on time and on budget.

Speaker 3: We progress several initiatives during the year that will enhance the long-term growth and sustainability of our nitrogen business. This includes the launch of phase two of Brownfield expansion projects, as well as GHG emissions reduction projects at several of our nitrogen sites.

We progress progressing several initiatives during the year that will enhance the long term growth and sustainability of our nitrogen business. This includes the launch of phase III brownfield expansion projects as well as <unk> emissions reduction project at several of our nitrogen sites.

Speaker 3: Finally, in phosphate, our team capitalized on improved market fundamentals to deliver record adjusted either of 540 million.

Finally in phosphate our team capitalized on improved market fundamentals to deliver record adjusted EBITDA of $540 million.

Speaker 3: Our focus in phosphate is to maximize the free cash flow of the business by improving the reliability of our operations and leverage the flexibility of our plans to increase volumes of higher margin industrial and premium fertilizer products.

Our focus in phosphate is to maximize the free cash flow of the business by improving the reliability of our operations and leverage the flexibility of our plans to increase volumes of higher margin industrial and premium fertilizer products.

Speaker 3: Turning to the outlook, global green and oil seed supplies are well below historical levels, which continues to support crop price.

Turning to the outlook global grain and oilseed supplies are well below historical levels, which continues to support crop prices.

Speaker 3: In the U.S. corn and soybean prices increased by 10 to 15 percent over the past month due to global supply uncertainty.

In the U S corn and soybean prices increased by 10% to 15% over the past months due to global supply uncertainties.

Speaker 3: US Corn Grow or Cash margins are projected to be 70% above the 10-year average based on current new crop futures.

U S corn grower cash margins are projected to be 70% above the 10 year average based on current new crop futures.

Speaker 3: In fact, it returns for key crops in Brazil and Australia are also very strong. And we expect this with support crop input demand in these markets.

Prospective returns for key crops in Brazil, and Australia are also very strong and we expect this will support crop input demand in these markets.

Speaker 3: In 2021, our retail business generated above average per ton fertilizer margins due to the timing of procurement and a rising price environment.

In 2021, our retail business generated above average per ton fertilizer margins due to the timing of procurement in a rising price environment.

Speaker 3: Our retail adjusted EVA dot guidance assumes a return to more historical average commodity fertilizer margins in 2022.

Retail adjusted EBITDA guidance assumes a return to more historical average commodity fertilizer margins in 2022.

Speaker 3: We had a very strong fall fertilizer application season and anticipates this led to some pull forward of volume and earnings.

We had very strong fall fertilizer application season, and anticipate this led to some pull forward of volume and earnings.

Speaker 3: We expect our specialty crop nutritional and crop protection product margins will remain strong and anticipate growth in our seed business, particularly in Brazil.

We expect our specialty crop nutritional and crop protection product margins will remain strong and anticipate growth in our seed business, particularly in Brazil.

Speaker 3: Our strategy and pot-assures to utilize our world class network of six minds to respond to changes in market conditions, and we see significant opportunity for growth again in 2022.

Our strategy in potash is to utilize our world class network of six mines to respond to changes in market conditions, and we see significant opportunity for growth again in 2022.

Speaker 3: We expect to ship record punish volumes between 13.7 to 14.3 million tons. Assuming sanctions on Belarus have a temporary impact on supply.

We expect to ship record potash volumes between 13, 7% to $14 3 million tons, assuming sanctions on Belarus have a temporary impact on supply.

Speaker 3: If we were to see more significant long-term impact, Nutrient has the capability to further increase production by hiring additional employees and incurring some small incremental capital expenditures.

If we were to see more significant long term impact nutrient has the capability to further increase production by hiring additional employees and incurring some small incremental capital expenditures.

Speaker 3: Capotex is fully committed through the first quarter due to the strength and demand from customers in Latin America and Southeast Asia. Earlier this week, Capotex also signed new contracts with customers in India and China at $590 per ton, which shipment is expected to occur April through December .

Canpotex is fully committed through the first quarter due to the strength in demand from customers in Latin America and Southeast Asia.

Earlier this week, a canpotex also signed new contracts with customers in India, and China at $590 per ton with shipments expected to occur April through December .

Speaker 3: Our domestic order book is now closed for the first quarter and we recently announced a $25 per short time increase for deliveries in the second quarter.

Our domestic order book is now closed for the first quarter and we recently announced a $25 per short ton increase for deliveries in the second quarter.

Speaker 3: The increase reflects the current strength in global products, market fundamentals, in particular for granular grade product.

The increase reflects the current strength in global part Mark potash market fundamentals in particular for granular great product.

Speaker 3: In nitrogen, we expect high-level energy prices, Chinese export restrictions, and heightened geophysical risks will support prices in 2022.

In nitrogen, we expect high global energy prices Chinese export restrictions and heightened geopolitical risks will support prices in 2022.

Speaker 3: We entered the year with relatively low nitrogen inventory levels and have incurred a few plant outages in the first quarter. However, we expect our sales volumes will increase due to the completion of our Borger expansion project in 2021 and higher full year operating rate.

We entered the year with relatively low nitrogen inventory levels and have incurred a few plant outages in the first quarter. However, we expect our sales volumes will increase due to the completion of our Borger expansion project in 2021 and higher full year operating rates.

Speaker 3: I will now turn it over to Pedro to review our capital allocation priorities. Pedro.

I will now turn it over to Pedro to review, our capital allocation priorities Pedro.

Speaker 4: Thank you, Ken. The scan just highlighted, 2022, it's set off to be an excellent year for the company, given the strength of the market fundamentals and the competitive advantages we have in each of our business.

Thank you Ken.

Dan just highlighted 2022 is set up to be an accident year for the company given the strength of the market fundamentals and the competitive advantages we have in each of our businesses.

Speaker 4: We guided to an adjusted EBITDA of $10 to 11.2 billion, which at the midpoint represents a 50% increase from our record earnings in 2021.

We guided to an adjusted EBITDA of 10 to $11 $2 billion, which at the midpoint represents a 50% increase from our record earnings in 2021.

Speaker 4: The key drivers of this growth, a higher expected selling prices and our ability to utilize existing capacity to increase sales volumes in punish and nitrogen.

The key drivers of this growth a higher expected selling prices and our ability to utilize existing capacity to increase sales volumes in potash and nitrogen.

Speaker 4: Although retail earnings expect to be lower in 2022, due to the normalization of commodity fertilizer margins and some pull forward in K4, the underlying trends in key financial metrics for the business are still very strong.

Although retail earnings are expected to be lower in 2022 due to the normalization of commodity FERC Liza margins and some pull forward in Q4, the underlying trends and key financial metrics for the business are still very strong.

Speaker 4: We expect a substantial increase in our cash provided by operating activities this year and have provided a scenario of this opportunity in earnings presentation posted on our website.

We can expect a substantial increase in our cash provided by operating activities. This year.

We've provided a scenario of this opportunity earnings presentation posted on our website.

Speaker 4: based on our adjusted EBITDA guidance range and a conversion ratio of approximately 75%. We have the potential to generate operating cash flow of $7.5 to $8.4 billion this year.

Based on our adjusted EBITDA guidance range and a conversion ratio of approximately 75% we have the potential to generate operating cash flow of seven five to $8 $4 billion. This year.

Speaker 4: This scenario illustrates the significant opportunity we have to advance our capital location priorities in 2022.

This scenario illustrates the significant opportunity we have to advance our capital location priorities in 2022.

Speaker 4: We expect sustaining cathode expenditures in the range of 1.2 to 1.3 billion, which reflects the impacts of the inflation over the past year. The prioritization of projects that were deferred during the pandemic and replacement of some end of life assets at our nitrogen site.

We expect sustaining capital expenditures in the range of one two to $1 3 billion, which reflects the impacts of inflation over the past year. The prioritization of projects that were deferred during the pandemic and replacement of some end of life assets at our nitrogen sites.

Speaker 4: In 2021, we reduced long term debt by 2.1 billion, and we do not expect the need to reduce the nominal debt any further.

In 2021, we reduced long term debt by $2 1 billion and we do not expect the need to reduce nominal debt any further.

Speaker 4: Our balance sheet is now very well positioned to take advantage of that enhancing opportunities through this fact.

Our balance sheet is now very well positioned to take advantage of that and enhancing opportunities through the cycle.

Speaker 4: In terms of growth capital, we have a well-defined set of retail opportunities that include growing out on network in Brazil, cutting acquisitions in other core markets, expanding our proprietary product business, any enhancing our digital capability.

In terms of growth capital, we have a well defined set of retail opportunities that include growing our network in Brazil, Turkey and acquisitions in other core markets, expanding our proprietary product business enhancing our digital capabilities.

Speaker 4: The Brazilian market in particular provides a significant opportunity for target growth due to its rapidly expanding agriculture production and fragmented retail structure. In nitrogen, we have embarked on a phase two brown field expansion plan that is expected to add an additional half million tons of low cost, environmentally efficient capacity for a total investment of 260 million.

The Brazilian market in particular provides us significant opportunity for targeted growth due to its rapidly expanding agriculture production and fragmented retail structure.

In nitrogen we have embarked on a phase two brownfield expansion plan that is expected to add an additional half million tons of low cost environmentally efficient capacity for a total investment of $260 million.

Speaker 4: We are also evaluating options to increase the production of low carbon ammonia and have approved $50 million in projects that are eliminating approximately 10% of our current scope one in two emissions in hydrogen by 2023.

We are also evaluating options to increase the production of low carbon ammonia and have approved $50 million and projects that are aimed at eliminating approximately 10% of our current scope, one and two emissions and hydrogen by 2023.

Speaker 4: Our global bondage position is unmatched. And we expect to make small and many investments, well, mind development and underground equipment that would enable us to increase production from existing capacity. We're making moderate investments to increase self-generated power, autonomous mining, and other technologies that are willing to enhance the safety and efficiency of our bondage sites.

Our global potash position is unmatched and we expect to make small and any investments or mine development and underground equipment that would enable us to increase production from existing capacity, we are making moderate investments to increase self generated power autonomous mining and other technology instead.

It will enhance the safety and efficiency of our potash sites in total we expect to all located approximately 1 billion to investment projects across our businesses.

Speaker 4: In total, we expect to allocate approximately one bid in to investment projects across our businesses in 2022 with a track of projected returns. Lastly,

2022 with attractive projected returns.

Lastly, I will address shareholder distributions.

Speaker 4: Since 2018, Newtron has allocated $9 billion to share holders through dividends and share purchases, including $2.1 billion return in 2021 alone. We have demonstrated the ability to pay a stable and growing dividend under the most step of market conditions and distribute excess cash through share purchases.

Since 2018 nutrient has relocated $9 billion to shareholders through dividends and share repurchases, including $2 1 billion returned in 2021 alone.

We have demonstrated the ability to pay a stable and growing dividend under the most difficult market conditions and distribute excess cash through share repurchases.

Speaker 4: Yesterday, the board of directors approved a 4% increase in the quarterly dividend to 48 cents per share, and the purchase of up to 10% of our nutrients, common shares, over a one year period.

Yesterday, the board of directors approved a 4% increase in the quarterly dividend to <unk> 48 per share and the purchase of up to 10% of our nutrients common shares over a one year period.

Speaker 4: We plan to allocate a minimum of $2 billion to share references in 2022 on a balanced cadence throughout the year.

We plan to allocate a minimum of $2 billion to share repurchases in 2022 on a balanced cadence throughout the year.

Speaker 4: Given the strength of our projected cash flow, we believe there is a potential for additional capital to be allocated beyond the opportunities that just outline.

Given the strength of our projected cash flow. We believe there is a potential for additional capital to be allocated beyond the opportunities are just offline.

Speaker 4: When we evaluate the most battery enhancing users for this cache and provide an update to our shareholders as the year progresses. And now I'll pass it back to Ken. Thanks, Pedro. Just a few.

When we evaluate the move battery enhancing uses for this cash and provide an update to our shareholders as the year progresses, and now I'll pass it back to Ken.

Thanks Pedro.

Just a few final comments before we get to your questions.

Speaker 3: The outlook for our industry and our company has never been stronger.

The outlook for our industry and our company has never been stronger <unk>.

Speaker 3: global grain and oil seed inventories remain well below historical levels and crop prices are supportive of demand in the key regions where we operate

Global grain and oilseed inventories remained well below historical levels and crop prices are supportive of demand in the key regions, where we operate.

Speaker 3: We entered 2022 with significantly higher prices for our products and the capability to bring on additional products and nitrogen volume.

We entered 2022 with significantly higher prices for our products and the capability to bring on additional potash and nitrogen volumes.

Speaker 3: We have well-defined strategic plans for each of our business and the executive leadership team is focused on advancing the key priorities that will maximize long-term value for all stakeholders.

We have well defined strategic plans for each of our business and the executive leadership team is focused on advancing the key priorities that will maximize long term value for all stakeholders.

Speaker 3: We have an extremely talented group of employees throughout the organization that helped deliver record results in 2021. And I am highly confident in their ability to rise to the occasion once again in 2022.

We have an extremely talented group of employees throughout the organization that helped deliver record results in 2021, and im highly confident in their ability to rise to the occasion once again in 2022.

Speaker 3: I'm joined today by members of our leadership team and we would be happy to take your quest.

I'm joined today by members of our leadership team and we would be happy to take your questions.

Speaker 1: We will now begin the Q&A session. To ask a question, you will need to press star one on your telephone to withdraw your question, press the pound key. For the company's request, there will be one question per analyst.

We will now begin the Q&A session to ask a question you will need to press star one on your telephone to withdraw.

Jay Your question press the pound key part of the company's request there'll be one question per analyst.

Speaker 1: Your first question will come from the line of Joel Jackson with BMO. Please proceed with your question.

Your first question will come from the line of Joel Jackson with BMO. Please proceed with your question.

Speaker 5: Hi, good morning, everyone. Obviously the Belarus BPC issue is quite fluid and human.

Hi, good morning, everyone.

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Obviously, the Belarus DPC issue is quite fluid ends.

Crazy.

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Speaker 5: I have a couple of questions on this. So if Belarus has significant sales restrictions to an extended number of months, they can't do their million times a month, they're gonna be a fraction of that.

A couple of questions on that so.

Belarus has significant sales restrictions for an extended number of months they can't do their million tonnes, a month or a fraction of that.

Speaker 5: What do you think the market will do? If you put our prices half to rise to induce demand destruction to balance the market, because nobody can balance the market unless demand goes down. And the second part is longer is.

What do you think the market will do but do potash prices have to rise to induce demand destruction of the balanced market because nobody can balance the market unless demand goes down and the second part of the longer is.

Speaker 5: What do you need to see to hire a bunch of minors and spend the small investments to bring on the millions of times you have sitting idle? Because I imagine it's going to take you a year to ramp and you probably want what, two or three years to think that BPC is in trouble and you can't conclude that right now. So is it fair to say you're nowhere near really making the decision to bring back what that's your time?

What do you need to see to hire a bunch of minors and spend the small investment to bring on the millions of tons you have sitting idle because I imagine you know it can take you a year to ramp and you probably want one two or three years to think that PPE is in trouble and you can't conclude that right. Now so is it fair to say, you're nowhere near really making.

The decision to bring back those extra tons.

Speaker 3: Great, well thanks for the questions, Joel. And yeah, we're watching the situation, Belarus quite closely. You know, we're guiding and suggesting 68 to 71 million times worth of.

Great well, thanks for the questions Joel and yes, we're watching the situation in Belarus quite closely.

Guiding.

Suggesting so 68 to 71 million tons worth of.

Speaker 3: pot action in 2022. And that is, you know, we're taking into account what's happening in Belarus when we say that. You know, for our part, we sort of had anticipated that it would be difficult for BPC to get access to tidewater with, you know, difficulties getting through Lithuania, obviously. And then also difficulties finding other port access and even rail to the east. So.

Potash shipments in 2022 and that is we're taking into account what's happening in Belarus, when we say that for our part we.

We sort of had anticipated that it would be difficult for <unk> to get access to tidewater with.

No difficulties getting through Lithuania, obviously, and then also difficulties finding other port access and even rail to the east so.

Speaker 3: You know, we're looking at this and wondering with all the uncertainty around it, how long will this last? And the meantime, your question about what market prices will do. Well, if anything, on that 68 to 71 million tons of shipments, the top end could be capped by the actual availability of supply.

No.

We're looking at this and I'm wondering with all the uncertainty around it how long will this last in the meantime, your question about what market prices will do well if anything on that 68% to 71 million tonnes of shipments to top end could be capped by the actual availability of supply and so yes, we could see some additional pressure on pricing.

Speaker 3: And so yes, we could see some additional pressure on pricing. Of course,

Of course.

Speaker 3: Camptix concluded contracts with India and China at $590 per ton, but it is true we could see some additional pressure on pricing. In the meantime, for our part, what do we need to see? So, you know, we have always planned our production capability for two and a half to three percent average annual growth rates. We've talked about our 18 million times of existing capacity in the ability to bring on additional brown goes when the market's calling for it.

Canpotex concluded contracts with India, and China at $590 per ton, but it is true we could see some additional pressure on pricing in the meantime for arc part what do we need to see so we have.

We supply into our production capability for two 5% to 3% average annual growth rates, we've talked about our 18 million tons of existing capacity.

To bring on additional brownfields when the market is calling for it.

Speaker 3: So, you know, we're looking at the Belarusian situation and we would need to see some prolonged challenges in that part of the world in order to make those investments on open-air ground, putting mining machines at faces and hiring people as exactly as you say Joel. In the meantime, you know, we're guiding 13.7 to 14.3 million tons.

So.

We're looking at the Belarusian situation and we would need to see some prolonged challenges in that part of the world in order to make those investments on opening up ground, putting mining machines that faces and hiring people is that exactly as you say Joel in the meantime, we're guiding 13, 7% to $14 3 million tonnes.

Speaker 3: which is an increase from 2021. And certainly at the top end, it's an opportunity for us to put more material into the market. And I'll also say in addition to that, we're preserving additional flex capacity for this year, should our customers need more volume.

Which is an increase from 2021 and certainly at the top end is an opportunity for us to put more material into the market and I'll also say in addition to that we are preserving additional flex capacity for this year should our customers need more volume.

Speaker 3: You know, for the longer term, again, Joel, you know, we wouldn't need to see in order to make the investments of opening up the ground and hiring people, we would need to see some prolonged challenges in Belarus in order to make those investments.

For the longer term again, Joel we would need to see in order to make the investments of opening up the ground and hiring people, we would need to see some some prolonged challenges.

In Belarus in order to make those investments.

Speaker 1: Your next question will come from the line of Jacob Bout with CIBC. Please proceed with your question. Good morning.

Your next question will come from the line of Jacob bout with CIBC. Please proceed with your question.

Good morning.

Absolutely.

Speaker 4: Looking for some further granularity on the retail guidance for 2022, you're guiding for EBITDA to be down year and year. Can you talk a bit about what your organic versus m&a growth assumptions are? How big is that poll-forward effect? And are we going to feel that in the first quarter, first half?

Looking for some further granularity on the retail guidance for 2022, you're guiding for EBITDA to be down year on year can.

Can you talk a bit about what sure organic versus M&A growth assumptions are how big is that pull forward effect or are we going to feel that in the first quarter first half.

Speaker 4: And then when we're looking at proprietary products,

And then when we're looking at proprietary products.

Speaker 4: And I guess to a lesser extent, digital sales, when I look at, you know, 2020 three targets, in particular for proprietary sales, I was surprised it was actually lower year on year and well down from 2023 targets in 2020.

And I guess to a lesser extent digital sales so when I look at two.

2023 targets in particular proprietary sales that was surprising was actually lower year on year, and well down from 2023 targets of 20%.

Speaker 3: Great, thanks, Jacob. So I think you identified the moving parts there. We did have some...

Great. Thanks, Jacob So I think you identified the moving parts there we did have some.

Speaker 3: So, meeting full fertilizer margins in 2021 with fertilizer prices escalating the way that they did. We had very strong fall application season, so there was some pull forward into Q4, but we also had significant market share games that we intend to carry through to 2022, but I'll hand it over to Jeff Tarsie that provides more color. Yeah, Jacob, and look, obviously, we had a very strong fall.

So meaningful fertilizer margins in 2021 with.

With fertilizer prices escalating their way that they did we had a very strong fall application season. So there was some pull forward into Q4, but we also had significant market share gains that we intend to carry through to 2022, but I'll hand, it over to Jeff tariffs either provided some more color, yes, Jacob and look obviously, we had a very.

Strohm fallen.

Speaker 6: I might mention on that strong fall, we really needed that strong fall to occur with some of the supply chain constraints and things that we've seen in the marketplace. And so we were quite happy about the fall that we had. We think it sets us up really early.

Mitch you know strong fall, we really needed that stroke, followed to occur with some supply chain constraints and things that we've seen in the marketplace and so we were quite happy about the fall that we add we think it sets us up really early for the spring and spring planning season.

Speaker 6: for the spring and spring planning season, as it relates to that. And obviously our margins for time, last year on fertilizer were up. We were able to take advantage of our strategic.

As it relates to that and obviously our margins per ton last Joel fertilizer were up.

We were able to take advantage of our strategic network.

Speaker 6: network efficiencies that we have and storage capabilities and things like that. So we will see margins return to something that's of a more normal basis in 22. But if I look at it from a commodity fertilizer margin, standpoint, they'll be above what they were in 20. And one other thing I'll point out on fertilizer margins that anywhere from 20 to 20.

Efficiencies that we have in storage capabilities and things like that so we will see margins return to something of a more normal basis.

In 'twenty, two but if I look at it from a commodity fertilizer margins standpoint, there'll be above what they were in 'twenty and one other thing I'll point out or fertilizer margins that anywhere from 20% to 25% of those margin Jamaica barred proprietary nutritional products.

Speaker 6: 25% of those margins are made up by proprietary nutritional products.

Speaker 6: And we don't see those going back. We actually have, we've actually built in increases for 22 from a margin standpoint. If we look at organic growth, we've got an organic growth built into our plan in 22. I think we got just over $90 million for organic ebidop built into that plan for 2022 and look, our focus for our...

And we don't see those going back we actually have we've actually built in increases for 'twenty two from a margin standpoint.

If we look at organic growth, we've got organic growth built into our plan in 'twenty. Two I think we got just over $90 million of organic EBITDA, the odeon into that plan.

For 2022 and look at.

Our focus for our organic growth in 'twenty, two will rely very heavily on our proprietary business as well as organic growth Kian just mentioned just a minute ago, we were up pretty amazing in 'twenty. One we grew market share and grow margins across all three shelves over our business.

Speaker 6: Organic growth in 22 will rely very heavily on our proprietary business as well as organic growth Ken just mentioned just a minute ago. We were up pretty amazing in 21. We grew market share and grew margin

Speaker 6: across all three shelves of our business. And we certainly have in our plan for 22 that we'll keep those share gains.

We certainly have in our plan for 'twenty, two that will keep those share gains and from a seat perspective, we've got a pretty healthy place deal together, we really expect to continue.

Speaker 6: From a seed perspective, we've got a pretty healthy plan built together. We really expect to continue to expand our share in the seed shelf of our business on it. So I hope I have.

And our sheer in the seed shelf of our business.

So I hope that answers your question.

Speaker 1: Your next question will come from the line of Christopher Parkinson with Mizzouho. Please proceed with your question.

Your next question will come from the line of Christopher Parkinson with Mizuho. Please proceed with your question.

Speaker 7: Great, thank you very much. Just given the incredibly healthy potta shot, and you demand outlook, just how should we be thinking generally about the cost per ton outlook? I'm assuming you're already getting the full benefit.

Great. Thank you very much just given the incredibly healthy potash demand outlook, just how should we be thinking generally about the cost per ton outlook, you know I'm, assuming you're already getting the full benefit.

Speaker 7: from Roconville, Lanagan. But how should we be thinking about the near-to-intermediate term about Corey Allen and Vanscoy? Will the operates be, let's say, noticeable to us on the cost line? And, you know, if we could circle back to Joel's question, what would be kind of the characterization of the current plan embedded in your guidance and what would be the characterization of if things potentially change with the BPC outlook? Thank you so much.

From broken down Atlanta, again, but how should we be thinking about the near to intermediate term out Corey Allen in Vanscoy.

Operator, let's say noticeable to us on the cost line and if we could circle back to Joel's question, what would be kind of the characterization of the current plan embedded in your guidance and what would be the characterization of if things potentially change with the BPC outlook. Thank you so much.

Speaker 3: now great thanks Chris yeah with respect to cash cost per time i mean there's a we're experiencing uh... a few pressures at the moment obviously foreign exchange has worked against us a bit

Great. Thanks, Chris with respect to cash cost per ton I mean, there is we're experiencing.

Few pressures at the moment, obviously foreign exchange has worked against us a bit.

Speaker 3: We're also paying higher royalties given where Polish prices have gone in now. I'll have to say that we're also experiencing some inflationary pressures.

We're also paying higher royalties given are aware potash prices have gone and I'll have to say that we're also experiencing some inflationary pressures, but that said we were able to make up those pressures in 2021 with increased volumes. So that I don't I wouldn't say that you should expect material changes in our cash cost per ton in 'twenty one to 'twenty.

Speaker 3: That said, we were able to make up those pressures in 2021 with increased volumes so that I don't. I wouldn't say that you should expect.

Speaker 3: You know, material changes in our cash cost for $1.21 to $22.

Two.

Speaker 3: You know, with respect to, you know, our plans for Powhat Action in 2020, so I'll just say again, you know, we're guiding 13.7 to 14.3 million times. And we are preserving additional capacity above that, you know, maybe another half million times that we would able to bring on if we see that our customers are calling part. If there's, you know, a gap in the market created by this fellow Russian situation, and again, an ability to bring on sustained volumes if some of these supply state events.

Now with respect to.

Our plans for potash in 2020, so I'll, just say again, we're guiding $13 7 million to $14 3 million tons in.

We are preserving additional capacity above that maybe another half a million tons that we would be able to bring on if we see that our customers are calling part if there is.

A gap in the market created by this belorussian situation again and ability to bring on sustained volumes. If some of these supply side events persist.

Speaker 1: Your next question will come from the line of Ben Isaacson with Scoti Bank. Please proceed with your question.

Your next question will come from the line of Ben Isaacson with Scotiabank. Please proceed with your question.

Speaker 8: Thank you very much and good morning everyone. That's another pot-ash question for you. Maybe it's just a two-parter. Ken, I was a little surprised to sure you say that Campatex is sold out to six weeks ahead, or I think you said to the end of Q1. Most of 2021.

Thank you very much and good morning, everyone.

Just another potash question for you maybe its a two partner Ken I was a little surprised to hear you say that Canpotex is sold out to six weeks.

I think you said to the end of Q1.

Most of 2021.

Speaker 8: It felt like Camp Pex will sold out anywhere from three to four and a half months ahead due to strong demand. So the first part of the question is, is this the sign of demand destruction starting, especially as we're going into the spring?

Like Canpotex is sold out anywhere from three to four and a half months ahead.

Due to strong demand. So the first part of the question is is this a sign of demand destruction, starting especially as we're going into the spring. My second part of this question on potash as you just mentioned you would want to see a prolonged issues in Belarus in order for you to start investing.

Speaker 8: My second part of this question on POT-AISH is, you just mentioned you would want to see a prolonged issues in Belarus in order for you to start investing more money with respect to POT-AISH development. Yet you've been talking about five million tons of incremental expansion for a number of years.

More money with respect to.

Potash development, yet you've been talking about 5 million tons of incremental expansion for a number of years and so I would've thought that now that you have the cash and theres incremental issues have the Belarus, you would've accelerated that it doesn't sound like that's the plant can you elaborate on that.

Speaker 8: And so I would have thought that now that you have the cash and there's incremental issues out of Belarus, you would have accelerated that. But it doesn't sound like that to the plan. Can you elaborate on that?

Speaker 3: you've been and thanks for the question so you know i would i definitely wouldn't say that this is a sign of uh... of demand destruction again would go region to region you know gore sentiments are strong and margins are strong

Yes, you bet Ben Thanks for the question so.

I definitely wouldn't say that this is a sign of.

Demand destruction again, if we go region to region.

<unk>.

<unk> sentiments are strong and margins are strong.

Speaker 3: You know, the commitments out through the first quarter offshore are really related to just demanding the key regions where we operate in actually low inventory levels and just about every region where we sell as well. And so we sort of go to market to market it. A big market for granular, sorry, standard grade product in the first quarter this year has been Southeast Asia, where...

The commitments out through the first quarter offshore are really related to just demand in the key regions, where we operate and actually low inventory levels in just about every region, where we sell as well and so we sort of go to market to market a big.

A big market for granular sorry standard grade product in the first quarter. This year has been southeast Asia, where we're seeing really incredibly strong call metal prices record palm oil prices and so demand there is strong and certainly canpotex sense meaningful full commitments, so standard grade product into southeast Asia.

Speaker 3: you know we're seeing really incredibly strong palm oil prices record palm oil prices and so demand there is strong in certainly capital tax as meaningful for commitments of standard grade product in the southeast Asia

Speaker 3: been turning to the US again we had a very strong fall application season so you know growers in the US are looking into the spring here now and looking to shore up supply and then Brazil again record demand in 2021 we're anticipating very strong demand in 2022 again and while inventories have grown a little bit in Brazil it's the image our growth is small compared to the overall growth in the market and so

And then turning to the U S. Again, we had a very strong fall application season. So.

Growers in the U S are looking into the spring here now and looking to shore up supply in and then Brazil again record demand in 2021, we're anticipating very strong demand in 2022, again, and while inventories have grown a little bit in Brazil.

The inventory growth is small compared to the overall growth in the market and so.

Speaker 3: you know the Brazilian grower also looking to shore up supply so no at this stage we are not seeing demand destruction in fact grower margins are strong

Brazilian grower also looking to shore up supply. So no at this stage, we are not seeing demand destruction in fact grower margins are strong.

Speaker 3: You know, your question about our 5 million times, and you know, I just say, Ben, we just want to take a very pragmatic approach to this.

A question about <unk>.

5 million times, and I would just say, we just want to take a very pragmatic approach to this.

Speaker 3: You know, when we increase production, we have to go open up ground, which is expensive. We have to install infrastructure. We have to maintain that ground. If demand comes off, we still have to maintain that ground. We have to hire people. We have to put mining machines at faces. And so we absolutely, in a planned and thoughtful way, can wrap up from, you know, our 14, 13.7 to 14.3 million tons. So we can ramp that up on a paced basis.

When when we increase production we have to go open up ground, which is expensive we have to install infrastructure. We have to maintain that ground. If demand comes off we still have to maintain that ground. We have to hire people, we have to put mining machines. It faces and so we absolutely in a planned and thoughtful way he can.

Wrap up from.

Our 2014, 13, 7% to $14 3 million tonnes.

We can ramp that up on a paced basis, but we're going to do it in a very pragmatic way because.

Speaker 3: But we're going to do it in a very pragmatic way because if the supply side issues...

As the supply side issues.

Speaker 3: you know, go away quickly, then we don't want to be left with all these costs.

Go away quickly then we don't want to be left with all these costs.

Speaker 3: So, you know, we can bring on production in a plan fully, and that's the way we're going to do it.

So we can bring on we can bring on production and applying full and that's the way we're going to do it.

Speaker 1: Your next question will come from the line of Vincent Andrews with Morgan Stanley . Please proceed with your question.

Your next question will come from the line of Vincent Andrews with Morgan Stanley . Please proceed with your question.

Speaker 4: Thank you and good morning everyone. I'm wondering if you could give a little more color on your nitrogen guidance for the year and in particular how you see the shape of the year and maybe more specifically how you're thinking about the second half, maybe some of the energy or cost-care assumptions that are baked into it.

Thank you and goodbye.

Everyone I'm wondering if you could give a little more color on your nitrogen guidance for the year and in particular.

How you see the shape of the year and maybe more specifically how youre thinking about the second half maybe some of the energy or cost curve assumptions that are baked into it.

Speaker 3: Yeah, great. Thanks, Vincent. So again, it's strong back drop in the egg fundamentals, some supply side events in nitrogen as well. But I'll hand out over to Rafe Sully to provide more color.

Yes.

Yes, great. Thanks, Vince and so again, it's a strong backdrop drop in the AG fundamentals some supply side events in nitrogen as well, but I'll hand that over to Rafe salt Lake to provide more color.

Speaker 9: Thanks Vincent, so let me start just with an overall perspective of the ammonia market. You know, supply and demand, the underlying supply and demand is tight.

Thanks, Vincent So let me start just with an overall perspective of the ammonia market.

Supply and demand the underlying supply and demand is tight.

Speaker 9: That market has been growing. It's something like two to three million tons a year. And we have not seen that additional production built out at the same rate. And then of course, to make matters worse, we saw the spike in gas prices in Europe that led to some shut-ins in sort of a very tight situation. Now, going forward, we would think that, I think the forecast for gas prices in Europe remain above $20 for the rest of the year. That of course puts a floor under ammonia.

Market has been growing at something like two to 3 million tons a year.

And we have not seen that additional production build out at the same rate.

And then of course to make matters worse, we saw the spike in gas prices.

In Europe , the led to some shut ins and so the tight situations now going forward. We would think that I think the forecast for gas prices in Europe remain above $20 for the rest of the year that of course puts a floor under ammonia.

Going forward.

Speaker 9: Are you re-assimilarly very tight global supply and demand situation? We're seeing restrictions on exports.

Similarly, great tight global supply and demand situation, we've seen on <unk>.

Fictions on exports from China that that was about two and a half million tons last year that won't be in the market. This year, we're seeing increased demand in India.

Speaker 9: from China that was about two and a half million tons last year that won't be in the market this year we're seeing increased amount in India.

Speaker 9: good strong demand, grow economics in North America. So again very tight market, new and similar picture. What I would suggest is that in North America, so in Europe we'll see gas pricing above $20. In North America I think we'll see gas prices in the US being that range of $375 to $425 for Biden is a very good advantage position.

Strong demand grow economics in North America, So again very tight.

Market.

Similar picture.

What I would suggest is that in North America, and Europe will see gas pricing above $20 in North America, I think we'll see.

Gas prices in the USB in that range of $3 75 to 425, providing some very good advantaged position.

Speaker 9: So you know, I think we see some really good strong pricing throughout the year. We do think there'll be a reset

So.

I think we see some really good strong pricing throughout the year, we do think there'll be a reset in.

Speaker 9: In summer is the normally years there's normally a low in demand at that point It's hard to get product out the door so we'll see some pricing reset But we think overall we'll see some good strong pricing continue in the second half

In summer as they normally use theres only a lull in demand at that point, it's hard to get product out the door. So we will see some pricing reset, but we think overall, we'll see some good strong pricing continue in the second half.

Speaker 9: And overall, average pricing for this year will be higher than last year. And we'll see the nitrogen business performing better. We've got the forecast out there at the minute. I think it's going to be a good, strong year for us.

Overall average pricing for this year.

Will be higher than last year, and we will see.

The nitrogen business.

The performing better and we've got the forecast out there, but I think it's going to be a good strong year for us.

Speaker 1: Your next question will come from the line of Steve Bern with Bank of America. Please proceed for their question.

Your next question will come from the line of Steve Byrne with Bank of America. Please proceed with your question.

Speaker 4: Yes, thank you. I was wondering if your retail business has visibility into two items.

Yes. Thank you I was wondering if your retail business has visibility into two items.

Speaker 4: One would be nutrient application rates, either from increased soil sampling, a service that you have, and maybe orders for more variable rate application, or from...

One would be nutrient application rates.

Either from <unk>.

Increased soil sampling a service that you have and maybe orders for more variable rate application.

Or from.

Speaker 4: farmer calculations to increase returns by trimming application rates. Do you expect much of that for this spring? And then the other item that I was hoping you'd share some visibility on would be...

Farmer calculations to increase returns by trimming application rates do you expect much of that.

For the spring and then the other item that I was hoping you could share some visibility on would be.

Speaker 4: Your forecast for planning and pensions, you have a forecast for.

Your forecast for planting intentions, you have a forecast for you.

Speaker 4: US corn and soybean acreage. Is that based on your own economic analysis or is that based on seed orders from your...

U S corn and soybean acreage is that based on your own economic analysis or is that based on seed orders from your retail business.

Speaker 3: Great, thank you, Steve. So I will pass the first question over to Jeff Tarsi, our Head of Retail and then Interim Head of Retail, and then over to Jason Newton, our Chief Economist for your second question. So, Jeff.

Great. Thank you, Steve So I'll pass the first question over to Jeff Tarr C.

Our head of retail and then interim head of retail and then over to Jason Newton, Our Chief economist for your second question. So Jeff.

Speaker 6: Yeah, good morning, Steve. And you know, I'll take these questions in part as it relates to application rates. And obviously, we would

Good morning, Steve and I will take these questions in part as it relates to application rates and obviously, we would our base that today off of what we saw this fall in the fourth quarter and Steve We certainly saw no pullback.

Speaker 6: I would base that today off of what we saw this fall in the fourth quarter and Steve we certainly saw

Speaker 6: No pullback on rates, particularly across the corn belt. And as you well know,

<unk> <unk>.

Particularly across the corn belt.

Speaker 6: A lot of those rates are dependent on what the size of the crop was and how much you know how much in thinking, okay, we hadn't removed based on that and yields were very strong in most areas last year.

You will know a lot of those rates are dependent on what the size of the crop wasn't how much how much your opinion.

We had removed based on that and yields were very strong in most areas last year and so growers. What we saw this fall with growers went riding in with their with their programs work they've done over the last two or three years as it relates to sole testing out looked at some numbers the other day.

Speaker 6: And so growers, what we saw this fall was growers went right in with their programs like they'd done over the last two or three years.

Speaker 6: as it relates to soil testing, I'll look at some numbers the other day.

Speaker 6: So, testing is very strong. If I look at a year over year number with out of waypoint analytical, our soil tests were up, total number of soil testing ran through there, well, up somewhere between three and five percent. And so, and you gotta remember that that came out for an extremely strong year in 20. So, we continue to see the direction.

So testing is very strong.

If I look at it year over year number with a waypoint analytical or so we will test were up.

Total number of so we'll test it ran through there were up somewhere between three and 5% and so and you got to remember that that came out for an extremely strong year in 'twenty. So we continue to see the direction move really strongly in that rate.

Speaker 6: move really strong in that rate in that capacity. And I think we'll see a lot more testing this spring as well for those that didn't get in this fall and make some of our application.

And that capacity and I think we'll see a lot more testing this spring as well.

Didn't get in this fall and makes them applications as it relates to that from a standpoint of variable rate look we've seen that increase over the last 10 or 15 years.

Speaker 6: as it relates to that. From a standpoint of variable rate, look we've seen that increase.

Speaker 6: over the last 10 or 15 years. The days of blanket rate applications just really don't exist that much anymore. And our machinery is set up today to run variable rate. Our digital platform we have today and some of the tools that we have to be able to go in and map those acres.

The days of blanket rate applications, just really don't exist that much anymore.

Our machinery is set up to date.

To run variable rate.

Our digital platform, we have today and some of the tubes that we have to be able to go in and map those acres and bill those prescriptions, specifically off the solo testing that we're doing we're able to take that information and schlink shot it back to an applicator.

Speaker 6: and build those prescriptions specifically off the soil testing that we're doing. We're able to take that information and sling shot it back to an applicator and bury our rates as we go across as we go across eating individual fields. So we're very optimistic about what we're seeing there. We're optimistic.

And Barry our range as we go across as we go across eating individuals feel so.

We're very optimistic about what we're seeing there we're optimistic.

Speaker 6: In late summer, we're going to release Escholane 2.0, which is our new digital tool, as it relates to precision agriculture, and that'll give us even more capabilities with our growers and allow our agronomist, more real-time information as we sit with our growers.

Late summer, we're going to release the echelon two <unk>.

Which is our new digital too.

As it relates to precision agriculture, and that will give us even more capabilities, what our growers and allow our agronomists more real time information as we sit with our growers and build each prescription plans for them that help them maximize ROI.

Speaker 6: feel these prescription plans for them to help them maximize ROI. From a crop standpoint, and I'll let Jason expand on this a little bit more, but see, we just don't see a lot of movement.

From a crop standpoint, and I'll, let Jason to expand on this a little bit more but we just don't see a lot of movement.

Speaker 6: Today, you know, corn to me looks basically flat what it looked like last year.

To date corn to me looks basically flat to what it looked like last year. So were the same in and yes, we base that off of what our seed book looks like we started book can see last year in September . So obviously, we're well into that process and what we're looking at it what we're looking at.

Speaker 6: So we're the same and yes, we base that off of what our seed book looks like. We started booking seed last year in September . So obviously we're well into.

Speaker 6: that process and what we're looking at it, you know, what we're looking at, what we've got booked today. We just don't see a lot of movement. Movement, if it comes will be more prevalent in South, and that's probably where they've been a little bit slower to make some decisions because they have so many crop options in that area. Jason, I don't know if you want to add something to that. No, I just, I just,

We've got booked today, we just don't see a lot of movement.

But if it comes will come will be more prevalent in south and that's probably where they've made a little bit slower to make some decisions because they have so many crop options in that area. Jason I don't know if you want to add something to that.

No just to add just two.

Speaker 3: give our range for crop acreage, expect 91 to 93 million acres of corn, 87 to 89 million acres of soybeans. And we're really basing that range off a combination of economic analysis, looking at the economics of

Give our range for for crop acreage expect 91% to 93 million acres of corn $87 87 to 89 million acres of soybeans.

And we're really basing that range off a combination of economic analysis looking at the economics of a growing crops that we know today the perspective margins for both corn and soybeans are historically high.

Speaker 3: Growing crops, and we know today the perspective margins for both corn and soybean are historically high, strong competition for acreage, and also look at the SMDs and what's needed from an acreage standpoint. And then we're really fortunate to have Jeff and his team to run the economics assumptions by and get the in-market intelligence on feed sales and so on that helped to make the forecast more robust.

Competition for acreage and also look at the SMB needs in and what's needed from an acreage standpoint, and then we're really fortunate to have Jeff and his team to run the economics assumptions by and get the.

In market intelligence on seed sales and so on that that helps make the forecast more robust and I don't want to leave that are important Canadian market because the fundamentals route canola very strong as well and we've seen a very strong booking to oversee our proven.

Speaker 6: And I don't want to leave out our important Canadian market because the fundamentals around canola are very strong as well and we've seen a very strong booking on our seed, our proven

Speaker 6: see varieties in Canada and the same with our downed growing corn and soybeans in the US mark.

Seed varieties in Canada, and the same with our data grow on corn and soybeans in the U S market.

Speaker 1: Your next question will come from the line of Jeff Sikowskas with JP Morgan. Please proceed with your question.

Your next question will come from the line of Jeff Zekauskas with J P. Morgan. Please proceed with your question.

Thanks very much.

Okay.

Speaker 10: What do you think about the ability of Belarus collied to ship out of Uzblu-Ga in Russia? Do you know of any cargoes that have gone out or any commits?

What do you what do you think about the.

Ability.

<unk> colleague to ship out of Luca and Russia.

Do you know of any cargoes that have gone out or any commitments have you received any.

Speaker 10: Have you received any inquiries from Belarus?

Inquiries from Belarusian customers, our typical customers.

Speaker 10: customers or typical customers. Do you see as much of their product on the water as?

Do you see as much of their product on the water as you would normally see.

Sure.

Speaker 4: Yeah, thanks, chef. And I missed which sort of broke up there, which poured out of Russia, but I'll just say that we've looked very closely at that. And the poorest state, Peter's Burg is obviously the closest, but we, you know, it's, I think it's clear that there's not a lot of capacity at the poorest state, Peter's Burg. There's already a lot of product moving through.

Yes, Thanks, Jeff and I missed which sort of broke up there, which port on Russia, but I'll, just say that we've looked very closely at that.

The port of St. Petersburg is obviously the closest.

It's I think it's clear that there's not a lot of capacity at the port in Petersburg, Theres already a lot of product moving through.

Speaker 4: that port. And then further to the north is Murmansk. Again, we've looked at that one closely. It's 2,000 kilometers from the Belarusian production, and I think a challenge as well. So, and there's rail to the east, but that track is a very long track, 7,000 kilometers to China.

That port and then further to the north and some romance again, we've looked at that one closely too.

2000 kilometers from the Belarussian production and I think a challenge as well so and then there was a relatively easy, but but that track is a very long track 7000 kilometers to China and so.

Speaker 4: You know, the options that we think are limited for BPC, getting access to tidewater at the moment, and I'm sure they're working very hard on that. With respect to what we're seeing in the market, it is absolutely a case that we have had some traditional BPC customers inquiring about volumes, and it is also the case that we're seeing less, we're seeing less BPC volumes shipping at the moment.

The auctions that we think are limited.

For BPC.

Getting access to Tidewater at the moment I am sure. They are working very hard on that with respect to what we're seeing in the market. It is absolutely. The case that we have had some traditional.

Traditional BPC customers enquiring about volumes and it is also the case that we're seeing less.

We're seeing less BPC volumes are shipping at the moment.

Speaker 1: Your next question will come from the line of Adam Samuelson with Goldman Sachs. Please proceed with your question.

Your next question will come from the line of Adam Samuelson with Goldman Sachs. Please proceed with your question.

Speaker 1: Hello Adam, your line is open. You may unmute from your end at this time.

Hello, Adam Your line is open you may on mute from Euro and at this time.

Speaker 1: We will move on to the next question in queue from P.J. Juvicar with Citi. Please proceed for their question.

We will move on to the next question in queue from P. J <unk> with Citi. Please proceed with your question.

Speaker 11: yes i good morning i was wondering why would you ramp up your part-time production more aggressively to take advantage of this uh... bellarose situation higher-grade prices low inventories i mean uh... you know you've been waiting for this kind of situation to ramp up your production for years if not decades getting that access capacity

Yes, hi, good morning.

I was wondering why wouldn't you ramp up your potash production more aggressively to take advantage of this Belarus situation.

Higher grain prices low inventories.

<unk>.

<unk> been waiting for this kind of situation to ramp up your production for years, if not decades getting that excess capacity.

Speaker 11: So just can you talk a little bit about why wouldn't you bring on this capacity faster in part-ash? Thank you.

So just can you talk a little bit about why wouldn't you.

All of this capacity faster.

In potash thank you.

Speaker 4: Great thanks, PJ. You know, I just, we are ramping up capacity again with this additional million tons that we did in 2021. And now building off of that into 2022. And again, preserving additional capacity over and above our 13.7 to 14.3 million tons. What we're trying to do and say it again, walk a very practical and pragmatic line here of getting products to our customers.

Great. Thanks P J.

So just we are we are ramping up capacity again with this additional million tons that we did in 2021 and now building off of that into 2022, and again preserving additional capacity over and above our 13, 7% to $14 3 million tonnes, what we're trying to do and I'll say it again walk.

A very practical and pragmatic line here.

<unk> product to our customers.

Speaker 4: And we're doing that at the moment, watching the markets in this Belarusian situation and how long this may last.

And we're doing that at the moment watching the market and this Belarusian situation and how long this may last and then.

Speaker 4: And then, you know, always important things, the left and the cost curve, and managing our costs. And so it's trying to strike that balance. And again, I'll say that, you know, I always say we're trying to avoid building churches for Easter Sunday because opening up ground and maintaining infrastructure, hiring people, only to see some of these potentially near-term supply side events go away, yet stuck with all those costs. So that's the practical approach we're trying to take.

<unk> important thing to the left on the cost curve and managing our costs and so it's trying to strike that balance and again I'll say that.

I would say we are trying to avoid building churches for Easter Sunday, because opening up ground and maintaining infrastructure hiring people only to see some of these potentially near term supply side events go away yet stuff with all those costs. So that's that's the practical approach we're trying to take.

Speaker 1: Your next question will come from the line of Michael Tupelm with TD Security Zink. Please proceed with their questions.

Your next question will come from the line of Michael <unk> with TD Securities Inc. Please proceed with your question.

Speaker 12: Thanks. Related to the last question and answer, regarding the potash business, if you do decide to add incremental production, can you talk about how quickly you can ramp up that, both in terms of the 500,000 tons of flex capacity and then anything also more significant beyond that? And then just as a follow-on along the same lines, can you also talk about expected timing for bringing on the incremental 500,000 tons of nitrogen production based on the Phase 2 expansions?

Thanks related to the last question and answer regarding the potash business. If you do decide to add incremental production can you talk about how quickly you can ramp up.

And both in terms of the 500000 tons of flex capacity.

And then anything also more significant beyond that.

And then just as a follow on along the same lines can you also talk about expected timing for bringing on the incremental 500000 tons of nitrogen production.

Just on the phase two expansions.

Yes.

Speaker 4: You know, again, with respect to pot, I should now hand it over to Ray for nitrogen, but again 14.3 million times at the top end of what we're guiding to today and preserving an additional half a million times at least, you know, after after that that we could bring on in the second half of this year. And I think in terms of pacing that, you know, that's how we can sort of think about it is, in from meant in sort of that ballpark.

Goodwill.

Again with respect to potash and then I'll hand, it over to Ray for nitrogen, but again $14 3 million tons of at the top end of what we're guiding to today and preserving an additional half a million tons at least.

After after that that we could bring on in the second half of this year and I think in terms of pacing that that's how we can sort of think about or is increments in sort of that ballpark as again, we're making these decisions mine development.

Speaker 4: As again, we're making these decisions, mine development, over upground higher people, some capital expenditures.

And hire people.

Some capital expenditures as we watch the market unfold as we watch some of these near term supply side events as our customers are looking for more volume.

Speaker 4: As we've watched the market unfold as we watch some of these near term supply side events and their customers are looking for more volume.

Speaker 9: So Michael just in relation to the nitrogen expansions, I think we've mentioned we've finished our phase one projects. The last major component of that was Borgah, which was finished in September . It's now operating.

So Michael just.

In relation to the nitrogen expansions I think was mentioned we finished our phase one projects. The last major component of that was booger, which was finished in September . It's now operating at the higher rates. So this year should be the first year, we see the full benefits of those phase one brownfield expansions the second phase is.

Speaker 9: higher rate so this year should be the first year we see the full benefit.

Speaker 9: of those Phase 1 brownfield expansions. The second phase has started.

Has started.

Speaker 9: But completion of the projects will be a three-year period.

But the completion of the projects will be.

A three year period.

Speaker 9: for 23, 24 and 25. The bulk of it should be finished by 24, the last project will be in 25. So we're just bringing those on gradually. Eight.

For 'twenty three 'twenty four 'twenty five the bulk of it should be finished by 'twenty four the last project will be in 'twenty five.

We just bring those on gradually.

It's a good mix of urea.

Speaker 2: of Urea and UAN, as well as the ammonia to supply those additional downstream products.

And <unk> as well as the ammonia to supply those additional downstream products.

Sure.

Speaker 1: Your next question will come from the line of Adam Samuel, Tim with Goldman Sachs. Please proceed for their questions.

Your next question will come from the line of Adam Samuelson with Goldman Sachs. Please proceed with your question.

Speaker 2: Yes, thank you. Good morning everyone. Sorry about that. I guess my question is on on capital allocation and really just trying to think about the new buyback authorization is committed to at least two billion dollars this year rattably and upside beyond that.

Yes, Thank you and good morning, everyone and sorry about that.

I guess my questions on capital allocation and really just trying to think about.

The new buyback authorization, you've committed to at least $2 billion. This year ratably in upside beyond that.

Speaker 4: by the 10% of shares. Can you help us think about alternative uses of cash that would be waiting in the wings? Is it really just a question?

Implied by the 10% of shares can you help us think about.

And alternative uses of cash that would be waiting in the wings or is it really just a question of what.

Speaker 4: What cash flow and EBITDA looks like this year that would dictate the upside, is there?

<unk> cash flow and EBITDA looks like this year that would dictate the upside is there.

Speaker 4: The M&A pipeline kind of give you some line of sight, that potentially some larger things coming through to try to get a sense of how where the danger cat ball is.

The M&A pipeline kind of give you some line of sight to potentially some some larger things coming through.

Just trying to get a sense of where.

Where the major capital allocation I'll come to realize.

Speaker 2: Yes, great. Thanks for the question. I'll pass it over to Pedro.

Yes, great.

Thanks for the question I'll pass it over to Pedro.

Speaker 13: Okay, Adam, thanks for the question. I, yes, I think we are in a very good, a strong cash position, not only from a point of view of even that generation, but also cash conversion. This year,

Okay Adam.

Thanks for the question.

Yes, So I think we are in a.

Very kind of a strong tax cash position not only from our point of view of EBITDA generation, but also cash conversion.

This year.

Speaker 13: Our cash conversion has fluctuated over time and we think at this point in time it's like 75% and we

Our cash conversion has fluctuated over time and we think at this point in time, it's like 75% and we.

Speaker 13: We are fairly confident, of course, on the...

We are fairly confident of course on on the first $2 billion.

Speaker 13: First, two billion dollars of the share my back. And we are kind of balancing those throughout the year. We're going to be doing those throughout the year. And

The share buyback and we are.

Balancing those throughout the year, we're going to be doing those throughout the year.

And.

Speaker 13: And that's the reason why we kind of committed to that. And in respect to the additional $2 billion.

And that's the reason why we kind of come.

Committed to that.

And in respect to the additional $2 billion.

Speaker 13: Frankly, when we started doing this forecast, since we did that, there was a few things that actually farmed up in the market.

Frankly, when we started doing this forecast since since we did that there is a few things that I actually firmed up in the market.

Speaker 13: Specifically the Indian and China contracts and some of the geopolitical risks that we have here

Specifically, the India and in China contracts and some of the.

Geopolitical risks that we have here.

Speaker 13: So it makes us even more confident on our guidance for the year. So should that additional cash...

So it makes us even more confident on.

On our guidance for the year so.

Should should that additional cash.

Speaker 13: materialized throughout the year. We do have an option of two billion dollars that we are seeing there.

Materialize throughout the year, we do have an option of $2 billion that we are seeing there.

Speaker 13: And of course, we'll see how the year develops. But this ought to be a dos, we are getting, we evaluate some of the options that we have.

And of course.

We'll see how the year develops but this ought to be in the doors, where we are going to evaluate some of the options that we have for investments throughout the year in specific some opportunities in retail that we have there's also.

Speaker 13: for investment throughout the year. In specific, some opportunities in retail that we have. There's also the evaluation of some low carbon ammonia that we are evaluating as a project.

The evaluation of some low carbon ammonia that we are evaluating as a project.

Speaker 13: And, you know, we'll try to utilize as much as possible for very attractive projects that we have. And...

And.

We will try to utilize as much as possible for very attractive projects that we have and should.

Speaker 13: Should we not be able to allocate those this year? Our intent is always not to hoard cash, but it's a distribute to the shareholders as we have done historically.

Should we not be able to allocate those this year.

Our intent is always not to hoard cash for them to distribute to the shareholders as we have done historically and therefore, we will overlay additional.

Speaker 13: and therefore we'll overlay additional share by-backs on top of that. So that's what's behind the additional 5% NCIB that we have because we're committing to five and with an additional cash flow that will be used for the other five.

Share buybacks on top of that so that's what's behind the additional 5% and CIB that we have because we are committing to five and with an additional cash flow there.

Be used for the other five.

Speaker 1: Your next question will come from the line of John Roberts with UBS. Please proceed with your question.

Your next question will come from the line of John Roberts with UBS. Please proceed with your question.

Speaker 2: Thanks. Welcome, Ken and good luck. On slide 22 and the stocks to use ratio, could you give us to your view on what the global stocks to use ratios are, whether they're higher or lower than the U.S.? Do you think constraints on nitrogen outside North America could constrain global crop?

Alright, Thanks, welcome Ken and good luck.

On slide 22 in the stocks to use ratio could you give us your view on what the global stocks to use ratios are whether they are higher or lower than the U S. And do you think constraints on nitrogen outside North America constrained global crop yields.

Speaker 2: Great, thank you, John . So I'll pass the first question to Jason Newt and my chief economist and then over to tooric on The Nature-aching Class.

Great. Thank you John So I'll pass the first question to Jason Newton, Our Chief Economist and then over to Ralph on the nitrogen question.

Speaker 3: Here at Morning John , as we look around the world at the stocks used to ratio, they are really tight as well. And actually, if you look at grain stocks outside of China, they're at the lowest level since 2007. So really historically tight.

Yes, good morning, John as we look around the world.

Stocks to use ratio they are really tight as well actually if you look at grain stocks outside of China. They are at the lowest level since 2007 so.

Historically tight.

Speaker 3: As we know, there's this crop's growing in multiple seasons, given northern southern hemisphere, and we already know Brazil and Argentina are having struggles with soybean production. So as we look forward to the coming year, there's already major growing regions with production challenges that will be supportive to maintaining the tightest.

As we know there is crops chromium and multiple season, given northern and southern hemispheres and we already know.

Brazil, and Argentina are having struggles with soybean production. So as we look forward to the coming year.

Already major growing regions with production challenges.

We'll be supportive to maintaining a tight supply demand balance going forward.

Speaker 3: supply demand balance going forward. But whether we're looking at corn or wheat or soybeans, palm oil, really across the board, across major crops.

Whether we're looking at corn or wheat or soybeans palm oil.

Really across the board across major Cros as supply demand balances are tight currently by historical standards.

Speaker 3: supply-man balances are tight currently by historical standards.

Speaker 9: So the second part of the question was, will we see any demand destruction, the tightness there? Look, I think a lot depends on how quickly the season starts and the length of it. I am a little bit concerned that within North America, for example, there may be constraints from a transportation and distribution perspective.

So I mean, the second part of the question was will we see any.

Demand destruction.

The tightness there.

I think a lot depends on how quickly the season.

And the length of it I am a little bit concerned that within North America for example.

The constraints.

From a transportation and distribution perspective.

Speaker 9: I think globally, if we don't have any constraints around transportation distribution, I think most of the people will be able to get most of what they need. But you know, to previous comments, it'll be at a good price because there's an underlying tightness in the supply there.

Think globally, if we don't have any constraints around transportation distribution I think.

Most of the people will be able to get most of what they need.

But it's to the previous comments.

It'll be at a good price because there's an underlying tightness in the supply base.

Speaker 1: Your next question will come from the line of Michael Piken with Cleveland Research. Please proceed with your question.

Your next question will come from the line of Michael <unk> with Cleveland Research. Please proceed with your question.

Speaker 14: Yeah, good morning. Just wanted to get your sense for the retail guidance and whether there's any tuck-in acquisition built in and kind of your growth strategy for both internationally and domestic in this environment where it seems like a lot of retailers just came off a pretty good year.

Yes. Good morning, just wanted to get your sense for the retail guidance and whether there was any tuck in acquisitions built in and kind of your growth strategy for both internationally and domestic and this environment, where it seems like a lot of retailers just came off a pretty good year.

Speaker 2: Great. Thank you, Michael. Yeah. Over you just sorry about the twins. Yeah. Hey, good morning, Michael. And we do have we're pretty conservative in what we have built in our plan for for just tough-eating acquisitions as

Great. Thank you Mike over to you just sorry about that.

Yes, hi, good morning, Michael and we do have we're pretty conservative in what we have built in our plan for.

Just tuck in acquisitions is as you know, which top of the cycle right now so we're a little bit more judicious when we're looking at those opportunities that we don't say that.

Speaker 6: As you know, we're at the top of the cycle right now, so we'll a little bit more judicious when we're looking at those opportunities. I will say that.

Speaker 6: I think that pipeline is still there and there are opportunities there as well. Obviously, and we continue to see a pretty rich pipeline in Australia and obviously Brazil's a growth area for us. And so we wouldn't necessarily turn our noses as tucking in. So when I look at tucking in acquisitions.

That pipeline is deals there and there are opportunities there as well obviously.

We continue to see a pretty rich pipeline in Australia, and obviously, Brazil is a growth area for us and so we wouldn't necessarily term those as Turkey, and so when I look at tuck in acquisitions, primarily looking at North America and Australia.

Speaker 6: I'm primarily looking at North America and Australia. And again, those opportunities are there. We want to be careful with where we are in this point, the cycle and the valuations we put on them. But we continue to look at those opportunities, and act on them.

Those opportunities are there we want to be careful with where we are in this cycle and valuations we put on them, but we continue to.

We continue to look at those opportunities and act on them.

Speaker 1: Your next question will come from the line of Stephen Hanson with Raymond James. Please proceed for their questions.

Your next question will come from the line of Stephen Hanson with Raymond James. Please proceed with your question.

Speaker 12: Yeah, good morning guys. Just a quick question on the allocation of your tons into different end markets here. Just looking at the CamperTech's data and the report, it does show a pretty market shift away from China and India last year towards Southeast Asian LADAM. You've got a couple new contracts signed here this week. So I think we'll see some normalization in that data, but we've also got to consider the vacuum created by the BPC tons that could be created. So I guess the question is, how should we think about the allocation of those tons?

Yeah. Good morning, guys. Just a quick question on the allocation of your tons into different end markets here.

Looking at the Canpotex data in the report it does show a pretty market shift away from China, and India last year towards Southeast Asia, and Latam you have got a couple of new contracts signed here. This week. So I think we'll see some normalization in that data, but we've also got to consider the vacuum created by the BPC tons that could be created so I guess the question is how should we.

About the allocation of those tons going forward into the higher better use markets.

Speaker 12: going forward into the higher, better use markets versus the past. Thanks.

In the past thanks.

Speaker 2: Yeah, no, great question, Stephen. Thanks for that. Yeah, I think what you can expect is with the China and India contracts settled now, you can expect a return to sort of historical market share for Capitex in each of the major markets that they serve.

Yes, no great question, Steven Thanks for that yes, I think what you can expect is with the.

The China and India contract settled now you can expect to return to sort of historical market share for canpotex and each of the major markets that they serve and so historically they've been about a third of the Brazilian market had been.

Speaker 2: And so historically, they've been about a third of the Brazilian market. They've been about a quarter of the Chinese market, you know, around a third of the Indian market, and then in North America, you know, about 44%. And so, again, in terms of allocation among the offshore market,

A quarter of the Chinese market around a third of the Indian market.

And then in North America.

44% and so again in terms of allocation among the offshore markets.

Speaker 2: Given those contracts, we will expect more standard rate going into China and India. It is true that last year, 2021, with that contract settled at well below market, capital X was diverting volumes to other markets. That's true, but again, with these latest settlements, you can expect to return to more traditional market shares.

Given our given those contracts, we will expect more standard grade going into China and India.

It is true that last year 2021.

With that contract settled at well below market cap, Texas diverting volumes to other markets Thats true, but again with.

These latest settlements you can expect to return to more sort of traditional market shares.

Speaker 1: We do have time for one final question in Q, which will come from the line of Adrian Tuchmano. With Baron Burke, please proceed with your question.

We do have time for one final question in queue, which will come from the line of Adrian took mono with Bahrenburg. Please proceed with your question.

Speaker 15: Hello, good morning. Thank you for taking my questions. I have two actually. First, on Belarus, do you see actually the sanctions having an impact on their growth projects, not the existing capacity?

Hello.

Good morning, Thank you for taking my questions I have two actually.

First on better risks do you see actually the sanctions.

Impact on the growth projects not the existing capacity.

Because.

Speaker 15: It could be that the country might not be able to

It could be that.

Sanction of the country and may not be able to act.

Speaker 15: actually handle well it supply chain and not be able to deliver on its growth in the coming years or you're seeing this with not be the case and they are well integrated domestically and secondly

Actually handle Wendy supply chain and not be able to deliver on its growth in the coming years.

<unk> seen in the Sweden won't be the case and what integrated domestically and secondly.

Speaker 15: For the low carbon ammonia, do you see apetypes from a farmer perspective currently, or we need carbon pricing to be more than just voluntary for these two really take off? Thank you.

For the low carbon and ammonia out do you see appetite from a farmer perspective currently we need carbon pricing to be more than just voluntary for these to really take off thank you.

Speaker 2: Great, thanks Adrian for the questions. And so yeah, with respect to your question, about Belarus, I mean, we are expecting some additional volume and new volume in the market here in 2022, but I'll pass over to Jason Newton for the longer term view. Sure, good morning Adrian. We didn't see some ramp up, we believe, at least of the Petrokov project in 2021 in Belarus. And I think,

Great. Thanks, Adrian for the questions and so yes with respect to your question about Belarus, I mean, we are expecting some additional volume in new volume in the market here.

2022, but I'll pass it over to Jason Newton for the longer term view.

Sure Good morning Adrian.

We did see some ramp up we believe at least of the Petro <unk> project in 2021 and Belarus.

And I think.

Speaker 3: done certain whether their sanctions will have any impact on them expanding or or racking up production further.

One of the it's uncertain, whether there are sanctions will have any impact on them expanding more or ramping up production further but with the constraints on shipping they.

Speaker 3: But with the constraints on shipping, they may be restricted in how much they can actually produce within Belarus, which could slow the ramp up, depending on how they allocate the volume within their system. But probably the sanctions and restrictions on their exports may have a bigger impact than sanctions with respect to construction of the project.

They may be restricted in how much they can actually produce within Belarus, which which could slow the ramp up depending on how they allocate the volume within our system. So I think probably the sanctions and restrictions on their exports may have a bigger impact than sanctions with respect to construction of the project.

Speaker 2: Yes, and then on the low carb, but ammonia, question, hydrogen, over-the-rate.

Yes, and then on the low carbon ammonia question Adrian over rate.

Speaker 9: Thanks, Andrew. So look, we're all watching this carefully. What's apparent, I think, to us?

Thanks, Andrew So so look.

We're all watching this carefully.

What's apparent I think to US is that the first place, we'll see low carbon ammonia used.

Speaker 9: is that the first place we'll see low carbon ammonia use.

Speaker 9: We'll be as an energy substitution. So power generation in countries that don't have access to other sources.

B is an energy substitution so power generation in countries that don't have access to other sources and also in transportation and you will have seen that we signed.

Speaker 9: and also in transportation. And you will have seen that we signed an agreement that the next vessel we get will be in your power. And we think that that's a good application.

An agreement that next to the vessel, especially we get will be ammonia pound, we think that thats.

A good application for it I do think there is growing demand in the agriculture sector.

Speaker 9: For it, I do think there is growing demand in the agriculture sector driven by the need for some of the crops to go or be classified as renewable or lower carbon. I think you will see that grow over time. So the answer is small today but growing. And in the meantime, we'll see I think strong demand from those other sources we talked about.

But the need for some of the crops to go will be classified as renewable or low carbon I think you will see that grow over time. So the answer is small today, but growing.

And in the meantime, we will see I think strong demand from those other sources, we talked to them.

Speaker 1: Alright, and we have reached the end of the allotted time for our Q&A session. I would now like to turn the call back over to Jeff Holstman for closing remarks.

Alright, and we have reached the end of the allotted time for our Q&A session I would now like to turn the call back over to Jeff Hoffman for closing remarks.

Speaker 9: Thank you for joining us today. If you have follow up questions, feel free to reach out to Investor Relations. Have a good day.

Thank you for joining us today, if you have follow up questions feel free to reach out to Investor relations have a good day.

Speaker 1: This concludes today's Cup Fits call. Thank you for participating. You've been out of disconnect. In that- Still can the

This concludes today's conference call. Thank you for participating you may now disconnect.

Right.

Yes.

Yes.

Yes.

Okay.

Great.