Nutrien Ltd. (NTR) Earnings Call Transcript & Summary

For the sake of kicking the conference off, we'll get going. So Ken and Mark, you just came off a very strong quarter, reported earnings last week, clearly capitalizing on the favorable Nutrien backdrop. So maybe we want to start off a little bit, if you want to rehash the year that was 2025 and where the company stays, and then we'll dive in and start there.

Yes. Thanks, Matt, and good morning, everyone. Good morning, Steve. It's good to see you. I think like everyone, it's good enjoying seeing Steve. Yes. So 2025 was a good year for us. And I would say that, that is true even though we obviously had some headwinds in North American agriculture, and we could talk about corn, soybeans and canola up in Canada. But at the same time, had reasonable, I would say, prices in our fertilizer business. And looking at Potash, we can talk about the market, certainly what we saw happen with nitrogen. And obviously, the phosphate market was in a place that -- where we saw prices well above mid-cycle levels. I think what I would say is in that environment, the backdrop for us it just continues to be that we're in a space, the agriculture industry where the demand for food just continues to grow. And we can talk about growing population and a decreasing rate of arable land expansion, absolutely everywhere that I go in the 50 countries, the 50-odd countries that we send our products, there's just this ongoing realization that farmers, governments can do more with the complement of land that they're farming. And that more is obviously seeds and germplasms and highest quality technologies there. It's killing weeds and it's killing bugs and it's balanced fertilization. So with the backdrop of a growing demand for just about everything that we do, we sit on what we believe are the highest quality assets upstream of an acre, and that is -- starts with our downstream business, our retail business, and that is serving over 600,000 grower accounts in North America and Australia, Brazil, it's our midstream assets that we've built out supply chain logistics, more built out than I would say, anyone else in the world. And then that is backed up by the largest footprint of fertilizer production in the world. And again, asset quality that we believe is top tier. We have been focusing on our business, I would say, with a renewed focus on a few things. One is portfolio, and Mark can talk about the work that he and his team has done to just focus on free cash flow asset by asset and sort of upgrading the portfolio accordingly. And that body of work has led to some projects that we have in flight, on calling some of the portfolio, and we can talk about that, Matt. I know you have that on your list of questions. We've been focusing on cost and even getting ahead of our $200 million SG&A target, which we achieved last year and heading into 2026, knowing that there'd be more that we can do. And there certainly is more we can do in terms of pulling out cost. And then just continuing to grow the business. So we increased fertilizer production again last year by $1.3 million. We increased our downstream earnings by $300 million. And again, when we do -- every year, we've got those retail earnings growing at 5% or 6%. We believe that's kind of structural in nature. And again, pulling out cost and then focusing on capital. That's been, I would say, the work that's been going on through 2024, 2025 and absolutely will be the focus of 2026. And that sort of culminates in the sources and uses of cash discussion. In other words, capital -- disciplined capital allocation. Maybe, Mark, you want to say -- talk a little bit about that.

Yes, Matt, I know we'll get into some of this more. But I think just to build on what Ken said, I think 2025 was a foundational year for Nutrien in terms of really setting a tone from a capital allocation standpoint in terms of what investors should expect from us. And as Ken said, that's capital discipline. We've taken $600 million out of CapEx over the last few years. You saw that in our numbers. From an investing CapEx standpoint, we've really simplified and focused the company in terms of where we're investing, things that we're good at in our core business where we have core structural advantages, and we can grow the company with accretive investments. And then from a return of capital standpoint, just that discipline that Ken talked about, including the introduction of ratable share repurchases as part of our framework to grow free cash flow per share across cycles, paired with steady growth in dividends per share. And so I think all the things that Ken said in terms of operational performance, controlling what we can control, doing what we say we're going to do, set the tone in terms of a very disciplined capital allocation strategy that was on display in 2025. And I think the punchline for capital allocation is that investors should expect more of the same from us in 2026. So Matt, maybe hand it to you to...

As opposed to passing that microphone back and forth, I'll just -- I'll stand up here. I mean, if we want to start on the retail business, 2025, the guidance and the outlook catches that kind of $1.9 billion EBITDA target towards the high end. But it also opens the door for some flattish performance year-over-year and clearly, farmer profitability is not extraordinary, and there are some headwinds. But you're also going through a number of company-specific actions to boost profitability. So as we look at kind of the high and low end of that range, it feels difficult at least for us to kind of get down to that lower side, given what you have going on. So can you just walk through maybe the puts and takes on...

Yes. So I'll hand it over to Mark to just provide the sort of list of assumptions on the high end and the low end. But yes, I think you sort of alluded to it there, Matt. When we originally set the Investor Day target of $1.9 billion to $2.1 billion, there were some, of course, assumptions about, I don't know, call it, historical averages or normal weather and normal agricultural patterns. And as I started out saying, it's -- last year, we saw where corn prices were and that record corn crop that came off and really kind of around the world in 2025. It's true that, that pulled an extraordinary amount of crop nutrients out of the soil, but certainly, the yields were there, and we saw the impact on corn prices with soybeans, obviously, the trade war with China buying today really less than half of what they were buying just a few years ago, and that's up from zero prior to striking a deal. So the soybean farmers have been -- in U.S., Brazil have been feeling that. And if it's North America, we're talking about, obviously, canola with China has been a huge challenge as well. So we can -- that's a North American story. We can go around the world, and there's some pockets where it's better, some pockets where it's worse. But certainly, for our core retail business, that's been part of the story. Australia has been a story about weather and dry conditions. So here we are in it's less than ideal agricultural environment. Obviously, funds from U.S. government are helping, but that's certainly part of the story and maybe Mark, do you want to just provide sort of the top end, low-end assumptions?

Sure. Happy to do that. And Matt, I think I'd just double back on the comment that Ken made earlier. When you look at where we set the bar at Investor Day, we were about $1.45 billion in 2023 in retail EBITDA. And so the midpoint of our 2026 guide implies about $400 million of EBITDA growth over that time period. As Ken said, we think it's structural because of the changes we've made. So notwithstanding the tough environment, the growth has been quite impressive. I think notwithstanding that, based on what Ken said and our outlook for the environment, obviously, it's incumbent upon us to provide the best view that we can to investors based on the world we see around us. That said, at the midpoint of our guidance, we're going to be growing the business about 6% on an EBITDA basis year-over-year in that kind of environment. And as we said on the call, there's a few core anchoring assumptions on that. I think, one, at that midpoint, we would expect that you've got kind of mid-single digits fertilizer volume growth year-over-year, and that's informed by the fact that we had an early cutoff to the fall season with snow in the U.S. in December that sort of stopped that field activity. Importantly, we see high single digits proprietary product growth in 2026. And that's obviously part of that engine of ratable growth in retail that Ken talked about, and we see a great opportunity, both on the CP side, but our nutrition business, which has been growing at a very good clip over the years. And so that's embedded at the midpoint of our guidance. The other would be that we experienced some tough weather conditions in Australia last year. We assume a normalization of those conditions. And then in terms of what we can control, an assumption that we continue to look at cost takeout opportunity across all of our geographies, which has been a core part of what we've been doing over the last few years in that structural growth. And then lastly, I would just say on the CP side, generally for Crop Protection in our total shelf, looking at kind of mid-single digits gross profit growth with some of the recovery there, including weather and in our business. So really, you could toggle any of those assumptions to figure out where you are in the high and low case is always the case. Weather is a factor in our business. But we think based on the environment we see that we've set the bar appropriately for that growth. And I think importantly, when you cast out beyond 2026, as Ken said, we think those drivers are structural in nature. So we think that mid-single-digit growth for our business, which we've achieved over the last number of years is something we can cast forward into the future, such that this is a growth story for Nutrien.

Tuck-ins have been kind of a [Technical Difficulty] that profile. Tuck-in acquisitions probably have slowed a little bit. And obviously, the portfolio in general is shifting. As you think about Nutrien's retail footprint, right, we've talked or you've talked openly about Brazil and whether that business has earned a position. Obviously, Australia has had its own issues, some more recently weather related. But as you look at what that business ultimately -- like the footprint over time, what are you expecting? What's your 5-year vision for that plan?

Yes. I would say that when we -- as Mark just explained, when we think about guidance or our next set of targets that might be a few years out, we're not assuming that we do a certain number of tuck-ins that are going to stack EBITDA, and we'll come out the other end having achieved the target. For us, it's always -- and maybe it's a statement of the obvious, but it's always about the quality of the opportunity and whether that opportunity is going to meet both our strategic objectives, and you talked about it, Matt, sort of like what's your footprint? Where do you crave to have better access in the name of both the synergies associated with that acquisition, but then our ability to grow organically beyond that. And then finally, looking at the network that every time you complement that network with a tuck-in of some storefronts, how you can optimize the network after you've done that acquisition. And there's actually more and more work that we're doing in that regard to understand, well, when you do that tuck-in, actually, is there an optimization exercise that reaches right from that branch all the way through our midstream assets, all the way through up to our production -- crop nutrients, fertilizer, nitrogen, NPK products. So again, strategic fit and then, of course, the financial metrics and certainly, IRRs, but doing more and more payback as well in terms of when you're going to see $1 of positive cash flow from these things. Applying that sort of that lens to tuck-in acquisitions over the last 1.5 years has led to fewer tuck-in acquisitions, exactly as you said, Matt. Now we'll always look at those, but I would say we're really scrutinizing them in a way just more and more in a way that maybe we haven't in the past. And it's only not in the context that we haven't been scrutinizing, but some of our criteria is changing. So that today, in terms of the retail regions where we serve farmers, the focus really will be on North America, probably the U.S. There are parts of the U.S. where we'd like a greater presence. Corn Belt is a good example. It's really sort of dominated by the co-ops. So it's difficult. But we'll -- we did a few last year, and we have a few in the pipeline this year. And we'll look at Australia as well, albeit our market share in Australia is really quite substantial. Brazil, Brazil is a region where we're, as you say, has Brazil earned the right to be in the nutrient downstream portfolio. I think we're coming to the conclusion. The answer is actually no. And the reason for that is that we simply have better uses for our capital. When we look at the performance of that business and when we project out what we think it will do, even if the thing is cash flowing in a positive way, which it hasn't over the last couple of years, it's -- it is -- we're coming to the conclusion that there's just, like I said, better uses for our capital than Brazilian retail. So we may be going -- and we'll have some conclusions on that this year, but we may be going the other direction in Brazil.

It feels like -- I mean, you're not alone, right? There's retrenchment in Brazil. People are trying to figure out the best way to compete. We've got nutrient mines and processing facilities closing or being sold, retail businesses going bankrupt, closures of retail footprints in general, retrenching of sales strategies across different companies. I mean, maybe take a minute or 2 and just try to articulate why competition in Brazil is so hard. And for a market that's generally expected to be a growth engine for the next few years, how do you -- how has your opinion changed on how you're actually going to be able to participate profitably?

Right. And I think to your point, Matt, there's been a bit of a reckoning there, and that will continue. Still a very exciting agricultural market that we can serve through our -- what we would just describe as really our core business, fertilizer, proprietary products. And retail, obviously, North America, Australia, but not necessarily Brazil. But I'll hand it over to Mark, whose team has been hard at work on collections and certainly focusing on our business down there and our business improvement plan over the last few years. So Mark, maybe you want to talk about Matt's question.

Sure. Thanks, Ken. And I think, Matt, on the more fundamental question about the industry, I mean, you look back over the last couple of years, there have been some structural changes in Brazil. So I think you go back to what happened during the Ukraine-Russia war at the outbreak, there was a stocking up of fertilizers during COVID, there was a stocking up of chemicals. And there was a fairly painful de-inventorying process for the whole country in the ag supply chain, certainly on the input side to get through that. And that took the better part of a couple of years to move through that. At the same time, the price volatility, some of the economic conditions in agricultural markets also caused a shift to more just-in-time purchasing behavior at the grower level. You couple that with interest rates in Brazil going from 2% to 15% and the cost of working capital has gone up exponentially. And all of that has created a fundamentally different cost structure for the industry and a different set of behaviors in the market, which has led to a lot of the things that you talked about in terms of some of the challenges in Brazil. In response to that, we did everything that we thought was appropriate in terms of shuttering locations, closing blenders, taking cost out of our system, actually shrinking our business to get better, leaning more into proprietary products, as Ken said. And when you look at the results of that on a year-over-year basis, we went from just under negative $80 million of EBITDA in our downstream business in Brazil in '24 to being right on target at about breakeven earnings in 2025 and actually some positive cash flow. That said, we have about $0.5 billion in invested capital there today. And as Ken said, breaking even is not the definition of success in Brazil. So when we step back and we think about Nutrien's exposure, as Ken said, by far, our most material exposure to Brazil is Potash through Canpotex and Nutrien's relationships in the country. That's a very profitable business. Credit risk is minimal. We've operated that business successfully for years. And as Ken said, we love that business. We have exposure to the growth in the Brazilian market in a very profitable way that's sustainable and growing. As Ken also mentioned, proprietary products is an engine we think can be very successful without some of the same challenges that the retail channel is presenting to us, which takes us to retail and my comment on the invested capital and with that free cash flow and the returns lens that we have, really having to earn its right in the portfolio, which takes us to what Ken said, which is the analysis in 2026 of our options, what the future looks like there and where the dollar is best deployed for a shareholder, which is the work that we're doing now. So we do see all the positives about Brazil. I think it's really an exercise in positioning Nutrien with those core businesses of ours where we have strong competitive advantages to get leverage to that growth in the right ways.

Okay. I appreciate that. I want to pivot a little bit. And Ken, you mentioned something that I'm just thinking about in general as it relates to the fate of the U.S. farmer or I should say like the fate of the U.S. soybean farmer, right? Because Brazil is stepping in, in a much more material way as a global source of soybeans. China is more than happy to purchase from Brazil. They're using it as a trade tactic, certainly in negotiations. What -- I mean, near term, would we see -- or do you expect farmers to maybe shy away from switching to soybeans because there's a concern about having a market for it? And if we look 5 years down the road, if Brazil keeps this path, like what is ultimately you think the path for the soybean out of the U.S.? Because if we get supplanted, it creates a little bit of a conundrum for our farmers, both from like a normal healthy crop rotation side of things, but also just financial flexibility.

Yes. We actually had the head of the American Farm Bureau Federation come up to Canada last week and talk to our Board. And some of it was about exactly this. And yes, I think there's a lot of concern about -- among the U.S. growers about never getting that Chinese market back to where it was at 25 million tonnes of soybeans and that the Brazilians are happy to supply that volume. I think stepping back from the entire -- that sort of localized discussion, you look at global grain stocks-to-use ratio, which has been for the last several years, well below the 10-year average with the crop that came off last year, we're sort of at average levels in terms of stocks-to-use ratio. I think that if you believe that grains and oilseeds are global markets, which they are, ultimately, it becomes a zero-sum game. And when the Brazilians are supplanting the Americans and the head of the Farm Bureau Federation said this last week, the Americans go and look for new markets. They look for the markets that the Brazilians vacated. That's always bumpy. It's always volatile. And we've lived this with our fertilizers. It's also more expensive because you typically go to your backyard or go where logistically, it makes most sense for any of these suppliers. I think there is that transition in some ways underway. In the meantime, the Americans -- U.S. growers going to plant corn and soybeans, they are. I mean, we're saying 94 million to 96 million acres of corn next year and sort of high 80s in terms of soybeans. In other words, historical levels as this transition takes place. So I'm not going to count out the U.S. soybean farmer. It's obviously some of the best technologies, best yields, best farm practices in the world that can compete, and it is a global market. So I think in the meantime, we're in a bumpy period here for sure. The last thing I'll say is what the U.S. government has done with the $11 billion announcement just prior to the holidays, some of the relief in the one big beautiful Bill Act and even now Congress, I think considering some more for the U.S. farmer, that really obviously helps through that, if you can call it a transition.

I appreciate that. I asked this kind of to pivot a little bit. I asked this on the earnings call, about Trinidad, right? I understand the gas availability issues and clearly, the Trinidadian government is putting pressure to extract more economics in the form of gas prices. And based on the return profile, it's not really a tenable solution. And so the asset is down. As I think about the long-term optionality, right, and we talked about the Venezuelan government changeover, how do you think about the decision to decommission? Is decommission on the table? Or is it just care and maintenance for the next few years? Because the plant wasn't unprofitable. It was maybe breakeven or the returns weren't there on a cash basis, correct me if I'm wrong. Obviously, that could change if gas prices move up. But -- where does your mind go as it relates to the longer-term optionality of that plant? And does it really change with what we've seen in Venezuela? Did you wake up that morning saying, wow, this is a little bit different? Or was it like, we'll see.

No, I think it's a very good point you're making. I mean, I think -- first of all, we sort of haircut the probability of Venezuelan gas coming anytime soon. New additional full gas on the island there in Trinidad, it's always 3 years out. And it's been 3 years out since I joined Nutrien. And then next year, it's going to, I believe, be 3 years out. It's just extraordinary uncertainty around what's happening with Venezuelan energy and then building a pipeline on the seabed over to the island there and then the complications associated with feeding energy on the island, obviously, the industrial complex, which we're part of and then exports with their LNG terminals and the competition among those 3. I think the change -- the one change that you'd see with full complement of gas would be we've been throttling our plant, 75%, 80% operating rates because we don't get gas to run our plant. But your point, Matt, is a good one is that if it's uneconomic at 100%, uneconomic at 80%, it's kind of uneconomic at any level of gas supply, and that's because of cost. That's because of what the Trinidad government told us just in the fall of last year, and that is your gas costs are going up. Your access to the port and port fees are going up. And I get it, the government of Trinidad and the island has their own needs, their own challenges, but it simply renders our plant uneconomic. And so we made the decision to shut it down. We're talking to the Trinidad government right now. I would say everything is on the table in terms of our outlook, but maybe I'll let Mark talk about how we're sort of seeing that assessment through 2026.

Yes. I don't have a lot to add to what Ken said. I mean I think he's painted the picture of the backdrop really well. And so back to your point, Matt, I think at the end of the day, there's a lot of human resources, management attention, capital risk, all those things you bear when you run an operation of that size. And so ultimately, when we look at free cash flow that was already stressed from this facility, I think Ken has said a number of times or myself on our public commentary and calls, notwithstanding that it generates EBITDA from a free cash flow standpoint because of all the reasons that Ken just cited, it's very negligible, less than 1% of total free cash flow at old, more attractive cost structures, which if everything is going up, I think just puts further pressure on that picture. So when we think about the focus of the company and we step way back, we've been stewarding all of our assets, the portfolio review process, looking at free cash flow, looking at free cash flow volatility, stability, growth, returns on invested capital, management attention such that our portfolio is a portfolio that cash flows in any market environment and the profile of Trinidad that Ken just described really doesn't fit that picture. And so as Ken said, like the other items that are under portfolio review for us, phosphate, Brazil, we'd like to make a decision on Trinidad in 2026 based on the factors that we see. But obviously, there will be a number of factors that play into that. But I think the philosophy of the company is very clear, and this is a situation that doesn't fit the portfolio in its current state.

And this is maybe a little bit of a circular reference here, but ammonia has been pretty tight. Clearly, we've had some geopolitics at play, some asset inconsistencies. But there was a little bit of a difference between what you had kind of mentioned on the earnings call in CF as it relates to what the expectations are around ammonia. I think you were in the camp that ammonia stays tighter. At BofA, we're a little bit more concerned about the ammonia market. But what is ultimately feeding that? And is there any -- I mean, presumably, if the expectation is tight, does that lean for the Trinidad to stay? Or is it like almost 2 entirely separate conversations?

Yes. I think the situation we described is highly bespoke to our operations on the island, the government context, the cost structure that Ken talked about. So that decision was driven entirely by those factors. You've got a confluence of things happening in the ammonia market today. I think like you, we would have entered the year expecting ammonia prices to ease based on the fundamental factors, supply and demand globally that we saw in front of us. There was expectations of new supply in North America, which those start-ups have been bumpier than expected. You've had plant outages, less production, some of those issues on the Trinidad Island generally across the whole industry. You've had issues elsewhere in the world. And notwithstanding all of that, you've had very high gas prices in Europe as well, which tends to be the marginal cost-setting mechanism for the Tampa ammonia contract. So we continue to say that the nitrogen market has been supply driven. So the combination of outages, supply crunches, geopolitical uncertainty and risk coming into the market, all of that has kept a bottom under ammonia prices. And by definition, those things can't be predicted. So here we are in a tighter-than-expected ammonia market to start the year.

And to parlay that, right, like bumpy commissioning. Obviously, there's concerns around potash supply kind of next year with Jansen and I mean, maybe towards the back half of next year. And similar expansion work kind of in the Eastern former Soviet Bloc, right? How do you assess the risk to that market? What's your view ultimately on how this tonnage filters into the market? How -- I mean, I don't want you always to comment on somebody else's business, right, but kind of want you to comment on somebody else's business at the same time.

Yes. We obviously think hard about that. So we're happy to comment on our assumptions around how we see sort of things playing out between now and end of this decade, early next. And yes, of course, as demand continues to grow, and I'd start out by saying that food and food security and governments realizing that food security is now national security in light of all this geopolitical uncertainty and risk. And hence, the growth that we've seen in fertilizer volumes and potash has been absolutely part of that story. We talk about 2.5% average annual growth rates. And while that's not, of course, linear, if you step back and look at it over the last 10 years, it's been exactly that. And even since -- and Mark mentioned the sort of the volatility that was created by the conflict in Eastern Europe and volumes were way up, shipments were way up in light of supply concerns only to come off the following year in light of extremely high prices. And so that was a blip in that sort of, if you could call it, 2.5% average annual growth rates. In the meantime, we've had 4 years of potash demand growth in a row. We're saying this year, we're going to grow again. And we're right back on what we would call sort of trend level demand growth as if the conflict in Eastern Europe never happened. And we expect that obviously to continue to go through the end of the decade, early next and beyond. So that when you get to the end of the decade, we're in an 80 million to 85 million tonne market. We're saying 74 million to 77 million tonnes this year, about 1 million tonne growth from -- at the midpoint from what the number -- shipments numbers came in last year. And it's important to note that when we talk about shipments, we're not seeing inventory build either. And so shipments is equaling consumption. And so when we say 4 years in a row, demand growth, that's certainly part of the story is when you don't see inventories building, you don't have a year where there's destocking. They just -- it continues to go to ground. And we can talk about what we're seeing in China, particularly in terms of volume growth, and it's really quite extraordinary. So that's the demand side of the equation. And then to your point, Matt, you sort of look at the supply stack and you go, well, how is that demand consumption going to be met? And there's obviously sort of the incumbents and their plans, albeit there's some depletion among the incumbents, and that would be true for -- absolutely true for Chinese domestic production, for example. We see that every year coming off. And of course, we all know that, that has been on the books that we've known that, that's going to happen. Indeed, it is. So you've got the current supply stack with depletion and then some new tonnes, as you say, Matt, and yes, we have assumptions about new production coming out of Russia over the period. And yes, we have assumptions about new production coming out of Belarus and maybe 1 million tonnes more out of Laos, albeit certainly with risk as you've seen the challenges in Laos and their ability to bring on volume, given sort of the really difficult geology that they're dealing with. And yes, we have Nutrien and our plans to continue to grow our volumes, which we have been over the last -- since -- again, since I joined the company, every year increasing production. And this year, we'll be about just over -- or about 14.5 million tonnes with 15 million tonnes of capacity. Again, that's growth again from last year. And so we talk about our 19% to 20% market share. We believe we'll maintain that. It costs us about $200 a tonne in CapEx to bring on that next tonne. And we can get to 18 million tonnes with -- those CapEx levels. That would be today, the only benchmark I have is that new mine that's being developed in Saskatchewan, which is probably $3,000. Well, probably it is. It's announced. It's $3,000 a tonne for that greenfield development. In other words, our next tonne is extraordinarily competitive from a CapEx point of view. And then from OpEx, we talk about the work we're doing on mine automation and our ability to fight back inflation and stay at that $60 cash cost per tonne, which would be among the most competitive produced tonne in the world. And then we can talk about the investments we're making in logistics. We've just announced a new terminal off the West Coast of the U.S., Washington State, where on a delivered basis, again, we're going to continue to be among the most competitive. So we're going to be there with our tonnes. As it relates to Jansen and BHP's project there, let's see, announced new production -- start of production next year, 2027, ramping up to their Phase 1 volumes by end of the decade, early next 4 million tonnes. But I keep saying 4 million tonnes in an 80 million to 85 million tonne market, frankly, we think the market is going to call for those tonnes. We are going to need those tonnes. The last thing I'll say is everything I described is if all these operating rates and mines work properly, if we're looking at announced plans, they're on the books, this is the way it's going to work. When we look back decade after decade, the market usually loses 6 million to 7 million tonnes per decade. And that's just unforeseen events. And it sort of happens ratably. And whether it's a sink hole or a mine flooding, you're going to talk about exactly what's going on in Laos with water, geology and mine flooding, we lose 6 million to 7 million tonnes. So when we think about sort of the base case between now, end of the decade, early next, we call it kind of a balanced market as it is today. But as it relates to sort of skewness toward is there upside to that market or downside? We skew to the upside actually because we think that everything has to work properly in order for it to be a balanced market. And the history would tell us everything doesn't work properly all the time.

I don't know if I'm happy to open it up. We've got a few minutes left. If anybody in the audience has a question, I'm happy to kind of entertain. Otherwise, I did want to just talk a little bit about capital calls because to your point, you've got a pretty attractive return on CapEx. You're net talking about probably closures of footprint more so than adding. So Mark, as you think about the cash profile of Nutrien, like mine automation. Maybe that's a good example of something where you're investing in, but none of that is like large dollars. So if I look out over the next few years, are there any major capital calls or investments that Nutrien will ultimately make?

Yes. Thanks, Matt. I mean the short answer is no. But I think you go back to Ken's vision for the company and really what's been manifested here over the last couple of years, and it's, again, back to simplifying and focusing the business, really focusing on operational performance, operational excellence and then just being exceptionally disciplined, thoughtful and intentional about capital allocation. And that's really founded into the capital stack. So when you go back to some of the decisions we've made over the past couple of years, I mean, I think the cancellation of the Geismar Clean ammonia expansion is a good example of that. The thought of having CapEx risk that is that multiyear in nature with a very uncertain market backdrop was not something that we felt was in the best interest of a Nutrien shareholder, and there were far better alternatives for that capital. In our core business with things we're good at with lower risk or just giving the capital back to shareholders directly. So when you look at our capital allocation priorities for '26, I think it's a blueprint for what the next several years could look like for us. And so if you look at CapEx, once again, we've guided to $2 billion to $2.1 billion. We've held that level that's well below the Investor Day target. In there is about $1.65 billion of sustaining CapEx, which we've done a tremendous amount of risk-based work to hold that number back in a safe and reliable way for the business. We've got about $400 million of growth CapEx. And as you said, it's not any large multiyear chunky projects. It's automation in potash, finishing our nitrogen debottlenecks and the retail priorities that Ken talked about. So beyond the $2 billion to $2.1 billion in CapEx, we've got about $0.5 billion in capital leases. The dividend continues to be about $1 billion. And really, the marginal dollar today is going towards that ratable buyback program for shareholders. And so I think there's a couple of important points to zoom in on. One, with the divestitures that we made last year of Profertil and Sinofert, that allowed us to get the balance sheet in an even stronger position. We paid down over $600 million in debt. We like where we're at for where we are in the cycle today with a lot of optionality. And when we look at what Ken talked about earlier in terms of that steady earnings growth in the company with ratable improvements in fertilizer volumes and reliability, ratable growth in the retail business, continuing to pull cost out of the business, we think the structural earnings base for the company just continues to grow and increase the amount of cash available for allocation. So there's upside to the amount of cash we can return to shareholders over time. And as we buy back the stock, it allows us to grow dividends per share without touching dividend expense. So that formula, that blueprint is something that Nutrien shareholders can expect to continue to see from us. And we don't have any projects on the horizon that are multiyear or chunky in nature, and we don't see any today. And if we do see something, the lens we will take is, is that better for a Nutrien shareholder than just giving the capital back? And the whole goal of that entire framework is growing free cash flow per share across cycles, which all of the ways that we're deploying capital today do. So I think that's a very consistent approach. It's a shared philosophy inside of Nutrien. It's based on the vision that Ken set out and shareholders can depend on us to continue to do that.

All right. I appreciate it. Thank you, both Mark and Ken, for leading off the day and for joining us. So we'll end it there.

Thank you, Matt.

Thanks.