Joel Jackson

Joel Jackson asked about the change in phosphate production expectation from 2 million tons per quarter to 1.7-1.8 million tons per quarter, and if this adjustment is primarily due to turnarounds in the first half of the year.

Answer

President and CEO Bruce Bodine clarified that the guidance is based on demonstrated trailing three-month performance, implying potential upside. He reiterated confidence in reaching full utilization and 8 million tons, citing progress in operating factors.

Joel Jackson asked about the change in phosphate production expectations, specifically why the company is now targeting 1.7-1.8 million tons per quarter compared to a previous expectation of 2 million tons per quarter, and if this is primarily due to first-half turnarounds.

Answer

President and CEO Bruce Bodine explained that the current guidance is based on demonstrated prior trailing three months, implying potential upside. He stated that the company is being more cautious with guidance after potentially getting ahead of itself in the past, but expressed confidence in reaching full utilization and 8 million tons, citing ongoing operational improvements.

Joel Jackson of BMO Capital Markets requested granular detail on the ramp-down of the $50 million in extraordinary idle and turnaround costs, asking how these costs are expected to phase out in Q3 and Q4.

Answer

Bruce Bodine, CEO, President & Director, clarified that while Mosaic does not provide quarterly guidance on this specific line item, the costs are not expected to repeat at Q2 levels. He provided context that normalized annualized turnaround costs for the phosphates segment are typically in the $100-$110 million range. Luciano Pires, EVP & CFO, also directed investors to historical data provided in the earnings presentation.

Joel Jackson questioned the expectation of a potash supply decrease from Belarus, noting that recent export volumes were high, and asked about Mosaic's strategy in response.

Answer

EVP, Commercial Jenny Wang acknowledged that Belarusian shipment reductions haven't materialized as announced. However, she highlighted that production cuts from China and Chile, combined with lower imports, have driven Chinese port inventories to critically low levels, creating a favorable setup for future contract negotiations.

Speaking on behalf of Joel Jackson, an analyst asked what Mosaic's maximum potential potash production could be in 2025 if global demand were to surprise to the upside, relative to the company's current guidance.

Answer

Bruce Bodine, President and CEO, stated there is limited upside to maximum production from Mosaic, as key mines are already running at full rates. He identified the primary constraint as the Canadian supply chain, including rail and port capacity. EVP of Commercial Jenny Wang added that there is no significant spare production capacity available elsewhere in the world.

Joel Jackson inquired about the 2025 potash market outlook, specifically regarding supply and demand growth, and questioned how many incremental tons Mosaic could supply next year.

Answer

Jenny Wang, EVP of Commercial, projected 2025 demand growth driven by affordability, with supply increases expected from Russia and Laos. President and CEO Bruce Bodine added that Mosaic's Hydrofloat project at Esterhazy will add 400,000 tons of capacity by mid-2025, bringing the Esterhazy and Belle Plaine mines to a combined 9 million-ton production capability. He noted the Colonsay mine would be used flexibly to meet additional demand or cover turnarounds.

Joel Jackson inquired about the implications of various Carbon Border Adjustment Mechanism (CBAM) scenarios (as is, suspension, offsets/subsidies) on CF Industries' business this year and the projected returns for the Blue Point project. He also asked for details on the Yazoo City plant restart, specifically if the plant configuration and product mix would remain the same, and if there's a particular piece of equipment driving the Q4 2026 restart timeline.

Answer

Chris Bohn, President and CEO, stated that CBAM is in place, and European customers continue to show interest in low-carbon products, with CF Industries securing premiums from various global sales. He noted that the company did not model any product premium from Blue Point or Donaldsonville low-carbon products, so any realized premium is upside to internal rates of return. For Yazoo City, Mr. Bohn clarified the incident affected the ammonium nitrate plant, with the Q4 2026 restart driven by long lead times for electrical components. Rich Hoker, VP, Interim CFO and Chief Accounting Officer, added that the full-year EBITDA impact is estimated at $200 million, but they expect to offset most or all of this with business interruption insurance proceeds.

Joel Jackson asked about the potential scenarios for the EU's Carbon Border Adjustment Mechanism (CBAM) on CF Industries' business and the returns for the Blue Point project, as well as the restart plans and equipment needs for the Yazoo City plant.

Answer

Chris Bohn, President and CEO, CF Industries, stated that CBAM is in place and European customers are showing interest in low-carbon products. He emphasized that Blue Point's internal rate of return models did not include product premiums, viewing them as upside. Rich Hoker, VP of Interim CFO and Chief Accounting Officer, CF Industries, explained that the Yazoo City incident affected the ammonium nitrate plant, with a restart expected in Q4 2026 due to long lead times for electrical components. He also noted an estimated $200 million EBITDA impact for 2026, largely offset by business interruption insurance.

Joel Jackson asked if the $75 million of brought-forward maintenance CapEx in 2025 implies a lower base CapEx of $425 million for 2026, and about the potential duration of the Yazoo City outage.

Answer

Chris Bohn (EVP and COO) clarified that the 2025 CapEx increase was due to more completed projects, a nitric acid precious metal purchase, and slightly higher costs, and that the base CapEx for 2026 is still expected to be around $550 million. W. Anthony Will (CEO and President) stated it was too early to speculate on the Yazoo City outage duration, confirming the ammonia plant was not directly affected and the focus is on safety and investigation.

Joel Jackson asked if the $75 million of maintenance capital expenditures brought forward into 2025 would result in a lower CapEx projection for 2026. He also sought an update on the Yazoo City incident, specifically regarding the potential duration of any operational outage.

Answer

Christopher Bohn (EVP and COO) clarified that the 2025 CapEx increase was due to more completed projects, a nitric acid precious metal purchase, and slightly higher costs, maintaining that $550 million remains the base CapEx for 2026, in addition to Bluepoint. W. Anthony Will (CEO and President) stated it was too early to speculate on the Yazoo City outage duration, noting the ammonia plant was unaffected and the focus was on safety and investigation, not immediate financial implications, while reiterating the 10 million tons ammonia production target for the year.

Joel Jackson of BMO Capital Markets asked for clarification on a report suggesting a temporary halt in loading at the Donaldsonville facility, questioning if it was due to strong demand depleting inventory or a production issue.

Answer

EVP & COO Christopher Bohn clarified the report was incorrect and there were no operational issues. He explained that strong demand led to extremely low urea inventory (2,000 tons vs. 7,500 tons/day production). The team made a management decision to pause loading over a weekend to rebuild inventory for more seamless and safe operations.

Joel Jackson of BMO Capital Markets asked about the dynamics of the spring fertilizer market and how CF Industries is mitigating capital inflation and labor risks for the Blue Point project.

Answer

EVP Bert Frost described the spring market as very positive with a strong order book, driven by low inventories and strong demand, which he expects to continue into Q3. CEO Tony Will addressed the project risk, explaining that Blue Point will use modular construction with large components built overseas on a fixed-price, lump-sum turnkey basis to dramatically reduce on-site labor and protect against inflation.

Joel Jackson asked about CF Industries' natural gas hedging strategy for 2025 amid price volatility and questioned the year-over-year change in the company's EBITDA sensitivity grid.

Answer

EVP Bert Frost stated that the company has been more opportunistic, hedging front-month gas for commitments and weather volatility. CEO W. Will added that the EBITDA grid is a heuristic based on the prior year's actual product price differentials and cost structure, which included heavy Q1 maintenance in 2024, as noted by EVP & COO Christopher Bohn.

Joel Jackson of BMO Capital Markets asked about the Q4 sales outlook versus Q3, the status of the greenfield blue ammonia project, and whether its economics are viable even without new clean energy demand.

Answer

EVP Bert Frost explained that sales patterns vary yearly and the Q4 order book is healthy. CEO Tony Will confirmed the project's estimated $4 billion cost is reasonable and that it can generate a solid return based on traditional ammonia demand and 45Q credits alone, given the tightening global market. EVP & COO Christopher Bohn added that potential partners are comfortable with these capital parameters.

Joel Jackson asked for a bridge between the previous retail guidance range of $1.9 billion-$2.1 billion and the current $1.85 billion plan for 2026, specifically highlighting proprietary products, Brazil, North America, and retail tuck-ins.

Answer

Ken Seitz, President and CEO, explained that the $150 million difference is primarily due to modestly weaker macro fundamentals, leading to slower proprietary product growth and more selective tuck-ins. He detailed actions taken to accelerate cost reductions, including Latin American restructuring, closing over 50 underperforming locations, reducing headcount by over 400, and optimizing capital expenditures, which have structurally increased retail EBITDA by $400 million since 2023.

Joel Jackson asked about bridging the retail guidance from previous targets to the current $1.85 billion, specifically inquiring about the impact of proprietary products, Brazil operations, North American retail, and tuck-in acquisitions.

Answer

Ken Seitz, Nutrien's President and CEO, explained that the $150 million difference in retail guidance was primarily due to modestly weaker macro fundamentals, leading to slower proprietary product growth and more selective tuck-ins. He detailed actions taken, including accelerating cost reductions, restructuring in Latin America, implementing the Brazil margin improvement plan, closing over 50 underperforming locations, reducing headcount by over 400 positions, restructuring non-core businesses, optimizing capital expenditures, increasing contributions from Nutrien Financial, and improving working capital management. He highlighted a structural increase of $400 million in retail EBITDA since 2023.

Joel Jackson inquired about the short-term outlook for the fall season, specifically regarding crop nutrient demand in Q4, previous expectations of 5% growth, the impact of an early harvest, and potential phosphate/potash demand deferral observed by competitors.

Answer

Ken Seitz, President and CEO, noted that the retail business guidance midpoint remains unchanged, with strong Q3 plant health season. Jeff Tarsi, EVP and President, Nutrien, added that strong crop yields necessitate nutrient replenishment, and favorable weather is supporting robust fall applications of anhydrous, P&K. He projected slightly elevated volumes year-over-year for the fall, with nitrogen volumes likely up, potash flattish, and phosphate volumes potentially a bit down, as growers prepare for the 2026 corn crop.

Joel Jackson asked for an update on the fall fertilizer application season, specifically regarding crop nutrient demand in Q4, given earlier harvest and competitor comments about demand deferral.

Answer

Ken Seitz, President and CEO, noted that the retail business guidance midpoint remains unchanged. Jeff Tarsi, EVP and President of Nutrien, added that strong Q3 plant health sales and robust crop yields are driving the need for nutrient replenishment. He expects nitrogen volumes to be up, potash flattish, and phosphate slightly down in the fall, with favorable weather supporting current applications.

Joel Jackson of BMO Capital Markets questioned if the positive outlook for North American fall demand is more dependent on favorable weather than affordability. He also asked about confidence in returning the Brazil retail business to a significant positive EBITDA run rate by 2026.

Answer

President & CEO Ken Seitz agreed that an open fall application window (good weather) is the primary determinant for fall demand, where they expect volumes to be up 5% from last year's compressed season. Regarding Brazil, Seitz stated the company's improvement plan is on track to achieve breakeven or slightly positive EBITDA in 2025 and that he expects this positive trend to continue into 2026, market conditions permitting.

Joel Jackson asked if Nutrien's earnings outlook has improved compared to three months ago, given the mark-to-market increase in commodity prices and a strong U.S. spring season.

Answer

President and CEO Kenneth Seitz confirmed the outlook has strengthened. He cited robust demand across all fertilizer products, noting that global potash supply is constrained, leading to price increases in every market. Seitz highlighted that Nutrien has raised its domestic potash price three times since the winter fill program and that Canpotex is fully committed through Q2, signaling a constructive view for the rest of the year.

Joel Jackson asked about Nutrien's Henry Hub natural gas forecast, which appears low given recent price surges, and questioned why ammonia seems to be underperforming other nitrogen products.

Answer

CEO Kenneth Seitz highlighted the significant cost advantage of North American gas over European prices. Executive Trevor Williams explained the gas forecast, attributing recent high prices to extreme weather but expecting normalization later in the year. Executive Christopher Reynolds addressed the ammonia market, acknowledging a recent price decline due to a weak fall application season and new supply prospects. However, he noted that unapplied ammonia will likely boost demand for urea and UAN, and the overall nitrogen market remains tight.

Joel Jackson asked how to reconcile the $150 million reduction in Retail EBITDA guidance with the optimistic growth targets presented at the Investor Day less than two months prior, questioning if the company still stood by those targets.

Answer

CEO Kenneth Seitz reaffirmed Nutrien's commitment to its 2026 targets. He attributed the near-term guidance cut primarily to a slower-than-expected market stabilization in Brazil and, to a lesser extent, a wet spring in North America that delayed applications. He emphasized that a clear margin improvement plan is in place for Brazil and that the long-term growth strategy remains intact.

Joel Jackson inquired about the expected performance of individual business segments (Potash, Bromine, Phosphate Solutions, Growing Solutions) within the 2026 guidance, and asked for ICL's sensitivity to the Israeli shekel and the assumed US dollar-shekel exchange rate for 2026, including hedging levels.

Answer

Raviv Zoller, Chairman, ICL Group, explained that Potash volumes and prices should improve, but the strengthening shekel would temper gains due to high shekel-denominated expenses. Bromine was expected to be stable. Phosphate Solutions might see a slight weakening in EBITDA due to sales prices and sulfur costs. Growing Solutions was anticipated to perform better, benefiting from currency dynamics. He stated that ICL is generally short about $1 billion in shekels, with every 1% change equating to roughly $10 million. The 2026 guidance assumes a naked shekel rate of around 3.10, but a hedged rate over 3.20, with approximately 50% of the exposure currently hedged.

Joel Jackson inquired about the expected performance of individual business segments (potash, bromine, phosphate, Growing Solutions) within the 2026 guidance, ICL's sensitivity to the shekel exchange rate, and the specific USD/shekel assumption used in the 2026 guidance, including hedging levels.

Answer

Raviv Zoller (Chairman, ICL Group) explained that potash volumes and prices are expected to be up, but shekel strength will temper gains. Bromine is anticipated to be stable, Phosphate Solutions somewhat lower due to sales prices, and Growing Solutions potentially better due to less shekel dependency. He stated ICL's shekel sensitivity is approximately $10 million per 1% change for $1 billion exposure, with a naked USD/shekel assumption of around 3.10 and a hedged assumption over 3.20 for 2026, with about 50% of exposure currently hedged.

Joel Jackson of BMO Capital Markets asked for the potash pricing outlook for Q3, the production run rate for the remainder of 2023 and into 2024, and the current profitability and long-term viability of the polysulphate business.

Answer

President and CEO Raviv Zoller projected an average potash price of around $340 per ton for the second half of the year, with 2023 production expected to be approximately 4.7 million tons. He described the polysulphate business as profitable, though less so than in 2022, and expects it to achieve double-digit EBITDA margins this year. CFO Aviram Lahav added that stabilizing Russian supply contributes to a more constructive pricing environment.

Joel Jackson of BMO Capital Markets sought clarification on the 2022 specialties EBITDA calculation, questioning the $500 million difference between segment totals and the reported figure. He also asked about the 2023 potash volume outlook and the timeline for major contract settlements in India.

Answer

President and CEO Raviv Zoller clarified that the specialties EBITDA calculation excludes the Phosphate Commodities business, which accounts for the difference. He guided for 2023 potash production and sales of 4.8 million tonnes and stated the 5.1 million tonne target is for 2026. Regarding contracts, he would only comment that he expects a settlement in India 'soon'.

Joel Jackson of BMO Capital Markets questioned whether the full-year EBITDA guidance was conservative, pointing to the lower second-half forecast. He also asked for details on expected margins for Industrial Products, growth drivers for Innovative Ag Solutions, and Q3 potash margins.

Answer

CEO Raviv Zoller clarified the guidance is not conservative, with the second-half moderation attributed to softer Q3 potash prices and typical Q4 seasonality in specialty businesses. He expects Industrial Products to maintain high margins due to a favorable product mix. For Innovative Ag Solutions, growth is organic, driven by strong performance in Brazil. CFO Aviram Lahav added that the guidance reflects significant uncertainty in Q4.

Joel Jackson asked about North America's farmer sentiment and its potential impact on CNH's sales, as well as CNH's views on potential government initiatives regarding equipment and crop inputs in the U.S. political arena.

Answer

CEO Gerrit Marx acknowledged that farmer sentiment in North America is 'not great,' with projected flat farmer income for 2026 tied to commodity prices for soy and corn, for which no relief is in sight. He mentioned that the U.S. administration is preparing help for the agricultural industry, with discussions ongoing, and noted his upcoming meetings in Washington to address these points.

Joel Jackson asked about farmer sentiment in North America and its potential impact on CNH's sales, as well as the company's views on possible government initiatives regarding equipment and crop inputs in the U.S.

Answer

Gerrit Marx, CEO, acknowledged that farmer sentiment in North America is not strong, primarily due to low commodity prices for soy and corn, with little relief in sight for 2026 income projections. Regarding government initiatives, he noted that there is significant attention and help being prepared for the agricultural industry by the U.S. administration, though specific actions are yet to be determined.

Joel Jackson questioned whether Albemarle's energy storage segment should achieve mid-50s% adjusted EBITDA margins in Q1, given the $20,000/ton spot price, and sought clarification on Kent Masters' earlier comment regarding a $4-$5/kilo conversion cost difference between China and ex-China, specifically if it referred to Kemerton's absolute costs or the differential.

Answer

Kent Masters, Chairman and CEO, clarified that the mid-50s% EBITDA margin for energy storage would not be immediately realized in Q1 due to the typical 2-3 month lag in contract pricing, but should be the case once the current market price works through the P&L. He further clarified that the $4-$5/kilo figure was a general, broader difference in conversion costs between China and ex-China, not specific to Kemerton's absolute costs.

Joel Jackson asked if Albemarle expects to achieve mid-50s% EBITDA margin in energy storage in Q1, given the $20,000/ton spot price, and sought clarification on the $4-$5/kg conversion cost difference mentioned for Kemerton.

Answer

Kent Masters, Chairman and CEO of Albemarle, explained that while spot business benefits immediately from current market prices, contract volumes have a 2-3 month lag, so the full margin impact will take time to reflect in the P&L. He clarified that the $4-$5/kg conversion cost difference was a general estimate between China and ex-China operations, not specific to Kemerton's absolute costs.

Joel Jackson asked about Albemarle's strategy given limited growth beyond CGP3 and China conversion, reduced CapEx, and concerns about not growing proportionally with the industry. He also sought tangible evidence of accelerating growth rates in ESS beyond hype.

Answer

CEO Kent Masters explained that current actions preserve growth optionality, focusing on discipline and managing the balance sheet to navigate market lows and capitalize on upticks, leveraging their strong resource base. He aims for an agile business that pivots to investments with right economics. Chief Commercial Officer Eric Norris confirmed tangible ESS growth, citing full utilization of LFP cathode and battery cell lines in China, global grid demands, and North American data center growth. He also noted battery partners in the U.S. retrofitting facilities for ESS and aggressive pursuit of LFP technology by cathode producers outside China.

Joel Jackson questioned Albemarle's growth strategy given limited new investments beyond CGP3 and some China conversion, asking if the company risks not growing proportionally with the industry. He also asked for tangible evidence of accelerating growth rates in ESS, beyond the hype.

Answer

Kent Masters, CEO, stated that current efforts preserve growth optionality, emphasizing disciplined investment and managing the balance sheet to pivot when economics are right. Eric Norris, Chief Commercial Officer, provided tangible evidence for ESS growth, citing full utilization of LFP cathode and battery cell lines in China, global grid demands, and U.S. battery partners retrofitting facilities for ESS technology, along with aggressive LFP pursuit by cathode producers outside China.

Joel Jackson of BMO Capital Markets sought clarification on the timing for initial volumes from the Greenbushes CGP3 expansion and asked about the strategic importance of the Kings Mountain project and potential for U.S. government partnerships.

Answer

CEO Kent Masters projected that initial volumes from Greenbushes would likely be seen in early 2026. He affirmed the strategic value of Kings Mountain and expressed encouragement about the U.S. government's focus on critical minerals, noting Albemarle has been in discussions about the need for public-private partnerships.

Joel Jackson from BMO asked about pressure on long-term contract pricing floors and whether the market has been surprised more by excess supply than by demand weakness.

Answer

CEO Jerry Masters asserted that Albemarle's contracts are holding as expected, though they evolve over time. He acknowledged that the supply side is difficult to predict, with some unprofitable assets remaining online longer than expected, but reiterated that long-term prices must rise to incentivize needed investment.

Joel Jackson from BMO Capital Markets inquired about the contract structure for 2026, particularly regarding floor price renegotiations, and asked how Albemarle navigates a market with potentially irrational actors.

Answer

CEO Jerry Masters explained that contracts are typically adjusted over time rather than having hard renewal dates and noted the portfolio has become more spot-oriented due to growth in China. He stated that Albemarle's strategy is to focus on its own cost structure to ensure competitiveness at the bottom of the cycle, allowing it to pivot to growth when the market recovers.

Joel Jackson asked if more supply needs to exit the market for prices to recover and requested comments on media speculation about potential asset sales, such as the Greenbushes stake.

Answer

CEO Kent Masters agreed that more supply needs to come offline for a price recovery and expects it will if low prices persist. On asset sales, he confirmed that the Ketjen business remains non-core and for sale. He explicitly refuted rumors about selling the Greenbushes stake, stating, 'Greenbushes, not something that we're thinking about selling.'

Joel Jackson requested a detailed breakdown of 2026 revenue guidance for specific product buckets, including Rynaxypyr (partnered and non-partnered), non-Rynaxypyr core, Cyazypyr, and Plant Health, compared to 2025.

Answer

Andrew Sandifer, EVP and CFO, indicated that Rynaxypyr partner sales are expected to decline due to volume and price, while the legacy core portfolio will see a slight contraction. He confirmed growth across all aspects of the growth portfolio, led by new active ingredients, Cyazypyr, and Plant Health. Pierre Brondeau, Chairman, CEO and President, reiterated that all parts of the growth portfolio are growing, and branded Rynaxypyr earnings are targeted to be flat.

Joel Jackson sought clarification on the 2026 revenue guidance for specific product buckets, asking if Rynaxypyr sales (partnered and non-partnered) and the non-Rynaxypyr core portfolio would be down, and if Cyazypyr sales would be down while Plant Health would be flat to up.

Answer

Andrew Sandifer, EVP and CFO, and Pierre Brondeau, Chairman, CEO and President, clarified that for 2026, branded Rynaxypyr earnings are expected to be flat, but partner sales will shrink due to price and volume. The legacy core portfolio is expected to contract slightly in both pricing and volume. They emphasized that the entire growth portfolio, including new AIs, Cyazypyr, and Plant Health, is expected to grow, with new AIs leading the growth.

Joel Jackson of BMO Capital Markets questioned the timing and rationale for excluding the India business from guidance, noting the added complexity and asking why a similar approach wasn't used for the GSS divestiture.

Answer

EVP and CFO Andrew Sandifer explained that the GSS business was a collection of product lines across geographies, making it more difficult to carve out, unlike the discrete India commercial unit. He added that operating a business for sale involves different decisions than long-term ownership, making forecasts unreliable. Chairman and CEO Pierre Brondeau simplified the impact, stating it's a removal of ~$70 million in H2 sales with a breakeven EBITDA effect, leaving core guidance intact and providing a clearer view of go-forward earnings.

Joel Jackson from BMO Capital Markets questioned the confidence behind the historically back-loaded forecast, asking for a breakdown of the drivers for the strong expected growth in the second half of the year.

Answer

CEO Pierre Brondeau expressed 'very high' confidence, citing three key drivers: strong, known demand for new products; a new direct-to-grower route to market in Brazil; and a mathematical $50 million EBITDA uplift from the absence of a prior-year negative variance. He emphasized that these factors are largely within FMC's control and supported by a much healthier channel inventory position entering H2.

Joel Jackson of BMO Capital Markets asked for an update on the preliminary 2025 financial outlook, specifically questioning the previously guided 6% revenue growth, pricing assumptions, and cost-saving targets.

Answer

Pierre Brondeau, Chairman and CEO, confirmed the company still anticipates approximately 6% revenue growth in 2025, though the pricing environment remains uncertain. He noted that cost savings are now expected to be at the higher end of the prior range, trending closer to $200 million.

Joel Jackson asked for reconciliation between the current royalty positive chart (showing $1 billion by 2035) and the previous investor day deck, noting similarities through 2030 despite claims of accelerated timelines.

Answer

Chuck Magro (CEO, Corteva) stated that the acceleration from the Bayer agreement is significant, pulling corn licensing many years ahead (starting 2027) and opening up cotton, which was not contemplated in earlier plans. He emphasized that the licensing business is now in a 'much higher gear' and that the $1 billion target does not include hybrid wheat.

Joel Jackson asked for an update on the estimated synergy costs related to the separation, initially projected at sub-$100 million, and Corteva's capital deployment plans, specifically regarding share buybacks, leading up to and after the split.

Answer

CFO David Johnson stated that the separation management team is actively working to minimize synergy costs, with initial estimates of $80 million-$100 million, and more details will be provided in February. Regarding capital deployment, he noted strong cash flow, potentially exceeding $1.9 billion for the year, and mentioned that 2026 plans, including share buybacks, will be updated in February, ensuring proper capital structures for both businesses post-split. CEO Chuck Magro confirmed the commitment to complete $1 billion in share repurchases for 2025.

Joel Jackson inquired about updated estimates for synergy costs related to the separation, following initial projections of sub-$100 million. He also asked about Corteva's plans for share buybacks, specifically whether the current rate would continue into the first half of next year and up to the split, or if the company intends to maintain balance sheet stability.

Answer

EVP and CFO David Johnson stated that the separation management team is actively working to minimize synergy costs, with more detailed plans to be shared in February, reiterating the initial estimate of $80 million-$100 million. Regarding capital deployment for 2026, he mentioned updates would be provided in February, emphasizing the need for proper capital structures for both businesses post-split. CEO Chuck Magro confirmed the commitment to completing the $1 billion share buyback communicated earlier for 2025.

Joel Jackson from BMO Capital Markets questioned the drivers behind the significant free cash flow guidance increase and asked if the strong first-half performance represented a pull-forward of earnings from 2026.

Answer

EVP & CFO David Johnson attributed the higher cash flow guidance to increased earnings and lower cash taxes from recent legislation. CEO Chuck Magro asserted there was no pull-forward from 2026, stating that performance is on track with the company's long-term framework, driven by growth platforms and strong execution on cost savings.

Joel Jackson asked for quantification of the risks and potential upside or downside to Corteva's second-half EBITDA guidance, noting that a large percentage of the full-year earnings is expected in the first half.

Answer

CEO Chuck Magro stated that the strong Q1 performance has derisked the second half compared to the original February guidance. He identified Crop Protection (CP) pricing, now expected to be down low-single digits for the full year, as a key variable that is already factored into the current guidance range. CFO David Johnson added that the first half is now expected to be up 4-5% versus the original flat expectation, and the second half still implies a significant 40% year-over-year EBITDA increase.

Joel Jackson asked for details on the expected cadence of earnings and earnings growth throughout 2025, whether it would be even across quarters or weighted to one half of the year.

Answer

CFO David Johnson stated that Corteva expects earnings growth to be weighted towards the second half of the year. He projected the first half to be up slightly versus the prior year, with a stronger year-over-year improvement in the back half. This is driven by Crop Protection pricing pressure being more pronounced in H1 and the benefits of lower seed costs in Brazil being realized in Q4.

Joel Jackson questioned if the 2025 guidance for seed and crop protection cost deflation, totaling a couple hundred million dollars, might be conservative and have potential for upside.

Answer

CEO Chuck Magro stated that this is an early look at 2025 and that deflation represents about half of the $600 million in gross benefits from controllables. He emphasized that seed cost deflation is a three-year journey (2025-2027) that is just beginning. CFO David Johnson confirmed that the benefits are roughly split between productivity actions and cost deflation.

Joel Jackson asked about the current lithium demand environment, specifically investigating a potential disconnect between higher Chinese demand forecasts (possibly driven by energy storage) and lower Western forecasts. He also inquired about maintaining Chilean and Australian lithium production targets for the year and the expected decrease in the international lithium price discount as the Kwinana Hydroxide Conversion Plant ramps up in 2026.

Answer

Pablo Hernandez, VP of Strategy and Development, SQM, stated that 2025 demand expectations have improved, driven by stronger EV sales in Europe and a sharp increase in BSS shipments, projecting over 1.5 million metric tons with over 25% growth. He noted China's significant lead in EV markets with 30% year-on-year growth. Carlos Díaz Ortiz, General Manager Lithium Potassium Division, SQM, confirmed Chilean production is on schedule, expecting close to 230,000 tons from Salar de Atacama, with 180,000 tons processed in Chile and 50,000 tons as lithium sulfate in China. Mark Fones, Vice President of Strategies and M&A Lithium, SQM, affirmed the Mount Holland spodumene concentrate production forecast of 150,000-170,000 tons and increased the LCE sales projection to 23,000-24,000 tons. Andrés Fontannaz, Commercial Vice President, SQM, clarified that the international price discount is due to spodumene sales being reported as LCE, requiring conversion factors and refining costs for fair comparison. Gerardo Andrés Illanes González, Vice President of Strategies and M&A Lithium and CFO, SQM, added that starting next quarter, Australian numbers will be reported by product type (spodumene or lithium hydroxide) to avoid confusion.

Joel Jackson inquired about current lithium demand trends, specifically addressing the perceived disconnect between higher demand forecasts from Chinese analysts versus lower Western forecasts, and whether this difference is driven by energy storage demand in China.

Answer

Pablo Hernandez, VP of Strategy and Development, confirmed improved 2025 demand expectations, driven by stronger EV sales in Europe and a sharp increase in BSS shipments, projecting over 1.5 million metric tons and 25% growth. Carlos Díaz Ortiz, General Manager Lithium Potassium Division, detailed Chilean production at 230,000 tons (180,000 in Chile, 50,000 in China). Mark Fones, VP of Strategies and M&A Lithium, maintained Mount Holland spodumene concentrate production estimates (150,000-170,000 tons) and increased LCE sales projection to 23,000-24,000 tons. Andrés Fontannaz, Commercial Vice President, explained the price discount between Chilean and international lithium is due to international sales being primarily spodumene, requiring conversion and refining cost considerations. Gerardo Andrés Illanes González, CFO, added that future reporting will break down sales by product type.

Joel Jackson from BMO Capital Markets asked for clarification on the Mt. Holland/Kwinana sales volume composition for 2025, the progress of the Kwinana refinery ramp-up compared to other Australian plants, and how customer discussions have evolved with recent lithium price volatility.

Answer

Mark Fones, CEO of the International Lithium Division, clarified that the 20,000-ton LCE guidance for 2025 is primarily from spodumene concentrate sales weighted to H2. He expressed confidence in the Kwinana ramp-up, citing rigorous planning and strong partnerships. Felipe Smith, Commercial VP of Lithium, noted that Q3 sales volumes and prices are expected to be higher than Q2, with realized prices closely tracking the spot market recovery.

Joel Jackson from BMO Capital Markets asked for details on Mt. Holland's Q3/Q4 volumes to meet its 2025 target, the Kwinana refinery's ramp-up progress, and how recent lithium price volatility has affected customer discussions and contracts.

Answer

Mark Fones, CEO of the International Lithium Division, clarified that the 20,000-ton target will be met with spodumene sales heavily weighted to H2 and noted Kwinana's successful first production was due to extensive planning. Felipe Smith, Commercial VP of Lithium, added that Q3 lithium sales volumes and prices are expected to be higher than Q2, with realized prices closely tracking spot market levels.

Joel Jackson from BMO Capital Markets questioned if SQM maintains its 15% sales volume growth forecast for 2025, asked about pricing dynamics in China where customers might be pushing back on contracts, and challenged the strategy of expanding capacity in an oversupplied market.

Answer

Felipe Smith, Senior Commercial VP of Lithium, stated that SQM has not updated its annual volume forecast due to market uncertainty but expects Q2 volumes to be similar to or slightly lower than Q1. He declined to comment on specific confidential customer pricing mechanisms in China. Carlos Díaz Ortiz, General Manager of the Lithium Potassium Division, defended the expansion strategy, emphasizing SQM's confidence in long-term demand and its position as the industry's lowest-cost producer, viewing the current oversupply as a short-term issue.

Joel Jackson from BMO Capital Markets asked if SQM maintains its 15% lithium sales volume growth target for 2025, questioned how the company is handling customer pushback on contract pricing in China, and challenged the rationale for capacity expansion in an oversupplied market.

Answer

Felipe Smith, Senior Commercial VP of Lithium, stated that SQM has not updated its annual volume forecast due to market uncertainty but expects Q2 volumes to be similar to or slightly below Q1. He declined to comment on specific contract negotiations in China, citing confidentiality. Carlos Díaz Ortiz, General Manager of the Lithium Potassium Division, defended the expansion strategy, emphasizing SQM's low-cost leadership and confidence in long-term demand despite the short-term oversupply.

Joel Jackson asked for more detail on farmer caution, specifically how they are weighing lower crop prices against large yields, alongside uncertainties from tariffs and other macro factors.

Answer

Cory Reed, President of the Ag & Turf Division, stated that customers are in a 'wait and see' mode, delaying major purchases until there is more clarity on trade deals. While a large harvest creates near-term needs, broader investment decisions are being deferred. He reiterated that long-term fundamentals from trade, tax policy, and renewable fuels remain positive, but the timing of a demand recovery is uncertain.

Joel Jackson of BMO Capital Markets questioned if the 2% to 4% deicing price increase would lead to higher netbacks after inflation. He also asked for commentary on why the bid season wasn't stronger and about the drivers behind the significant Q3 improvement in Plant Nutrition costs and the guided increase for Q4.

Answer

CEO Edward Dowling explained the company's 'value over volume' strategy and deferred margin guidance, noting it takes two years for the market to clear. CCO Ben Nichols added that last winter was merely average. Regarding Plant Nutrition, Mr. Dowling cited the multi-year recovery plan is ahead of schedule, while COO Patrick Merrin noted that projections for higher KCL input costs are impacting future cost guidance.

Joel Jackson questioned the decision to lower full-year salt volume guidance despite strong recent snowfall and asked for an update on progress in reducing SG&A expenses, which appeared flat year-over-year.

Answer

President and CEO Edward Dowling explained the revised guidance is a cautious approach, reflecting the Q1 sales shortfall with only a partial recovery from January's strength factored in, as the company avoids forecasting future weather. Regarding SG&A, Dowling stated that while headcount has been reduced by about 20%, progress has been offset by rising legal costs, though it remains a key focus for management.

Joel Jackson of BMO Capital Markets inquired about the drivers of the expected Salt EBITDA margin contraction in fiscal 2025, the potential for normalized margins in 2026, and the company's stance on recent market rumors about a potential sale. He also asked for clarification on what constitutes a 'normal' salt sales volume and questioned an observed historical trend of weaker December quarter sales.

Answer

CFO Jeffrey Cathey attributed the 2025 margin pressure to higher inventory costs from the Goderich mine curtailment. CEO Edward Dowling addressed the sale rumors by stating a policy of not commenting on speculation, emphasizing the board's focus on improving the business. Regarding volumes, an executive estimated the normal North American highway deicing market at 7.5 to 8.5 million tons, while CSO Ben Nichols acknowledged the trend of weaker December quarters, suggesting a possible but unconfirmed shift in winter weather patterns.

Joel Jackson asked about the operating rates of the G3, Beaumont, and Natgasoline facilities, and sought clarification on a $50 million downward revision to the company's run-rate EBITDA guidance.

Answer

President, CEO & Director Rich Sumner confirmed that the G3, Beaumont, and Natgasoline assets are all operating at high rates. He clarified the $50 million EBITDA guidance reduction is entirely due to a lower production forecast for New Zealand (down 600,000 tonnes) and is unrelated to the OCI acquisition's performance.

Joel Jackson inquired about the operational confidence in the G3 plant, asking if its unique configuration might lead to lower long-term reliability. He also asked for an update on the OCI assets' ramp-up and questioned if the implied 40% discount to posted price in Q2 is a good baseline for the rest of the year.

Answer

Executive Rich Sumner expressed high confidence in the G3 plant's sustained reliability, noting a recent smooth start-up with new, validated conditions. On the OCI assets, he said more details would be available post-closing but noted they recently completed turnarounds. Regarding pricing, he was hesitant to confirm a specific discount rate, instead emphasizing the premium realized over China spot prices.

Joel Jackson sought clarification on the Q1 2025 sales volume outlook relative to Q4 2024 production and inventory levels. He also asked how a $400 methanol price, versus the company's $350 assumption, would accelerate debt repayment and potential share buybacks post-OCI deal.

Answer

President and CEO Rich Sumner explained that the Q4 inventory build was of produced methanol, not an overall inventory increase, and that Q1 sales should normalize closer to Q4's higher production levels. He added that at current pricing, Q1 free cash flow could exceed $150 million, significantly accelerating the deleveraging timeline ahead of the OCI acquisition closing.

Joel Jackson of BMO Capital Markets asked for clarity on the firmness of the 7 million tonne annual production guidance, the timing of the Egypt repair insurance settlement, and the key signposts for resuming share buybacks.

Answer

President and CEO Rich Sumner expressed confidence in the 7 million tonne guidance. He stated that insurance proceeds from the Egypt repair are expected in Q3 but are not included in guidance. Regarding capital allocation, the top priority is repaying the $300 million bond in December, after which share repurchases will be considered.

Joel Jackson asked about the durability of European margins, questioning if the sharp Q3 decline was transient and how to think about H1 2025 performance. He also asked management to reconcile maintaining its full-year market outlook while year-to-date market contraction data for Europe and North America had worsened.

Answer

Damon Audia, SVP & CFO, noted that while it's too early for a 2025 outlook, European markets are historically less volatile. Greg Peterson, an executive, added that Q4 European margins are expected to rebound to first-half levels. Peterson also clarified the market outlook, stating they are now at the high end of the forecasted decline range and that the South American outlook is based on wholesale data, which differs from retail.

Joel Jackson of BMO Capital Markets asked for clarification on a potential land dispute and its impact on the Phase 2 expansion. He also questioned the company's SG&A expenses, noting they remain elevated despite cost-cutting goals, and asked what market conditions would trigger more aggressive cost reductions.

Answer

CEO and Co-Chairperson Ana Cabral Gardner characterized the land issue as a 'non-issue' stemming from a personal matter that does not affect Phase 2 operations. Executive Matthew DeYoe explained that SG&A is elevated because the company is building a scalable platform for future growth, which will provide operating leverage as production doubles. Ana Cabral Gardner added that Phase 2 is proceeding regardless of market prices due to its high capital efficiency, though the construction is being 'paced' over 12-15 months to manage liquidity, unlike the 'raced' approach for Phase 1.

Joel Jackson asked for clarification on a potential land dispute and its impact on the Phase 2 expansion. He also questioned the elevated SG&A costs relative to prior targets and asked about plans for cost reduction in the current depressed price environment.

Answer

CEO Ana Cabral Gardner stated there is no land dispute affecting Phase 2, dismissing it as a non-issue unrelated to the project's ore body. Executive Matthew DeYoe addressed SG&A, explaining that current spending is building a platform for future growth and that per-ton costs will decrease significantly as production scales. Ana Cabral Gardner added that Phase 2 is proceeding due to its high capital efficiency, but on a 'paced' 12-month timeline to manage costs, unlike the 'raced' approach for Phase 1.

Questioned the pricing assumptions for maintaining positive operating cash flow, the project's margins at current spot prices, potential design changes after recent optimizations, and whether partner Ganfeng's investment strategy has changed amid market conditions.

Answer

The company confirmed its cash flow projections are based on current low spot prices (around $11,000/ton). They are confident margins will improve as costs decrease with higher production volumes and realized prices increase with better quality. No major plant design changes are planned, only minor optimizations. Partner Ganfeng remains committed to its long-term investment strategy, focusing on high-quality, low-cost assets.

Asked for updates on inventory levels, the price-quality relationship for lithium carbonate, the strategy regarding production volume versus quality, and key learnings from the recent plant downtime.

Answer

The company confirmed a substantial build in finished product inventory and noted significant quality improvements leading to better pricing, which will be reflected in Q2. The priority remains increasing production volume, which in turn improves quality. The April downtime was planned to address known issues, and the team's effectiveness in managing it was a key positive outcome.

Questioned the economic sense of the Nemaska conversion project given industry challenges with ex-China conversion, and asked a big-picture question about what will break the cycle of 'irrational' overproduction in the lithium industry.

Answer

The Nemaska project's economics are sound due to its specific customer contract, and there will be a shortage of ex-China hydroxide. The broader market oversupply will resolve as demand growth eventually outpaces the supply from new sources like lepidolite and African spodumene, but the industry's reaction time is slow, and single-asset producers are reluctant to curtail production.

Questioned the significant drop in the company's cash balance during the first quarter and asked for more detail on future production volumes associated with the 2026 capacity target, as well as a breakdown of the 2025-2026 capital expenditure plan.

Answer

The Q1 cash burn was attributed to significant one-time merger-related costs (transaction, integration, severance), tax payments, and an investment, and is not indicative of future quarters. Specific production forecasts for 2026 are premature due to ramp-up variability, but full run-rates are expected in 2027. A detailed CapEx breakdown will be provided at the September Investor Day after methodologies are standardized.

Asked about the company's short-term order book visibility for the coming months and commented on the general opaqueness of market data from China and the fragmentation of pricing indices, asking how the company navigates this environment.

Answer

The company has good visibility on contracted hydroxide volumes but less on pricing for uncommitted volumes and carbonate, which is more market-dependent. The executive agreed that the market is the most opaque it has been in a decade, with conflicting data from China and immature pricing indices, making it difficult for everyone to get clear information.