Agrium Investor Presentation

Chuck Magro, Agrium President & CEO

January 2015

Forward-Looking Statements

2

IFRS Advisory

Additional IFRS and Non-IFRS Financial Measures Advisory

Certain statements and other information included in this presentation constitute "forward-looking information" or "forward-looking statements" (collectively, “FLS”).  All statements

in this presentation, other than those relating to historical information or current conditions, are FLS, including, but not limited to, statements as to management's expectations with

respect to future crop and crop input volumes, demand, margins, prices and sales; business and financial prospects; dividends and other plans, strategies, objectives and

expectations, including with respect to future operations and expectations regarding Agrium's expansion projects. The FLS included in this presentation are based on certain

assumptions made by us and all FLS are qualified by the assumptions that are stated or inherent in such FLS. Investors should not place undue reliance on these assumptions and

such FLS. The key assumptions that have been made include, among other things assumptions with respect to Agrium's ability to successfully integrate and realize the anticipated

benefits of its already completed and future acquisitions, that future business, regulatory and industry conditions will be within normal parameters, including with respect to prices,

margins, product availability and supplier agreements; the completion of our expansion projects on schedule, as planned and on budget; assumptions with respect to global

economic conditions; and our ability to access our credit facilities or capital markets for additional sources of financing. Also refer to the discussion under the heading "Key

Assumptions and Risks in Respect of Forward-Looking Statements" in Agrium's Management's Discussion & Analysis for the year ended December 31, 2013 (the "2013 MD&A")

with respect to the material assumptions and risks associated with the FLS. 

FLS are subject to various risks and uncertainties which could cause Agrium's anticipated results and experience to differ materially from the anticipated results or expectations

expressed. The key risks and uncertainties include, but are not limited to: general economic, market and business conditions, weather conditions including impacts from regional

flooding and/or drought conditions; crop prices; the supply and demand and price levels for our major products; governmental and regulatory requirements and actions by

governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the

interpretation thereof, and political risks, including civil unrest, actions by armed groups or conflict, as well as counterparty and sovereign risk; and other risk factors detailed from

time to time in Agrium reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States. We also refer you to the risks set

forth in the 2013 MD&A under the headings "Enterprise Risk Management” and "Key Assumptions and Risks in Respect of Forward-Looking Statements".

Agrium disclaims any intention or obligation to update or revise any FLS in this presentation as a result of new information or future events, except as may be required under

applicable U.S. federal securities laws or applicable Canadian securities legislation.

Historical financial information relating to Agrium for periods beginning on or after January 1, 2010 in this presentation is prepared in accordance with International Financial

Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. All financial information prior to 2010 is presented in accordance with previous Canadian

generally accepted accounting principles. 2012 financial information has been restated to reflect the adoption of IFRS 11 Joint Arrangements, whereby the classification and

accounting for our joint arrangements are accounted for using the equity method, and  discontinued operations. 

We consider earnings (loss) from continuing operations before finance costs, income taxes, depreciation and amortization ("EBITDA"), earnings (loss) from continuing operations

before finance costs, income taxes, depreciation and amortization and before finance costs, income taxes, depreciation and amortization of joint ventures ("adjusted EBITDA"),

current net debt/EBITDA ratio, capital expenditures – sustaining and investing, and retail metrics including operating coverage ratio, return on capital employed (“ROCE”) and

ROCE (excluding intangibles and goodwill), average non-cash working capital to sales, and EBITDA to sales measure, all of which are non-IFRS financial measures, and free cash

flows, which is an additional IFRS measure, to provide useful information to both management and investors in measuring our financial performance and financial condition. Refer

to the table under the heading "Additional IFRS and non-IFRS Financial Measures" in the 2013 Annual Report and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov

under our corporate profile for further discussion of how these measures are calculated and their usefulness to users including management. Non-IFRS financial measures are not

recognized measures under IFRS and our method of calculation may not be comparable to that of other companies. These non-IFRS measures should not be considered as a

substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

For a reconciliation of these additional IFRS and non-IFRS measures to the most directly comparable measures calculated in accordance with IFRS for the twelve months ended

December 31, 2013 and 2012, refer to the table under the heading "Additional and non-IFRS Financial Measures – Reconciliation of Additional IFRS and non-IFRS Financial

Measures" in the 2013 Annual Report. 

Adjusted EBITDA is approximated using a proportional allocation as a percentage of gross profit for 2013.

* Other includes AAT and Wholesale Product Purchased for Resale.

3

AGRIUM’S STRATEGY AND CO. OVERVIEW

Agrium: A Global Provider of Ag Inputs & Services

2013 Adjusted EBITDA

$2.2B

Retail

Crop Protection

and Seed

Retail

Nutrients

and Other

Nitrogen

Other*

Phosphate

Potash

RETAIL

WHOLESALE

•

Largest global retail distributor of crop inputs & leading producer of crop nutrients

•

Multiple growth levers & competitive advantages

across our core businesses:

•

Increased N & K capacity & lower cost position

•

Retail position & growth profile

•

Operational Excellence  focus

•

‘Integrated where it makes sense’

–

provides

synergies in core markets

•

Peers are investing in distribution –

we have it

•

Identified growth & >$1.3B drop in capital

expenditure by 2016 will lead to:

•

Significant growth in cash flow

•

Increased returns of capital to shareholders

Figures in pie chart based on full-year EBITDA for 2013 excluding other inter-segment eliminations. Retail and Wholesale products and services

AGRIUM’S STRATEGY AND CO. OVERVIEW

Leading Global Agricultural Retailer Through Diversity

Gross Profit

(2013)

Crop Nutrients 32%

[17% gp]

Crop Protection 38%

[23% gp]

Seed 10%

[22% gp]

Services/Other 20%

$2.6B

Over 1,300 facilities

in 7 countries

4

Chile

Argentina

Brazil

Uruguay

SOUTH AMERICA

USA

Canada

Hawaii

NORTH AMERICA

AUSTRALIA

Crop inputs & services for

over 50 different crops

Geographic Diversity

Products and services cover

all aspects of crop inputs

Crop Diversity

Products & Services

Diversity

Corn,

22%

Wheat,

20%

Soybean,

15%

Canola,

13%

Cotton,

7%

Perm

Crops,

6%

Veg, 4%

All Other,

13%

Revenue by Crop Type

5

North America

Facilities

1

Base N includes AS & other.  Equity ownership consists of a 50% joint venture interest in Profertil’s South

American nitrogen facility and a 26% equity ownership in MOPCO’s Egyptian nitrogen facility .

2

Includes incremental expansions in equity ownership of Profertil and MOPCO.

Source: Agrium

South America

Facility

Egypt

Nitrogen

Potash

Phosphate

AGRIUM’S STRATEGY AND CO. OVERVIEW

Wholesale Overview:

Strong Strategic Position & Growing Capacity

•

In-market distribution and/or cost advantages across our products/regions

•

Significant capacity expansion in 2015/16 for nitrogen and potash

1

2

1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Nitrogen

Potash

Phosphate

NPK Production Capacity Overview

Base Production

Equity Ownership

Capacity Expansion

AGRIUM’S STRATEGY AND CO. OVERVIEW

Strategic North American Footprint

6

Wholesale

Locations

Crop Production Services (CPS)

Retail Locations

Kennewick

Americus

Lynchburg

Paducah

•

In-market Retail distribution channel for Wholesale production generates significant value

•

Fertilizer

production

peers

lack

Agrium’s

extensive

distribution

network

–

unique

competitive advantage

>30% of total NA nutrient sales for

Retail sourced from Wholesale

>50% of Wholesale domestic potash

sales to AGU Retail, >50% of W.Cdn.

ag sales move thru CPS Canada retail

Bloom

Granum

Carseland

Standard

Vanscoy

Joffre

Redwater

Fort Saskatchewan

Plymouth

Moses Lake

West

Sacramento

Borger

Conda

Reese

Leal

Denver

Homestead

Florence

Tifton

New

Madrid

Garner

Early

North Bend

Mt. Vernon

Paducah

Marseilles

Nitrogen Production

Solution Production

Phosphate Production

Phosphate Mine

Potash Production

Potash Mine

Granulation Production

Micronutrient Production

ESN Production

Ammonia Pipeline System

Anhydrous Ammonia Storage

Solution Storage

Dry Storage

Blend Storage

U.S.

Sales

Office

–

Denver,

U.S.

Wholesale

Head

Office

–

Calgary,

Canada

FUNDAMENTAL UPDATE

Outlook for 2015

7

Outlook Fundamentals

•

Shortened

fall

2014

application

window

to

support

2015

spring

demand

•

Crop protection application anticipated to return closer to normal in 2015,

after weak summer of 2014

•

Retail customer prepays similar to last year’s record level

•

Lower

NA

gas

prices

to

support

our

nitrogen

margins

(earnings

sensitivity: 

lower gas price by $0.50/mmbtu adds $35 million of EBIT)

•

Lower Canadian dollar to further benefit our bottom line

FUNDAMENTAL UPDATE

Improved Corn Cash Margins

8

•

Expect 2015 corn acreage to decline slightly in US & globally:

•

U.S. corn acres of ~88-89M vs. 90.6M in 2014

•

Dec. 2015 corn futures prices have risen to ~$4.20/bu from harvest lows

of ~$3.70/bu  –

positive impact on grower margins/confidence

Corn

Soybeans

* New crop futures for 2015/16 crop have an estimated basis deducted

* Source: USDA, Doane, Agrium

$3.64/bu

$3.57/bu

$4.07/bu

$8.97/bu

$9.30/bu

$9.50/bu

$0

$50

$100

$150

$200

$250

$300

$350

2003/04

-

2011/12 Avg.

Sep. 30, 2014

Jan. 20, 2015

2003/04

-

2011/12 Avg.

Sep. 30, 2014

Jan. 20, 2015

----

Dec. 2015 Futures ----

----

Nov. 2015 Futures ----

Portfolio Review Update

•

Core businesses: N, K and Retail

•

Continue to work phosphate options including rock sources

•

Turf & Ornamental business & PFR terminals sold

9

2014 OPERATIONAL UPDATE

Operational Review & Update

Operations  / Expansion Update

•

Vanscoy potash re-started end of Dec, target 2.1 M tonnes in 2015

•

Nitrogen operations refreshed

•

Borger nitrogen expansion continues on time and on budget

•

Egypt N plant expansion complete Q2’15, Argentina complete Q1’15  

•

2014: international retail improvement & strong tuck-in growth

•

Operational excellence to focus on improved operating rates in N&K and

optimal cost structure across the business

Enhanced Disclosure

•

Commitment to further enhancements to level of disclosure and guidance

Existing

Dividend

$3.12/share

Significant Future Cash Flow Generation

10

Illustrative 5 -

Year Potential Cash Generation & Fund Potential

Potential for >$10/share per year in available free cash flow, allowing for

significant returns of capital to shareholders and  value-added growth

1

5-Year period starts in 2016.

2

Operating cash flow has been calculated using average annual fertilizer benchmark prices for 2014: NOLA urea $355/st, Midwest potash $390/mt,

Florida DAP $440/st & NYMEX $4.28/MMBtu. The production profiles

for this period include incremental nitrogen and potash expansions as                                                  

reported in Agrium’s November 2014 Investor Day presentation..

3

Total Funds Available includes upside range of +$25/mt on all benchmarks and  $3.50/MMBtu for NYMEX, as well as incremental debt  leverage

created by operating cash flow.  Incremental debt capacity has been calculated based upon a Debt to EBITDA ratio of 2.5X (2.9X currently) and net

of long-term debt maturities in  the period presented ($626M next 5 years).

Up to $10.6B

(includes market upside of

+$25/mt & incremental leverage  )

$7.3B FCF

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Operating

Cash Flow Potential

Sustaining

Capital

Free Cash Flow

Total Funds Available

Upside Market Scenario

and Incremental Leverage)

1

3

2

3

(incl.

11

Update on Capital Allocation Policy

Capital Allocation Policies for 2015

Increased targeted dividend payout ratio to 40-50% of

normalized free cash flow, net of sustaining capital (previously

25-35%)

Institute a Normal Course Issuer Bid (NCIB) of 5% of

outstanding shares

Target consistent rise in dividend over time and more emphasis

on share buybacks, in-line with expected higher FCF post 2015

expansion projects

•

•

•

Summary

12

•

Agrium is well-positioned to capitalize on solid 1H 2015 market demand

•

Poised to complete multi-year capital expansion in 2015 –

delivering

substantial growth in earnings and free cash flow for years to come

•

Multiple value drivers within our control

Potential for > $10/share per year in available free cash flow =

allowing for significant returns of capital to shareholders and

value-added growth