2011 Jan Mike Wilson CIBC Presentation

7/26/2019 2011 Jan Mike Wilson CIBC Presentation

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Growing Across theValue Chain

January 2011


2/23

STRENGTH THROUGH GROWTHAND DIVERSITY2

Certain statements and other information included in this presentation constitute forward looking informationwithin the meaning of applicable Canadian securities legislation or constitute forward-looking statementswithin the meaning of applicable U.S. securities legislation (collectively, the forward-looking statements). All

statements in this presentation, other than those relating to historical information or current condition, areforward-looking statements, including, but not limited to, estimates, forecasts and statements as tomanagements expectations with respect to, among other things, business and financial prospects, financialmultiples and accretion estimates, future trends, plans, strategies, objectives and expectations, including withrespect to future operations following the proposed acquisition of AWB. These forward-looking statements aresubject to a number of risks and uncertainties, many of which are beyond our control, which could causeactual results to differ materially from such forward-looking statements.

Events or circumstances that could cause actual results to differ materially from those in the forward-lookingstatements, include, but are not limited to, the expected combination benefits and synergies and costs

savings from the Agrium/AWB transaction not being fully realized or not being realized within the expectedtime frame, disruptions from the proposed transaction with AWB making it more difficult to maintainrelationships with customers, employees and suppliers, any other recent or proposed business acquisitionsnot being integrated successfully or such integration being more difficult, time-consuming or costly thanexpected, general business and economic conditions, interest rates, exchange rates and tax rates, weatherconditions, crop prices, the supply, demand and price level for our major products, gas prices and gasavailability, operating rates and production costs, domestic fertilizer consumption and any changes ingovernment policy in key agriculture markets, including the application of price controls and tariffs onfertilizers and the availability of subsidies or changes in their amounts, changes in development plans,construction progress, political risks, including civil unrest, actions by armed groups or conflict, governmentaland regulatory requirements and actions by governmental authorities, including changes in government

policy, changes in environmental, tax and other laws or regulations and the interpretation thereof and otherrisk factors detailed from time to time in Agrium reports filed with the Securities and Exchange Commission(the SEC) or Canadian provincial securities regulators.

Agrium disclaims any intention or obligation to update or revise any forward-looking statements in thispresentation 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.

Forward-Looking Statements


3/23


Agriums Growth Across the Value Chain

Industrial Customers

Specialty (Turf,Home & Garden)

Growers

15%

Retail Customers

End Use Customers

77%

Distribution and StorageBusiness Units and Acquisitions

8% sales to AGU Retail

Agrium Wholesale:$3-billion sales*

Royster, ConAgra, ADM retail, and UAPOver $3 billion invested

Agrium Retail:$6-billion sales*

2.5 million tonnestorage capacity


Hanfeng, Pursell, NuGro, ESN

Over $280 million invested

Agrium AdvancedTechnologies:

$0.3-billion sales*

Purchase for Resale


Potash expansion, CMF, Egyptian NitrogenOver $400 million invested

13% sales to AGU Retail

*2009 Net Sales


4/23


Strength Through Growth and Diversity

Through a great team effort over the past 5 years, we delivered on our

promise of diverse growth and remained true to our vision Over past 5 years: over 10 acquisitions (over $5-billion invested), other

growth initiatives (potash expansion, Egypt, ESN) and investment intechnology

Retail growth

Wholesalegrowth

AAT growth

2004 2005 2006 2007 2008 2009 2010

Potash Expansion

IOL

CMF

EgyptianNitrogen

Argentina/Chile

Royster-Clark

PursellNu-Gro

Hanfeng

ADM

UAP

ESN CapacityExpansion

Carseland ESN

Revenue

US, Canadian, &

Argentina RetailAcquisitions/tuck-ins

ESN Capacity Expansion

AWB Acquisition


5/23


Strategic acquisitions and other expansion/growth

initiatives across the agricultural value chain Acquisitions, capacity expansions, & optimizing base business

Reach $1-Billion Retail EBITDA by 2015 through: Acquisitions, market share expansion

Broaden private label product offering and penetration Continued growth in seed business

Potash & Nitrogen Wholesale Expansions Brownfield, >40% increase in capacity by 2013/2014

Triple size of Egyptian Nitrogen facility by 2012

Reach $100-million AAT EBITDA by 2015 ESN growth

Global expansion of controlled release products

Agriums 5-year Growth Objectives


6/23

STRENGTH THROUGH GROWTHAND DIVERSITY66Source: USDA, Doane Advisory Services, Agrium

Cash Margins Improve Significantly

Corn and Wheat margins are >3Xs historic 5 yr average

0

100

200

300

400

500

600

700

CashMargin(USD/acre)

U.S. Crop Cash Margins

Corn Soybeans Wheat Cotton

$2.37/bu

$5.78/bu

$13.44/bu

$6.14/bu

$7.95/bu

$3.25/bu$0.50/lb

$1.34/lb


7/23


Largest North American AgriculturalRetailer Well balanced portfolio of seed, fertilizer, crop protection products, and application

services Q1-Q3 2010 EBITDA is $445-million (FY 2009: $266-million; FY 2008: $560-

million)

Over 900 North American retail branches today

21%

Crop NutrientsCropProtection

Seed, Services, & Other

43%

2007 - 2009 Average Agrium

Retail Gross Profit

36%


8/23


Leader in environmentally friendly specialty products, broad mix of

products marketed to: Turf, Ornamental, Greenhouse, High Value SpecialtyCrops, Lawn and Garden

New ESN plant at New Madrid, MO (120,000 tons) started operations in Q22010, brings total capacity to 360,000 tons from 3 plant locations

Equity position (19.5%) in Hanfeng (HF.TO), a leading producer of value-

added fertilizer in China

Totaltons

sold

0

100

200

300

400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013 2014

Carseland Sylacauga New Madrid 2nd Potential IMC Site

ESN is Agriumspatented controlled-

release product formajor crops

ESN Growth

Advanced Technologies


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Potash (K)

Nitrogen (N)

Phosphate (P)

Purchase forResale (PFR)

- Over 2.0 mmt of low cost productioncapacity

- Diverse global/NA customer base

- Over 5.0 mmt production capacity

- Natural gas and in-market advantages

- Diversified global production assets

- Over 1.0 mmt production capacity

- Two integrated facilities with in-marketand cost advantages

- Optimizes our extensive distributionand marketing capabilities

- CMF acquisition enhances annualPFR volumes by 2.5 mmt

Wholesale Advantages


10/23


Positive Factors for Spring 2011

1) All crop prices and grower crop budgets are wellabove historical averages

2) North American fertilizer inventories continue to bebelow 5-year averages

3) Grower sentiment and demand remains strong


11/23


Strong grower sentiment, crop prices & cashmargins remain well above historical averages

North American fertilizer inventories remain below5-year averages

Agrium will continue to grow across the valuechain, leveraging our diversity, financial strengthand strong team

2011 will demonstrate increased demand andimproved grower sentiment

Agrium provides the best opportunity to benefitfrom the positive agricultural outlook

Summary


12/23

Agrium Inc.13131 Lake Fraser Drive SECalgary, Alberta, Canada T2J 7E8Telephone (403) 225-7000

Agrium U.S. Inc.4582 South Ulster Street, Suite1700Denver, Colorado, U.S. 80237Telephone (303) 804-4400

NYSE and TSX: AGUwww.agrium.com


13/23

STRENGTH THROUGH GROWTHAND DIVERSITY

5 Ag Retail companies with sales >$1bln, combined they have 1,690 outlets

22 Ag Retail companies with sales $1bln-$100mn, these 22 companies haveabout 1,020 retail outlets 27 Ag Retail companies with sales $100mn-$50mn, these 27 companies

have total sales of $1.8bln.

U.S. Ag Retail Market Segmentation

Source: 2009 CropLife 100 Survey

5

22

27

25

17

338

4612

6 5

0

50

100

150

200

250

300

350

400

0

5

10

15

20

25

30

Over $1,000 $100-$1,000 $50-$100 $25-$50 $15-$25

Average#ofRetailOutlets

#ofCompetitors

Annual Revenue (millions)

# of Companies Average # of Retail Outlets


14/23


Fertilizer Use Rebounds

Unprecedented decline in USA demand for all 3 nutrients, followed by

a rebound in 2009/10 Consumption remains below 2007 levels

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1989

/90

1990

/91

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

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/00

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/01

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/02

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/04

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/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

ch

angeinUSAnutrien

tdemand

Nitrogen Phosphate Potash

Source: IFA, Agrium


15/23


Argentina6%

Australia12%

Canada14%

EU-2718%

FSU13%

United States27%

ROW10%

Argentina3%

Australia11%

Canada14%

EU-2716%

FSU28%

United States

18%

ROW10%

15

U.S. Wheat Continues Strong Export Pace

2009/10 2010/11

Russian wheat exports are projected to drop from 18.6 milliontonnes to 4.0 million tonnes

Market share shifts to the U.S. positive influence on prices

Export sales of U.S.

Wheat quality concerns have reduced Canadian and Australian exportprojections

Source: USDA


16/23

STRENGTH THROUGH GROWTHAND DIVERSITY16Source: USDA, Fertecon, and British Sulphur Based on Annual Averages

Step Change in Corn and FertilizerPrices Fertilizer cost as a percent of corn revenue relatively flat to

1997(currently 14%) Nitrogen (NH3) is $0.41/bu ($0.16/bu in 1997), DAP is $0.27/bu

($0.11/bu in 1997) and K is $0.13/bu ($0.07)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Index

(2000=1)

NOLA Urea CF DAP Midwest Potash U.S. Corn


17/23


0

200

400

600

800

1,000

1,200

USD/

tonne

Black Sea NOLA PNW

1717

Benchmark Prices: Urea

Source: Blue, Johnson & Associates, Green Markets

$518/t

$407/t

$384/t

Black Sea Urea (per tonne)

Avg. Dec 2010 376$Avg. Dec 2009 263$

Avg. Dec 2003-2007 230$


18/23


0

200

400

600

800

1,000

1,200

1,400

Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10

USD/tonne

Central Florida PNW

1818

Benchmark Prices: Phosphate

Source: Blue, Johnson & Associates, Green Markets

$708/t

$612/t

Avg. Dec 2010 612$

Avg. Dec 2009 348$

Avg. Dec 2003-2007 278$

Central Florida MAP (per tonne)


19/23


0

200

400

600

800

1000

1200

USD/tonne

Saskatchewan Midwest

1919

Benchmark Prices: Potash

Source: Green Markets, Blue, Johnson & Associates, Agrium

$559/t

$526/t

Avg. Dec 2010 559$

Avg. Dec 2009 491$

Avg. Dec 2003-2007 223$

Midwest Potash (per tonne)


20/23


Source: Fertecon, IFA, Agrium

Note: Excludes Chinese capacity additions and demand

(million

tonnesofnitrogen)

-5

-4

-3

-2

-1

1

2

3

4

5

2006 2007 2008 2009 2010 2011 2012 2013 2014

Other Iran Oman Egypt

Algeria Pakistan Qatar Russia

Demand Growth

Rebound in nitrogen demand in 2010 Nitrogen capacity ex China is 107 million tonnes

Nitrogen Medium TermSupply and Demand Outlook


21/23

STRENGTH THROUGH GROWTHAND DIVERSITY21Sources: British Sulphur, IFA, Agrium

(milliontonneso

fP205)

-3

-2

-1

0

1

2

3

4

2007 2008 2009 2010 2011 2012 2013 2014

Other North Africa China Saudi Arabia

Limited Growth in PhosphateCapacity Before and After Maaden

Demand Growth

Little new phosphate capacity outside Chinaand the delayed Saudi Arabias MaadenProject


22/23


Approximately 25% reduction in demand from 2007 peak to 2009

Expect global demand to return to 2007 levels by 2011/12 2010: 50 million tonnes KCl

2011: 57 million tonnes KCl

-6

-5

-4

-3

-2

-1

0

1

2

34

5

6

2006 2007 2008 2009 2010 2011 2012 2013 2014

Other FSU Canada

Sources: Fertecon, IFA, AgriumFSU denotes the Former Soviet Union (Belarus, Russia, Uzbekistan)

(milliontonnesofK2O)

Potash Capacity Additions

Demand Growth


23/23


ESN Value Proposition

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

Corn Wheat Canola

USD/

Acre

ESN Cost ESN Benefit

Assumes per bushel prices of $4.00 for corn, $5.00 for wheat and $10.00 for canola

Per acre benefit $40 $30 $20

Benefit/Cost ratio 2.4 3.5 3.2

Documents

2011 Jan Mike Wilson CIBC Presentation