yara international asa · 2018-03-06 · yara international asa thor giæver, svp investor...

Yara International ASA

Thor Giæver, SVP Investor Relations

BofAML conference

London, 5 December 2017

IR – December 2017

Our planet faces massive challenges – Yara is part of the solution

Our Mission

Responsibly feed the world and protect the planet.

Source: OECD and FAO

*To stay within the 2°C goal by 2050

http://yara.com/media/multimedia_library/videos/?id=tcm:9-241120 2

9.7 billion

people

+ 50 %

Increased food production

-40 to -70%

Reduced greenhouse gas

emissions*

Our Values

Ambition, Curiosity, Collaboration and Accountability

http://yara.com/media/multimedia_library/videos/?id=tcm:9-241120




Yara drives sustainable agriculture with the right nitrogen fertilizer

products and precision farming tools

3

19.9

10.8

3.0 1.8

0.7

Urea UAN AN CAN CN

% N

H3

-N p

er

un

it N

ap

plie

d

N fertilizer

Lower volatilization losses* with Yara’s premium

fertilizers

Precision farming tools promote sustainable

agriculture

• Precision farming promotes best agricultural practices

• Yara’s N-sensor, N-tester and water sensor help optimize

application rates and water use

• Yara’s solutions help farmers comply with environmental

legislation while supporting their competitiveness

Agriculture is responsible for about a quarter of global greenhouse gas emissions. Yara contributes to lower emissions

through promoting premium fertilizers and sustainable farming

Reference: EMEP/EEA emission inventory guidebook 2013

*Nitrogen is changed to ammonia gas (NH3) and lost into the atmosphere


1.5

2.0

2.5

3.0

3.5

4.0

4.5

Jan'16

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan'17

Feb Mar Apr May Jun Jul Aug Sep

TRI (Total recordable injuries 12-month rolling)1

Safe operations is our first priority

4

1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours.


Integrated business model creates value through scale, flexibility

and value chain presence

5


Yara’s leading global position and differentiated product portfolio

represent key sources of competitive edge

Global #1 in Nitrates1

1) Including TAN and CN – Including companies’ share of JVs 2016YE

2) Compound NPK, excluding blends

3) 2016/2017 season volume

*Ammonia trade not included in chart above

6

7.4

4.5 3.2 2.7 2.3

Yara Eurochem Ostchem Uraichem Borealis

Global #1 in NPK2

5.3

3.3 2.7 2.7

1.9

Yara C. mandel Gresik Iffco Phosagro

0.3

1.2

Africa 4.4%

1.0

3.1

NorthAmerica12.1%

0.2

2.1

Asia 6.6%

0.3

2.2

LatAm ex.Brazil 7.3%

4.7

9.4

Europe41.4%

0.4

9.2

Brazil28.2%

Industrial products & solutions Fertilizers % = total sales 2016/ sales figures in mill. tonnes

Fertilizer product portfolio3

Standard products

(Urea, UAN, Ammonia)

34%

Differentiated products

(CAN, AN)

21%

Specialty (CN,

Compound NPK,

Fertigation)

26%

NPK blends

19%


14.1% 14.4%

14.1%

16.1%

22.8%

8.5%

17.4%

20.9%

17.3%

12.6% 13.3% 14.0%

9.5 %

0

20

40

60

80

100

120

140

160

0

0

0

0

0

0

2004 '06 '08 '10 '12 '14 16

Ex special items Yara avg. gross investment, 12M rolling

Strong growth and profitability through the cycle

1) Share price appreciation (end 2016) plus dividend payments

Average cash return on gross investment (CROGI)

well above the Yara CROGI target of 10% Average annual shareholder return of 23%1

10% target

0

50

100

150

200

250

300

350

400

NOK/share

16 15 14 13 12 11 10 09 08 07 06 05 IPO

2004

Share price 19 Oct 2017

Average annual share price

Book equity

Accumulated cash dividend payments

7


'14 '15 '16 '17 '18 '19 '20 '21 '22

Urea oversupply outside China is offset by lower Chinese exports

13.7 13.7

8.9

3.5

0

2

4

6

8

10

12

14

16

2014 2015 2016 2017YTD

Source: CRU, September 2017. Numbers include both additions and closures of capacity

8

Capacity additions, excluding China (Mt urea) Urea exports from China (Mt urea)

• Market is currently dominated by oversupply outside China, however lower China exports balance the urea market

• Urea market price is set by Chinese swing producers

3.1

4.7

7.2

3.8

2.1

1.6 2.0 2.1

~3Mt = 10 year historical

trend consumption growth

0.9

Other Nigeria USA Iran Russia


Increased coal prices in China have driven nitrogen prices higher

1) Source: IHS, CFMW

9

China anthracite and urea prices (RMB/mt)1 Increasing urea prices

170

190

210

230

250

270

290

310

330

350

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

US

D/tons

Urea fob Black Sea Urea prilled fob China

Urea inland proxy China


Western Europe producers have clear cost advantage over China

• Production based on European natural gas has a

cost advantage over China up to a gas price of 10

USD /MMBTU1

1) Based on an FOB China export price of 295 USD/t

2) IHS forecast – TTF (USD/MMBTU)

Source: IHS, Yara internal analysis 10

Urea pricing derived from a Chinese export price European gas cost2

• China as the swing producer defines the Urea

market prices for Western Europe

0

2

4

6

8

10

12

'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22

10 USD/

MMBTU

1,750 RMB/t

(265 USD/t)

RMB/mt = 6.6 * USD/mt

285 USD/t

+ (X+10) = 1,950 RMB/t

(295 USD/t)

+ 200

+ 30 315

USD/t

# Logistics cost / t # FOB product cost / t

FOB Black Sea prices typically at ~10

USD below FOB China; EU prices in turn

correspond to FOB Black Sea + freight

+ X


Yara has expected commodity nitrogen oversupply, and has

focused its growth pipeline on premium & industrial products

Uusikaupunki NPK (3Q 2016)

Porsgrunn/Glomfjord CN/NPK (4Q 2017)

Sluiskil urea+S (4Q 2017)

Rio Grande NPK/NPK blends (2H 2020)

Expand premium products

sales and supply

Freeport ammonia JV (1Q 2018)

Babrala urea acquisition (4Q 2017)

Expand commodity scale

based on attractive full-cost

growth opportunities

Act on attractive

opportunities to grow

industrial sales and supply

Galvani / Salitre

(mining: 1Q18, chemical 1H19)

Structurally secure P and K

supply

Pilbara – TAN (1H 2017)

Köping – TAN (2Q 2018)

250

TAN

500

1,200

Ammonia Urea

400 Nordic

250 160

1,000

500 Rio Gr.

NPK CN Urea+S NPK Blends

Pipeline tonnes by product (kt)1 Growth focused on premium & industrial

Medium Low High Exposure to commodity nitrogen prices:

1 Including Yara’s share of volume in non-consolidated investees. Fully consolidated entities presented at 100% basis

1,000

SSP/NP

11


Yara Improvement Program targets minimum USD 500 million

sustained annual EBITDA improvement by 2020

12

Improvement categories:

• Volume: increasing production in existing plants by improving reliability

• Consumption factor: reducing spend, primarily on energy, through better reliability and new technology

• Variable unit cost: leverage global scale, advanced category management and collaborative procurement approaches

• Fixed cost: improve support function standardization and realize scale benefits

1) Versus 2015 baseline, at 2015 prices

Today Start:

2016

End:

2020

2017 2018 2019 2020

64 90 120

210 150

500

2017 2018 2019 2020 2021 20222020

target

2017

target

Status as

of 3Q17

Status as

of 2Q17

Status as

of 1Q17

Status as

of 4Q16

USD 500m Improvement Program Progress Annualized EBITDA improvement, USDm1


Yara Improvement Program ahead of schedule

Program still progressing according

to plan, with benefits ahead of target

Yara Productivity System continues

to be rolled out. Production reliability

strong compared to same period last

year

Procurement Excellence progressing

into Wave 2 and delivering ahead of

plan

A total of USD 97 million one-off cash improvement realized,

primarily working capital release

Accumulated one-off program costs: opex USD 47 million and

capex USD 147 million

500

150210

1209064

2020

target

2017

target

Status as

of 3Q17

Status as

of 2Q17

Status as

of 1Q17

Status as

of 4Q16

Program progress Financial benefits

Annualized EBITDA improvement, USD million, vs. 2015

baseline, at 2015 prices

Today Start:

2016

End:

2020

2017 2018 2019 2020

13


2020 2019

1.1

0.4

0.7

2018

4.3

3.0

1.3

2017

11.4

10.1

1.3

2016

7.9

7.3

0.6

Committed expansions + M&A

Improvement program

2020

1,100

600

500

2019

850

400

450

2018

600

300

300

2017

250

100

150

2016

104

40

2020

16

6

10

2019

12

3

9

2018

7

1

6

2017

3

3

2016

1

1

1 Currency assumptions for 2017 onwards: USD/NOK 7.90, EUR/NOK: 9.32 , USD/BRL: 3.15 2.Excluding maintenance capex on existing assets – see page 21. Yara’s share of capex. Fully consolidated entities presented at 100% basis 3 Measured at 2015 conditions. Main average market prices: Ammonia fob Yuzhny 390 USD/t, Urea fob Yuzhny 275 USD/t, DAP fob Morocco 495 USD/t

Improvement program:

+ 350 MUSD cost improvement

+150 MUSD volume improvement:

-> 0.4 mill. tonnes ammonia

-> 0.7 mill. tonnes fertilizer

Committed expansions + M&A:

+ 1.2 mill. tonnes ammonia

+ 3.5 mill. tonnes fertilizer

Major improvement and growth investments in 2017;

main earnings improvement from 2018 onwards1

EBITDA improvement3 (MUSD)

Earnings improvement3 (NOK per share)

Improvement and growth capex2 (BNOK)

14


Additional information

Global leadership by growing knowledge for 112 years

16

About the company:

• Headquarters in Norway

• President and CEO: Svein Tore Holsether

• Present in more than 60 countries, sales to ~160 countries

• Close to 15,000 employees

• Established as Norsk Hydro in 1905, demerged and listed

on Oslo Børs as Yara International ASA in 2004

Stable ownership structure:

• Norwegian State 36.2%

• Norwegian National Insurance Scheme Fund 5.3%

• Other Norway 14%

• Outside Norway 44.5%

Key metrics 2016 / YTD 2017:

• Operating revenues: 95.2 BNOK / 69.8 BNOK

• EBITDA: 15.6 BNOK / 8.6 BNOK

• CROGI: 9.5% / 6.5%

• Total deliveries (in million tonnes):

• Fertilizers: 27.2 / 20.8

• Industrial products: 6.9 / 5.3

• Ammonia trade: 2.0 / 1.5

Strong and stable credit position:

• S&P: BBB (stable), BBB+ between 2005 and 2007

• Moody’s: Baa2 (stable), unchanged since 2004

• Clear commitment to BBB/Baa2 rating

• Financial ratios as of 3Q 2017:

• Debt/equity: 0.22

• Net debt/L12M EBITDA: 1.55x

Three operating segments supported by a global supply chain

function cover the value chain

1) External revenues and other income

2) Excluding other and eliminations

USD translations use USD/NOK exchange rate of 8.18 as of 15 November 2017 (Source: Bloomberg) 17

Crop Nutrition Industrial Production

Supply Chain

Description

Credit highlight

2016 Revenues1

2016 EBITDA2

• Global function responsible for optimization of energy, raw materials and third party sourcing

• Sourcing and trade of 3,864 kilotons of ammonia and purchases of 293mm MMBtu of energy, 3,408

kilotons of potassium and 969 kilotons of phosphate rock

Provides worldwide sales, marketing and

distribution of a range of crop nutrition

products and programs

Develops and markets environmental

solutions and products for industrial

applications

Runs large-scale production of nitrogen-

based products, the starting point for our crop

nutrition and industrial solutions

Crop Nutrition creates resilience in earnings with distribution and agronomic competence

Industrial segment reduces cyclicality and seasonality

Production has plants and mines globally, providing scale and flexibility

72.7 BNOK (8.9 BUSD)

75%

16.0 BNOK (2.0 BUSD)

16%

5.5 BNOK (0.7 BUSD)

36%

2.9 BNOK (0.4 BUSD)

19%

8.5 BNOK (1.0 BUSD)

9%

6.7 BNOK (0.8 BUSD)

44%


Supply Chain delivers industry-leading economies of scale

18

Biggest industrial buyer of natural gas in Europe Third single biggest buyer of P&K globally

2016 gas consumption, Million MMBtu* 2016 P&K purchases (mt)

157

22

109

Europe Canada RoW

7.0

3.9 3.4

Potash, MOP

7.0

1.1

Phosphate**

China India Yara

*Including share of JVs

** In P2O5 equivalents


Yara has strong cost and market positions globally

Source: Fertilizer Europe

*Production cost index: 100 = European FE average excluding Yara 19

Leading cost position in Europe Strong competitive positions outside Europe

50

60

70

80

90

100

110

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

European

average*

• North America: World class low-cost

production assets in core agriculture market

• Brazil: Unrivalled distribution network with 28

sites in 11 states. Limited commodity margin

exposure due to (1) strong premium product

positions and (2) third-party sourcing for blend

business

• Asia: Export market for Yara premium

products for more than 100 years. Strong

knowledge margin and brand awareness.

Ammonia


Production scale advantage and variable cost flexibility due to asset

set-up and product mix

Mill tons 2016FY

20

Diversified product portfolio1 High ammonia flexibility Yara’s operating cash costs are

mainly variable

1) Including Yara’s share of joint venture plants

Source: Yara internal accounts

Urea

Nitrates

Ammonia

Phos. Rock

CN

SSP

UAN

NPK

5

6

8

1

1

1

1

5

Mill tons 2016FY NOK billions, 2016FY

4.9

2.9

0.4

1.6

Non flexible Flexible European

ammonia

capacity

Land-locked nitrates Urea Rest of the World Europe

12.4

69.6

Variable costs (85%)

Dry raw materials

Energy

Freight

3rd party finished fertilizer

Fixed cash cost (15%)

~90% of nitrate and NPK production can operate independently of ammonia production


Industrial segment delivers growth and offsets fertilizer cyclicality

and seasonality

21

Mining Applications Industrial Applications1 Base Chemicals Environmental Solutions

Key product and

service offering

Strategic fit

Geographical

market

Market drivers

EBITDA 2014-

2016 (MNOK)

Chemical applications for food,

automotive, space,

pharmaceutical and construction

industries

NOx and SOx abatement of

emissions from heavy duty

vehicles and industry

Technical nitrates and solutions

for mining and construction

industries

CN and associated solutions for

industrial applications

Feed urea and phosphates for

Animal nutrition

Optimization of Upstream assets Utilize logistics advantage and

infrastructure footprint

Utilize technology, logistics and

infrastructure advantage Monetize products into higher

value markets

Europe Global Global Global

GDP growth Legislations, GDP growth GDP growth, mining industry GDP growth, standard of living

2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014

551 713

544 584 468

226 153 198 176 337 296 314

1) Excluding CO2 gas, liquid and dry ice which was divested in Q2 2016, 2014-2016 EBITDA figures restated to exclude divested business


Yara has a strong position in value-added fertilizer, while urea is the

main reference product for nitrogen pricing

22

Nitrogen – The most important nutrient1 Urea is the key commodity N-product2

57%

24%

19% Potassium (K)

Phosphorus (P)

Nitrogen (N)

Total 186 million

tons nutrients

107 million

tons

1) Source: IFA 2016/2017 season (June 2017 estimates)

2) Source: IFA 2016 (nutrient totals) and 2015 (product split)

Urea

50%

UAN

5%

AN/CAN

9%

NPK

15%

DAP/MAP

7%

Ammonia

4%

Other

10%


Growth and capex pipeline

23

2019

7.5

5.8

0.4 1.3

2018

10.9

6.3

3.0

1.6

2017

16.5

5.3

6.3

3.5

1.5

2016

14.2

5.3

6.9

0.4 1.5

Maintenance

Committed growth

M&A

Cost&capacity improvements 2) NOK bn

Capex plan1

1) Yara’s share of capex. Fully consolidated entities presented at 100% basis.

2) Includes Yara Improvement program Capex and other improvements

3) Rio Grande expansion also adds 1 million tonnes NPK blends by 2020

4) Finished fertilizer and industrial products, excl. bulk blends

5) Including Yara share of production in non-consolidated investees

6) Adjustment to normalized / 2016 turnaround level 7) Committed projects only. TAN Pilbara: 160 kt, Porsgrunn: 235kt, Glomfjord: 105kt, Uusikapunki: 250kt,

Köping: 90kt, Sluiskil: net 160kt, Galvani (Salitre ~ 0.8 mill.tonnes, reaching 1.1 mill.tonnes in 2022), Rio

Grande: 500kt

8) Including 100% ownership in Pilbara NH3 plant

Production growth 2015 - 20203

Finished products4 Ammonia

Mill.tons

0.70.7

1.2

2.3

1.6

0.3

Est. 2020

23.8

Other

growth7

Babrala Regularity T/R6 20155

19.2

17.3

0.4

1.2

0.3

1.1

Est. 2020

9.0

Freeport

& Babrala

Pilbara8 Regularity T/R6

0.2

20155

7.0

5.8

0.2

Yara-operated

Yara share of Qafco & Lifeco

GrowHow UK (divested mid-2015) Porsgrunn 1.2 0.7 -

Köping 0.4 0.5 0.1

Sluiskil 0.7 0.7 0,0

BASF JV 1.6 0.9 0.5

Rio Grande 0.1 1.2 0.7 0.4

Salitre 0.8 2.0 1.6

Other projects 2.1 0.3 0.1

Total 6.9 6.3 3.0 0.4

Committed growth (NOK bn):


300

2017

100

104 300

600

250

2018

450

150

2016

850

600

1,100

2019

500

2020

400

40

2016

1

1

2020

12

3

9

2019

3

1

6

7

2018 2017

3

10

6

16

Improvement and growth investments; earnings and sensitivities1

EBITDA improvement2 (MUSD)

Earnings improvement2 (NOK per share)

0.7 0.7

1.4

Ammonia Urea DAP

Growth: Impact3 of +100 USD/t price change (NOK/share)

1 Currencies for all amounts from 2017: USD/NOK 7.90, EUR/NOK: 9.32, USD/BRL: 3.15

2 Measured at 2015 conditions. Main average market prices: Ammonia fob Yuzhny 390 USD/t, Urea fob

Yuzhny 275 USD/t, DAP fob Morocco 495 USD/t. 3 Improvement: 2020 numbers. Growth: At full capacity (2019 for urea and ammonia, 2020 for DAP). 4 Phosphate-driven price change, equivalent to 138 USD/t phosphate rock (72 bpl)

Improvement program: Impact3 of +100 USD/t price change

(NOK/share)

0.4

0.7

Ammonia Urea

4

24


Yara Improvement Program targets sustained improvement of

minimum $500MM EBITDA, plus cash benefits

Fixed cost

Variable unit cost

Consumption factor

Production volume

500

~25%

~30%

~15%

~30% ~450

~300

~150

641

USD$MM, vs. 2015 baseline and 2015 prices

Sustained

EBITDA

improvement

Sustained capex

improvement

One-off working

capital release (~125MM total) ~15 ~15 ~15 ~40 ~40

One-off cost

One-off capex

EBITDA impact (~80MM total) ~10 ~10 ~20 ~30 ~10

(~500M total)

2020 2019 2018

~170

2017

~170

2016

~70 ~90

Sustained capex improvement: Target under development

1 Effects calculated on 2015 prices. If actual prices in 2016 are applied, the total is $25M; Only confirmed 2016 benefits included 25


The improvement program is organized into concrete projects

across the company

Improve safety, customer

responsiveness, reliability, cost,

productivity and quality on our

sites as well as the ability to

assess and integrate acquired

assets

Improve working capital

management in selected

countries

Realize sustainable, incremental

savings based on advanced

category management and

collaborative procurement

Standardize processes in supply

chain and finance to improve

customer experience and

efficiency

Improve project execution and

cost position of basic IT services

while increasing customer and

business orientation

Yara Productivity

System

Working Capital

Procurement

Excellence

Support function

efficiency and

quality

IT Optimization

Better Cheaper

Faster

Improve quality, cost and

speed of construction through

standard specifications, by

challenging requirements and

focus on execution strategy

EB

ITD

A ta

rget1

C

ash

effe

cts

Improve our commercial activities in Crop

Nutrition and Industrial segments through

being more focused, efficient and effective in

developing our sales & marketing channels

Sales & Marketing

enhancement

More

for less

Added

value

1Projects contribute primarily towards EBITDA, but also contain elements of capex improvement 26


Volume and energy consumption improvement targets

243

~400

2020

~6,4001

2016

6,471

2015

5,755

697

~18,7001

~700

2020 2016

17,961

2015

17,348

Production

volume

Consumpt-

ion factor 35.4

-3%

2020 2016

36.0

2015

36.4

Ammonia production,

thousand tonnes

Finished fertilizers production,

thousand tonnes

Energy consumption,

Mmbtu (HHV2) per tonne Ammonia

(weighted average)

Ammonia production (excl. pipeline growth)

Finished fertilizers production

Adjustment to normalized / 2016 turnaround level

Pilbara acquisition effect (last 49%)

Improvement program target

Note: Volume and energy targets are not final; they

are subject to change as additional plant

assessment deep-dives are completed

1 Indicative target based on improvements to the baseline (improvement program target), and known turnarounds and expansions in 2016; 2 Higher Heating Value 27


Uusikaupunki

Sluiskil

Yara Productivity System in practice

262292 3321

+14%

Total production at site, thousand tonnes

1 Includes 58kt production volume related to expansions (not counted in overall benefits realization); Producing more high-N NPK grades in 2017 compared to 2016 and 2015

Base production (excluding effect of

planned maintenance stops)

1,505 +2%

1,444 1,476

Belle Plaine 535439490

3Q17 3Q16 3Q15

+9%

28


0

100

200

300

400

500

600

3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

USD/t

Nitrogen upgrading margins1 (monthly publication prices)

CAN (46% N) NH3 CFR (46% N) Urea Egypt CFR proxy

Yara EU gas cost *20

Higher European nitrate premiums

29

Nitrate

premium

above urea

Value above

ammonia

Value

above gas

0

10

20

30

40

50

60

70

80

90

3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

European nitrate premium2 (quarterly Yara realized) USD/t

2) Yara European realized nitrate prices (excl. sulphur grades)

compared with urea publication prices (Egypt CFR proxy) with

1 month time lag. All numbers in USD per tonne of CAN equivalents. 1) All prices in urea equivalents

Source: Fertilizer Market Publications


Weighted average global

premium above blend cost

0

100

200

300

400

500

600

700

3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

USD/t NPK premium over blend1

Value above

raw material

0

100

200

300

400

500

600

3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

USD/t Phosphate upgrading margins

DAP, fob USG

Solid commodity phosphate margins and compound NPK premiums

1) Export NPK plants, average grade 19-10-13, net of

transport and handling cost.

Rock, fob North Africa *1.4

NH3, fob Black Sea *0.22

DAP, CIF inland Germany

MOP, CIF inland Germany

Urea, CIF inland Germany

Nitrate premium, CIF inland Germany

Source: Fertilizer Market Publications

30


Yara has invested for the long term in Brazil; Bunge acquisition

brought critical mass in distribution

31

Acquisition

Acquisition

Divestment

Acquisition

Acquisition 60%

Volume

(MM tons) 9.3

8.27.8

3.33.22.7

2.22.22.42.8

1.81.72.01.81.51.3

0.80.5

99 00 01 04 05 06 14 08 09 10 11 12 13 15 16 02 03 07

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=qNfkQP0H5oVWFM&tbnid=WEjJW0OceK6rIM:&ved=0CAUQjRw&url=http://www1.cedrofinances.com.br/opHistoricalPrice.cedro?q=ilmd1&ei=3wzDUZ_UMqXa4ATW8YDABw&bvm=bv.48175248,d.bGE&psig=AFQjCNEjp1lgGcPxD_DlGkCFyC1PaU1Xhg&ust=1371823694683813

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=KjgSYrsPe0T5EM&tbnid=tAm3nj_9R1t6MM:&ved=0CAUQjRw&url=http://www.lecom.com.br/lecom/Portugues/detCases.php?codcases=46&ei=Aw3DUea8IKT_4QTY6IGYBg&bvm=bv.48175248,d.bGE&psig=AFQjCNEBuBDBb3oZ5WtdSHuqrbFZwRJ-pA&ust=1371823737777697

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=A-xzfD57VEUbrM&tbnid=6CsBJ0_UWPT_LM:&ved=0CAUQjRw&url=http://www.gaflon.com.br/clientes.php&ei=HQ3DUdjtO6KJ4gTMmoHgDA&bvm=bv.48175248,d.bGE&psig=AFQjCNEauHAlopxHjTwt67z_SOz8OZSDXQ&ust=1371823761388840


Yara Brazil today: unrivalled market presence and farmer-centric

strategy

> 20,000 growers using Yara solutions

> 200 Yara agronomists and 600 sales

representatives

> 55% of Yara deliveries are direct to farmer

> 55,000 interactions with growers p.a.

Unrivalled presence: 28 sites in 11 states Farmer-centric strategy drives growth

Galvani (fertilizer

production, mining

and port operation)

Yara (offices,

production, blending

and distribution of

fertilizers, port

operation)

32


Crop Value Index – a key guide to our approach What is CVI:

Crop revenue

Fertilizer costs

Low value - High volume

Limited price premiums for quality

Nutrient use efficiency is key

+1200 USD/ha = 50% yield increase

CV

I

Global area grown (ha)

High value, Low volume

Double price premium for high quality

2% yield increase= +1200 USD/ha

Optimal cost position for lower value segments

Low level of differentiation

Build positions for crop with both value and scale

Yield, quality and productivity

Take the position in cash crop – but not enough scale

Key parameters: Quality and yield

33


0

200

400

600

800

1,000

1,200

1,400

1,600

08 09 10 11 12 13 14 15 16 17

+21%

0

5,000

10,000

15,000

20,000

25,000

30,000

2013 2014 2015 2016 2017

Th

ou

san

ds

+1%

Kilotons Kilotons

0

2,000

4,000

6,000

8,000

2013 2014 2015 2016 2017

+5%

Kilotons

Yara Brazil Industry (ANDA)

Brazil season-to-date premium product deliveries Brazil season-to-date fertilizer deliveries

Brazil: focus on premium products and solutions drives growth

34

3Q

1H

1H

3Q

1H

3Q


Earnings before interest, tax, depreciation and amortization

(EBITDA)

35

3,591

4,227

3,964

4,625

4,794 5,179

7,884

3,504

5,055 5,489

3,004

2,015

3,216

2,992

2,386

3,830 4,185

4,002 4,528

5,742

5,055

4,614

3,508

5,050 3,958

2,968 2,474

3,335

2,873 2,728

2014 2016 2015 YTD 2017

NOK millions

EBITDA excluding special

items

NOK

millions 16,407 21,361 15,563 8,594

Annual


Debt/equity ratio

36

0.07

-0.04

0.05

0.13

0.11

0.18

0.08

0.01

0.06

0.15

0.13

0.22

0.06 0.06 0.08

0.06

0.14

0.22

0.02

0.06

0.17 0.16

0.17

2012 2013 2014 2015 2016 2017

Net interest-bearing debt / equity ratio (end of period)


Fertilizer deliveries

37

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

Europe Outside Europe

Kilotons

2013 2010 2011 2012 2014 2015 2016 2017


Higher finished fertilizer and ammonia production

38

0

500

1,000

1,500

2,000

2,500

Kilotons

2017 2016 2014 2015

Ammonia1

+7%

1) Including share of equity-accounted investees

0

1,000

2,000

3,000

4,000

5,000

6,000

Kilotons

Urea Nitrates NPK CN UAN SSP - based fertilizer

2016 2014 2015 2017

Finished fertilizer & industrial products1

+8%


Strong premium product deliveries

39

1) YaraBela, YaraMila and YaraLiva deliveries

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

3Q13 3Q14 3Q15 3Q16 3Q17

305

250 236

37

85

300

517

302

128 84

268

618

398

117 78

Asia Brazil LatinAmerica excl.

Brazil

Africa NorthAmerica

Value-added fertilizer deliveries1 Value-added fertilizer deliveries1

CAGR

16%

Outside Europe Europe

3Q17 3Q16 3Q15


YaraMila (compound NPK) and YaraBela (nitrate) deliveries

40

0

200

400

600

800

1,000

1,200

1,400

1,600

3Q13 3Q14 3Q15 3Q16 3Q17

Yara-produced YaraMila deliveries

0

200

400

600

800

1000

1200

1400

1600

3Q13 3Q14 3Q15 3Q16 3Q17

Yara-produced YaraBela deliveries Kilotons

Outside Europe Europe Outside Europe Europe

Kilotons


AdBlue deliveries

41

0

100

200

300

400

500

600

1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17

Kilotons


Industrial volume development

938939967

912900866847829815

892859864852849

816866

618640637663

572571538

577541540

482511

438456

382432

172135

171177152

299310328

385364333346

380361339367

2Q17 3Q17 1Q17 2Q16 1Q16 3Q16 4Q16 4Q13 4Q14 3Q14 4Q15 3Q15 2Q14 1Q14 2Q15 1Q15

Other Industrial N-chemicals Environmental products

Kilotons

1 European CO2 business divested 1 June 2016

1

42


-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Urea Nitrates Compound NPK Other

Yara stocks

Kilotons

Finished fertilizer Bunge Fertilizer

included from 3Q 2013

43


Food demand drives fertilizer consumption –

Grain is the key driver for nitrogen consumption growth

Grain consumption and production1

1) Source: USDA October 2017

2) Source: International Fertilizer Association (IFA) 2017. Per season actual and forecast. 44

Global nitrogen consumption growth2

1,950

2,050

2,150

2,250

2,350

2,450

2,550

2,650

08 09 10 11 12 13 14 15 16 17E 18F

Mill

ion tons

Consumption Production

Food demand drives fertilizer consumption

• Population growth of about 80 million each year

• Economic growth also changes diets

63 61 62 63 63 64 64 65 66

16 16 16 17 17 17 17 17 17

15 14 15 14 14 15 15 15 15 8 8 8 9 9 9 10 10 10

120

60

80

mt

100

40

0

20

4 4 104

4

1.3%

4 105 106

5

112 111

4

110 107

4 103

3

109

3

North America Latin America Africa Asia/Oceania Europe

13/14 14/15 15/16 16/17 F17/18 F18/19 F19/20 F20/21 F21/22


Strong urea oversupply outside China

Source: CRU, September 2017. Numbers include both additions and closures of capacity.

CRU year-over-year production change

0.9

2018

3.8

2019

2.1

7.2

2017 2020

3.1

4.7

2015

1.6 2.0

2021

2.1

2022 2016 2014

Capacity additions, excl. China

(mill. tonnes urea)

Egypt 0.6

Indonesia 0.5

Saudi Arabia 0.5

Malaysia 0.3

Bangladesh 0.1

Vietnam 0.1

Romania -0.8

USA 3.0

Nigeria 0.7

Iran 1.4

India 0.7

Egypt 0.3

Uzbekistan 0.1

USA 1.6

India 0.9

Bolivia 0.5

Azerbaijan 0.5

Turkmenistan 0.3

Indonesia 0.1

Kuwait -1.2

Iran 0.6

Russia 0.4

Turkmenistan 0.9

Indonesia 0.4

Azerbaijan 0.2

Iran 0.5

India 0.7

Egypt 0.3

Uzbekistan 0.3

Tajikistan 0.2

~3 Mt = 10 year historical trend

consumption growth Algeria 0.8

Nigeria 0.7

Russia 0.7

USA 1.2

Malaysia 0.9

Bangladesh 0.5

India 0.4

Bolivia 0.2

Indonesia -0.1

Bangladesh -0,5

Romania -0.9

Indonesia -0,7

Bangladesh -0,1

Russia 0.2

Nigeria 0.6 Iran 0.5

Iran 0.5

Nigeria 0.6

Brunei 0.6

Tajikistan 0.2

Russia 0.1

45


9.9 9.7

11.8 12.1

Import catch-up need in India

46

20.8 19.7 20.1 20.0 20.7

21.5 22.0 22.3 23.0 22.7 23.7

24.4

22.6 23.5

25.5 26.9 26.4

27.3

29.4 29.6

31.5

29.7

32.5

30.2

+1.5%

2017 2016 2016

+2.7%

2005

Production Sales

Million

tonnes

+ 3%

- 2%

Season-to-date (Apr – Aug) Calendar year

Million

tonnes


Normal start to the European fertilizer season, slow in

USA like last season

47

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

3Q13 3Q14 3Q15 3Q16 3Q17

Domestic Imports

West Europe USA

Million tons N Million tons N +1%

Source: Yara estimate, TFI, US Customs.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

3Q13 3Q14 3Q15 3Q16 3Q17

Domestic Net imports

+0%


European producers’ nitrate stocks

48

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

17/18 12/13 13/14 14/15 15/16 16/17

Source: Fertilizers Europe, Yara estimate for September

Index

June 2007 = 1


Energy cost

49

4.0 4.4

4.0

2.8

3.7 4.4

2.6 2.0 2.1

2.8 3.0 3.0 3.0 2.9 2.9 3.2

4.8

5.7

8.2 8.0 8.0

6.9

5.5

4.1 3.8 4.0 4.3

5.3 4.7 4.6

5.1 5.4 4.7

6.6

9.2 9.4

10.5

8.1

6.4

4.2 4.4 4.2

5.4 5.8 5.0 5.5

6.2 6.3

6.6

7.6

10.7 11.0 11.4

9.1

7.1

5.0 4.6 4.9 5.3

6.5

5.6 5.7

6.5 6.9

2009 2010 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

US gas price (Henry Hub) Yara Global TTF day ahead (Zeebrugge 2009-2012) Yara Europe

Yearly averages 2009 – 2015, quarterly averages for 2016-18 with forward prices* for 4Q17 and 1Q18.

*Dotted lines denote forward prices as of 10 October 2017 Source: Yara, World Bank, Argus/ICIS Heren


Relatively weak grain economics

50

0

50

100

150

200

250

300

1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012 1/2013 1/2014 1/2015 1/2016 1/2017

Index FAO price index

Cereals Price Index Cereals 5 year avg. Food Price Index Food 5 year avg.

Source: FAO


Key value drivers – quarterly averages

51

183 206

242

190 207 193 233

265

201 234

3Q16 4Q16 1Q17 2Q17 3Q17

Urea prilled fob Black Sea (USD/t)/Urea granular fob Egypt (dotted line, USD/t)

166 184 231

198 205

3Q16 4Q16 1Q17 2Q17 3Q17

CAN cif Germany (USD/t)

2.9 3.0 3.0 3.0 2.9

3Q16 4Q16 1Q17 2Q17 3Q17

US gas price Henry Hub (USD/MMBtu)

4.2

5.4 5.8

5.0 5.5

3Q16 4Q16 1Q17 2Q17 3Q17

TTF day ahead (USD/MMBtu)

8.3 8.4

8.4 8.5

8.0

3Q16 4Q16 1Q17 2Q17 3Q17

NOK/USD exchange rate

210 190

301 282

198

3Q16 4Q16 1Q17 2Q17 3Q17

Ammonia fob Black Sea (USD/t)

Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank

yara international asa · 2018-03-06 · yara international asa thor giæver, svp investor...

Documents