Yara International Asa · OSL:YAR
Yara International Asa — Q3 2024 Earnings Presentation
30 slides from Yara International Asa's earnings presentation, Oct 25, 2024
Slide 1: Yara International ASA 2024 third-quarter results
Yara International ASA 2024 third-quarter results 25 October 2024
Slide 2: Cautionary note
Cautionary note This presentation contains forward-looking information and statements relating to the business, financial performance and results of Yara and/or industry and markets in which it operates. Forward-looking statements are statements that are not historical facts and may be identified by
Slide 3: Our ambition is zero injuries
Our ambition is zero injuries TRI1 (12-month rolling) 5 4 3 2 1.0 1 0 1Q16 2Q24 3Q24 1) Total Recordable Injuries per 1 million working hours 3
Slide 4: Improved earnings in 3Q
Improved earnings in 3Q 3Q 2024 EBITDA excl. special items1 of 585 MUSD Strong premium1 generation All-time high production performance2 Returns improving but still below target, cost and portfolio optimization continues 1) For definition, explanation and reconciliation see APM section in the 3Q rep
Slide 5: Improved EBITDA with higher margins and lower fixed cost
Improved EBITDA with higher margins and lower fixed cost ROIC2 EBITDA excl. special items (MUSD)1 Price/margin +145 21 Energy cost4 -10 36 135 Currency +9 -5 Underlying improvement: ~14 MUSD incl. divestments 585 396 3Q23 Volume/mix 3 Margin Fixed costs5 Other 3Q24 3.6% 8.9% 1) EBITDA excl. special
Slide 6: All-time high underlying production performance
All-time high underlying production performance1 Ammonia, million tonnes Finished products, million tonnes +14% +8% 7.3 7.3 20.0 19.6 6.5 6.4 17.9 18.2 Actual production2 2021 2022 2023 L12M 2021 2022 2023 L12M Improved actual production driven by operational performance and Best performance since 2
Slide 7: Financial performance
Financial performance EBITDA excl. special items1 EPS excl. currency and special items1 ROIC1 (MUSD) (USD per share) (12-month rolling, %) 585 0.73 6.2% 6.9% 396 0.19 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 Change in net operating capital2 Cash from operations Investments (net)3 (MUSD) (MUSD) (MUSD) 801 -242
Slide 8: Strong premium generation
Strong premium generation Strong premiums1, MUSD P-upgrade margin: strong year-over-year improvement, USD/t Premium generated Average 2019-2024 DAP excl. N2 Rock cost per tonne DAP3 800 550 500 600 450 400 P-margin: 400 ~225 USD/t 350 P-margin: 200 ~33 USD/t 300 0 0 Q1 19 Q3 19 Q1 20 Q3 20 Q1 21 Q3
Slide 9: Fixed cost and capex reductions progressing
Fixed cost and capex reductions progressing Fixed cost1 Capex MUSD, including currency translation effect2 BUSD 2,513 2,533 1.2 1.2 1.2 1.2 2,488 2,379 2,400 1.0 2022 2023 2Q L12M 3Q L12M 4Q 2025 2022 2023 2Q L12M 3Q L12M 2024/25 run-rate guidance First wave already delivering results from externa
Slide 10: Lower deliveries, mainly of commodity products
Lower deliveries, mainly of commodity products External deliveries 3Q 2023 vs 3Q 2024, in kt 3Q23 3Q24 Comments Limited commodity product pre- buying in southern Europe -7% 6,451 Lower third-party product 5,991 deliveries in Brazil, due to margin over volume focus Commodity -7% Increased Clean
Slide 11: Results by segment
Results by segment 3Q23 3Q24 EBITDA excl. special items1 (MUSD) ROIC1 3Q ROIC1 L12M 93 3.7% -4.2% Europe 82 2.1% -0.8% 171 10.4% 9.8% Americas 188 15.9% 11.6% 30 0.4% 5.4% Asia & Africa 88 9.5% 8.1% 49 -1.6% 5.6% Global Plants 108 7.8% 8.4% 56 4.9% 8.6% Industrial Solutions 89 9.9% 8.5% 7 -8.4% 13.1
Slide 12: Stable net debt development
Stable net debt development Net interest-bearing debt: 3Q development (MUSD) +17 3,587 3,604 93 478 242 160 Net debt end Cash earnings1 Net operating Investments (net) Other2 Net debt end of of last quarter capital change current quarter 1) Operating income plus depreciation and amortization, write
Slide 13: Driving sustainable performance with an integrated scorecard
Driving sustainable performance with an integrated scorecard People Planet Profit 2025 2025 2025 Yara KPI 2021 2023 L12M Yara KPI 2021 2023 L12M Yara KPI 2021 2023 L12M target target target Strive towards zero GHG emissions, Ammonia 1.0 1.1 1.0 <1.0 3.0 3.0 2.9 2.7 7.8 7.8 8.0 8.6 accidents, TRI int
Slide 14: Tighter urea market balance with limited Chinese exports
Tighter urea market balance with limited Chinese exports Key supply and demand drivers Urea price development, USD/t Capacity additions, million tonnes Supportive market development with limited supply growth ex China and Demand-driven urea market with pricing above historical averages Limited urea
Slide 15: Active portfolio management and capex discipline
Active portfolio management and capex discipline - driven by shareholder returns only Fixed costs for completed divestments: 43 MUSD annualized 4Q23 1Q24 3Q24 Divestment: Cameroon Divestment: Divestments: Divestment / Yara Marine West Sacramento terminal 1 optimization of Announced intention to tran
Slide 16: Yara's ammonia and Europe set-up offers value creation from upstream US projects
Yara’s ammonia and Europe set-up offers strong value creation potential from upstream US projects Increased nitrate and NPK margins with Equity investment in US ammonia can Unrivalled ammonia system Yara’s ammonia and Europe set-up2 create significant shareholder value2 -310 ~400 ~100 ~500 ~400 190
Slide 17: Progress to future-proof core operations and increase shareholder returns
Progress to future-proof core operations and increase shareholder returns Value- Current Reduce cost Portfolio accretive Premium Market baseline and capex optimization ammonia growth conditions growth Focus on core operations Asset portfolio review Low-cost & low-emission Premium over volumes Tighte
Slide 18: Appendix
Appendix
Slide 19: Free cash flow
Free cash flow Free cash flow before financing activities1,2 Divestment proceeds Investments Operations Free cash flow adjusted for divestment proceeds 2,104 1,669 1,973 1,560 1,091 863 1,442 1,298 1,246 777 532 619 1,142 284 288 105 123 -1,242 2018 2019 2020 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 20: Yara Improvement Program
Yara Improvement Program Ammonia production1 (mt) Finished product production1 (mt) GHG emission intensity (t CO2e/tN) Improved performance and reliability across several plants Strong performance more than offsetting Montoir not producing due Reduced GHG emission intensity following successful proj
Slide 21: Nitrate and NPK premiums
Nitrate and NPK premiums Nitrate premium above urea1 NPK premium above commodity blend2 USD/t (CAN27 equivalents) USD/t (NPK average grade equivalents) 1000 1000 Yara's realized European nitrate price Urea Egypt CFR proxy 1M lag Yara's realized NPK price Commodity Blend 2M lag 500 500 0 0 1Q21 2Q21
Slide 22: Key product price development
Key product price development 3Q23 3Q24 Urea price development1 (USD/t) Spot gas prices1 (USD/MMBtu) Yara realized CAN2 and NPK price3 (USD/t) -6% -1% 381 -5% 357 613 608 +10% 324 309 11.1 10.1 +1% 300 302 -8% 2.4 2.2 Urea granular Urea inland Europe (TTF) US (Henry Hub) CAN 27 Compound NPK FOB Egyp
Slide 23: Energy cost
Energy cost Quarterly averages for 2020 – 3Q 2024 with forward prices1 for 4Q 2024 and 1Q 2025 US gas price (Henry Hub) TTF day ahead Yara Global Yara Europe2 13.1 13.3 11.2 13.0 13.2 11.4 10.1 10.0 8.7 2.1 2.6 3.1 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24
Slide 24: Details of energy cost actuals and estimate 4Q 2024 and 1Q 2025
Details of energy cost actuals and estimate 4Q 2024 and 1Q 2025 Europe 4Q24 estimations based on 1Q25 estimations based on 4Q23 1Q24 2Q24 3Q24 forward prices forward prices Average gas cost USD/MMbtu 13.0 11.7 9.7 11.2 13.1 13.3 Gas consumption1 Million MMBtu 37.5 29.3 34.2 35.3 37.5 29.3 European g
Slide 25: Yara inventories
Yara inventories Fertilizer - finished products inventory development in mt 8 7 6 5 Other 4 3 Compound 2 NPK 1 Nitrates Urea 0 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 25
Slide 26: Peak of urea capacity additions is behind us
Peak of urea capacity additions is behind us Global urea capacity additions ex. China 1,2 (mt) India Russia Iran Algeria USA Nigeria Australia Others 6.6 6.2 5.6 5.0 4.5 4.8 4.4 4.2 3.3 1.9% average 2.2 historical consumption 1.2 1.4 growth3 1.0 0.5 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 27: Farmer incentives: wheat example
Farmer incentives: wheat example Optimal nitrogen application1,2 kg/ha +1% 211 210 212 197 22/23 23/24 1 year ago current 22/23 23/24 1 year ago3 current3 Wheat price4 (USD/t) 309 242 251 250 CAN price5 (USD/t) 561 315 330 314 Optimal nitrogen application (kg/ha) 197 211 210 212 Grain yield (t/ha) 9
Slide 28: EU nitrate margin and ammonia cash cost calculations
EU nitrate margin and ammonia cash cost calculations European nitrate upgrade position, USD/t Urea equivalents Illustrative ammonia cash cost, USD/t -310 ~500 ~400 illustrative ~400 ~100 n-margin above ammonia cost3 With CBAM, importers will pay 190 carbon tax (CBAM) for deliveries to EU 140 90 40 U
Slide 29: Alternative performance measures
Alternative performance measures Alternative performance measures are defined, explained and reconciled to the Financial statements in the APM section of the 3Q report on pages 24-32
Slide 30: Knowledge grows
Knowledge grows ; ae ee es : :