Yara International Asa · OSL:YAR
Yara International Asa — ESG Presentation (December 2020)
43 slides from Yara International Asa's sustainability presentation, Dec 7, 2020
Slide 1: ESG investor seminar
ESG investor seminar 7 December 2020
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 b
Slide 3: We are broadening our core and enabling a hydrogen economy, while driving sustainable performance
We are broadening our core and enabling a hydrogen economy, while driving sustainable performance • We are broadening our core as a leading food solutions company, with significant value creation potential − Ambition to add ~USD 300-600 million new EBITDA by 2025 on top of existing initiatives − We
Slide 4: Agenda
Agenda Section Main content Speaker 1. Backdrop • A global drive towards climate-neutral food Holsether • External perspectives Polman Mayfield 2. Broadening our core • Our journey towards food solutions Monthean • Broadening our core across three dimensions Knutsen • De-carbonization at farm • Regi
Slide 5: Backdrop
Backdrop 5
Slide 6: A global drive towards climate-neutral food
A global drive towards climate-neutral food Global megatrends driving change Consumer companies ready to turn regulatory ambitions into reality Ag and food industry EU Green Deal 2030 ambitions integration Net zero by 2039 • Reduce nutrient losses • Organic farming and sustainable Dietary shifts far
Slide 7: Agriculture is a major source of greenhouse gas emissions; improving land use efficiency is key
Agriculture is a major source of greenhouse gas emissions; improving land use efficiency is key 45% Global GHG Agriculture, 5% Major forestry and Other 80% emissions 20% land-use agriculture by sector change 6% contributors 6% 5% 32% Mineral fertilizer use Residues & org. soils Total: 53.6 Billion t
Slide 8: Yara solutions reduce the carbon footprint of farming
Yara solutions reduce the carbon footprint of farming Case: growing 9.5t wheat on 1 Ha land requires 10 % less nitrogen using Yara premium product (CAN) vs. Urea (global average) If fertilizers are not applied, more land is needed to provide the same supply – increasing net emissions by 13.6 tonne
Slide 9: Global food system can be made sustainable, agriculture plays a key role
Global food system can be made sustainable, agriculture plays a key role Four key aspects Enabling a turnaround With massive potential 40% of cropland can be restored, Reverse land use enabling natural carbon sinks and 88 Gt CO sequestered from land restoration 2 1) natural habitat restoration Clima
Slide 10: Yara is broadening its business model
Yara is broadening its business model People Knowledge Broadening our core Our Enabling the towards food solutions competitive Hydrogen economy edge Ramping up business within Green Ammonia Connection to Farm Global footprint Driving Sustainable Performance Diverse and Active portfolio Clear capital
Slide 11: Broadening our core
Broadening our core 11
Slide 12: Our evolution; from pure producer to solutions provider
Our evolution; from pure producer to solutions provider Producer Company Crop Nutrition Company Commodity Margin Knowledge Margin Climate-neutral Closeness to farmer and food companies solutions Food Solutions Using our Crop competitive edge Scalable farmer to unlock food Product centric solutions P
Slide 13: We are transforming our core across key dimensions
We are transforming our core across 3 key dimensions, building on our knowledge, connection to farm and global footprint Change business model New offering Transform channel Shift from Shift distributor “Shifting” existing Yara traditional sales to business to direct- business from one channel or ou
Slide 14: Our transformation could add ~USD 300-600 million new EBITDA by 2025
Our transformation could add ~USD 300-600 million new EBITDA by 20251 2025 illustration of financial impact, USD million ~4,000 ~1,700 ~300-600 "Shifted" revenue 2025 New revenue 2025 New EBITDA 2025 “Shifting” existing Yara New revenue generated by Profit delivered through business from one channel
Slide 15: De-carbonization at farm represents a significant business opportunity
De-carbonization at farm represents a significant business opportunity Farming matters … • Large lever: ~20% of global carbon emissions • Sustainability income potential for millions of farmers … and presents a significant business opportunity • >1 Gigatons of CO2e potential • Up to USD 10 billion a
Slide 16: Our solutions will reward farmers for carbon-smart practices
Our solutions will reward farmers for carbon-smart Represent new ambitions to contribute practices to UN Sustainable Development Goals: CO2e farming emissions Carbon credits (example: corn) Value through Others 7% Value channel 1 carbon credit ∆ carbon / market hectare Energy use 24% Carbon reductio
Slide 17: Significant business opportunity
Significant business Business model: opportunity Credit generation Gold Standard / Verifier Credit selling by grower to buyer Our 2021 focus is to scale-up co- funding options with partners and investors. Contract Yara - grower Contract Yara - buyer We are inviting global and local partners to build
Slide 18: Our regions drive commercial performance and transformation
Our regions drive commercial performance and transformation Key regional focus areas 2021 Americas Europe • Expand food chain sales for key crops • Launch scalable climate-smart solutions for key crops, in • Build increased connectivity to farm collaboration with value chain players • Drive growth t
Slide 19: Continued operational improvement; focus on achieving 2023 targets announced in 2019
Continued operational improvement; focus on achieving 2023 targets announced in 2019 Ammonia production Energy efficiency Million tonnes GJ/ton NH3 produced 8.9 34.1 33.6 34.4 32.7 7.9 7.6 8.3 Current status 2018 L12M Annualized 2023 2018 L12M Oct 20 2023 • Sustaining operations through Covid-19 end
Slide 20: Our operational excellence initiatives are delivering results
Our operational excellence initiatives are delivering results and will help us reach our 2023 targets Belle Plaine (Canada): Tringen (Trinidad): Key 2021 actions across Yara From low performance to Yara’s best RCIP2 implementation • History of technical issues, downtime • Plant struggled with severa
Slide 21: Digital Production shows good potential
Digital Production shows good potential Selected examples Golden Batch Energy load curve (Uusikaupunki, Finland) (ammonia plants) • Control room web application that • Energy consumption is the key cost assists operators in selecting ideal factor in ammonia production set points for critical paramet
Slide 22: Enabling a hydrogen economy
Enabling a hydrogen economy 22
Slide 23: Clean hydrogen economy will develop fast, with ammonia powering the transition
Clean hydrogen economy will develop fast, with ammonia powering the transition 1. Clean hydrogen strongly positioned to lead energy transition 2. Ammonia is best suited for zero-carbon shipping fuel and energy carrier purposes 3. Shipping fuel the likely next ammonia application to reach scale; prom
Slide 24: Both blue and green ammonia facilitate decarbonization
Both blue and green ammonia facilitate decarbonization Green and blue ammonia production process End-use applications ATR/SMR Haber- Low + CCS1 Bosch Fertilizer carbon Natural Low Low carbon carbon (blue) gas Hydrogen Ammonia ammonia Industrial applications Electrolysis Haber- Bosch Power Green Rene
Slide 25: Ammonia is the most promising hydrogen carrier and zero-carbon shipping fuel
Ammonia is the most promising hydrogen carrier and zero-carbon shipping fuel Properties: Liquid Hydrogen The most promising The most promising zero- LH2 H H hydrogen carrier carbon shipping fuel • -253 °C • 2.00 kWh/litre • Ammonia is a better hydrogen carrier • IMO initial GHG strategy from 2018 se
Slide 26: Yara has a unique starting point to capture value
Yara has a unique starting point to capture value • Major ammonia producer: ~ 8.5 mt production across 17 units Producer • Leading operational know-how, with world record production runs • Higher energy efficiency compared to other producers • Global trader with own back-up supply system with >20% m
Slide 27: Pipeline of green ammonia pilots laying the foundation for full scale plants
Pipeline of green ammonia pilots laying the foundation for full scale plants Pilbara Sluiskil Porsgrunn • Cooperation with Engie • Cooperation with Ørsted • Cooperation with NEL (5 MW) • Scale of 3.5 kilotons of green • Scale of 70 kilotons of green • Scale of 20 kilotons of green ammonia / 10 MW am
Slide 28: World-scale project possible in Porsgrunn, with the right partners and regulation
World-scale project possible in Porsgrunn, with the right partners and regulation • Full electrification of ~500 kt ammonia unit (removing ~800 kt CO2) possible with limited infrastructure investments − Renewable power supply from Norwegian grid, leading to 100 % hydrogen asset utilization − Deep se
Slide 29: Yara ready to lead the way as the ammonia champion in the hydrogen economy
Yara ready to lead the way as the ammonia champion Represent new ambitions to contribute in the hydrogen economy to UN Sustainable Development Goals: Yara will commercialize the opportunity, drive business development and deliver value • Build on our global leadership in ammonia trading, distributio
Slide 30: Sustainable performance
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Slide 31: Yara has delivered significant performance improvement and demonstrated commitment to capital allocation policy
Yara has delivered significant performance improvement and demonstrated commitment to capital allocation policy Strategic targets YaraVita sales (mill units) Premium products (mt) Hectares under management (million) Farmweather users (million) 47.0 50.1 13.5 13.7 14.4 12.2 3.0 38.8 10.7 4.6 0.8 0.0
Slide 32: We see significant value creation potential in a climate-positive food future
We see significant value creation potential in a climate-positive food future, building on our baseline Current Farming Industrial Yara baseline Market YIP Solutions Solutions Hydrogen 2025 Current baseline1 Key factors: Deliver on our EBITDA Leading Enabling the EBITDA ~2.2 BUSD • Crop prices targe
Slide 33: Yara's baseline is resilient to commodity prices
Even before including the improvement levers, Yara’s baseline is resilient to commodity prices Current Market Farming Industrial Yara baseline conditions YIP Solutions Solutions Hydrogen 2025 Current baseline1 EBITDA ~2.2 BUSD Mid-cycle ROIC ROIC 7.9% >10% 1) Measured L12M September 2020 33
Slide 34: Announcing new ambition for absolute CO2 emission reductions by 2030
Announcing new ambition for absolute CO2 emission Represent new ambitions to contribute reductions by 2030 to UN Sustainable Development Goals: Planned Historic reductions reductions Our climate roadmap 32 2025 Intensity target: 10% reduction in CO2e per 13 tonne N Scope 1 & 2 <1 2 Roughly equivalen
Slide 35: Yara will set Science Based Targets, delivering on the Paris agreement
Yara will set Science Based Targets, delivering on the Paris agreement ✓ ✓ ✓ Commitment Timeline Partners to deliver SDA1 Set emission reduction 2022 - target completion of targets in line with Sectoral Decarbonization - Nutrien independent climate Approach for the nitrogen - World Business Council
Slide 36: Safe and responsible operations are the backbone of our business
Safe and responsible operations are the backbone of our business Safety Responsible business conduct Ensuring a safe and compliant workplace for employees and Respecting human rights is integrated in our Compliance Program partners, with zero injuries as our ambition and risk management processes TR
Slide 37: A diverse and inclusive culture is a prerequisite to achieving a successful transformation
A diverse and inclusive culture is a prerequisite Represent new ambitions to contribute to achieving a successful transformation to UN Sustainable Development Goals: 2019 status 2025 goal Engagement index: 75% Top quartile Diversity and Inclusion index: 73% Top quartile Senior managers - % females:
Slide 38: Stable capital structure and credit rating targets; introducing ESG rating targets
Stable capital structure and credit rating targets; introducing ESG rating targets Credit ratings: • Capital discipline and financial policy targets unchanged, but integrating the ESG dimension S&P: Net debt/EBITDA1: • Maintain strong and sustainable credit and ESG ratings in line with Yara's strate
Slide 39: Integrated and holistic performance management and governance
Integrated and holistic performance management and governance Performance management Governance structures integrate sustainability and drive holistic thinking Transparency - Dimensions: initiatives: CICERO “Shades of - Board Audit and Sustainability Green” assessment Committee established, reinforc
Slide 40: We will provide regular performance reporting
We will provide regular performance reporting We launch accelerated ambitions for 2025, broadening Reporting ...while in addition leveraging our unique position to capture our core... Quarterly Annually Upon updates value in ammonia Current position Reporting • No fatalities and TRI<1.0 • Major ammo
Slide 41: Closing remarks
Closing remarks 41
Slide 42: We are broadening our core and enabling a hydrogen economy, while driving sustainable performance
We are broadening our core and enabling a hydrogen economy, while driving sustainable performance • We are broadening our core as a leading food solutions company, with significant value creation potential − Ambition to add ~USD 300-600 million new EBITDA by 2025 on top of existing initiatives − We
Slide 43: Attractive Yara prospects
Attractive Yara prospects Attractive opportunities Focused strategy Strong track record • Resource and environment • Crop nutrition leader; #1 premium • Nine consecutive quarters of ROIC challenges require strong agri product and market presence growth, with USD 1.5 billion free productivity improve
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