Yara International Asa · OSL:YAR
Yara International Asa — Shareholder Meeting (May 2018)
19 slides from Yara International Asa's shareholder meeting presentation, May 8, 2018
Slide 1: Yara International ASA Annual General Meeting
Yara International ASA Annual General Meeting 8 May 2018
Slide 2: Safe operations is our first priority
Safe operations is our first priority 5 TRI (Total recordable injuries 12-month rolling)1 0 Jan'16 Mar May Jul Sep Nov Jan '17 Mar May July Sep Nov Jan'18 Mar'18 1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours.
Slide 3: Yara's results reflect the business environment
Yara’s results reflect the business environment Urea supply increases in 2018, Food prices increasing European nitrogen deliveries higher than trend demand recently, but nitrogen demand and gas prices impacted by growth still muted cold weather Global capacity additions ex China USD/ Yara European n
Slide 4: Earnings impacted by supply-driven market
Earnings impacted by supply-driven market Earnings per share1 36.3 34.9 35.3 30.7 31.5 25.0 20.7 20.4 15.9 14.9 11.5 9.8 8.8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 Excluding special items and currency 4
Slide 5: EBITDA development 2017
EBITDA development 2017 USD millions 1,854 6 43 265 12 215 87 1,348 2016 Volume Price/margin Energy cost Currency Special Other 2017 items 5
Slide 6: Highlights 1Q 2018
Highlights 1Q 2018 USD millions Improved margins offset by lower 381 79 50 370 European deliveries 31 35 19 7 Strong Industrial results India acquisition successfully completed Yara improvement program on track EBITDA VolumePrice/Margin Energy Currency Special Other EBITDA 1Q17 costs items 1
Slide 7: Yara Improvement Program on track
Yara Improvement Program on track Start: 2016 2017 2018 2019 2020 End: 2020 Today Annual impact, USD million, vs. 2015 baseline, at 2015 margins 500 450 2018 EBITDA benefits on track 350 Sustained 242 275 (in 2015 terms): EBITDA Yara Productivity System improvement 84 rolled out to 15 out of 30
Slide 8: Yara is delivering on its growth pipeline; multiple plant expansions and M&A coming on stream in 2018
Yara is delivering on its growth pipeline; multiple plant expansions and M&A coming on stream in 2018 Production growth 2015 - 2020 Mill.tonnes (mt) Finished products Ammonia 25.1 9.2 0.5 0.2 0.8 0.5 Yara-operated plants 0.1 GrowHow UK (divested mid-2015) 1.2 0.7 0.2 7.7 Yara share of Qafco & Lifeco
Slide 9: 7 growth projects starting up during 2018 (1)
7 growth projects starting up during 2018 (1) - Take-over 12 January Babrala (India) - 1.2 mt urea and approx 40 MUSD EBITDA p.a. Acquisition of urea plant and - Provides footprint to accelerate premium product growth distribution assets Porsgrunn (Norway) - Start-up in 1Q NPK and calcium nitrate -
Slide 10: 7 growth projects starting up during 2018 (2)
7 growth projects starting up during 2018 (2) - Start-up in 2Q Sluiskil (NL) - Adds approx. 210 ktpa and 30 MUSD EBITDA p.a. Revamp and urea+S expansion - Improved product mix - from urea prills to nitrates and urea+S - Start-up in 2Q (rock production only) Salitre (Brazil) - Adds approx. 1.1 mtpa S
Slide 11: Profitable growth through the cycle
Profitable growth through the cycle Average cash return on gross investment (CROGI) Average annual shareholder return of 20%1 well above the Yara CROGI target of 10% NOK/share 0 22.8% 160 400 20.9% 140 350 0 17.4% 17.3% 120 300 16.1% 14.4% 0 14.1% 100 250 14.1% 13.3%14.0% 12.6% 80 200 9.5 % 0 10% ta
Slide 12: Major improvement and growth investments in 2018; main earnings improvement from 2019 onwards
Major improvement and growth investments in 2018; main earnings improvement from 2019 onwards1 Improvement and growth capex2 (BUSD) Improvement program EBITDA improvement3 (MUSD) Committed expansions + M&A 1.4 1,100 950 0.1 500 450 550 Improvement program: 282 350 600 + 350 MUSD cost improvement 104
Slide 13: Our leading global footprint and differentiated product portfolio set us apart
Our leading global footprint and differentiated product portfolio set us apart Global #1 in Nitrates1 9.2 7.7 4.2 4.7 3.0 2.9 3.0 2.4 2.2 Europe 40.4% 1.1 Yara Eurochem Ostchem Uraichem Acron 0.2 North America Asia 7.1% 12.0% Global #1 in NPK2 6.2 1.3 3.3 2.7 2.7 2.2 2.4 0.3 0.3 Africa 4.8% Yara C.
Slide 14: FtMA is designed for scale, and has already increased the income of 136,000 farmers
FtMA is designed for scale, and has already increased the income of 136,000 farmers THE CHALLENGE SOLUTION IMPACT TO DATE OBJECTIVE • Feeding a world 136,000 farmers across Connect 1.5 million population of 9.8 billion Rwanda, Tanzania, Zambia smallholder farmers • Predictable markets people in 2050
Slide 15: Companies that are changing the world
56 COMPANIES THAT ARE CHANGING THE WORLD = Bie Foon’s CEO EXODUS gET BANKING ON . ~ DETROIT Stow JAMIE DIMON ano sPHorsan chase \ | ARE FUELING THE MOTOR CITY'S REVIVAL ' Vey FORTUNE CHANGE THE WORLD THE TOP 10 RANK COMPANY EE sPMorgan Chase DSM Apple Novartis LeapFrog Investments Ant Financial Walm
Slide 16: Ramp-up of digital solutions
Ramp-up of digital solutions • We are quickly building a strong pipeline of digital solutions • Every 3 months launch of 1-2 digital solution teams • Commercial pilots in coming season • Examples Sensor-aided N-application Nutrient optimization tailored to specific fields Crop advisory platforms htt
Slide 17: 2018 is a peak year for Yara growth investments
2018 is a peak year for Yara growth investments USD bn 2.2 0.1 Cost&capacity improvements M&A 1.7 1.7 0.7 1.6 Committed growth 0.1 0.2 Maintenance 0.2 0.0 1.2 0.9 0.6 0.2 0.8 0.6 0.9 0.4 0.2 0.0 0.8 0.7 0.7 0.6 0.7 0.7 2015 2016 2017 2018 2019 2020 17
Slide 18: Proposed dividend NOK 6.50 per share
Proposed dividend NOK 6.50 per share Dividend and buy-backs1 per share Share of net income 15.5 64% 0.5 14.1 13.8 57% 1.1 0.8 16% 53% 6% 11.9 48% 48% 48% 47% 6% 11.0 45% 1.9 6% 1.0 41% 12% 6% 32% 25% 7.4 30% 15.0 0.4 6.5 7% 13.0 13.0 26% 5.4 5.5 23% 51% 5.3 21% 48% 47% 7% 19% 43% 45% 4.5 0.8 10.0 10
Slide 19: YARA Knowledge grows
i YARA Knowledge grows