Yara International Asa · OSL:YAR
Yara International Asa — Non-Deal Roadshow (September 2012)
31 slides from Yara International Asa's roadshow presentation, Sep 10, 2012
Slide 1: Yara International ASA
0 Yara International ASA Helsinki, 10 September 2012 Anders Lerstad, IR IR - September 2012
Slide 2: Integrated business model provides scale, flexibility and a strong end-to-end presence
Integrated business model provides scale, 1 flexibility and a strong end-to-end presence Downstream Upstream Industrial Supply & Trade Scale advantages + Unique flexibility + Unrivalled presence IR - September 2012
Slide 3: Yara – the leader in nitrogen fertilizers
2 Yara – the leader in nitrogen fertilizers Global no 1 in NPK Global no 1 in ammonia Global no 1 in nitrates complex fertilizer Production capacity* (mill t) Production capacity* (mill t) Production capacity* (mill t) 9 7 8 8 6 7 7 6 5 6 5 5 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 Yara CF GDF Agrium PCS Yara
Slide 4: Yara production capacities
3 Yara production capacities Million tons product 8.0 6.0 4.0 Outside Europe Europe 2.0 0.0 Nitrate NPK Urea IR - September 2012
Slide 5: Reduced exposure to oil and European gas
4 Reduced exposure to oil and European gas Yara’s geographic energy exposure Yara’s feed-stock contract structure Europe 100% NAT 90% GAS 15% 25% 80% 70% 60% 80% 70% 65% 50% 55% 40% 30% 20% -20% -20% -20% -30% 10% 0% NON 2006 2007 2008 2009 2012 GAS 2006 2009 2010 2012 Europe ROW Spot gas Oil-linked
Slide 6: Yara creates substantial value over and above the commodity nitrogen margin
Yara creates substantial value over and above 5 the commodity nitrogen margin Nitrogen upgrading margins Phosphate upgrading margins NPK blend premium USD/t USD/t USD/t 700 700 700 650 600 Nitrate premium 600 above urea Margin 600 above blend Value above 500 500 cost raw material 550 400 400 500 Val
Slide 7: Premiums reflect actual value-add from using Yara Crop nutrition program
Premiums reflect actual value-add from using 6 Yara Crop nutrition program Yara crop nutrition program significantly improves …for instance providing higher returns results compared with traditional farmer for Vietnam coffee growers and Yara practices… (based on field trial) Others Yara 160 % 37% 23
Slide 8: Working closely with end-users facilitate knowledge transfer
Working closely with end-users facilitate knowledge transfer 48% Europe 9.4 mill tons North America 15% 2.9 mill tons Asia 12% 2.3 mill tons Africa 6% 1.2 mill tons 19% Latin America 3.8 mill tons Yara plants Joint venture plants Sales offices Development programs R&D Units IR - September 2012
Slide 9: Global collaboration are progressing well e.g. Nestle initiatives on three continents
Global collaboration are progressing well e.g. 8 Nestle initiatives on three continents Mexico: increased yield of Robusta Vietnam: increased coffee yield of coffee (Robusta) Africa: increased yield and Guatemala: impact sustainability of of nutrition on cup Cocoa and Coffee taste (Arabica) and CO2
Slide 10: Demand rationing needed as production fails
9 Demand rationing needed as production fails Grain production and consumption Days of consumption in stocks Million tons Days 2,350 85 2,300 80 2,250 75 2,200 2,150 70 2,100 65 2,050 60 2,000 1,950 55 06 07 08 09 10 11E 12F 13F 06 07 08 09 10 11E 12F 13F Consumption Production Source: USDA, August
Slide 11: Strong incentives needed
10 Strong incentives needed FAO price index Index 300 250 200 150 100 50 0 1/2004 1/2005 1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012 Cereals Price Index Food Price Index Annual average Food price index Source: FAO IR - September 2012
Slide 12: Projected nitrogen capacity additions outside China in line with historical consumption growth
Projected nitrogen capacity additions outside 11 China in line with historical consumption growth Urea capacity growth relative Year Driving regions to nitrogen capacity World Excluding China World Excluding China 2011 China 34% Pakistan 34% 1.3% (1.6%) 1.3% (1.4%) Pakistan 22% Iran 17% 2012 China 6
Slide 13: Continued project delays
12 Continued project delays New 2012 urea capacity Million tons 8.0 Lead time for a new greenfield 7.0 project 4-5 years 6.0 5.0 Significant delays in 2012 4.0 compared with earlier forecasts 3.0 2.0 Further delays evident even compared with latest forecast 1.0 0.0 Oct 11 estimate Jan 2012 est
Slide 14: Domestic price level in China
13 Domestic price level in China Chinese export price derived from domestic price and tariffs Fob price, USD/t 550 525 500 475 450 425 400 375 350 325 300 1,750 1,850 1,950 2,050 2,150 2,250 2,350 2,450 2,550 Domestic price ex works, RMB/t * China Fertlizer Market Week IR - September 2012
Slide 15: Chinese export situation
14 Chinese export situation Accumulated urea exports Urea price and export tax Kilotons USD per ton Export tax 8,000 600 120 % 7,000 2010 500 100 % 6,000 400 80 % 5,000 2007 4,000 300 60 % 2011 2009 3,000 200 40 % 2,000 100 20 % 1,000 2012 0 0 0% * Export tax during low tariff period depends on pric
Slide 16: More information can be found at www.yara.com
15 More information can be found at www.yara.com IR - September 2012
Slide 17: Yara sensitivities
16 Yara sensitivities Operating Income EBITDA EPS* USD million USD million USD Urea sensitivity +100 USD/t 944 1,095 2.8 …of which pure Urea 304 422 1.2 …of which Nitrates 367 391 1.0 …of which NPK 198 207 0.5 Nitrate premium +50 USD/t 439 467 1.2 …of which pure Nitrates 273 294 0.8 Hub gas Europe +
Slide 18: Price and currency assumptions in scenarios
17 Price and currency assumptions in scenarios Last 4 5-year avg. to Chinese Demand- quarters 30 Sep 11 swing* driven** Ammonia fob Black Sea (USD/t) 459 366 450 550 Urea prilled fob Black Sea (USD/t) 386 342 360 510 Nitrate premium , USD/t 94 77 62 68 Phos rock fob North Africa (USD/t) 164 158 200
Slide 19: Simplified P&Ls for scenarios
18 Simplified P&Ls for scenarios Last 4 5-year avg. to Chinese Demand- NOK quarters 30 Sep 20112) swing driven EBITDA1) 14,800 15,200 13,500 23,600 Depreciation -2,600 -2,600 -2,600 -2,600 Interest expense -800 -700 -700 -700 Income before tax 11,400 11,900 10,200 20,300 Tax -2,400 -2,800 -2,100 -4,
Slide 20: Earnings per share
19 Earnings per share* EPS excluding currency and special items NOK 14 12.86 12.42 11.84 12 9.86 10.58 10.02 10 7.73 8 6.68 5.42 6 4.93 5.27 3.88 4 3.06 2 1.21 0 2009 2010 2011 2012 Annual NOK 13.08 30.24 41.99 20.44 * Average number of shares for 2Q 2012: 283.9 million (2Q 2011: 287.8 million). IR
Slide 21: Net debt development
20 Net debt development NOK millions 4,500 3,971 4,000 500 3,484 3,500 135 3,000 2,500 1,899 2,000 1,500 461 1,000 603 500 3,369 261 0 345 349 -500 NIBD Cash NOC Potash Short-term Other Share Yara FX loss Other NIBD Mar 12* earnings** change investments loans*** investments buy-backs dividend Jun 12
Slide 22: Debt/equity ratio
21 Debt/equity ratio Net interest-bearing debt / equity ratio (end of period) 0.8 0.75 0.7 0.63 0.6 0.57 0.56 0.49 0.5 0.4 0.38 0.32 0.3 0.27 0.22 0.20 0.2 0.12 0.12 0.08 0.1 0.07 0.0 2009 2010 2011 2012 IR - September 2012
Slide 23: Fertilizer volumes
22 Fertilizer volumes Kilotons 7,000 6,000 5,474 5,481 5,433 5,210 5,216 5,129 5,247 4,882 4,791 4,759 2,910 4,914 2,543 4,970 4,834 2,553 2,993 5,000 2,658 2,765 2,146 2,290 2,514 2,715 2,617 4,239 2,355 2,412 4,000 2,280 3,000 2,983 2,937 2,880 2,592 2,551 2,451 2,564 2,000 2,436 2,347 2,400 2,256
Slide 24: Yara 2Q fertilizer sales by market and product
23 Yara 2Q fertilizer sales by market and product 2012: 5.2 million tons (2011: 5.0 million tons) Kilotons 2Q11 2Q12 2,500 2,256 2,254 2,000 1,500 1,174 909 917 987 1,000 600 538 500 289 294 0 Europe Latin America Asia North America Africa Kilotons 3,000 2Q11 2Q12 2,000 1,489 1,493 1,363 1,211 1,219
Slide 25: Yara – production volume
24 Yara – production volume* Finished fertilizer Kilotons Ammonia Kilotons 2,500 5,000 4,500 2,000 4,000 3,500 1,500 3,000 2,500 2,000 1,000 1,500 1,000 500 500 0 0 2009 2010 2011 2012 2009 2010 2011 2012 Urea Nitrates NPK CN UAN * Including share of equity-accounted investees IR - September 2012
Slide 26: Yara's average gas costs
25 Yara’s average gas costs Yearly averages 2006 – 2010, quarterly averages for 2011-12 with forward prices* for 3Q12 and 4Q12 USD per MMBtu 14 12.0 12 11.1 11.0 11.0 10.9 10.8 10.6 10.5 10.1 10 7.6 8 7.5 7.0 9.6 6.6 8.3 8.3 8.6 7.6 7.9 7.7 7.7 7.5 6 5.6 5.6 5.7 4 4.8 2 0 2006 2007 2008 2009 2010 1Q
Slide 27: Change in European energy cost
26 Change in European energy cost NOK millions 1,400 1,200 1,000 Actual for quarter July 2012 estimate* 800 608 600 543 400 217 200 0 (24) -50 -200 -100 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 * Based on forward prices as of 9 July 2012 IR - September 2012
Slide 28: European producer nitrate stocks
27 European producer nitrate stocks Index, June 2007=1 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 11/12 07/08 08/09 09/10 10/11 Source: Fertilizers Europe, Yara estimate for June IR - September 2012
Slide 29: Indian urea import requirement
28 Indian urea import requirement Sales minus production Kilotons 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000 -2,000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2012/13 2009/10 2010/11 2011/12 Source: Indian Statistics IR - September 2012
Slide 30: Key value drivers – quarterly averages
29 Key value drivers – quarterly averages Zeebrugge day ahead(USD/MMBtu) Urea prilled fob Black Sea (USD/t) CAN cif Germany (USD/t) 600 450 9.6 9.5 384 376 378 484 471 400 361 9.5 500 446 331 9.4 408 350 9.3 389 9.3 400 300 9.2 9.2 250 9.1 300 9.1 200 9.0 9 200 150 8.9 100 100 8.8 50 8.7 0 0 2Q 11 3
Slide 31: 10-year fertilizer prices – monthly averages
30 10-year fertilizer prices – monthly averages Ammonia fob Black Sea CAN cif Germany USD/t USD/t 1,000 500 800 400 600 300 400 200 200 100 0 20 20 20 20 20 20 20 20 20 20 20 20 0 01 02 03 04 05 06 07 08 09 10 11 12 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Urea prilled fob Black S
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