Yara International Asa · OSL:YAR
Yara International Asa — Q4 2024 Earnings Presentation
35 slides from Yara International Asa's earnings presentation, Feb 7, 2025
Slide 1: Yara International ASA 2024 fourth-quarter results
Yara International ASA 2024 fourth-quarter results 7 February 2025
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: All time low TRI
All time low TRI TRI1 (12-month rolling) 0.9 1) Total Recordable Injuries per 1 million working hours 3
Slide 4: Strong operational performance in 4Q
Strong operational performance in 4Q 4Q 2024 Record production1 and safety performance, and delivering on cost improvements EBITDA2 of 519 MUSD with lower prices, but improving markets into 2025 NOK 5 per share annual dividend proposed Top priority is increasing free cash flow3 and shareholder retur
Slide 5: A record year in production
A record year in production Ammonia production, YIP terms1 (mt) Finished product production, YIP terms1 (mt) GHG emission intensity (t CO2e/tN) – All time high production levels – All time high production levels when adjusting for – Reduced GHG emission intensity following – Improved performance and
Slide 6: Increased deliveries and cost improvements partly offset lower margins
Increased deliveries and cost improvements partly offset lower margins EBITDA excl. special items (MUSD)1 Price/margin -150 Currency +17 Energy cost3 +10 2 4 1) EBITDA excl. special items. For definition and reconciliation see APM section in the 4Q report, pages 26-34. 2) Volume effect calculated as
Slide 7: Proposed dividend NOK 5 per share
Proposed dividend NOK 5 per share Net Debt/EBITDA excl. Special Items1 Comments 2.5 ▪ For 2024 the Yara Board proposes an ordinary dividend of 2.2 NOK 5 per share 2.0 1.7 1.8 ▪ Yara’s overall objective to maintain BBB/Baa2 credit rating 1.7 from S&P/Moody's, with a targeted mid- to long-term net 1.4
Slide 8: Maximizing long-term shareholder value is the sole driver
Maximizing long-term shareholder value is the sole driver f Y ’ p Y ’ f Key prioritities Large-scale growth projects (irrespective of growth projects) (will need excellent strategic fit, strong shareholder value creation and sound funding) Improve earnings in core business • Fixed cost and capex • D
Slide 9: Financial performance
Financial performance EBITDA excl. special items1 EPS excl. currency and special items1 ROIC1 (MUSD) (USD per share) (12-month rolling, %) 0.88 0.36 4Q23 4Q24 Change in net operating capital2 Cash from operations3 Investments (net)4 (MUSD) (MUSD) (MUSD) 1) For definition and reconciliation, see the
Slide 10: Increased premium product deliveries
Increased premium product deliveries External deliveries 4Q 2023 vs 4Q 2024, in kt 4Q23 4Q24 Comments ▪ Increased nitrate and NPK +5% deliveries in Europe 5,601 ▪ Lower deliveries in Africa and 5,310 Asia driven by lower commodity trade volumes Commodity 0% 22% 2,376 2,380 +2% 2,154 1,760 -9% 1,514
Slide 11: Delivering on cost reduction program
Delivering on cost reduction program Fixed cost excluding special items, L12M1 MUSD, including currency translation effect -90 2,533 Good progress with 90 MUSD cost reduction since launch, including: ~20 MUSD from divestments 2,443 ~25 MUSD currency effects 2,380 Early cost improvements achieved fro
Slide 12: Strict capital discipline, repositioning capex towards higher-return investments
Strict capital discipline, repositioning capex towards higher-return investments 2024 capex in line with target Capex prioritization towards higher-return investments BUSD Uncommitted growth Maintenance Committed growth Growth capex restricted pre-FID for Guidance: 1.10 1.2 BUSD US projects (approx.
Slide 13: Net debt increase following seasonal build-up of operating capital
Net debt increase following seasonal build-up of operating capital Net interest-bearing debt: 4Q development (MUSD) +126 175 3,730 3,604 287 187 201 Net debt end Cash earnings1 Net operating Investments (net) Other2 Net debt end of of last quarter capital change current quarter 1) Operating income p
Slide 14: Full year condensed statement of income
Full year condensed statement of income 2024 2023 Variance Comments Revenue and other income 13 934 15 627 -1 693 Raw materials, energy costs and freight expenses (10 200) (11 445) 1 245 - Lower revenues and variable costs reflect Change in inventories of own products 70 (650) 721 Payroll and relate
Slide 15: Condensed statement of financial position
Condensed statement of financial position Comments - Lower non-current assets mainly reflect currency translation, as most functional currencies in Yara have depreciated against US dollar - Lower current assets mainly reflect lower trade receivables and lower cash and cash equivalents - Lower equity
Slide 16: Strong nitrogen fundamentals going in to 2025
Strong nitrogen fundamentals going in to 2025 Key supply and demand drivers Urea price4 development, USD/t Capacity additions, million tons Supportive market development going into main application Demand-driven urea market with pricing above historical Limited urea capacity additions5 season in the
Slide 17: Low-cost ammonia would strengthen returns in core business
G Y ’ : w-cost ammonia would strengthen returns in core business Large-scale, low- p w p v Y ’ Y ’ p y v f p 1 ammonia cost curve position Location of Yara’s ammonia production2 Yara’s nitrogen upgrading margins Illustrative cash cost calculation3, USD/t Illustrative based on capacities and average
Slide 18: Significant ammonia offtake and margin improvement opportunity in Europe
Significant ammonia offtake and margin improvement opportunity in Europe Y ’ import need in Europe1 Million tonnes 4.7 Integrated production not required, 100% flexible on ammonia source 2.0 Yara Europe Mothballing Hull: - 0.3mt imports 1-1.5mt Optimization of excess capacity Urea production per yea
Slide 19: Optimizing sourcing and improving nitrate margins with low-cost ammonia
Optimizing sourcing and improving nitrate margins with low-cost ammonia Nitrate cash cost margins more than double when upgraded from own-produced low-cost ammonia Illustrative example of nitrate margins1 in mid-2030s, USD/t CAN (27N) - Annual European ammonia requirement of 2.2 million tonnes Depen
Slide 20: Yara will use its competitive edge within ammonia to select growth path
Yara will use its competitive edge within ammonia to select growth path solely based on shareholder returns Strong Yara shareholder return track record on Yara is the strongest partner for any ammonia Y ’ f b y v ammonia investments project, for existing demand and new markets resilience Million ton
Slide 21: 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 Premium over volumes Tightening nitrogen supply Low
Slide 22: Appendix
Appendix
Slide 23: Driving sustainable performance with an integrated scorecard
Driving sustainable performance with an integrated scorecard People Planet Profit Y Y Y trive towards ero emissions Ammonia accidents intensity t et roduction mt op emissions inished ertilliser Engagement ndex uartile scope e roduction mt Diversity and op Digiti ed hectares remium A A inclusion inde
Slide 24: Record production and safety performance
Record production and safety performance Ammonia production1 (mt) Finished product production1 (mt) GHG emission intensity (t CO2e/tN) Improved performance and reliability across most plants Strong performance, especially on Nitrates ontoir Reduced GHG emission intensity following successful project
Slide 25: Results by segment
Results by segment 4Q23 4Q24 p 81 -3.7% -10.3% Europe 79 -2.8% -0.6% 201 14.1% 11.0% Americas 156 7.4% 9.9% 81 8.2% 3.0% Asia Africa 108 12.5% 9.1% 114 12.4% 2.3% lobal lants 120 -4.7% 4.2% 73 15.8% 6.3% ndustrial olutions 95 4.0% 5.7% 43 25.9% 9.0% lean Ammonia 40 20.4% 11.0% 25 1) For definition a
Slide 26: 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 1,091 863 1,442 1,560 1,298 1,246 777 532 619 1,142 398 284 288 105 123 -1,242 2018 2019 2020 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4
Slide 27: 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) Yara global reali ed nitrate price Yara s reali ed European nitrate price Yara s reali ed price ommodity lend lag rea Egypt proxy lag • Premiums and
Slide 28: Key product price development
Key product price development 4Q23 4Q24 Urea price development1 (USD/t) Spot gas prices1 (USD/MMBtu) Yara realized CAN2 and NPK price3 (USD/t) -8% -2% 403 -22% 632 617 370 344 -1% 12.9 12.8 268 -12% 335 296 -21% 2.8 2.2 Urea granular Urea inland Europe (TTF) US (Henry Hub) CAN 27 Compound NPK FOB Eg
Slide 29: Energy cost
Energy cost Quarterly averages for 2020 – 4Q 2024 with forward prices1 for 1Q 2025 and 2Q 2025 US gas price (Henry Hub) Yara Europe2 Yara Global TTF day ahead 13.2 14.3 15.9 15.4 15.7 13.4 10.4 11.6 9.9 3.7 3.5 2.4 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24
Slide 30: Details of energy cost actuals and estimate 1Q 2025 and 2Q 2025
Details of energy cost actuals and estimate 1Q 2025 and 2Q 2025 Europe 1Q25 estimations based on 2Q25 estimations based on 1Q24 2Q24 3Q24 4Q24 forward prices forward prices Average gas cost USD/MMbtu 11.7 9.7 11.2 13.2 14.3 15.9 Gas consumption1 Million MMBtu 29.3 34.2 35.3 31.5 29.3 34.2 European g
Slide 31: Yara inventories
Yara inventories Fertilizer - finished products inventory development in mt 8 7 6 5 Other 4 3 Compound NPK 2 1 Nitrates Urea 0 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 31
Slide 32: 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 6.7 6.2 5.5 4.5 4.9 4.5 4.2 4.0 3.2 1.9% average historical 1.9 consumption 1.7 growth3 1.0 1.2 1.1 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 33: Farmer incentives: wheat example
Farmer incentives: wheat example Optimal nitrogen application1,2 kg/ha -2% 211 211 206 197 22/23 23/24 1 year ago current 22/23 23/24 1 year ago3 current3 Wheat price4 (USD/t) 309 242 238 240 CAN price5 (USD/t) 561 315 302 350 Optimal nitrogen application (kg/ha) 197 211 211 206 Grain yield (t/ha) 9
Slide 34: Alternative performance measures
Alternative performance measures Alternative performance measures are defined, explained and reconciled to the Financial statements in the APM section of the 4Q report on pages 26-34
Slide 35: Knowledge grows
Knogyledge grows