Yara International Asa · OSL:YAR
Yara International Asa — Debt Investor Presentation (June 2024)
29 slides from Yara International Asa's debt investor presentation, Jun 7, 2024
Slide 1: Credit Investor Presentation
Credit Investor Presentation 7 June 2024
Slide 2: Disclaimer (1/3)
Disclaimer (1/3) This document and any related oral presentations are confidential and have been prepared by Yara International ASA (the “Company”) solely for use in this presentation and may not be taken away, reproduced or redistributed to any other person. This document has not been reviewed by o
Slide 3: Disclaimer (2/3)
Disclaimer (2/3) This document and any related oral presentation do not purport to, and do not, contain all of the information that may be required to evaluate factors relevant to a recipient making any investment decisions. Each recipient should make its own independent appraisal of, and investigat
Slide 4: Disclaimer (3/3)
Disclaimer (3/3) The securities described herein have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to any national, resident or citizen of Aus
Slide 5: Forward looking statements
Forward looking statements Certain statements in this document are forward-looking. Such forward-looking statements are only predictions and are not guarantees of future performance. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could caus
Slide 6: Yara is the world’s leading crop nutrition company
Yara is the world’s leading crop nutrition company Key facts: Global market position: • Established as Norsk Hydro in 1905 • Demerged as Yara International ASA in 2004 Global #1 in Nitrates1 • Consolidated revenues of USD 15.5 bn in 2023 • Headquartered in Oslo, Norway • President and CEO: Svein Tor
Slide 7: Our key credit highlights
Our key credit highlights Globally diversified with Resilient market position anchored Sustainability integrated in strategy production and distribution in all in global food demand and business model major regions Clear long-term commitment to Stable and long-term Norwegian Resilient cash flows and
Slide 8: Flexible and robust business model
Flexible and robust business model Flexible global production footprint Ammonia production Ammonia import • Europe Flexible production setup • Norway • Canada • Netherlands 70% of Yara finished product assets in • Belle Plaine • Finland Europe are flexible on ammonia source • Germany • France • US G
Slide 9: Nitrogen production is essential to global food security
Nitrogen production is essential to global food security Annual nitrogen application is critical for ~1/2 of the global population relies on Stable global nitrogen consumption crop yields nitrogen fertilizers for food security2 pattern Grain yield from Nitrogen (“N”) fertilizer1 Billion people3 (201
Slide 10: Safe and responsible operations are the backbone of our business
Safe and responsible operations are the backbone of our business Safety Responsible business conduct Diversity, Inclusion and Engagement Ensuring a safe and compliant workplace for • Respect for human rights is integrated in • A diverse and inclusive culture is a key employees and partners, with zer
Slide 11: Yara strategy focused on profitable decarbonization, strengthening ammonia and crop nutrition core
Yara strategy focused on profitable decarbonization, strengthening ammonia and crop nutrition core Key global trends Strategic response Key projects and priorities Climate emergency and Decarbonize and diversify energy decarbonization position through profitable growth in low-carbon ammonia and prem
Slide 12: Yara will strengthen its core nitrate upgrading margin through decarbonization
Yara will strengthen its core nitrate upgrading margin through decarbonization unique to nitrates and NPKs Nitrogen pricing based on CO2 content in urea creates unique Yara’s premium product portfolio uniquely positioned for decarbonization margin for nitrates and NPKs decarbonization through low-ca
Slide 13: Yara’s ambition is to become climate neutral by 2050
Yara’s ambition is to become climate neutral by 2050 Use HESQ 360 reporting system Update data gathering process to be aligned with PRO energy reporting N2O catalyst technology removed about 90% of GHG emissions intensity: 10% reduction of CO2 per tonne of N by 20251 the N2O emissions in our nitri
Slide 14: Green Financing Framework Overview
Green Financing Framework Overview Yara aims to connect financing to the ambition to Grow a Nature-Positive Food Future • Issued in 2022 • Internal tracking system to monitor allocation of proceeds • Project selection monitored by a dedicated Sustainable Working Group and approved by the Group Execu
Slide 15: Driving sustainable performance with an integrated scorecard
Driving sustainable performance with an integrated scorecard People Planet Profit 1Q24 2025 1Q24 2025 1Q24 2025 Yara KPI 2021 2023 Yara KPI 2021 2023 Yara KPI 2021 2023 L12M target L12M target L12M target Strive towards zero GHG emissions, Ammonia 1.0 1.1 1.1 <1.0 3.0 3.0 2.9 2.7 7.8 7.8 7.8 8.6 acc
Slide 16: The basis for our financial policy is our BBB / Baa2 rating target
The basis for our financial policy is our BBB / Baa2 rating target Targeted capital structure Net Debt/EBITDA ex Special Items1 2.49 2.38 2.16 • BBB/Baa2 rating and FFO/Net debt at 0.4-0.5 1.66 1.72 2.0 1.36 1.36 1.5 • Mid- to long-term Net debt/EBITDA of 1.5-2.0 0.66 • Maintain a net debt/equity ra
Slide 17: Strong resilience and results delivered in 2021-2022 but challenging 2023
Strong resilience and results delivered in 2021-2022 but challenging 2023 as market prices declined Revenues1 L12M (MUSD) EBITDA L12M2 (MUSD) 24 051 4 959 16 607 15 547 14 595 2 804 12 936 11 728 2 095 2 223 1 709 1 659 2019 2020 2021 2022 2023 1Q24 2019 2020 2021 2022 2023 1Q24 Net interest-bearing
Slide 18: Healthy demand growth and limited capacity additions support tighter markets
Healthy demand growth and limited capacity additions support tighter markets once new supply is absorbed Farmer affordability healthy and low value- Consumption trend growth rate stable as Project pipeline historically thin chain stocks nitrogen needed to maintain yields Cereal / Urea1 Urea producti
Slide 19: Yara has access to a broad range of funding sources
Yara has access to a broad range of funding sources Yara’s interest-bearing debt1 as of 1Q 2024 (MUSD) Debt Maturity Profile (MUSD)3 463 4 282 NOK Bonds USD Bonds Bank Loans Other 3 953 1 008 2 850 -329 736 750 200 600 547 1 000 149 442 500 392 466 101 56 61 93 21 Other Loans2 NOK USD Leases Gross D
Slide 20: Resilient and flexible business model with a focused strategy enables stable capital allocation
Resilient and flexible business model with a focused strategy enables firm and stable capital allocation policy Key highlights Credit rating history Resilient business model; globally diversified with BBB+/Baa1 production and distribution in all major regions BBB/Baa2 Sustainability integrated in st
Slide 21: YARA Knowledge grows
i YARA Knowledge grows
Slide 22: Eligible green project examples
Eligible green project examples Green ammonia Carbon Capture and Storage Premium fertilizers The demonstration plant aims to A key contributor to regenerative First cross-border transportation and produce green hydrogen from agriculture through improved nitrogen storage of CO2, cutting 12 million to
Slide 23: Results by segment
Results by segment 1Q23 1Q24 EBITDA excl. special items1 (MUSD) ROIC1 1Q ROIC1 L12M -5 -6.3% 15.2% Europe 28 -3.6% -9.8% 248 13.9% 24.1% Americas 171 8.4% 9.6% 70 6.7% 19.0% Asia & Africa 69 6.7% 2.9% 32 -3.5% 3.2% Global Plants 96 10.6% 3.1% 65 6.5% 20.9% Industrial Solutions 58 5.9% 6.1% 33 13.2%
Slide 24: Risk factors 1/6
Risk factors 1/6 Investing in the bonds (the "Bonds") involves inherent risks. These risks include, but are not limited to, risks attributable to Yara International ASA and its subsidiaries (jointly the "Company" or "Yara"). Prospective investors should carefully consider, among other things, the ri
Slide 25: Risk factors 2/6
Risk factors 2/6 Risks related to the company Strategic risks Nitrogen commodity fertilizer prices A large part of the Company’s business consists of sales of fertilizer products used in agriculture. While a growing world population, economic growth and changing dietary patterns are driving overall
Slide 26: Risk factors 3/6
Risk factors 3/6 Regulatory framework on production/application of the Company's products There is an increasing trend of stricter governmental regulation impacting the whole value chain, hereunder production, distribution, storage, and application of fertilizer, related to both the environmental as
Slide 27: Risk factors 4/6
Risk factors 4/6 Human capital Yara’s ability to compete effectively and meet market demands depends heavily on the competence, engagement, enablement, and performance of its employees. Furthermore, the Company’s strategy entails a shift towards an expanded business model that requires a transformat
Slide 28: Risk factors 5/6
Risk factors 5/6 Health, Environment, Safety and Quality (HESQ) risks Health and safety Yara’s production sites are large industrial plants, and many of Yara’s raw materials, intermediates, and products are classified as substances dangerous and hazardous to the health. Yara operates several materia
Slide 29: Risk factors 6/6
Risk factors 6/6 Climate change legislation may have a material adverse effect on the Company's industry Climate change poses both up- and downside risks for the company, exposing the Company's markets, assets, operations, and the supply chain. Climate change leads to societal processes which may po
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