Yara International ASA First quarter results 2015 24 April 2015
1 Summary first quarter Strong result driven by higher deliveries and margins Margins benefit from lower gas prices and stronger US dollar NOK 1.8 billion currency loss due to US dollar appreciation Improved production reliability Lifeco write-down of NOK 929 million Strong Industrial result IR – 24 April 2015
2 Earnings per share* EPS excluding currency and special items 10.8 10.51 8.32 9.00 10.54 8.52 9.82 8.17 7.97 7.74 9.25 7.21 7.62 7.03 8.04 8.26 7.67 5.62 6.74 6.69 6.40 6.18 5.66 2.65 2.65 0.23 2012 2013 2014 2015 Annual NOK 37.31 20.67 27.59 2.65 *Average number of shares for 1Q 2015: 275.5 million (1Q 2014: 277.1 million). IR – 24 April 2015
3 Market development Chinese urea exports put pressure on prices USD nitrate prices have followed the urea price development Western Europe nitrogen fertilizer industry deliveries 3% lower; season-to-date in line Phosphate prices and upgrading margins similar to last year Strong demand for value-added fertilizer products Industrial: continued demand growth for environmental solutions but weaker TAN market IR – 24 April 2015
4 Chinese urea exports put pressure on prices Chinese exports and urea price Chinese production Black Sea USD/t Million tons Kilotons 2 400 550 7.0 12/13 2 200 500 6.5 14/15 2 000 450 13/144 1 800 6.0 400 1 600 350 5.5 1 400 300 1 200 5.0 250 1 000 4.5 200 800 150 600 4.0 100 400 3.5 50 200 0 0 3.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: BOABC, CFMW IR – 24 April 2015
5 European industry deliveries similar to last season West Europe USA Million tons N Million tons N 7.0 16.0 0% +6% 6.0 14.0 5.0 12.0 10.0 4.0 8.0 3.0 6.0 2.0 4.0 1.0 2.0 0.0 0.0 10/11 11/12 12/13 13/14 14/15 10/11 11/12 12/13 13/14 14/15 Domestic Imports Production Net imports Source: Yara estimate for fertilizer deliveries to selected West European countries. Total nitrogen deliveries based on TFI, US Trade Commission, Blue-Johnson and Yara estimates IR – 24 April 2015
6 Strong production with improved reliability Finished fertilizer and industrial products Ammonia Kilotons Kilotons 2 500 6 000 5 000 2 000 4 000 1 500 3 000 1 000 2 000 500 1 000 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Urea Nitrates NPK CN UAN SSP - based fertilizer * Including share of equity-accounted investees IR – 24 April 2015
7 Industrial accounts for ~20% of world nitrogen consumption Global nitrogen consumption Industrial applications Global Nitrogen market in 2014: 137 mill. tons Industrial 19% 81% Fertilizer CAGR 2014-2020 1 : Fertilizer: ~2% Industrial ~3% 1) Fertecon Ammonia Outlook 2014 IR – 24 April 2015
8 Yara Industrial enhances value of fertilizer operations Solid growth last 10 years… • Yara’s global production system mill. tonnes CAGR enables reliable supply with close 6.7 +7% 6.2 5.7 5.5 proximity to industrial customers 5.2 4.7 4.6 3.9 3.8 3.5 • Industrial adds value above 3.3 commodity reference prices • Industrial is adding scale in operations 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Industrial enables optimization of Environmental products Industrial N-chemicals TAN CO2 Yara’s upstream assets … with more stable earnings than fertilizer Quarterly EBITDA, excl. non-recurring items (rebased to 1Q 2012=100) Yara’s Industrial segment is 200 unique in the fertilizer industry 150 creating stability and robustness in 100 revenues and margins 50 0 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2015 2012 2013 2014 Industrial Downstream Upstream IR – 24 April 2015
9 13% EBITDA growth p.a. since 2011 Gas and Industrial Environmental Base Chemicals Mining Applications applications Solutions Chemical applications CO 2 in a gas, liquid Abatement of emissions Solutions to the Civil for food, feed, and Dry ice format from heavy duty vehicles, explosives industry Key product and automotive, space, off-road vehicles. based on Technical CN for Industrial service offering pharmaceutical and nitrates for mining and Applications NO x and SO x abatement construction industries construction for maritime sector Animal nutrition Monetize secondary Utilize technology, Optimization of Handling, storage and products into primary Strategic fit logistic advantage and Upstream assets economies of scale markets applications infrastructure footprint Geographical Europe Global Global Global market GDP growth, GDP growth, standard Legislations, GDP Market drivers GDP growth infrastructure projects, of living growth raw material security EBITDA 2011- 2014 533 492 303 343 413 357 426 237 337 246 311 225 223 232 139 114 (MNOK) 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 Market CAGR 5% 1 5% 1 16% 2 2.5% 3 2014-2020 1) Source: IHS Global Insight. Nominal world GDP growth. 2014-2020 IR – 24 April 2015 2) Source: Fertecon Urea Outlook - 2014 3) Source: «Technical Ammonium Nitrate Quarterly Market Outlook February 2015», CRU
10 Yara well on track to become global market leader for emissions abatement Growth initiatives 2005 to date 2007 2011 2014 Invested > NOK Aug: Yarwil (JV Oct: acquired Jan: Acquired 1 bn in own with Wilh. Petro Miljö H+H (SCR Other selected emissions plants Wilhelmsen) (SNCR Technology) technology) April: Acquired 63% in Green Tech Marine June: Acquired Technology & services Strabag (flue gas cleaning) Reagents 2005 2010 2015 2020 2020 target: become full-service provider of environmental solutions with top-industry profitability IR – 24 April 2015
11 We serve a wide range of customers through an extensive offering End users Yara value proposition Yara competitive edge Reagent Technology Services Trucks • AdBlue: • Dispensing bulk • Global reach Off-road High-quality equipment Automotive vehicles • Telemetry urea • Training • Strong market Cars solution infrastructure • NOxCare: • SCR • Optimization of Power • Reliable supply plants high-quality Technology operations, • SNCR urea solution emissions Cement Stationary and Technology reduction, safety • Proximity to customers factories • Hybrid- ammonia and performance solution systems improvement Waste • High-quality products Incinerators • NOxCare40: • SCR • Commissioning Cruise and • Proven technology • Operational ferries High purity Technology • SOx urea solution training • Strong Yara brand Marine Coast-near • Safety training scrubbers vessels • Design and • Maintenance • Spare-parts engineering Deep sea vessels IR – 24 April 2015
12 Yara Environmental Solutions grows rapidly Yara performance Market growth 2014-2020 USDbn. 1,183 CAGR +16% 1 905 13.1 713 AdBlue volumes (kt) 619 609 NOxCare volumes (kt) 8.3 604 5.4 Yara ES 2014 sales was 279 245 USD540mill, AdBlue EBITDA (MNOK) 3.2 predominantly 139 4.9 NOxCare reagents EBITDA (MNOK) 2.2 2020 2012 2013 2014 2014 Technology Reagent (AdBlue+NOxCare) Recent acquisitions have built Yara a solid position to capture the fast-growing Environmental Solutions market 1) Per urea-equivalent (46% Nitrogen), excl. non-recurring items, source: Fertecon Urea Outlook - 2014 IR – 24 April 2015
13 Earnings before interest, tax, depreciation and amortization (EBITDA) EBITDA excluding special NOK millions items 5 742 5 196 4 528 3 935 4 185 4 002 4 966 4 149 4 103 4 186 4 794 3 830 4 625 4 310 3 541 4 184 4 039 4 227 4 103 3 223 3 964 3 591 3 591 3 318 2 363 1 858 2012 2013 2014 2015 Annual NOK 16,970 13,399 16,407 4,794 millions IR – 24 April 2015
14 EBITDA development NOK millions 710 1,023 4,794 515 1,089 316 3,591 EBITDA Volume & mix Price/margin Other Currency Special EBITDA 1Q14 items 1Q15 IR – 24 April 2015
15 Improved earnings in all segments EBITDA 1 3 808 (NOK millions) EBITDA excluding special items 1 888 1 868 1 789 1 646 2 884 1 792 1 843 414 365 365 414 Downstream Industrial Upstream 1Q14 1Q15 1) 1Q 2015 result reflects new segment structure. 1Q 2014 on previous segment structure. IR – 24 April 2015
16 Lower natural gas cost in Europe Yara European gas & oil cost Change in European energy cost NOK USD/ millions MMBtu 12.0 0 (36) 11.0 (200) (150) 10.0 (400) 9.0 (600) 8.0 (650) (660) (800) (726) 7.0 (891) (1 000) 6.0 (1 200) 5.0 4.0 (1 314) (1 400) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 TTF (1-month lag) Yara Europe Actual April 2015 estimate* *Dotted lines denote forward prices as of 15 April 2015 Source: Yara, World Bank, Argus/ICIS Heren IR – 24 April 2015
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