Yara International ASA · OSL:YAR
Yara International ASA — Investor Day (June 2019)
92 slides from Yara International ASA's investor day presentation, Jun 26, 2019
Slide 1: Capital Markets Day 2019
Capital Markets Day 2019 London 26 June 2019
Slide 2: Agenda
Agenda Section Time Presenters 1. Strategy update Start 08:30 Holsether 2. Driving value growth Knutsen/Hanzen 3. Improving operations Andersen/Røsæg Coffee break 10:20-10:50 4. Portfolio review Bonte 5. Capital allocation & returns Røsæg 6. Wrap-up Holsether 7. Q&A End 12:00 All presenters 2
Slide 3: Strategy update
Strategy update The Crop Nutrition Company for the Future Svein Tore Holsether
Slide 4: The Crop Nutrition Company for the Future
The Crop Nutrition Company for the Future Delivering improved returns as a focused company Crop Nutrition Focus Industrial Focus Improvement Evaluating IPO of industrial business • Capturing the full value of our growth investments • First major integrated industrial nitrogen-player • Extending p
Slide 5: Agriculture has delivered huge benefits to humankind over the past 100 years
Agriculture has delivered huge benefits to humankind over the past 100 years Mineral Fertilizer (1909) 2.7 Billion Lives Saved Blood Groups (1902) 1.09 Billion Smallpox Vaccine Green (1796) DDT- Diphtheria Penicillin Measles Chlorination Revolution 530M Malaria & Tetanus Mold (1928) Vaccine of Water
Slide 6: The agricultural sector is facing several fundamental changes
The agricultural sector is facing several fundamental changes CC impacts how and where crops Yara’s premium products, knowledge and solutions Climate Change can be grown, and demands reduce emissions, preserve resources and address agricultural efficiency improvements specific challenges like water
Slide 7: Our Corporate Strategy is evolving to meet these challenges
Our Corporate Strategy is evolving to meet these challenges xx xx Capital allocation to product Operational improvement Crop Nutrition focus Industry consolidation and market growth focus and value growth 2004 2007- 08 2013-15 2016 2017 2018 Yara listed on Major LatAm M&A, Yara Improvement Digital f
Slide 8: The Crop Nutrition Company for the Future
The Crop Nutrition Company for the Future Our Strategy Strategic Priorities • Yara’s strategy is to become the Crop Nutrition Company for the Future, delivering sustainable crop nutrition solutions to farmers and industry, while delivering Advance superior return on capital Operational • Crop nutr
Slide 9: Our journey from pure producer to the Crop Nutrition Company
Our journey from pure producer to the Crop Nutrition Company for the Future Producer Company Crop Nutrition Company Commodity Margin Knowledge Margin Market depth / Closeness to farmer Solutions Crop Scalable farmer Product centric solutions Crop focused Asset approach & Build product offerings repu
Slide 10: Our integrated business model combines production of premium products with a farmer centric approach
Our integrated business model combines production of premium products with a farmer centric approach 10
Slide 11: Our business model creates value from factory to field
Our business model creates value from factory to field Value drivers: EBITDA (MUSD) Examples: • Consistent NPK premiums Capture knowledge margin by providing crop and high margin knowledge nutrition solutions covering both product, Knowledge margin intensive micro nutrients knowledge and services ba
Slide 12: We are uniquely positioned to create value
We are uniquely positioned to create value Competitive landscape Yara’s competitive edge Proof points Global Sales to +160 countries Unique global presence and +60 countries with operations farmer interaction 9,000 fully branded retail outlets1 Geographic presence Yara is positioning Sales to 20 mil
Slide 13: Our Commitments: Safety
Our Commitments: Safety TRI Ensuring a safe workplace environment for 12M rolling employees and partners 5 Striving toward zero accidents with no fatalities and Total Reported Incidents (“TRI”) <1.2 by 2025 9.8 1.4 6.1 TRI 1.4 0 Norwegian Fertilizer Europe Yara 2018 Jan'16 Mar'19 industry average 13
Slide 14: Our Commitments: Diversity, Engagement and Compliance
Our Commitments: Diversity, Engagement and Compliance Empowering an engaged, respected and diverse workforce • Engagement index1 >80% by 2025 • Minimum 20% of female top managers by 2020 and 25% by 2025 Ethics and compliance is our license to operate • Zero tolerance for corruption • Commitment to r
Slide 15: Our Ambition: towards climate neutrality
Our Ambition: towards climate neutrality Use HESQ 360 reporting system Update data gathering process to be aligned with PRO energy reporting Yara’s total greenhouse gas Further improving on world Ambition to become climate emissions halved by almost leading performance by CO2 neutral by 2050 elimi
Slide 16: We will deliver improved returns
We will deliver improved returns Return on Invested Capital (ROIC) 10% Targeting >10% ROIC at mid- cycle conditions by driving Improvement, Value and Growth 4% L12M Mid-cycle conditions 16
Slide 17: Driving value growth
Driving value growth Strengthening our crop-focused solutions, food-chain partnerships and digital capability Terje Knutsen Lair Hanzen
Slide 18: Our terminal footprint is the key to secure other value creation levers
Our terminal footprint is the key to secure other value creation levers Value drivers Knowledge margin Shortening the distribution chain Infrastructure and logistical margin Production and sourcing 18
Slide 19: Sales & Marketing contributes with resilient earnings despite deteriorating farmer economics
Sales & Marketing contributes with resilient earnings despite deteriorating farmer economics Crop prices have deteriorated Nitrate and NPK premiums EBITDA development Index* USD/t Last 4 quarters rolling average 100 130 Production Sales & Marketing 50 70 Coffee Corn Nitrates Wheat NPK 0 0 Avg 12-15
Slide 20: We are growing the premium segment
We are growing the premium segment Total Sales & Marketing deliveries Million tonnes +7% 31.3 32.0 Our ambition: 29.8 3.9 3.9 3.3 >3.5 million tons premium product growth, improving 14.1 14.7 overall EBITDA/t in Sales 14.5 and Marketing 17.0 12.0 13.4 13.4 2015 2018 L12M 2025 Premium products Commod
Slide 21: We are continuously evolving to become the Crop Nutrition Company for the Future
We are continuously evolving to become the Crop Nutrition Company for the Future Producer Company Crop Nutrition Company Commodity Margin Knowledge Margin Market depth / Closeness to farmer Solutions Crop Scalable farmer Product centric solutions Crop focused Asset approach & 3• Holistic solutions b
Slide 22: Increased focus on developing high value and differentiated product portfolio
Increased focus on developing high value and differentiated 1 product portfolio Foliar Application: ~140 MUSD Foliar Application Soil Application Fertigation Open Field Greenhouse Soil application: Fertigation: ~9.200 MUSD ~ 400 MUSD Coating Biostimulants Coating: Biostimulants: ~45 MUSD ~0 MUSD Num
Slide 23: Growing our premium portfolio through innovation
1. Growing our premium portfolio through innovation 1 55% growth since 2015, CAGR of 16% YaraVita volumes (units) 100 Our ambition: >100 million units of YaraVita sales by 2025 +15% 60 49 39 34 25 29 2015 2016 2017 2018 2019 2020 2025 Contribution margin of ~ USD 100 million 23
Slide 24: A focused crop approach adds value for farmer and Yara – Mexico case study
A focused crop approach adds value for farmer and 2 Yara – Mexico case study Program cost, Yield, Income, 12 days after harvest USD/ha USD/ha USD/ha +113% +37% +37% 1.556 29.473 16 Traditional program 12 21.552 730 Yara Program Farmer cost benefit: 10:1 24
Slide 25: Holistic crop solutions to deliver farmer value
3. Holistic crop solutions to deliver farmer value 3 Growth stage in weeks Digital services Tailored portfolio Starter concept Nutrient Use Protein quality (yield + less cost, if no autumn application) Efficiency (ROI increase) 25
Slide 26: Strengthen Food Chain Collaboration to grow value and reach
4. Strengthen Food Chain Collaboration to grow value and reach 4 • Create business with food chain companies through solutions that deliver optimal crop quality, supply security and sustainable production • Establish an effective channel to reach a large number of contract growers globally at scale
Slide 27: Circular Economy – create new business models through recycling nutrients
Circular Economy – create new business models through 4 recycling nutrients in food and agriculture production chains What Value drivers Example • Solutions to use • Strengthen competitive Yara-Veolia partnership recovered materials as advantage; respond to What? Develop the circular sources for N,
Slide 28: Digital farming vital both to support existing model and to create new revenue streams
Digital farming vital both to support existing model and to create 5 new revenue streams for Yara Digital value creation Support fertilizer Build digital farm and Innovate digitally enabled crop business growth field services business nutrition business models 28
Slide 29: Critical proof points of our ability to deliver our digital strategy
Critical proof points of our ability to deliver our digital strategy 5 over the past 12 months ..build a strong digital capability We have proven ..innovate industry-leading digital services organically out of this new capability that we can ..quickly get user adoption so farmers actually use our in
Slide 30: World-class digital capability
World-class digital capability 5 Unique global footprint Proximity to all key ag markets Top digital talent 260 from 38 nationalities, 36% female talent Dedicated Digital Growth & Commercialization organization Focus on value and ability to quickly scale High paced organic innovation “Yara has a rea
Slide 31: Innovation at speed: examples of early 2019 launches
Innovation at speed 5 examples of early 2019 launches Yara Irix atfarm Turning your phone into Precise fertilization a precision sensor made simple Yara Connect Yara Ayra Linking Yara with the Personalized Crop smallest sub-dealers and Nutrition advisors in smallholder markets 31
Slide 32: Encouraging farmer adoption
Encouraging farmer adoption 5 Farmland under management1 > 10 Million Hectares Our 2020 ambition: >10 million hectares under +150% management 6 2 May 2018 May 2019 2020 target 1 Defined as active users of digital solutions 32
Slide 33: Proof of value creation: First scalable value creation models
Proof of value creation 5 First scalable value creation models Digital services business Digitally-enabled business model Yara Irix Yara Ayra Turning your Personalized Our ambition: phone into a Crop Nutrition Positive EBITDA from precision sensor digital farming in 2022 • Subscription service model
Slide 34: Yara and IBM partner to transform the future of farming
Industry-shaping partnerships 5 Yara and IBM partner to transform the future of farming • Combining world-leading capabilities • Building the globally leading Digital Farming data and services platform • Joint innovation teams across Digital Hubs • Bold ambition: reaching 100 million ha incl. millio
Slide 35: We are enabling Farm-to-Fork Connected Digital Ecosystem
We are enabling Farm-to-Fork Connected Digital Ecosystem 5 • First agricultural player to join Farm and Field Food processing Food retail world leading food traceability and food chain alliance • Provide global coverage of the first miles of food production on the farm • Farm and field-oriented solu
Slide 36: We are poised to become the leading global digital farming crop nutrition platform
We are poised to become the leading global digital farming 5 crop nutrition platform Why will Yara succeed? • Farmer access and insight • Proven agronomy competence • Ability to develop holistic solutions • Global reach • Strategic partnerships to complement our capabilities 36
Slide 37: Optimize regional business models based on scale and growth opportunities
Optimize regional business models based on scale and growth opportunities Markets with Defend and/or critical mass sharpen focus Markets with potential Invest and grow to reach critical mass Struggle to reach Review model critical mass 37
Slide 38: India is increasingly attractive due to a combination of scale and government recognition
India is increasingly attractive due to a combination of scale and government recognition • Distribution muscle from acquired local footprint • Digital opportunities growing through adoption • Yara India scale up from niche base Premium product growth enabled by acquired footprint and knowledge tran
Slide 39: Brazil case: We are transforming our business model to maximize premiums
Brazil case: We are transforming our business model to maximize premiums ROIC, % Investments peaked in 2018 2.4 2.4 (Invested Capital 1.5 1.8 Billion USD) 2016 2017 2018 1Q 2019 …premium sales are 81% 78% 76% 75% growing 10 (% of total MMT1) 19% 22% 24% 25% 2016 2017 2018 L12M Premium Commodity 7 6
Slide 40: Brazil case: Our new YaraVita plant
Brazil case: Our new YaraVita plant will enable us to profitably produce local premium products in Brazil YaraVita world class factory at Sumare - Brazil Brazil YaraVita growth (CAGR%) Million units +23% 18.0 15.9 13.2 9.7 2016 2017 2018 LTM 40
Slide 41: Brazil case: We deliver full crop focused solutions
Brazil case: We deliver full crop focused solutions in Brazil and drive growth in key crops Asset Product Crop Solutions • Rio Grande assets converted from • Growth of high value product • Crop knowledge drive improved • Complete solution from pre- commodity SSP to premium NPK portfolio yield and hi
Slide 42: Brazil case: premium segment growth in coffee
Brazil case: We are demonstrating premium segment growth in coffee Premium products sales to coffee Coffee sales through barter model 300 35 273 276 252 30 30 250 218 25 200 159 20 kt 150 15 100 10 8 50 5 0 0 2015 2016 2017 2018 L12M 2018 L12M 42
Slide 43: Brazil case: shifted from volume to value
Brazil case: We have shifted our offerings and focus from volume to value Growth CAGR% (CB1) Share of portfolio (CB1) 2018-2025 2015 2018 2025 Premium products for high value crops – Niche ~18 5% 6% 10% Layer 1 Premium products for other crops – Value ~10 24% 41% 50% Layer 2 Commodities – Scale ~4 7
Slide 44: Our strategy enables increased premium deliveries, higher margins and new revenue streams
Our strategy enables increased premium product deliveries and higher margins combined with new revenue streams from Digital Sell more premium products… …improving overall margins Adding new revenue streams Million tonnes Commodity Sales and Marketing EBITDA margin EBITDA contribution from Digital Pr
Slide 45: Improving operations
Improving operations Capturing the full value of our growth investments Tove Andersen
Slide 46: Capturing the full value potential of expanding million tonnes
Capturing the full value potential of expanding 6 million tonnes Investing for the future Volume ramp-up from growth portfolio2 • Significant investments made over Million tonnes several years now coming onstream ~6.1 NPK/CN 19% Ammonia Finished Products ~5.1 1.5 • Yara invested approx. 3.0 BUSD1 in
Slide 47: We have seven new projects fully integrated and operating
We have seven new projects fully integrated and operating Expansions Newbuilds M&As Uusikaupunki (FI) Pilbara TAN1 (AU) Babrala (India) Porsgrunn (Norway) Freeport (US) Cubatao (Brazil) Our focus in 2019 will be on capturing full value potential by finalizing and achieving full operability of existi
Slide 48: Three projects reaching completion by 2021
Three projects reaching completion by 2021 Sluiskil value add Salitre Rio Grande consolidation • Project completion 2H 2019, full • First full earnings effect 1Q 2021 • First full earnings effect granulation: earnings from market development by • Annual output in full operation: 1.2 mt 2Q 2020 2022
Slide 49: Significant reduction in number of projects under execution
Significant reduction in number of projects under execution Large committed projects (Capex > 50 MEUR) 16 Medium committed projects (Capex 10-50 MEUR) 12 8 11 6 7 9 6 1 5 4 8 5 5 3 3 2 1 2015 2016 2017 2018 2019 2020 49
Slide 50: Leveraging global production knowledge to optimize turnaround planning and execution
Leveraging global production knowledge to optimize turnaround planning and execution represents a large upside opportunity Turnaround performance Belle Plaine highlights Kt. lost from 5 recent • High complexity turnaround, major turnarounds maintenance and upgrade of ammonia and urea units 198 • Pla
Slide 51: Continued strong focus on reliability
Continued strong focus on reliability Reliability Program Target to significantly reduce the risk of unscheduled stops in our plants • Identify (recurring) problem areas • Use root cause problem solving to identify and initiate actions to eliminate problems. Monitor and measure effect of actions • U
Slide 52: Investing to reach CO2 intensity reduction target in 2025
Investing to reach CO2 intensity reduction target in 2025 represent positive business cases for Yara 5.4 Carbon intensity in t CO2/t N Our ambition: 10% reduction1 in CO2eq intensity by 2025 3.3 3.0 • 2025 target reflects GHG emissions already 2.7 considerably reduced from 2005 • Lower emissions imp
Slide 53: Decarbonize Yara – exploring climate neutral agriculture
Decarbonize Yara – exploring climate neutral agriculture through innovative partnerships What Value drivers Example • Reduce Yara’s direct • Higher revenue (consumers “Green ammonia” in Decarbonize GHG emissions increasingly value products Australia Yara and solutions with lower • Produce zero-carbo
Slide 54: Improving operations
Improving operations Extending productivity, cost and capital improvements beyond 2020 Lars Røsæg
Slide 55: The Yara Improvement Program has led to significant changes in performance
The Yara Improvement Program (YIP) has led to significant changes in performance across our business New operating model 750 KT of Volume Production records Implemented in improvements last 12 months procurement Porsgrunn, Glomfjord, Köping, Uusikaupunki, Siilinjärvi, Ferrara, Le Havre, Cartagena, B
Slide 56: Improvement initiatives have had significant impact
Improvement initiatives have had significant impact Siilinjärvi reduced fixed costs by Tertre reduced use of Optimized packaging in Brazil > 6% since 2015 scaffolding on site by 80% with cost reduction of 30% Knowledge transferred to other sites and locations, leading to bigger potential gains 56
Slide 57: Higher Leaner Smarter
Extended Yara Improvement Program further improves ROIC Higher Leaner Smarter production volumes and cost base working capital management energy efficiency 57
Slide 58: Extended YIP targets 70% increase in sustained EBITDA improvement
Extended YIP targets 70% increase in sustained EBITDA improvement Sustained EBITDA improvement (MUSD) In addition: Working capital reduction + 70% increase + 3 years Current YIP Extended YIP 58
Slide 59: YIP towards 2023: Productivity and cost in focus
YIP towards 2023: Productivity and cost in focus Higher production returns Leaner Smarter and lower variable costs cost base working capital management Improving returns from global Strong improvement in fixed cost1 Improved working capital position production footprint: position across Yara: throug
Slide 60: Higher production returns from fully implementing the Yara Productivity System
Higher production returns from fully implementing the Yara Productivity System Production volume targets1,2 Ammonia KT +13% • Continue to leverage the Yara Productivity 8,900 System (YPS) which has delivered additional 7,850 5% 750 kt 2015-2018 8% 5,975 • Growth and improvement volumes will be repor
Slide 61: Higher production returns from energy efficiency improvements
Higher production returns from energy efficiency improvements Production energy targets Ammonia GJ/Ton • Continued focus on optimizing the energy use 34.5 across our production platform -4% • Ammonia is the single most important energy 33.9 KPI representing 80% of overall improvement potential • Bas
Slide 62: Leaner cost base by keeping fixed cost nominally flat
Leaner cost base by keeping fixed cost nominally flat despite anticipated growth, strategic priorities and inflationary push Fixed cost targets1 MUSD • Our cost base is subject to inflationary pressure 2.5%/y as well as increasing due to pursuing value -300 adding activities • Between 2018 to 2023 o
Slide 63: Smarter working capital management to release 300 MUSD
Smarter working capital management to release 300 MUSD Working capital Working capital days • Building on the learnings and successes of the -12% current project, we will continue to work smarter with working capital management across our system • Levers include optimize local business models, deplo
Slide 64: Our new improvement targets build on successes from current efforts
Our new improvement targets build on successes from current efforts with an increased fixed cost focus Production related target Targets in other areas Ammonia (kt) Fixed costs (MUSD) 8,540 8,900 7,850 2.340 2.340 2.340 Finished fertilizer (kt) Working capital days 22,420 23,960 102 20,870 97 90 201
Slide 65: YIP will deliver 600 MUSD of EBITDA improvements by 2023
YIP will deliver 600 MUSD of EBITDA improvements by 2023 compared to 2018 with further upside on working capital Higher • 8,900 kt of ammonia production • 23,960 kt of finished product returns • 4 % improvement in energy consumption Leaner • Fixed cost improvements of 300 MUSD cost base Smarter • 12
Slide 66: Portfolio review
Portfolio review Evaluating IPO of industrial assets Yves Bonte
Slide 67: Evaluating an IPO similar to the demerger from Hydro in 2004
Evaluating an IPO opening up for a similar growth story as the demerger from Hydro in 2004 vPre -1999 v 1999 2004 2018 2019 - Industrial Oil & Aluminum Crop Nutrition Company conglomerate focus for the Future Leading nitrogen Focused Crop company Nutrition company Norsk Today a focused The first int
Slide 68: An IPO of the first integrated industrial nitrogen company would be an important milestone
An IPO of the first integrated industrial nitrogen company would be an important milestone for Yara's new strategy July 2018 October 2018 December 2018 Today Yara's strategy is Ambition: “Yara simplified operating to become a "Crop Nutrition Company model” announced more focused for the Future" Yara
Slide 69: NewCo would be a new company consisting of a large share of the former Yara Industrial
NewCo would be a new company consisting of a large share of the former Yara Industrial, and relevant production plants, assets and supply chain The first integrated industrial nitrogen company Scope is still being evaluated Potential downstream scope Production Other NewCo scope +12% + + = Relevant
Slide 70: NewCo would be the first integrated industrial nitrogen company with global reach
NewCo would be the first integrated industrial nitrogen company with global reach The first integrated industrial nitrogen company A leading player with the highest value proposition in core markets Solid European platform as fundament to achieve a strong global position Attractive market portfolio
Slide 71: Final scope decision is planned early 2020 before carve-out
Final scope decision is planned early 2020 before carve-out effort will commence IPO would be initiated 1 2 3 after successful carve-out NewCo currently not a Final scope decision Carve-out effort to standalone business – planned for early 2020 be initiated Yara plan to will require effort to retain
Slide 72: Capital allocation & returns
Capital allocation & returns Driving value growth through performance management and strict capital allocation Lars Røsæg
Slide 73: Yara is improving capital returns after a period of heavy investments
Yara is improving capital returns after a period of heavy investments and adverse market conditions Growing asset base driven by our Earnings hit by unfavorable development Capital returns under pressure as a investment program in urea and natural gas consequence Avg. Invested Capital, USD Billions
Slide 74: We have been investing for premium product growth and market access
We have been investing for premium product growth and market access USD Billions 7.0 Market access to premium growth regions 1.3 Growth 3.5 Premium product capacity 0.6 Gas exposed capacity in Europe 0.0 Cost & capacity 0.7 improvements Gas exposed capacity outside Europe 0.8 Mainenance 2.8 Industri
Slide 75: Our assets have distinct value drivers
Our assets have distinct value drivers Asset types Invested Capital ROIC – transfer price based1 Value drivers 2 USD Billions, L12M 136 Upgrade margin • Upgrade margin from raw material to finished ROIC product Production 11% 9.6 90 • Operational excellence; production reliability, raw - Production
Slide 76: Our production portfolio features a diversified asset base
Our production portfolio features a diversified asset base with a strong cyclical upside Plant portfolio Invested Capital Volume USD Billions 2018 Gas exposed in Europe 2.0 9.2 1.4 Premium focused plants 4.3 Commodity focused plants 3.9 3.3 Gas exposed outside Europe 4.0 5.0 Other plants Ammonia pla
Slide 77: Our Sales & Marketing is backed by a strong infrastructure
Our Sales & Marketing is backed by a strong infrastructure Invested capital in Sales and Marketing driven by working capital.. ..and a strong infrastructure footprint across regions USD Billions 2.8 LatAm ex Brazil Owned Leased Brazil North America 1.9 Europe Africa 0.1 Asia 0.7 Total 0.7 Invested W
Slide 78: By executing our strategy we are unlocking the value potential of our business
By executing our strategy we are taking measures to unlock the value potential of our business 1 Improving margins by driving premium growth 2 Deliver on our growth projects Covered earlier today 4 Improve underlying performance through extended YIP 5 Sharpen focus on core business, evaluating IPO o
Slide 79: We are currently optimizing the asset base of our core business
We are currently optimizing the asset base of our core business Assets and optimization • Yara’s asset base has varying as-is profitability and differing outlook and investment profile per site • Yara is continuously reviewing its plants and markets to optimize future value creation, including syner
Slide 80: We are exercising strict capital discipline
We are exercising strict capital discipline with focus on delivering committed growth Capex plan and committed growth Strict capital discipline USD Billions • Investment level peaked in 2018 and material part of 2.2 Expansions and M&A Cost&capacity improvements committed growth investments are being
Slide 81: Capital return improvements enabled through internal improvements and cyclical upside
Capital return improvements enabled through internal improvements and cyclical upside ROIC % Internal improvement levers Cyclical market upside ~3% ~10% ~3% ~7% 4% 2018 Internal improvements 2023 External factors Mid-cycle conditions (with 2018 margins) • Deliver on our growth projects • Improve und
Slide 82: Urea and EU Gas scenarios indicate a cyclical upside
Urea and EU Gas scenarios indicate a cyclical upside, while downside is to remain at current level Illustrative ROIC impact Assumptions ~16% Urea: EU Natural gas: “High” ~350 USD/t ~5 USD/MMBtu case FOB Black Sea ~10% “Low” ~225 USD/t ~8 USD/MMBtu case FOB Black Sea 4% ~4% Including ROIC effects fro
Slide 83: Yara is protecting its investment-grade rating with a revised dividend policy
Yara is protecting its investment-grade rating while providing cyclical upside in dividends through a revised policy Net Debt/EBITDA ex Special Items • Overall objective to maintain mid investment-grade rating o BBB Standard & Poor’s / Baa2 Moody’s 2.49 o Mid- to long-term target FFO1/net debt of 0.
Slide 84: Yara's financial priorities
Yara’s financial priorities Priority Ambition • BBB Standard & Poor’s / Baa2 Moody’s Maintain BBB rating • Mid- to long-term target FFO/net debt of 0.40-0.50 and floor of 0.30 • Conservative short-term investment approach Prudent capital allocation • Normalized maintenance capex of ~0.8 BUSD • Super
Slide 85: The way forward
The way forward Our long-term targets and prospects Svein Tore Holsether
Slide 86: We are committed to fulfill our Strategy, our KPIs and our Ambition
We are committed to fulfill our Strategy, our KPIs and our Ambition Advance operational excellence Create scalable solutions Drive innovative growth Delivering improved operations and Improving margins and nitrogen use Building closeness to farmers through superior profits efficiency through premium
Slide 87: The Crop Nutrition Company for the Future
The Crop Nutrition Company for the Future Delivering improved returns as a focused company Crop Nutrition focus Industrial focus Improvement: 70% YIP target increase Value: Higher Sales & Marketing margins Evaluating IPO of industrial business The first integrated industrial nitrogen company Grow
Slide 88: Attractive Yara prospects
Attractive Yara prospects Attractive industry Operating cash flow Focused long-term strategy fundamentals improvement • Growing population and dietary • Operating cash flow improving with • Crop nutrition focus; #1 market improvement drives demand cycle and Yara actions presence and #1 premium ferti
Slide 89: Yara - the Crop Nutrition Company for the Future
Yara - the Crop Nutrition Company for the Future 220 million No. 10 people our products Yara has been ranked no. 10 help to feed among the 50 companies on FORTUNES’ prestigious Changing the World List2 20 million The number of farmers we collaborate with +60 The number of countries we operate in 9,0
Slide 90: Appendix
Knowledge grows Appendix
Slide 91: Going from reporting USD values to value drivers with extended YIP
Going from reporting USD values to value drivers with extended YIP YIP 2.0 represents higher What we have Extended YIP - higher or equal We will report on our new Extended YIP represents already delivered: ambition levels in 2020: targets going forward: ambitions as YIP 1.0 on all higher targets tha
Slide 92: Overview of volumes from Yara Improvement Program and growth investments
Overview of volumes from Yara Improvement Program and growth investments 2018 2020 2023 Change 2018 Change 2020 YIP volumes (kt) 750 1,100 2,090 1,340 990 Ammonia 80 400 720 640 320 Finished products 670 700 1,370 700 670 Growth investment volumes (kt) 3,210 5,100 6,110 2,900 Ammonia 1,070 1,440 1,4