cmd 2012: track record and strategy (jørgen ole haslestad)

Track record and strategyJørgen Ole Haslestad, President & CEO

1

Capital Markets Day 2012 – 4 December

2011/12 season saw highest EBITDA so far

0 %

5 %

10 %

15 %

20 %

25 %

30 %

0

5 000

10 000

15 000

20 000

25 000

06/07 07/08 08/09 09/10 10/11 11/12

EBITDA EBITDA ex sp. Items CROGI

NOK millions CROGI

2


47 %43 %

-15 %

7 %

73 %

24 %

10 %15 %

3Q11 4Q11 1Q12 2Q12

Yearly change in nitrogen prices

Ammonia Urea

Our Upstream system benefitted from increased

fertilizer prices

5,1

1,0

7,1

4,5

2,0

13,5

Downstream Industrial Upstream

EBITDA excluding special items, NOK billions

10/11 11/12

3


7 010

1 490

6 952

2 092

6 513

2 222

Europe Overseas

OPP nitrate and NPK volumeskilotons

09/10 10/11 11/12

Weaker European season compensated by our

ability to export high value products

4


Asset optimization has contributed to

earnings growth

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

06/07 07/08 08/09 09/10 10/11 11/12

EBITDA

(NOK

millions)

Kemira

GrowHowBelle Plaine

Fosfertil

Pilbara

(increase)

Yara Praxair

(partial)

Acquisitions Divestments

Fertibras

Lifeco

Rossosh

Yara Praxair

(partial)

5


0,75

0,49

0,20

0,07

0,63

0,38

0,22

0,08

0,57

0,32

0,120,06

0,56

0,27

0,12

2009 2010 2011 2012

Strong balance sheet gives significant flexibility

Net interest-bearing debt / equity ratio (end of period)

6


32.5

24.5

+8.0

20162010

Growth in OPP/JV volumes

Growth ambition remains firm

7


We started up Qafco 5 & 6 and initiated

expansions in Porsgrunn and Belle Plaine

8


We took control in Yara Pilbara and decided to

invest USD 350 million in the TAN plant

9


Strategic backdrop

• Continued demand growth

• New gas situation, with lower North American prices and new

emerging gas regions

• China continuing as swing exporter

• Concern about supply additions, North America and others adding new

capacity

• Strong cash generation from all players in the next few years,

competition for assets

10


Securing competitiveness through

differentiation

Using the strength of

our business modelCreating impactIncreasing innovation

11


Both value-added and commodity products

important to strengthen competitive edge

6.5

1.2

1.3

Urea**

Commodity

7.5

NPK

12.9

5.0

UAN

Value add

5.7

Nitrates

Announced expansions

Million tons capacity*

* Including equity share of non-consolidated investees’ capacity

** Including recently implemented expansions in Qafco and Sluiskil

12


32.5

28.5

24.5

New supply

needed to

achieve ambition

~4.0

2016 with

committed projects

Committed

projects2

~4.0

2010

+8.0

2016

1) Excluding CO2 and industrial gases

2) Qafco V and VI, Sluiskil VII and Porsgrunn NPK, Pilbara TAN, Belle Plaine, capacity creep/smaller expansions

Growth in OPP/JV volumes

Growth ambition remains firm

13


Debottlenecking and regional M&A

most attractive

Reconfiguration/expansion at

existing sites, potential for

increased NPKs, nitrates and

CN

Pursue medium-size/regional

M&A, likely highest probability

of success in current

environment

Secure longer term partnerships

with access to low cost raw

materials for potential new

builds

1

2

3

14


We want to create impact through our

Leadership Agenda

14

Drive profitable

revenue growthLeading

enterprise

in agricultural

development

Performance

and positioning on

environmental

solutions

Continuous

improvement to

fine tune operations

Company-wide

focus on corporate

governance

Industry Shaper

Conclusions and outlook

16


Prospects 2013

Strong demand amid tight global grain

situation, strong food prices and farmer

margins

Capacity growth outside China likely to be

below consumption growth

China likely to keep a swing role during the

second half of 2013

US capacity growth impacts markets mainly

after 2015

17


Premium fertilizer margins linked to farmer

profitability, also at lower urea price levels

CAN price

USD/t

Wheat price

USD/t

0

50

100

150

200

250

300

350

400

0

50

100

150

200

250

300

350

400

450

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

Adjusted urea* Nitrate premium, USD/t Wheat price

18


Well positioned for profitable

operations and growth

Need for sustainable improvements in

agricultural productivity is as strong as

ever

Yara’s value-added products provide

additional productivity, and provide

sustainable premiums over and above

commodity margins

Committed to delivering sustained

shareholder value generation, through

profitable growth and cash returns

cmd 2012: track record and strategy (jørgen ole haslestad)

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