Link to presentation

0
Yara International ASA
Sanford C. Bernstein Conference
Jørgen Ole Haslestad, CEO
17 September 2014
IR date: Sep 2014
Integrated business model provides scale,
flexibility and end-to-end presence
Downstream
Upstream
Industrial
Supply & Trade
Scale
advantages
IR date: Sep 2014
+
Unique
flexibility
+
Unrivalled
presence
1
Yara – the leader in ammonia and value-added
nitrogen fertilizers
Global no 1 in ammonia
Global no 1 in nitrates
Global no 1 in NPK
complex fertilizer
Production capacity* (mill t)
Production capacity* (mill t)
Production capacity* (mill t)
9
8
7
6
5
4
3
2
1
0
7
8
6
7
5
6
5
4
4
3
3
2
2
1
1
0
Yara
CF
GDF Agrium PCS
* Incl. companies’ shares of JVs
Source: Yara & Fertecon
Excluding China
IR date: Sep 2014
2
0
Yara Euroc. GDF Acron Agrofert
Source: Fertilizer Europe
Yara* Euroc. Acron
Source: Fertilizer Europe
ZAT Rossosh
24 million tons of fertilizer sold in 2013, and
further growth in Latin America in 2014


Bunge (Brazil):
–
Blending & distribution
business, closed 3Q13
–
USD 50 million annual
synergies effective 2014
Europe
10.2 mill. tons
OFD (Colombia):
–

43%
Distribution & production
–
Closing expected 3Q
–
USD 20 million annual
synergies
14%
9%
4%
–
Integrated phosphate
business, with significant
pipeline growth
Closing expected 4Q
IR date: Sep 2014
Asia
2.1 mill. tons
Africa
1.0 mill. tons
- Bunge full-year
- OFD completion
Galvani (Brazil):
–
North-America
3.3 mill. tons
29%
1%
Latin-America
6.9 mill. tons
Oceania
0.2 mill. tons
3
Strong NPK quarter and season, with continued
growth outside Europe
Yara-produced compound NPK deliveries
(by season)
Kilotons
Yara-produced compound NPK deliveries
(by quarter)
5,000
Kilotons
1,400
4,500
1,300
4,000
1,200
3,500
1,100
3,000
1,000
2,500
900
2,000
800
CAGR
7%
1,500
1,000
700
500
600
0
500
09/10
10/11
Europe
IR date: Sep 2014
11/12
12/13
Overseas
13/14
2Q10
2Q11
2Q12
2Q13
2Q14
4
Brazil: Yara benefiting both from Bunge
acquisition and increase in industry deliveries
Brazil 1H fertilizer industry deliveries
Kilotons
Yara Brazil 1H fertilizer deliveries1
Kilotons
14,000
3,500
+7%
12,000
3,000
10,000
2,500
8,000
2,000
6,000
1,500
4,000
1,000
2,000
500
0
0
2011
2012
Source: ANDA, Yara
IR date: Sep 2014
2013
2014
2011
1) Excluding trade
2012
2013
2014
5
Value-added upgrading and distribution make
up larger part of Yara’s contribution
Total Yara contribution
NOK millions
9,000
8,000
Trade
7,000
6,000
Upgrade & distribution
5,000
4,000
3,000
Commodity overseas
2,000
1,000
Commodity Europe
0
2Q10
4Q10
IR date: Sep 2014
2Q11
4Q11
2Q12
4Q12
2Q13
4Q13
2Q14
6
7
Strong nitrate premium at season close
European nitrate premium2
(quarterly Yara realized)
Nitrogen upgrading margins1
(monthly publication prices)
USD/t
800
180.0
700
160.0
600
140.0
Nitrate premium
above urea
120.0
500
Value above
ammonia
400
100.0
80.0
300
60.0
Value above gas
200
40.0
Yara EU gas cost *20
100
20.0
0
2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14
Urea CFR
CAN (46% N)
1) All prices in urea equivalents
IR date: Sep 2014
NH3 CFR (46% N)
0.0
2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14
2) Yara European realized nitrate prices compared with urea
publication prices with one month time lag. All numbers in USD
per ton of CAN equivalents.
8
Improved NPK premiums
NPK premium over blend1
Phosphate upgrading margins
USD/t
USD/t
700
700
600
600
500
500
Value above
raw material
400
400
300
NH3, fob Black Sea *0.22
Weighted average global
premium above blend cost
Nitrate premium
300
Urea, fob Black sea
200
200
MOP, cfr NWE
Rock, fob NA *1.4
100
100
DAP, fob Morocco
0
2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14
0
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
DAP, fob USG
1) Export NPK plants, average grade 19-10-13, net of
transport and handling cost.
IR date: Sep 2014
Fertilizer portfolio is being driven towards
greater product differentiation and profit
Product portfolio (2013/14 season volume)

Differentiation improves margins
and reduces exposure to
commodity price volatility

On-going efforts to further
increase differentiation through:
20%
34%
25%
–
Additional Nitrate+S and Urea+S
–
On-going optimization of NPK
portfolio towards higher value
segments
–
Innovation and market growth in
high-value fertigation markets
–
Continued YaraVita growth
22%
Standard products (Urea, UAN and Ammonia)
Differentiated products (CAN, AN)
Specialty (CN, Compound NPK, Fertigation)
NPK blends
IR date: Sep 2014
9
10
Lower natural gas cost in Europe
Yara European gas & oil cost
Change in European energy cost
NOK
millions
USD/
MMBtu
13.0
Actual for quarter
200
12.0
July 2014 estimate**
1
0
11.0
(51)
(36)
(200)
10.0
9.0
(400)
8.0
(600)
7.0
(660)
6.0
(700)
(800)
5.0
(950)
(1,000)
4.0
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Zeebrugge (1-month lag)
4Q13
1Q14
2Q14
3Q14
Yara Europe
*Dotted lines denote forward prices as of 10 July 2014
Source: Yara, World Bank, Platts
IR date: Sep 2014
3Q13
** Based on forward prices as of 10 July 2014
4Q14
Farm economics strong overall, despite grain
price decline
Source: FAO
IR date: Sep 2014
11
Chinese urea: strong export volume increase,
limited production increase
Chinese production
(kilotons)
7.0
13/14
Chinese exports
(kilotons)
1,800
2013/14 season 11.1 mt
(7.9 mt season-to-date last year)
1,600
Year-to-date 5.3 mt
(2.6 mt year-to-date last year)
12/13
6.0
11/12
July 2014
12
Black Sea
USD/t
550
500
450
1,400
400
5.0
1,200
350
4.0
2013/14 season 71.8 mt
(71.2 mt season-to-date last year)
3.0
Year-to-date 41.2 mt
(42.3 mt year-to-date last year)
1,000
300
800
250
2.0
600
1.0
400
200
150
100
200
0.0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Source: BOABC, CFMW
IR date: Sep 2014
0
50
0
13
Debt/equity ratio
Net interest-bearing debt / equity ratio (end of period)
0.75
0.63
0.570.56
0.49
0.38
0.32
0.27
0.20 0.22
0.12 0.12
0.07
0.08
0.06
0.06 0.06 0.05 0.06
0.02
0.01
-0.04
2009
IR date: Sep 2014
2010
2011
2012
2013
2014
Increased dividend payout ratio improves
capital efficiency
14
37%
28%
48%
Overall target 40-45%
10%
3%
Minimum 30% dividend
10%
25%
34%
34%
9%
7%
11%
23%
18%
2005
2006
2007
19%
3%
18%
16%
2008
2009
2010
2011
Numbers reflect cash returns executed in a calendar year relative to net income the year
before. 2005 number reflects buy-backs and redemptions carried out in 2004 and 2005.
IR date: Sep 2014
17%
2012
2013
2014
Continued brownfield expansion potential:
250 kt NPK expansion in Uusikaupunki, Finland
Annual NPK production capacity (kt)
1,250
1,000
Current

Strong NPK demand growth
outside Europe presents solid
business case

Project to install new
granulator adds ~250 kt
annual capacity

Competitive capex at ~200
EUR/t capacity addition

Completion end 2015
250
Expansion
IR date: Sep 2014
End 2015
15
16
Additional information
IR date: Sep 2014
17
Yara sensitivities
Operating
Income
USD million
EBITDA
USD million
EPS*
USD
Urea sensitivity +100 USD/t
937
1,103
3.1
…of which pure Urea
285
416
1.2
…of which Nitrates
367
393
1.1
…of which NPK
211
220
0.6
Nitrate premium +50 USD/t
468
498
1.4
…of which pure Nitrates
289
311
0.9
(145)
(162)
(0.4)
Ammonia + 100 USD/t
30
86
0.2
Phos rock + 50 USD/t
50
50
0.1
Hub gas North Am + 1 USD/MMBtu
(26)
(26)
(0.1)
Crude oil + 10 USD/brl
(15)
(15)
(0.0)
Currency NOK per USD +10%**
30
25
0.1
Currency EUR per USD +10%
115
95
0.2
Currency BRL per USD +10%
30
25
0.1
Hub gas Europe + 1 USD/MMBtu
*Assuming 25% marginal tax rate on underlying business and 277.6 million shares
** *e.g. If NOK per USD depreciate 10% from 6 to 6.60 NOK
Sensitivities assume stable value-added margins and no inter-correlation between factors
IR date: Sep 2014
18
Yara financial scenarios (December 2013)
NOK millions
2)
5-year avg.
to
30 Sep 132)
Chinese swing
Low
High
Demanddriven
EBITDA1)
14,800
14,800
11,300
14,700
23,500
Depreciation
-3,400
-3,600
-3,600
-3,600
-3,600
-900
-800
-800
-800
-800
Income before tax
10,500
10,400
6,900
10,300
19,100
Tax
-2,000
-2,200
-1,400
-2,100
-4,000
Minorities
-250
-250
-200
-200
-300
Net income
8,250
7,950
5,300
8,000
14,800
Number of shares (millions)
279.7
276.6
276.6
276.6
276.6
Earnings per share (NOK)
29
29
19
29
54
Interest expense
1)
Last 4
quarters
Including interest income, assumed in line with last 4 quarters in all scenarios.
Not historical earnings, but estimated earnings for today’s Yara business, using 5-year average price conditions.
IR date: Sep 2014
19
Price and currency assumptions in scenarios
Last 4
quarters
5-year
avg. to
30 Sep 13
Chinese swing*
Low
High
Demanddriven**
Ammonia fob Black Sea (USD/t)
546
424
400
400
475
Urea prilled fob Black Sea (USD/t)
365
340
300
350
475
Nitrate premium, USD/t
84
85
85
85
85
Phos rock fob North Africa (USD/t)
162
160
125
125
125
DAP fob USG (USD/t)
496
499
360
360
360
Zeebrugge natural gas (USD/MMBtu)
10.3
8.0
10.4
10.4
10.4
Henry hub natural gas (USD/MMBtu)
3.6
3.9
3.7
3.7
3.7
Yara’s European energy price (USD/MMBtu)
11.0
9.5
10.7
10.7
10.7
Brent blend crude oil price (USD/bbl)
103
88
105
105
105
NOK/USD
5.8
6.0
6.10
6.10
6.10
EUR/USD
1.31
1.34
1.35
1.35
1.35
BRL/USD
2.08
1.91
2.30
2.30
2.30
*Energy prices are forward prices as of 9 November
** Given example to illustrate effect of urea price USD 150 per ton above average of the two swing scenarios
IR date: Sep 2014
20
Earnings scenario price assumptions
USD/t
Urea price fob China
440
420
USD/RMB 6.23
USD/RMB 6.23
USD/RMB 6.10
USD/RMB 6.10
400
380
360
360
340
335
320
22
300
24
56
320
7
24
310
7
280
260
33
33
289
289
270
270
CMD 12
Assumed cost
CMD 12
Realized export tax
CMD 13 Assumed cost
CMD 13 High tax
0
Tax
IR date: Sep 2014
Logistics
Cost
85 USD/t nitrate premium in scenarios,
in line with 5-year average
CAN
USD/t
160

Lower urea prices increase farm
margins and make room for
stronger nitrate premiums

A situation with continued strong
food prices and supply-driven urea
pricing allows for higher nitrate
premiums than previously assumed

Nitrate premium of 85 USD/t
assumed in scenarios, in line with
5-year average
140
120
100
80
60
40
20
0
Nitrate premium, USD/t
IR date: Sep 2014
5-year average
21
22
Earnings per share*
EPS excluding currency and
special items
12.42 11.84
10.54
10.02
9.82
9.25
8.04
7.73
7.67
8.26
6.69
6.40
5.66
0.23
2011
2012
2013
2014
Annual
NOK
•
41.99
37.31
Average number of shares for 2Q 2014: 276.5 million (2Q 2013: 279.3 million).
IR date: Sep 2014
20.67
14.66
23
Strong growth in Air1 deliveries
Kilotons
350
20%
> 1 million tons of
product sold L12M
18%
300
16%
250
14%
12%
200
10%
150
8%
6%
100
4%
50
2%
0
0%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
Europe
IR date: Sep 2014
North America
ROW
% of total Industrial deliveries
24
Fertilizer deliveries
Kilotons
7,000
6,146
6,017
5,884
6,000
5,474
5,2565,179
5,000
4,763
6,491
6,405
6,342
6,284
6,104
5,2105,216
4,742
4,882
5,296
5,129
4,791
4,914
4,759
4,970
4,834
5,437
5,253
5,0135,044
5,297
4,239
4,000
3,496
3,000
2,000
1,000
0
2007
2008
2010
2009
Europe
IR date: Sep 2014
2011
Outside Europe
2012
Total
2013
2014
25
Yara 2Q fertilizer sales by market and product
Kilotons
2Q13
2,771
2Q14
2,487
2,183
1,448
1,118
644
Europe
1,211
Latin America
1,360
537
361
Asia
North America
329
Africa
1,672
1,551
1,119
1,114
954
1,331
865
607
NPK compounds
NPK blends
IR date: Sep 2014
518
Nitrate
Urea
Other products
469
407
UAN
314
295
CN
26
Fertilizer deliveries by product and source
Kilotons
1,672
1,551
1,360
1,119
1,211
1,331
1,114
865
607
469
518
407
2Q13 2Q14
2Q13 2Q14
2Q13 2Q14
2Q13 2Q14
2Q13 2Q14
2Q13 2Q14
Nitrate
NPK compounds
NPK blends
Urea
UAN
Other
Yara-produced deliveries
IR date: Sep 2014
Joint venture & third party sourced
Total
27
NPK and nitrate deliveries
Yara-produced compound NPK deliveries
Kilotons
1,400
Yara-produced nitrate deliveries
Kilotons
1,700
1,300
1,500
1,200
1,100
1,300
1,000
1,100
900
900
800
700
700
600
500
500
2Q10
2Q11
IR date: Sep 2014
2Q12
2Q13
2Q14
2Q10
2Q11
2Q12
2Q13
2Q14
28
Industrial deliveries
Kilotons
896
860
867
843
837
816
455
432
343
368
304
1Q13
2Q13
342
374
3Q13
Industrial N-chemicals
IR date: Sep 2014
346
337
4Q13
Environmental products
382
342
313
1Q14
Other
2Q14
29
Yara production volume*
Ammonia
Finished fertilizer and industrial products
Kilotons
Kilotons
5,000
2,500
4,500
2,000
4,000
3,500
1,500
3,000
2,500
1,000
2,000
1,500
500
1,000
500
0
0
2010
Urea
2012
2011
Nitrates
NPK
CN
UAN
* Including share of equity-accounted investees
IR date: Sep 2014
2013
2014
SSP - based fertilizer
2010
2011
2012
2013
2014
30
Net interest-bearing debt development
NOK millions
3,347
860
2,591
124
2,606
2,758
26
1,382
Net debt
Mar 14*
Cash
earnings**
Dividends
received
from equityaccounted
investees
1,580
Net operating Investments net Yara Dividend
capital change
FX gain/(loss)
Other
Net debt
Jun 14*
* Included in net interest-bearing debt are external bank time deposits (4-12 months), this is part of other current assets in balance sheet
** Operating income plus depreciation and amortization, minus tax paid, net gain/loss on disposals, net interest expense and bank charges
IR date: Sep 2014
Increased investments in 2014 drive continued
value-added product growth outside Europe
Total
NOK 13 billion
2.5
0.8
• Smaller growth initiatives:
- Largest category is plant expansions; e.g.
Norway & Finland approx. 500kt NPK & CN
- Also Downstream & Industrial “small M&A”,
ammonia ships and Downstream terminals

Hurdle rate for all
investments is 7%
real after tax

Apart from
maintenance,
majority of
investments target
downstream and
value-added
margin growth

On-going reliability
and productivity
improvements add
~1-2% production
growth p.a.
• Pilbara nitrate plant construction:
- Expected commissioning 2H 2015
• OFD acquisition:
3.0
1.4
- Closing expected mid 2014
- Synergies 20 MUSD
• Productivity improvements:
- Frame available for short payback efficiency
improvements in plants
• Maintenance:
5.2
IR date: Sep 2014
- “Steady state” is approx. NOK 4 billion
- Additional ~ NOK 1 billion in 2014 due to
turnarounds and on-going reliability upgrade
31
32
Currency exposure affecting P&L
At the beginning of the third quarter 2014
1.
2.
The US dollar debt generating p&l exposure was USD 950 million
•
Kept as hedge of future earnings and to finance inventories in emerging markets
•
Around 80% towards EUR and BRL, the rest towards NOK and emerging market
currencies
•
The debt level in emerging markets will fluctuate with fertilizer seasons
Additional p&l exposure from internal currency positions vs. NOK
•
Payables mainly CAD (200 million)
•
Receivables mainly EUR (165 million), GBP (25 million) and AUD (45 million)
IR date: Sep 2014
33
Yara stocks: normal level, adjusted for Bunge
Kilotons
Finished fertilizer
Bunge Fertilizer
included from 3Q 2013
6,000
5,000
4,000
3,000
2,000
1,000
-
Urea
IR date: Sep 2014
Nitrates
Compound NPK
Other
Delivering growth in Latin America:
with Bunge acquisition – and OFD Group

Value-added N production in
Colombia (Abocol)

Distribution companies
across Latin America

FTEs 2012: 959
USD million
2010
2011
2012
540
820
796
47
64
35
K tons
2010
2011
2012
Total net volumes
1,030
1,261
1,131
Net Revenues
EBITDA
IR date: Sep 2014
34
35
Integration and synergy harvest on track
Total USD 50
million
35%
• Operations:
- Plant & overhead optimization
- Storage cost reduction
- Equipment leasing contracts
• Local logistics & procurement :
- Gains in scale
- Optimization of product flows
20%
• Supply:
- Maritime freight: larger vessels, fewer stops, more FOB
- Discounts / rebates
35%
10%
• Other:
- Commercial optimization
- IT cost savings
Legal merge effective 1 November; joint operation running well and minimum
annual synergies of USD 50 million to be realised by 2014
IR date: Sep 2014
Value-added products drive commercial
synergies through increased footprint
Brazil value-added product deliveries (kilotons)
900

Significant growth track record
for Yara value-added fertilizer
products exported from our
European production facilities
to Brazil

The enlarged scale of the
operation will enable us to
extend the reach of our valueadded portfolio
800
700
600
500
400
300
200
100
0
2007 2008 2009 2010 2011 2012
YaraBela
YaraLiva
YaraMila (T16)
YaraMila (Other)
IR date: Sep 2014
36
37
Bunge: increased scale drives
maritime logistics savings
1 USD/t improvement on
shipping = 6 MUSD
Other
Nitrates
6 million tons
NPK
Urea
Phosphate
MOP
Pre
Bunge
IR date: Sep 2014
Post
Bunge
Yara’s product portfolio is continuously
improved to meet changing customer needs

Yara has over many years developed a wide, differentiated product
offering

Continuous development of both new and improved differentiated products
key to maintaining earnings in competitive global market

We will also seek out niche businesses for acquisition to help achieve this
objective
IR date: Sep 2014
38
39
YaraVita: a specialty product success story
YaraVita revenues,
USD millions
110
CAGR
+17%
78
81
2011/2012
2012/2013
68
58
2009/2010
2010/2011
IR date: Sep 2014
BP 2014
YaraVita Procote: Cost effective vehicle for
differentiation and better agronomic efficiency

Uses YaraVita micronutrient expertise
in innovative new fertilizer coating
products

Allows wider differentiation within
Downstream with minimal complexity

Very strong agronomic and material
handling feedback in test markets

Expect approximately 2% of Yara’s
fertilizer with Procote in 2014
Fertilizer
Micronutrient
coating
IR date: Sep 2014
40
41
Supply & Trade – global optimization
Biggest industrial buyer of
natural gas in Europe
Third single biggest buyer of
P&K globally
Gas consumption, MMBtu
2012 raw material purchases (mt)
5.3
185
Significant market
share on trade
2012 annual trade volumes (mt)
43
21.3
115
2.8
3.0
19
11
3.3
25
Europe
Canada
= BASF JV
RoW
Potash, MOP
China
*72 BPL
IR date: Sep 2014
Phosphate rock*
India
Yara incl.
Bunge
23%
9%
30%
Ammonia
Urea
NPK
Yara share
42
Leading global position in ammonia trade
Europe
6.1
4.9
Available
5.1
• Yara-operated ammonia fleet
Demand
unrivalled giving scale and
flexibility
Americas
2.5
2.3
Middle East / Africa
1.5
Available
1.1
Demand
0.7
Available
Available
• Operate 18 ships
Asia
Demand
Demand
Australia
0.8
BASF JV
0.3
Marketing agreement
Yara production
External sales
Upgrade
IR date: Sep 2014
Available
Demand
• Total shipping capacity of ~260
kilotons
Yara’s flexible cost structure gives
downside protection
Total cost base L4Q, NOK Bn
43
European ammonia balance (million tons)
Upgrade / consumption
72
Fixed
Available
7
Non flexible
1.6
Flexible
0.3
4.9
Variable
65
2.1
1.5
L4Q
1.1
0.5
1. Excluding depreciation,
amortization and
impairment
IR date: Sep 2014
NH3 Urea/UAN Tertre Nitrates
production
Nitrates
NPKs
IND
Short
off-take position
44
Gas & oil cost
Yearly averages 2009 – 2010, quarterly averages for 2011-14 with forward prices* for 3Q14 and 4Q14
USD per MMBtu
14
11.1
12
11.4
10.9
10.8
10.1
10
6.6
4
9.2
9.3
9.0
8.3
8.3
8.6
7.9
7.6
6
4.7
4.8
4.0
10.8
10.8
9.1
11.1
10.1
10.3
11.2
11.3
10.7
9.7
7.7
8.1
8.3
8.3
8.1
7.8
8.5
8.5
9.2
9.1
9.0
7.6
6.6
11.0
10.3
9.5
8
11.0
11.9
11.5
7.8
7.3
8.6
6.2
7.5
6.9
5.9
5.7
6.4
5.2
4.4
4.2
4.4
4.6
4.1
3.3
2
2.5
2.9
3.4
3.5
4.0
3.6
3.9
4.1
4.2
2.3
0
2009 2010 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
US gas price (Henry Hub)
*Dotted lines denote forward prices as of 10 July 2014
Source: Yara, World Bank, Platts
IR date: Sep 2014
Yara Global
Zeebrugge day ahead
Yara Europe
For 2014/15, global grain production and
consumption close to balanced
Grain consumption and production
45
Days of consumption in stocks
Million tons
Days
2,500
85
2,450
80
2,400
2,350
75
2,300
2,250
70
2,200
2,150
65
2,100
2,050
60
2,000
55
1,950
06
07
08
09
10
Consumption
Source: USDA July 2014
IR date: Sep 2014
11
12
13
Production
14E
15F
06
07
08
09
10
11
12
13
14E
15F
46
Large variations in yields across regions
Maize yields
Wheat yields
Tons/Ha
Tons/Ha
12
8
7
6
5
4
3
2
1
0
10
8
6
4
2
0
US
Argentina
China
Brazil
Mexico
France
Rice yields
Tons/Ha
China
US
India
Russia
Soybean yields
Tons/Ha
8
7
6
5
4
3
2
1
0
4
3
3
2
2
1
1
China
Viet Nam
Indonesia Bangladesh
Source: FAOSTAT. 2010
IR date: Sep 2014
India
0
Argentina
Brazil
US
China
India
Projected nitrogen capacity additions outside
China
Year
Driving regions
Excluding China
Qatar 23%
Algeria 16%
Algeria 16%
UAE 15%
Saudi Arabia 22%
USA 20%
USA 48%
Malaysia 12%
Nigeria 34%
USA 26%
2013
2014
2015
2016
2017
Urea capacity growth relative
to nitrogen capacity
Excluding China
1.6%
1.5%
1.9%
2.0%
2.1%
Gross annual addition 2013-2017
~1.8%
Assumed annual closures
~0.5%
Net annual addition 2011-2015
~1.3%
Trend consumption growth from 2002
2.1%
Source: CRU urea update July 2014 . Consumption data source is IFA.
IR date: Sep 2014
47
India nitrogen consumption outpaces capacity
Urea supply & demand 2005-2012
1,4%
4,6%
31,0
30,5
28,0
26,8
26,5
26,5
25,2
22,6
20,8
2005
21,8
2006
22,0
2007
22,0
2008
22,2
2009
22,6
2010
22,7
2011
23,0
2012
Production
Consumption
New subsidy policy aimed at increasing production – but
limited gas available
IR date: Sep 2014
48
European producer nitrate stocks ending the
season close to average
Index
June 2007=1
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Jul
Aug
Sep
Oct
13/14
Source: Fertilizers Europe, Yara estimate for June
IR date: Sep 2014
Nov
Dec
08/09
Jan
09/10
Feb
Mar
10/11
Apr
11/12
May
Jun
12/13
49
50
Non-commercials’ net long position in corn
Thousand contracts
500
400
300
200
100
0
-100
-200
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
Source: US Commodity Futures Trading Commission
IR date: Sep 2014
51
Key value drivers – quarterly averages
Urea prilled fob Black Sea (USD/t)/Urea
granular fob Egypt (USD/t)
Zeebrugge day ahead (USD/MMBtu)
10.3
10.1
10.7
9.7
7.6
2Q13
3Q13
4Q13
1Q14
2Q14
5.2
4.6
3.6
414
379
2Q13
308
336
3Q13
354
314
322
358
338
4Q13
294
291
3Q13
4Q13
1Q14
2Q14
2Q13
485
430
417
354
1Q14
2Q14
NOK/USD exchange rate
500
3.8
345
299
Ammonia fob Black Sea (USD/t)
US gas price Henry Hub (USD/MMBtu)
4.0
342
CAN cif Germany (USD/t)
6.1
438
6.1
6.0
6.0
5.8
2Q13
3Q13
4Q13
1Q14
2Q14
2Q13
3Q13
4Q13
Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank
IR date: Sep 2014
1Q14
2Q14
2Q13
3Q13
4Q13
1Q14
2Q14
52
10-year fertilizer prices – monthly averages
Ammonia fob Black Sea
USD/t
CAN cif Germany
USD/t
500
1,000
800
400
600
300
400
200
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0
2004
Urea prilled fob Black Sea/Urea granular fob Egypt
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
DAP fob US Gulf/MOP granular fob Vancouver
USD/t
1,200
USD/t
800
1,000
600
800
600
400
400
200
200
0
2004
2005
2006
2007
2008
2009
2010
2011
Source: Average of international publications
IR date: Sep 2014
2012
2013
2014
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Average prices 2004 - 2013
53
Lower US nitrogen deliveries, stable in Europe
USA
West Europe
Million tons N
Million tons N
9.0
20.0
-8%
18.0
16.0
7.0
14.0
6.0
12.0
+2%
8.0
5.0
10.0
4.0
8.0
3.0
6.0
4.0
2.0
2.0
1.0
0.0
0.0
09/10
10/11
Production
11/12
12/13
Net imports
13/14
09/10
10/11
Domestic
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 date: Sep 2014
11/12
12/13
Imports
13/14