Société Générale, Paris

Yara International ASA
4Q 2015 roadshow
Torgeir Kvidal, CFO
Kjetil Storås, IR
2
Summary fourth quarter
 Weaker
result reflecting lower margins and deliveries
 Significant
downtime impacts production of urea, ammonia and nitrates
 Global
deliveries down 7%, but increase in Brazil
 Strong
Industrial result with continued growth for environmental products
 Asset
write-downs of NOK 1,150 million
 Proposed
dividend NOK 15 per share, 51% of net income
IR – 11 February 2016
3
Earnings per share*
EPS excluding currency and
special items
14.56
7.41
10.54
8.32
10.80
10.51
2.65
9.25
9.82
8.52
9.00
7.67
7.21
8.04
8.26
7.97
7.03
6.40
6.69
5.66
7.74
7.62
6.18
10.59
9.58
8.17
6.74
5.62
3.97
1.58
2.65
0.23
Annual
NOK
2012
37.31
2013
2014
20.67
27.59
*Average number of shares for 4Q 2015: 274.6 million (4Q 2014: 275.8 million).
IR – 11 February 2016
2015
29.38
4
EBITDA development
NOK millions
4,625
722
102
3,504
1,296
Of which
Pilbara and
Belle Plaine
~ 700 MNOK
EBITDA 4Q14
IR – 11 February 2016
Volume
1,460
461
Price/margin
Other
Currency
Special
items
EBITDA 4Q15
5
Lower production due to maintenance stops and
unplanned outages
Ammonia1
Kilotons
2,500
Kilotons
6,000
Finished fertilizer & industrial products1
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
Urea
* Including share of equity-accounted investees
IR – 11 February 2016
2012
Nitrates
2013
NPK
CN
2014
UAN
2015
SSP - based fertilizer
6
Brazil: 4Q industry deliveries 7% lower than last year,
pick-up in Yara deliveries
Brazil 4Q fertilizer deliveries
Yara Brazil value-added product deliveries
Thousands
Kilotons
Kilotons
-7%
9,000
370
8,000
7,000
290
287
6,000
250
231
222
5,000
198
4,000
+2% ex.
Galvani
3,000
183
175
Galvani
170 kt
147
102116
2,000
1,000
0
2011
Source: ANDA, Yara
2012
Brazil industry
deliveries
IR – 11 February 2016
2013
2014
Brazil
deliveries
2015
Galvani
deliveries
1Q
3Q
2Q
2013
2014
4Q
2015
7
Stable European nitrate premium
Nitrogen upgrading margins1
(monthly publication prices)
USD/t
700
European nitrate premium2
(quarterly Yara realized)
USD/t
180
160
600
140
500
400
Nitrate
premium
above urea
300
Value above
ammonia
200
Value
above gas
100
120
100
80
60
40
Yara EU gas cost *20
0
4Q12
20
0
2Q13
4Q13
2Q14
Urea Black sea CFR proxy
NH3 CFR (46% N)
1) All prices in urea equivalents
IR – 11 February 2016
4Q14
2Q15
4Q15
CAN (46% N)
Urea Egypt CFR proxy
4Q12
2Q13
4Q13
2Q14
4Q14
2Q15
4Q15
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
Stable commodity phosphate margins and solid NPK
compound premiums
NPK premium over blend1
USD/t
Phosphate upgrading margins
USD/t
600
700
600
500
500
400
Value above
raw material
Weighted average global
premium above blend cost
400
300
Nitrate premium, CIF inland Germany
300
NH3, fob Black Sea *0.22
Urea, CIF inland Germany
200
200
MOP, CIF inland Germany
Rock, fob North Africa *1.4
100
100
0
4Q12
DAP, CIF inland Germany
2Q13
4Q13
2Q14
DAP, fob USG
IR – 11 February 2016
4Q14
2Q15
4Q15
0
4Q12
2Q13
4Q13
2Q14
4Q14
2Q15
1) Export NPK plants, average grade 19-10-13, net of
transport and handling cost.
4Q15
9
Lower natural gas cost in Europe
Yara European gas & oil cost
USD/
MMBtu
Change in European energy cost
NOK
millions
9.0
0
8.0
(200)
7.0
(400)
6.0
(600)
5.0
(800)
4.0
(1,000)
3.0
(1,200)
2.0
(1,400)
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
TTF (1-month lag)
Yara Europe
*Dotted lines denote forward prices as of 02 February 2016
Source: Yara, World Bank, Argus/ICIS Heren
IR – 11 February 2016
(151)
(588)
(588)
(726)
(900)
(1,050)
(1,314)
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Actual
February 2016 estimate*
10
Lower urea prices due to lower supply cost from China
Chinese urea balance this season
Declining urea pricing
USD/t
380
Million tons
45
38.9
40
35
35.1
+24%
30
340
31.9
25.6
360
320
7.0
300
25
9.4
5
220
0
200
Jul-Dec 14/15
Source: BOABC, CFMW
IR – 11 February 2016
Jul-Dec 15/16
Production
240
Export
10
Domestic
260
Domestic
15
Export
280
Production
20
Urea price China (inland proxy price)
Urea fob Black Sea
11
Proposed dividend NOK 15 per share
Share of net income
Dividend and buy-backs1 NOK per share
64%
15.5
0.5
14.1
57%
13.8
0.8
1.1
16% 53%
11.9
48% 48%
47%
1.9
6%
6%
41%
12%
6%
32% 25%
7.4
0.4
5.4
4.0
2.3
2.3
2.8
0.4
1.5
2.4
2.5
1.4
4.5
5.3
0.8
15.0
13.0
5.5
4.0
4.5
7%
10.0
5.5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015P
Share buy-backs
Dividends
1) Number of shares based on the number of shares receiving dividend
IR – 11 February 2016
30%
26%
13.0
7.0
4.5
7%
5%
25% 23%
23%
21%
18% 19% 16%
34%
19%
1%
48% 47%
51%
6%
35%
18% 17%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015P
Target range 40-45%
Share buy-backs
Dividends
12
Multiple growth options; de-bottlenecking and
regional M&A currently most attractive
1
Reconfiguration/expansion at
existing sites, potential for
increased NPKs, nitrates and CN
2
Pursue medium-size/regional
M&A, likely highest probability of
success in current environment
3
Secure longer term partnerships
with access to low cost raw
materials for potential new builds
IR – 11 February 2016
Additional information
IR – 11 February 2016
14
Safe operations is our first priority
20.0
TRI
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours
IR – 11 February 2016
2015
15
Strong growth pipeline
Production growth 2014-2017
Capex plan
NOK bn
14.6
0.8
14.5
1.3
Cost&capacity improvements
Committed growth
mt
0.5
Maintenance
8.3
7.4
9.2
1.2
3.0
0.9
21.6
2.2
6.8
1.2
0.6
1.0
5.5
5.8
5.0
5.0
2015
2016
2017
2018
1.7
0.5
1.2
0.8
0.8
0.3
0.3
0.3
0.9
1.4
0.6
7.4
0.8
Committed growth (NOKbn)1
BASF JV
Pilbara TAN + M&A
Porsgrunn
Köping
Sluiskil
Uusikapunki
Galvani (Salitre)
Ammonia vessels
Other projects
Total
1)
1.1
3.7
0.6
0.3
0.3
0.3
1.6
0.2
0.2
8.3
Yaras share of capex
IR – 11 February 2016
0.8
3.0
18.8
Production Committed
20142
growth3
2)
3)
4)
0.6
0.6
5)
M&A4
Sale
Production Ammonia5
GrowHow
2017
UK
Finished fertilizer and industrial products, excl. bulk blends
Committed projects only. TAN Pilbara: 160 kt (net 90kt),
Porsgrunn: 250kt, Glomfjord: 185kt, Uusikapunki: 250kt, Köping:
90kt, Sluiskil: net 160kt,
Full-year impact vs. 2014 of Galvani (60% of ~ 3 mill.- tons) and
OFD: ~400kt higher than 2014
Pilbara ammonia: 420 kt, BASF JV: 510 kt
16
Integrated business model provides scale, flexibility
and end-to-end presence
Downstream
Upstream
Industrial
Supply & Trade
Scale
advantages
IR – 11 February 2016
+
Unique
flexibility
+
Unrivalled
presence
17
Fertilizer portfolio is being driven towards greater
product differentiation and profit
Product portfolio (2014/15 season volume)

Differentiation improves margins and
reduces exposure to commodity price
volatility

On-going efforts to further increase
differentiation through:
17%
37%
24%
22%
Standard products (Urea, UAN and Ammonia)
Differentiated products (CAN, AN)
Specialty (CN, Compound NPK, Fertigation)
NPK blends
IR – 11 February 2016
– Capacity expansions compound NPK, CN,
nitrate 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
18
Yara Industrial enhances value
of fertilizer operations
Solid growth last 10 years…
• Yara’s global production system enables
reliable supply with close proximity to
industrial customers
• Industrial adds value above commodity
reference prices
• Industrial is adding scale in operations
• Industrial enables optimization of Yara’s
upstream assets
mill. tonnes
3.3
CAGR
+7%
3.8
3.5
3.9
4.7
5.2
4.6
5.5
5.7
6.2
6.7
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Environmental products
Industrial N-chemicals
TAN
CO2
… with more stable earnings than fertilizer
Quarterly EBITDA, excl. non-recurring items (rebased to 1Q 2012=100)
200
 Yara’s Industrial segment is unique in
150
the fertilizer industry creating stability and
robustness in revenues and margins
100
50
0
IR – 11 February 2016
1Q
2Q
3Q
4Q 1Q
2012
Industrial
2Q
3Q
4Q 1Q
2013
Downstream
2Q
3Q
4Q 1Q
2014
2015
Upstream
19
13% EBITDA growth p.a. since 2011
Base Chemicals
Key product and
service offering
Strategic fit
Gas and Industrial
applications
Chemical applications
for food, feed,
automotive, space,
pharmaceutical and
construction industries
CO2 in a gas, liquid and
Dry ice format
CN for Industrial
Applications
Animal nutrition
Optimization of
Upstream assets
Monetize secondary
products into primary
markets applications
Environmental
Solutions
Abatement of emissions from
heavy duty vehicles, off-road
vehicles.
NOx and SOx abatement for
maritime sector
Utilize technology, logistic
advantage and
infrastructure footprint
Mining Applications
Solutions to the Civil
explosives industry
based on Technical
nitrates for mining and
construction
Handling, storage and
economies of scale
Geographical
market
Europe
Global
Global
Global
Market drivers
GDP growth
GDP growth, standard of
living
Legislations, GDP
growth
GDP growth, infrastructure
projects, raw material
security
EBITDA 2011- 2014
(MNOK)
Market CAGR
2014-2020
IR – 11 February 2016
413
357
426
533
2011
2012
2013
2014
5%1
1)
2)
3)
311
232
337
492
2011
2012
2013
2014
5%1
139
237
303
246
343
114
2011
2012
2013
2014
2011
2012
16%2
Source: IHS Global Insight. Nominal world GDP growth. 2014-2020
Source: Fertecon Urea Outlook - 2014
Source: «Technical Ammonium Nitrate Quarterly Market Outlook February 2015», CRU
225
223
2013
2014
2.5%3
20
We serve a wide range of customers through an
extensive offering
Yara value proposition
End users
Reagent
Trucks
Automotive
Off-road
vehicles
Cars
Power
plants
Stationary
Cement
factories
Waste
Incinerators
Cruise and
ferries
Marine
Coast-near
vessels
Deep sea
vessels
IR – 11 February 2016
Technology
• AdBlue:
High-quality
urea solution
Yara competitive edge
Services
• Dispensing bulk
equipment
• Telemetry
• Training
• NOxCare:
high-quality
urea solution
and ammonia
solution
• SCR
Technology
• SNCR
Technology
• Hybridsystems
• Optimization of
operations,
emissions
reduction, safety
and performance
improvement
• NOxCare40:
High purity
urea solution
• SCR
Technology
• SOx scrubbers
• Design and
engineering
• Commissioning
• Operational
training
• Safety training
• Maintenance
• Spare-parts
• Global reach
• Strong market
infrastructure
• Reliable supply
• Proximity to customers
• High-quality products
• Proven technology
• Strong Yara brand
21
Price sensitivities linked to capacities
Parameter
1
Operating income
(MUSD)
Urea + USD 10/t
... of which pure urea
… of which UAN
Compound NPK premium + USD 10/t
4
Hub gas Europe + USD 0.1/MMbtu
5
Ammonia + USD 10/t
6
Phosphate rock + USD 10/t
IR – 11 February 2016
0.15
0.13
7
7
0.02
96
58
… of which pure nitrates
… of which NPK
3
51
44
39
33
CAN price + USD 10/t
2
EPS
(USD)
EBITDA
(MUSD)
102
62
38
40
51
7
15
0.11
54
0.16
-0.05
-18
-16
0.28
0.17
9
0.03
15
0.04
22
Yara benefits from a stronger USD
 Revenues and raw material costs are both USD-driven
 Fixed cost base in EUR (~40%), NOK (~20%), BRL (~15%) and USD/other (~25%)
“Run-rate” vs. 2014-average2
Impact of 10% appreciation vs. NOK1
Fixed costs
(NOK bn)
USD
EUR
Translation impact
on gross profit
(NOK bn)
-0.4
-0.3
Combined
-1.2
2.6
3.0
-0.5
BRL
NOK vs. FX
EBIT
(NOK bn)
EBITDA
(NOK bn)
-0.5
-
-0.3
-
3.0
1.8
EPS
(NOK)3
2.5
6.7
-0.8
-0.3
-1.7
-0.8
1.4
2014
avg.
3 Feb
2015
1)
2)
3)
Impact on EPS
(NOK)
6.30
7.69
22%
8.38
8.69
4%
-0.8
2.67
2.85
7%
-0.6
4.2
Note: Currency gain/loss on USD debt reported in P&L statement will vary
IR – 11 February 2016
% appreciation
in FX vs NOK
Compared with 2014 average FX-rates. Assumed long-term effects (approx. one year +)
Run-rate=market as of 3 Feb 2015.
25% tax rate
14.7
13.4
23
Increased production and exports from China
Chinese urea balance L12M
Kilotons
Million tons
80
71.4
70
75.3
7%
57.7
60
61.6
13.8
13.6
50
40
30
20
10
Jan 14– Dec 14
IR – 11 February 2016
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Jan 15– Dec 15
Black Sea
USD/t
550
500
450
400
350
300
250
200
150
100
50
0
Production
Export
Domestic
Domestic
Export
Production
0
Chinese exports and urea price
Source: BOABC, CFMW
24
Brazil 2015 industry deliveries 6% lower than last year,
Yara Brazil -5%
Brazil 2015 fertilizer deliveries
Yara Brazil value-added product 2015 deliveries
Kilotons
Thousands
Kilotons
35,000
1,200
-6%
30,000
1,000
25,000
800
20,000
600
15,000
-5%
10,000
400
200
5,000
0
0
2011
Source: ANDA, Yara
2012
2013
Brazil industry
deliveries
IR – 11 February 2016
2014
2015
Yara Brazil deliveries
2007 2008 2009 2010 2011 2012 2013 2014 2015
25
Yara 4Q fertilizer sales by market and product
Kilotons
2,667
2,267
4Q14
2,784
2,084
766
Europe
1,099
4Q15
1,114
Latin America
1,315
1,358
1,464
549
477
North America
1,342
445
408
Asia
Africa
1,426
1,006
849
923
233
NPK compounds1
NPK blends1
1) Yara produced NPK compound and NPK blends
IR – 11 February 2016
Nitrate
286
Urea
Other products
203
UAN
203
200
CN
26
Continued premium products growth outside Europe
Value-added fertilizer deliveries1
Value-added fertilizer deliveries1
Kilotons
Kilotons
370
3,500
3,000
292 281
287
268
2,500
242
224
2,000
183
1,500
144
119 122 108
CAGR
10%
1,000
77
62 56
500
0
4Q11
4Q12
4Q13
Outside Europe
4Q14
Asia
Brazil
Latin
America excl.
Brazil
Africa
4Q13
4Q14
4Q15
Europe
1) YaraBela, YaraMila and YaraLiva deliveries
IR – 11 February 2016
4Q15
North
America
27
YaraMila and YaraBela deliveries
Kilotons
Yara-produced YaraMila deliveries
Kilotons
1,600
1,600
1,400
1,400
1,200
1,200
1,000
1,000
800
800
600
600
400
400
200
200
Yara-produced YaraBela deliveries
-
0
4Q11
4Q12
4Q13
Outside Europe
IR – 11 February 2016
4Q14
4Q15
Europe
4Q11
4Q12
4Q13
Outside Europe
4Q14
Europe
4Q15
Value-added and distribution make up larger part of
Yaras contribution
Total Yara contribution
NOK millions
11,000
10,000
9,000
Trade
8,000
7,000
6,000
Upgrade & distribution
5,000
4,000
3,000
2,000
Commodity overseas
1,000
Commodity Europe
0
2Q10
4Q10
IR – 11 February 2016
2Q11
4Q11
2Q12
4Q12
2Q13
4Q13
2Q14
4Q14
2Q15
4Q15
28
29
Earnings per segment
3,434
3,251
EBITDA1
(NOK millions)
EBITDA excluding special items
2,176
1,998
1,234
1,435
1,211
1,253
Crop Nutrition
296
308
235
308
Industrial
4Q14
4Q15
1) 4Q 2015 result reflects new segment structure as described in note 3 of the financial report.
IR – 11 February 2016
Production
30
Industrial volume development
Kilotons
844
792
866
819
816
864
852
849
343 328
1Q13
368 358
2Q13
374 364
3Q13
432
367
4Q13
382
339
1Q14
Industrial N-chemicals
IR – 11 February 2016
361
2Q14
829
815
511
456
892
859
438
380
3Q14
346
4Q14
Environmental products
540
541
577
482
333
1Q15
Other
364
2Q15
385
328
3Q15
4Q15
31
AdBlue deliveries
Kilotons
450
400
350
300
250
200
150
100
50
0
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
IR – 11 February 2016
32
Earnings before interest, tax, depreciation and
amortization (EBITDA)
EBITDA excluding special
items
NOK millions
7,884
4,614
5,742
5,196
4,310
4,966
4,625
4,184
4,186
3,935
4,103
3,591
3,541
4,149
4,103
4,039
3,830
3,318
3,223
2,363
3,591
4,227
4,002
4,185
3,964
4,794
5,179
5,055
4,528
3,508
3,504
1,858
2012
2013
16,970
13,399
Annual
NOK
millions
IR – 11 February 2016
2014
16,407
2015
21,361
33
Write-downs of NOK 1,150 million

Yara Montoir (France) – nitrate and
compound NPK plant
NOK millions
• small scale
• limited export opportunities
• serves home market, exposed to more
commodity grains
1,150
224
382
544

Yara Trinidad - ammonia plant
• small scale
• frequent gas supply curtailments
• lower energy efficiency compared to
Yara’s average
Montoir
IR – 11 February 2016
Trinidad
Other
Total writedowns
34
Net interest-bearing debt development
NOK millions
11,868
364
362
Share
buy/backs
FX gain
1,164
4,057
756
793
4,401
2,533
Net debt
Sep 15
Cash
earnings*
3,229
Pilbara
buy-out
Galvani
payment
Net operating Investments
capital
net
change
Other
Net debt
Dec 15
* Operating income plus depreciation and amortization, minus tax paid, net gain/loss on disposals, net interest expense and bank charges
IR – 11 February 2016
35
Debt/equity ratio
Net interest-bearing debt / equity ratio (end of period)
0.49
0.38
0.32
0.27
0.20
0.22
0.17
0.12
0.13
0.12
0.07
0.08
0.06
0.06
0.01
0.02
0.06
0.05
0.06
0.08
0.16
0.15
0.06
-0.04
2010
IR – 11 February 2016
2011
2012
2013
2014
2015
36
Yara stocks
Kilotons
Finished fertilizer
Bunge Fertilizer
included from 3Q 2013
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
Urea
IR – 11 February 2016
Nitrates
Compound NPK
Other
37
NutrioxTM - calcium nitrate with integrated technology
solutions, for preventive waste water odor control
•
•
•
•
Kilotons
226
Hydrogen sulphide (H2S) is a toxic gas that often
develops in waste water and sewage systems
208
215
The absence of air and oxygen cause bacterial
production of hydrogen sulphide (H2S).
76
84
90
128
128
131
2013
2014
2015
H2S causes eye, nose and throat irritation. H2S can
also transform into sulphuric acid, causing corrosion in
sewage networks
Nutriox™ provides H2S prevention for corrosion,
odor and toxicity control of municipal and industrial
waste water systems
Rest of World
IR – 11 February 2016
Europe
North America
38
Season-to-date Europe and US nitrogen fertilizer industry
deliveries behind last year
Million tons N
Million tons N
West Europe
-5%
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2H11
2H12
2H13
Domestic production
2H14
2H15
Net imports
US
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-4%
2H11
2H12
Domestic production
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 – 11 February 2016
2H13
2H14
2H15
Net imports
39
European producers’ nitrate stocks
Index
June 2007 = 1
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Jul
Aug
Sep
Oct
15/16
Source: Fertilizers Europe
IR – 11 February 2016
Nov
10/11
Dec
11/12
Jan
Feb
12/13
Mar
13/14
Apr
14/15
May
Jun
40
Energy cost
Yearly averages 2009 – 2013, quarterly averages for 2014-15 with forward prices* for 1Q16 and 2Q16.
USD per MMBtu
10.7
11.0
11.4
10.5
9.2
7.6
8.2
6.6
6.6
4.7
4.8
8.0
8.0
9.2
9.8
8.5
7.5
8.1
7.0
6.9
6.1
5.2
4.0
6.5
2010
2011
3.9
3.7
2012
7.0
6.8
6.0
2013
1Q14
5.7
7.0
6.2
6.5
5.3
2Q14
Yara Global
*Dotted lines denote forward prices as of 13 October 2015
Source: Yara, World Bank, Platts/Argus/ICIS Heren
3Q14
5.4
5.2
3.8
2.9
US gas price (Henry Hub)
IR – 11 February 2016
7.5
4.6
2.8
2009
7.6
8.1
7.6
5.7
4.4
4.0
9.4
11.3
4Q14
1Q15
2.7
2Q15
2.7
3Q15
TTF day ahead (Zeebrugge 2009-2012)
5.0
4.2
4.1
4.6
4.1
3.9
2.1
2.1
2.2
4Q15
1Q16
2Q16
Yara Europe
41
Currency exposure affecting Profit & Loss
At the beginning of the first quarter 2016
1.
The US dollar debt generating Profit & Loss exposure was USD 1,800
million
•
Kept as hedge of future earnings and to finance inventories in emerging markets
•
Exposure mainly towards EUR (40 %), AUD and BRL (20 % each) and other
emerging market currencies
•
The debt level in emerging markets will fluctuate with fertilizer seasons
2. Additional Profit & Loss exposure from internal currency positions
•
Payables mainly CAD (150 million) vs. NOK
•
Receivables mainly EUR (700 million) vs. NOK and BRL (1,750 million) vs. EUR
IR – 11 February 2016
42
Global grain balance
Grain consumption and production
Million tons
2,550
2,500
2,450
2,400
2,350
2,300
2,250
2,200
2,150
2,100
2,050
2,000
1,950
07
08
Days of consumption in stocks
Days
90
85
80
75
70
65
60
55
09
10
11
Consumption
Source: USDA February 2016
IR – 11 February 2016
12
13
14
Production
15E
16F
07
08
09
10
11
12
13
14
15E
16F
43
Non-commercials’ net long position in corn
Thousand contracts
500
400
300
200
100
0
-100
-200
Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
Source: US Commodity Futures Trading Commission
IR – 11 February 2016
44
Projected nitrogen capacity additions outside China
Year
2015
2016
2017
2018
2019
Driving regions
Excluding China
Algeria 26%
Saudi Arabia 24%
USA 33%
Algeria 14%
USA 35%
Nigeria 10%
Nigeria 30%
Russia 20%
Nigeria 36%
Russia 29%
Urea capacity growth relative
to nitrogen capacity
Excluding China
1.8% (2.6%)
3.1% (3.0%)
2.3% (1.6%)
1.5% (1.5%)
1.2% (1.3%)
Gross annual addition 2015-2019
~2.0%
Assumed annual closures
~0.5%
Net annual addition 2015-2019
~1.5%
Trend consumption growth from 2004
2.0%
Source: CRU urea update September 2015 (June 2015 in brackets) . Consumption data source is IFA.
IR – 11 February 2016
45
Key value drivers – quarterly averages
Urea prilled fob Black Sea (USD/t)/Urea
granular fob Egypt (dotted line, USD/t)
TTF day ahead (USD/MMBtu)
8.1
7.0
4Q14
1Q15
6.8
2Q15
6.4
3Q15
315
310
355
295
337
5.5
4Q15
US gas price Henry Hub (USD/MMBtu)
4Q14
CAN cif Germany (USD/t)
1Q15
277 297
268 281
250 270
2Q15
3Q15
4Q14
Ammonia fob Black Sea (USD/t)
4Q14
295
1Q15
273
257
255
2Q15
3Q15
4Q15
NOK/USD exchange rate
3.8
572
2.9
2.7
6.9
2.7
2.1
4Q14
1Q15
2Q15
3Q15
4Q15
4Q14
413
393
388
355
1Q15
2Q15
3Q15
4Q15
Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank
IR – 11 February 2016
4Q14
7.7
7.8
8.2
8.5
1Q15
2Q15
3Q15
4Q15
46
10-year fertilizer prices – monthly averages
USD/t
USD/t
Ammonia fob Black Sea
1,000
500
800
400
600
300
400
200
200
100
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Urea prilled fob Black Sea/Urea granular fob Egypt
USD/t
0
2006
CAN cif Germany
2007
2008
2009
2010
2011
2012
2013
2014
2015
DAP fob US Gulf/MOP granular fob Vancouver
USD/t
1,200
800
1,000
600
800
600
400
400
200
200
0
2006
2007
2008
2009
2010
2011
2012
Source: Average of international publications
IR – 11 February 2016
2013
2014
2015
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Average prices 2006 - 2015