Yara International ASA 2016 first quarter results

Transcription

1 Yara International ASA 216 first quarter results 21 April 216

2 Safe operations is our first priority TRI Mar ) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours 2) OFD and Galvani included in statistics from January 216 2

3 Summary first quarter Strong results in a challenging market Global fertilizer deliveries 5% lower, Brazil deliveries 15% higher Negative price effects offset by lower energy prices and currency effects Improved production reliability Strong Industrial result 3

4 Earnings per share* EPS excluding currency and special items Annual NOK *Average number of shares for 1Q 216: million (1Q 215: million). 4

5 Lower exports from China, higher domestic price USD/t Declining urea pricing Kilotons 2,4 2,2 2, 1,8 1,6 1,4 1,2 1, Chinese exports and urea price Black Sea USD/t Urea price China (inland proxy price) Urea fob Black Sea Source: BOABC, CFMW 5

6 Season-to-date Europe and US nitrogen fertilizer industry deliveries at normal level Season-to-date deliveries (9 months ending 31 March) Million tons N West Europe 7. -4% /12 12/13 13/14 14/15 15/16 Domestic production Imports Million tons N US % /12 12/13 13/14 14/15 15/16 Domestic production 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 6

7 Brazil: industry deliveries up 7%, Yara up 15% Kilotons 7, 6, 5, 4, 3, 2, 1, Brazil season-to-date fertilizer deliveries +7% +15% Yara Brazil 1Q value-added product deliveries Kilotons Source: ANDA, Yara Industry Yara ex Galvani Galvani

8 Rio Grande expansion and operational improvement Consolidation of 3 sites reduces fixed cost and maintenance investments RIG 2 Increased fertilizer production and blending capacity Improved safety and lower unit cost through: RIG 3 RIG 1 Improved material flows Automated bagging process Million tons 2.6 New capacity Increased product quality through improved handling and storage conditions As is capacity Acidulation Granulation Blending 8

9 Improved production reliability Kilotons 2,5 Ammonia 1 Kilotons 6, Finished fertilizer & industrial products 1 2, 5, 1,5 1, 5 4, 3, 2, 1, Urea Nitrates NPK CN UAN SSP - based fertilizer * Including share of equity-accounted investees 9

10 Earnings before interest, tax, depreciation and amortization (EBITDA) EBITDA excluding special items NOK millions 7,884 4,614 4,184 4,149 4,13 4,39 3,318 3,223 2,363 1,858 3,83 3,591 4,227 4,185 4,625 4,2 4,528 3,964 5,742 4,794 5,179 5,55 3,58 3,54 5,55 5,5 Annual NOK millions ,399 16,47 21,361 5,55 1

11 EBITDA development NOK millions 4, , ,51 1,186 EBITDA 1Q15 Volume Price/margin Energy cost Currency Special items Other EBITDA 1Q16 11

12 Stable earnings for Crop Nutrition and Industrial EBITDA (NOK millions) EBITDA excluding special items 3,88 2,884 2,845 2,84 1,868 1,778 1,843 1, Crop Nutrition Industrial Production 1Q15 1Q16 12

13 Lower natural gas cost in Europe USD/ MMBtu 8. Yara European gas & oil cost NOK millions Change in spot energy cost Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 TTF (1-month lag) *Dotted lines denote forward prices as of 12 April 216 Source: Yara, World Bank, Argus/ICIS Heren Yara Europe (2) (4) (6) (8) (1,) (1,2) (1,4) (151) (588) (588) (923) (1,) (1,15) (1,314) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Actual April 216 estimate* 13

14 Stable European nitrate premium Based on Egypt granular urea reference, and excluding nitrate with sulphur USD/t 7 Nitrogen upgrading margins 1 (monthly publication prices) USD/t 16 European nitrate premium 2 (quarterly Yara realized) Nitrate premium above urea Value above ammonia Value above gas 4 1 Yara EU gas cost *2 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 CAN (46% N) NH3 CFR (46% N) Urea Egypt CFR proxy 1) All prices in urea equivalents 2 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 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. 14

15 Stable commodity phosphate margins and solid NPK compound premiums USD/t 6 Phosphate upgrading margins USD/t 7 NPK premium over blend NH3, fob Black Sea *.22 Rock, fob North Africa *1.4 Value above raw material 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 DAP, fob USG Weighted average global premium above blend cost Nitrate premium, CIF inland Germany Urea, CIF inland Germany MOP, CIF inland Germany DAP, CIF inland Germany 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 1) Export NPK plants, average grade , net of transport and handling cost. 15

16 Net interest-bearing debt development NOK millions 93 11,868 2,454 3, , ,465 Net debt Dec 15 Investments net Share buy/backs Cash earnings* Dividends from equityaccounted investees Net operating capital change FX gain * Operating income plus depreciation and amortization, minus tax paid, net gain/loss on disposals, net interest expense and bank charges Other Net debt Mar 16 16

17 Prospects Supportive farm margin outlook overall; higher export profitability in Brazil Current Chinese fob urea prices close to break-even levels for swing producers 2Q catch-up in European nitrogen deliveries expected Continued premium products growth in Brazil, but commodity crop sector demand elsewhere impacted by lower prices NOK ~2.2 billion reduction in Yara s spot-prices gas cost for next 2 quarters 17

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19 Strong growth pipeline NOK bn Capex plan Cost&capacity improvements M&A Committed growth Maintenance Mill.tons Production growth end Finished fertilizer Ammonia Production Regularity improvement Committed growth 3 Production end 218 Production Regularity improvement BASF JV Production end 218 2) Finished fertilizer and industrial products, excl. bulk blends. Including Yara share of production in JVs. 215 numbers excl. Growhow UK (~3 kt) 3) Committed projects only. TAN Pilbara: 16 kt, Porsgrunn: 25kt, Glomfjord: 185kt, Uusikapunki: 25kt, Köping: 9kt, Sluiskil: net 16kt, Galvani (Salitre - 6% of ~ 2 mill.tons) 4) Excl. Growhow UK (~2 kt). Including 1% ownership in Pilbara NH 3 plant 5) Rio Grande expansion ads.5 million tons SSP and 1 million ton blends by 22 1) Yara s share of capex 19

20 Yara 1Q fertilizer sales by market and product Kilotons 3,8 2,733 1Q15 1Q16 1,377 1, Europe Brazil Latin America North America Asia Africa 1,414 1, ,595 1,445 1,375 1, NPK compounds 1 NPK blends 1 Nitrate Urea Other products UAN CN 1) Yara produced NPK compound and NPK blends 2

21 YaraMila and YaraBela deliveries Yara-produced YaraMila deliveries Kilotons 1,6 1,4 1,2 1, Q12 1Q13 1Q14 1Q15 1Q16 Yara-produced YaraBela deliveries Kilotons 1,6 1,4 1,2 1, Q12 1Q13 1Q14 1Q15 1Q16 Outside Europe Europe Outside Europe Europe 21

22 Strong premium product deliveries in Brazil; weaker elsewhere Value-added fertilizer deliveries 1 Value-added fertilizer deliveries 1 3,5 41 3, 2,5 2, 1,5 1, CAGR 2% Q12 1Q13 1Q14 1Q15 1Q16 Outside Europe Europe Asia Brazil Latin America excl. Brazil Africa North America 1) YaraBela, YaraMila and YaraLiva deliveries 1Q14 1Q15 1Q16 22

23 Value-added and distribution make up larger part of Yaras contribution 11, Total Yara contribution 1, 9, 8, Trade 7, 6, Upgrade & distribution 5, 4, 3, 2, Commodity overseas 1, Commodity Europe 1Q1 3Q1 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 23

24 Fertilizer deliveries Kilotons 7, 6,5 6, 5,5 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, Europe Outside Europe 24

25 Fertilizer deliveries by product and source Kilotons 1,595 1,445 1,414 1, ,375 1, , Q15 1Q16 1Q15 1Q16 1Q15 1Q16 1Q15 1Q16 1Q15 1Q16 1Q15 1Q16 Yara-produced deliveries Joint venture & third party sourced 25

26 AdBlue deliveries Kilotons Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 26

27 Industrial volume development Kilotons Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Industrial N-chemicals Environmental products Other 27

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

29 Yara stocks Kilotons Finished fertilizer 7, Bunge Fertilizer included from 3Q 213 6, 5, 4, 3, 2, 1, - Urea Nitrates Compound NPK Other 29

30 European producers nitrate stocks Index June 27 = Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: Fertilizers Europe, Yara estimate for March 15/16 1/11 11/12 12/13 13/14 14/15 3

31 Energy cost Yearly averages , quarterly averages for with forward prices* for 2Q16 and 3Q Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 US gas price (Henry Hub) Yara Global TTF day ahead (Zeebrugge ) Yara Europe *Dotted lines denote forward prices as of 12 April 216 Source: Yara, World Bank, Argus/ICIS Heren 31

32 Global grain balance Grain consumption and production Million tons 2,55 2,5 2,45 2,4 2,35 2,3 2,25 2,2 2,15 2,1 2,5 2, 1, E Days of consumption in stocks Days E Consumption Production Source: USDA April

33 Non-commercials net long position in corn Thousand contracts Jan-9 Jul-9 Jan-1 Jul-1 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 33

34 Weaker farm economics in USD, affecting particularly P and K demand FAO price index Index /24 1/25 1/26 1/27 1/28 1/29 1/21 1/211 1/212 1/213 1/214 1/215 1/216 Source: FAO Cereals Price Index Cereals 5 year avg. Food Price Index Food 5 year avg. 34

35 Projected nitrogen capacity additions outside China Year Driving regions Excluding China Algeria 26% Saudi Arabia 24% USA 22% Algeria 15% USA 33% Iran 15% USA 34% Turkmenistan 19% Nigeria 36% Russia 29% Urea capacity growth relative to nitrogen capacity Excluding China 1.8% (1.8%) 3.% (3.1%) 2.5% (2.3%) 1.1% (1.5%) 1.2% (1.2%) Gross annual addition ~2.% Assumed annual closures ~.5% Net annual addition ~1.5% Trend consumption growth from 24 2.% Source: CRU urea update March 216 (December 215 in brackets). Consumption data source is IFA. 35

36 Key value drivers quarterly averages TTF day ahead (USD/MMBtu) Urea prilled fob Black Sea (USD/t)/Urea granular fob Egypt (dotted line, USD/t) CAN cif Germany (USD/t) Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 US gas price Henry Hub (USD/MMBtu) Ammonia fob Black Sea (USD/t) NOK/USD exchange rate Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank 36

37 1-year fertilizer prices monthly averages USD/t Ammonia fob Black Sea 1, USD/t CAN cif Germany USD/t Urea prilled fob Black Sea/Urea granular fob Egypt USD/t DAP fob US Gulf/MOP granular fob Vancouver 1,2 1, Average prices