Yara International ASA Third Quarter results 2012

Transcription

1 Yara International ASA Third Quarter results October 212

2 1 Summary third quarter Strong results and cash flow Yara-produced NPK deliveries up 1% Strong production increase Cautious start to European nitrate season

3 2 Earnings per share* NOK EPS excluding currency and special items Annual NOK * Average number of shares for 3Q 212: million (3Q 211: million).

4 3 Strong production increase Kilotons 4,6 Finished fertilizer Kilotons 1,9 Ammonia 4,4 1,8 4,2 1,7 4, 1,6 1,5 3,8 1,4 3,6 1,3 3,4 1,2 3,2 1,1 3, , * Including share of equity-accounted investees

5 4 Fertilizer market development Increased food prices support fertilizer demand Export price level for urea from China reduced, lower export tax the main reason Increased nitrogen supply from Qatar and Vietnam, in addition to China Western Europe nitrogen fertilizer deliveries at same level as last year Phosphate and potash markets negatively affected by reduced use in India, but Yara s main NPK markets running well

6 5 Fertilizer incentives remain strong Index 3 FAO price index /24 1/25 1/26 1/27 1/28 1/29 1/21 1/211 1/212 Source: FAO Cereals Price Index Food Price Index Annual average Food price index 5

7 6 Cautious buying in Europe, stronger in US Million tons USA Million tons West Europe % % Q7 3Q8 3Q9 3Q1 3Q11 3Q12 Production Net imports. 3Q7 3Q8 3Q9 3Q1 3Q11 3Q12 Domestic 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

8 7 Lower Chinese urea export price in 212 Chinese export tax 1 Jul 1 Nov Domestic urea price in China Fob China 7 RMB/t 2, ,4 6 2, ,2 2,1 2, 1, ,8 35 1,7 3 1,75 1,95 2,15 2,35 2,55 Domestic price ex works, RMB/t 1,6 Jan Apr Jul Oct * China Fertlizer Market Week

9 8 Continued project delays Million tons Additional urea capacity Fertecon assumptions: 1 new site in Egypt from Jul 13 Startup in UAE in Jan Startups in Algeria in Jul 12, Jan 13 and Jul Oct 11 est. 212 Oct 12 est. 213 Oct 12 est. Source: Fertecon urea updates

10 Earnings before interest, tax, depreciation and amortization (EBITDA) 9 NOK millions 7, EBITDA excluding special items 6,587 6, 5, 4, 3, 2, 1, 2,36 1, ,394 3,251 2,992 2,486 4,281 3,455 5,444 4,982 4,312 4,968 4,15 Annual NOK millions ,549 15,315 18,163 13,385

11 1 Variance analysis NOK millions 3Q 212 EBITDA 212 4,15 EBITDA 211 5,444 Variance EBITDA (1,339) Volume & mix 496 Price/Margin (633) Oil & gas costs in Europe 12 Special items (1,314) Other (22) Conversion (NOK vs. USD)* 31 Total variance explained (1,339) * Based on average NOK per USD rate for the quarter 212: 5.9 (211: 5.5)

12 11 Net debt development NOK millions 4,5 4, 3,971 3, , ,866 2,5 2,855 2, 1,116 1,5 1, NIBD Jun 12* Cash earnings** Dividends received NOC change Investments (net) Share buy-backs Yara dividend FX gain Other NIBD Sep 12* * 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

13 12 EBITDA per segment NOK millions 4,5 4, 3,5 3, 2,5 2, EBITDA excluding special items 3,77 4,71 1,5 1, , Downstream Industrial Upstream 3Q12 3Q11

14 13 Downstream segment Strong results driven by 4% volume growth at healthy margins Yara produced NPK volumes 1% higher Increased ammonia input prices reduce margins

15 14 Strong NPK development Yara-produced compound NPK volumes Kilotons % Realized prices on Yara -produced NPK compounds Index* 14 +3% % 1-9% Europe Overseas Europe Overseas 3Q 211 3Q 212 3Q11 3Q12 * 1 = European price in 3Q11

16 15 Industrial segment Strong results Positive volume and margin development for TAN Continued growth in North American environmental segment European process chemical sales negatively impacted by economic conditions

17 16 Upstream segment Strong results Ammonia production 14% higher and finished fertilizer production 7% higher Higher ammonia prices offset negative urea price effect First ammonia line started up in Lifeco

18 17 Lower nitrogen upgrading margins Nitrogen upgrading margins Phosphate upgrading margins NPK blend premium USD/t USD/t USD/t Nitrate premium above urea Value above ammonia Value above gas Value above raw material NH3* Margin above blend cost Urea MOP 2 Yara EU gas cost *2 2 Rock*1.4 1 DAP 1 3Q1 1Q11 3Q11 1Q12 3Q12 1 3Q1 1Q11 3Q11 1Q12 3Q12 3Q1 1Q11 3Q11 1Q12 3Q12 Urea CFR CAN (46% N) NH3 CFR (46% N) DAP DAP T17 del France

19 Share of net income in equity-accounted investees 18 NOK millions 3Q 212 3Q 211 Qafco Tringen Burrup - (24) GrowHow UK Ltd Lifeco (78) (57) Other 2 17 Total

20 19 Prospects Tight global grain outlook and strong grain prices support fertilizer demand Lower nitrogen fertilizer pipeline stocks at the beginning of the season while pre-buying incentives are stronger than a year ago Chinese urea export level next quarter linked to international urea price development and bonded warehouse stocks Second ammonia line and urea production in Lifeco scheduled to start up during fourth quarter Fertecon estimates for 213 capacity additions slightly above historical consumption growth but delays evident

21 2 Stronger pre-buying incentives Crop futures higher than a year ago Urea price, fob Black Sea USD/bu 9. USD/t % 5-19% % Corn Dec 12 Corn Dec 13 Wheat Dec 12 Wheat Dec 13 Oct 211 Oct 212

22 Continued strong price incentives necessary to avoid further inventory decline 21 Grain production and consumption Days of consumption in stocks Million tons 2,35 2,3 2,25 2,2 2,15 2,1 2,5 2, 1, E 12F 13F Days E 12F 13F Consumption Production Source: USDA, October 212

23 Yara committed to developing African agriculture 22

24 23 Additional information

25 24 Net income after non-controlling interests NOK millions 4, 3,5 3,716 3,566 3,386 3, 2,5 2,889 2,225 3,2 2,8 2,616 2, 1,927 1,5 1,122 1,424 1,522 1,564 1, Annual NOK millions 3,782 8,729 12,66 8,436

26 25 Debt/equity ratio Net interest-bearing debt / equity ratio (end of period)

27 26 Fertilizer volumes Kilotons 7, 6, 5, 4, 4,882 2,29 5,21 5,216 2,658 2,765 4,791 2,355 5,129 2,146 4,759 2,412 5,474 2,91 4,914 2,514 5,481 2,543 4,97 4,834 2,715 2,617 4,239 2,28 5,433 5,247 5,8 2,553 2,993 2,739 3, 2, 2,592 2,551 2,451 2,436 2,983 2,347 2,564 2,4 2,937 2,256 2,216 1,96 2,88 2,254 2,27 1, Europe Outside Europe Total Accumulated, Kilotons Fin. fertilizer 2,99 2,276 19,524 15,698

28 27 Yara 3Q fertilizer sales by market and product 212: 5. million tons (211: 4.8 million tons) Kilotons 2,5 2,214 2,27 3Q11 3Q12 2, 1,5 1,27 1,492 1, Europe Latin America Asia North America Africa Kilotons 3, 3Q11 3Q12 2, 1, 1,79 1,81 1,423 1, NPK Nitrate Urea Other products UAN CN

29 28 Yara production volume* Kilotons 5, Finished fertilizer Kilotons 2,5 Ammonia 4,5 4, 2, 3,5 3, 1,5 2,5 2, 1, 1,5 1, UAN CN NPK Nitrates Urea * Including share of equity-accounted investees

30 29 Yara s average gas costs Yearly averages 26 21, quarterly averages for with forward prices* for 3Q12 and 4Q12 USD per MMBtu Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 US gas price (Henry Hub) Yara Global Zeebrugge day ahead Yara Europe *Dotted lines denote forward prices as of 9 October 212 Source: Yara, World Bank, Platts

31 3 Change in European energy cost NOK millions 1,4 1,2 1, 8 Actual for quarter October 212 estimate* (24) (12) 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 * Based on forward prices as of 9 October 212

32 Projected nitrogen capacity additions outside China in line with historical consumption growth 31 Year Driving regions Excluding China Pakistan 37% Iran 18% Qatar 34% Vietnam 2% Algeria 38% UAE 18% Egypt 25% Algeria 16% Saudi Arabia 15% Brazil 14% Urea capacity growth relative to nitrogen capacity Excluding China 1.2% (1.3%) 2.2% (2.1%) 2.6% (3.1%) 1.5% (1.2%) 2.5% (1.9%) Gross annual addition ~2.% Assumed annual closures ~.5% Net annual addition ~1.5% Trend consumption growth from % Source: Fertecon urea update October 212. Consumption data source is IFA. Previous update in brackets.

33 32 Non-commercials net long position in corn Thousand contracts Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Source: US Commodity Futures Trading Commission

34 33 Indian urea import requirement Kilotons 8, 7, 6, 5, 4, 3, 2, 1, -1, Sales minus production -2, Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 212/13 29/1 21/11 211/12 Source: Indian Statistics

35 34 Chinese export situation Accumulated urea exports Urea price and export tax Kilotons USD per ton Export tax 8, 6 12 % 7, 6, % 5, 4, 3, 2, % 6 % 4 % 1, % % Source: BOABC * Export tax during low tariff period depends on price level with 7% representing the minimum tax level

36 35 Key value drivers quarterly averages Zeebrugge day ahead(usd/mmbtu) Urea prilled fob Black Sea (USD/t) CAN cif Germany (USD/t) Q 11 4Q11 1Q12 2Q12 3Q Q 11 4Q11 1Q12 2Q12 3Q Q 11 4Q11 1Q12 2Q12 3Q12 US gas price Henry Hub (USD/MMBtu) Ammonia fob Black Sea (USD/t) NOK/USD exchange rate Q 11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 3Q 11 4Q11 1Q12 2Q12 3Q12 Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank

37 36 1-year fertilizer prices monthly averages USD/t 1, Ammonia fob Black Sea USD/t 5 CAN cif Germany USD/t 8 Urea prilled fob Black Sea USD/t 1,2 DAP fob US Gulf 6 1, Source: Average of international publications Average prices