CMD 2012: Downstream Focus (Egil Hogna and Tove Andersen)
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CMD 2012: Downstream Focus (Egil Hogna and Tove Andersen)

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Presentation on Yara's Capital Markets Day, December 4, 2012, held by Head of Downstream Egil Hogna and Head of Marketing Tove Andersen

Presentation on Yara's Capital Markets Day, December 4, 2012, held by Head of Downstream Egil Hogna and Head of Marketing Tove Andersen

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  • 1. Downstream focus Egil Hogna, Head of DownstreamTove Andersen, Head of Marketing
  • 2. 1Downstream role and priorities Our goal… …and what we prioritize to get there Safe and productive operations Knowledge leadership in sustainable Be the crop nutrition agriculture and crop nutrition provider adding the most value after own Creating pull for Yara solutions working costs to any fertilizer with food companies and other product from plant stakeholders gate to customer Farmer and distributor preference for Yara solutions driven by engaging tools Innovation a clear market differentiator: Adapting to a water scarce world Capital Markets Day 2012 – 4 December
  • 3. 2Yara Small Site Productivity System Yara Small Site Productivity System Product/ Engineering/ Productivity material Safety maintenance handling Capital Markets Day 2012 – 4 December
  • 4. 3Strong financial performance last 12 months EBITDA ex special items and CROGINOK millions CROGI 6 000 35 % 5 000 30 % 25 % 4 000 20 % 3 000 15 % 2 000 10 % 1 000 5% 0 0% 2008 2009 2010 2011 L12M EBITDA ex sp. Items CROGI Capital Markets Day 2012 – 4 December
  • 5. 4Increased OPP sales and sales overseasKilotons Kilotons16 000 25 00014 000 -1% 20 00012 00010 000 15 000 5% 8 000 6 000 10 000 4 000 5 000 -7% 2 000 0 0 OPP/OBL JV TPP 2010/11 2011/12 2010/11 2011/2012 Europe Outside Europe Capital Markets Day 2012 – 4 December
  • 6. 5Strong NPK development Yara-produced compound NPK volumes Realized prices on Yara-produced NPK compounds Kilotons Index*2,000 130 +5% +1% 1201,500 +15% 110 -2% 1001,000 90 80 500 70 0 60 Europe Overseas Europe Overseas Jan-Sep 2011 Jan-Sep 2012 * 100 = European price in YTD 2011 Capital Markets Day 2012 – 4 December
  • 7. 6Increased nitrate demand overseas, butEuropean presence remains important Nitrate premiums* Nitrate sales Kilotons100 % 6 00080 % 5 00060 % 4 00040 % 3 00020 % 2 000 0% 1 000-20 % 0 Jan July Jan July Jan July Jan July Jan July 08/09 09/10 10/11 11/12 2008 2009 2010 2011 2012 Outside Europe Europe * CAN cif Germany premium above (Urea black sea + $35 freight) * 1.065 duty tax Capital Markets Day 2012 – 4 December
  • 8. 7Operating capital discipline maintained Gross operating capital days, 12 months rolling Days 140 120 100 80 60 40 20 0 2008 2009 2010 2011 3Q 2012 Capital Markets Day 2012 – 4 December
  • 9. 8Innovation is progressing Idea Scouting Active Development Industrialization Market Implementation Fertigation Fertigation Semi-soluble Tool & Service Portfolio -CN NPK Water Sensor In-house KNO3  Growth in calcium and potassium nitrate identified Leadership in  Fertigation Plan software launched for data collection in major markets fertigation  In-house research project crop water sensor technologies  New process route for production of potassium nitrate Leadership in  Leadership in semi-soluble fertilizers semi-soluble  A new NPK-type commercially launched in Brazil fertilizers  New product offered together with direct injection technology Market shaper for  Market shaper for water scarce agriculture water scarce  R&D on the link between water use efficiency and crop nutrition agriculture  Water footprint calculator: focus on effect of crop nutrition Capital Markets Day 2012 – 4 December
  • 10. 9Downstream develops Push and Pull for Yara’sproducts and solutions Capital Markets Day 2012 – 4 December
  • 11. 10Significant potential in shifting sales into valueadded segments Premium above global blend USD/t Kilotons Capital Markets Day 2012 – 4 December
  • 12. 11We work in a systematic manner to identify thecrop segments with highest potentialCVI CVI and hectare grown of key crops 700 Strawberry 600 500 400 300 Apples 200 Oranges 100 Coffee Potato Maize Wheat 0 0 50 100 million ha 150 200 250 Crop Value Index is sales price of the crop divided by cost of fertilizers and is used as an indicator for the profitability of an investment in fertilizer to produce that crop Capital Markets Day 2012 – 4 December
  • 13. 12Knowledge is developed and translated intocrop nutrition solutions for the farmer External research Segment and country specific + Crop Nutrition Program Yara research and trials = Local adaptation Capital Markets Day 2012 – 4 December
  • 14. 13Yara’s Plantmaster series includes 14 cropsand 400 million ha of harvested land Capital Markets Day 2012 – 4 December
  • 15. 14 Yara’s crop nutrition solutions provide large benefits for farmers Citrus yield in Brazil Coffee yield in Vietnam 65 3,3 44% 3,0 12% 45 Current practice Yara Current practice Yara Corn yield in Tanzania Sugarcane yield in Brazil 84 4,3 19% 71 83% 2,4 Current practice Yara Current practice YaraSource: Yara trias IR – Date: 2011-12-06
  • 16. 15 To promote our solutions to the farmer we work with different partners and channels Demonstration plots Crop Clinics Farmer meetings Value chain Web partners Social media Distributors Mobile appsResearch institutes Advisors Precision farming tools Capital Markets Day 2012 – 4 December
  • 17. 16ImageIT – fertilizer recommendations in thefarmers hand Process images and Receive and display Acquire and transmit images generate response recommendation Central server Smartphone with camera and internet access Capital Markets Day 2012 – 4 December
  • 18. 17Agronomic calibration% of leaf cover into N uptakeN-Uptake [kg N/ha] 160 Predict N-uptake from: 140  Percentage leaf cover 120  Growth stage 100  Fraction of brown leaves 80 60 40 20 0 0% 20 % 40 % 60 % 80 % Leaf cover [%] Capital Markets Day 2012 – 4 December
  • 19. 18Downstream in 2013 Organic growth and growth through acquisitions utilizing existing platform and strengths Further improved safety and productivity through standardized processes Innovation and agronomy leadership to sustain premium margins Capital Markets Day 2012 – 4 December