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

Egil Hogna, Head of Downstream

Tove Andersen, Head of Marketing

Downstream focus

1

Capital Markets Day 2012 – 4 December

Downstream role and priorities

Knowledge leadership in sustainable

agriculture and crop nutrition

Creating pull for Yara solutions working

with food companies and other

stakeholders

Farmer and distributor preference for

Yara solutions driven by engaging tools

Innovation a clear market differentiator:

Adapting to a water scarce world

Be the crop nutrition

provider adding the

most value after own

costs to any fertilizer

product from plant

gate to customer

Our goal… …and what we prioritize to get there

Safe and productive operations

2


Yara Small Site Productivity System

Yara Small Site

Productivity

System

Engineering/

maintenanceProductivity

Product/

material

handling

Safety

3


Strong financial performance last 12 months

0 %

5 %

10 %

15 %

20 %

25 %

30 %

35 %

0

1 000

2 000

3 000

4 000

5 000

6 000

2008 2009 2010 2011 L12M

CROGIEBITDA ex special items and CROGI

EBITDA ex sp. Items CROGI

NOK millions

4


0

5 000

10 000

15 000

20 000

25 000

2010/11 2011/12

Europe Outside Europe

Increased OPP sales and sales overseas

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

OPP/OBL JV TPP

2010/11 2011/2012

Kilotons Kilotons

-7%

-1%

5%

5


Strong NPK development

Realized prices on Yara-produced NPK compounds

* 100 = European price in YTD 2011

Yara-produced compound NPK volumes

0

500

1,000

1,500

2,000

Kilotons

+15%

+1%

OverseasEurope

Jan-Sep 2012Jan-Sep 2011

60

70

80

90

100

110

120

130

Index*

+5%

-2%

OverseasEurope

6


Increased nitrate demand overseas, but

European presence remains important

Nitrate sales

-20 %

0 %

20 %

40 %

60 %

80 %

100 %

Jan July 2008

Jan July 2009

Jan July 2010

Jan July 2011

Jan July 2012

Nitrate premiums*

0

1 000

2 000

3 000

4 000

5 000

6 000

08/09 09/10 10/11 11/12

Kilotons

Outside Europe Europe

* CAN cif Germany premium above (Urea black sea + $35 freight) * 1.065 duty tax

7


0

20

40

60

80

100

120

140

2008 2009 2010 2011 3Q 2012

DaysGross operating capital days, 12 months rolling

Operating capital discipline maintained

8


Innovation is progressing

Scouting Market ImplementationActive Development IndustrializationIdea

Water Sensor In-house KNO3

Fertigation Tool & Service

Fertigation Portfolio -CN

Semi-soluble

NPK

Leadership in

fertigation

Market shaper for

water scarce

agriculture

Leadership in

semi-soluble

fertilizers

Growth in calcium and potassium nitrate identified

Fertigation Plan software launched for data collection in major markets

In-house research project crop water sensor technologies

New process route for production of potassium nitrate

Leadership in semi-soluble fertilizers

A new NPK-type commercially launched in Brazil

New product offered together with direct injection technology

Market shaper for water scarce agriculture

R&D on the link between water use efficiency and crop nutrition

Water footprint calculator: focus on effect of crop nutrition

9


Downstream develops Push and Pull for Yara’s

products and solutions

10


Significant potential in shifting sales into value

added segments

USD/t

Kilotons

Premium above global blend

11


We work in a systematic manner to identify the

crop segments with highest potential

0

100

200

300

400

500

600

700

0 50 100 150 200 250

CVI

million ha

CVI and hectare grown of key crops

Strawberry

WheatMaizeCoffee

Oranges

Apples

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

Potato

12


External research

+

Yara research and trials

Knowledge is developed and translated into

crop nutrition solutions for the farmer

Local

adaptation

=

Segment and country specific

Crop Nutrition Program

13


Yara’s Plantmaster series includes 14 crops

and 400 million ha of harvested land

14

IR – Date: 2011-12-06

Yara’s crop nutrition solutions provide large

benefits for farmers

45

65

Current practice Yara

Citrus yield in Brazil

44%

2,4

4,3


Corn yield in Tanzania

83%

71

84


Sugarcane yield in Brazil

19%

3,03,3


Coffee yield in Vietnam

12%

Source: Yara trias

15


To promote our solutions to the farmer we work

with different partners and channels

Web

Social media

Precision farming tools

Farmer meetings

Demonstration

plots

Advisors

Research institutes

Value chain

partners

Mobile apps

Crop Clinics

Distributors

16


Acquire and transmit images

Process images and

generate response

Receive and display

recommendation

Central server

Smartphone with camera and

internet access

ImageIT – fertilizer recommendations in the

farmers hand

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0

20

40

60

80

100

120

140

160

0 % 20 % 40 % 60 % 80 %

Leaf cover [%]

N-Uptake [kg N/ha]

Agronomic calibration

% of leaf cover into N uptake

Predict N-uptake from:

Percentage leaf cover

Growth stage

Fraction of brown leaves

18


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

Downstream in 2013

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

Investor Relations

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