Yara International ASA First Quarter results 2013

Transcription

1 Yara International ASA First Quarter results April 213

2 1 Summary first quarter Strong results with stable margins Strong cash flow Fertilizer deliveries close to last year despite late spring Record NPK production and sales

3 2 Earnings per share* EPS excluding currency and special items Annual NOK * Average number of shares for 1Q 213: 28.6 million (1Q 212: million).

4 3 Fertilizer market development Tight agricultural markets support fertilizer demand Urea markets remain demand-driven despite strong supply increase from China and elsewhere Western Europe nitrogen fertilizer industry deliveries equal to first quarter last year; season-to-date deliveries 4% ahead of last year Late spring in Europe and North America negatively affecting demand in March Phosphate and potash markets negatively affected by reduced use in India, but main NPK markets running well

5 4 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 1/213 Source: FAO Cereals Price Index Cereals 5 year avg. Food Price Index Food 5 year avg.

6 Stronger pre-buying in Northern hemisphere Nitrogen deliveries season to date (9 months ending 31 March) 5 USA West Europe Million tons Million tons % % /8 8/9 9/1 1/11 11/12 12/13. 7/8 8/9 9/1 1/11 11/12 12/13 Production Net imports 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

7 met by strong supply response from China More balanced urea market compared with last year 6 Chinese urea exports, Kilotons Urea price, USD/t 1,8 55 1,6 5 1,4 1,2 1, Jul 1 Oct 1 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Urea, fob Yuzhny Chinese urea exports Source: BOABC

8 7 Record NPK production and sales Kilotons 1,3 1,2 1,1 1, Q9 3Q9 1Q1 3Q1 1Q11 3Q11 1Q12 3Q12 1Q13 Yara-produced NPK compound deliveries Yara NPK compound production

9 Earnings before interest, tax, depreciation and amortization (EBITDA) 8 NOK millions 6,587 EBITDA excluding special items 5,444 4,982 4,966 3,251 2,992 2,486 4,281 3,455 4,31 4,13 3,591 4,129 Annual NOK millions ,315 18,163 16,97 4,129

10 9 Underlying EBITDA improvement NOK millions 122 4, , EBITDA 1Q12 Special items Volume Price/margin Gas & oil costs in Europe Other Currency EBITDA 1Q13

11 1 Strong earnings in all segments NOK millions EBITDA excluding special items 2,669 2,649 1,235 1, Downstream Industrial Upstream 1Q12 1Q13

12 11 Stable fertilizer volumes Kilotons 1,466 1,45 1,328 1,36 1,238 1, Q12 1Q13 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 Nitrate NPK compound NPK blends Urea UAN Yara-produced fertilizer JV/TPP Total

13 Higher net income from equity-accounted investees 12 NOK millions Q12 1Q Qafco Tringen GrowHow UK Lifeco

14 13 Stable value-added premiums Nitrogen upgrading margins Phosphate upgrading margins NPK blend premium USD/t USD/t USD/t Nitrate premium above urea Value above raw material 6 5 Margin above blend cost 4 3 Value above ammonia Value above gas NH3, fob Black Sea * Urea, fob Black sea MOP, cfr NWE 2 Yara EU gas cost * Rock, fob NA *1.4 1 DAP, fob Morocco 1 1Q12 2Q12 3Q12 4Q12 1Q13 1 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 Urea CFR CAN (46% N) NH3 CFR (46% N) DAP, fob USG NPK T17, del France

15 14 Yara European gas cost closer to hub price USD/ MMBtu 13. European energy cost USD/ MMBtu Spread between Yara and Zeebrugge Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Zeebrugge (1-month lag) Yara Europe *Dotted lines denote forward prices as of 12 April 213 Source: Yara, World Bank, Platts

16 15 Strong cash flow NOK millions 954 2,741 1, , NIBD Dec 12* Cash earnings** Dividends from equity accounted investees Net operating capital Net investments FX loss Other NIBD Mar 13* * 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

17 16 Prospects Continued strong grain prices support fertilizer demand More balanced market due to earlier purchases in Northern hemisphere China: capacity utilization rates and 1 November tax change enforcement are key for level in second half 213 Capacity outside China: unclear timing for remaining 213 start-ups Continued strong and stable margins for premium products

18 China: capacity utilization and tax enforcement key for export level second half Chinese urea exports, Kilotons Urea price, USD/t 1,8 55 1,6 5 1,4 1,2 1, Jul 1 Oct 1 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Urea, fob Yuzhny Chinese urea exports Source: BOABC

19 18 Additional information

20 19 Yara production volume* Finished fertilizer and industrial products Ammonia Kilotons 5, Kilotons 2,5 4,5 4, 2, 3,5 3, 1,5 2,5 2, 1, 1,5 1, Urea Nitrates NPK CN UAN SSP - based fertilizer * Including share of equity-accounted investees

21 Yara 1Q fertilizer sales by market and product 213: 5.3 million tons (212: 5.4 million tons) 2 Kilotons 1Q12 1Q13 2,88 2, Europe Latin America Asia North America Africa 1,328 1,36 1,466 1,45 1,238 1, NPK compounds NPK blends Nitrate Urea Other products UAN CN

22 21 Debt/equity ratio.75 Net interest-bearing debt / equity ratio (end of period)

23 22 Gas & oil cost Yearly averages 29 21, quarterly averages for with forward prices* for 2Q13 and 3Q13 USD per MMBtu Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 US gas price (Henry Hub) Yara Global Zeebrugge day ahead Yara Europe *Dotted lines denote forward prices as of 12 April 213 Source: Yara, World Bank, Platts

24 Production Export Domestic Domestic Export Production 23 Chinese urea balance Million tons 7. Chinese urea production Million tons 5 Domestic urea balance % Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: BOABC Jul-Feb 11/12 Jul-Feb 12/13

25 Continued strong price incentives necessary to avoid further inventory decline 24 Grain consumption and production Days of consumption in stocks Million tons Days 2, ,3 8 2,25 2,2 75 2,15 7 2,1 65 2,5 2, 6 1, E 12F 13F E 12F 13F Consumption Production Source: USDA, April 213

26 Projected nitrogen capacity additions outside China in line with historical consumption growth 25 Year Driving regions Excluding China Pakistan 37% Iran 18% Qatar 39% Vietnam 21% Algeria 39% UAE 14% Algeria 28% Egypt 21% Saudi Arabia 17% Argentina15% Urea capacity growth relative to nitrogen capacity Excluding China 1.2% (1.2%) 1.9% (1.9%) 2.5% (2.5%) 1.8% (1.8%) 2.2% (2.2%) Gross annual addition ~2.% Assumed annual closures ~.5% Net annual addition ~1.5% Trend consumption growth from % Source: Fertecon urea update February 213 (December update in brackets). Consumption data source is IFA.

27 26 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 Jan-13 Source: US Commodity Futures Trading Commission

28 27 Key value drivers quarterly averages Zeebrugge day ahead (USD/MMBtu) Urea prilled fob Black Sea (USD/t) CAN cif Germany (USD/t) Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 US gas price Henry Hub (USD/MMBtu) Ammonia fob Black Sea (USD/t) NOK/USD exchange rate Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank

29 28 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