Yara International ASA Bernstein Conference Petter stb, EVP, Chief - PowerPoint PPT Presentation

Yara International ASA Bernstein Conference Petter Østbø, EVP, Chief Financial Officer 26 September 2018

Agenda • Yara introduction • Market fundamentals • Yara strategy • Targets 2 IR – September 2018

Safe operations is our first priority 5 TRI (Total recordable injuries 12-month rolling) 1 4.5 1.4 0 Jan'16 Jun'18 1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours. IR – September 2018 3

External safety benchmark TRIs per million hours worked Shell (Combined) 1.0 Yara (Combined) YTD 2018 1.4 Yara (Combined) 2017 1.8 DuPont (Combined) 2.2 Hydro (Combined) 2.6 Statoil (Combined) 2.9 Mosaic (Combined) 3.3 PotashCorp (Combined) 5.0 CF Industries (Own) 6.0 Fertilizer Europe (combined) 6.1 Agrium Inc (Own) 7.7 8.0 IFA (own employees) Norsk Industri (NHO bedrifter) 10.8 IR – September 2018 4

Yara’s leading global position and differentiated product portfolio represent key sources of competitive edge Global #1 in Nitrates 1 7.7 9.2 4.2 3.0 2.9 2.3 3.0 4.7 2.2 Europe 40.4% Yara Eurochem Ostchem Uraichem Borealis 1.1 0.2 North America Asia 7.1% Global #1 in NPK 2 12.0% 6.2 1.3 3.3 2.7 2.7 2.2 2.4 0.3 Africa 4.8% 0.3 Yara C. mandel Gresik Iffco Acron LatAm ex. Brazil Fertilizer product portfolio 3 7.9% 9.0 NPK blends 19% Standard 0.5 products (Urea, Brazil 27.9% UAN, Ammonia) Specialty 34% (CN, Compound NPK, Differentiated Fertigation) Products 26% (CAN, AN) Fertilizers Industrial products & solutions 2017 sales figures in mill. tonnes, % = total 2017 Yara sales 4 21% 1) Including TAN and CN – Including companies’ share of JVs 2016YE 2) Compound NPK, excluding blends 5 3) 2016/2017 season volume 4) Ammonia trade not included in chart above

Why is nitrate fertilizer the better nitrogen fertilizer? best fit for precision 2-20% yield agriculture improved local up to 90% reduced environment ammonia emissions only N-source in a up to 15 % lower carbon neutral future GHG emissions

Yara’s integrated business model is unique within the fertilizer industry IR – September 2018 7

Profitable growth through the cycle Average cash return on gross investment (CROGI) Average annual shareholder return of 20% 1 well above the Yara CROGI target of 10% NOK/share BUSD 0 20 400 18 350 0 16 300 14 250 0 12 10 200 10% target 0 8 150 6 100 0 4 50 2 0 0 0 IPO 05 06 07 08 09 10 11 12 13 14 15 16 17 L12M 2004 '06 '08 '10 '12 '14 '16 L12M 2004 Ex special items Yara avg. gross investment, 12M rolling Accumulated cash dividend payments Average annual share price Book equity Share price 24 Sep 2018 1) Share price appreciation (end 2Q 18) plus dividend payments IR – September 2018 8

Agenda • Yara introduction • Market fundamentals • Yara strategy • Targets IR – September 2018 9

Market fundamentals improving, with positive developments towards 2019 on grain stocks and urea supply Grain prices rising slowly, and Urea supply increases high in Strong Asian demand drives stocks are falling 2018, falling thereafter LNG prices higher Global capacity additions ex China Grain price index Million LNG imports Days tonnes Index 6.7 140 200 70 121.3 106.2 4.5 Trend consumption growth 2.6 2.5 24.2 24.0 0 100 40 2017 2018 2019 2020 1/2015 1/2017 1/2019 Asia Europe Grains Price Index Capacity growth Supply increase 1H 2017 1H 2018 Grain stocks-to-use ex. China IR – September 2018 10

Steady growth in grain consumption, production expected to fall short for the 2018/19 season Grain consumption and production Days of consumption in stocks Days Million tons 2,650 100 95 90 85 80 75 70 65 60 2,000 55 09 10 11 12 13 14 15 16 17 18E 19F 09 10 11 12 13 14 15 16 17 18E 19F Consumption Production Source: USDA August 2018 IR – September 2018 11

Stronger global pricing, pulling Chinese pricing higher as well Increasing urea pricing (USD/ton) Lower Chinese export (thousand tonnes) 390 2,400 2,200 370 2,000 350 1,800 330 1,600 310 1,400 290 1,200 270 1,000 250 800 230 600 210 400 190 200 170 0 Urea fob Black Sea Urea prilled fob China Urea granular fob Egypt Urea inland proxy China Source: BOABC, CFMW IR – September 2018 12

Higher natural gas cost expected for the next two quarters Yara European natural gas cost Y-o-Y change in Yara gas cost USD/ USD MMBtu millions 9.0 120 8.0 100 7.0 80 6.0 60 20 5.0 100 12 91 40 4.0 20 70 46 45 42 3.0 20 27 2.0 0 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 TTF (1-month lag) Yara Europe EU/US actual EU/US estimate* * Dotted lines denote forward prices as of 10 July 2018 Pilbara actual Source: Yara, World Bank, Argus/ICIS Heren IR – September 2018 13

Agenda • Yara introduction • Market fundamentals • Yara strategy • Targets IR – September 2018 14

Yara’s mission and vision guides our strategy Our Mission Our Vision Responsibly feed A collaborative society; the world and a world without hunger; protect the planet. a planet respected. IR – September 2018 15

The Crop Nutrition Leader Advance Operational We will grow responsible solutions to Excellence farmers, industry and society, while delivering superior return on capital Create Drive Scalable Innovative Solutions Growth IR – September 2018 16

Advance Advance Operational excellence; Yara Improvement Program delivering ahead of plan Start: 2016 End: 2020 2017 2018 2019 2020 Today 500 Annual impact, USD million, vs. 2015 baseline, at 2015 margins 450 350 310  The Yara Improvement Sustained 242 Program has so far delivered EBITDA 310 million US dollars of improvement 84 annual sustained benefits, measured at 2015 margins One-off  The equivalent number using 2018 margins is ~300 million 69 60 Benefits 1 19 15 15 15 US dollars 500  Improvements on Production 49 Cost 39 14 12 13 11 volume, Consumption factor and Variable unit costs are on or ahead of target 140 116 90 69 Investments 18 0 2016 2017 Q2 2018 2018 target 2019 target 2020 target IR – September 2018 1 One-off benefits are related to working capital improvements and sales of white certificates 17

Create Scalable Solutions; Create Closer collaboration with the Food Industry Food Industry Farmer Crop Product Market depth Sell benefits of our Asset solutions Farmer centric solutions and • Deliver required crop quality to processor tools Build crop and ensure reliable solutions raw material supply to • Building Yara’s Build product food factories knowledge margin reputation • Crop knowledge • Unlock superior value Sell what we • Product portfolio • High quality creation for farmers produce • Application products through food industry • Place new capacity competence • Viking ship brand • Manage seasonality Time IR – September 2018 18

Precision fertilization made simple - atfarm Create  10x10m precision application of fertilizer  Quantitative recommendation “in only 5 clicks”  Empowered by decades of Yara precision fertilization R&D  Benefits for farmers - Higher yield - Reduced waste - Higher protein content IR – September 2018 19

Drive Innovative Growth; Drive Yara is delivering on its growth pipeline 1 Jan 1 Jan 1Q 2Q 4Q 3Q 2018 2019 Babrala (India) Cubatao (Brazil) Sluiskil (NL) Acquisition of urea plant and distribution N and P production facility acquisition Revamp and urea+S expansion assets - 1.2 mt urea and approx 40 MUSD EBITDA - Adds approx. 210 ktpa and 30 MUSD - 1.4 mtpa and approx. 60 MUSD EBITDA p.a. p.a. EBITDA p.a. - Strengthens production and industrial - Provides footprint to accelerate premium - Improved product mix - from urea prills to footprint in Brazil product growth nitrates and urea+S Freeport (US) Porsgrunn (Norway) Köping (Sweden) Hydrogen-based ammonia new-build JV NPK and calcium nitrate expansion Nitric acid revamp and TAN expansion with BASF (Yara 68%) - Adds 250 ktpa and approx. 50 MUSD - 550 ktpa and approx. 100 MUSD EBITDA - 90 ktpa and approx. 20 MUSD EBITDA p.a. EBITDA p.a. p.a. (Yara share) - Strong long-term fundamentals for civil - Record nitric acid production in March (5,127 - Strengthens Yara’s global ammonia position explosives industry tpd) Salitre (Brazil) Phosphate mine - Adds approx. 1.1 mtpa SSP equivalents by 2020 - Limited earnings until chemical production starts end 2019 EBITDA figures at 2015 prices except Cubatão which reflects business case prices IR – September 2018 20

Agenda • Yara introduction • Market fundamentals • Yara strategy • Targets 21 IR – September 2018