cmd 2012: track record and strategy (jørgen ole haslestad)
DESCRIPTION
Presentation on Yara's Capital Markets Day, December 4, 2012, held by CEO Jørgen Ole HaslestadTRANSCRIPT
Track record and strategyJørgen Ole Haslestad, President & CEO
1
Capital Markets Day 2012 – 4 December
2011/12 season saw highest EBITDA so far
0 %
5 %
10 %
15 %
20 %
25 %
30 %
0
5 000
10 000
15 000
20 000
25 000
06/07 07/08 08/09 09/10 10/11 11/12
EBITDA EBITDA ex sp. Items CROGI
NOK millions CROGI
2
Capital Markets Day 2012 – 4 December
47 %43 %
-15 %
7 %
73 %
24 %
10 %15 %
3Q11 4Q11 1Q12 2Q12
Yearly change in nitrogen prices
Ammonia Urea
Our Upstream system benefitted from increased
fertilizer prices
5,1
1,0
7,1
4,5
2,0
13,5
Downstream Industrial Upstream
EBITDA excluding special items, NOK billions
10/11 11/12
3
Capital Markets Day 2012 – 4 December
7 010
1 490
6 952
2 092
6 513
2 222
Europe Overseas
OPP nitrate and NPK volumeskilotons
09/10 10/11 11/12
Weaker European season compensated by our
ability to export high value products
4
Capital Markets Day 2012 – 4 December
Asset optimization has contributed to
earnings growth
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
06/07 07/08 08/09 09/10 10/11 11/12
EBITDA
(NOK
millions)
Kemira
GrowHowBelle Plaine
Fosfertil
Pilbara
(increase)
Yara Praxair
(partial)
Acquisitions Divestments
Fertibras
Lifeco
Rossosh
Yara Praxair
(partial)
5
Capital Markets Day 2012 – 4 December
0,75
0,49
0,20
0,07
0,63
0,38
0,22
0,08
0,57
0,32
0,120,06
0,56
0,27
0,12
2009 2010 2011 2012
Strong balance sheet gives significant flexibility
Net interest-bearing debt / equity ratio (end of period)
6
Capital Markets Day 2012 – 4 December
32.5
24.5
+8.0
20162010
Growth in OPP/JV volumes
Growth ambition remains firm
7
Capital Markets Day 2012 – 4 December
We started up Qafco 5 & 6 and initiated
expansions in Porsgrunn and Belle Plaine
8
Capital Markets Day 2012 – 4 December
We took control in Yara Pilbara and decided to
invest USD 350 million in the TAN plant
9
Capital Markets Day 2012 – 4 December
Strategic backdrop
• Continued demand growth
• New gas situation, with lower North American prices and new
emerging gas regions
• China continuing as swing exporter
• Concern about supply additions, North America and others adding new
capacity
• Strong cash generation from all players in the next few years,
competition for assets
10
Capital Markets Day 2012 – 4 December
Securing competitiveness through
differentiation
Using the strength of
our business modelCreating impactIncreasing innovation
11
Capital Markets Day 2012 – 4 December
Both value-added and commodity products
important to strengthen competitive edge
6.5
1.2
1.3
Urea**
Commodity
7.5
NPK
12.9
5.0
UAN
Value add
5.7
Nitrates
Announced expansions
Million tons capacity*
* Including equity share of non-consolidated investees’ capacity
** Including recently implemented expansions in Qafco and Sluiskil
12
Capital Markets Day 2012 – 4 December
32.5
28.5
24.5
New supply
needed to
achieve ambition
~4.0
2016 with
committed projects
Committed
projects2
~4.0
2010
+8.0
2016
1) Excluding CO2 and industrial gases
2) Qafco V and VI, Sluiskil VII and Porsgrunn NPK, Pilbara TAN, Belle Plaine, capacity creep/smaller expansions
Growth in OPP/JV volumes
Growth ambition remains firm
13
Capital Markets Day 2012 – 4 December
Debottlenecking and regional M&A
most attractive
Reconfiguration/expansion at
existing sites, potential for
increased NPKs, nitrates and
CN
Pursue medium-size/regional
M&A, likely highest probability
of success in current
environment
Secure longer term partnerships
with access to low cost raw
materials for potential new
builds
1
2
3
14
Capital Markets Day 2012 – 4 December
We want to create impact through our
Leadership Agenda
14
Drive profitable
revenue growthLeading
enterprise
in agricultural
development
Performance
and positioning on
environmental
solutions
Continuous
improvement to
fine tune operations
Company-wide
focus on corporate
governance
Industry Shaper
Conclusions and outlook
16
Capital Markets Day 2012 – 4 December
Prospects 2013
Strong demand amid tight global grain
situation, strong food prices and farmer
margins
Capacity growth outside China likely to be
below consumption growth
China likely to keep a swing role during the
second half of 2013
US capacity growth impacts markets mainly
after 2015
17
Capital Markets Day 2012 – 4 December
Premium fertilizer margins linked to farmer
profitability, also at lower urea price levels
CAN price
USD/t
Wheat price
USD/t
0
50
100
150
200
250
300
350
400
0
50
100
150
200
250
300
350
400
450
02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12
Adjusted urea* Nitrate premium, USD/t Wheat price
18
Capital Markets Day 2012 – 4 December
Well positioned for profitable
operations and growth
Need for sustainable improvements in
agricultural productivity is as strong as
ever
Yara’s value-added products provide
additional productivity, and provide
sustainable premiums over and above
commodity margins
Committed to delivering sustained
shareholder value generation, through
profitable growth and cash returns