Presentation 3Q 2016

Yara International ASA

2016 third quarter

results

21 October 2016

IR – 21 October 2016

Safe operations is our first priority

2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours

2) OFD and Galvani included in statistics from January 2016


Summary third quarter

3

Weaker results due to lower fertilizer commodity prices

Strong growth in premium product deliveries, especially in Brazil

Strong Industrial result


Earnings per share*

4

8.04

6.69 5.66

0.23

6.40

8.26

6.18 6.74

2.65

10.59

14.56

1.58

10.22

11.23

3.00

8.52

7.97

5.62

2.65

7.03 7.74 7.62

8.17

10.51 9.58

7.41

3.97

9.14

6.37

3.46

NOK 20.67 27.59 29.38 24.46

Annual 2013 2014 2015 2016

*Average number of shares for 3Q 2016: 273.2 million (3Q 2015: 275.1 million).

EPS excluding currency and

special items


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

3Q11 3Q12 3Q13 3Q14 3Q15 3Q16

Domestic production Imports

Normal start to the European season, slow in the US

5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

3Q11 3Q12 3Q13 3Q14 3Q15 3Q16

Domestic production Imports

West Europe US Million tons N Million tons N

-13% +2%

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


Yara Improvement Program: significant progress during third

quarter towards full program launch first quarter 2017

2Q 2016 presentation • All units working to establish and detail

improvement initiatives

• Several large-impact initiatives have started

execution, with positive results so far

• Work so far gives confidence Yara will deliver at

least USD 500 million EBITDA improvement by

2020

• Baseline for measurement will be 2015

• Full target, description and timeline to be launched

in connection with 4Q results

6


Plant productivity improvement and portfolio optimization

will make our upstream positioning more robust

• Implement global best practices

• Improve maintenance execution

• Reduce energy consumption

• Enhance product quality

• Further strengthen safety

culture

• Improve capex efficiency

• Optimize asset footprint

Intensive rollout with up to three parallel groups of

implementations for the next 2.5 years, starting with

Sluiskil

Systemic assessment across Yara Production

organization identified a number of improvement areas

across all sites

7

Example: Production


Brazil: focus on premium products and solutions drives growth

8

Source: ANDA, Yara

0

100

200

300

400

500

600

3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16

+100%

0

2,000

4,000

6,000

8,000

10,000

12,000

3Q12 3Q13 3Q14 3Q15 3Q16

Th

ou

san

ds +6%

Kilotons Kilotons

0

1,000

2,000

3,000

4,000

3Q12 3Q13 3Q14 3Q15 3Q16

Th

ou

san

ds

+11%

Kilotons

Yara Brazil Industry Galvani Trade

Yara Brazil 3Q premium product deliveries Brazil 3Q fertilizer deliveries


Brazil: unrivalled market presence and farmer-centric strategy

> 20,000 growers using Yara solutions

> 200 Yara agronomists and 600 sales

representatives

> 55% of Yara deliveries are direct to farmer

> 55,000 interactions with growers p.a.

Unrivalled presence: 28 sites in 11 states Farmer-centric strategy drives growth

Galvani (fertilizer

production, mining

and port operation)

Yara (offices,

production, blending

and distribution of

fertilizers, port

operation)

9


Earnings before interest, tax, depreciation and amortization

(EBITDA)

10

4,184

4,039 3,318

1,858

3,591

4,227

3,964

4,625 4,794 5,179

7,884

3,504

5,055

5,489

3,004 4,149

4,103

3,223 2,363

3,830 4,185

4,002 4,528

5,742

5,055

4,614

3,508

5,050

3,958

2,968

2013 2015 2014 2016

NOK millions

EBITDA excluding special

items

NOK

millions 13,399 16,407 21,361 13,548

Annual


EBITDA development

11

3,233

2,641

857

3,004

7,884

EBITDA 3Q16 Other

241

Currency

translation

156

Energy costs Price/Margin Volume

223

EBITDA 3Q15 Special

items

NOK millions


Lower prices mainly impact Production segment

12

1,519 1,502

432 403

6,221

894

1,534 1,502

432 403

2,937

857

3Q15 3Q16

EBITDA

(NOK millions)

EBITDA excluding special items

Crop Nutrition Industrial Production


Natural gas cost in Europe

13

2.0

3.0

4.0

5.0

6.0

7.0

8.0

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

USD/ MMBtu

TTF (1-month lag) Yara Europe

Yara European gas & oil cost Change in spot energy cost

(151)

(588)

(923) (1,042)

(704)

(300)

350

(1,200)

(1,000)

(800)

(600)

(400)

(200)

0

200

400

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

NOK millions

October 2016 estimate* Actual

Source: Yara, World Bank, Argus/ICIS Heren *Dotted lines denote forward prices as of 13 October 2016


Lower European nitrate premiums in new season

14

0

100

200

300

400

500

600

700

3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

USD/t

Nitrogen upgrading margins1 (monthly publication prices)

CAN (46% N) NH3 CFR (46% N) Urea Egypt CFR proxy

Yara EU gas cost *20

Nitrate

premium

above urea

Value above

ammonia

Value

above gas

0

10

20

30

40

50

60

70

80

90

100

3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

European nitrate premium2 (quarterly Yara realized) USD/t

2) Yara European realized nitrate prices (excl. sulphur grades)

compared with urea publication prices (Egypt CFR proxy) with

1 month time lag. All numbers in USD per tonne of CAN equivalents. 1) All prices in urea equivalents


Weighted average global

premium above blend cost

0

100

200

300

400

500

600

700

3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

USD/t NPK premium over blend1

Value above

raw material

0

100

200

300

400

500

600

3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

USD/t Phosphate upgrading margins

DAP, fob USG

Lower commodity phosphate margins, solid compound NPK

premiums

15

1) Export NPK plants, average grade 19-10-13, net of

transport and handling cost.

Rock, fob North Africa *1.4

NH3, fob Black Sea *0.22

DAP, CIF inland Germany

MOP, CIF inland Germany

Urea, CIF inland Germany

Nitrate premium, CIF inland Germany


Net interest-bearing debt development

16

3,1462,836

Net debt

Sep 16

10,390

Other

32

Foreign

currency

translation loss

114

Net operating

capital change

26

Yara dividend

and share

buy-backs

210

Investments

(net)

Cash earnings* Net debt

Jun 16

9,698

* Operating income plus depreciation and amortization, minus tax paid, net gain/loss on disposals, net interest expense and bank charges

NOK millions


Yara growth project pipeline adds ~5 NOK earnings per share by

2020 at current market prices

17

CN/NPK expansion Porsgrunn (2H 2017)

NPK expansion Uusikaupunki (2H 2016)

Urea 8 Sluiskil (2H 2017)

Rio Grande expansion (2H 2020)

Expand premium products

sales and supply

Freeport ammonia JV (4Q 2017)

New ammonia vessels (2016)

Babrala urea asset (2H 2017)

Expand commodity scale

based on attractive full-

cost growth opportunities

Act on attractive

opportunities to grow

industrial sales and supply

Galvani, Salitre (mining: 2H17, chemical 1H18) Structurally secure P and K

supply

Pilbara – TAN (4Q 2016)

Köping – TAN (1H 2018)

Profitable growth through expansions and M&A Incremental earnings at current prices1 (NOK/share)

0.5

1.8

4.0

5.3

2017 2018 2019 2020

Impact2 of +100 USD/t price change (NOK/share)

0.8

1.2 1.5

Urea Ammonia DAP

1 Urea fob Yuzhny 190 USD/t, Ammonia fob Yuzhny 170 USD/t, DAP fob Morocco 345 USD/t 2 At full capacity (2019 for urea and ammonia, 2020 for DAP) 3 Phosphate-driven price change, equivalent to 138 USD/t phosphate rock (72 bpl)

3


Prospects

18

Supportive farm margin outlook overall, with higher prices for several crops

Urea capacity increases in US and North Africa partially displacing Chinese exports

Improved pre-buying incentives in Europe, but some markets impacted by poor harvests

Continued growth in Brazil, but fourth quarter industry deliveries expected to be broadly in

line with a year earlier

Yara expansion projects will deliver NOK 5 per share incremental earnings by 2020,

based on today’s market prices

Yara improvement program entering implementation phase


Acquisition of Tata Chemicals’ urea and distribution business in

India provides footprint to accelerate premium product growth

19

Integrated world scale urea plant in Babrala, Uttar Pradesh

• ~0.7 million tons ammonia production

• ~1.2 million tons urea production

• Commissioned in 1994

World-class operations and energy efficiency

• Workforce is committed to high HESQ standards; solid safety track

record

• Energy consumption below 21 mmbtu/t, on par with Sluiskil

Significant distribution footprint

• Warehouses: 4 own and approx. 100 third-party operated

• Salesforce: 50 own, and approx. 600 on contract

Acquisition provides footprint to accelerate premium product growth

• Yara India 17% p.a. growth in premium product sales since 2010

• Yara Brazil premium products growth provides reference case


Additional information


Strong growth pipeline

21

1) Yara’s share of capex

2018

9.0

5.6

2.1

1.3

2017

16.2

5.4

6.2

3.3

1.3

2016

14.2

5.5

7.0

0.4 1.4

2015

14.4

6.0

4.2

3.3

0.9

Maintenance

Committed growth

M&A

Cost&capacity improvements NOK bn

Capex plan1

2) Finished fertilizer and industrial products, excl. bulk blends. Including Yara share of production in

JVs. 2015 numbers excl. Growhow UK (~300 kt)

3) Committed projects only. TAN Pilbara: 160 kt, Porsgrunn: 250kt, Glomfjord: 185kt, Uusikapunki:

250kt, Köping: 90kt, Sluiskil: net 160kt, Galvani (Salitre - 60% of ~ 2 mill.tons)

4) Excl. Growhow UK (~200 kt). Including 100% ownership in Pilbara NH3 plant

5) Rio Grande expansion ads 0.5 million tons SSP and 1 million ton blends by 2020

Production growth 2015 - end 20185

Finished fertilizer Ammonia

Mill.tons

0.8

1.2

2.3

Regularity

improvement

Production

20152

18.9

Production

end 2018

23.3

Committed

growth3

Babrala

0.7

0.7

9.0

7.20.5

Babrala BASF JV Regularity

improvement

Production

end 2018

Production

20154


Production

22

0

500

1,000

1,500

2,000

2,500

Kilotons

2016 2015 2013 2014

Ammonia1

1) Including share of equity-accounted investees

0

1,000

2,000

3,000

4,000

5,000

6,000

Kilotons

Urea Nitrates NPK CN UAN SSP - based fertilizer

2015 2013 2014 2016

Finished fertilizer & industrial products1


Yara 3Q fertilizer sales by market and product

23

2,085

2,930

582 526 577 235

2,100

3,190

619 427 591 322

Europe Brazil Latin America North America Asia Africa

3Q15 3Q16

1,101

1,603 1,415 998

1,347

236 234

1,419 1,750

1,448

913 1,210

229 279

Nitrate Urea Other products UAN CNCompound NPK1 Blend NPK

1) Yara-produced compound NPK and third party sourced (Total NPK minus blend NPK)

Kilotons


Fertilizer deliveries

24

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

Europe Outside Europe

Kilotons

2012 2009 2010 2011 2013 2014 2015 2016


Fertilizer deliveries by product and source

25

1,415 1,448

1,101

1,419

1,603 1,750

998 913

236 229

1,582 1,488

3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 3Q15 3Q16

Yara-produced deliveries Joint venture & third party sourced

NPK compounds NPK blends Urea UAN Other

Kilotons

Nitrate


YaraMila (compound NPK) and YaraBela (nitrate) deliveries

26

0

200

400

600

800

1,000

1,200

1,400

1,600

3Q12 3Q13 3Q14 3Q15 3Q16

Yara-produced YaraMila deliveries

-

200

400

600

800

1,000

1,200

1,400

1,600

3Q12 3Q13 3Q14 3Q15 3Q16

Yara-produced YaraBela deliveries Kilotons

Outside Europe Europe Outside Europe Europe

Kilotons


Strong premium product deliveries

27

1) YaraBela, YaraMila and YaraLiva deliveries

0

500

1,000

1,500

2,000

2,500

3,000

3,500

3Q12 3Q13 3Q14 3Q15 3Q16

303

231

148

41

84

305

250 236

37

85

300

499

302

128

84

Asia Brazil LatinAmerica excl.

Brazil

Africa NorthAmerica

Value-added fertilizer deliveries1 Value-added fertilizer deliveries1

CAGR

8%

Outside Europe Europe

3Q16 3Q15 3Q14


Value-added and distribution make up larger part of Yara’s contribution

28

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

1Q15

Trade

Upgrade & distribution

Commodity Europe

Commodity overseas

3Q10 3Q11 1Q12 3Q12 3Q16 1Q16 1Q11 3Q15 3Q14 1Q10 1Q14 3Q13 1Q13

Total Yara contribution


AdBlue deliveries

29

0

50

100

150

200

250

300

350

400

450

500

3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Kilotons


Industrial volume development

30

893889847829815

892859864852849

816866

819

572571538

577541540

482511

438456432

207242

308328

385364333346

380361339367364

3Q13

374

3Q16 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 4Q14 3Q14 2Q14 1Q14

382

4Q13

Other Environmental products Industrial N-chemicals

Kilotons


Debt/equity ratio

31

0.20

0.07

-0.04

0.05

0.13

0.11

0.22

0.08

0.01

0.06

0.15

0.13 0.12

0.06 0.06

0.08

0.06

0.14

0.12

0.02

0.06

0.17 0.16

2011 2012 2013 2014 2015 2016

Net interest-bearing debt / equity ratio (end of period)


-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Urea Nitrates Compound NPK Other

Yara stocks

32

Kilotons

Finished fertilizer Bunge Fertilizer

included from 3Q 2013


Reduced exports from China amid lower prices…

33

170

190

210

230

250

270

290

310

330

350

370

390

410

430

450

USD/t

Urea fob Black Sea Urea prilled fob China

Urea granular fob Egypt

0

50

100

150

200

250

300

350

400

450

500

550

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Chinese exports and urea price Declining urea pricing Black Sea

USD/t Kilotons

Source: BOABC, CFMW


…and increased production elsewhere

34

2018 2017

4.5

2019 2020

4.1

2016

7.4

6.9

2.0

~3 Mt

consumption

growth

Gross capacity additions, excl. China

(mill. tonnes urea1)

Source: CRU, gross capacities, September 2016 1) Using 50% operating rate in new plants’ first year of production

Indonesia 0.7

Egypt 0.6

Malaysia 0.6

Saudi Arabia 0.5

Bangladesh 0.2

USA 1.7

Algeria 1.2

Nigeria 0.7

Iran 0.5

Russia 0.3

India 0.7

Malaysia 0.6

Indonesia 0.5

Mexico 0.5

Bolivia 0.3

Bangladesh 0.3

Canada 0.1

USA 2.5

Nigeria 0.7

Iran 0.5

Russia 0.3

USA 0.9

India 0.7

Brazil 0.6

Turkmenistan 0.6

Mexico 0.5

Azerbaijan 0.4

Indonesia 0.3

Bolivia 0.3

Canada 0.1

Iran 0.5

Russia 0.3

India 0.7

Brazil 0.6

Turkmenistan 0.6

Azerbaijan 0.4

Indonesia 0.3

Russia 0.4

Nigeria 1.3

Algeria 1.2

Russia 0.1

Nigeria 1.3

India 0.6


12.9

1.8

11.1

9.9

1.7

11.6

0

2

4

6

8

10

12

14

Pro

du

ctio

n

Expo

rt

Dom

estic

Dom

estic

Expo

rt

Pro

du

ctio

n

Million tons

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Million tons

Source: CFMW

16/17

The new season starts with reduced Chinese urea production

Chinese urea production Domestic urea balance

Jul-Aug 15/16 Jul-Aug 16/17

-11%

14/15

15/16

35


Increasing coal prices

36

CIF ARA1 December 2016 ($/mt)

1) Amsterdam, Rotterdam, Antwerp

China anthracite prices September 2016 (RMB/mt)

Source: CME Group, China Fertilizer Market Weekly


European producers’ nitrate stocks

37

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

16/17 10/11 11/12 12/13 13/14 14/15 15/16

Source: Fertilizers Europe, Yara estimate for September

Index

June 2007 = 1


Energy cost

38

4.0 4.4

4.0

2.8

3.7

5.2 4.6

3.9 3.8

2.9 2.7 2.7 2.1 2.0 2.1

2.8 2.8 3.3

3.6

4.8

5.7

8.2 8.0 8.0 8.1

6.9

6.1 6.5

5.9 5.7 5.3 5.2

4.1 4.0 4.3

4.9 4.7

6.6

9.2 9.4

10.5 9.8

7.6 7.0

8.1

7.0 6.8 6.5

5.4

4.2 4.4 4.2 5.1 5.3

6.6

7.6

10.7 11.0 11.4 11.3

9.2

7.5

8.5

7.6 7.5 7.0

6.2

5.0 4.6 4.9

5.2 5.8

2009 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

US gas price (Henry Hub) Yara Global TTF day ahead (Zeebrugge 2009-2012) Yara Europe

Yearly averages 2009 – 2013, quarterly averages for 2014-16 with forward prices* for 4Q16 and 1Q17.

*Dotted lines denote forward prices as of 13 October 2016 Source: Yara, World Bank, Argus/ICIS Heren


Global grain balance

39

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2,300

2,350

2,400

2,450

2,500

2,550

2,600

07 08 09 10 11 12 13 14 15 16E 17F

Million tons

Consumption Production

Grain consumption and production Days of consumption in stocks

55

60

65

70

75

80

85

90

95

07 08 09 10 11 12 13 14 15 16E 17F

Days

Source: USDA October 2016


Non-commercials’ net long position in corn

40

-200

-100

0

100

200

300

400

500

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Thousand contracts

Source: US Commodity Futures Trading Commission


Weak grain production economics, affecting particularly P and K

demand

41

0

50

100

150

200

250

300

1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012 1/2013 1/2014 1/2015 1/2016

Index FAO price index

Cereals Price Index Cereals 5 year avg. Food Price Index Food 5 year avg.

Source: FAO


Key value drivers – quarterly averages

42

268 250 207 198 183

281 270 233

208 193

3Q15 4Q15 1Q16 2Q16 3Q16

Urea prilled fob Black Sea (USD/t)/Urea granular fob Egypt (dotted line, USD/t)

257 255 249

197 166

3Q15 4Q15 1Q16 2Q16 3Q16

CAN cif Germany (USD/t)

2.7

2.1 2.0 2.1

2.9

3Q15 4Q15 1Q16 2Q16 3Q16

US gas price Henry Hub (USD/MMBtu)

6.4

5.5

4.1 4.3 4.2

3Q15 4Q15 1Q16 2Q16 3Q16

TTF day ahead (USD/MMBtu)

8.2

8.5

8.7

8.3 8.3

3Q15 4Q15 1Q16 2Q16 3Q16

NOK/USD exchange rate

388 355

270 274

210

3Q15 4Q15 1Q16 2Q16 3Q16

Ammonia fob Black Sea (USD/t)

Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank


10-year fertilizer prices – monthly averages

43

0

200

400

600

800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USD/t Urea prilled fob Black Sea/Urea granular fob Egypt

Average prices 2006 - 2015

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USD/t DAP fob US Gulf/MOP granular fob Vancouver

0

100

200

300

400

500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USD/t CAN cif Germany

0

200

400

600

800

1,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

USD/t Ammonia fob Black Sea

Presentation 3Q 2016

Documents

Transcript of Presentation 3Q 2016