Yara International : 2Q 2021 Report

Yara second-quarter and half-year report 2021

• USD 3.0 billion free cash flow 1) rolling 4 quarters
• Improved pricing and recovering premiums
• 9.8% ROIC 2), up from 7.3% a year earlier
• NOK 20 per share additional dividend proposed

Yara's second-quarter EBITDA excluding special items was 32% higher compared with a year earlier, mainly reflecting improved pricing more than offsetting higher energy costs. Net income was USD 539 million compared with USD 223 million a year earlier. Excluding currency effects and special items, the basic earnings per share was USD 1.42 compared with USD 1.06 per share in second quarter 2020.

Highlights 2)

USD millions, except where indicated otherwise	2Q 2021
Revenue and other income	3,947
Operating income	477
EBITDA	799
EBITDA excl. special items	775
Net income	539
Basic earnings per share 3)	2.10
Basic earnings per share excl. foreign currency translation and special items 3)	1.42
Net cash provided by operating activities	1,056
Net cash used in investing activities	(156)
Net debt/equity ratio	0.32
Net debt/EBITDA excl. special items (last 12 months) ratio	1.05
Average number of shares outstanding (millions)	256.6
Return on invested capital (ROIC) 4)	13.8 %

2Q 2020	1H 2021	1H 2020
2,869	7,090	5,720
335	799	583
583	1,385	1,094
588	1,360	1,092
223	553	105
0.83	2.13	0.39
1.06	2.22	1.45
736	1,614	928
(139)	(349)	(338)
0.45	0.32	0.45
1.59	1.05	1.59
268.8	258.9	269.6
9.0 %	9.8 %	7.3 %

Key statistics

Yara production (thousand tonnes) 5)

Ammonia

Finished fertiliser and industrial products, excl. bulk blends

Yara deliveries (thousand tonnes)

Ammonia trade

Fertiliser

Industrial Product

Total deliveries

2Q 2021	2Q 2020

1,891 1,868

5,074 5,108

589 523

7,347 7,584

1,843 1,542

9,779 9,648

1H 2021	1H 2020
3,684	3,792
10,233	10,418
1,047	943
14,201	14,427
3,610	3,263
18,858	18,634

Yara's Energy prices (USD per MMBtu) Global weighted average gas cost 6) European weighted average gas cost

6.73.5

7.53.1

6.4	3.9
7.2	3.8

1. Net cash provided by operating activities minus net cash used in investment activities (see cash flow statement page 16).
2. See page 31-36 for definitions, explanations and reconciliations of Alternative Performance Measures (APMs).
3. USD per share. Yara currently has no share-based compensation programs resulting in a dilutive effect on earnings per share.
4. Quarterly numbers annualized. Half-year numbers 12-months rolling average.
5. Including Yara share of production in equity-accounted investees, excluding Yara-produced blends.
6. Excluding Babrala.

2 Yara second quarter 2021

Variance analysis

USD millions	2Q 2021	1H 2021
EBITDA 2021	799	1,385
EBITDA 2020	583	1,094
Reported EBITDA variance	216	291
Special items variance (see page 9 for details)	28	22
EBITDA variance ex special items	188	269
Volume/Mix	5	2
Margin	252	373
Currency translation	(34)	(51)
Other	(35)	(55)
Total variance explained	188	269

Second quarter

Yara's second-quarter EBITDA excluding special items was 32% higher than a year earlier, mainly reflecting higher prices more than offsetting increased energy cost, fixed costs and currency effects.

Europe

EBITDA excluding special items was 53% higher than a year earlier, as higher prices more than offset lower deliveries and higher feedstock costs. Deliveries were down 16%, as strong fertilizer price increases led buyers to cover only the necessary volumes for current season application, following relatively strong purchasing earlier this season.

Americas

EBITDA excluding special items was 39% higher than a year earlier, as increased nitrogen and phosphate prices positively impacted margins. Overall deliveries decreased 2%, mainly reflecting phasing of deliveries following the early season last year.

Africa & Asia

EBITDA excluding special items was 96% higher than a year earlier, reflecting improved prices, production output and deliveries.

Global Plants & Operational Excellence (GPOE)

EBITDA excluding special items was 2% higher than a year earlier, as higher nitrogen and phosphate prices more than offset increased energy prices, negative currency effects and slightly higher fixed costs.

Clean Ammonia

EBITDA excluding special items was 22% higher than a year earlier, reflecting higher activity level and pricing benefits due to increasing ammonia prices.

Industrial Solutions

EBITDA excluding special items was 65% higher than a year earlier, reflecting higher deliveries, improved margins and

improved reliability in the production units. The deliveries were strong as demand for industrial nitrogen continue to recover.

First half

Yara's first-half EBITDA excluding special items was 25% higher than a year earlier, mainly reflecting higher prices more than offsetting increased energy cost, fixed costs and currency effects.

Europe

EBITDA excluding special items was 35% higher than a year earlier, as higher prices more than offset lower deliveries and higher feedstock costs.

Americas

EBITDA excluding special items was 43% higher than a year earlier, as increased nitrogen and phosphate prices positively impacted margins, especially in North America. In addition, deliveries increased with higher premium product sales.

Africa & Asia

EBITDA excluding special items was 116% higher than a year earlier, reflecting higher prices, increased premium product deliveries and higher production output.

Global Plants & Operational Excellence (GPOE)

EBITDA excluding special items was 4% higher than a year earlier, as higher nitrogen and phosphate prices more than offset increased energy prices, negative currency effects and slightly higher fixed costs.

Clean Ammonia

EBITDA excluding special items was 13% higher than a year earlier, reflecting higher volumes and ammonia prices.

Industrial Solutions

EBITDA excluding special items was 18% higher than a year earlier, as higher deliveries and margins offset a lower result in Maritime.

Yara second quarter 2021 3

Production volumes

					2Q 2021	2Q 2020	1H 2021	1H 2020
	Thousand tonnes
	Ammonia			1,891		1,868		3,684		3,792
	of which equity-accounted investees			-	-	-	181
	Urea				1,221		1,154		2,388		2,665
	of which equity-accounted investees			-	-	-	268
	Nitrate			1,494		1,622		3,105		3,155
	NPK				1,501		1,543		3,019		2,999
	CN			455		428		853		836
	UAN			220		237		439		477
	SSP-based fertiliser			181		110		415		243
	MAP			3		12		14		43
	Total Finished Products 1)				5,074		5,108		10,233		10,418

1) Including Yara share of production in equity-accounted investees, excluding Yara-produced blends.

4 Yara second quarter 2021

Deliveries

	Crop Nutrition deliveries	2Q 2021		2Q 2020	1H 2021		1H 2020
	Thousand tonnes
	Urea		1,800		1,539	3,168		2,965
	Nitrate		1,171		1,357	2,763		3,015
	NPK		2,280		2,477	4,728		4,848
	of which Yara-produced compounds		1,402		1,439	3,049		3,019
	of which blends		786		947	1,404		1,589
	CN		476		463	958		861
	UAN		378		505	761		861
	DAP/MAP/SSP		335		301	482		449
	MOP/SOP		516		443	665		566
	Other products		392		499	676		861
	Total Crop Nutrition deliveries		7,347		7,584	14,201		14,427
	Europe deliveries
	2Q 2021		2Q 2020	1H 2021		1H 2020
	Thousand tonnes
	Urea		263		244	556		552
	Nitrate		764		1,041	1,920		2,310
	NPK		471		533	1,395		1,471
	of which Yara-produced compounds		429		491	1,302		1,379
	CN		129		152	265		262
	Other products		409		447	821		892
	Total deliveries Europe		2,035		2,417	4,957		5,487
	Americas deliveries
	2Q 2021		2Q 2020	1H 2021		1H 2020
	Thousand tonnes
	Urea		786		715	1,416		1,336
	Nitrate		304		243	670		592
	NPK		1,305		1,502	2,420		2,554
	of which Yara-produced compounds		565		586	990		949
	of which blends		661		832	1,185		1,384
	CN		302		272	602		522
	DAP/MAP/SSP		321		274	429		384
	MOP/SOP		486		421	606		521
	Other products		333		489	576		748
	Total deliveries Americas		3,837		3,915	6,718		6,658
	of which North America		1,064		1,085	2,022		1,944
	of which Brazil	2,209	2,292	3,675	3,755
	of which Latin America ex Brazil	564	538	1,021	959

Yara second quarter 2021 5

	Africa & Asia deliveries	2Q 2021
	Thousand tonnes
	Urea			751
	Nitrate			103
	NPK			504
	of which Yara-produced compounds			407
	CN			46
	Other products			71
	Total deliveries Africa & Asia			1,475
	of which Asia		1,151
	of which Africa	324

2Q 2020	1H 2021		1H 2020
580	1,197		1,077
74	173		113
442	914		823
363	757		691
39	91		77
117	152		192
1,252	2,527		2,282
895	1,962		1,688
357	565	594

	Industrial Solutions deliveries	2Q 2021	2Q 2020	1H 2021	1H 2020
	Thousand tonnes
	Ammonia 1)			132	137	282	278
	Urea 1)			410	354	807	764
	Nitrate 2)			298	272	578	549
	CN			46	42	92	84
	Other products 3)			420	301	826	671
	Water content in industrial ammonia and urea			537	436	1,024	917
	Total Industrial Solutions deliveries			1,843	1,542	3,610	3,263

1. Pure product equivalents.
2. Including AN Solution.
3. Including sulphuric acid, ammonia and other minor products.