Yara International Asa

Hello and welcome to JARA's third quarter results presentation. The presentation today will be held by JARA CEO Svein Tore Holsether and CFO Magnus Krogh Ankarstrand. Once the presentation is done, we will move straight into the Q&A session. If you wish to listen only to this, you may remain in this window. To ask questions, please press the link under the window to enter the team's meeting after the presentation is done. But first, let's start the presentation. It's my pleasure to hand over to our CEO, Svein Tore Holsether.

Thank you, Maria, and good morning, good afternoon, good evening, depending on where you're calling in from. And thank you for joining our third quarter earnings call. As always, I will begin with our safety performance. Our 12-month rolling total recordable injury rate stands at 1.2, as we had a stable development through the third quarter. We have made significant progress over time, but colleagues are still being injured at work. And I take this very seriously. Safe by choice remains the foundation of our safety work. Thank you very much. Original price differences persisted while overall nitrogen prices increased compared with a year ago. However, this was more than offset by higher European gas costs, which pushed European ammonia margins into negative territory towards the end of the quarter. We have used our ammonia flexibility to curtail production accordingly, as I will return to later on in the presentation. In Europe, Yara increased deliveries, particularly of nitrous, despite a year-on-year decline in industry deliveries, demonstrating strong commercial performance. At the same time, slow demand across most key markets, particularly for MPKs in Latin America, resulted in a negative volume impact of 40 million US dollars in the quarter. Production volumes were also affected by some plant-specific reliability issues. Increasing output is significant. Central to our improvement program, we're making reliability and tight cost control clear priorities. Purchasing for the 2027 season is lagging in Europe and in the US and Brazil, leaving significant volume still to be bought as the Northern Hemisphere application season approaches. In this environment, we remain focused on what we can influence directly, including accelerating delivery of our EBTA improvement program. In parallel, the Gulf Coast ammonia acquisition will further diversify our gas exposure upon closing. Turning to the EBTA development, we delivered 650 Thank you very much. segments that were partly offset by higher nitrate volumes in Europe. We also have some third-quarter spillover from the turnarounds at Pilbara and Belle Plaine. MPK premiums improved compared with the second quarter, but remained under pressure year on year as is typically the case in periods of rising commodity prices. Fixed costs were up 4 million US dollars year on year, excluding currency effects. Had cost developed in line with inflation, the impact would have been negative 18 million US dollars. We therefore beat inflation by 14 million US dollars in the quarter, demonstrating continued cost discipline. Our improvement program remains on track with the $60 million US dollars delivered so far in 2026, and Magnus will provide more detail later on in the presentation. Together, the cost program completed in 2025 and the $60 million US dollars year-to-date EBITDA improvements have contributed to approximately 1.5 percentage points to This demonstrates stronger underlying profitability over the past 12 months. Our focus is to strengthen returns further through improved operational performance and continued capital discipline. Natural markets continue to be shaped by volatility and uncertainty. And as I noted in the second walker presentation, the Disruption in the Middle East came at the very end of the previous season. While weak crop prices and poor farmer affordability reduced some Northern Hemisphere demand, most of the demand implications came for the new season by starting in May. Prices increased gradually during the quarter, although development in China and India continued to weigh on the market balance. As we now approach year-end, the Chinese export window is closing, and there was limited interest in the latest Indian tender. At the same time, the Northern Hemisphere still has significant purchasing ahead of them, while supply uncertainty persists due to reduced exports through the Strait of Hormuz and production curtailments in Europe. Yara has demonstrated its ability to navigate this volatility by optimizing across the system and prioritizing profitable production. Our global business model and diversified product portfolio strengthens Yara's resilience in volatile markets, including periods of high European gas prices, approximately 80% of Jara's finished goods portfolio is not directly exposed to TTF reflecting both our production outside Europe and the flexibility to source ammonia for our European nitrate production. The remaining 20% include industrial urea and upgraded fertilizer urea products with sulfur. So both technically command a higher Svein Tore Holsether, We have been focused on increasing the flexibility and the resilience of our system. We have a High raw material flexibility, but we also run our plants on a lower technical minimum than prior to the energy crisis in Europe that started in 2021. In addition, we have closed ammonia production both in tank and in hull and continue to work on reducing our logistical costs and increasing optimization within our system. This makes us more robust in the face of the ongoing volatility. Let me then bring us back to our central priority, strengthening returns. As highlighted earlier, our 12-month return on invested capital stands at 13.5%, and we remain focused on further improving the underlying performance of the business. Thank you very much. Thank you very much. And over time, broader gas diversification and sustained focus on our core operations will further strengthen JARA's competitiveness and returns. And with that, I will now hand over to Magnus Krogh Ankarstrand.

Thank you, Svein Tore Holsether.