Investor Relations

Strategic goals – performance 2008

Yara has established ten long-term goals for value creation, ­underlining its growth ambition, while creating value for stakeholders. By pursuing its strategy throughout 2008 consistently, Yara has delivered on its goals according to the summary below:

1 Profitability

Yara’s goal is to deliver a Cash Return On Gross Investment (CROGI) of more than ten percent as an average over the business cycle.
Performance 2008: Yara delivered a CROGI of 22.8 percent, up from 16.1 percent in 2007.
Priorities for 2009: Continued emphasis on global optimization and operating capital.

2 Relative competitiveness

Yara’s goal is to deliver a Gross Return (EBITDA /Total Assets) in the top quartile of a peer group of leading chemical companies.
Performance 2008: Yara’s ­return on assets (22%) was fourth in Yara’s defined peer group of 10 companies, unchanged from last year.
Priorities for 2009: Maintain continued investment discipline to ensure new projects add value for shareholders

3 Solidity

Yara’s goal is to retain a mid investment grade credit ­rating, i.e. minimum BBB ­according to Standard & Poor’s methodology.
Performance 2008: Rating Standard & Poor’s BBB with stable outlook.
Priorities for 2009: Continue to deliver strong financial performance. Normalize operating capital and secure new long-term financing before major new step growth.

4 Returns

Yara’s goal is that cash return to shareholders should average 40–45 percent of net income, with dividends at minimum 30 percent over the business cycle. Share buy-backs will constitute the rest.
Performance 2008: Total cash returned to shareholders in 2008 was NOK 1,588 million or approximately 26 percent of 2007 net income.
Priorities for 2009: Stable growth in dividends, while buy-back activity depends on balance of cash flow, access to financing and available growth projects.

5 Growth in low cost gas supply

Yara’s goal is to increase its proportion of production in low cost gas regions in order to reduce the average production cost of its fertilizer products.
Performance 2008:  Yara’s share of low cost gas increased from 27 percent in 2007 to 32 percent in 2008 due to production curtailments in Europe and the acquisition of Saskferco.
Priorities for 2009: Optimize the Libyan JV and continue to develop new potential projects in low-cost gas­regions.

6 Overall growth

Yara’s goal within a business cycle is to achieve a ten percent market share in the global fertilizer market, and an average annual growth in the industrial segment of 10–15 percent.
Performance 2008: Saskferco acquisition added approximately 1.2 million tons of finished fertilizer capacity.
Priorities for 2009: Optimize Libyan JV, finalize expansion in Siilinjärvi and continue to develop new potential growth projects with production capacity in low-cost gas regions, while increasing captive phosphate sourcing and new market positions in high growth markets.

7 Citizenship

Yara’s goal is to establish global citizenship as a fundamental part of its business, leveraging its position to impact positively on major global challenges.
Performance 2008: Yara developed its citizenship approach, established a governing structure, published its first COP, and intensified its engagement in global food issues and support for the African green revolution.
Priorities for 2009: Yara will finalize a CC strategy, adopt a more systematic approach to stakeholder engagement and continue to develop solutions that meet global challenges related to energy, climate, food and health.

8 Environment

Yara’s goal is to be among the most energy-efficient companies in the industry, and to reduce its greenhouse gas emissions by nearly 25 percent from 2004 to 2009.
Performance 2008: Yara reached its greenhouse gas emissions target, cutting emissions in 2008 by 30 percent compared to 2004, and improving energy efficiency by 13 percent from 2007 to 2008.
Priorities for 2009: Continue the implementation of its energy management system and evaluate further installation of the nitrous ­oxide catalyst in nitric acid plants.

9 Safety

Yara’s goal is to be a leading performer in the area of worker safety, with a targeted accident rate as close to zero as possible.
Performance 2008: Yara achieved an LTI rate of 1.2 for employees and contractors combined. The average LTI rate for other fertilizer producers in Europe was four times higher.
Priorities for 2009: Continue the implementation of its behavior based safety program in newly acquired plants and launch a company-wide safety campaign.

10 Organization

Yara’s goal is to integrate Kemira GrowHow according to established plans, with global synergies – also within the field of manning.
Performance 2008: Yara continued the integration process in accordance with plans, including a combined staff reduction of 254 employees worldwide.
Priorities for 2009: Continue the integration process, with a target of staffing synergies at 297 by 2010 compared to the beginning of 2008.

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