Yara International Aktie

Hello, and welcome to Yara's second quarter results presentation. The presentation today will be held by our CEO, Svein Tore Holsether; and CFO, Magnus Krogh Ankarstrand. I would like to remind you that once the presentation is done, we will move straight into the Q&A session. I will come back with instructions on how to ask questions in the Q&A. 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, and thank you for dialing into our second quarter earnings call. As always, I will start with our safety performance. And in first quarter, we reported an increase in accidents. And this is also reflected in our second quarter numbers. And this is something that I take very seriously, and we've been working diligently across the entire organization to continue emphasizing the importance of our safety culture.

And we had our Annual Safety Day on April 28, which engaged colleagues across the world to increase the awareness and the commitment to the Safe by Choice approach because we know how to improve safety. And I am pleased to see that we have seen improving numbers towards the end of the quarter. And hope that we're able to continue to turn the negative trend that we've seen in the recent year. This is our license to operate. Every accident is avoidable, and we will bring our TRI down to 0.

Let's then look at the key elements for the quarter. We report an EBITDA excluding special items of $906 million. That is an increase of 39% from last year, driven by increased margins. In addition, we did sell parts of our surplus EUA quotas with a gain of $153 million, and that is a special item to our EBITDA. This is the highest quarterly EBITDA in the last decade, except for 2022.

Return on invested capital is 14.3%, reflecting strong quarterly margins further supported by sale of EUA quotas. While margins have been strong, continued market uncertainty impacted demand in off-season markets, particularly in the Northern Hemisphere. And as a result, demand was deferred to third quarter, and we report crop nutrition deliveries 17% below same quarter last year. Since late last week, we have, however, seen an uptick in buying activity again with demand resurfacing and prices gradually moving upwards.

Earlier this month, we announced the acquisition of the Gulf Coast Ammonia plant in Texas. And the acquisition strengthens Yara's position on the global cost curve enhances portfolio flexibility and represents an important step in delivering on our strategic priorities.

Looking at the EBITDA variance for the quarter. The 39% increase compared to last year mainly reflects increased nitrogen margins. And this is Yara's highest quarterly EBITDA since 2022, driven, then, by increased market margins, but also solid underlying finances.

Prices have increased, and this is more than offsetting higher gas costs. We do report a negative volume impact in the quarter of $240 million, and approximately half of this reflects lost volumes due to reliability issues in our Pilbara ammonia plant and in addition to lost volumes due to the planned maintenance at our Belle Plaine plant. On top of that, we report $120 million volume impact due to the demand deferral, reflecting the 17% lower fertilizer volumes reported in the quarter.

Fixed costs continue to reflect the cost reduction measures that we delivered on in 2025. And as presented at the Capital Markets Day and then quarter increase then of $8 million. That is a strong beat of inflation for the quarter. Return on invested capital has increased from 7% last year to 14.3%, also supported by the $153 million gain from selling EUAs, which contributes to approximately 1 percentage point of return on invested capital.

The volatility in the quarter has had a profound and also an unusual impact on the market dynamics. The closure of the Strait of Hormuz led to a supply shock, driving prices sharply upwards and then peaking when India purchased 2.5 million tonnes of urea at over $900 per tonne in April. However, this occurred at a point in time when the European season was largely complete. And the combination of high prices and significant volumes going into India and among others, Australia, meant that demand was reduced dramatically elsewhere in the world. Simply put, customers and farmers did not need nitrogen for prompt application, delayed regular purchasing for the next season to avoid buying at peak prices.

This market uncertainty led to a delay of the new season in Europe and also deferred demand elsewhere. And as the graph in our presentation here shows, there were large variations between regional price references, clearly illustrating the demand volatility across markets during the quarter.

In recent days, demand for the new season has significantly resurfaced and prices have rebounded in many key markets, with the urea FOB Egypt prices increasing from around $410 per tonne at the end of July, with the latest reported sale well above USD 500 per tonne. And this is reflecting increasing demand globally and Europe now being willing to pre-buy for the next season again.

Market to supplier risk is also resurfacing now with an unresolved situation in the Middle East.

As mentioned already, Yara announced the acquisition of the Gulf Coast Ammonia plant earlier this month. And this represents a significant milestone and largely fulfills our ammonia strategy. The acquisition will strengthen our ammonia cost position and enhance flexibility across our integrated production and distribution network. The plant is located in Texas, and we'll have a nameplate capacity of 1.3 million tonnes per year.

Yara will own the ammonia plant and the Air Products will supply hydrogen, nitrogen and utilities under a long-term agreement. This purchase price of $1.3 billion will be paid upon closing and represents an attractive entry point into a highly competitive U.S. ammonia production. The asset is expected to generate strong cash flows and deliver solid returns, fully aligned with the Yara's discipline and returns-focused capital allocation framework.

Bringing this plant into our portfolio really structurally improves our competitive position while also increasing our flexibility for ammonia optimization. The acquisition demonstrates how Yara can leverage our global platform, our market position and operational flexibility to capture attractive opportunities and strengthen long-term value creation.

I will now then hand over to Magnus, who will take a closer look at the financials for the quarter. So with that, over to you, Magnus.

Thank you. As mentioned by Svein Tore, EBITDA is up 39% on a strong second quarter 2025, predominantly driven by increased nitrogen operating margins. This has translated into an 84% increase in earnings per share, and we clearly see the effects of increased earnings on a stable capital base and better utilization of our installed capital is core to our improvement potential.

This also translates into a significant increase in return on invested capital, 14.3% for the last 12 months versus 7% at the same time last year. Please also note that this number includes the sale of EUAs, which had a cash effect of USD 153 million, which is classified as a special item.

Looking towards the cash side, the delayed start to the season as well as the increased price environment has led to a small buildup in operating capital compared to what is usually a release in the second quarter. And this will subsequently be released when prices stabilize and volumes catch up. This impacts cash from operations, which is lower than second quarter 2025, which benefited from a normal operating capital release.

Finally, our net investments are down to USD 100 million as the USD 152 million divestment of parts of our surplus EUAs is booked here. And that leaves us with a free cash flow of the quarter of $583 million.

As mentioned, the price surge in the second quarter came at a point where sales for the ongoing seasons in the Northern Hemisphere was at the very end. Deliveries for the ongoing season went on as normal, but there has been a significant delay of the new season where deliveries usually pick up end of May. And as Svein Tore mentioned, this is linked to low willingness to participate at elevated price levels for customers not in an immediate need of product, particularly when India purchased 2.5 million tonnes at more than $900 per tonne of urea, significantly over market prices everywhere else.

And consequently, our deliveries are down, especially in Europe. The majority of other reduction of own-produced products is linked to the scheduled turnaround in Belle Plaine and Babrala. And beyond that, we have a reduction in third-party traded volumes in the Americas and Africa, Asia, but these are volumes with more limited EBITDA impact.

And looking closely at Europe and the season as a whole, we see that a much more stable picture than the tail end of the season. Yara's deliveries in Europe for the season as whole are stable on a season-to-date basis. Imports of urea to the European market, however, are also significantly down for the season, and this is a trend that has continued into the second quarter, and that increases Yara's relatively -- relative market share considerably.

As mentioned, Yara's Q2 deliveries in isolation reflects a slow start to the new season. However, there is a significant pickup in market activity in the European market in July. And as you will have noted, global nitrogen prices are on the rise as well. And renewed tensions in the Middle East cash further uncertainty about nitrogen and phosphate availability for the third quarter and the upcoming season in the Northern Hemisphere.

And while demand is deferred, Yara remains focused on maximizing and increasing the utilization of our assets. Looking at actual production tonnes and including the effect of turnarounds, Yara's had a solid organic production growth over the last years. And also during the current volatility, Yara has been able to profitably uphold production, which is critical.

The quarter in isolation saw some reduction in produced volumes due to the scheduled turnarounds in Belle Plaine and Babrala as well as the previously reported outage in Pilbara ammonia production. Both Babrala and Belle Plaine are now back producing, while Pilbara has been taken offline in July for the scheduled maintenance.

As the Strait of Hormuz was blocked in March, significant demand rationing was required to meet more than a 20% reduction in available nitrogen trade. And this was exacerbated by India's purchase of 2.5 million tonnes above $900 in April. And this also is illustrated at the top of the slide, showing major reductions in imports to key consumption regions with Europe and Brazil lagging the most. Europe, of course, affected by the very strong imports in Q4 ahead of CBAM. And consequently, a lot of buying remains to happen despite demand reduction in nitrogen application, application as a whole for the season cannot be skipped. And the renewed tensions in the Middle East also adds uncertainty to the supply picture.

Chinese supply, currently quota being 3 million tonnes, will be a key factor to balance the market, and India consumption will also be another important factor to monitor.

Looking to the medium term, the urea balance remains tight with a limited number of projects coming over the next years compared to historical demand growth. It remains unclear to what extent projects have been further delayed by the ongoing war in the Middle East.

As mentioned, the significant increase in EBITDA in the quarter is driven by increased margins. Looking at nitrate's operating margins from both our TTF and Henry Hub-linked gas cost exposure, margins have expanded significantly as nitrogen prices increased more than TTF and Henry Hub stayed below $3 per million Btu.

A similar expansion in margin is seen in our NPKs, also helped by the phosphate upgrading margin. This is particularly relevant for Yara's 2/3 of our NPK production does not require sulfur in the production process of upgrading phosphate, and sulfur shortage has been a major driver of phosphate price increases in the last 2 quarters. This also erode significant production margins for producers using the phosphoric acid route. But as mentioned, Yara does not require sulfur for 2/3 of this production.

At the very high price levels during the quarter, premium calculations become less of a driver for our earnings, particularly given the high increase in overall margins. And I recognize that this makes it challenging for analysts to forecast margins, particularly given that our sensitivities are based on global urea references. For the current quarter, both the large gap between global and local references as well as premium being consumed by the production margin, contributes to deviation between our outside-in model and reported results.

Summarizing the quarter and the impact on the balance sheet, we see that net debt stays relatively stable despite the dividend payout in the quarter. And this is sustained by strong cash earnings as well as the USD 153 million gain from the sale of EUAs. This puts our balance sheet in a robust position in anticipation of the regulatory closing and subsequent payments of the Gulf Coast Ammonia acquisition.

And looking to this acquisition, it is not only a major strategic milestone, but should provide clarity on the -- to the capital markets on Yara's approach towards ammonia, which has been in development for some time. And with this acquisition, Yara achieves major strategic objectives in terms of lowering ammonia production costs with Henry Hub-linked gas and a larger production asset as a result.

The acquisition represents a very attractive entry point with a CapEx significantly below other acquisitions in the U.S. Gulf when adjusting for size and operating costs. And as previously mentioned, the plant consists only of the back end of the ammonia plant and is supplied with hydrogen and nitrogen and certain other utilities from Air Products. Energy consumption is charged through directly, and this will be among the most energy-efficient plants in Yara's portfolio.

For the hydrogen and nitrogen, there is also a base fee paid to Air Products, as is normal in the industrial gas industry, also similar to the arrangement we have in our Freeport ammonia plant. This replaces what would otherwise have been a construction CapEx of the front end of the ammonia plant as well as the sustaining CapEx and the fixed cost of operating a front end of an ammonia plant. And as such, this ammonia plant is among the most competitive in the U.S. seen from a total cash flow perspective. And also when looking at total cash costs per year, including the full operating cost, the plant is in the area of the first and second quartile on the cost curve.

Post closing, this acquisition will have a significant impact on Yara's energy exposure. Coming from a time before Freeport, when less than 15% of our gas purchases were in North America, our portfolio will now be close to 40% exposed to Henry Hub or AECO. Of the remaining European TTF exposure, half of the exposure is linked to nitrate production, where locally produced ammonia can be replaced by imports if the gas to ammonia spread is negative.

The acquisition also adds considerable length to our internal balance of ammonia between equity-owned production and owned consumption, which allows even greater flexibility on further portfolio adjustments. And this opens for adjusting the relative energy exposure further in favor of low-cost production.

On the topic of decarbonization, Yara remains strongly positioned in the carbon tax European market, also with this change of our portfolio. Firstly, because what the introduction of CBAM does is to expose imports to the same carbon cost as European produced products. This increases the price they have to take for their products of imports and levels the playing field.

Yara's basis for carbon costs are average emissions intensity, and this is lower than import -- lower than the average of imports, leading to a margin gain for Yara. And this is not by coincidence but due to structural investments in energy efficiency and emission reductions over time, which, irrespective of accumulated free quotas, have had a very short payback time.

Yara can also increase this positive delta further by replacing gray ammonia productions with low carbon ammonia imports and by reducing emissions further, like, for example, the CCS Sluiskil project. For Yara imports into Europe, we expect to utilize inward processing mechanisms for reexporting finished fertilizer, significantly reducing our import exposure to CBAM.

The financial benefit of having carbon intensity below benchmarks is illustrated by Yara's accumulated surplus of EUA quotas equaling 5.2 million by year-end 2025. And during the second quarter, we have divested 1.7 million of these, leading to a cash impact and gain of USD 153 million reported as a special item in this quarter. This illustrates the added value of previous projects that have been done and also how we can monetize reduced emissions in projects like CCS Sluiskil as well as potential carbon reduction measures in our U.S. plants.

Then moving to capital allocation. Yara maintains its policy after the Gulf Coast acquisition. Our overarching target is always to maximize returns to our shareholders through return on invested capital and where this quarter is a big testimony to that. Delivering on our improvement program is the first priority in achieving that. And as previously mentioned, the GCA acquisition will also expand our EBIT margins further by significantly lowering our cost position.

And beyond that, Yara will maintain our strict capital discipline, focusing on reprioritizing sustaining CapEx towards the highest return assets and ensuring realization of benefits from executed growth investments.

Post closing of the acquisition, it will be a priority to maintain a strong balance sheet, ensuring that we have the capability for high-quality investment opportunities at the right timing, while, of course, maintaining attractive shareholder distributions.

And concluding with the improvement program, the successful and continued implementation of our cost program and adoption towards more flexibility puts Yara in a much stronger financial position than before 2024. The improvement program extends from our cost program, covering a broader range of initiatives with a significant portion focused around increased asset utilization and expanded production output.

Additionally, ensuring cash flow delivered from completed growth investments, such as our YaraVita plant in the U.K. and the [ BK ] expansion in Colombia are core focus areas. The program is in its early stages but currently delivering according to plan with USD 50 million, USD 60 million of the 2027 target realized so far, and continued follow-up remains our core priority.

And with that, I give the word back to Svein Tore.

Well, thank you very much, Magnus. Looking beyond the quarter then. Yara remains focused on strengthening long-term competitiveness and creating shareholder value through disciplined execution. First, capital discipline remains the foundation of our approach. And we continue to prioritize returns focused capital allocation to execute on our EBITDA program and to maintain a robust balance sheet.

Second, we remain committed to high-quality value accretive growth and the Gulf Coast Ammonia acquisition is a testament to how we allocate capital to opportunities that strengthen our competitive position while meeting very strict return requirements.

Finally, our approach to decarbonization remains unchanged. One of the strengths of our business model is that we have multiple pathways to profitable decarbonization, providing flexibility to optimize timing risk and returns as market conditions evolve. And this flexibility allows us to advance our climate ambitions while maintaining focus on competitiveness, capital discipline and long-term value creation.

To conclude today's presentation. Yara remains committed to continue to deliver sustainable cash flow expansion. We continue to see positive traction from our cost reduction program that we concluded in 2025. And as Magnus already mentioned, we are on track with our EBITDA improvement program. Despite being below consensus in a very volatile quarter, the quarterly results represents a significant increase from last year, almost 40% up and is one of the strongest quarter outside the record year in 2022.

Strict resource prioritization and active portfolio management are key levers in strengthening Yara's competitiveness further. And with a strong balance sheet, capital discipline maintained and a clear commitment to our credit rating, Yara is well positioned to deliver sustainable long-term value creation.

And with that, I'll hand back to Maria.

Thank you, Svein Tore. That concludes today's presentation. We will now move to a Q&A session. [Operator Instructions] We will just take a few minutes to set up, and then we will revert shortly. Thank you for watching.

[Break]

Okay. Welcome back to everyone. We're now ready for the Q&A session. This is Maria speaking, and I'm here joined by today's presenters, our CEO, Svein Tore Holsether; and our CFO, Magnus Krogh Ankarstrand, in addition to our Head of Market Intelligence, Dag Tore Mo. [Operator Instructions]

So with that, we're ready for the first question. David Symonds, please unmute and ask your question.

Three questions, I think, from me, please. Magnus, you touched on it in your presentation, but I think the margin item in the bridge was 20% below the outside-in calculation. I was hoping you could give some more color on where the shortfall was. Was that just a timing thing?

Secondly, could you talk, in a similar vein, could you talk about the forward sales level for Q3 versus normal? Should we be shortening the pricing lags in our Q3 estimates given that volumes are seemingly picking up at a lower price level and the forward sales could be lower than usual?

And then thirdly, could you talk about the motivation for the sale of EUA credits? Is that linked to Sluiskil's carbon capture, which I think is starting up soon? Or is there some other motivation for that?

Yes. Thank you. I had a little bit of problem hearing your second question, but I'll see if we can get back to that. I think on the margin side and sort of the mix compared to the outside-in view, I think obviously, this quarter, there's more volatility on pricing, which, of course, makes deviations and misses easier. But I think the main driver for this is also on the volume side, right, that when -- I mean, when volumes are sold at which point in the quarter or even before the quarter.

And I think what sort of particularly makes it a bit difficult in this quarter when you had such a delay in particularly the buying for the new season is, of course, that the price references as they're published, are published every week regardless of 50,000 tonnes were sold that week in the market or 1 million tonnes, right? So when you sort of average our volumes out on the price references, you can get a very different number.

And I think particularly when prices were at the highest, of course, also particularly when customers in the Northern Hemisphere didn't have an immediate need to buy. Of course, there was a hesitation and people wanted to wait to see how things were going. So I think that the volume weighting is probably the biggest single explanation for that deviation.

I think the second question, if -- in terms of how to think about the third quarter and sort of whether or not to, sort of, change the lag? I don't think there's any reason to change as such. I think -- I mean, obviously, price levels are more normalized now than what they were a few months ago, even though, of course, as we see now that activity is picking up and also the situation in the Middle East, the prices are quite a lot up in the last week.

But I think as a starting point, we wouldn't sort of recommend that, but I do think it's important to sort of have a view, particularly at the differences between various global references, if that sort of discrepancy gets very high, then obviously that will have -- can have an impact on how prices will be -- look like as well on the realized pricing.

I don't know, Maria, if you have anything to add?

I can just add that quite often when we enter into the third quarter, we do often have a normal -- longer order book than normal, right, because we take a lot of orders at the end of second quarter, but that has not been the case this quarter. So there's no reason why you should obviously increase the lag due to a longer order book now as demand has been more soft. So it's more as demand is picking up and activity is picking up, those prices will be the key prices for third quarter earnings.

I think even, of course, if -- I mean, obviously, results are impacted by how your volumes kind of -- how your sales sort of hit the different price levels and so on. I think always good to consider that you have sort of -- if you have extreme peaks. And of course, customers will always be a bit more hesitant as we get closer to application. And of course, customer flexibility is lower as well. Yes. So I think we'll leave it at that.

With regards to the EUA sales, I think I mean the decision to offload some of our long position, which is what we did this quarter, is also, of course, a financial decision. I mean it's -- we don't sort of speculate in EUA trade as such and I think sort of sitting on a very long position, would only make sense if you think that -- well, keeping them would sort of see a price increase, including our discount rate that will sort of merit keeping the EUAs for a longer time. So I think it's partly risk management, finance management to sort of -- to take down our long position there.

But I do think what is important, then you link it to CCS Sluiskil, and that's, of course, that when we reduce our CO2 emissions in Sluiskil by 700,000 tonnes (sic) [ 800, 000 tonnes ] each year. That in isolation, of course, means that our long position becomes longer, right? So I think we still are sort of -- we have a long position that with Sluiskil CCS now takes us through 2029 just based on our current emissions. But then again, the decision to -- how we sort of deal with this surplus is more a financial decision and how we view the market.

Okay. Angelina, it's your turn. Please unmute and ask your question.

It's Angelina Glazova from JPMorgan. I have a couple of questions around the demand environment, and then a quick follow-up on emission certificate sales. So you have already given us quite a lot of color on how demand has developed through the second quarter. And deferral is a term that has often been used to describe what's happened. Now obviously, we haven't been in that period for a very long time, but over the past week, we have seen a pickup. I think the most notable was Europe. And on that point, I wanted to ask, to what extent do you think it is driven by some support or subsidies that have been provided to the European farmers?

And then when you think about other regions into the third quarter, so for example, the LATAM and in general, the fact that it's the Southern Hemisphere that will be in the season in...

Angelina, we lost your sound. But we can start answering the first question and then see if we can get you back online by the time we've answered that.

Yes. I think that as a general comment globally, when the disruptions in the Arab Gulf happened and the supply was lost, there was simply a requirement to ration on demand somewhere in order to balance the market that drove the prices so high. And I think if you then count in that neither India nor China wanted to take part in that demand rationing by keeping domestic prices stable or low. There was quite a burden on most private markets in the world to rations on demand.

So of course, there is some demand -- quite a bit of demand deferral. And I think your point on Latin America is a star example there where you see that Brazil, for instance, so far this year, through June, has imported, 23% less nitrogen than last year and are now coming into peak season, as you mentioned. So they will be logical to expect a pickup. But of course, in the Northern Hemisphere and also countries like Australia, I think even South Africa, some other places, there has also been lost demand for the season that we have now finalized.

If you just look at Europe, for instance, the European Union has imported 25% less urea during the season that we have now ended than the previous one, clearly indicating that there has been lower application of nitrogen, which you can say then is lost. So a combination.

And I think just to add, what's important here is sort of the distinction between demand destruction and deferral in season and out of season, right? So I think in the beginning of March, and to some extent in April when the Northern Hemisphere was in season and, of course, needed tonnes promptly as India and others as well. And then suddenly, a big portion of supply suddenly disappears. Then you have to have the demand destruction, right, because there's no extra supplies anywhere. So if 20% of supply is gone, then 20% of demand has to go away as well.

And I think the way that played out was that, a bit simplified, that India said we buy -- we want to buy 2.5 million tonnes, and we'll pay almost anything to get it, right, ended up paying $930 significantly above market price. And that price was enough to release 2.5 million tonnes from others who otherwise would have bought it, right? And that too, of course, leads to demand destructions in the season that farmers apply less or shift from corn to something else and so on, right?

But that kind of demand destructions ends with the season, it's not like they're going to stop buying nitrogen forever, right? And I think what we see post the season is deferral is to say that, okay, at this price, I'm not going to buy something that I'm not going to need until January, February, right? And you can do that for a while, but you cannot do that forever. And I think to the extent that turns into destruction for the next season, well, then, of course, that would be rationed by price again, right? So I think that's kind of important to remember that this isn't sort of demand that goes away forever.

Angelina, I can see that you're back on the line, could you unmute and ask the rest of your question as we lost you a bit earlier?

Yes, apologies about that. My follow-up was on the EUA sale. So the comments that you've provided earlier, should we treat that as a sign that you are open to further sales potentially later this year or further down the line?

No, I think -- I mean, for us, it's really a question of how much we're going to need going forward and what the price outlook on EUA sales or the EUA price is going to be. So we don't have any sort of firm message around how we think about that going forward. But I think for now, we thought it was a good idea to lower our long position on EUA sales somewhat.

Then we move to Tristan. The line is yours.

Tristan from Deutsche Bank. Two questions, please. The first is, are there any special things like outages or turnarounds to consider in Q3? And how large will the Pilbara maintenance impact be for Q3?

And then second one is a bit more high level. I was wondering if you could talk maybe about the potential impact of El Nino on crop prices and the kind of balance between higher crop prices being a benefit for fertilizers, but then it also causes demand destruction as well. So how do you see those kind of factors playing out together?

Yes. Thank you. Thanks for your question, Tristan. On the turnaround side, I think what we have scheduled for the third quarter is Pilbara. So as mentioned before, we have the unfortunate outage there and the -- and that sort of -- we run it for June, but then came the planned scheduled turnaround that we have to perform. So that's going to be out for a month or so in Q3. Other than that, there are no other major turnaround scheduled.

Dag Tore, do you want to talk about the El Nino?

When it comes to kind of previous El Ninos, I think that most professionals that I would -- I've seen and also be consistent with our own agronomists is that it's hard to find a very strong link between an El Nino and global production that there are more local and regional differences. Whether this will also be the fact now that we are talking about is Super El Nino, I guess it's a little bit early to say. I see there are concerns in part of the world, including Australia, Southeast Asia, India, et cetera. And then I'm not sure exactly how efficient grain markets are, but I would hope they are reasonably efficient so that the fact that grain prices are not through the roof, it's a sign that the market is not kind of overly concerned on a global level.

Having said that, prices have improved quite a bit over the last week or two, and we see that USDA now reduced their inventory projections in their July report. There are a little bit more talk about concerns. We had the winter wheat in the U.S. to begin with. Now there are concerns about the corn crop in Europe, for instance, where acreage is sharply down in France and the heat wave is affecting crop progress as well. And these are things that are kind of ahead of the El Nino.

So I think it's something that we follow extremely closely and one of the topics that we are most kind of uncertain about is whether it's all of these issues that are part of which you raise lower nutrient application and other, whether all of that is reflected in the numbers yet. So we look forward to how this is going to progress through the year.

As to the link to fertilizer, I think we can -- yes, of course, higher food prices makes it more difficult for particularly the poor part of the world to secure food. But from a fertilizer perspective, it's clearly positive that food prices increase.

Okay. Then we move to John Campbell. The line is yours.

Everyone, it's John. I was thinking about kind of how production and deliveries have evolved in Q3. So production was down 7% year-on-year, and there's some turnarounds there. Deliveries is down 17%. So you built a little bit of inventory incrementally, I guess, in Q2. How should we think about kind of your earnings relative to the sensitivities given the fact, for example, that you had a $12 per MMBtu gas cost in Q2, and now you're guiding us to something 10-ish percent lower at around $11 per MMBtu.

So I guess if you're selling some of the inventory, some of it might have been recognized at a higher cost of production, and therefore, the sensitivities might potentially overstate the profitability of those tonnes. Correct me if I'm wrong and help me maybe try and think about this how I calibrate my model.

I can start. But yes, you're right, if you have very big swings in especially the gas cost, right, that will impact how we use the sensitivities. But -- and the gas price has changed a bit, but it's been fairly stable. So I don't think you should adjust too much necessarily for that because if you look through the months of -- from May to at least April, May, June, that shouldn't impact too much, but there will be an impact, but you should take it in the volume bucket, right, where both -- if we have more on inventories now and we have different volumes than the normal assumption that sensitivities is based on, which is based on 25% volume delivery every quarter, right? That's where you've taken adjustments on volumes largely.

But it makes sense to look at costs for the last few months because we have a longer inventory than normal.

And I think the only thing I can add there for the second quarter, I think the -- as mentioned, the delay in volumes or the lower volumes really came towards the end for the new season. And the -- with the first part of the quarter, it was actually quite strong on the volume side. So that also sort of means that the sort of impact of lagging gas prices is a bit less.

Then we move to Mollie Gorman. The line is now yours.

Mollie Gorman from S&P Global Energy here. I just wanted to ask about the GCA acquisition. And if it includes the OCP offtake agreement for about 800,000 tonnes per year? And if not, what is happening with that offtake agreement?

Thank you. So I mean, as mentioned in the press release, the plant was offered for sale without any current offtake in place. And I think beyond that, just cautious that closing has not occurred yet. So we are not really in a position to sort of comment on commercial matters related to GCA as of yet. But of course, that's something that we will revert to at a later stage.

Next question is from Bengt Jonassen from ABG.

I have two questions, if I may. One is related to the fixed cost, which increased quite materially quarter-over-quarter. How much of that was currency?

And then the second question would be on the Ammonia acquisition where you state that you expect full operation, I think, by the end of next year, if I remember correctly. And as such, should we think of a dilutive to earnings in the first quarter, i.e., negative EBITDA contribution for the first quarter of 2027?

For the fixed cost in the quarter-over-quarter, we have an increase of $8 million in fixed cost, but that's a large beat to the inflation for the year, which is estimated to roughly $35 million, so it's a strong beat to inflation within the quarter.

And the currency effect, it's also quite significant in the quarter.

The last 12 months currency effect is roughly $65 million.

Could you repeat your second question, Bengt?

Yes. I think you're stating in your presentation that -- it will reach full, let's say, contribution from the end of next year. And then if we should assume that there will be a small dilution to earnings in the first part of 2027.

Yes. So of course, how...

End of 2026. I read it wrong. So I'm sorry. You can just delete that question.

Okay. No. But just sort of in general terms, of course, it also depends on when closing occurs. So that's, of course, dependent on the regulatory process. So the transaction won't close until that's complete, of course. Thank you.

There are no more questions. It seems online. So if there's not coming anything through now in the next few seconds. No.

Then I just thank you for your attention and wishing you all a good summer.

Thank you for now, and bye.

Hello, and welcome everyone to this conference call about the announcement Yara made today of our acquisition of the Gulf Coast Ammonia Plant. I am Maria Gabrielsen, Head of Investor Relations, and I'm joined by our CEO, Svein Tore Holsether; and our CFO, Magnus Krogh Ankarstrand. I just want to start by saying that we will only address questions today about the announcements we've made this week, and we will not answer any questions related to quarterly financials or current market dynamics. [Operator Instructions]

So with that, I'll give the word to Svein Tore Holsether.

Well, thank you so much, Maria. Hello, and good afternoon to everyone, and thank you for joining this call, and I'm really happy to share that Yara today has announced that we're acquiring the Gulf Coast Ammonia production facility located in Texas City for consideration of $1.3 billion. And this is a plant with an expected nameplate capacity of 1.3 million tons a year. And this acquisition demonstrates Yara's execution of our strategy to diversify our energy exposure and enhance the competitiveness of our global ammonia production footprint through accessing low-cost gas and also economies of scale and through that lowering both our fixed cost and our capital per ton.

And this acquisition is a very attractive entry to low gas cost production in the U.S. and we will use our experience to contribute to improving plant reliability and performance, targeting production to or beyond the nameplate capacity. It also demonstrates our return-focused capital allocation policy by executing on investments with strong and robust returns, which increase our long-term competitiveness.

Following completion of the acquisition, our immediate priority will be commissioning the Gulf Coast Ammonia plant while delivering on our previously announced EBITDA improvement targets from the Capital Markets Day.

And with our resilient and future-ready business model, Yara is well positioned to deliver strong shareholder value returns today and in the future.

And with that, I will now hand over to Magnus Krogh Ankarstrand, our CFO, to elaborate on the financials. So with that, over to you, Magnus.

Thank you, Holsether. So reiterating to his comments, this plant has the potential to become one of the most profitable plants in our portfolio. The consideration of $1.3 billion is very attractive entry ticket to ammonia production in the U.S. at a very attractive cost.

And it clearly demonstrates our ability to execute on our ammonia strategy, combined with the agreement we also are finalizing with Air Products on green ammonia out of Saudi Arabia. The combination of these 2 fulfills the main objectives with our ammonia strategy that we worked on for several years.

We expect that the plant will generate strong and robust returns, the key variable components being natural gas, linked to Henry Hub and global ammonia prices. And that's perfectly aligned with Yara's wanted exposure as integrated nitrogen producer. The hydrogen and the nitrogen will be sourced from Air Products, a very similar setup as we have in our Freeport plant. The plant is currently completing outstanding work to gradually ramp up to nameplate capacity and stable operations. Yara has done a very extensive technical due diligence as part of the process and concluded that the plant's potential is significant and that this will become a key strategic asset in our global portfolio.

The acquisition in itself leads to CapEx for 2026 provided that we closed within the end of the year of USD 2.5 billion.

And while this front loads anticipated growth CapEx, it is still within the CapEx framework and the CapEx expectation that we had for the period up to 2030 announced at our Capital Markets Day. And also, of course, this asset has a much faster cash flow than a building project as an example. Yara remains committed to our capital allocation framework and also our guided CapEx of around $1.2 billion in real terms on average for the next few years, meaning that we also will maintain strong capital discipline even with this acquisition and also prioritize growth investment accordingly, limited and focused on selective high-return opportunities only.

And as of first quarter, Yara reported a net debt-to-EBITDA of around 1. And a pro forma net debt to EBITDA after this acquisition and dividend payments brings us roughly to 1.7 within the range of our capital allocation policy. And just to reiterate, Yara remains committed to our capital allocation policy with an overall objective of maximizing value creation for shareholders and maintaining our BBB credit rating.

And with that, I think we'll open up for questions.

[Operator Instructions]

So the first question is now from Elliott.

Elliott Jones from Danske Bank. A couple of quick ones. Firstly, on the kind of CapEx of the project, just confirmation that the -- yes, the $1.3 billion is the final ticket here and maybe how that's going to be split between the quarters? And also, if you expect it to be kind of 100% equity or equity and debt? And then actually, I'll let you answer that, and then I've got 2 more questions after that.

Can you repeat the last sentence there, Elliott?

Sorry. Yes, I just said that maybe you guys can answer that first, and I've got 2 more questions after that.

Okay. Yes. No, sure. So yes. So I mean, it is a normal acquisition of an existing asset. So the purchase price is $1.3 billion, and that will be payable upon closing. And I think I gave -- that's the amount of details that we give on that. But again, I mean, with our balance sheet, it doesn't really matter so much exactly when that kind of falls.

And I think sort of from a capital allocation policy and if you're sort of thinking dividends, et cetera, I mean we will stay very committed to our existing policy and yes, we'll fund the acquisition in itself as a combination of cash and corporate debt.

Got it. And then in terms of the economics of the project, just any more color would be super helpful. I mean, obviously, we can work out the cash cost using maybe Henry Hub prices, but obviously, there's a potential cost for the hydrogen and nitrogen. Is there any way you can kind of let us understand how things are structured then if it's kind of maybe on top of the Henry Hub? And if so, what type of range that could be? That would be really helpful.

No. I think what we can say around that is that, I mean, like Freeport, this is half an ammonia plant in a sense, right, where the other half is the hydrogen and nitrogen production part, which is not a part of our acquisition. So that's supplied by Air Products, kind of similar as was intended in the Darrow project as well. But we buy that over the fence.

And then, of course, it's also -- when you take fixed cost maintenance CapEx, et cetera, it's a bit different than an ammonia plant where we have sort of both the front end and the back end. So part of that is also baked into, obviously, what we pay for hydrogen and nitrogen and other utilities and so on. But I think we can sort of roughly in the current market environment, say that it's out of around $250 per ton cash flow.

Got it. And then just maybe one last one going forward. Yes, this is 1.3 million tons. I suppose the first question is, should we see this as kind of in the future replacing other parts of your existing portfolio? Or is it kind of on top? And then the second question is do you envisage potentially more U.S. acquisitions of a similar size going forward? Or are you kind of happy with whether your future system cash costs will be after this acquisition?

Yes. This is Svein Tore, as you saw earlier this week, we discontinued the project that we had ongoing with Air Products in Darrow. So this is the project that we're doing. And how we should think about it is that we're now getting 1.3 million tons more into our total ammonia system, which is a robust and global system that is set up to serve both ourselves but also to other players in the market. So it adds to our flexibility.

And first and foremost, it gives us access to low-cost gas and low-cost ammonia. But this is the project that we're doing. And you should not expect that there will be other large-scale ammonia investments at this stage.

Next one to ask questions is the phone number that ends with 5222. Please introduce yourself and ask your question or unmute yourself first, probably.

So number ending with 5222. If you unmute yourself, you're able to speak. If not, I will move to the next person on the list. Thales Schmidt, please ask your question.

Hello, everyone. I'm Thales Schmidt. . I'm with S&P Global Energy Market reporter for ammonia. So my question is regarding GCA, it has an offtake contract with OCP. So I wonder now with that Yara bought the plant, where does this contract with OCP stand?

Yes. So the -- as mentioned in the press release as well, the plant or the tariff was sold through an auction process and the asset was offered without any offtake contracts.

So the asset was offered without any offtake specifically linked to OCP or any other organization linked to it, right?

Yes, it was offered without offtake contracts. And then, of course, as of now and until closing, of course, Yara will have no interaction as such with the plant. We don't own it before we close. And obviously, when we do, this becomes a part of our system that has a wide range of commercial arrangements and agreements. But until we've closed, we're not at liberty to say anything more about any sort of commercial plans or either existing or future. But as mentioned, the plant was offered for sale without any offtake contracts in place.

Next question is from Lizzy Lancaster.

I've got 2, if that's okay. Firstly, I just wonder if this kind of reflects a move away from investment in blue ammonia or low-carbon projects, considering obviously some of the other projects that you're pursuing were CCS related? And if this also means that you're not considering investing in the Project Yara that you were exploring previously as well? And then the second question was just kind of surrounding CBAM and the U.S. country default value. There was kind of some ambiguity around whether the GCA was going to be able to get verified early in 2027 or not? And do you have any concerns around that? Or are you expecting that the plant will be able to get a verified CI score in order to ship those volumes back to your own system in Europe without a high penalty?

So thanks for the questions now. And this is Svein Tore. I will start on the carbon question. I think you need to see this in the context of what we've done at Yara over the last decades in terms of reducing our carbon footprint, where we've reduced by close to 50% already. We set carbon intensity target in 2019 as well that we were very proud to deliver on in 2025. And on top of that, we're now in the final stages of our decarbonization project in our plant in Sluiskil in the Netherlands as well, 800,000 tons of CCS, largest industrial decarbonization project with CCS in Europe. And what we've done with our pilot plant on the green hydrogen in our plant in Porsgrunn in Norway.

And as communicated, earlier this week that we're continuing the contract discussions with Air Products on the NEOM project with green ammonia as well. So when it comes to our decarbonization journey, we're committed to that, but we look at the totality of this also considering that decarbonization also has to be profitable. And as I said in the past, no green transition with red numbers. So it's about capital allocation, capital discipline and net present value as well. And then for us, it's about looking at the totality of this.

Now -- this plant is an SMR plant. It is not at the moment, blue nor green ammonia for that sake. But there are future opportunities for that, either through pipeline or in the SMR itself to do carbon reduction, just like we're doing in Sluiskil. And we can do that if it's profitable and fits into the totality of the needs that we have as a company. So think about this in a portfolio where we need both access to low-carbon and low-cost ammonia. And when we now look at the totality, this fits in very well.

And then I'll hand over to Magnus for other questions.

Yes. No, I think -- and also when it comes to other projects, as Svein Tore mentioned, we don't have any other large-scale projects in our CapEx plans in the coming years. When it comes to CBAM and certification, I think what's -- that's certainly something that we're watching very closely. And obviously, we've done our due diligence on this specific facility as well in terms of what that would look like once verified.

I think what's important to keep in mind on that one is that we have a very flexible system in Yara. We also have a significant portion of what we call inward processing in Europe and which means that we are exempt from CBAM on ammonia, we import to produce finished fertilizer, which is reexported. And then, of course, we have our different sources. And importantly, also, even though that later in '27, we have our important agreement with Air Products out of NEOM in Saudi Arabia as well, which is renewable ammonia and zero-carbon footprint.

So looking at that, including our CCS project in Sluiskil and other opportunities that we already have. We are quite well covered for our, say, call it, CBAM exposure for '27 and also keeping -- of course, we're not entirely sure when closing will occur. But of course, that's also later this year.

And I think that's -- it's difficult to speculate how much time it takes to get certification. But we're not particularly concerned about that.

And then we will try again with Joel Jackson. [Operator Instructions]. That did not work, unfortunately. Some issues with the questions when joining.

Hi, this is Joel. Can you hear me?

Yes, now we can hear you, Joel.

It kept saying I was not allowed to unmute, but now I am. So thank you very much. Thank you. Sorry for the humor there. I just wanted to ask a question about blue premiums. So in some of the initial cargoes coming out of this plant. Is the market -- are you getting blue premiums from this plant? And then maybe general commentary, are you seeing blue premiums for low-carbon ammonia globally now?

Yes. No, I think -- I mean, currently, there's no carbon capture on this particular plant. So I mean -- so the answer to that question is no. And as Svein Tore mentioned, there could be possibilities in the future to do it stepwise. As a general comment when it comes to the way we think -- I don't want to comment too much on the market now kind of being in the time period. But in general, how we think about this when it comes to the projects and investments for decarbonization. The margin is really the ETS or CBAM number, right? That's currently what we see as a margin for decarbonization.

Yes. I think on this one, it's fair to refer back to our Capital Markets Day presentation as well. We're describing the way forward when it comes to Yara Climate Choice fertilizers. And again, here, I encourage to look at totality of our portfolio, and that's really core to the strength of Yara. It's the resilience in our production portfolio, where we're producing, how we're producing and how we can move products around and then also going from the production stage, but all the way into the field of the farmers that we're working through the whole value chain also to support decarbonization.

So -- and as Magnus said, not to comment on the specific situation as of today, but more the long-term evolution of this. And then I think the best answer to that is really in our Capital Markets Day presentation from back in January.

Okay. And then earlier, you talked about this is going to be your most profitable plant. Now obviously, your costs are higher because it's not like a traditional integrated ammonia plant. When you talk about being the most profitable plant, are you talking about a percentage basis? Like can you talk about how you quantify that?

Yes. So I mean it's the full cash flow profile of the asset, right? So obviously, cash flow from operations and cash flow from investments. But I think also cash flow from operation in isolation, it will fit very well or fit very well on the -- or we placed very well on the cost curve internally in Yara and certainly globally.

So I mean this is, even on a sort of operating cost basis, improving our cost position on production. So I mean the -- and similar as Freeport is as well. And I think the -- this is another big investment into the United States by Yara, which is a very, very important market for us. And also because energy cost in the United States is very attractive, which puts us in a good position for us in our portfolio.

And you may have answered it earlier, but are there ways to talk about as time goes on with your off-take contracts for feedstocks here, what's your sensitivity to different cost inflation in the feedstock? The one was natural gas prices? Are there different pass-through mechanisms? Are there inflators? Can you give an idea of what it looks like?

We will update our sensitivities once we have closed this acquisition and then the key variables here is obviously gas costs and ammonia prices. So those will be changing with this nameplate capacity and also reflecting then that we expect this plant to be quite energy-effective. So in terms of -- that's the main -- one of the most important part for the gas sensitivity, but that will be updated once we are approaching closing.

Okay. Then I will give the word to David Symonds. [Operator Instructions].

Can you hear me?

Yes.

Three questions from me, please. Firstly, there were repeated delays to the start-up of this project. Is there anything you can say on the due diligence process that you undertook and what the issues were previously and how you think you can fix them going forward as much as you can comment on that? Secondly, can you give the build cost for the portion of the project that you're buying? I think it was originally scoped at $600 million, but I imagine it's run over from that. And then also maybe how much would it cost to build today?

And thirdly, a bit more sort of stepping back a little bit, is there a signal here that the risk of Europe being pushed off the top of the cost curve is bigger than the opportunity of earning a blue premium under CBAM in your minds, given that you're sort of devoting capital to pivoting away from Europe, more so than pivoting away from carbon intensity?

Yes. No, I think when it comes to the technical status of the facility, I mean, obviously, when we acquire something, we do a very thorough due diligence. I believe we -- when it comes to operating ammonia plants, we have the best people in the world on that. And so we are very -- we know exactly what we're buying, so to say.

I think sort of beyond that, it's not appropriate for us now pre-closing to comment any more on that. And that goes for building costs as well. So that -- it's not appropriate for us to comment on that at this point. I think when it comes to your question about Europe and sort of this one versus blue premiums, et cetera. I think we've been very clear in our strategy that there are 3 important components when we look at our ammonia part of our strategy. And that's number one, to improve our energy costs, number two, to improve scale in production, and that way lower fixed cost and CapEx per ton.

And number three is to position us well towards carbon cost in Europe and also, of course, our greenhouse gas targets as well.

And I think, obviously, this acquisition in itself is a major step forward on 1 and 2. And of course, given that there's no carbon capture here, it doesn't do much for #3 [indiscernible] yet. But I think, again, it's very important to think about -- or we think about this as our portfolio, right?

And again, here is why the our collaboration with Air Products on NEOM becomes very important as well. Both fills need that Yara has in its system, right, but also with the ammonia infrastructure that we have in Europe, important gateway to the largest -- obviously, largest market with blue premiums, but also I would say the only market with green premiums, which is an important element as well. We shouldn't forget that, right?

And I think the combination of that facility and our import capacity in Europe is also very attractive for both parties, both Air Products and Yara. And even as you sort of alluded to that, the appetite for renewable ammonia is perhaps less than what it was a couple of years ago in the market. It's also important to remember that the combination of Air Products and Yara presents to the remaining demand there, the only -- is the only combination that has a real producing plant and a real import infrastructure. I mean the rest is basically for most MoUs and plants. So sort of for the interest there is and there is RFNBO legislation in Germany, as an example, and in other countries in the EU, as well, and so there are opportunities there.

So yes, so that's definitely not off the table or unimportant. But I think the combination that we have with this facility, this acquisition here and our collaboration with Air Products in Saudi Arabia as well as some other opportunities that we have announced previously as well, smaller -- it positions us very well.

And just to add, we're very much committed to our European operations to the European market. And we have, through several years now worked in a rather volatile environment, and we've built in a lot of flexibility and resilience into our European plants as well for finished goods production. And -- but then we also need a portfolio in totality that makes sense here as well. And we look at the -- so don't think about this as individual assets, but rather do we put together the right portfolio of products that can support, and this is one important component that really helps to strengthen the totality of our ammonia position.

Then we move to Angelina. [Operator Instructions].

I hope you can hear me? I just have a follow-up on what you have said earlier that there is a possibility technically to retrofit this newly acquired plant and, for example, make it a blue ammonia plant. And I just wanted to ask from a strategic standpoint or maybe from the external environment standpoint, what will be the catalyst for Yara to take such a decision going forward? Is there something that needs to change from the regulatory perspective? Is it that you need more certainty? Or how would you think about that going forward overall?

Well, the key catalyst is net present value. It needs to make sense. So back to no-green transition with red numbers. They need to also show up in cash flow. And then for us, it's about looking at the totality of our portfolio. And we've done, as I mentioned earlier, significant decarbonization in our current structure.

We are doing similar projects to what would be needed to be done here in order to decarbonize. So the project in Sluiskil in the Netherlands would be very similar to what you could do in a location like this in order to do further decarbonization, but there needs to be an income side to that as well. And when we look at the totality of what we have now, whether that is our own blue ammonia production that is coming online.

The agreement that we were working on with Air Products on green ammonia from the NEOM project, our own green hydrogen production it's about having available tons that you then have a scale and market for us as well. And currently, that is not needed, should it be? Well, then we can go ahead and do investments similar to what we're doing in Sluiskil if it makes economic sense. And currently, that is not needed.

Understood. And just another very quick follow-up. So you have commented earlier that you are not considering any other large-scale projects at the moment. But when it comes to offtake agreements for clean ammonia, for example, what you have for the NEOM projects, would you still be considering such agreements if they were available in the near term or maybe a few years out?

Yes. No, I think that depends a bit on what type of ammonia and what type of agreement. I think when -- right now, as I talked about earlier, of course, our focus is to commercialize this project or -- that project, NEOM, from an offtake perspective. In addition to, of course, the GCA facility once we close. But in general, our ammonia portfolio, what we buy and sell ammonia goes far beyond what we produce and consume ourselves as well. We already have a large portfolio of varying types of contracts, some shorter, some longer. So I think that's something that we can continuously sort of add and subtract to that portfolio.

Yes. As Magnus is saying, we have a very interesting and strong midstream position here. And as other industries move to decarbonize as well, keep in mind that ammonia is a very suitable carrier of hydrogen. And as that is for other industrial processes and you need to carry hydrogen over long distances, well, then we could utilize our network. So here, this investment doesn't change anything to that. If anything, it strengthens our midstream position. But it depends on both profitable offtake agreements, but also demand for low-carbon ammonia/low-carbon hydrogen.

We will now give the word to Magnus Rasmussen. [Operator Instructions].

So if you were to add CCS at a later stage, is it the correct understanding that such project CapEx would be CapEx for Air Products and then matched by higher OpEx for Yara? And if so, how much higher OpEx would be roughly then we're talking about to defend Air Products' investments?

Yes. I think sort of the specifics of exactly how that would happen. I think it's a bit premature to talk about that also keeping in mind that we are pre-closing still on this acquisition. But I think in general, I mean, today, this is an ammonia plant that receives part of the hydrogen from their SMR, part of the hydrogen from a pipeline. So Air Products in their system, they have a lot of flexibility, which then, of course, also means that in terms of whatever changes that you could do to that hydrogen supply in the future, it comes with a lot of flexibility.

So that -- so it's even too early to sort of speculate on exactly kind of what opportunity you would do, but that certainly does offer the opportunity at least for a more sort of step-wise approach and also as Svein Tore pointed out, if it's profitable. I think -- but obviously, doing capture of existing CO2 streams of any ammonia plant, including this and also like we are doing in -- with our Sluiskil project comes at a much lower CapEx -- significantly lower CapEx than what you're talking about in terms of new builds, right? And so that's a totally different picture, yes.

Understandable. And just want to...

But again, maybe to -- I mean on your question, I think whether the CapEx comes here and the OpEx comes there. I mean from an [indiscernible] perspective, it doesn't really matter so much, right? So it sort of to calculate the value creation for such an investment, you kind of need to look at what would -- I mean both the CapEx and OpEx be and what kind of margin would you get from CBAM 45Q, obviously, and so on.

Yes. I just wanted to also sort of confirm your -- you said roughly $250 cash costs now given current gas prices, and that's on the EBITDA level, right?

Yes.

And also finally, just it was asked earlier the question, I don't think you answered it maybe just skipped it. What would it have cost to build such a project now? Do you have a rough idea of that?

I mean I think in terms of replacement cost for an ammonia plant and of course, it differs a little bit, obviously, which scale and size to build and so on. I would guide towards the publications, but also our Capital Markets Day presentation where we have some numbers from trying to average out a bit projects that have been announced recently and what that means in terms of CapEx per ton. And I think that's quite applicable for a project like this as well. So I think that's probably -- I don't have those numbers off the top of my head, but they're in our Capital Markets Day presentation.

Then we have a question from David Symonds. [Operator Instructions]

Yes, just a quick follow-up. So obviously, part of the CBAM premium that's available to [indiscernible] comes from efficiency, being better efficient -- more efficient than competitors basically. I would assume that this is bottom quartile for efficiencies or sort of around the 30 to [indiscernible] mark for gas per ton of ammonia. Is that a reasonable assumption?

Yes.

It seems like that was all the questions for today. So just a big thank you for everyone for joining the conference call. And should we have more questions, IR is always available for that. Thank you, and goodbye.

Welcome to Yara's First Quarter Results Presentation. The presentation today will be held by Yara's CEO, Svein Tore Holsether; and Yara's CFO, Magnus Krogh Ankarstrand. I would like to mention that we have a change in how we do our Q&A session today. Once the presentation is done, we will move straight into the Q&A session. [Operator Instructions] But first, let's start the presentation. It is my pleasure to hand over to our CEO, Svein Tore Holsether.

Thank you, Maria. Good morning, good afternoon, good evening, depending on where you're dialing in from. And thank you for joining our first quarter presentation. As always, I'm starting with our safety performance. Our license to operate is creating a safe working environment for all our employees and contractors. And we have a lot to be proud of our performance in the first quarter, but safety is not one of them.

We continue to see an increase in accidents, and this has also been the case in April, which means that we will likely see further deterioration as we get into the second quarter. And there is only one responsible for it, and that is me. And I take that responsibility very seriously. I'm now in my 30th year in industry. And what I've learned from safety is that you cannot dictate your way to safety and also that campaigns, they only have a short-term impact.

It is what we do every day, every week and every year that matters. And we know what to do. We will continue to work according to our Safe by Choice approach that has now been in place for 12 years. This is our joint commitment to safety throughout the whole organization because at the end of the day, 1.2 TRI, that's a ratio. But behind that, there are 59 accidents, 59 colleagues, someone's mother, father, brother, sister, friend that got injured at work during the last 12 months. We can, and we will bring that to 0.

But for now, we need to turn the negative trend. On Tuesday next week, we will have our Annual Safety Day, and that is another opportunity for us to spend time together and get this right. That was the low light. Now let's take a look at some of the key highlights for the first quarter. Yara delivered a strong quarter with an EBITDA, excluding special items of $896 million. This is an increase of 40% compared to last year, and that's reflecting higher nitrogen upgrading margins in a tight market in the start of 2026.

And in addition, Yara has increased deliveries to customers in the quarter, reflecting a strong commercial execution. And this also enables us to maximize production volumes and consequently also capital efficiency. First quarter results mostly reflect pre-war markets, but the Middle East conflict has disrupted global fertilizer markets since the end of February. The blockage of the Strait of Hormuz disrupts around 1/3 of global traded urea.

It also has other key raw materials for fertilizer production such as its gas, its ammonia, its phosphates, and sulfur. And this supply shock has led to significant increase in global fertilizer prices. And that, coupled with weak crop prices and high regulatory burdens, farmer affordability has increasingly come under pressure. And the high prices are increasing volatility and also risk premiums across the fertilizer value chain and eventually into the food markets as well.

As we said at our Capital Markets Day in January, Yara is a battle-proven organization due to our global diversification, our energy flexibility in Europe and also our highly competent workforce. And now that is being put to the test again, and we are demonstrating the strength of our business model where our global system enables us to uphold production and to ensure the continuity of supply.

And this means that we are uniquely positioned in the current situation with strong commercial and operational execution in a disrupted nitrogen market. And I want to thank all my colleagues in Yara for their strong performance this quarter. Looking then at the EBITDA variance for the quarter. The increase of 40% since last year mainly reflects the increased nitrogen spreads. Nitrogen prices have seen a significant increase since first quarter of 2025.

And gas price changes are typically reflected after 2 months in our earnings. So this quarter, EBITDA is largely based on pre-war market dynamics. Volumes are also up, reflecting strong commercial execution in the season to date. And keep in mind here that we also had a strong fourth quarter on volumes. We continue to see a positive impact on EBITDA from our fixed cost reduction program and a further $18 million down from last year.

Return on invested capital has doubled from 6% last year to 12.2% on a rolling 12-month basis. And that's above our through-the-cycle target of 10%. Global fertilizer markets are currently heavily affected by the ongoing conflict in the Middle East. Around 1/3 of globally traded urea is exported through the Strait of Hormuz, but also 1/4 of the world's ammonia as well as 50% of sulfur, which is significantly impacting the availability of phosphate fertilizer.

And furthermore, 20% of global LNG trade is disrupted, and that's leading to urea production curtailments as well, such as in India. The disruption to urea availability has led to a significant price increase, so far, 47% since February. And urea FOB Egypt is up even more at 77%. TTF gas prices have also increased, however, less so than urea and phosphate prices.

Farmers' situation was challenging before the war driven by weak crop prices and cost inflation across many input factors as well as regulatory burdens and global market volatility, which all add to this pressure, and this is concerning. And those that will be hit the hardest are smallholder farmers in the poorest parts of the world because of lower ability to pay.

But it's actually a double hit because it's likely also impacting the farmers where the yield curves are the steepest, meaning that marginally lower fertilizer application will have a higher yield impact. Fertilizers are essential for food production and stable access is really critical for farmers to produce the food that the world needs. Yara's role is to remain robust and to ensure the continuity of our production and also the deliveries to the farmers.

Building on long-term operational improvements, our production system has seen a steady increase in output. And this is also our core focus in the current situation. And as you see here, deliveries to customers are also up in the same period. Volumes on this slide are not adjusted for turnarounds, but it's reflecting actual production and actual deliveries.

And ensuring a high uptime of our assets is really a key objective, and it improves our capital utilization and also our energy efficiency. In addition, our energy flexibility enables us to import ammonia if needed in order to keep finished goods production running.

And this has enabled Yara to be a reliable source of fertilizer in this critical period as well, alleviating some of the pressure on markets and serving farmers around the world. Yara's position is unique globally and the flexibility in our system continues to limit cyclical downside as well as maximizing output in the current situation. And with that, I'll now hand over to our CFO, Magnus Krogh Ankarstrand.

Thank you, Svein Tore. As mentioned, EBITDA is up more than 40% on a strong first quarter 2025, predominantly driven by increased nitrogen operating margins before the effects of this ongoing conflict in the Middle East. This translated into a 60% increase in earnings per share as depreciation, interest and tax remained stable. Return on invested capital increased to 12.2% on a 12-month rolling basis, reflecting both increased earnings as well as portfolio adjustments.

The quarter saw a USD 35 million increase in operating capital, driven by an increased price environment. However, this was more than offset by an increase in cash from operations, resulting in a significant increase in free cash flow of USD 196 million as net investments were flat. This increase in cash returns is attributable both to the improvements undertaken as well as the constructive nitrogen market in the first quarter.

Turning to deliveries. We see an increase of 3% in Crop Nutrition deliveries compared to first quarter last year. This was primarily driven by increases in the Americas, but worth noting that stable deliveries in Europe, comes on top of a strong first quarter last year that saw a 15% increase over the year before and a 6% increase in volumes in Q4 2025. That means that season-to-date deliveries in Europe are up 2.5% and are among the highest in the last 5 years.

In Africa and Asia, we saw a reduction of commodity volumes, however, an increase in deliveries of our premium products. And deliveries in Industrial Solutions are down 5% for the quarter, following plant closures in Brazil. However, these portfolio changes have a positive impact on our cash flow. Yara has focused through the last months to ensure both production and supply chains flow in the extreme situation to safeguard deliveries to our customers worldwide, and we have not experienced major disruptions to our production or supplies.

This then increases our cash earnings further and strengthens our balance sheet, putting Yara in a robust position in the ongoing market volatility. Cash earnings are partly offset by an increase in net operating capital, which despite the seasonal release of inventory is up due to the increased values driven by prices. We are currently experiencing a strong market for all nutrients, especially nitrogen and phosphate.

This increase in Yara's nitrogen and phosphate operating margins and increases the bar for our premiums, which we measure above commodity value for the nutrients. That, combined with lower crop prices in general, exercised some pressure on our premiums in certain markets. For the fourth quarter, strong demand and pre-buying in Europe supported European nitrate premiums ahead of the year-end and premiums in the first quarter of 2026 were comparable to the fourth quarter, but lower than first quarter last year given the higher nitrogen prices in general.

NPK premiums are somewhat pressured, and primarily driven by Asia, we see a contraction towards more normalized premium levels at a very high commodity price base. Yara has a robust commercial organization and is on a day-to-day assessing the market environment on how to optimize volumes and margins globally. This also underlines flexibility of our business model and the ability to create value both on the upstream margin as well as the premiums, which also limits the commodity downside through the cycle.

And building on that, there is no doubt that the current global situation puts significant stress on supply chains, and this is particularly visible in the fertilizer space. Yara's global reach and flexibility is uniquely positioned to navigate this. The current price environment, coupled with weak crop prices, is already leading to a substantial difference in buying appetite in prompt markets versus off-season markets.

Despite moving into the end of the season in the Northern Hemisphere, the significant loss of nitrogen and phosphates as described by Svein Tore, means a supply and demand shortage in several Southern Hemisphere market as well in addition to India being a main driver for demand in the period to come. And due to Yara's global reach, we are able to optimize global deliveries and ensure we can keep our production system running at full speed, also by changing from locally produced to imported ammonia, if necessary, due to gas prices in Europe.

And this is vital to keep serving a market in severe shortage of nutrients in our core markets such as Latin America. Ensuring our assets are uninterrupted is a core part of our operational excellence. However, we have had an unfortunate outage in Pilbara since mid-March, expecting to come back on stream in May. That is our ammonia plant that was stopped. In addition, we will execute a long-planned major turnaround in Belle Plaine after the season is over in June.

And this will lead to a reduction of approximately 150,000 tonnes of urea in Belle Plaine compared to a full year of production and a loss of 140,000 tonnes of ammonia in Pilbara due to the outage. Diving deeper into this market situation, it is clear that the ongoing crisis in the Middle East has an unprecedented impact on global supply, not only urea and phosphate, but also other raw materials essential for fertilizer production such as sulfur are stranded and limiting fertilizer supply globally.

And with as much as 1/3 of urea supply impacted and further supply reductions from Russian plants as well as reduced production in India due to LNG shortages, global availability is severely reduced and in an already tight urea market without spare capacity, significant demand reduction is required to balance the lack of supply. And naturally, market prices go up to balance the market and ration demand.

This has been exacerbated by the ongoing season in Europe and the U.S., and it's obviously an extraordinary situation given the crisis in the Middle East. Market development going forward will depend a lot on the duration of the blocked Strait of Hormuz, the level of damage to infrastructure and the ramp-up time required to get back on stream. Demand reduction is a balancing factor as is potential exports out of China.

In the medium term, as previously illustrated at our Capital Markets Day, there's a limited number of supply additions from ongoing urea projects, and this already seem to increase market tightness versus historic demand growth. And recently and recent announcements suggest that several of these projects are -- that were announced to be commissioned in 2027 will be further delayed, driven by both the Middle East situation and other factors.

Capacity and export out of China is likely to remain the balancing factor in the medium term. And for Yara, this medium-term constructive nitrogen outlook is set to drive further value creation. However, our strategic priorities are designed to increase shareholder value irrespective of market developments. As presented at our Capital Markets Day, our strategic priorities rest on 2 pillars: driving performance and competitiveness and growing from our core.

The former is the operationalization of our improvement program, focus on asset utilization, logistical optimization, capital reallocation and commercial excellence, all aimed at increasing our EBITDA and cash flow. Our medium-term goal of diversifying our energy position further remains a core part of that agenda. Meanwhile, growing from our core is key to increase value creation, scale and return to our shareholders.

This includes healthy organic growth from recent and future production increases, up to 1 million tonnes on premium products as we announced in January. In addition, this includes realization of recent growth projects such as the NPK expansion in Cartagena, our YaraVita plant in the U.K. and the CCS project in Sluiskil, all to be completed this year. In addition, Yara will explore further growth opportunities linked to our core, all within our commitment to strict capital discipline and focus on cash returns.

As mentioned on the previous slide, energy diversification is core for Yara and the collaboration with Air Products is a strong strategic fit to deliver this. The combination of Yara's significant ammonia system, including import infrastructure in Europe and Air Products advanced projects in the ammonia space is a strong strategic fit for both parties. For Yara, the drivers are threefold: access to low-cost gas, asset competitiveness and renewal through scale and the ability to harness carbon premiums.

Predominantly through CBAM and with our collaboration with Air Products, we get all of these 3. At the same time, Yara is able to place volumes from Air Products more cheaply and efficiently into the core markets without the significant infrastructure investments otherwise needed. Commercial negotiations are proceeding according to plan with a priority on the NEOM project that is due to commission in 2027, and the U.S. project is progressing according to the previously announced time line.

Yara is fully underway to materialize the improvement program announced in January. And summarizing the first part, our cost program that we launched almost 2 years ago, we already have a head start on that. Excluding currency changes, our fixed cost level on a 12-month basis is at USD 2.3 billion, down approximately USD 230 million from the second quarter of 2024, and this incorporates the underlying inflation in those 2 years as well.

Going forward, we will include this into our improvement program, which expands the value levers into a range of other areas as well, but having achieved a strong cost control environment upfront provides us with a very solid starting point. And the improvement program remains a core focus going forward, aiming at more than USD 200 million EBITDA improvement by the end of 2027 and USD 350 million by the end of 2030.

This includes our 10% ROIC target through the cycle, and we are starting to see strong financial metrics through a combination of market developments and improvements. It is, however, important that our aim of improvements irrespective of market developments. Looking at the last 12 months, we see a significantly increased EBITDA of about USD 3 billion, and accumulated cash flow close to USD 1.2 billion and perhaps most importantly, a return on invested capital firmly above 12%. And with that, I will give the word back to Svein Tore.

Thank you, Magnus. The current situation is really unprecedented for the global markets, and the fertilizer industry is no exception to that. Together with the Ukraine war, the current conflict in the Middle East adds to the geopolitical volatility. Yara's business model is well adapted to navigate such volatility. And as we said at our Capital Markets Day, we have improved our resilience, building on our experience over recent years. And our competitive edges are really key in achieving this.

The bedrock of this is our scale and global optimization, which is even more vital in the current situation. Operational excellence combined with flexible energy sourcing helps us to uphold finished fertilizer production. And our premium and diversified product portfolio provides a strong foundation helping to mitigate earnings volatility when commodity prices fluctuate.

Finally, a disciplined and flexible investment approach, clearly anchored in our strategic priorities, will continue to strengthen our long-term competitiveness. Then to conclude our presentation, it is important to highlight that our ambitions and commitments remain firm despite the current market turmoil, further maturing our resilient business model and delivering on the improvement program launched at our Capital Markets Day back in January.

They remain core focus areas. And our long-term goals of diversifying our exposure to lower gas costs and enabling low-carbon ammonia opportunities remain key priorities with a strong balance sheet, capital discipline maintained and a clear commitment to our credit rating, Yara is well positioned to deliver sustainable long-term value creation. And with that, I'll hand back to Maria.

Thank you, Svein Tore. That concludes today's presentation. We will now take a short break to set up and get ready for the Q&A session. [Operator Instructions] With that, we'll see you in a short bit. Thank you.

[Break]

Okay. Welcome back to everyone. We are now ready for the Q&A session. This is Maria speaking. I'm here joined by today's presenters, our CEO, Svein Tore Holsether; and our CFO, Magnus Krogh Ankarstrand, in addition to our Head of Market Intelligence, Dag Tore Mo. [Operator Instructions] Christian Faitz, please unmute yourself and ask your question.

Two questions, if I may. First of all, can you remind us how you deal with the volatility in gas prices at this point in time? And are you considering hedging at some point? And how are you secured through the rest of the year on the gas side? That's the first question. And then the second question, obviously, yes, thanks for the helpful slides you had in the presentation and in the slide deck.

And you did show, obviously, that a large part of the European -- of the Northern Hemisphere is actually covered in terms of fertilizer demand. But if I was a farmer, I would obviously try to optimize costs and maybe also skip one or the other topping during the season. Is that what you see? And could that also be an inventory issue at some point heading into the '27 season?

Yes. It's Svein Tore. I can start with the first and then I'll hand over to my colleagues on the second one. When it comes to gas prices, we're not hedging that. And that's been our practice over a very long time period because we see a very strong correlation between global energy prices and nitrogen prices that we have that flexibility to move with the market. And then we've built in additional robustness in our system by also being able to switch between producing ammonia and then I can use Europe as an example, where it's most exposed.

So we don't have to produce the ammonia in Europe for about 75% of our finished goods. We can bring ammonia into Europe, and that gives us flexibility to switch if it should not be economical to use gas to produce ammonia in Europe. For the time being, the upgrading margins from gas to ammonia in Europe are also at a level that justifies continued operation, and we're running at full blast. And should that, for some reason, change, well, then we will do like we did back in 2021 and 2022 to bring ammonia in.

And that's part of the strength in our business model where we can utilize the global network that we have on ammonia. We're one of, if not the largest ammonia traders in the world, and we have ships that can transport ammonia across the world, and we're utilizing that to maintain finished goods production. And should we have hedged, then we would have lost some of that flexibility. So that's the reason we have that structure in place. And then I'll hand over to Dag Tore or Magnus on the second question.

Yes. When it comes to, let's say, markets like Europe or North America, in some ways, they are kind of well covered when you talk about the import situation and urea in particular, I think I should mention that we are still seeing nitrogen demand. I mean we are delivering both from Belle Plaine and from our production system in Europe now in the second quarter as well. But if you look at -- if you just look at the urea situation, both the U.S. Gulf, which is far away from the application areas in North America at the moment and in Europe, pricing now is such that they do not match, let's say, the India price or the peak pricing elsewhere.

So from that perspective, at the current global urea values, there is very low demand, import demand and probably not the need for it either if you look at relative pricing between nitrates and urea, for instance, in Europe. So in that sense, covered on the application, I think that nitrogen application, most areas that are exposed to the global values today will see some demand destruction more or less, you have kind of -- you have China and India covers almost half of global demand for urea, which are not covering -- which are not following the global market and have their own domestic pricing, which is way below.

So that leaves kind of half the global market that has to do the demand rationing in a situation where there are significant supply losses. So if we again take Europe as an example, just to give some more details, I think that the industry deliveries in Europe are fairly stable, season over season.

And we see that imports according to Eurostat and the numbers from the European Union, so far this season through March, Europe or EU has imported 4.2 million tonnes of urea, which is down from 4.9 million tonnes of urea same period last year, and there's probably been some declines also in other products or there has been some declines in other products, although urea is the dominant one.

So I think that just looking at the current supply situation, it's logical to expect, let's say, a short fall of demand or a drop in demand of 5% to 10%, something like that in Europe probably. On your question of inventories, that is something that I kind of concerned us or we have been trying to follow that as well. And what we hear from the field is that from our commercial units is that the farmers are generally using the fertilizer they have bought.

So no big carryover risk there into next season, we think, and that distributors and retailers are also back-to-back mostly so that in Europe, and that is normal, there are kind of regularly -- people are quite careful about not having too much inventories. North America, that can be a little bit different because of the longer lead times on the import side that it could end up with a situation where, let's say, imports are a little bit more than what is needed. So I hope that helps.

The next question is then from Magnus Rasmussen.

Magnus Rasmussen, SEB. I wanted to touch upon volumes as well. And I wonder if you can give some comments about what you are thinking for Q2. You stated in the presentation that Europe had among the highest season-to-date levels, but also strong volumes in America in Q1. I think Dag Tore touched upon it a bit as well, but some further comments sort of for Yara specifically as well would be helpful.

Also a question on price realization in Q2. I mean we see urea prices skyrocketing and nitrate prices not so much and Profercy also reduced their European nitrate prices yesterday. Your sensitivities cover a mix of different products. Is there anything that we should keep in mind and be aware of in terms of price realization into Q2? And also how do you read the low nitrate prices in Europe relative to urea from, call it, demand or market perspective in Europe?

Yes. I can maybe start a bit on the volume side. We don't -- as normal, we don't give any future guiding on volumes as such. I think what we can comment, as we also said in our presentation, is that Yara has a global system. And of course, that's also in normal circumstances, obviously, benefit given the difference between season in the Northern Hemisphere and the Southern Hemisphere. And we think that will be even more so the case this year.

And of course, beyond that, I mean, our production levels are a question of whether we are -- whether we have sufficient margin to actually produce at different times. And so in a way, looking at market prices and gas prices throughout the quarter, that will kind of explain that situation. But of course, in addition to that, it's important to keep in mind the fact that we also can import ammonia from -- into Europe if gas prices were to go up.

But obviously, as everyone can see right now in the current situation, nitrogen prices have increased a lot more than gas prices. So I mean, so that in terms of what we produce and then ultimately sell, that's really what determines that. And of course, where we sell it depends a bit on how markets develop. And I think on maybe the urea nitrate pricing, I can give to you, Dag Tore.

Yes. I think it's, of course, a bit more challenging for you and others to monitor this now that prices are so extremely high because it leads to some more fragmentation and regional differentiation than otherwise. When prices are more normal, then you can use fairly straightforward sensitivities, right, because everything is kind of correlating very strongly. Some of that is now kind of a little bit distorted.

Let's say, if you put in spot prices in the Arab Gulf, that is basically the netback from the India tender which they paid kind of $950, say, there are very few regions now in the world that are willing to pay $100 -- $950 for urea, as you can observe, if you observe carefully in the regional prices that the publications quotes, nothing secret about that. You see that U.S. Gulf is discounted. Even Europe is somewhat discounted.

Brazil is discounted. So just putting in, let's say, $910, $920 for Arab Gulf, for instance, is giving a little bit exaggerated picture probably. So that is one thing that, of course, we have to be a little bit careful about. When it comes to Europe, of course, I mean, if you were a farmer now that needs urea for March, would you buy it now, question mark. And of course, that is an understandable dynamic.

I think that for a while now, maybe the urea import parity is not really the main driver of nitrogen prices in Europe for a period and that we see already as you were hinting at, right? You have 0, say, round numbers, 0 nitrate premiums right now based on the publication references. And it wouldn't be a surprise if you, let's say, with a starting price for next season that you will see a negative nitrate premium versus urea unless urea comes down a bit.

So I think that as Svein Tore was saying, I mean, the farmer affordability is so stretched that I think that there will be more regional differentiation based on what farmers need the product right now and what -- and those farmers that can defer the purchasing to closer to their application season. So a bit more challenging, I think, to be very precise on price realization than normal.

And just to remind everyone as well, the sensitivities are based on high-level easy assumptions, right, 1-month lag and 2 or 3 market prices in volatile markets and with increased regionalization, like you say, it's natural that they will be less precise than in a more stable market environment, yes. Moving to the next question is from John Campbell.

It's John from Bank of America. I have 2 quick questions. So maybe if we continue kind of on the NPK and nitrate premium. If I remember properly, I think second quarter '25 had pretty robust reported NPK, I think it was $265 per tonne. I think you've discontinued the practice of actually quoting the specific figure. But presumably, based on what you're kind of saying, gathering the comments you've made on this call, it sounds like that will be down maybe quite steeply into the second quarter.

That was my first question. Second question, just very quickly, any comments or assumptions or expectations for resumption of Chinese exports of urea in 2026? I think Bloomberg had a comment saying that it could be something like 3 million tonnes, which should be down year-on-year, but anything you've heard interesting, given, as you say, it's kind of one of the market balancing areas of supply.

Should I take the China question first. Nobody knows, of course. I think there is discussions ongoing in Beijing as we speak. So our understanding, they are debating this right now. The flow started in July last year, so a little bit of time left for that. We also see that there are quite a few market players that have already started to move products to ports. I mean, effectively removing that product from the domestic market already.

And that has caused some reactions both from the government and from the nitrogen association. It seems that are a little bit upset about this development ahead of approval. So that there are even some discussions of maybe that -- whether that could lead to some delays in the export approvals. Let's see how that fits. And I also said you referred to those 3 million tonnes. I've also seen those referred.

And to me, I haven't seen anything concrete yet nor from our experts in the market. So I tend to believe that must be some kind of speculation. But I also saw 3 million tonnes mentioned. I would think that would be a first tranche then in that case and not necessarily the total volume for the year. But that's what they also did last year, right?

They first approved 2 million tonnes and then they added to that quota as they saw that the domestic market did not react to the export volumes. So I don't think you should conclude -- I wouldn't have concluded that those 3 million tonnes, that's it. But be open that this is a really important factor in the market for the rest of the year.

And on NPK premiums, and again, of course, we don't give guiding on premiums, exact premium levels as such. But I think it's fair to say that the last couple of years, NPK premiums have been very high and higher than maybe average over a longer time period. But obviously, now with commodity prices increasing as much as they have and nitrogen, as we talked about, but also phosphates with a significant increase in -- due to -- well, same reasons that for nitrogen in the current crisis.

It's also natural that, that puts some pressure on the premium that farmers are -- can pay on top of that, of course, also considering the farmer economics. But -- so even though NPK premiums are somewhat down since last quarter and a year ago, it's still holding up quite well, and we'll see how that plays out, which will depend as well on the commodity development in the next quarter. But of course, for Yara, we -- I mean, we, of course, make money both on the premium as well as the operating margin or the commodity margin.

And there, of course, on both end, but also particularly phosphate, of course, there's been a significant increase. And I think also worth to mention in our production system, roughly only 1/3 of our NPK production depends on sulfur in the production system. And of course, sulfur is right now being a significant cost driver in phosphate or DAP production and phosphate prices. That's, of course, an advantage that we have on the margin side.

[Operator Instructions] The next question is from David Symonds.

It's David from BNP. I have 3, I think, please. First one, could you talk about your assessment of damage to Middle Eastern nitrogen and LNG facilities so far? How much do you think we've lost longer term? And if the war ends this weekend, let's say, what would be the time lag before we get back to a more normal situation in nitrogen? Second, could you -- this is more just a modeling question. You very generously gave us the 150,000-tonne number for the Belle Plaine turnaround.

Is there an estimate of how much you might lose from the India and Australia outages and curtailments that you announced in the second quarter? And then thirdly, what could the policy response to this current crisis be? Is there an increased likelihood of CBAM suspension for fertilizers in the near term? Do you think we might see reopening of plants as we saw Brazil do with Petrobras? Any thoughts on that would be great.

On the Middle East, it's, of course, hard for us to know. We -- what has been announced is that Qatar has had some damage to their natural gas infrastructure that will take quite some years to repair. We don't think that the fertilizer plant is damaged, so that should be able to restart very quickly. There has been some damage in Bahrain and some damage in Saudi Arabia also we hear, a little bit unclear how much and how long it will last.

And in Iran, there is quite a lot of damage to the gas infrastructure, and there are only a few of the plants in Iran that has been able to start up. So -- but to your question about how long time this would take to normalize, I think it's hard for us to speculate around that. It certainly takes some time, how much -- yes, it's hard to estimate.

I think on your questions on India and Australia, I mean, on the Indian side, the impact to -- I mean, to our results is fairly limited from the current curtailment there. On the Australian part -- sorry, Australian ammonia plant, as I said, we assessed roughly 140,000 tonnes in total. I think we also said in the market that we expect start-up sometime in the first half of May. So then -- I mean, from a -- you can sort of do math on how much that -- because -- I mean, when the plant went down, so how much of that will be in the second quarter versus the first quarter policy?

Policies, here. You mentioned CBAM. I think the last thing that Europe should do right now is to create any uncertainty around CBAM because that's in place in order to create a level playing field so that imported volume pays the same emission cost as European players do. And if there's one region that has felt the consequence of dependencies, it's Europe, look at what happened in the energy sector on the energy crisis and what that meant for households and industries that we're still struggling with in Europe right now.

So then -- to then weaken such a vital industry as fertilizer and farming would further emphasize the challenges in Europe. So I think what the policymakers should consider here is rather use the CBAM revenue and redirect that towards farmers to not put a burden on the shoulders of the farmers. They don't have the margins to support this, but we need food production in Europe, and we need a healthy fertilizer production system in Europe as well.

And if we're -- as a result of this creating an uneven or not a level playing field, that would maybe come at a very short-term relief maybe, but a very high-cost long term because then we would be even more dependent on imports. So it's important to keep the long term in mind here as well. But any uncertainty on CBAM in Europe for the industry right now will have impact on the ability to invest in long-term projects.

But of course, as we look globally and with fertilizer being responsible for half of the world's food production, I understand that this is something that is very high on the agenda for politicians all over right now, but it's important that we balance the short-term need with the long-term implications for that interventions could have.

But we really do think that CBAM is an important lever and that in combination with ETS, if you are to reach the Paris Agreement to reach the emission targets for Europe, that needs to stay here. And that's also important for the long term of actually growing food because we also have to solve the climate challenge here. And I would say that one of the occupations hardest hit by climate change is actually farming.

They work out in nature, and they work, whether it's floods or droughts or record heat or record cold, that's where they have to produce food. So it is in our interest that we deal with the climate challenge as well, but it's not something that we could just put on the shoulders of farmers.

Let's move to the next question, which is from Tristan Lamotte.

Tristan Lamotte, Deutsche Bank. Two questions, please. The first one is how high is the risk that the CapEx number that you quoted for central blue ammonia projects has to move up given the developments in the world since you first gave those numbers and given that the final agreement is yet to be signed? And the second question is, I'm just wondering if you could talk about any opportunities for permanent market share gains relating to the conflict.

Yes. When it comes to the project with Air Products, as we said when we had the announcement, I mean, the time we spend towards midyear to the next phase of that project, including the preparations of the potential FID is sort of around the contracting market and evaluating the technical side the project together with AP. And I think that work is still ongoing, and there's nothing particular that's happened since then that sort of changed anything substantial in that regard.

So I mean, it depends on the market, depends on the bids. And so yes, there's nothing new as such there and sort of things are proceeding according to the plan that we had. I think in terms of market share, I would say -- our primary objective also sort of reflected in our improvement program is to increase organically production output for organic growth from our production system, so up to 1 million tonnes of additional premium products through production improvement and debottlenecking.

And in addition, we have a few projects coming online now with NPK expansions in Cartagena as well as YaraVita biological plant in the U.K. and so on. So obviously, that will go into increasing our market share as we sell what we produce. But in addition to that, and also as a part of the improvement program, we are looking at optimizing our global system, taking more market share in our most profitable markets.

I think -- and as we also communicated there, Europe is one, not the only, but one core market for us, of course. And I think that is also why it is very important for us to keep production running now as we have, take some risk in doing that. But of course, at the current levels so far, we have good production margin on finished products. We also had good operating margin on ammonia.

And if gas prices were to go up further, we also have the possibility to import ammonia and keep finished fertilizer production going. So we believe that Yara as such as a quite strong competitive edge also against competition, also in Europe in terms of being a very stable, reliable supplier for the European market and gaining market share.

And to add on, you put it very well, Magnus. And as we said at our Capital Markets Day back on January 9th as well, we said that we're a battle-proven organization, and we've been tested again now. And I want to thank all our colleagues for an outstanding performance where finished goods production is at one of the highest levels we've seen. But one thing is to produce, but also to get it out to our customers as well and it's been an outstanding performance on really working hard throughout our whole supply chain in order to get that done.

And we've used the robustness and the flexibility that we knew that we had in our business model before the energy crisis and before Russia's war in Ukraine, but the learnings that we had from that, we've also built in even more flexibility in our system, and that's what we're fully utilizing now to maintain production at high levels, but also moving the product.

[Operator Instructions] With that, we'll move to the next question, which is from Mazahir Mammadli.

So 2 questions from my side. Sorry, firstly, as we near the planting season in the Southern Hemisphere and if the situation stays the same, how should we think about the market development, whether it's volumes, demand destructions, acreage decisions and also perhaps some relief from amsul substitution in Brazil from Chinese imports?

And my second question is, with the free cash flow that you are generating now and perhaps in the next few quarters, what's the plan first, in the scenario where you decide to go ahead with the Air Products project? And second, in the scenario where you decide not to do that, what would be the capital allocation decision there?

On the first, I think it's hard to -- at least for me here in Oslo now - to have a full picture on exactly how the decision-making is going to be on the Southern Hemisphere by the farmers. What we have heard -- it's logical that the topic is on the agenda, right? We hear from Australia, for instance, where -- which has a peak import season for urea now in the second quarter and maybe one of the regions that are hardest hit by the timing of this conflict.

There are some talks about reducing wheat acreage, for instance, to go for maybe barley, maybe some canola, find some other crops that are a little bit less nutrient demanding. And I would think that, that would be also a topic in places like Brazil, Argentina. We know South Africa is struggling with high prices and low margins. So exactly -- I think a good -- very good questions, but I think it's hard for us to speculate on exactly how that will play out. But surely, there will be efforts to try to find solutions that would maybe require less nutrients.

To the question on cash flow and capital allocation, I mean, for us, it obviously starts with strong capital discipline and as we outlined in January, investing into U.S. projects, as we said, is a core priority for our energy diversification strategy. And then we outlined there as well roughly over the period up to 2030, how much money we sort of -- or much CapEx we plan to spend on that. I think irrespective of sort of FID decision there, I mean, capital discipline will stay strong.

Potentially, we would do other projects, pursue other similar type projects for the same objective, but still with the same discipline. And that's really driven by how much we believe that we can take on at one point in time, not only sort of from a balance sheet perspective, but also to make sure we actually deliver a strong return on those projects. And that's kind of the guiding star for that.

And of course, if our cash flow was to increase significantly in the period as well, I mean, that doesn't change our plans on the investment side materially necessarily as such. But of course, then we would look at the levers that we have at hand. And of course, as we've said, additional distribution is also something that we would always consider, right, in such a scenario. And I think also on that note, of course, also important to mention that with the current market volatility that we see, we also, of course, need to keep in mind that there could be changes in the market as well.

And I think particularly with what we see now, of course, maintaining a very strong balance sheet is extremely important for our flexibility, both to navigate the market, but also to sort of make shareholder-friendly decisions. But sort of regardless, of course, our capital discipline remains even though our cash flow would increase. But that said, we are sticking to our capital allocation policy, our dividend policy, and we will, as a part of that, always consider additional distributions.

The next question is then from Angelina Glazova.

Angelina Glazova from JPMorgan. I just have one question left actually, and that's on the U.S. blue ammonia project. I am wondering how you think about the time line for mid-2026 FID that you provided us with. Do you view it as a hard deadline? Or do you think that this is a goalpost that can be moved potentially? And the reason I'm asking is that we had quite a detailed discussion on policy earlier on the conference call.

And it is a possibility that we might not get final certainty on CBAM regulation in Europe by mid-2026. And I'm wondering, in this case, how would you approach the decision? Would you still make the decision in conditions of uncertainty? Or would you rather wait until we get this final certainty on regulation?

Yes. Thank you for the question. I think when it comes to certainty around political decisions, whether it's CBAM or tax rates for that matter, you never get that right. They never get 100% certainty. So I think we, as such, are -- always have to make decisions knowing that there is that level of uncertainty. Everything that's politically decided could, of course, be undecided.

That being said, I think sort of the tendency that we see on CBAM now as well, also politically and the signals that are public out there is that the appetite for changing it seems to meet with resistance in many places and importantly, among those European parliament as an example. That being said, when we do a project like this, obviously, we don't base that solely on subsidies or sort of political incentives like that, right? As we've said many times before, basically 3 main objectives.

It's lower gas prices, it's increased scale and with that comes lower fixed cost and CapEx per tonne. And then it's tapping into carbon -- sort of carbon margin as well. So all 3 are important and play a role in the business case. Obviously, if you take one away, then the business case is less strong. But I mean, still, for us as a big ammonia producer, the 2 first ones are very important. When it comes to the time line, I think that is our plan, and we work by the plan.

But I mean, what's important both for us and for Air Products is to make the right decision. So I mean, if there's outstanding technical matters or any other good reason that it makes more sense to wait a little bit, that's, of course, what we do. I mean there's nothing forcing our hand to make a decision on a certain date. I mean we will make the right decision for both companies, and that is one that is value-creating for all our shareholders.

Thank you. We only have one more question so far. So if anyone else has a burning question, they should raise their hand now. First, Bengt Jonassen, the line is yours.

Bengt Jonassen, ABG. Just one follow-up question on the comment on the Industrial segment. I think you stated in the webcast that there were some curtailments or permanent curtailments of some capacity in the industrials. Could you confirm that? And how much of the capacity was curtailed?

So yes, so it's -- on the volume side, we have made -- we announced last year a few closures of segments in Brazil for the industrial side. In addition to that, we had some smaller production issues as well in Cubatao this quarter that also impacted on the volumes. So it was a bit remiss not mentioning that in the presentation as well.

It's the hibernation of the sulfuric acid plant in Paulinia which we've mentioned last year, if you remember. Smaller plants as such or a smaller volume impact. Okay. There are no further questions, it seems like. So that means that we will end the Q&A session now. Should you have any need for follow-ups, the IR team remains at your disposal. But with that, thank you for joining, and we wish you a pleasant day. Thank you.

Hello, everyone, and welcome to Yara's Fourth Quarter Results Call. Please note that this call is being recorded.

I will now hand over the call to Maria Gabrielsen, Head of Investor Relations in Yara. Please go ahead.

Thank you, operator, and welcome to everyone for joining us for this conference call for our fourth quarter results. And I'm here together with the representatives in Yara's management, our CFO, Magnus Krogh Ankarstrand; Head of Market Intelligence, on Dag Tore Mo, well is the representative from Yara. We're not planning to give a presentation or further opening remarks as we hope you all just watched our webcast, and we will therefore go straight into questions.

And I will ask operator, if you may please open the first line.

Our first question comes from the line of Joel Jackson of BMO Capital Markets.

I'll ask a couple of questions, maybe one by one.

Can you talk a little bit about the difference in Q4 between Europe and the Americas. You had a lot of buying in Q4 in Europe. Was that ahead of CBAM, and the Americas was flat. Was that weather? Can you talk about that, please?

Yes. Yes, in Europe, we had a strong Q4, both when it comes to our own sales, but also the market in general, both up because we think a large part of that was due to positioning ahead of CBAM already from November, in particular, there was quite strong interest in buying, importing as well as from domestic producers to avoid the CBAM charge from January 1, and it's actually led to a price increase across the products already in Q4 because of that partly then reflecting the CBAM charge already in Q4.

In the U.S., I think it's more -- there has been [indiscernible]. The norms of the recent seasons has been quite a lot of late buying in North America and the U.S. with a lot of imports focused in, let's say, the February through April period. And this season looks to be similar. It's just slightly ahead. But I would say that's not more than just more or less random variation. I have not seen anything kind of specific or any structure when it comes to that. There's a lot of buying from the U.S. that remains.

Okay. And then I'm trying to reconcile your comments around Q1. So you talk about how -- because there is some pre-bond in Q4 in Europe, your Q1 is ahead of [ a season ]. You kind of talk about, yes, but there's lots of products still to buy in Europe. So in one hand, you're kind of saying like, oh, people have bought ahead, but oh, they haven't bought enough. I'm just trying to understand your comments.

And then can you -- as part of that, with some of the uncertainties around CBAM, whether there might be some offsets or not, can you try to sort of talk about that and how it's affecting the market and your strategy?

I can start with some comments, and then Magnus can add if he wish. First of all, given that we -- as our estimate, that deliveries are 7% ahead as of end December compared to last year, even if not, you would think that the first application for the farmers are generally already purchased.

And now we still have winter. So until there is a kind of a movement in the field there is no real need for farmers to replenish their inventories or further buying in order to -- for the subsequent applications. So -- and also, as you hint that there is now a CBAM in force. There's some political uncertainties that has kind of surfaced through January around this. So it's logical then that as we start the new year that we have a relative slowdown -- a little bit of a slowdown in the market after Christmas.

But 7% ahead, almost half of the seasonal demand has yet to be bought. And we think that imports is slowing now in Q1. So that's where we are kind of coming from that, yes, it's a little bit slow start. No, we are kind of depending a little bit on spring arriving. And then it could be a very -- quite a busy period actually, and it depends a little bit on how much will be imported. Just for your reference, urea is the main product on the nitrogen side that is imported, less for nitrates. And Q1 last year, EU imported 2.2 million tonnes of urea. That's quite a lot.

So even if imports is down, there is quite a lot needed. So that's kind of -- I can understand that you are a little bit puzzled by the formulations maybe. But -- so yes, the market is a little bit ahead by the end of December, but it's a lot that remains and we'll see how that plays out in a market where imports is now more expensive.

Yes. No. I think that's the key point. And obviously, with the prospect of CBAM in Q4, there was a bit of a rush on the import side, which is also reflected on the pricing or in prices. But I think it's also key to remember that CBAM is still enforced. I mean every ton that goes into Europe now faces CBAM. And of course, by the time any changes to that would be in place.

Of course, that project will have been sold and probably applied a long time ago. So I mean we don't really see that. From a market perspective, this spring that any CBAM changes would impact anything on prices as such. And then also we believe it's highly questionable that there will be any changes to the CBAM at all.

Okay. Just to fit one more in. Would you expect '26 -- for ammonia production, would you expect '26 to play out largely like 2025 and 2024, where you're producing 1.7 million, 1.8 million tonnes a quarter, except for Q3, where you produce significantly more. Should it be similar kind of ranges across the quarters this year?

I think when -- if you're referring to Yara's ammonia production, I mean, we...

Yara. Just Yara, 1.7%, 1.8% a quarter except for Q3, where you produce more.

Well, I mean, we run our facilities 24/7 all year around, if there's a positive cash margin. So -- and then, of course, there are some turnarounds that impact the schedule. And of course, from now and then, there's a plan to stop as well. But in general, our uptime is very, very strong.

So I think our plan is to produce sort of the practical production rate that we have. Right now, there is strong -- right now, there is good cash margin in all our production facilities.

So do you have any special turnarounds or any additions this year in '26, that would be significantly different than '25, excluding unplanned adages?

No. No. I mean I think we distribute our turnarounds fairly evenly. So there's nothing special compared to other years.

Next question comes from the line of Christian Faitz of Kepler Cheuvreux.

Two questions, please. First, your scheduled maintenance CapEx for '26, some USD 200 million higher versus '25. I'm aware of the phasing that you mentioned in the webcast, but can you elucidate this a bit, for example, which plants are mainly concerned? And the second question would be, can I ask whether the sequential property plant equipment increase over the past few quarters is largely U.S. dollar driven?

Yes. No, I think on the first question, our maintenance schedule is basically driven by the turnaround. So we do have a few turnarounds this year, which have a bigger scope. I think in referring to the previous question in terms of sort of how much we will produce this year or not produce because of turnarounds, that's pretty stable, but some turnaround are more expensive than others because scope change from turnaround to turnaround.

So that's why the maintenance for 2026 is somewhat higher than the sort of the -- or in the upper part of the range that we've given from sort of USD 700 million to USD 850 million per year. And then that includes -- a small portion of that includes a little bit of phasing from 2025 as well, but that's not much.

And could you repeat your question on PP&E, please?

Your plant, property and equipment in your balance sheet seems to be going up sequentially over the past 3 quarters or so. Is that largely U.S. dollar driven?

Yes. Most of the increase is -- most of our assets are booked in euros across Europe. So that will likely reflect the currency rate.

Your next question comes from the line of Lisa De Neve of Morgan Stanley.

I want to follow up on the first question around spring demand. If you can give us an idea of what you think current channel inventories are across the Americas and Europe? Some idea on that would be great. That's my first question.

And my second question would be around CBAM. I mean to which extent have you been involved with European policymakers around what your view is on the importance of CBAM and what sort of variables are being discussed to make the -- potentially move ahead with banning CBAM for fertilizers or maintaining that structure?

On your first question, when it comes to North America, I mean players supplying nitrogen to the U.S. or North American markets are normally coming down with their feet on the ground, playing this out quite well.

And I can say that already now, U.S. Gulf pricing for urea is up at $500, which is kind of sufficient to attract quite a lot of tonnage. So it seems -- to us, it seems like it is fairly normal. It's one of the reasons why the market globally is so tight, I mean it's $500 basically, is part of that reason is outstanding U.S. demand.

And there is also activity into Europe from North Africa, in particular. You've probably seen last week, there was quite a substantial volume that was bought. So there is also that's going on in anticipation of the spring that will come. So I would say it's fairly normal, both in North America and Europe in that sense.

And now you have Indian addition that is trying to fight for March availability by announcing a 1.5 million tonne tender as we probably saw. So it's fairly busy in the very short term.

And on CBAM, I think what's important, first and foremost, is to kind of be accurate on what's actually happening, right? So right now, CBAM as per EU legislation is in force. Then there is a proposal, Paragraph 27a, which is passed was open for temporary suspension or give the commission a temporary suspension opportunity. If there are unforeseen impact on the single market or something like that.

For that to even be a possibility, that paragraph has to be passed by the European Parliament, which is obviously not a given -- this is not something that either the member states or the commission can decide on their own. So obviously, and referring to your questions, we are, of course, in close contact with at the political level, in several member states with the EU Commission and also the EU Parliament to voice our view on that.

And I think our CEO has been very clear on that, of course, there's absolutely nothing with CBAM that is unforeseen. I think it should be evident that prices will go up equivalent to the import tax you put on ag. So it's very difficult from our perspective to see any logic in implementing such a paragraph. But of course, politics is politics. And this will then -- we will see what the mood in Europe and how receptive the MEP will be for that.

But as a reference, in the same -- same event where this was introduced, the commission also and the member state agreed on Mercosur, which was later rejected by the MEP. So, there is certainly no guarantee that the proposal from the EU Commission is approved by the European Parliament.

Your next question comes from the line of John Campbell of Bank of America.

Maybe sticking with CBAM. So do you have a sense within Yara of the potential time line for when the EU could pass or not pass this modification to the suspension tool, et cetera, number one.

Number two, on your Air Products projects, sort of what confidence do you have at this stage that it can be delivered within the NOK 8 billion to NOK 9 billion budget. I think it's probably fair to say the projects have seen numerous costs increases. Air Products, I think, are quite clear on their calls that there's a lot of construction market labor bids from data centers.

I think Air Products has tried to basically split up the construction to several different tenders, et cetera. Maybe you could tell us how that's going? But I can tell you, at least from the Air Product call, they said 90% of the missing puzzle piece to reach FID relates to the cost. So is there any reassurance you can offer that NOK 8 billion to NOK 9 billion figure will be achieved?

Yes. I think on your CBAM question, I mean it's difficult for us to sort of give us sort of a fair estimate on how much time EU need to pass this through parliament. So that's, of course, something that we are watching closely. However, we do note that there is significant resistance both in the European parliament, but also from several member states as well as the industry as well as commissioners against this proposal of opening for a possibility of suspension. So at least, I think it's fair to say that it's going to be a fight -- pretty good fight.

I think -- and whether that sort of comes in time or how that sort of matches up with our time line for the Air Products project is, of course, equally difficult to say. But of course, next month, we'll hopefully, provide some direct entities in terms of what the political mood is and where this is going.

On the cost increases, we don't have any sort of further update to what we and Air Products have stated earlier in terms of the range that we are looking at. I think, of course, as you say, from the original outset of that project from a product side, CapEx has gone up, but it's also important to remember that the technical maturity of the work detailed engineering, et cetera, has developed a lot as well, right?

So I think sort of costs that -- comparing cost estimates, is not like comparing apples and apples necessarily, right? It's a big difference between cost estimate after detailed engineering and the cost estimate that you do on your first FID as an example.

So they are working diligently to get these estimates in place. We are supporting that as well with our expertise. And as you said, there is competition for this, but there are also not many ammonia plants being actually being built in the U.S. So we will see how that works out over the next month. And of course, a very important element in the decision making as Air Products have pointed out. And of course, that will case for us as well.

The question comes from the line of David Symonds of BNP Paribas.

So 2 questions for me, please. Firstly, you mentioned strong demand fundamentals, but you're showing optimal nitrogen application on Slide 29 for a wheat farmer. As being 4% lower versus this time last year. And I think if you scale that up to the whole nitrogen market, the equipment of losing maybe 5 million tonnes of urea demand in 2026 ex-China.

Now I know you're not just selling to wheat farmers, but soy and corn, economics are very weak as well. So could you comment on expectations for supply and demand balances in 2026 based on current farmer economics as opposed to long-term averages that you show on the slide? That's question one.

And then question two, the NPK margins have come down, and you mentioned that's normal in a type and nitrogen market. But I noticed that compound NPK inventories also look like they've built in the 3Q and 4Q. So are you seeing farmers down trading to straight nutrients? Or what's behind that larger than usual inventory build in compound NPKs?

Yes. As you mentioned, the example we showed there is, kind of, course, a little bit of a theoretic issue where we have a yield curve that we have, kind of, based ourselves on from a research center in Germany. And it, as you say, if a farmer already is at optimal application rate, it does show what hold that optimal application rate is changing with the price ratio between wheat and fertilizer.

And the fertilizer is clearly expensive. I mean, affordability issues is high on the agenda, both on nitrogen, even more on phosphate. So it's a limiting factor. I think that if not for relatively modest or low grain prices, we will have even higher prices for N and P than what we have today.

And if you look at, as you said, demand, has this led to lower global demand, this pressure on affordability, it hasn't. And that's, of course, maybe it can be more or less surprised by that. If you look at 2025, with that increase in Chinese exports of 5 million tonnes, even if you then take away some production outside China due to India producing less, due to Iran and Egypt producing less, due to the conflict and also gas diverted to other purposes, I think you'll find that fairly healthy supply growth for nitrogen in 2025 and into '26 and even despite that we are having $500 urea prices now.

So -- and I think that has taken some players by surprise. If you look at -- if you look, let's say, a year ago at forecast for 2025 and 2026 pricing from most players, consultants, et cetera, they will be considerably lower than what we have been realizing. So yes, we have a very strong and tight supply demand balance despite relatively poor affordability.

On the NPK side, I think what's important to remember is that most of our NPKs goes into what we call premium products, where, of course, the value of those products on yield quality and several other aspects, is kind of what determines price and the willingness to pay, which is, of course, on the absolute price that the farmers pay. When we talk about premiums, we refer to that price less sort of commodity value of the 3 nutrients in the product.

So in that scenario, even though sort of NPK prices go up when NP&K go up as well, when they go up as much as they do now, it's natural to sort of see some contraction in the premium in the way we measure it. And I think if you look at across nitros and NPK, premiums that actually hold up very well, I would say, considering the high commodity price environment that we have. But we have, as we reported, seen some tightening on the premium side, particularly in Asia, whereas sort of margins, which is Yara margin, are not down in the same way.

When it comes to inventories, actually, our sales in Q4 and the year in total are slightly up. But our production levels are also significantly up due to improvements in productivity in our production system. So that has led to I would say, a fairly slight inventory buildup, which we believe that -- which we are working hard to, of course, sell the additional tonnages that we get out of our plants now in the spring.

Your next question comes from the line of Bengt Jonassen of ABG Sundal Collier.

I have 2, if I may, both related to Q4. If you take your EBITDA bridge year-over-year, prices had a tailwind of [ 140 ], looking at your nitrate price realization is [ 358 ] versus your own pre-quarter material list prices at [ 370 ]. Could you talk a little bit about the price realization and if it's timing or discounting.

So the prices for fourth quarter realized slightly lower than publication prices, but it actually was last year as well. So we typically -- that's why we typically recommend using the delta for publication prices or delta realized prices, I think you will end up with roughly the same impact in the EBITDA bridge.

But then the other part is also that if you look at the publication prices for CAN, it's not a fully liquid reference in the sense that publications aren't able to capture the exact price that every trade goes. And I'm sure that could expand on that. And also they aren't volume weighted. So it means that you will always have these deviations a bit between publication prices and realized prices, which are also linked to how they make their estimates and not only commercial performance.

So the biggest impact in the price margin compared to the outside in if you use pure publication prices is really related to the NPK premiums that were pressured, especially in Asia, China and Thailand, and that we estimate to be roughly $20 million, $30 million impact this quarter compared to same quarter last year.

And then I think it's fair to say that the impact the risk in Europe is mostly due to timing in the quarter.

Yes. Okay. But let me ask the question the other way around that. If you take your official publication prices, your list prices to your clients, it's much higher than your price realization implies.

And then back to the question, why our realized price is so much lower than the prices that you're actually announces to your client? There seems to be some kind of either increased competition or discounting or timing independent of the EBITDA bridge year-over-year.

The biggest factor in that regard is timing, right? That's -- and in a way, that's difficult to predict from year-to-year for us as well as for you guys, of course, as well. I mean there are -- it depends on a lot of different factors when the markets move, right, when buyers step in to buy, when imports come in and so on. So there are a lot of factors there that impact what -- how we have -- I mean, how our sales team have to determine what's the optimal volume to sell at each point in time.

We can have an idea of where we think prices are going or will go. But if the market moves, you have to move with it to some extent in order to stay a part of the market. So I think of the factors you mentioned, I would say sort of timing is the key one.

Also you're right, when we announce prices, which we do from time to time, but it depends a bit on how often we do it publicly through official announcements and how much do we announce at a certain point in time and ongoing negotiation.

So -- and that's really typically based on Germany and France, right? And then there can be other deviations from that in the other markets, which can then lead us to deviate from those which prices you're correct [indiscernible].

And on that topic, how should we view current publication prices? Are they a reflection of the actual market or is the softness that you are communicating, maybe delaying some purchases on the price realization for the current quarter?

Yes. No, list prices, we have a reflection of the current market.

Here CAN around EUR 350 that we think is pretty close to where it's actually.

Your next question comes from the line of Angelina Glazova of JPMorgan.

I will also have 2. And my first question is on free cash flow dynamics. We have noticed that in the past couple of quarters, there was a sizable working capital buildup. And I'm wondering how you the working capital to develop into 2026?

And we, of course, know that the working capital trend is impacted by seasonality, can be path on a quarterly basis. But I'm just wondering, in general, if you could give us some color on next year? And also because you now have a free cash flow target. So just wondering how you think of working capital as a variable in achieving that target?

And my second question would just be a follow-up on CBAM. Apologies again on this topic, but I just wanted to make sure I understand correctly what you have said earlier in the call. I believe you have mentioned that [ you doubt ] there will be any meaningful changes to CBAM in principle. So I just wanted to understand, is this something that you're seeing based on the discussions that maybe you have had with regulators so far? Or what is this view based on?

Yes. Thank you for your questions. I think on the first one on working capital. So I mean, first half is the -- as you know, the season in the Western Northern Hemisphere, right, and that forget that's the biggest part of the global application as well. So that's where we have higher deliveries. And so that -- in that you see typically see a buildup of inventories somewhat and working capital before season. And then we release indices. So that's kind of the, I would say, the price neutral view.

But then, of course, when prices go up or down, that impacts working capital as well. And when prices go up like they have done through Q4, which is, of course, very good for Yara. But that, of course, also means that the value of receivables and so on is higher, also then working capital goes up. But there's nothing uncommon on credit days or inventory days or anything like that, that will constitute a change.

So this is kind of purely seasonality as such. And then of course, there are, from time to time, some sort of changes on when prepayments happen and so on. So I think as well as season starts and also let's see if prices stabilize at this level, it's fair to think that everything else equal, is the release of working capital.

If prices go up, it will -- there will be a buildup, it also will, of course, be released from sales done in Q4 but nothing uncommon compared to the previous years. And that, of course, also plays a little bit into -- when you talk about improvement or how to sort of think about working capital from a value perspective, then you, of course, think about sort of the average for the year or average towards the season, which is kind of what matters.

That being said, of course, working capital improvement in itself is an important topic, but that's not something we sort of improve by moving things around between the quarters. That's more a question of working on the different aspects of working capital such as reducing credit days, optimizing product flows based on inventory days, obviously, products we sell close to our plants, generally typically tend to have lower working capital and so on. So that's really something that we work on as well. And which, of course, we have to measure against the premiums we achieved for some of these products in markets far away from the plant.

On CBAM, just to be precise because I think I've seen a lot of different comments on this. And I think you sometimes read it as if either CBAM has been suspended, which is absolutely not the case. Or as if it's something that the EU commission or a member state could just decide on their own tomorrow. So what I said was that the commission has proposed a new paragraph, which does not take us today or it's not in part of the legislation today. That allows them to suspend CBAM not only for fertilizer, for any product, temporarily if there are unforeseen negative impact on the single market.

Now for them to even have that possibility, that paragraph needs to be included in the legislation and that will require sort of the full legislative process, including an approval by the European Parliament. And then when it comes to sort of what the likelihood of that happening, that's, of course, anybody's guess. But if you read the media, there have been both several members of the European Parliament who've spoken out against these changes. There have been people from the commission stating that CBAM is the cornerstone of the European decarbonization policy and so on. So I mean there's clearly in all -- in all camps, strong resistance of even contemplating this, even though the proposal is there.

But of course, as we then in politics, it's very difficult to sort of predict what that outcome could be. But I think what's important also to emphasize is that even if that was implemented, then unforeseen consequence, it's very hard to see how a price increase equivalent to a tariff could be unforeseen. That's -- so I mean, at least judging by the letter of the law, even if it was implemented, that shouldn't really open the opportunity for any suspension of CBAM on product fertilizer due to the grounds of being unforeseen. But of course, that's my personal interpretation not necessarily the interpretation of the European Commission.

Your next question comes from the line of Tristan Lamotte of Deutsche Bank.

Kind of CBAM adjacent, but I'm just wondering on proposed changes to ETFs and the phaseouts of free emissions. Can you just remind us of your position there? And I think you mentioned in the past that you have credits that you could start at some point. So could you also talk about your exposure to the need to buy credits over time?

And then second question is, just given whether net debt is now sitting, which I think is below your range, what's your view on kind of capital allocation and buybacks?

Yes. When it comes to ETFs, we have -- we take before around 6 million credits in our bank, so to speak. And then I mean we -- the way it works, of course, is that you -- we get a certain fee allowance per year that matches so far -- has matched or exceeded our need to buy ETF [ quotas ] and then now free allowances will be gradually phased out at least according to the current plan.

And I think -- I mean you can think about the credits that we hold in different ways, but just sort of a measuring it physically, that kind of takes us to 2029 or something like that -- through 2029, kind of where we could cover our need for actually buying credits with what we have in the bank.

And of course, I mean, given that your question was adjacent to CBAM, obviously, we would -- we almost assume that in the event that the EU Commission would take away or suspend CBAM temporarily. I would also almost they were granted that they would suspend or extend free allowances for the same period. Of course, it's not -- it would be treating domestic industry very, very unfavorably compared to imports.

And did you repeat your second question, please?

Can I just add a comment to the -- so if we have then a slower phase out, Tristan, right? So basically, it means that the deficit we expect in 2029 and 2030, that won't increase as much as we would have otherwise done until 2034, right? But whether we use those closes in the bank or whether we sell them, that's a pure financial decision ultimately depending on where prices are and where we think they're going because they have a cost regardless of when we materialize the cash effect related to them.

And yes, the second question was just around your net debt-to-EBITDA level, which I think is below the range and your thoughts around kind of buybacks or what you would do with extra headroom.

Yes. No, I think we outlined our capital allocation policy in our CMD month ago. And our main priority on the investment side or on the growth investment side is clearly U.S. projects and reducing our energy costs or investments into ammonia.

I think that beyond that capital discipline will be very strict. Of course, if we have smaller value very value-accretive opportunities, that's of course, something that we'll always consider. And then we sort of stick to our dividend policy of 50% cash dividend of net income.

Of course, as we also said earlier today, if there is headroom or availability for it, we will always also consider additional buybacks depending on what we believe is the most accretive for the shareholder.

Your next question comes from the line of Magnus Rasmussen of SEB.

I have 2, if I may. Firstly, when you announced the Air Products project, you said that you could do that within your $1.2 billion CapEx frame. I assume that implies you have to be quite a bit below that level towards 2030, still guide for $1.2 billion '26. So I'm just wondering sort of what's your thinking here? And how should we think about that beyond 2026?

And the other question I had was whether you could talk about -- a bit about the factors impacting your earnings, which are not captured in your sensitivities such as NPK premiums, phosphate margins, et cetera? Where are we now relative to '25? And how does '25 compare to sort of historical averages?

I'm not sure I capture your full first question. But I think what we've said is that the Air Products project is within our capital allocation policy. We've also indicated that we see sort of CapEx spend in real terms around $1.2 billion next year -- sorry, in the coming years. And then, of course, if you sort of deduct the maintenance level that we've indicated as well, that there should be within that also sufficient space for the project portfolio that we are looking at towards 2030.

And then -- yes, and then of course, as in the previous question, that also opens up for the dividend policy that we have and, of course, evaluating buybacks versus very accretive opportunities that might arise in addition. But I think, again, U.S. projects will be a priority, and of course, also CapEx discipline is critical.

In terms of variables beyond the one that we've given the sensitivity, I'll give the word to Maria.

Yes. Just to mention, I think the largest one, we have the phosphate upgrading margin which we used to have a sensitivity on but don't have currently, but it has had an impact in 2025 compared to 2024,,in general on the positive side, even though prices have been following for the later half. In the case premiums, for example, it tends to be fairly stable, but we do see some variations like we did in this quarter. So that will also impact us even though not covered in the bridge as such.

And then you could also -- because we have gas exposure mainly to TTF and Henry Hub, but we have some class exposed to other gas costs, which tends to be more stable. But in the degree they vary, they wouldn't typically reflected in our sensitivities. And fixed costs, for example, which obviously has been the impact for the year that to be the main drivers where most of them have contributed positively for '25 as such.

I don't know if it's helpful, but you have this -- the phosphate upgrading depends on sulfur as a raw material for most production processes. And sulfur has been so volatile. So far, let's say, for a phosphoric acid base, which is a normal route phosphate upgrader. There has been a very strong cost increase on the sulfur part, which we don't have with our nitrate phosphate process, that is the NPK plant in Norway. So that may also make it a little bit more complicated for you to make that assessment because phosphate upgrading margins are a little bit different depending on which processing route you are using.

We could also -- since we are talking a lot about CBAM today, for 2026, that will also have an impact. So CBAM costs doesn't impact our EBITDA as long as we're utilizing credits that we have. But the price effect will be there, of course, then dependent on whether it's in Europe or outside Europe, that will have different effects. So as we mentioned in CMD, we will pre-quarter package, we will update sensitivities to reflect that in due course before 1Q '26.

Our final question comes from the line of John Campbell of Bank of America.

I just had 1 or 2 follow-ups, if I could. Could you maybe give us a sense on your view in terms of the potential resumption of Chinese urea exports in '26? How many million tons basically, you're expecting? Number one.

And number two, coming back, I guess, to Air Products, have you -- presumably you've done some sort of levelized cost analysis in terms of delivering that ammonia resuming the project can be built for [ $8 billion or $9 billion ] or whatever it is.

And I thought maybe one way to think about it is how that compares to something like the gray cash cost have delivered U.S. ammonia and maybe what carbon price would be required or sustained to actually kind of make the blue ammonia projects look cost competitive with just importing gray ammonia and just paying for the CBAM? Have you kind of got a view on that? I think I came out to $160. Of course that's just a ballpark figure, but do you have a sense maybe on the longer-term carbon price?

On your first question, I think we don't have a very specific opinion exactly how much that will be exported. We have just said that it's certainly a very important factor in the global balance how much that volume will be, but we are also referring to some external opinions around this in the press, where last year, it was, let's say, it was in second half April, that this was addressed initially by the Chinese Government and NDRC, I think it will be logical for something similar that when it gets to second half April, maybe there will be -- that will be on the agenda of the Chinese government.

We observed that some of the consultants are working on that kind of baseline around 6 million tonnes, maybe a little bit higher than 2025. But of course, nobody knows all that is going to play out.

And I think -- I mean, obviously, that's very difficult to predict exactly what you're going to do, right? But I think more important than the actual number of tons as such is what would it potentially do to the global market and global pricing, right? And then there, I think it's just important to keep in mind that at least so far, it seems that the main policy from the Chinese government has been to keep urea prices low. And obviously, the more you export, the more you impacted the global pricing and if you export to the extent that you impact global pricing.

And of course, it's very likely to assume that it will impact domestic prices as well. And as we've talked about in our Capital Markets Day and as we see there's nothing that would point to sort of a softening to try demand balance outside China, meaning that sort of any opening to exports will sort of face quite high price environment globally. And I think it's sort of safe to assume that they will sort of exports to the extent that it doesn't impact domestic prices very much. And of course, I think it's also logical to assume then that at least from funding perspective, that shouldn't impact global prices too much either. But of course, things are difficult to predict.

And on the Air Products question or the U.S. project question, yes, I mean, we have, of course, our internal views on sort of what different levels of CBAM with due to more in the pricing into Europe and so on and how that impacts the project. But that's not something that we can share publicly. But I think as we have said before, it is -- I mean, it is an ammonia -- it is a regular ammonia plant with very high scale and certain advantages that we talked about in our Capital Markets Day and sort of there's a great sort of price comparison to that.

And then there's added premium, obviously, from CBAM as well. And I think as we've said also that -- just when we see from a total project perspective, sort of the CO2 capture park in itself is more than covered by the 45Q tax credit.

From that perspective, this is something that even without a CBAM premium, should be profitable. But obviously, the CBAM adds that up to the profitability of building a decarbonized plant.

[Operator Instructions] Your next question comes from the line of Julian Galliard of PGGM Investments.

I have 2 questions. So first, on your capital allocation framework, you highlighted maintenance and growth CapEx, but there was no explicit mention of sustainability or the transition CapEx. Could you explain how decarbonization investments are reflected and prioritized within the framework?

Well, I think -- as we've said, the U.S. projects would be the lion's share of that growth CapEx, right? And sort of even though they represent lower gas costs, more scale over fixed cost per tonne, they also are key to the carbonization. So I think from that perspective, you can sort of say -- I mean, the benefit that we have, right, is that a project like that and our position in the ammonia market means that we can do the decarbonization profitably and have -- because we have the other benefits as well, right?

So I think that part is fairly sort of, I would say, covering that. And I think when it comes to the maintenance CapEx, part of that go into improvements in our plant that are also related ESG related, such as energy efficiency, which also has a good momentary impact by using less energy and lowering costs. But I think in general, Yara does not do ESG investments unless they are profitable. So there's no separate budgets for that.

Okay. Okay. Okay, that's clear. It would be helpful, though, if you would include a figure that would show that officially because now it's just maintenance and growth.

Also to my second question. It stated that Yara's capital allocation policy is based on maximizing shareholder value. while maintaining a mid-investment grade profile. I'm wondering how do you operationally ensure that capital allocation decisions are still consistent with either a 1.5 degrees line pathway or a well below 2 degrees of pathway?

Yes. No, I think we have set targets for 2025, which we achieved in 2030 that we're working hard to achieve. And these are based on exactly that. And then we -- in our CapEx allocation, we I mean -- or to be different to achieve those targets, like we have done for 2025, we have a portfolio of different projects and of course, the U.S. ammonia investments being by far the biggest one, but also other projects like electrification project, we have our CCS project in Sluiskil that we complete this year and so on.

So we look at our portfolio in totality and then we look at whether our CapEx or sort of the capital investment that we do provide a sufficient return or a strong return to our shareholders as well as how it sort of meets targets such as the ones we've set, right on the ESG side.

But I think what's important to remember is that in order for that to be possible, there needs to be a firm sort of economic value drivers, right? So of course, our investment in [indiscernible] CCS, which contributes significantly to our targets, would not have been possible unless there was a carbon pricing in Europe, right? And I have to say, if the type of uncertainties, even though we believe firmly that CBAM will remain in place, would I think it's safe to say that is this kind of uncertainty would have come exactly when we were to do our investment decision on that project. It's just a guarantee that we would have actually approved that.

So I think that's important to keep in mind as well. However, we do believe that, that project will make us very competitive in the European context. And that's kind of the basis for all the projects. They need to be -- they need -- so basically, what I'm saying is that the regulatory side needs to be in place so that these projects are profitable. Some of them are profitable, no matter what because saving electricity is typically possible. But some others will not be a profit on that -- yes, the regulatory side is in place.

Our next question comes from the line of Mazahir Mammadli of Rothchild.

So my question is on CBAM. Basically, I wanted to ask. So we saw the benchmark values published by the EU on CO2 intensity of mitogen production in various countries. When you compare those benchmarks to the CO2 intensity of your own production. Do you see an advantage? If so, how big is it?

Yes. So for urea, we will have a variation between our plants naturally, some will be very efficient and some will be less efficient. But in general, Yara's plant will be more efficient than the [indiscernible] average European, but more so the global averages and the benchmark for imports. Yes is the short answer.

Absolutely. And I would say, particularly in our nitrate production with the investments that we've done there over a long period of time, we are significantly more advantaged on the carbon footprint side. So that's, of course, a huge advantage on nitrates in Europe, particularly when you compare to imports of urea.

And I think since this was the last question on the CBAM, many questions on CBAM, which, of course, is a very hot topic these days. I think you also sort of in its place to add that we are very concerned about sort of the impact on the farmer, obviously, not only from increased cost of fertilizer, but also on a lot of the other regulation that's put on the particular European farmers.

But I think, it is a very easy way to solve that problem for the EU, particularly when it comes to CBAM, and that would simply be to give that the CBAM revenue as a subsidy back to the farmer who buy the fertilizer. I can see no better use of that money than that sort of the train of thought that you would sort of suspend CBAM. So that 30 imports from outside Europe can outcompete European industry is clearly not the best route of achieving that. So I think there is a very easy way for the EU to help farmers and not negatively impact European industries as well.

We have reached the end of our Q&A session. I'd now like to hand the call back to Maria for final remarks.

Thank you for everyone for joining. No further comments from our side. But our Investor Relations is available for further questions, please feel free to have follow-up. Thank you and goodbye.

Thank you for attending today's call. You may now disconnect. Goodbye.

Welcome to Yara's fourth quarter results presentation. Today's presentation will be held by our CEO, Svein Tore Holsether; and our CFO, Magnus Krogh Ankarstrand. After the presentation, at 1:00 p.m. Oslo time, there will be a conference call where you can dial in and ask questions. You can find log-on details on our web page under Investors.

And with that, it's my pleasure to hand over to our CEO, Svein Tore Holsether.

Thank you, Maria. Good morning, good afternoon, and good evening, and thank you for joining our fourth quarter earnings presentation.

As always, I'm starting with our safety performance. Our license to operate is based on us creating a safe working environment for all our employees and contractors. Our 2025 performance has not been at the level that we want to be at. Our TRI rate increased from 0.9 at the end of fourth quarter 2024 to 1.2 at the end of 2025.

As I talked about in our third quarter presentation and at our Capital Markets Day, we experienced a tragic accident in Rio Grande, leading to the death of one of our employees, [ Amaral ], then this happened in August of last year. We are doing our utmost to prevent this or any serious accident from happening again. A few plants represent a large share of the accidents, meaning that a large share of our plants are still delivering strong performances on safety.

We're strengthening our safety program in order to get back on track as we're not satisfied with our current performance. And last week, we conducted a safety stand-down at all our plants worldwide as we've seen concerning development in accidents also continuing into January of this year. It is our -- it is my responsibility to ensure that we offer a safe place to work. any accident, big or small, is avoidable and our long-term ambition remains 0 accidents.

Looking at the key highlights for the fourth quarter. Yara delivered an EBITDA, excluding special items of $709 million, representing an increase of 37% compared to last year. This increase was driven by higher nitrogen upgrading margins, lower fixed cost and strong volumes. In connection with our second quarter 2024 presentation in July of 2024, we launched a target to reduce our fixed cost by $150 million by the end of 2025. Given our strong progress during 2025, this target was later updated to $180 million. And I'm very pleased to announce that we have more than delivered on this, achieving over $200 million in fixed cost reduction.

And while cutting costs, we have also improved our operational performance, delivering strong premiums and also increased deliveries and historically high production volumes in 2025. Our entire organization has demonstrated strong performance in 2025. We are proposing an annual dividend of NOK 22 per share to the Annual General Meeting. Going forward, Yara is set to further increase cash flow driven by EBITDA expansion initiatives launched at the Capital Markets Day, and this is also supported by constructive market fundamentals.

Taking then a closer look at the EBITDA variance for the quarter. We saw higher deliveries this quarter, particularly in Europe, where there has been a strong start to the season ahead of the implementation of CBAM on January 1. Nitrogen prices remained at high levels in this quarter and above the year before. In addition, we saw lower gas prices in the quarter in Europe, which is also then improving nitrogen upgrading margins. Price margin is impacted somewhat by slightly lower premiums on NPK, mainly in Asia, which is also normal with the development in the underlying commodity price components that we have seen over the last months. Fixed costs are $31 million lower than a year earlier, reflecting a strong conclusion of the cost program.

Other is mainly impacted by a currency impact of negative $42 million as Yara's main currencies strengthened against the U.S. dollar. The remaining $20 million of negative impact in other primarily reflects an insurance compensation that we received in the fourth quarter of 2024. Quarterly return on invested capital is at 11.4%. And for the year in total, we delivered a return on invested capital of 10.7%, both of which are above our through-the-cycle target of 10%.

Yara's capital allocation policy remains firm during 2025, we've delivered strong financial results. And the earnings per share, excluding currency for 2025 is USD 4.25 per share compared to USD 0.93 per share in 2024, reflecting strong underlying performance and our commitment to improve underlying cash flow. Furthermore, we ended the year with a net debt to EBITDA of 1.17, which is below our target range of 1.5 to 2x. On this basis, Yara proposes an annual dividend of NOK 22 per share for 2025. This is in line with our dividend policy and reflects stronger market conditions and significant improvements internally and also a strong balance sheet.

Going forward, the improvement program will be a key driver to increase cash flow. This again sets the basis for profitable growth investments as well as distribution to our shareholders. Yara will maintain a strict capital discipline and sets the bar for growth investments high with improved ammonia position as a key strategic objective. At the same time, we aim to maintain our dividend policy. And depending on market conditions, Yara will consider further distributions in line with our capital allocation policy.

I will then hand over to our CFO, Magnus Krogh Ankarstrand.

Thank you, Svein Tore. As explained earlier, EBITDA, excluding special items, is up USD 190 million compared to last year, driven by higher operating margins, increased deliveries and strong performance on improvement initiatives and cost reductions. Including special items, EBITDA for the quarter is up from USD 360 million fourth quarter last year to USD 773 million this year, reflecting a significant positive variance on special items year-over-year. This translates into higher earnings per share. Excluding currency and special items, EPS stands at USD 1.17 for the quarter versus USD 0.36 for the quarter last year. Return on invested capital for the quarter increased to 10.7% on a 12-month rolling basis, above our target of 10% ROIC over the cycle.

Looking towards the cash flow. Cash from operations increased by USD 248 million compared to a year earlier, mainly reflecting higher operating income. This was partly offset by an increase in operating capital. A buildup is common in Q4 and with the continued increase in fertilizer prices, we see an increase also in operating capital. The major difference towards last year is lower prepayments in Brazil Q4 this year compared to unusually high prepayments in the fourth quarter last year.

Yara's investing cash outflow decreased by USD 25 million compared to last year, reflecting some phasing and cash impact into 2026. Cost reduction was the first phase of our improvement program and has delivered ahead of plan. Since the launch of the program in second quarter 2024, fixed cost has reduced by more than USD 200 million in nominal terms. Factoring in the underlying inflation in that period, the actual reduction of the fixed cost base is well above USD 300 million. The run rate factoring in the full year effect of savings and adjusting for seasonality stands at USD 2.3 billion or USD 46 million better than the updated target of USD 180 million in savings. This reflects a reduction of more than 10% of the global workforce as well as a significant reduction to external spend.

Looking at CapEx, the strict capital discipline continues, reflected in the CapEx this year, with 2025 CapEx ended at USD 0.95 billion, USD 400 million lower than the original guidance back from 2024. Maintenance CapEx for 2025 is below earlier guiding, reflecting some phasing into 2026. However, the CapEx guiding for 2026 remains unchanged. This reflects a higher turnaround activity level for the year. This will vary from year-to-year depending on which plants go through turnaround in which year. Yara remains restrictive on committing to further growth CapEx until an FID for the U.S. project has been concluded.

Total deliveries for the quarter are 3% higher than the year before, supported by the gains made in our production system. Deliveries were mainly driven by higher Amidas and NPK sales in Europe with a strong start to the season and increased prebuying ahead of CBAM implementation. We also saw higher deliveries in Africa and Asia, mainly related to third-party product sales. Ammonia sales are higher following increased external sales in the Americas, where we have optimized volume flows by replacing them with third-party products in Europe. We are currently experiencing a strong market for all nutrients, especially nitrogen and phosphate. This increases Yara's upstream nitrogen margin and phosphate upgrading margins and increases the bar for our premiums, which we measure above the commodity value for those nutrients. That, combined with lower crop prices in general, exercised some pressure on our premiums in certain markets.

For the fourth quarter, strong demand and prebuying in Europe supported European nitrate premiums ahead of the year-end and CBAM implementation contributed as well. NPK premiums are somewhat pressured and primarily driven by Asia, we see a contraction towards more normalized premium levels. Yara has a robust commercial organization and is on a day-to-day assessing the market environment on how to optimize volumes and margins globally. This also underlines the flexibility of our business model and the ability to create value both from the upstream margin as well as the premium side, also limiting the commodity downsides for Yara through the cycle.

The strong cash earnings contributes to a reduction in net debt in a season where we typically see an increase due to the buildup of working capital. Investments are in line with plans with CCS project in Sluiskil and our new YaraVita plant making up the lion's share of the growth investments and maintenance investments according to our planned prioritization framework. Yara's balance sheet remains strong as presented in our Capital Markets Day.

Looking briefly at the income statement for the full year, we find the major variance in revenues and cost of goods sold with a solid increase in the resulting margins. Lower payroll costs reflects the impact from our cost program, however, also impacted by one-off severance costs in both periods. The currency gain is opposite of last year's loss and mainly reflects unrealized gain on U.S. dollar-denominated debt positions and gain on internal positions in other currencies than U.S. dollars. The effective tax rate for 2025 is 22.8%. And finally, the significant increase in net income is also impacted by the fact that 2024 net income included several noncash special items and currency translation losses totaling to approximately $565 million in difference.

Higher noncurrent assets mainly reflects currency translation gain and as most functional currencies in Yara have appreciated against the U.S. dollar. Current assets reflect higher inventory value and trade receivables due to increased prices in addition to higher cash and cash equivalents. Increased equity in 2025 reflects positive net income and the currency translation gain.

Looking to the market, we see that global nitrogen markets remain tight going into 2026 due to a combination of strong seasonal demand as we approach the Northern Hemisphere spring, strong sales in India triggering demand for more imports and lack of Chinese exports due to restrictions in their season. In India, urea sales were record high in December, adding to the import need. Around 5 million tonnes of urea were exported from China in 2025, which were clearly needed to cover the global deficit. The export window is again closed for the Chinese season. Both EU and the U.S. off-season imports are slightly ahead of last year, but more nitrogen is still needed for the upcoming season.

Looking to the supply side, we see that the peak of capacity additions, excluding China, has passed with modest capacity growth in 2025 and capacity additions below historic demand growth for the balance of this decade. Combined with supportive demand fundamentals, this indicates a continued tight global supply and demand balance in the coming years, excluding China, and improved European production margins with forward gas prices lower than current levels. Agriculture, fertilizers and the raw material market that feed them are inherently impacted by global markets and consequently geopolitics. Yara's competitive edges create a unique business model that is positioned to handle changes, create value through the cycle and limit the downside risk of global volatility.

First and foremost, we will continue to build shareholder value through our improvement program announced at our Capital Markets Day, expanding on the cost reductions achieved so far. This will strengthen returns as well as our balance sheet. Yara has demonstrated a strong capital discipline for several years and will continue to do so while prioritizing the most value-accretive opportunities, reducing exposure to European gas costs being a key priority. And for this, we have several pathways to follow as illustrated at our Capital Markets Day.

Finally, our business model contains significant flexibility, both on the energy side and with regards to regulation. Significant attention has been given to the CBAM in recent months. And unsurprisingly, increased cost for carbon increases the cost of products containing carbon, including fertilizers. This must also apply to imported products unless the EU intends to suspend its entire decarbonization plans. However, whether CBAM retains or is suspended, Yara will handle both scenarios. We have the flexibility to import all types of ammonia and the underlying objective of reducing energy costs is valid in all of the scenarios. Even though uncertainty around critical regulations such as CBAM is a clear negative for investments, Yara's business model and scale enables us to diversify our strategy in light of political uncertainty.

Work on our project collaboration with Air Products continues and the 2 companies have complementary business models and Yara's unique import capacity into Europe and not to forget Latin America is a key competitive edge for the combination. This is valid for NEOM, where Yara will distribute against the commission as well as [ Daro ], where the intention is for Yara to acquire the ammonia part of the project. As previously stated, both companies work on establishing the construction cost and commercial negotiations through the first half of 2026 and the target to make a decision mid-2026 remains. And as mentioned by Svein Tore, we believe that CBAM will remain in force, and we are, of course, evaluating developments closely ahead of a potential FID.

With the strong backdrop of delivering on cost reduction and the next phase of our improvement program, Yara will continue to deliver sustainable cash flow expansion. We already have a head start into the USD 350 million target by delivering close to USD 30 million over the targeted USD 180 million cost reduction target on the last 12 months basis. In addition to cost reductions and EBITDA improvements, we are working diligently to also grow cash flow through strict capital prioritization and optimization. And for further information on our improvement program, I refer to our Capital Markets Day presentation, which is available on our web page and further updates on progress will be provided through our quarterly reporting. And finally, the outlook of tight nitrogen markets will provide continued strong fundamentals in the coming years.

And with that, I hand over to Svein Tore.

Thank you, Magnus. I'd like to end the session reflecting on our total 2025 performance. While delivering on our targeted cost and CapEx reductions, we have also delivered a strong operational performance. Deliveries, they have increased with a large share driven by increases in our high-margin premium product output. And as mentioned by Magnus, premiums have remained strong in a high price environment, which is a testament to the strong commercial performance delivered across all of our regions. Production is at all-time high levels, and it's particularly pleasing to see that our flagship NPK plant in Porsgrunn is leading the way with continuously new production records.

This, combined with a strong market fundamentals led to a significant improvement in financial results compared to the year before. Both EBITDA and net income increased significantly compared to 2024. And earnings per share, excluding currency effect, increased from USD 0.93 per share last year to USD 4.25 per share this year. And 2025 free cash flow was at $988 million, which is 80% higher than the year before. Yara's cash flow through the cycle demonstrates the resilience of our business model. And we delivered a strong cash flow from operations also in periods with weaker market prices. This is partly due to the inherent nature of the nitrogen industry, but also partly due to the flexibility of Yara's diversified business.

There is limited downside to our cash flow as such, given the combination of ammonia flexibility and product optimization in an industry where both production levels and maintenance investments can be used to optimize in down cycles. We can, therefore, conclude that 2025 was a strong year, and I would like to thank our entire organization for their continued dedication to deliver on Yara's strategic priorities. And this will be achieved through our strategic priorities as presented in our Capital Markets Day. Our strategic priorities are designed to address global trends and opportunities while at the same time, utilizing the strength of our business model to maximize profitability in our current operations and drive value-accretive growth.

Through global scale and optimization and operational excellence, we will continue to drive asset utilization and improve core profitability while optimizing logistical costs. This is about focusing on our core operations and maximizing capital productivity through strict resource discipline and reallocating capital to priority plants. Our flexible nitrate assets enable us to strengthen our nitrate margins by shifting our position downwards on the ammonia cost curve by improving energy exposure as well as also increasing scale. And this builds resilience in our earnings and increase our long-term competitiveness. Our growth strategy is focused on expanding on what we know best, our core business.

This means monetizing recent growth investments such as CCS at Sluiskil and the new YaraVita plant, while also growing through our differentiated product portfolio and also our knowledge margin. We remain focused on driving long-term shareholder value while staying committed to our capital allocation policy.

To conclude, I would like to reiterate some of our messages from the Capital Markets Day. We have a strong business model, which is committed to sustainable value creation. We're working on our EBITDA improvement targets of USD 200 million and USD 350 million by 2027 and 2030, respectively. These targets are substantiated by concrete actions, and I believe we have demonstrated our ability to deliver. We have flexible pathways to energy diversification, and we have the unique infrastructure to make it happen. And importantly, we have a knowledge base, a team and an approach to provide agriculture with the nutrient use efficiency it will need going forward, irrespective of fluctuations in regulation. And we're solid with a strong balance sheet maintained and a commitment to our credit rating. Yara has the ability to deliver sustainable value creation.

I will now hand back to Maria.

Thank you, Svein Tore. As we're moving towards the end of this presentation, I would just like to take the opportunity to once again remind you about the conference call that starts at 1:00 p.m. Oslo time. If you go to yara.com under Investors, you will find details about log-in details. That concludes today's presentation. Thank you for watching.

Good morning to everyone. I am Maria Gabrielsen, I'm the Head of Investor Relations here in Yara. A big welcome to everyone both joining online and especially to you joining us here physically in the auditorium. The event is being streamed live and is also recorded for a later publishing.

Today's agenda, you can see here, it's split into a hybrid event and an all physical event. We will start with the presentation where Svein Tore will start giving an introduction to Yara and our key strategic priorities for the coming years. We will then hand over to our Director for Market Intelligence, Silje Nygaard, who will take you through the nitrogen market fundamentals before giving the word to EVP, Global Production, Johan Labby, to go through our priorities in the production system. Europe EVP, Mónica Andrés Enríquez, will take you through how we work downstream, focusing on our markets and how we generate premiums for both farmers and Yara before handing the word to Magnus, CFO, to take you through the financials and giving the word back to Svein Tore Holsether for closing remarks.

There will be a Q&A afterwards, where participants online can already now submit questions to the e-mail address listed below your webcast window, while persons in the auditorium can ask questions by raising your hand when we get to that. So after that, we will break for lunch for those physically here, and we will have some breakout sessions, which I will come back to explain how it works a bit later.

With that, it's my pleasure to hand the word over to Svein Tore Holsether.

Thank you so much, Maria, and good morning, and welcome to Yara's Capital Markets Day. We're very happy to see so many -- many of you here physically at our headquarter in Oslo, and also a big welcome to those of you joining us online.

Today, we'll give you an update on our strategy for the years ahead. And also how to then strengthen our resilience and also how to grow sustainable returns. We will demonstrate the value of Yara's business model, our key competitive advantages and also our growth opportunities.

Last year, we celebrated our 120-year anniversary as a company. And we are born from the application of science, and it was partly showed in the film already, but this is about solving the biggest challenge of the time if we go 120 years back or so at the turn of the century as we saw significant population growth as a result of the industrial revolution, and farmers were asked to increase food production. However, this proved to be a challenge because when you remove crops from the field, you also remove nutrients. And unless you're able to replace nutrients, that will have an impact on your yield.

So not only were they struggling to keep production, it was actually going down. And a key nutrient here is nitrogen. 78% of the air that we breathe is nitrogen. However, it's not available to the majority of the crops from the air. They need it in fixed form. That was a challenge that was sent to scientists across the world, how to sequester nitrogen from the air. That was sold by Professor Birkeland at the University of Oslo through the use of electric power. And then together with industrialist, Sam Eyde, and with funding from the beginning from the Wallenberg family, that was the start of our company in 1905. Then they went on to go from a breakthrough idea, a breakthrough technology, to full-scale production within just a few years.

And from our Norwegian origins, export has been important, really from the very beginning of our company across Europe in the early stages and also all the way to Asia. And I was really pleased to see, I was in Thailand a couple of months ago, and there, I was shown that the importance of our product and the joint history between Thailand and Norway dating back to the -- almost the very start of our company.

In 1907, the King of Thailand actually came to Norway to visit our founders, to visit the location that you just saw on the film, to learn more about fertilizer, and he became one of our very first customers. And we are very honored that -- this is a THB 100 bill from Thailand. That event is actually on the currency in Thailand. And to be a company that produces a product important enough to be on the currency of a country is something that we are very proud of, and we're very honored of that recognition from Thailand. Thailand is still a very important market for Yara.

Today, we are a world-leading crop nutrition company and our global and integrated business model is a core strength, and that is what ensures resilience within the Yara organization. Through our 120 years of history, we have weathered massive geopolitical shifts, but always stayed true to our core, contributing to feeding the world through our crop nutrition knowledge. And in an ever-changing world, we aim to show you today our plan to continue down just that path.

So as always, we will start with safety. And we are committed to providing a safe workspace for our employees and contractors. So we have our Safe by Choice way of working that is truly embedded into our entire organization. Any accident, small or big, can be avoided and our long-term ambition is 0 accidents. And that's what we're working on every day in Yara. And as you see here, we have brought down our numbers significantly over the recent years. We are industry leading in terms of accidents. And also when we compare it to the wider industry group, we are delivering quite well on safety.

However, 2025 has not continued that same positive trend when it comes to accidents. And as you see, we have an increase, taking us to 1.1 TRI rate. So that's the number of accidents per 1 million hours of work. So that is something that we're taking very seriously and that we're working on throughout the organization on how to turn this trend and get back to continued reduction in accidents.

Tragically, we've also had a fatal accident in Yara in 2025 on August 6. We had -- nearly had 7 years without fatal accidents. And tragically, this happened on August 6 at our Rio Grande facility in Brazil. This is a large site in a small community. And at that location, they are colleagues, they are friends, they are families, very often, all 3 things at the same time, and it's making a big impact on that whole organization and indeed the entire Yara family. We are all deeply impacted by this.

We have our Safe by Choice way of working. We have golden rules for how to work. Our colleague who died in that accident, [ Amaral ], he followed all these rules. He worked according to Safe by Choice, yet we had a roof structure that fell down, and that led to the fatal accident. That is -- when our colleagues and our contractors are following our Safe by Choice way of working and our golden rules, it's our responsibility, it's my responsibility to ensure that we have a safe working space. On August 6 last year, we did not. And that is my responsibility, and we take that very seriously, and we're having a thorough investigation to ensure that this never happens again, and we're also working with the entire fertilizer industry to share our learnings on this, to ensure that we all learn from each other, which is the common practice within the fertilizer industry.

We remain committed to our Safe by Choice way of working. This is a very tragic reminder of the importance of that. We go through every accident, every recordable accident, in Yara, in detail. I know each and every one of them. And my commitment to this that on a rolling 12-month basis, I know by heart, every accident that has happened in our organization. Now I don't expect everyone in all of Yara to know all accidents. But through the line organization, we do, and for the ones that are relevant for that line organization. And then this is a joint commitment also with our unions. So every Friday, we go through the accidents, together with line organization, with the union and with myself, to learn and to transfer these learnings across to continue on this journey. We remain committed to achieve our ambition of 0 accidents.

We live in an unpredictable world. And energy and agriculture are among the most impacted industries when it comes to global events that disturb both financial and commodity markets, as we've seen in recent years. Nevertheless, Yara, through our history, and including the last 5 years, we have proven to be resilient. And if I try to briefly go through some of the events that we've been through in the last few years in 2020 with COVID and ammonia markets coming to a complete standstill. That is, of course, a challenge for any company. And -- but with our organization, we managed through that. Utilizing our assets, utilizing our flexibility to deal with this.

Also, as you know, operating our plants takes a high degree of technical expertise. How do you run the plants if you can't bring people into the same room. How do you ensure that you have the capabilities and the capacity to run the plants. Well, this is not something that we could take for granted going into this, but we were very pleased to see how our entire organization stepped up to deal with the uncertainty and to ensure continued operations throughout COVID-19.

In the summer of 2021, energy crisis. Energy prices started to increase in Europe and created a very large energy cost delta compared to other parts of the world. That also made a new operating environment for us, where we had to deal with this kind of energy price volatility. And again, utilizing the flexibility in our system, while we knew that we had flexibility in how to run our ammonia plants, but we took that to the extreme, running our plants up and down to flex with energy prices, importing ammonia when needed in order to ensure that we maximize production and had availability of finished goods.

2022, then the majority of our phosphate, potash and supplies and also our third-party ammonia disappeared pretty much overnight as a result of sanctions on Russia and the Belarusian suppliers. And thanks to an incredible effort by our plant organizations, production organization and our procurement team, they were able to do what I thought would not be possible. And as all of you know, when you're switching raw materials, that's not something that you take lightly. When you switch from one grade of phosphate to another or potash and so on, that's something that you do over a significant time periods.

Test runs, see how it works, fine tuning and so on. Well, we didn't have that luxury at the time. We had to make massive changes overnight, and that kind of commitment made that possible to continue running, well, not without its issues, of course, but the ability of the organization to react to this is not something that you can plan for and not something that you can take for granted, but our organization, our people were able to do that.

Then 2023, 2024, extreme volatility in energy prices and nitrogen prices and global trade flows once again had major shifts. And I think we can say 2025 was not a quiet year either. And the start of 2026 does not seem to be less turbulent. Despite this, Yara's business model has proven to be resilient. And this is due to our global diversification and also the energy flexibility that we have in Europe. And when you combine that with our very competent workforce, I think it's right to say that Yara is a battle-proven organization.

Throughout this, Yara has upheld strong shareholder returns. We have distributed $5.5 billion since 2020. And also, at the same time, we have taken tough measures. And that is to further adapt Yara's business model, to adapt our business model to the new reality. And at the same time, aiming for significant growth in shareholder returns going forward.

Yara is a purpose-driven company. So for those of you that are here physically, I'm sure that as you entered into our building, you can see our mission on the wall in the lobby here. And this -- it's not just a statement on our walls, in our offices and production plants throughout the world, this is how we run our business every day. We spent one year to develop our mission statement following the Paris Agreement in 2015 to ensure that this is a joint effort and one that we all recognize in how we do our business every day. And our mission to responsibly feed the world and protect the planet is sort of -- captures the duality of what we're doing back to our origins 120 years ago, growing enough food, ensuring that there is food for a growing population. But now at the same time, also looking after our -- the planet. And that duality is what drives our organization.

Everyone in Yara knows what our mission is. And I could -- and I do this sometimes. I challenge any company in the world of size on our employees' ability to tell you what our mission is. I think we're quite unique. Everyone knows that. And that has proven to be extremely valuable in times of volatility and uncertainty because we have that North Star. We know why it's important. We know the purpose of our company, and that enables us to do the -- I mean, do what it takes in order to keep our system running and to be delivering on our commitment to society on growing food and looking after the planet. We operate in an essential industry feeding the population. Half of the world's food production is a direct result of fertilizer. That is a strong purpose.

Our vision, a collaborative society, a world without hunger, a planet respected is how we look forward, look ahead as a company. And that is about working across the value chain, realizing the opportunities, ensuring that we're doing our part in overcoming barriers and silos in order to think full value chain to see what can we do upstream to help downstream, first and foremost with the farmers, but also throughout the whole value chain with food companies and also society at large. And for us, these are not just words, these are actions, and I hope that we will be able to demonstrate that also through our presentations today.

And then looking into the future. Yara's taken significant steps to be part of the solution that the world needs. The world needs 50% more food for a growing population. And as I already said, 50% of the food today already is made as a result of mineral fertilizer. However, the food -- that food that the world needs, needs to be produced within planetary boundaries. This means that we have to continue on our path to reduce emissions and also optimizing nutrient use efficiency in the field of the farmers to support a sustainable food system. These are not abstract issues. These issues shape policy, they shape investment decisions and also shift customer demand, and we are well positioned for that.

The fertilizer sector, with the very nature of how we produce our products, is a major contributor to emissions. And we know that. And that also means that it's a responsibility on us to reduce those emissions and do this as efficiently as possible. And Yara has made early efforts to address just that and to reduce our emissions. And here, in front of me, I have a Yara in-house developed catalyst. This was developed by our R&D team in Porsgrunn in Norway. This is an N2O abatement catalyst. Through the utilization of this, it has been a major contributor of Yara, reducing our total greenhouse gas emissions by nearly 50% already by the time of the Paris agreement.

And I should also add that we're licensing out this technology and the catalyst to other parts of the industry. This catalyst reduces nearly 30 million tonnes of CO2 equivalent a year. So if you put that in context, the combined emissions of all of Norway is 45 million tonnes. So that says something about the value of R&D, product innovation and application of these technologies. We have continued on that path. And I'm really proud, and our entire organization is proud to say that we will reach our greenhouse gas intensity targets for 2025.

And at the same time, it is important to do this in a way that supports profitability as well. And I've been very clear, both with all of you attending here but also with other stakeholders, that there will be no green transition with red numbers. Profitability is also a must. It needs to be profitable to decarbonize in order to do this at scale. And if I reflect on the investments that we made on emission reductions in the last few years and look at the average payback of that, it's about 3 years. So we've been able to do profitable decarbonization in Yara. And this is through ensuring higher energy efficiency. Well, that means that we are consuming less gas to produce our products, and that's also very helpful as we look into this and the way forward.

But it's not only about that. It's also about the downstream part of it. It's about nutrient use efficiency, which is the hallmark of our knowledge and how we work all the way into the field of the farmers to address their opportunities and their challenges as well. And this is not just good for the planet, it's also good business.

Our key competitive advantages have been the drivers of our performance, and we plan to enhance those further to bring additional improvement. And I'll start from the bottom here. Core to our business is global scale and optimization. And this is vital in a capital-intensive industry like ours, it's about optimizing production, it's about optimizing flows. And I would say, nowhere is this more visible than in ammonia, where you need scale in order to justify the cost of the infrastructure, and this is absolutely critical to participate.

Operational excellence is key. And it's about ensuring that our production assets have a maximum uptime. And we're very proud of our track record and how we've driven this forward with our -- the target that we set for 2025 production back in 2019, that target for finished goods production is within reach. And when you put that into the context of what we've been faced in terms of disturbances in the last few years, this is something that we are very proud of that we've been able to achieve.

Then on energy, despite our current exposure to European gas prices, our premium product stronghold in Europe can also operate on imported ammonia. And that is providing flexibility on energy exposure. And we saw that in 2022, we saw it in 2023 on how we're utilizing that to flex our operations to deal with high energy price fluctuations. That very flexibility and how we utilize that, we're now translating that into how we can also get advantage and flex on our energy exposure going forward. And then lastly, our global in the market, in the field presence is key here. Our product portfolio, of course, the agronomic advice, the tools, the services that we yield to ensure farmer profitability, which also supports our premium product portfolio, and that adds value over commodity products.

Our strategic priorities are designed to address global trends and also opportunities while utilizing the strength that we have in our business model. It's about maximizing profitability on our current operations and it's also about driving value-accretive growth. And this is through global scale and optimization. It's about operational excellence. And it's about driving the asset utilization and improving core profitability in our operations.

Our flexible assets mean that we're able to strengthen our nitrate margins and then also shifting our cost position downwards on the ammonia cost curve, and that we will then do through improving our energy exposure. And by investing in U.S. ammonia, we can achieve this with the added benefit then on top of lower emissions through that and further then strengthening our European operations through linking that into that. And in Europe, as a carbon taxed market, this is also enabling us to capture growth opportunities.

In connection with the second quarter '24 report presentation, we launched also a cost and CapEx reduction program, which we expect will deliver -- will be delivered at $30 million above the target by the fourth quarter of 2025. But as we've said also before, our improvement journey does not stop there. Yara continues to seek further improvement opportunities on a broad set of initiatives. And that is why today, we're launching a target to improve our EBITDA by more than $200 million by end of 2027 and $350 million by end of 2030. In total, this will lead to a cash flow expansion of more than $600 million from 2024 to 2030, reflecting then Yara's commitment to continued cash flow improvement. Through targeted improvements, coupled with also supportive market fundamentals, Yara is positioned to deliver strong shareholder returns going forward.

So the combination of delivering on the cost program and new targeted EBITDA improvements, this will lift Yara's return on invested capital. Excluding special items, Yara's return on invested capital through the third quarter 2025 on a rolling 12-month basis, excluding special items, was just about 10%. All else equal, today's announced EBITDA improvements will deliver on an additional 2 percentage points in ROIC, strengthening our returns and supporting us to deliver on our through-the-cycle target of more than 10%.

In addition, our improvement to -- improvement program lowering our energy cost is also a key strategic priority. And in December, we announced our advanced negotiations with Air Products to partner up on low-carbon ammonia and those products in the U.S. and Saudi Arabia. And we see a strong strategic fit and synergies between our 2 companies, where we're combining the Air Products industrial gas capabilities and low emission hydrogen with Yara's ammonia production and the ammonia network and the distribution network that we have.

And -- but despite many project announcements, demand for low carbon ammonia is slower than anticipated, but Yara is in a unique position because with the internal demand for ammonia that we have and also the external sales that we have, we have a captive demand that is large enough to ensure a significant offtake tonnage from ammonia projects, which puts us in a unique position. CBAM is obviously important for -- an important element to the business case, and we will closely monitor changes in the coming months, and I will explain a bit more on that on the next slide.

But let me -- before I get to that, just say that we also have a developed terminal system in Europe that represent a significant cost advantage for us and that we are bringing into the partnership here. These projects, they then continue to build on the resilience in our business model and enable us to do profitable decarbonization across Yara, and at the same time, delivering double-digit returns in line with our capital allocation policy. They also show that Yara has great flexibility in terms of decarbonization and on energy cost, both equity position and also on sourcing, and that enables us to make the right decisions at the right time. And our approach to all of this is firm. These projects must be accretive to our shareholders.

As you may have seen, the European -- EU Commission issued some news on fertilizers on Wednesday afternoon. And this causes confusion and it causes uncertainty. But let's start with what was said. The commission suggests that they will suspend the regular import tariffs on fertilizers, which today are 6.5% on urea and 5.5% on ammonia. In addition, the commission open up for mechanisms to enable monitoring of the impact of CBAM on the internal market and also allow for temporary suspension of CBAM in case of unforeseen circumstances.

Our interpretation is that this new proposal has -- will then need to be voted and approved. And the commission also provide a guideline that the suspension could be retroactive once suspension mechanisms were approved. Suspending CBAM while continuing the reduction of EU ETS allowances will reduce the competitiveness of EU producers. And the intention of CBAM was to put a carbon cost on imports into Europe to mirror the cost that the European industry has been subject to for a number of years. So increasing the carbon cost burden on European producers would have a significant negative impact on European industry and also on European strategic autonomy, which goes straight against the intention of CBAM in the first place. And it will harm European fertilizer production and increase depends on imports, especially if CBAM was suspended.

More importantly, I would like to challenge the concept of emergency. It's been crystal clear that carbon cost would be reflected in the cost of the product. The additional carbon cost is based on the commission's own methodology and default values. So this cannot be a surprise or an emergency. It's exactly what it was supposed to do. So the impact that this will have on short-term fertilizer prices is uncertain, but -- and this means risk, and risk normally lead to higher added cost on the product.

For Yara, and I think as we've proven over the last few years, I mean, we are prepared for uncertainty. We have flexibility, and we will be able to utilize that flexibility, which means that we can flex between all types of carbon footprint. We can run on green ammonia, we can run on blue ammonia. We can also run on imported gray ammonia for that matter. So the energy cost component of this is still very valid. So we have a resilient business model.

But clearly, while we're also looking into the opportunities here to decarbonize, any of these decisions will be done if they are financially viable. And we have not taken any large investment decisions in Yara based solely on CBAM. So while we are considering investments in U.S., investments in low-carbon ammonia, we have not taken the financial investment decision, and we'll take our time to closely monitor the developments before we make that final decision. And key for this and any investment decision that we make is a robust financials. And as I already said, no green transition with red numbers. So for any potential investment in the U.S., they need to be profitable also without CBAM. However, if CBAM was to be fully suspended, we would need -- or we'll not be in a position to invest in such projects. So -- but I have to be clear, they have not suspended CBAM. That was not the message.

Then let me conclude this part of my presentation with the organization. We have organized our leadership and organizational structure to deliver on strategic priorities and improvement areas. It's about focus. And as you see on this slide and you will see throughout the presentations today. And for those of you here in Oslo in the break out sessions as well, you will see that we have a very strong and experienced management team in place and we have a highly competent workforce ready to continue to further deliver on enhanced value from Yara's robust business model.

So with that, I'll hand over to Silje Nygaard, who will go through the recent developments in the nitrogen market. Thank you.

Thank you, Svein Tore. So my focus today will be on market developments, and I will focus specifically on the medium to long-term outlook today. But before we start to look forward, let's have a look briefly backwards at how the market developed in 2025.

2025 was a year with demand-driven pricing in the urea market, which is characterized by urea prices being above cash costs for all the key producers. In addition to that, as you can see from the slide here, we have the falling natural gas price in Europe throughout the year, improving margins throughout, which again is something you can typically see in a demand-driven market, a disconnect between energy prices and urea prices.

This strong development came despite the fact that we had good supply in the global market. This was mainly driven by China, adding more than or allowing more than 4.8 million tonnes of urea export for the year compared to only 0.3 million tonnes in 2024. We also had low crop prices for the year, representing another headwind. When it comes to the added supply from China, this was not offset for the year by production issues elsewhere, but we did have that as well. We had production issues in Egypt to the market Egyptian producers due to a lack of natural gas over summer. The conflict in the Middle East also caused supply disruptions in Iran and Egypt. And finally, there was also lower production in India.

When it comes to demand, that was particularly strong in India in 2025. That was driven by a very strong agricultural season in India as well as rebuilding of inventories from unusually low levels in 2024 and also, as mentioned, the loss of domestic production. The strong sales in India persisted throughout the year, and we had -- there was another month of sales records in December, reducing the risk of an inventory overhang going into 2026. This combination of strong urea prices, coupled with an increase in supply, is indicative of a healthy demand for the year.

Let's spend a little bit more time and look at urea demand. And the reason for using a little bit of time on that is that very often, people equate nitrogen demand growth with urea demand growth. So what we're trying to illustrate on this slide is that, that is actually only one of the factors driving the need for additional urea capacity over time. But of course, the underlying nitrogen demand growth, that is the basis, that is driven by things like food demand, growing populations and agricultural practices. So if we look at that for the past 10 years, that growth has averaged 1.1% over time.

But then in addition to that, that growth rate is amplified when we look at urea, because urea is the major fertilizer, nitrogen fertilizer product where capacity still be growing, the added capacity. So meaning that urea has had to take market share from other products to compensate for less growth in other products. So that -- in addition, that adds 0.6% to that growth number, meaning that urea demand growth has been 1.7% in this time period.

Then there's the final factor, and that is that there is a need to replace aging capacity in the world. And you see it, we have included an example here. If we look back to this period here back to 2010, urea capacity grew with 50 million tonnes in that period while production only increased 30 million tonnes. If we translate that then into growth rates, that means that over time, 1.2% every year has been lost in output from installed capacity in this period.

When we look at this replacement need, this is driven both by closures and lower utilization rates. In addition to age, lack of maintenance, extortion of feedstock resources, natural gas resources, for example, and scale -- lower scale and efficiency of older plants contribute to this replacement needs over time. And by the way, this is also why capacity lists are an unreliable source for actual production capacity because typically, capacity is not removed from these lists.

Okay. So now looking forward. And what we have done here is that we have made an illustration. The graph to the left here, that is the current urea consumption multiplied with the historical growth rates that you saw on the previous page. If you use those growth rates, you arrive at urea, a need for urea capacity growth of 3.9 million tonnes with the breakdown as you see on the different elements here.

Of course, if you are doing forecasting, you have to mean something about how this will look in the future. And what we have done here is that we've just drawn a couple of illustrations, so that you can kind of see, of course, you can have different views on this depending on what you expect in terms of future demand growth, but also what you expect in terms of output from existing plants going forward.

So -- and how you read this graph then when you compare that supply need growth with the actual capacity in the pipeline. For every year where capacity added is below that supply need, that is indicative of a tightening market balance. Well, in this low case that we have drawn here, you see the market is more or less in balance. So that's in a way how to interpret it.

It's important to note, of course, that this is very difficult when you look year-for-year because, of course, demand can be impacted by things like inventory effect that can fluctuate, output from existing plants can fluctuate. And in addition, you can -- the supply that is added can be delayed. That is very normal to see. And we also see very often that the publications differ in terms of their views on when the different new projects will commission.

If we look forward, another unclarity in the market now is China. China has, over the past couple of years, kept strict control over their domestic urea supply. Their policy has been to ensure available -- ample available urea at a stable and low price. So that's how much is available from China as exports in the coming year will depend on things like their policies, how the domestic market develops as well as how net capacity develops in China.

Switching to another important market topic, European gas prices. We have already, in 2025, seen an easing of the global LNG balance. On the graph to the left here, you see changes in exports and imports of LNG for the year. And what you see from this graph is that in 2025, U.S. had better availability, so they added LNG to the market. And most of that kind of benefit went to Europe. Europe had got access to more LNG partly because of the increase in exports from U.S. but also partly because Asia bought less LNG for the year. That availability led to a fall in gas prices in Europe throughout 2025, as you see in the middle graph. As I mentioned, in a demand-driven market as we were in 2025, falling natural gas prices in Europe leads to expanding margins for European producers.

If we then look forward, and this graph here, you see the capacity growth in LNG capacity over the coming years. And what you can see here is that we are entering into a period with a wave of new LNG capacity coming into the market, dominated by projects in the U.S. and Qatar. So you see on this graph, you see that if we compare it to the last period where we had supply growth in the LNG market, actually, every single year, you have more supply being added than what we have had in the past. In addition to that, FIDs continue to be taken on LNG capacity, which extends this capacity growth period beyond 2030.

Switching topics again. Svein Tore already touched upon it, carbon pricing in Europe is, of course, a factor that is relevant for future prices. The graph on the left here is -- you've seen it before, but it's just as a reminder that Europe remains a net importer of nitrogen mainly in the form of urea, and that is important in setting the European price level.

This graph here shows you that we have already seen an impact from CBAM on the European prices. And you see, we had the period just before this deadline of purchasing urea to arrive at European ports before CBAM, 1st of January towards the end of November, you saw an increase in Egyptian prices. Egypt is one of the key suppliers to Europe, indicating buying activity ahead of the CBAM implementation. Thereafter, you see the Egypt price falling again, lower activity as that deadline passed, but urea prices in Europe stayed at a higher level. And right now, this differential between the price in Egypt and the price in Europe is roughly $100, representing a structural differential of -- from both carbon costs, freight costs and other duties as was expected and intended as Svein Tore mentioned.

And also, as already mentioned, now, of course, there is some uncertainty regarding CBAM. So I think from a market perspective, we will just have to wait and see what happens. However, as long as this uncertainty prevails and as long as carbon remains a part of European production economics, likely carbon is going to continue to be relevant as a pricing factor in Europe.

Final topic, ammonia. And here, focusing only on the long term. What we are illustrating here is a way that one can think of long-term ammonia prices. So the incentive price logic, many of you are familiar with it already. That implies that ammonia prices over time should move to a level high enough in order to cover both operating costs and a fair return on investment for capacity growth to happen to meet demand growth over time. As mentioned there as well, that cost should be, in a way, the places where it makes sense or is optimal to construct new capacity.

The logic of ammonia prices being pulled toward this level is evident in historical data, and we have tried to illustrate that here by showing a couple of examples. So there are 2 examples here. We look back to 2007 when the full cost of building a plant in the Middle East was estimated around $300. And another example, in 2015, we're looking at the U.S. This is around the time we built our Freeport plant together with BASF in Texas when full cost was $450. If we compare those estimates to realized prices in the coming years, what we see when we adjust for inflation is that for this first example, the price ended up roughly $60 above. Well, in this last one, we are approximately $30 below, but of course, it's a relatively short time period. Ammonia plants are typically constructed to be there not for 10 years, but for maybe 30, 40 years, at least.

When it comes to the ammonia market going forward, we are entering now a period with more capacity additions than what we've seen in the past years, which might mean a period of lower prices. However, according to this logic, at some point, there should be a convergence back to a higher level again in order to cover capital costs. And that can be driven by a number of things. It could be closures of all the capacity at the lower end of the cycle. It can be through more ammonia being directed to different downstream uses such as urea, for example, ammonia projects plugged with urea, or it could be through demand growth over time, either from traditional or new users.

That was all I was planning to cover. Happy to hand you over to Johan Labby, our EVP of Global Production.

Thank you, Silje. Good morning, everyone. I'm going to guide you through the way we are working with and strengthening our production system. The production system is really the backbone of Yara business and key driver for value generation. As an order of magnitude, 70% of our invested capital is in our production system. This represents a very large financial exposure, which means that it is critical to ensure safe, reliable and profitable operation. Svein Tore already mentioned very well the way we are working with safety and our commitment towards safety. I'm not going to come back on it. But you should all know that there is no business, no profitable business, no reliable business without safe operation.

Most of our nitrate capacity located in Europe can run on imported ammonia and is running on imported ammonia. It has been detailed that the color of ammonia can be flexed. That is very important prerequisite to keep in mind. And that is key for Yara flexibility. In addition, we have taken significant steps to flex even further the production system. I'm going to come back on it. You will see that we are operating a globally diversified portfolio of assets. We have a systematic way of working, and we are driven by operational excellence.

But first, let's take a look at our production system. We are operating all around the world, 25 high-performing production plants, 7 located in the Americas. We have North America, low gas price and the asset in Belle Plaine, located in the very high premium market for nitrogen. Then Latin America. Yara is holding the entire or near to the entire nitrate and NPK capacity in this part of the world. Europe, 13 high-performing assets, able to flex the ammonia sourcing for the majority of them. Asia and Africa, 5 production assets located to ideally reach the Asian market of ammonia, the growing agricultural market in India and the mining market in Australia. That is our production system, and I'm going to demonstrate how we are going to operate or how we are operating and flex this European system to optimize.

But first, as it has been mentioned by Svein Tore earlier, back in 2019, we have started an improvement program aiming to increase the production capacity from 19.4 million tonnes of finished product back in 2019 to 21.1 million tonnes of finished product in 2025. Today, I am happy to announce that this target is achieved. We are navigating, as you can see, at all-time high level since 5 quarters in a row at approximately 21 million tonnes of Finnish fertilizer. This represents an 8% increase in volumes and USD 250 million has positive impact on our bottom line. This, by operating asset in a better way and performing systematic debottlenecking of our premium plant and future-proof assets.

But at the same time, it has also been mentioned, our GHG carbon intensity target that we set in 2019, aiming to reduce by 10% our GHG emission intensity target that we measure by tonne of CO2 per tonne of nitrogen by 2025. And I'm quite comfortable to announce that this target will be reached. We are consolidating the final number, but the 10% of GHG emission intensity target will be real. This represents a saving or an impact -- positive impact of USD 100 million of our bottom line. And we are not only profitably decarbonized in Europe, but also outside Europe by operating our assets in a more efficient way. At the end of the day, less gas consumed to produce our nitrogen. And this comes on top of significant reduction, which have already been taken, thanks to the catalyst mainly before 2018. This comes on top.

But we can still further improve. We are, as we speak, performing multiple investments, and I would like to focus on 3 of them. The first one, the expansion of Cartagena NPK plant. We are investing USD 50 million, mostly executed. Commissioning of this expansion will start very soon to add 80 kilo tonnes in our portfolio of NPK product. This will represent USD 12 million as margin addition in Cartagena.

In parallel, Porsgrunn. Two years ago, Porsgrunn was producing 2.2 million of NPK per year. By strengthening our operation, by performing systematic debottlenecking of the plant, we are today operating at 2.5 million tonnes of finished product. Our goal by 2030 in Porsgrunn is to continue that journey to reach 2.8 million tonnes of finished product by 2030. We have nearly 400 kilo tonnes added in our portfolio right there.

We have described that our portfolio of assets in Europe, and I will come back on it, can run on imported ammonia, but not all of them. Sluiskil is one of the asset in the need of the ammonia production to be able to fully operate the nitrate part, urea and ammonium nitrate part. Therefore, Sluiskil, the 3 ammonia plants we have there, we have decided to take a significant step of performing a carbon and capture storage project. The first of its kind in Europe. It's a significant commitment to reduce our CO2 emission and to profitably decarbonize Sluiskil.

The first transborder agreement between the Netherlands and Norway, the biggest liquefaction plant of CO2 being built as we speak. Twice as big as the biggest one in operation today. Costs have been mostly taken, and the commissioning is going to start Q2 2026.

In addition, we have established a list of a systematic debottlenecking approach of our future-proof assets. This will bring an addition of 1 million tonnes of premium product by 2030 by growing organically, which means through our existing portfolio of assets, by operating our assets better and performing systematic debottlenecking.

Let me guide you through the way we are utilizing our CapEx. As you know, our business is CapEx intensive. Every year, we are utilizing between USD 700 million and USD 850 million in our asset portfolio. The difference depends on the turnaround cycle of each and every asset. The year where we have concentrated turnaround activities, we might -- we are in the need of more CapEx. And the year where we have less turnaround activities, we need less CapEx.

Two years ago, we have categorized our asset portfolio in 4 different categories. The harvest categories are the one where position has been decided already. We are either closing the asset, hibernating the asset or dismantling the assets. Obviously, the less of our CapEx is going there.

Moving on to the marginal categories, that's the asset sitting there where we are monitoring turnaround per turnaround cycle, and we ensure continuity from a turnaround period to another turnaround period. Then the old categories, that's where we want to operate and strengthen our operation, but we are extremely careful when considering a long-term development in that category of assets. Finally, the future proof. That's where there is no question about potential development of those assets. Porsgrunn and Sluiskil are 2 examples of this, and there are some more.

And you can see the repartition of the CapEx we utilized per category. And this has been a key driver to develop and to increase our production volume, by focusing on where we are generating the most value and accept a bit more flexibility on the asset where we are generating less of the value. And in our business, like I said, it's strongly linked to our turnaround cycle. Typically, 4 years, where the year before and the year of the turnaround, we need the most CapEx. And 2 years after, we can harvest the CapEx invested to run the asset optimally. And that's what we scrutinize carefully and even more so when you are going down into the categories, what are the scope of the turnaround? What do we need to ensure safe and reliable operation for the next turnaround cycle?

Our European system is flexible. There is a notion which is important to understand is that nitrate, ammonium nitrate and NPK are able to run on imported ammonia. You need the ammonia from a storage tank and you can utilize that ammonia. For producing urea, you cannot do that. You need an ammonia plant connected and up and running because you need the CO2, you need the steam in addition to the ammonia. That is the reason why the 3 assets you see on the right-hand side, they cannot be disconnected from their ammonia plants. We need to run the ammonia to run the urea. But they are linked to the industrial part of our business, mainly AdBlue, hence benefiting from the AdBlue premium.

Sluiskil, nitrate capacity and urea capacity. It's an hybrid plant. We need both. But there, for running the urea plant, we need the ammonia and we can flex to a significant extent, the ammonia sourcing for running the nitrate plants. The rest, Porsgrunn has own production but can run either on locally produced or imported ammonia. And all the rest is running, as we speak, on imported ammonia. As it has been mentioned, irrespective of the color of the ammonia, irrespective of the source of ammonia, irrespective of the carbon content, at the end of the day, of the ammonia. Our business is to optimize day-by-day, the flow of ammonia through our production system.

And now I would like to guide you through the way we operate our ammonia system. We handle every year, 4 million tonnes of ammonia. 1.7 million goes to external sales, 2.3 million is optimized through our production system. In total, our production system needs, in Europe, 3.7 million tonnes of ammonia to run and 0.5 million tonnes outside Europe. The difference between the 4 million tonnes and the 2.3 million tonnes is the locally produced ammonia. We have, in total, 18 ammonia terminals and 14 vessels to handle that ammonia and optimize the flow of ammonia all around the world.

And we can still further optimize. Let me take an example. In Sluiskil, the ammonia terminal, we were able to receive handy-sized vessel, meaning small ammonia vessels. By performing an investment of USD 8 million, we have transformed the ammonia terminal being able to receive bigger ammonia vessels. The first one was there a couple of months ago. This has a positive impact of USD 15 million, only by optimizing and make bigger the ammonia terminal we have there. And similar steps is going to be taken in other ammonia terminal in Europe to gain flexibility in Rostock, in Uusikaupunki. In many other plants, we are taking that steps to flex even more the flow of ammonia coming into Europe.

If we take a look at our ammonia system in Europe, it's unique because located on the coast side. It's ideally positioned stretching from France, the West Coast of France, going to the Benelux, the Baltic Sea and the Nordics in the South in Italy, ideally located to receive ammonia to run our own production system, but at the same time, to reach the growing demand expected on ammonia from now until 2030.

We have seen recently ammonia terminals changing hands for an amount of USD 300 million, one single terminal. We have 18 fully operational ammonia terminal in our portfolio today.

Svein Tore has already mentioned and covered quite well the announcement that we made back in December on exploring 2 major projects with Air Products. The first one, the Darrow project. The Darrow project is a combination of the largest hydrogen and ammonia complex being built in the U.S., with the biggest and only scalable import infrastructure in ammonia which exists currently in Europe. That's what it's all about. It's really a strategic fit between 2 companies.

The setup in the Darrow project is such that Air Products is building the entire plant, 3 [indiscernible] units producing hydrogen nitrogen; 2 ammonia loops, 1.4 million tonnes each ammonia loop; and storage tank and harbor facilities, plus the plant is getting ready for CCS, carbon capture and sequestration in order to qualify for the 45Q tax credit. Once the plant will be built and commissioned, Yara will acquire the ammonia part, meaning the ammonia loop, storage and harbor facilities. Getting the nitrogen and the hydrogen based on the long-term agreement with Air Product, while Air Product will operate the hydrogen facilities, and a third party will be onboarded for the carbon capture and sequestration part of the project.

Air Product hydrogen facility produces 20% more hydrogen than what it's needed to run the 2 ammonia trends, which means that adjusting the CapEx for additional hydrogen, we see a CapEx per tonne of this project, which has a significant advantage. Being early start of the project, having a head start, it gives a significant advantage to this project as well. Engineering has been completed. Procurement is completed. Equipments are there already. Grant has been prepared already. This is a head start, which reduces the CapEx risk quite significantly. But this is not a given. A lot of work remains. We know that.

And the construction market in the U.S. is quite challenging for the time being. We are monitoring that closely. We are monitoring the construction market. We are monitoring and working hard to get the final CapEx figure of that project. In addition, the whole geopolitical situation and political situation as described by Svein Tore will also be monitored, aiming to take FID or to be in a position to take FID by mid-2026.

In NEOM in Saudi Arabia, this is a green project power supplied by solar and wind, performed by Air Product together with ACWA Power and NEOM. And Air Products is the offtaker of that part. And Yara will distribute the volume on a commission basis. That is a setup that we are discussing with Air Products today. This is all about the earliest project existing with the biggest infrastructure for handling ammonia currently existing in Europe.

It creates a lot of benefits. Ammonia is so much more than just building a plant. We know that a lot of developers are discovering that as we speak. I can tell you that. We are combining the gas capacity and knowledge of Air Products with our ammonia knowledge together with our infrastructure and midstream position, which makes this project one of the most profitable and most credible project currently being developed.

I would like to conclude by saying that and summarizing that Yara is operated a globally diversified asset of high-performing plants. We have a strict capital allocation policy and strict prioritization amongst our portfolio of assets. We have a world-leading ammonia platform, think it as been clearly demonstrated. And we are all set for value-assertive production growth in premium products and low carbon ammonia.

Thank you. I will now hand it over to my colleague, Monica Andres, EVP Europe, who is going to guide you through the downstream part of our business. Thank you.

Thank you, Johan. Good morning, all. My pleasure to be here. On the strong asset footprint that Johan has described to us and in addition to that, our strong presence in downstream is also remarkable. And it is based on strategic advantages and competitive advantages that generate value for Yara. And the first advantage that we have is the agronomical knowledge. We know that our portfolio works in the field. And we know that works in the field because we have been for decades working with farmers that have provided us with feedback on what the challenges that we had and also how our products were operating.

We have the highest nutrient use efficiency. That means that our product portfolio applied in the field with the right doses works and works by increasing the yields of the harvest, but also increasing the quality of the harvest. And that, in the end, generates value for the farmers. So the value that is generated for Yara is anchored in the value that we generate in farmers because we work hand-in-hand with farmers.

Together with that, the second main competitive advantage that we have is the global and the scale -- the global optimization and the scale. And it's because we have a unique position to drive our business. We can, with that overcome the seasonality of the business and optimize the margins. So with that, we have -- we are, in a way, unbeatable on this. And rather than being a subject of inherit volatility that is linked to our business, we are -- with our value proposition, we are able to defend sustainable margins and sustainable profitability for the company in a market that is as Silje already mentioned, described is in continuous growth.

But we have challenges as well on delivering our fertilizers because Johan is producing 24/7 all the year long, and he is increasing production activity. And we need to sell. We have to move these tonnes that are generated in our production. And the challenge that we have is that we are operating in a system -- in a business that is seasonal because the farmers have a very narrow window to apply fertilizers for most of main crops.

So how can we offset this seasonality? Well, we do that with our global presence. And with our global presence and optimizing the margins and the volumes that we allocated to the different markets, we are able, as you see here, to deliver a fairly stable volumes all along the quarters. And with that, we are able also to improve the profitability. We have presence in more than 140 countries. There will always be a country with demand. And with that, we are confident that we will have market to swallow and deliver all the products that Johan is going to produce now and in the future as well.

As you see here, the seasonality, Americas that is mainly South Hemisphere has a different pattern than Europe, and this is key. So that is the way we work. Africa and Asia provides more stable consumption all along the year because they are more in the cash crop segments. And industrial is very stable as well. Bear with me in industrial because this is part of our integrated business model, industrial products. They are not delivering industrial products to crops because it's about industrial applications for the products that we produce in our assets as well. So they are not exposed to the seasonality that the fertilizer have.

So with that, it provides us with some stability that we need. But also industrial is -- have developed the strategy and the go-to-market by defending the position of the use of the portfolio by also offering reliability and just-in-time supplies. We have a very strong presence with our production sites, but also with the logistical hubs. And this is key in the industrial segment in order to be closer to the customers and be able to supply them with the demand when they need it. So we supply with products when they need that.

With that, we've been able in industrial solutions to increase the commercial EBITDA in more than 160%. And we are able also to defend 25% premium above commodity urea in many cases. So you see the main markets for industrial products are Europe and North and South America, Brazil mainly. So this is a fundamental part of our business because normally, we don't talk that much about industrial, but it's also relevant.

Back also to fertilizers but taking into consideration our global scale and the challenges that we have, we have a responsibility to serve the market. We are in a global business, and we need and we are moving big volumes. For that, it's fundamental to have strong logistical setup that to drive the scale that we need. One example of that is in Henry that is the state-of-the-art production hub of water-soluble fertilizers. It has a capacity of 60 kilotons, is quite big, I can tell you in this range. And we are able to serve high-value crop markets on that being close to farmers, being close to customers and a business that is in continuous growth.

We move now to Canada, Contrecoeur. This is an import terminal with a capacity above 160 kilotons. It's in a port in East Canada and St. Lawrence, and it's able to import product even in winter time, all the year long. And with that, we ensure the supplies to Canada by -- because it's a very important market in our business by receiving the product that we need and to be ready for the campaign and the season when it happens.

And Brazil, Rio Grande. We own a pier there. We own a blending unit. We own a bagging facility there. The capacity is 2.5 million tonnes. We are talking about big volumes because Brazil is a big country as well. With this, in Rio Grande, we are connected with the logistical barges and also railway. And this is a main hub that supplies the small hubs in South Brazil. And with that, we ensure, again, to be closer to the market, closer to the customers and be able to demand with the farmers need the products. This is, I can tell you, unbeatable and it is hard to replicate.

This is one of the main competitive advantages that we have because we are not dealing with commodities, we are dealing with mainly premium products because -- and this is one of the main slides that I would like you to bear in mind, 60% of the production that we do is premiums, 60%. This brings stability to our business and also sustain margins going forward. We are based on the agriculture needs. So we are in constant contact with farmers, with the end consumers, with food companies to understand what their challenges are.

We are leaving a -- working with vegetables and these crops are being grown facing the climate challenges as well and in continuous change. So being close like markets, being close to farmers and having the agility to respond to farmers needs is the fundament part of the business that we thrive in downstream. So it's about having the years open and being ready and flexible to move. As an example of this, we have prepared some proof points and that have been collected in a video.

[Presentation]

Seeing is believing, right? And how we translate the video into numbers that we want to see is on this premiums where we're talking about sustained premiums along the history and the future as well. On the left hand side you can see the -- for NPKs that is the yellow line represents the commodity blend so basin, urea, the APN, MOP and the blue one is the price -- realized price already for NPK to our compounds, the other compounds, the premium ones. And you see that sustainably, this is -- we are able to maintain and keep $200 of premium.

And the same happens with nitrates. And here in the right-hand side, the yellow one is urea and the blue one is Egypt urea, the commodity and the blue one is our nitrate realized prices in Europe. You see sustainably premium above urea. And it is how it happened in the past and will happen in the future, but it's based on the strategy I already showed to you. And because farmers believe in our crop advice and our digital tools and all the information that we get and we provide to them. This is a continuous flow of information back and forth. So seeing is believing. So that farmers see in this way, and we see in our, it is quite relevant.

And this is NPK, so it's for the micronutrients, nitrogen, phosphorus and potassium, but we have also in our business, micronutrients that are the essential mineral fertilizers that improve the crop's health as well. And together with micronutrients, we have biologicals. What is biologicals. Biologicals are -- they have a biological source. And what they do is that they support and enhance the resilience of the crop against frost, against flooding, against drought. That is the reality of farmers. One -- couple of months ago, [indiscernible] in my home country, we were in [indiscernible]. We were visiting 4 farms, almond, pistachio, potato and olive trees.

And it was amazing to see that the farmers were asking for more biologicals. Why? Because they have seen that by application of biologicals, they can test and see already that the crops becomes more resilient. So when a flood happened, and you know that in Spain, we have suffered that, the crop is able to recover faster because when the flood happened, the oxygen in the soil is substantially reduced, but it can recover. And also, it provides resilience against drought. So now that is a reality, water scarcity is a reality. With biologicals, we are confident and we know because we are science-based as well that we can provide the security to farmers because farmers are living in agriculture in general, it's a very uncertain business.

So -- and there's a business for us as well on this because biologicals consist on $10 billion. And it's growing sustainably. It has multiplied by 5 in the last 5 years. And you can see also the revenues have increased by 45% and the gross margin has increased by 50%, which is music for our years. We are -- we have invested already in a new plant to double the capacity of micronutrients and biologicals in Howden, in U.K. And we are ready to start delivering already in '26 in the year we are in. So our sales agronomists know already how to deal with this and how to expand our portfolio and our offering also in this segment that is very profitable. And so we are very confident that we will succeed on this.

Yes, and we are in Europe, right? I'm EVP Europe. Europe is now -- has been in the eye of the storm in the last 5 years and going to continue to be. But it's also the core business for our company. And we have a business model that is very hard to replicate. This is the idea I would like to bring after this presentation. It's very hard to replicate, not only because of the strong site and plant footprint because -- but also because we have the logistical hub and setup to be able to supply the customers and the farmers in a way that is the most efficient.

We have and continue to build in our market share. In average, we are 25% market average in the core markets. Here in Norway and Nordics, we are higher -- our market presence is quite higher. And with that, we get the information we need from the market. So we can move ahead on setting our pricing, and we can move ahead on positioning our products in the logistics warehouses, in the logistical hubs that we have in the warehouses.

And with that, we are growing our nitrate presence, both in straight nitrate applications, but also nitrate NPK based. And also, we are able to provide Johan with the predictability of the products that we are going to sell. So we are in an integrated business. So Johan brings the ammonia and produces the ammonia and also the products that we need that are demanded in the market.

We have -- on top of this, we have decarbonization market opportunities as well. We are ready to deliver already above 1 million tonnes of low-carbon fertilizers already in 2026 that comes out of the CCS project, carbon capture and storage in Sluiskil, as you know. So -- and the potential investment in the U.S. will bring lower carbon fertilizers. So we are ready with our market presence, with our knowledge and the contact that we have with customers and farmers, we are ready to deliver also in the low carbon segment at the moment that demand shows up.

And as mentioned, CBAM is an important driver of this development. I know that you are quite aware of what CBAM is. But here, just a couple of ideas that I want to remark. The average emission of carbon footprint and -- to produce 1 tonne of urea accounts for 1.5 tonnes of CO2. So every tonne of urea produced means 1.5 tonnes of CO2. And this is the production that is the average emissions for those producing outside Europe. Europe imports nitrogen above 25%. So urea produced outside Europe will be imported into Europe. And with CBAM, they have to pay for this carbon. And this carbon, it's a fixed number. It will depend on the carbon cost, but it's fixed because urea cannot be decarbonized. So that urea is going to pay.

What happens with Europe, with Yara. With Europe, we have a lower carbon emission. But in Yara, we are even lower. So we have a competitive advantage because we have invested already in this with the catalyst and we have invested already in reducing our carbon footprint. So our competitive advantage is translated in a further premium that we can build on our portfolio. So because we will -- we can uplift the price of the nitrates that are being sold and delivered in Europe, that are produced in Europe as well by the fact that the urea imported will have to pay for this carbon tax.

So far, CBAM was implemented 1 week ago. There are some doubts. But the message to you is that we are ready to move fast on the premiums on the prices to leverage on this, and we are ready for this. But -- and we are ready for that because Yara has been prepared for this for years with very smart, I would say, investments. The catalyst is one of them. It was a tiny investment that reduces substantially the NOx emissions. So with that, reduces our GHG already.

We have invested already in Sluiskil for the carbon capture and storage and our baseline is lower than the competitors. CBAM is implemented since 1st of January. With that, the importers have to pay, and they will be phased in. But Yara, the producer will face -- we will be charged on the phase out of the free allowances. We have been already working and investing on this. And actually, we have a quota bank of ETS quotas that accounts for 6 million, that translated into dollars is above $500 million that we have in our bank already. And we can use that to pay for the free allowances that are going to phase out or we can sell them in the market depending on our interest.

So there is -- today, there's already business with these free allowances and the quotas that we are able to collect and harvest out of these investments. Sluiskil will mean -- will reduce 800 kilotons of CO2 already and -- this year, it will start this year. And that will add more to the quota bank. So -- and these investments are already done. Will we invest further? Well, it depends on how the CBAM evolves. So far, what we have in our bank is already money. and we will work on that.

In the future, we have -- Svein Tore and Johan already described the flexibility of our business, we are producing ammonia in Europe, we are producing outside, we are bringing the ammonia that we need, and we produce and we sell and distribute according to the needs. Whatever it will stay in Europe or outside Europe, it will depend on the CBAM evolution and the market needs as well. But then we -- as said, we are ready for the future.

So with that, we will increase or improve our portfolio with low carbon fertilizers. We can run our operations with low carbon footprint in Europe, and we have this flexibility. It opens up a new segment, a new business segment that is with the food companies and the food chain. They have expressed and also public very ambitions -- ambitious sustainability pledges and they have to commit to them. And most of that comes from their Scope 3 that are the emissions that come from their suppliers that are the farmers who can contribute to the reduction of the Scope 3, only those that have the lowest fertilizer footprint. Who are the ones that have the lowest in the world is Yara.

So there's a business there. We are already signing of contracts with PepsiCo, Nordzucker and -- PepsiCo worldwide, also in Latin America, Nordzucker also in Germany and many others. So this is a new business opportunity that we are building, and we do not forget our traditional business. That is our base. Our backbone is what I already described so far. This is a new opportunity that comes and that will be incentivized by the CBAM framework.

And with that, I get to the end of my presentation and the summary is, and I would like to remark that we are in a pole position to generate value now, but also for the future. And the other key strength is the global position that we have, the global optimization that we do with our portfolio and our assets and the logistical hub, don't forget that. We are a leading premium product position and knowledge margin. The value-accretive growth in low carbon products and biologicals that is the new segment coming on stream and the value proposition food to serve future requirements of food systems when they come. Thank you very much.

Now I pass the word to our CFO that will go -- Magnus that will go better and deeper in the financials.

Thank you. Thank you, Monica, and good morning, everyone. Very nice to see so many of you here. And as we've seen through the previous sections, these competitive edges that Monica and Johan talked about are very important for us, and they're also very important for our financial results. And how is that? Well, the 2 lower ones, the scale and the global optimization and the operational excellence are really key in any market scenario. It's about lowering the fixed cost per tonne, lowering the CapEx per tonne, and that is, of course, a very important competitive edge in a CapEx-intensive industry.

Moving up, the operational excellence also is important in terms of energy consumption. And obviously, being exposed to energy prices, the less you use per tonne produced matters a lot as well. On the optimization part, also very, very important in terms of making sure that the products go where we get the best netback for them at all times. And that is important in an industry where anything from weather to political decisions can change reality in a very short period of time.

We are flexible on energy. Yes, we have a lot of production base in Europe. But with our ammonia system, our actual gas exposure is different and it's flexible. And last but not least, and probably the most differentiating part is that decades of farm knowledge, decade of application knowledge enables us to add an additional premium above commodity value, which is, of course, a value in itself, but which also means that we have more stability in our results.

And looking at our results, we see both from market implications, but also from the actions taken over the last 12 months that we've seen a significant improvement, and EBITDA last 12 months of end of Q3 of $2.6 billion is among the highest results we've had in our history. That also translates into a very strong increase in earnings per share. But of course, in a capital-intensive industry, we also have a very hard focus on return on that invested capital. We're very happy to see that we are now ex special items above 10%, and we will, of course, continue to work to improve that further.

Free cash flow as well has seen a significant improvement, which is, of course, at the end of the day, what really matters. And then the final number we have up here is gross margin, which is not necessarily a very good measure of profitability development in our industry, but it is worth noting that we do have a gross margin, which is quite stable and it was almost remarkable stable considering the volatility of the industry that we have. And that, of course, reflects the flexibility in the system that we've talked about earlier today.

Improvements both from the market as well as internal improvements, of course, and with a focus on strict capital allocation provides strategic flexibility, and a strong balance sheet is very important for us. We are strongly committed to an investment-grade rating, and we have an unbroken record of maintaining this since the IPO in 2004. But maintaining a strong balance sheet not only secures our rating, but also ensures that we have flexibility and capacity both for value-accretive growth as well as shareholder return through the cycle.

Taking a short pause looking at our scorecard from 2020. The world has, of course, changed a lot since then and so has the relevance of some of the KPIs, but I think it's still worthwhile to have a look at how we've done. And starting with some of the ones that we are very happy with, of course, happy to see that return on invested capital is above 10%. And of course, this is a key focus to improve even further going forward. As Johan mentioned as well, finished fertilizer production will achieve the target set. That represents a significant increase in volume, but also significant value in margin as was illustrated. And that's something that's come through years of hard work and also importantly, lays the foundation to grow that even further going forward.

And on the ammonia side, you will see that we are short of our target despite having a 500 million tonnes increase on the target. And that is from the fact that we prioritize value over volumes for ammonia as we talked about many times. If we can import more profitably than producing, then that is what we do, and that, of course, impacts the number as well. On fixed cost and greenhouse gas emission intensity, we also reached our target. And as both Monica and Johan talked about, we've done that in a profitable way.

Operating capital is one of the areas that we're not completely happy with yet. It has been impacted since that target was set by a dramatic change in product flows, obviously, since whatever -- what has happened since both 2020 and 2022. So this is an area that we'll focus on going forward. And we are, of course, not happy with our TRI, our safety numbers plateauing, even though they're industry-leading, and that's, of course, an area that we'll continue to work on going forward as well. And the KPIs that we've had in our KPI sheet will still be continue to be reported in our integrated reporting annually.

Digging a little bit more into the cost side, we are happy to report that we are ahead of our original target of USD 150 million. And by the end of Q3, we had realized $180 million, also when you adjust for a little bit of a help that we get from the currency. And this comes primarily from overhead cost reduction, but also a significant portion ties to portfolio optimization of lower performing assets. And even though we lost some volumes from that, obviously, the margin loss was quite small. And so the EBITDA effect is almost full from those actions.

Maintaining strong discipline and strong CapEx discipline will, of course, remain a key focus going forward. But also in terms of really increasing shareholder value, we cannot unilaterally focus on cost. We have to play on all the strengths that we have in our system. Looking a bit at productivity, obviously, reducing fixed costs also delivers productivity increase, closing down less efficient assets delivers a productivity increase. But I think it's worth stopping here a little bit and look at some of these numbers as well. FTE per tonne, as an example, is not necessarily a very good measure of productivity and the impact it has on profitability.

Salary costs differ a lot between different locations, but also value of tonne differ a lot. And also, for instance, when we sold our QAFCO assets, that had a lot of tonnes attached to it, but no FTEs. So for us, we look more at fixed cost per tonne, and we do see that with the reduction in fixed costs that we've had, we've had an improvement over the last years. And also looking at it in real terms, we are roughly at the same level where we were in 2015.

But I think what's important to remember here is that there are 2 sides of this equation. And going forward, we, of course, will continue working on fixed cost. But what is also important for here is to actually increase volumes and increase, of course, the profitability and the margin per tonne of volumes. And that is what we'll do going forward at the same time as maintaining control of cost and CapEx. And that's kind of what leads us into our improvement program. And Johan and Monica have talked about the different measures that we do.

If we try to summarize it, we've categorized it into 4 fairly broad categories, but I think specific enough to give an idea of what we're trying to achieve. The first one, maximizing asset utilization. That's what Johan talked about. That's about getting more tonnes and more profitable tonnes out of the CapEx, out of the assets that we already have. And that we will do through reliability improvements, through debottlenecking at fairly reasonable investment levels. And from a value creation perspective, increasing production through the assets we already have is obviously what makes the absolute most value for the shareholder.

On the logistics side, it's also a lot about scale. We talked about the ammonia example. And if we sort of scale up that example, we see a significant improvement potential in reducing cost per tonne shipped ammonia, and we ship a lot of ammonia. This comes about from all the changes that we've had over the recent years in the ammonia system. But basically, it's about bigger vessels. And with the ammonia infrastructure we already have, we can expand that to take larger vessels at a very, very reasonable investment as Johan demonstrated with one example from Porsgrunn.

But as Monica also talked about, on the logistics side, on finished fertilizer, scale matters a lot as well. The bigger the facility you have, the lower your logistic cost per tonne. And there also, we see an improvement potential through growing more through our existing assets using better utilization of the CapEx that we have. On the market side, which is, of course, also a very, very important aspect for Yara, we have a lot of different initiatives.

Growing our market share in Europe is one important element. And of course, after the turmoil that we've had over the recent years, we now have a strengthened position. We've done a lot of changes and adaptions, both on the asset side as well as on the market side. And we have a clear aim and we have regained significant market share in Europe. And of course, we always benefit more from selling close to our chimney. At the same time, as we use our global system, both to generate significant premiums outside Europe as well as having the flexibility to adapt to changing market conditions, both in Europe as well as in other markets as well.

We talked about adjacent offerings and Monica talked about that, YaraVita, YaraAmplix. Here, we have a growth opportunity in a market that we're already in and already delivered significant growth, which, of course, is tightly linked to our core, but also represents a different revenue stream than the traditional fertilizer as well. And this also ties very much into the smaller to medium-sized investments that we have prioritized over the last years, such as the YaraVita plant in the U.K., such as the NPK expansion in Cartagena, which are now more or less complete. And now, of course, it's the time to harvest the synergies from that as well.

And then, of course, finally, we will maintain a very strict focus on cost and a strict focus on CapEx allocation. And with this, we've set a target of increasing our EBITDA from improvements by $200 million by the end of 2027 and $350 million by the end of 2030. And these improvements, we believe will increase shareholder value creation, but also increase our earnings resilience, which -- and robustness further, which is, of course, important.

We do have a robust business model. We have stated that and demonstrated that it is more robust through the volatility that we have in the markets. But we are, of course, also naturally impacted by shifts in the global commodity markets. And it's important for us to also be -- have transparency on this and making sure that the improvement targets we set are sort of separate from how markets develop, even though, of course, we -- a big part of the job we do is also to adapt to that market development.

We have outlined some earnings scenarios. The 2 main drivers for Yara's profitability from an external perspective. is urea and TTF. Of course, there are others as well. But I think looking at this matrix gives you -- and this is in line with the sensitivities that we post on our website as well, gives you an impression of where the market can take us. And I think adding to that, what Silje presented a scenario with tightening supply-demand scenarios on the urea side, also a lowering gas price environment in Europe sets an outlook for improved earnings going forward. But of course, the improvement program will nevertheless go its course, and we will follow these targets irrespective of how the market develops.

On the CapEx side, we have for several years, guided at an average level of approximately USD 1.2 billion in real terms. Investments in Yara are strictly scrutinized, and we have also been below that level in nominal terms several years when that made sense. And I think at the end of the day, what matters for us is to making sure that both the fixed cost and the CapEx that we deploy has the best possible shareholder return, but also applying capital discipline, not only in terms of making sure that our balance sheet is strong, but also making sure that we don't take on more than what we can handle.

We have put a lot of emphasis on maintenance CapEx, making sure that also the maintenance CapEx goes where the return is the highest. And we've stabilized that around the levels you see. Johan talked about the natural variations there is. And also looking -- but looking at our assets, also investing in cash-generating assets is always a good investment as well because those are the cheapest expansion funds that we get. On the total CapEx spend, also including the potential investments in the U.S., we do believe that the guidance that we've given on average is a fair estimate going forward as well. So that guidance is kept.

And in the case of positive FID, that project will, of course, be a priority. There will be flexibility for other smaller investments or other investments into our capacity that makes sense as well. But rest assured that capital discipline will definitely apply. And this is also one of the main reasons why the project with Air Project -- with Air Products that we are evaluating fits well. It represents a value-accretive opportunity for both parties, but it also represents a lower CapEx for Yara compared to a lot of other alternatives.

Project economics in total for both parties, of course, is reflected by the underlying project. And we do believe that both the scale and the early adoption or the early start that this project has, having come as far as it has, gives it a specific advantage compared to other projects. It is also a model that we know quite well. We have the exact same setup in our Freeport plant where we buy hydrogen over the fence.

And so this is in line with sort of the industrial gas business model as well. And it reflects the 45Q tax credits, which then the carbon capture takes place on the Air Products side, and they are responsible for capturing this. But of course, that reflects the overall project economics and the price for the hydrogen and the nitrogen that we buy. And it does give us the same gas to nitrogen exposure as we have in our ammonia plant, which is what we see, which is the sort of the hallmark of the Yara share as well.

And then, of course, from a business case perspective, everybody obviously wonders what about CBAM. Well, I think, first of all, it's important to remember that to do a successful project for Yara, lowering the gas cost and having the right CapEx are the 2 most important factors for a project with strong return. Then in addition, there's a 45Q tax credit. And then obviously, building a plant that can capture CO2 with the carbonized ammonia, the CBAM or the price you get for decarbonizing obviously plays a big role as well. And as Svein Tore said, CBAM is not canceled. Carbon pricing in Europe is definitely not canceled.

We will, alongside other metrics such as construction costs and other factors that go into the business case before FID, monitor that very, very closely up until the final investment decision together with AP, which is slated somewhere mid this year. But as we've stated all along, Yara will only make investment decision if we believe it's profitable for our shareholders. We have the flexibility. We have a lot of options. And I think comparing this project to all the other projects that we have seen, we do see that it does offer a more attractive EBIT profile, a more attractive cash flow profile looking at the entire investment period.

And I think also it fits very well into our system, which ultimately benefits both parties. Also the U.S. project, but let's not also forget the NEOM project as well. And I think it's also important when you think about this project compared to other projects, to actually get to the market in Europe, you need to get in and you need to have the ammonia import tank infrastructure to get there. And Johan referenced some of the acquisitions that have taken place. I think we believe that at sort of a $300 million level, that kind of reflects pretty well what it costs to build ammonia infrastructure in Europe as well.

And to have a decent return on that, it means that the cost of bringing ammonia into Europe, whether you build the capacity or rent the capacity will be somewhere between $60 to $80, perhaps even more depending on the scale of the assets. And this is infrastructure that we already have. But again, we will scrutinize this very carefully, look at all the parameters. And we do realize that sort of our -- I wouldn't say dragging our feet, but that this, of course, is some frustration to the market. But at the end of the day, the most important thing is that we take our time and make the right decision for the shareholders.

And from a capital allocation perspective, it is also, I think, which is a question that a lot of you have, good to think about this potential acquisition CapEx of the Finnish plant as evenly distributed over the period through 2030. From a capital allocation perspective and our capacity, that is at the end of the day, what matters. There is some -- there will be a milestone payment plan, even though we take over the plant only when it's finished. Exactly how that looked like is not commercially fully finalized yet. But I think from a capital allocation perspective, it doesn't really matter from -- we plan several years ahead at any rate.

But looking at that and just taking our most recent last 12 months CapEx -- excuse me, cash flow as a starting point, deducting our sort of average maintenance CapEx level as well, slating in sort of a distributed split of the potential acquisition costs with Air Products, also factoring in improvements, we do see that there is flexibility both for dividends as well as potential other opportunities going forward. I think what's important to remember in this context is that if there are great, very value-accretive short-term opportunities that we can take, it always makes sense for Yara to take it. But I think what's important to remember is that even though we have the cash to do so, we will still apply very strict capital discipline and I think very much making sure that we don't take on anything more than what we can handle.

And for sure, if we do an investment here, that will be our priority. And this is also in line with our dividend policy through the period and also, of course, in line with our commitment to an investment-grade rating. We have and we maintain a policy of distributing 50% of net income subject to our capital structure. When the capital structure allows, we have also distributed extraordinary dividends in the past, as demonstrated here by distribution more than 50% of our adjusted net income and EPS.

So I think our main message is that capital discipline will remain strong. Dividend and shareholder distributions remain a priority. And in a cyclical industry with the uncertainty there are in this industry, of course, ensuring a strong balance sheet through the cycle, also through a downturn in the cycle is important. That keeps our flexibility, but also keeps predictability for distributions in the longer term.

So to conclude, we now launch on a continued and broadened improvement program for Yara in the short to medium term. This will build on the successful $180 million cost program that we've done, but it will be widened and address much more factors than just cost. Meanwhile, work to deaverage our energy cost, lowering our energy cost will remain a priority. We have significant flexibility. We have flexibility on timing on how to do that. And we also believe we have the best overview of which projects that can succeed. And combining that with what we believe will be a tighter nitrogen market in the medium term as well as a lower gas price environment in Europe, we do believe that Yara is set for substantial value creation going forward. And with that, I give the word back to Svein Tore.

[Presentation]

Thank you, Magnus. And I'll have a few concluding remarks and slides before we hand over to the Q&A session. And as you've seen throughout this morning's presentation, Yara has a proven business model, and it's well positioned and it's demonstrated its resiliency over a number of years, and we're strongly positioned to increase the shareholder value further. And this -- since the very start of our company in 1905, we built that, and it's to respond to the global food needs. We've built on that industrial strength. We created a global reach throughout the globe and with a deep agronomic knowledge and competence that we've talked about this morning as well. These remain our competitive edges.

Today, we support food production in 140 countries across the world. Our diversified footprint and also this -- the integrated value chain, this is really what has helped us to navigate volatility in our markets. It's helped us through energy crisis. It's helped us through geopolitical shocks while still continuing to create strong returns. Yara is a really critical player in the food system. With our products, we are enabling the production of 193 billion meals a year, 193 billion meals a year because of Yara's products. That is a strong purpose, and it says something about the scale of our operations, but also the importance of Yara in the global food system.

Looking forward, global food system is set to go through some significant changes driven by sustainability, it's driven by technology, it's driven by efficiency. The Food and Agriculture Organization, FAO, did a study back in 2024, where they analyzed the totality of the food system and also looked at the hidden cost of the food system. And what do I mean by hidden cost? Well, it's the impact of emissions. It's on land use, it's on water use. It's on unhealthy dietary patterns, on poverty, under nourishment, runoffs, all of this, that has a cost that is not really captured in the food system. Today, the totality of that is $12 trillion a year. That needs to be addressed.

And as we talked about and Monica dug deep into it, how do you balance the nutrition for plants? How do you ensure that you have the right combination of that to ensure that they grow and that they are strong? Well, it's the same thing for us humans. We also need balanced diets. And if you look behind it and look at the food that we're eating, is it as nutritious as it should be. And the reality is that it is not. And what's the best way to influence that? Well, it's through the crops. And we're able to do something about that. And we're utilizing that in how the plants grow.

Monica talked about our trip to Spain and how it's utilized by the farmers to grow food in conditions that they're not really set to grow in. But if you give the right, call it, diet to the plants, they are more resilient. They are able to grow even in more challenging places. And if there's one profession that is the most impacted by climate change, well, I think it's hard to think of any profession more impacted than farmers. They're working out in nature.

And if -- with our solutions, we can help them to be more resilient and to grow more efficient crops and to deal with the challenges. So whether that's drought, flooding, heat, cold and so on, it's about the crop nutrition opportunity here. So just like in 1905 when we were well positioned to deliver on one of the biggest challenges faced in the world at that time, well, we are also positioned on top of that to support some of the biggest challenges that the world is facing today. And that is something that comes on top of what we're already doing today, and we are set to grow that further.

Then summarizing our presentation, the key to Yara's resilience and also the value creation that can be simplified into these 4 categories. And I hope that through the presentations this morning, we've been able to dig further into each and every one of those and how we're delivering on that. Then you may view Yara as a complex company operating in a complicated world. And to some degree, that's right. But if we allow ourselves to zoom out a bit and look at this, I think we've proven over the last years and throughout our history that our business model is well positioned to deal with this and that these 4 competitive edges, they give us the resilience and also the flexibility to deal with these challenges.

And it all boils down to this on operating at scale, it's about operating with excellence, high productivity. It's about flexible sourcing, flexible sales and on top of that, the knowledge margin. Not more complicated than that really. So these are the key drivers of our success to date. They will be the key drivers for our success going forward as well.

So final slide. We have a strong starting point. And we have a business model that still has significant untapped potential, and we're committed to drive further sustainable value creation and to increase shareholder returns. We aim for concrete EBITDA improvements of $200 million and $350 million for 2027 and 2030, respectively. And these targets are substantiated by concrete actions behind them, and I believe that we have demonstrated our ability to deliver. We have flexible ways of -- and flexible pathways for energy flexibility and diversification. And we have -- and both -- all my colleagues really talked about it, we have the infrastructure in order to make it happen as well.

So you need that full integrated value chain and flexibility to get this done and physical assets to do that. We have that. And we have prepared our company step-by-step to make this possible. And importantly, we use that knowledge base also to approach how we support agriculture through nutrient use efficiency, and that's irrespective of any regulation. So -- and on top of that, we have a strong balance sheet, as Magnus just showed and a strong commitment to our credit rating, and we have the ability to deliver. So on that note, I want to thank all of you for listening, and I'll hand back to Maria and -- who will then coordinate our Q&A part of this session. Thank you.

Thank you, Svein Tore. I will now ask all presenters back on stage so we can move to the Q&A part of this session. If you are joining the CMD online, I'll remind you that you can ask questions by sending them to the e-mail address [email protected], and for people in the audience, you can just raise your hand and my colleagues, Fredrik and Viktoriia will come with a microphone. So please wait until you have the microphone in hand before speaking so that everyone can hear.

I can start quickly with a question from -- received online, and that is regarding the EU regulatory development. Bear with me, it's a bit of a long question. I'll try to shorten it. It's regarding the discussions from the EU Commission on Wednesday. And the question is with what impact has the suspension of the ammonia and urea import tariffs? What impact does that have on Yara's earnings? And also how does Yara expect the regulatory landscape to evolve around CBAM? And what implications could it have for the company's strategy, particularly the prospective U.S. blue ammonia project?

That's quite a bit. But I'll try to focus in on some of the elements, and then I'll get some support from my colleagues here. First and foremost, the communication creates a lot of uncertainty and confusion at a time when that is absolutely not needed. And if you take a step back, what was the intention here? It's about creating a level playing field. It's about Europe staying the course on decarbonization and yet supporting the industry so that if we are to produce 1 additional tonne of fertilizer in Europe, we have to pay a carbon tax for that, right?

So the idea -- and if you think about Europe then, if you need an additional tonne of fertilizer, either you produce it internally or you import it. And the idea is then that it shouldn't be a disadvantage to produce it in Europe so that the emitter pays for the emissions so that you pay the same cost when you're importing that into Europe, creating a level playing field. That's what we're aiming for. That's the intention. That's the methodology that EU has developed over 7 years. And it took quite a bit of time to create a clarity on this, and this has probably added to some of the confusion going into this. It went into effect on January 1, and then we had a communication around this on Wednesday this week.

So -- then there are 2 components of it. One is the import tariffs that really have nothing to do with CBAM, but it's communicated in that context. So that remains to be seen how that's really shifting anything in Europe in terms of price levels. Then on CBAM, they have not suspended it or they haven't canceled CBAM right now. What they've said is that they will monitor it to see if there are unforeseen events or if there are emergency events that are unexpected. This is not unexpected. This is exactly what CBAM is supposed to do. So from that point, there shouldn't be any change at all.

But clearly -- and we also need to analyze this and fully understand how this will impact and what will happen in the market as a result of this. But we have to step back and also analyze why was this put in, in the first place. It's about Europe's commitment to lowering emissions. It's to create a level playing field. It's about strategic autonomy. That's what it's intended to do. So now then 7 days after implementing it to do anything that undermines that would be highly surprising. But of course, we will communicate clearly around this, and then we also share the concerns among the farmers on profitability and so on.

But the quick way to have fixed this would be to take the revenue from CBAM and create incentives to pay that to the farmers, emitter pays and the farmers are compensated in some way. So creating this kind of confusion at this point in time is not very constructive, and we'll be very clear on that. So how this will continue to impact regulatory development, that's something that we will continue to work on. But again, I have to emphasize, it has not been suspended. CBAM is still in force. Then how does it impact our U.S. blue ammonia projects or -- and we touched on it on a number of our projects. None of them are entirely based on CBAM.

But if CBAM is suspended or canceled, obviously, that will have an impact where we wouldn't likely have the required return on a U.S. blue project. And again, as I said in my presentation as well, no green transition with red numbers, then we will not proceed. So it's about profitability at the end of the day, and we're committed to that. But the infrastructure that we have in place, that was not set up for green or blue. We're building on the structure that we have, so that we'll be able to operate on gray as well, and we have that flexibility and then we'll go in that direction. So we maintain that flexibility in our system.

Yes. And maybe just to add in terms of the earnings part of the question, which I guess was related to the regular most of the nation closed tariffs. I think -- I mean, the tariff on urea, I mean, Yara is long on urea and nitrates in Europe. So obviously, any price impact in Europe has a direct impact. I mean, it's 6.5% so at $400, take example, that's around $25 per tonne, but on the nitrate, it is around $15. So I mean it's an impact. It's not a massive impact as such.

And I think for reasons probably better described by Silje, maybe in the breakout, it's not a given that taking that tariff away actually will reduce the price either the way that the market is structured and where that product comes from, but I think that will be a little bit lengthy to take here and now. We're, as you know, short on ammonia into Europe. So that have a slightly positive impact. So I think it's hard to say.

I think on the CBAM part, it's important to remember that CBAM is still enforced. Nobody has taken away CBAM. So I would like to see the trader who would want to import knocking off CBAM of the price when they sell because there might be a retroactive reimbursement of that cost, which, by the way, wouldn't go to the farmer, it would go to the trader. So I think there are a lot of unanswered questions here, whether this has been properly thought through. But as of now, I can't foresee that anybody in Q1 would sort of disregard the fact that you actually have to pay CBAM for every tonne you import into the European Union today.

Okay. Questions from the audience there, Christian?

Christian Faitz, Kepler Cheuvreux. A couple of questions, please. First, on your specialties. Can you talk about the opportunities and challenges maybe of your P and K sourcing and particularly on the K side and whether it would make sense for you to, at some point, to build a more sizable K position? I know you had plans in the past, but they went somewhere nowhere, I guess. And then the second question would be on the carbon sequestration. Can you talk about the cost dynamics there? For example, how much does the sequestration of a tonne of CO2 cost you here offshore Norway?

I would start by then. So for the P and K position, it has been explained during the presentation that we had a system very well established before all this geopolitical turmoil, right? So overnight, all of this has more or less disappeared. And it has been explained that in theory, it took some time to be able to reshuffle the whole logistics system. That's what we had to do within an extreme short time frame.

And today, where are we today? After several years, we have built 2 things. First, we have diversified our sourcing approach. For P and K, we are much more global than what we used to be, having a straight line in the past from specific countries, first. Second, we have learned a lot on our production processes. It was clearly designed for the specific origin of the P and K. Today, we managed to get a production system significantly much more flexible than what it used to be. In that sense, we are in a much better position because we have been forced to than in the past. And we are constantly monitoring the position related to P and K globally day by day, month by month in order to take the best possible position when it comes to sourcing our raw material.

And in addition to that, we have our phosphate mine in Siilinjärvi in Finland as well, and we will continue to invest in that. And just given our size in the market, we are also an attractive partner. Of course, when we make as massive shifts as we had to do in 2022, it takes a bit of time to reshuffle and get that in place. But the size of phosphate volumes that we're buying or potash volumes is so large that we're a very attractive partner to many players in the industry. And given our global footprint, we can also utilize that to source in the most optimal way to support our operations.

And I think on your question on the CCS, obviously, we can't go into the commercial details between us and Northern Lights. But what I can say is that there is a -- in the current market environment on the ETS and the free allowances you get for that sequestration, there's clearly a positive per tonne cash flow. And that's the core of the business case that is accretive, is the difference between the ETS and expectation going forward and the cost of actually doing the sequestration, of course, then discount to then compare to the investment decision. And then as -- on top of that comes whatever money he can sell or can get a premiums for that product. But the base case is the money you save on -- or the free allowances you get on the sequestration itself.

And here, scale is important as well. And this is the biggest industrial decarbonization project with CCS in Europe, 800,000 tonnes. And through that, we're able to do and also the location of the asset is such that it is possible to do CCS at this scale and at the economics that Magnus just indicated.

Okay. Questions?

Yes, Bengt Jonassen, ABG. I think I have 3 questions. I just wanted to follow up on the regulatory. Sorry for that, but we have -- Obviously, you are planning for different scenarios. If one scenario where that CBAM was taken out of the equation. How would you -- let's say, you still be exposure to ETS and increasing carbon cost? How would you think strategically into such a scenario? The second question goes to Silje. You mentioned that nitrate demand was down annually in the last 10 years. How do you explain that? That's one thing. And could you also talk a little bit about the consolidation that has happened in Europe nitrates capacity in the last years and how the market shares are now? And the final question would probably go into the downstream, and that would be how would AI fit into your business model?

I'll start on the first one and Ben I'm not surprised that regulatory questions will be heading our way several times today. So let's say, CBAM is canceled. It isn't, but if it was, then it would be extremely surprising if ETS is still -- and the phasing out of free allowances would still be in place for the industry. I mean if there's one region in the world that has -- should have learned a lesson on what it means to be dependent, it's Europe. And look what happened on energy, where depending on imports from Russia, in particular, made sense you had cheaper energy for some time until you didn't, and then we paid an enormous cost of that for households and industry.

So then to go straight from that to significantly harming the production of fertilizer within Europe that is vital for food security, that would be -- I'm trying to find right surprising that's politically correct. I'll be clear next week when I'm in Brussels on this one, but that doesn't make sense at all. Should it happen, well, then we're back to the flexibility. Well, we can still import. So then we would bring in ammonia from other parts of the world, likely with carbon.

So Europe is not supporting the decarbonization either. But if CBAM is canceled, then we can bring it in, and we'll do that. So that's back to the resilience that we have in our business model. And -- but it will hurt other players much harder in Europe. And hopefully, this will be understood once we start to dig further into the consequences of the communication around this should we get to the conclusion that CBAM is canceled, but I don't see how both of those can happen at the same time where we phase out and then cancel at the same time. So I don't see that as a realistic scenario. It has to be one or the other, it will be detrimental to food security and strategic autonomy in Europe.

And just to add from a financial perspective, in that, hopefully, a hypothetical scenario where the EU would say, okay, we slam a carbon cost on our domestic producers and everybody else can just import freely. Of course, I mean, the price level would reflect that carbon cost and our production in Europe as long as there's production, and we can import gray ammonia. So we're the same, but it would, of course, be detrimental to ammonia production in Europe, but perhaps they would probably realize that when there's one plant left.

Hopefully, before...

And yes, on your second question, I think thank you for asking because that's a very important clarification. The reason why nitrates show a declining trend in that illustration is because there has been no additional capacity being built within nitrates of Canary in that period, meaning that when nitrogen total demand growth, it's basically the product that has been growing that has had to cover for that shortfall. But it's not to say that underlying demand for nitrates necessarily has changed. That is still a very key product in the market as you touched on as well, especially in Europe and a product that commands a premium in the market. So it's a reflection basically that no one is adding capacity on those products.

And then I think when it comes to this development within the European industry, of course, it's been a volatile couple of years that has impacted everyone, us included. Of course, we have been in a good position as both Johan and Monica has shown that we have some advantages that has enabled us to continue to produce while some others might not have had that opportunity. But I think in terms of kind of developments on market shares, et cetera, I don't have much comment. I don't know if you want to add to that.

No, no, you explained quite well. Yes. Well, we see that demand is growing, and then we are ready to supply them. But no, we see that demand is growing also because there is a need for autonomy of food production as well in the region. Region Europe is self-sufficient in food production. That is -- I think it's the only sector where we are self-sufficient in Europe. And for that, the application of fertilizers and access to fertilizers is critical and the population keeps on growing. So not at the speed that we would like, but at this point...

AI is our favorite -- one of our favorite projects and topics. The big advantage of AI is the chance and the possibility to develop predictive models. And for downstream, in particular, that would be a great help for farmers. Actually, we have a couple of projects. One is in green grass that we have not finished concluded and the other in grain. So to predict the yield will help the farmer in the end because we are helping the farmer to reduce the grade of uncertainty to predict the estimated yield will help the farmer to take decisions on the application rate. And with that, we can also benefit out of it because that will predict our sales as well as forecast and can make our supply chain operations and decisions in the logistical hubs that we have more efficient. That is in a nutshell.

And to add on that, I mean, data is important and utilizing science to make the right decisions. And if we think about our product portfolio, the types of product that we're producing, the competence that we have, the more data-driven the decisions are and the more data that goes into regulation, the more data that goes in throughout the whole food system, that's very supportive of our business model and the products that we have there.

There's huge untapped potential. And that's not strange given the complexity of agriculture and all the variables and you're out in nature, right? So how do you combine weather with and soil health, ensuring that you have the right nutrients in the soil, how does that translate into the food system? What can you do in terms of when you fertilize in order to ensure that you have the right yield, the right quality, even time to market. All of that combined will make a very good or a much better decision-making tool for the farmers.

And when they have that decision-making tool that will, in turn, create a demand for fertilizer products, and they will be more specialized and advanced and that's the majority of our product portfolio. So we'll be able to tap into new areas as well. And we were also -- I mentioned I was in Thailand to see now how drone technologies used satellite mapping on the fields of the farmers to analyze what do they need, where even drone application of fertilizer and then weight is an issue as well, and you want to have the most effective fertilizer per unit of weight as well and to see how they're completely automated. That's sort of a trip into the future for us. And in the future, that might not be that distant.

Bray, can you get the microphone there?

Sebastian Bray of Berenberg Bank. I have 2 questions, please. The first is on the development of nitrate premium or nitrogen -- Specialty Premium that were assumed for the next 4, 5 years. The prices of urea have been quite nice. The prices of the premium have been quite nice. I can understand why the market for urea might remain tight, but why would the specialty premium continue to perform as they have? Is there something supply or demand led in that assumption?

And my second question is on the NEOM project. If I look at the tonnage not allocated to Total of clean ammonia for this project, it's something like 0.7 million tonnes. And if I assume the commission is applied to that by Yara, it could be quite nice mid-double-digit million dollar figure. Is this deal signed and concluded? Or is it, well, everything is up for negotiation as part of the discussions with Darrow with Air Products over Darrow at this stage? And does Yara have a right to all of those volumes? Or is it something more minor? If I might squeeze in a third as well. You mentioned the EU ETS emissions war chest, the $400 million to $500 million. Is your base case assumption that remains flat? Or is it slightly depleted over the next 4 to 5 years?

So I will start with the nitrate premium. Question, if I understood correctly, how we can guarantee foresee that it's sustainable in the time. And there are several reasons. One is that our strong footprint in Europe and because nitrate businesses and market is in Europe, they're main one, that it works at farmer level. So the nutrient use efficiency at farm level is substantially better than the effect of urea. There are less losses as well and less leakage applied in the right rates.

Yara has a footprint has also the reputation. The farmer has the access to agronomical advice when it is needed, has access to digital tools that support them on deciding the application rate on nitrates and that works especially well for nitrates instead of urea because of there are less losses as well. Also, we are improving our product portfolio in nitrates as well with nitrogen plus sulfur. That is one of the main products that we have in our portfolio. And sometimes we don't talk about this enough. There is the deficiency of sulfur in Europe, and there is a need for nitrogen and sulfur. And we combine both in several grades that we have as well. So that also builds on sustainable margins going on premiums going ahead.

On NEOM, we have announced that we are in advanced negotiation with Air Products on 2 projects, NEOM and Darrow. It is quite clear that advanced negotiation means that the deal is not done. And we are also clear that we look at the totality of both projects and more generally speaking, of the whole ammonia strategy. In addition, the progress of the 2 projects are at a different stage. NEOM is supposed to come online in 2027, while Darrow would come online by 2030.

So in terms of negotiation, we also have to respect the fact that the 2 projects are not at the same stage, and there is an urgency on concluding on one compared to the other, but to grow on our clean ammonia segments, we also need to have credibility and to have access and to confirm that we have access to this clean ammonia source is also vital in order to gain credibility to get to the customers and to be able to sell and to develop the market related to clean ammonia.

And I think maybe important to add that even though, of course, let's say, enthusiasm for clean ammonia has been going in waves, it's important to keep in mind that this is a combination of almost one of the only few projects that there is and particularly on renewable ammonia with NEOM and it's close to being completed, combined with the only player who can really import ammonia into what's the main market for ammonia and certainly that type of ammonia, which is Europe.

And I think I mean, we don't have an ownership stake in NEOM, obviously, and the commission model is kind of the model that we've outlined, but I think what does that imply that imply also that there's a netback back to Air Products, right? And I think what's often overlooked in the market is that it's not for free to get ammonia ashore, right? That's -- we've seen that with acquisitions lately, and we know you can estimate what that cost is. So -- I mean, the point being that there are clearly strong synergies in this partnership, right? And which, of course, benefits both parties.

And then on the last one on the EU ETS question and our bank and as we show, we have 6 million tonnes in the bank, and that's really the result of what we've done over a number of years now to increase our energy efficiency, lowering our emissions so that we've been able to be below the allowances and put that into the bank and then we'll further help on that now with the CCS project in Sluiskil. But as Magnus said, here, that's how we monetize in a way that we're then paying for carbon capture and storage, but then we have allowances that we can use to offset that going forward, where it's flat or improving, it depends a bit on our production as well because with the trajectory now there will be a phase out, but we can choose to produce or not and then import as well. So that's always an evaluation that we do based on economics, whether it makes sense to produce or import or actually go ahead and sell allowances. So we can't really predict that. That's more utilizing the flexibility that we have in our system to make the most profitable decision for referring out.

We're slightly behind schedule. So I'll take a quick question from online and then luckily, physical participants can join the breakout session and ask lots of more questions there. And final question is on Darrow project as well. So how do you see CapEx inflation risk? And also what is your plan B if you don't go through with the Air Products project?

As I mentioned, this project is benefiting from a head start. So a part of the risk has already been reduced by having a head start, engineering, construction of equipment's and procurement and several activities like that. But we all know the construction market in the U.S., how it is today is quite heated, right? So that is clear that the main task from now on is to get the CapEx right? And to have the precise information about the CapEx it will take to bring the project to the finish line.

We will work hard supporting Air Products with our ammonia expertise and the expertise we have gained over the past years on developing our own projects in order to have all the chance for this project to succeed. When it comes to potential alternatives, we have always been doing that. We have always monitored the entire landscape of projects being developed there, and we will still continue doing that. But so far, it has been explained by myself, by Magnus that this is as of today, the best option based on the whole market intelligence we have developed that we have identified, and we are going to pursue from now on.

And this is a project that -- I mean, there are strong synergies between Air Products and the Island, so that is our primary path. But of course, for any project, and I think this is what we see across right now, offtake is key to have that captive demand that we have as one part, but also the physical infrastructure in order to move ammonia. So we're bringing in a very valuable part of enabling a project like that to happen, and that remains regardless of what, but this is our primary path, and we're working very well together with the Air Products to develop that.

And I think from a CapEx perspective, I mean, we want to do this project. The projects want to do this project and because we believe it will be shareholder very accretive at the circumstances and the assumptions they are. But part of CapEx discipline is to consistently view all those assumptions and also make the right decisions if it turns out not to be the case. I mean there's no other driving force behind any companies than profitability in this. And as mentioned, we're not driven by the fact that we have to do anything by a certain date. We have multiple alternatives with the infrastructure that we have.

Thank you to everyone. That marks the end of this hybrid session. So for online participants, we hope you enjoyed today's presentation, and thank you for watching.

Hello, everyone, and welcome to Yara's Third Quarter Results 2025 Conference Call. Please note that this call is being recorded. [Operator Instructions] I'd now like to hand the call over to Maria Gabrielsen, Head of Investor Relations. You may now go ahead, please.

Thank you, and a big welcome to everyone from me as well. I'm here in the room together with representatives from Yara's management. We have our CEO, Svein Tore Holsether; our CFO, Magnus Krogh Ankarstrand; and the Head of Market Intelligence, Dag Tore Mo. We're not planning to give a presentation, but we hope you all just watched our webcast. So we will dive straight into questions. So operator, you could open the first line, that would be great.

Your first question comes from the line of Christian Faitz of Kepler Cheuvreux.

First of all, can you talk about the current demand conditions in Brazil? I noted that you talked about improved NPK sales in Q3 there. Is that also a trend we should expect to see in Q4? And my second question would be, how long will be the Belle Plaine maintenance last and which quarters in 2026 according to your current schedule are affected?

On the Brazil market in general, we feel that it's relatively stable this year compared to last year, particularly on the nitrogen side, it's -- there is a stable imports of nitrogen in total with a little bit of a switch towards ammonium sulfate because of the increased availability of ammonium sulfate from China. So urea imports is a little bit down, but the total nitrogen is stable. And I think that it's not very different elsewhere. I don't know exactly on our side on the NPKs, but...

Yes. No I think -- yes, nothing to add on that. I think as to your question around Belle Plaine, we typically do our turnarounds there after the season is over. They have a very comprised season. And that typically is -- yes, that takes place in the early third quarter.

Next question comes from the line of Lisa De Neve of Morgan Stanley.

I have 3, if I may. So one, I would like to come back to your presentation, and I would love for you to speak a little bit more about how we should think about urea prices or nitrogen prices, also nitrate and NPK prices in the European market, both into 2026 and midterm in the lights of currently European duties on nitrogen fertilizers from Russia being in place, which seem to have caused a level of inflation in the internal European market as well as the expected implementation of CBAM from the start of 2026?

And maybe following on from that, what do you hear from farmers on this? Because they faced quite significant price inflation on their inputs this year. And I wonder what their stance on CBAM is? So anything you have on that would be very helpful. Secondly, on the clean ammonia projects, I recall over the summer, you sort of put aside the clean ammonia projects, you would potentially pursue in collaboration with BASF.

But I would love for you to sort of remind us a little bit of how many U.S. clean ammonia projects are being under consideration. I'm aware of the collab with Enbridge, but it would be great to sort of make sure that we have a good overview of what you're actually considering in the U.S. And lastly, I mean, very strong EBITDA in the third quarter. How should we think about the free cash flow generation into the end of the year given the net working capital outflow was quite meaningful in the third quarter?

If we start with the European nitrogen prices and as you say, all the legislation and political around that, I think it's a bit early to call. I think if you look at the current nitrogen price level in Europe, it's fairly logical and consistent with the global level with the same kind of premiums that we've had historically. And on the Russian duty that you mentioned, the EUR 40 on nitrogen products, EUR 45 on phosphate products that was put in place from July 1. So far, I don't think we've seen any major effects on that. First, what happened is that Russia pushed a lot of products into EU ahead of July 1, very strong numbers in May and June, particularly.

Now, we had -- Eurostat announced their August numbers today, and you can see that July and August numbers are low, but that's from a position where there probably were quite a lot of inventories. So I think if you look at a nitrate or an NPK or even a urea price in Europe now, it's not very different compared to global values as we've seen in the past. It's a bit early to conclude on that. And you've also seen that -- probably seen that there are consultants out there stating that this duty will not have a major impact on the price level in Europe because of alternatives that Europe has when it comes to the nitrogen sourcing.

As to CBAM, of course, there are lots of unknowns, but there will be an additional cost on imports of nitrogen into Europe that you would think to a larger degree will have to be reflected in the price, as Magnus also explained during the conference call. And it remains to be seen, of course, exactly how that plays out. I don't know Magnus...

I could add. It's Svein Tore here, and I had a similar question on CNBC this morning as well when it comes to the farmers. And clearly, we need to listen to the messages that they're sending and the burden on the shoulders of farmers. At the same time and in the long term, the CBAM will support a stable supply of sustainable fertilizers. It's about strengthening Europe's food security. It's about helping the whole agri food chain, including farmers to have sustainable solutions.

But clearly, we need to listen to farmers. This is also for policymakers, making sure that we have support and incentives in place to help them as well. And it's about creating a level playing field in Europe and reflecting carbon prices into the price of fertilizers as well, and that's what CBAM is designed to do. So this is being implemented. It will have an impact, but it's important that the entire impact is not put on the shoulders of farmers.

Yes. And I can continue a bit on the other question. So in terms of our ammonia investments, in the U.S. And we will return with more details on that when we have more details to share and when things have matured. And I think from a timing perspective, we still communicate the plan that we communicated earlier, which is first half next year. But I think the way to think around it, as we also said in our presentation today and in the Q2 presentation as well, is that we will -- we aim to size the equity portion in a manner that enables us to uphold our capital allocation policy, and we will not seek to, for instance, do an equity issuance in connection with the project in the U.S.

And then beyond that, of course, the investment itself needs to be at the double-digit return investments. In terms of the strategic fit, I think that kind of goes without saying, but the economics need to work as well. On free cash flow, obviously, with this pricing and price level in the market has a significant impact on our operating capital, all-in-all, that's, of course, good news when prices go up and market goes up like it has in the recent months and this year.

When we -- particularly when we build a little bit more inventory outside the main season, that also -- the combination of the 2 leads to an increase in operating capital, which then obviously is released if price levels flatten or even soften a bit. So I think we are not concerned about that per se. I think strong price environment is a good thing for Yara. And I think our focus, as we also said, is to make sure that volumes flow out like they did in Q3.

Question comes from the line of Joel Jackson of BMO Capital Markets.

I ask a couple of questions, but maybe in order. The first question I'd ask is just on the U.S. potential blue ammonia plant. Can you -- you said you're going to give updates soon when you have some more information, but maybe if you can go through some of the rationale or drivers in that decision? What's changed in the last 6 months, positive, neutral, negative to that decision? And then also, are you seeing a blue premium in the market right now? Unrelated to 45Q, are you seeing like a blue nitrogen and blue ammonia premium for products that are coming out lower carbon, some of your competitors starting to put products into the market?

Yes. No, I think the -- I mean the main strategic drivers and also the ones that can drive value creation for our shareholders in such a project is, of course, the strong synergies that we have with our global ammonia system. As a starting point, as an ammonia producer, obviously, access to low-cost gas, which will contribute to EBIT margin improvement for us, increased scale, which will lower fixed cost and CapEx per tonne. All of these are the fundamental underlying drivers that need to be in place for such an investment.

And then, in addition, of course, in the U.S., you have 45Q. And in terms of what's changed, I think with the Big Beautiful Bill, 45Q has been confirmed there. So of course, some change, but of course, it removes some uncertainty maybe that was introduced around that in connection with the shift of the U.S. administration. So I think that's a clear positive in that regard. And I think -- and again, I mean, in addition to the strategic levers I just mentioned, obviously, the return -- the expected return for us would have to be at a double-digit stage. And then it's a matter of finding the just the best approach given a risk-reward perspective for us and for our shareholders, and that's what we're doing as we see.

When it comes to blue premiums, I think, as Dag Tore just mentioned and as we also talked about today, I mean, we have with CBAM now being implemented in Europe from next year, that in itself constitutes a premium on top of gray ammonia in Europe. And in addition to that, we continue to see development in new segments for ammonia as well, such as shipping, although slower than perhaps what many had anticipated a couple of years ago.

But I think the real sort of value driver for us in this regard is that we are able to take significant amounts of ammonia into our own system, both ammonia that we consume for our own production, but also that we sell into other markets already today. And that's really the unique part of this for us and in connection with any project that we have that ability to offtake, which, of course, is the Achilles heel for most projects these days...

Just to add on that and what Magnus pointed out in terms of offtake and to have a stable and predictable offtake for an ammonia plant is, of course, key. And as we touched upon in the presentation earlier today as well, we're consuming 3 million tonnes of ammonia for our nitrates and NPK production in Europe now and already half of that is imported, and we have the flexibility to produce all our nitrates and NPKs with imported ammonia. So that is a unique position that Yara has that creates a significant value to any project.

Just following up on Brazil. I think you said the market is stable. I was looking at some of the inventory data, I think this week and I was saying when you talk about stable nitrogen markets, I look at some of the inventory data. It seemed like potash inventories are pretty good, like [ snug ] and not too much, where phosphate inventories are getting kind of high. Can you maybe talk about the different kind of fertilizer markets or dynamics you're seeing in Brazil, not just nitrogen, but the whole sort of complex?

Yes. I think on the potash side, I think it's the whole potash market globally, but also including in Brazil has seen a very strong growth over the last few years due to relatively high affordability at relatively low prices, $350. It's not a high potash price. So deliveries have been running very well on the potash side, and there has been record deliveries on the global scene with ramp-up both in Russia, Belarus and Canada. So I think that market is doing fine from a demand perspective.

It's more a question that there has been quite a lot of supply additions as well. Of course, phosphate is quite different at $800 DAP, that's a very high phosphate price. And you are seeing demand disruptions in many places, right? And now the prices are coming under pressure. And I think that is understandable for a farmer that has seldom seen so poor affordability ratios on phosphates as there has been recently. So I can understand what you're saying there that there might be some inventory buildup around due to the fact that the farmers maybe are not taking quite as much as many of the distribution system would have expected.

Next question comes from the line of Elliott Jones of Danske Bank.

Just a couple here. Just going back to the farmer affordability side. I think you said in the presentation, it's been a good achievement to deliver these results given farmer economics. So I'm just kind of wondering, is it fair to assume that if prices do go up from here, do you see a point whereby we will start to see this really bite and farmers having to kind of revert to wait-and-see modes for the remainder of the year? Or are you just not really seeing that around these levels? I'll let you answer that first, and I'll come back to the questions.

Yes. No, I mean that is the inherent nature of a demand-driven market, right, that you have -- it's not -- prices are not set by costs. It's set by the demand side basically and how much they are willing and able to pay, and that is the situation we have. It creates quite a lot of volatility short term logically as demand is coming in, going out. So then this becomes the topic as you raised.

And of course, as we now mentioned that the European market for third quarter was pretty stable compared to last year. That is a relatively slow quarter in a historic context. In the U.S., we don't have that much data due to the shutdown. We only have July import numbers, and they were 0. They were basically a net export. So the way we read the market in the U.S. is that we have another season where we will have very concentrated demand in Q1. So yes...

Yes. And I think -- I mean as we, of course, mentioned affordability on -- and then on P&K and of course, also applies to nitrogen. On the other side, particular as it comes to Europe with CBAM being implemented from January 1, which, of course, will come at a cost on imports, right? I mean you would think that just from a pure economics perspective, obviously, buying your nitrogen before that happens is better than after. So that also, of course, may have an impact on the market as well. But then of course, there are other constraints such as storage, credit and so on. So yes...

Got it. That's helpful. And then just again on CBAM, just to kind of confirm that, like you said, in theory, the cost should be reflected in the European prices. But again, it just seems impossible that the farmers can then take all of the -- put that on their shoulders. So I'm just wondering if policy doesn't step in to help is your stance that -- who would then have to pay for the extra CBAM cost if policy doesn't come in to help farmers?

I think sort of classic microeconomics would kind of tell you that eventually would be reflected in the food prices. But I think if there are sort of schemes or things in place to help the farmer bear this cost, we don't have any overview of that, of course. But as far as we can see from a regulation perspective, there are no intentions to not implement this as communicated from January 1. But of course, as the EU has communicated when they updated this earlier this year is that the actual cash payment will be deferred to 2027.

Got it. That's very helpful. And then sorry, last question just on CapEx on your 2026 guidance, I think that included $200 million of uncommitted growth CapEx. Is it fair for us to kind of read into that, that could include the equity CapEx of the U.S. projects? Or is this a completely separate bucket to any potential U.S. project and that would actually come on top of the $200 million uncommitted?

Yes. No, I am on this money, so it's -- I think what we have as it says, is that there are $200 million that we, as for now, do not have any specific project assigned to that. But I think we would -- as we said earlier, and of course, also depending on when potential CapEx for U.S. project would come, we want to maintain this within our policy. And I think most importantly is that, of course, we will have very strict capital discipline. So if we go ahead and do a project or spend money in that area, obviously, that will restrict other spend -- other CapEx spend as well.

Next question comes from the line of Angelina Glazova of JPMorgan.

I would like to ask 2 questions, please. One is a follow-up on CBAM. As we know, this mechanism is intended to level the playing field in Europe, but it doesn't do much to help the competitiveness of exports of products made in Europe with carbon tax paid in it and then exported subsequently. Now we have seen some headlines out of the Fertilizers Europe conference yesterday suggesting that the EU might consider some CBAM export support. And I was wondering do you have any more color on that? Like would you expect this to translate into some tangible support measures?

And if so, how do you see Yara potentially benefiting from that? And then secondly, I would like to ask on your Capital Markets Day. So obviously, this is preliminary at this stage, but you have mentioned that strategy will be the key focus point at that event. But the time line for the final investment decision on the U.S. project potentially is possibly further than the CMD in January. So I was wondering if you're expecting to give us some more clarity on that project or it's not necessarily the case at the CMD?

Yes. I can talk briefly around CBAM first. I mean there are today in the European Union inward processing mechanisms on customs and then -- so which already exists. That cover exports made by -- or that allows you to avoid taxes and customs on intermediate goods and raw materials used for reexport. So that we believe will, to quite some extent, apply also for us. And then this is a fairly complicated scheme and sort of exactly sort of how it plays out, it's difficult to give a very clear picture on here now.

But I think we, for the large [Technical Difficulty] will have benefits from that. And on top of that, a lot of the exports that we do out of Europe comes out of Norway from our plant there, so in Porsgrunn. So yes, more than 90% of what we produce there, which is our second largest plant in the system is exported. And Norway will not implement CBAM in 2026. So there, we can categorically say that there's no impact in this year. As it pertains to the Capital Markets Day, we don't have any additional details around the agenda yet, but we will, of course, talk about all of the important strategic topics for Yara and ammonia is, of course, certainly a part of that. And yes, I think we'll leave it at that.

Next question comes from the line of Marcus Gavelli of Pareto.

So I wonder if you could provide us some color on the cost potential to see outside the USD 180 million, if you do? And also, if you could try to put some more idea of the portfolio optimization measures you're talking about. You have mentioned those a couple of times and Tertre is fairly a good example. But is this more of a potentially further restructurings? Or are you actually looking at potential divestments and so on of the portfolio? Just to give you an idea of how you think about that? That would be very much appreciated.

Could you repeat your first question, please?

Yes. On the cost potential outside the USD 180 millions that you've mentioned in your presentation, if you see any further potential and what that could be?

First, I think, I can start. When we first launched the cost reduction program a little bit more than a year ago in connection with the second quarter results in '24, we set a target for $150 million. And we did spend a lot of time internally through the line organization together with the unions to define that program and to have a thorough process on that. It meant that when we entered the execution phase that we were able to move faster on that and that we're hitting that target now, and we've seen further potential for this that we've increased our target to $180 million by year-end.

We're not going to stop reducing costs because of that. But then I think you should see it more in a continuous improvement as a normal ongoing part of business rather than one-off programs. So we're not planning to launch anything specific to that. But again, as I said, we will continue to focus on cost. And when we find opportunities, we'll take those and reduce our cost base further.

In terms of on the portfolio side, the way -- I mean as we talk about that in terms of our improvement programs, it's really a focus around making sure that we get the sufficient return from all our assets, including the maintenance CapEx we spend and so on and ensuring that the assets that we have generate a good return on investment also in the longer term. So it's not sort of a scheme to -- or a plan to look at sort of divestitures from a strategic perspective if you sort of understand the difference.

I think when it comes to the asset portfolio, we have taken quite significant steps, not only in the last year, also before that are the closures we've done in France, the closure we've done in Brazil, the closure of the ammonia plant in -- hibernation of the ammonia plant in Belgium are all very significant changes to the portfolio, and then we continue to monitor this.

And of course, those decisions also depend on timing. It depends on where we see prices going, both in the short and the medium term. And of course, importantly, what improvement measures we can do as well, anything there. But we've also done in parallel, as we talked about earlier today, is to increase productivity in our assets as well, which, of course, in a high CapEx industry is tremendously important for the return on investment as well.

Yes. Sure. Just one last question. Not something we used to discuss too much on this call, but it would also be nice just to hear your opinion on what sort of measures you're doing on reducing operating capital days because it's something that has been fairly flat since 2023. But also clearly something that would -- or could change your cash flow assumptions a fair bit if you actually reach further targets. So yes, could you elaborate some on that what you're actually actively doing right now?

Yes, I mean, we are quite -- I mean when we monitor performance across different markets, we calculate the cost of operating capital per tonne and sort of deduct that from the margins when we evaluate and compare. And of course, we try to optimize flows accordingly as well. But I think what's important to keep in mind is that one of the strong advantages that Yara has is the ability to distribute worldwide, which shields us from a lot of seasonality variation, which allows us to optimize the markets better.

But obviously, that also comes with somewhat higher operating capital as these products ship relatively far and yes -- and so that's in a way, you always have to look at the operating capital in connection with that flexibility that we have and which many others do not. But of course, we are looking at operating capital every day and looking to how we can optimize that and increase cash flow.

Your next question comes from the line of Tristan Lamotte of Deutsche Bank.

The first one is just following up on CapEx. You talked about elevated maintenance CapEx. What do you see as a normalized maintenance CapEx level stand? And then second, there were some one-offs in other in Q3 that you mentioned in the bridge as a headwind. I'm just wondering if there's anything similar to think about in Q4?

Yes. No, I think on the maintenance CapEx, we communicated a range of USD 700 million to USD 850 million in Q2 and per year. And the range simply comes from the fact that -- I mean the way maintenance is done in our industry that we typically have turnarounds of the plant with 3 or 4 years in between and then the plants run more or less 24/7 in between those.

So even though we sort of have an annual average CapEx, the actual CapEx per site varies significantly, where it's very high in the turnaround year and significantly lower in the other years. So -- and of course, different plants have different -- well, different sizes and so on. So sometimes the turnaround budgets are higher and some years, it's lower. And as we said in 2026, we will be in the higher end of that scale because some of the larger but also most profitable plants that we have in our system will have a turnaround.

The other bucket [ in the bridge. ]

Yes, exactly. The other bucket. And so no -- so that's largely -- I mean something you can think of as real one-offs. A portion of that gap came from positive other effects last year, such as the divestment of our business in Ivory Coast as an example. And then we have a few sort of negative one-offs in this quarter. So there's nothing particular to sort of see a continuation of in Q4.

The next question comes from the line of John Campbell of Bank of America.

First one I had was when do you expect to basically have clarity on the EU ETS and the CBAM benchmark emissions level? Because if we think about it, it's nearly roughly 2.5 months before the 1st of Jan 2026. And as far as I understand, we do not have an emissions benchmark yet for ammonia. My second question basically had around CBAM and NPK et cetera. If I sort of follow the logic, I think you presented previously was that urea prices will be naturally higher in Europe under CBAM and under ETS, particularly.

That they are major inputs, I guess, into nitrates and NPKs, therefore, NPK prices in Europe should be higher. But also if we think about it a lot of your footprint for producing NPKs is located within Europe or Norway, which I guess will have CBAM from 2027. And you sell a lot of products of NPKs outside of Europe, where presumably there wouldn't be as much of a price premium because they wouldn't have CBAM and ETS. How should we think about this? And does this come back to the point that Angelina raised related to some sort of CBAM export allowance, et cetera, re-export allowance?

Yes. Now to your first question, we don't know when we will have clarity. And as you say, even though it's only 2.5 months, there are information suggesting that there will be -- these benchmarks will not be known until March, April, the earliest. I've even heard that they might not be released until 2027 when the actual payment is going to be made. So this is, of course, going to create a lot of uncertainty around these issues and how this is going to -- because when you import a tonne of nitrogen, you -- as you say, and in that, you don't actually know the precise cost of that tonne but you have to allow for it and pay it in 2027.

And I think, of course, when it comes to EU ETS, there we have, I mean, a very good overview of -- I mean, that scheme has been in place for quite some time. And of course, we've received free allowances, which also then goes against CO2 emissions and so on. And of course, we have a good -- very good control of sort of the -- how that -- how the free allowances are reduced and sort of the surplus of free allowances that we have in our bank and so on. So that side of the equation is relatively straightforward, I would say.

I think when it comes to the import side, it's important to add that, I mean, we are not to a very limited degree, importing urea into Europe ourselves. Of course, we do import ammonia. And as we said earlier, there is an inward processing scheme there for ammonia and -- or any intermediary that used into reexports. And as mentioned, for 2026, our production in Norway that imports around 0.5 million tonnes of ammonia so that's more than 40% of our current imports into Europe, there will be no CBAM in 2026, and it will be in '27 at the earliest. So I appreciate that. This topic is quite confusing. But I think at least from -- I mean we are as prepared as we can be, I would say, given the uncertainties that still remain.

Your next question comes from the line of Magnus Rasmussen of SEB.

Firstly, I wonder if you can explain what impact you've seen from, I assume, improving phosphate economics year-on-year this quarter. And also, we have seen a bit higher both interest costs and depreciation today than we've seen in the past couple of quarters. So just a comment on whether that is temporary or whether we should expect that to continue? And finally, the USD 35 million special items labeled as other in Europe, what that is?

I start on the phosphate, and -- of course, we benefit from high phosphate prices through our captive phosphate operations in Finland as a large part of our -- all of the phosphate raw materials we need, we produce ourselves in Finland, and we benefit from a very tight and strong phosphate market. And as you also probably are alluding to, while phosphate prices -- Finland phosphate prices have increased quite sharply, a little bit under pressure recently, but at a very high level, the rock prices have been very stable.

So although, of course, we buy rock on different contracts and then there's a lot of price differentiation in the rock market between quality and grades, it's not the kind of -- you cannot just find -- easily find a benchmark for our average purchase rock price, but we do benefit also when that difference between the rock and the finished fertilizer is increasing. So yes, now -- particularly now in the third quarter, we have had expanded margins because of the phosphate situation as well on top of the nitrogen. I don't know if you want to give more details.

Yes. No. And maybe just also to remind that's the way we sort of present this right that we talk about our NPK premiums, that's sort of the -- I mean, the realized prices that we have above a global commodity blend. And then when we talk about the P upgrading margin, that's of course, the difference between our rock purchases and sort of commodity reference on DAP.

Yes, and I think that could explain the rest. In terms of depreciation, there's nothing particular to say around that or nothing out of the extraordinary there. When it comes to your question around Europe, that pertains to a couple of items. One is a recognition of future commitments in terms of environmental work that's needed to be -- that we are mandatory to do in our plant in Siilinjärvi in Finland.

So it's simply an accrual of running costs that we already have today, but which we, from an accounting perspective, accrue for now. So it's not a cash effect this year per se. Then there's also some provisions linked to another site that we closed in 2008, where we expect to sort of finish off our connection to that site in a few years' time. And yes, and those were the 2 main elements when it comes to the provisions for Europe.

Our final question for today comes from the line of Bengt Jonassen of ABG Sundal Collier.

Maybe a bit on the side of the previous questions, but I'm interested to hear your thinking. Maybe the first one to Dag Tore Mo and that's the difference between the politics from China on the urea and ammonium sulfate. We have seen that ammonium sulfate export has skyrocketed in the last years, whereas there has been several restrictions on the urea. Do you have any theory or good explanations behind that?

Yes, it would be a little bit speculative maybe, but I don't think they really regard ammonium sulfate as a critical fertilizer in China. It's kind of a byproduct of industrial production. It could, of course, be used as a fertilizer and they also do sometimes, but not now much because, of course, when the urea price is so depressed in China, while the global urea price is almost double, it gives all incentives to try to export all the ammonium sulfate they can because it's not controlled and then consume urea locally. And I think that given that the government feels that urea supply is adequate in China, they have no kind of interest in stopping ammonium sulfate exports just to stop it when they really don't need more nitrogen domestically.

So that's why they probably have done it this way. They give priority to urea for their domestic consumption and sees ammonium sulfate as a kind of a different animal. Whether there are some agronomic issues as well into this, I don't know because I mean, ammonium sulfate is quite acidifying for soils, et cetera, et cetera. So there could be a kind of a limit to how much you want to use of that and so on. But now I'm kind of speculating. But you're totally right they have -- there is absolutely no controls of ammonium sulfate, which I think you can find logical given that they have more than sufficient urea supply for the domestic market.

Yes. Very good answer. The second question would be on the industrial side of Yara. If we look at volumes on a 12-month rolling basis, they are down close to 5%. Maybe some explanation behind -- the drivers behind that. I understand that there are several products in that portfolio, but also if there are any changes in demand going into 2026?

Yes. No and I think if you refer to our Industrial segment as an -- so it's basically 2 things. I think the major reason is we had a stop in one of our plants that predominantly serves the industrial markets in this quarter. So that reduced production levels there. In addition, we have made, as we also communicated today, a small change in our segment reporting where our assets in Australia, ammonia plant and the technical ammonium nitrate plant have been moved from Yara Asia and Africa to Yara Global Production and Yara Industrial Solutions, respectively.

So -- and in the nitrate plant there that's now part of it, we also had some small production losses. And then the last point is that we have hibernated some of our assets in Brazil, specifically one producing sulfuric acid as part of the asset portfolio optimization. Yes, so that -- those 3 factors explain that difference. But there's no changes on the demand side.

A follow-up question from David Symonds of BNP Paribas.

Just a couple to finish from me. You mentioned, obviously, NPK margins came down in Q3 versus Q2. And you said this is pretty common with higher commodity prices, which we did see sequentially. But with nitrogen prices coming down again into the fourth quarter, can I just ask, are you currently seeing higher NPK margins in Q4 as those nitrogen prices come down? Or are those remaining a bit lower as a result of farmer weak economics essentially?

And then the second question on Brazil is clearly a growing credit issue for farmers in Brazil, but your -- there's no real sign of that in your deliveries, even your deliveries of higher-value NPKs to Brazil. So can I just ask what your distributor margins were in Brazil in Q3? And how were you able to sort of sidestep a pretty tough environment there?

Yes. No, I think to -- I mean to answer your last question, I think -- I mean what we can say around margins for Q3 was that they were pretty stable and at the levels that we usually have had them. I think when it comes to the volumes in Brazil and the issues that you raised, there -- I think our commercial teams, they have done a very, very good job in positioning our volumes.

I think also, I mean, the value that our products create in particularly the cash crop segment is still significant for the farmer and enables them to choose that as opposed to alternatives. And then of course, we -- when it comes to credit, we manage that, obviously, very, very closely, but we've not seen any significant issues per se. But if you want to say -- I mean we don't guide on premiums going forward, but we talk a little bit about the market right now, of course.

Yes. And I think also when it comes to, let's say, the European situation [ rather than ] back to the CBAM issue again [ right about what ] Magnus talked about earlier, that could lead to a phasing where, let's say, the market now in the rest of Q4 will be quite stronger than without that CBAM effect. You may have seen that we issued a new nitrate price yesterday for Germany at EUR 335, while that is kind of -- it is lower than the list price that we came out with earlier, but it's significantly higher than what the current recent pricing has been more like EUR 300. So I think it's a little bit of a -- yes, it -- I don't think we would like to give any precise guiding on exactly how this plays out now for the rest of the year.

No, but I think -- and again, it's very difficult to predict, particularly with the moving parts we have around CBAM as well. But again, of course, 45% of nitrogen into Europe is imported with the carbon adjustment tax on that -- the cost of those imports will go up. So I mean, from that perspective, obviously, buying before Christmas makes sense in that regard, and then we'll see what happens.

Thank you. I'd now like to hand the call back to Maria for final remarks.

So thank you to everyone for good questions. And if there are any further questions, feel free to contact IR. Thank you.

Thank you for attending today's call. You may now disconnect. Goodbye.

Welcome to Yara's Third Quarter Results Presentation. The presentation today will be held by our CEO, Svein Tore Holsether; and our CFO, Magnus Krogh Ankarstrand. At 1:00 p.m. after the presentation, there will be a conference call where you can dial in and ask questions to management. You can find log-in details under yara.com and Investors.

With that, it's my pleasure to hand over to our CEO, Svein Tore Holsether.

Thank you, Maria. Good morning, good afternoon and good evening, depending on where you're dialing in from, and thank you for joining our third quarter results presentation.

As always, we start by looking at our safety performance. Yara must be a safe place to work for our colleagues and contractors. This is, has been and will continue to be our main priority. However, our safety performance so far in 2025 has not continued the positive trend we've seen in the last years. And in August, we experienced a tragic loss of a colleague following a serious accident at the Rio Grande plant in Brazil. This accident is unacceptable, and we express our deepest condolences to the family, to friends and to all colleagues.

In Yara, we have our Safe by Choice way of working, and we have golden rules for safety behavior to protect us. [ Amaral ], our colleague who died in the accident, followed all our rules. In fact, he was on his way back to his workstation when he was struck by a roof structure that collapsed. When our colleagues follow the Safe by Choice way of working, accidents should not happen. It is my responsibility to ensure that we offer a safe place to work. On August 6, for [ Amaral ], we did not do that, and that is my responsibility. A comprehensive investigation is underway, and Yara is fully committed to implementing all necessary measures to prevent such event from happening again.

We must never compromise on safety, and targeted initiatives are also underway to strengthen the Safe by Choice program, including enhanced training, deeper learning from accident investigations and regular safety reviews. We have addressed this immediately within the organization, and we have taken action to strengthen our focus and execution on Safe by Choice, making sure that the basics and that the routines are in place. Safety requires continuous focus, and we will improve our performance. We remain committed to achieve our ambition of 0 accidents.

Moving to the key elements of our third quarter. With the continued improvements in operational performance, we're pleased to deliver another strong quarter. Yara delivered an EBITDA, excluding special items, of $804 million, reflecting an increase of 38% compared to the same quarter last year. Margins increased this quarter, driven by supportive market fundamentals, but also strong commercial performance. In addition, we continue to deliver strong progress on our cost reduction program, and we're already ahead of our original program target, and we're now targeting $180 million cost reduction to be achieved by fourth quarter 2025. Underlying production performance is at record levels again this quarter, breaking the previous record, which was set just 1 quarter ago.

Increasing asset utilization is the most value-accretive growth we have and the most effective way to increase capital returns. Adjusted earnings for first half of 2025 are USD 3.25 per share compared to USD 1.37 a year ago. And this clearly demonstrates our commitment to increase profitability through strong and consistent focus on improving our core operations.

Turning now to the EBITDA variance for the quarter. Volumes were stable this quarter as slightly higher crop nutrition and ammonia deliveries were offset by lower industrial deliveries. Underlying market fundamentals remain supported with stable gas prices and increased nitrogen pricing. And our commercial teams have been able to position our portfolio well in the market. Price margin is impacted somewhat by slightly lower premiums on nitrates and NPK as pressured farmer affordability puts an additional pressure on premiums, especially in the pre-buying season.

Fixed costs are $40 million lower than a year earlier, reflecting continued progress on the cost program. We have a larger-than-normal impact from Other this quarter beyond $17 million in currency. And this is mainly driven by positive one-offs last year that we did not have this year, such as the divestment of our operations in the Ivory Coast and insurance compensation in Belle Plaine. In addition, we had write-downs linked to smaller projects.

Quarterly return on invested capital, or ROIC, is at 12.6% and above our through-the-cycle target of 10%. And this marks a solid increase from 1 year ago and is a testament to the work we're doing to improve underlying returns. And I would like to thank all my colleagues for their strong contributions to make this possible.

Let's then take a closer look at return on invested capital. Since the launch of the cost and CapEx reduction program, we have seen a steady ROIC improvement driven by structural improvements such as closure of assets that are not yielding sufficient returns. And in addition, we have been supported by favorable market conditions. ROIC for the quarter is at 12.6%, and results over the last 12 months have been impacted by a settlement loss on Dutch pension fund of approximately $100 million in fourth quarter last year and in addition to restructuring provisions related to our cost program. Excluding these special items, the ROIC in the last 12 months is at 10.3%, and this is in line with our target of 10% through the cycle.

The cost and CapEx reductions are having a significant effect, and they represent 2 percentage points of that increase compared to second quarter 2024. Going forward, increased capacity utilization, continued strict capital discipline and portfolio optimization will support further underlying ROIC improvement, and we remain committed to deliver a 10% ROIC through the cycle.

Nitrogen prices are currently demand-driven and at high levels compared to historical averages. This is driven by a continued tightening of the supply/demand balance, which we expect to continue. The increase in nitrogen pricing is well reflected in our results and drives increased margins despite the compression on premiums.

But also in a higher price environment, the market values the premium attributes of yield, quality, but also the supply certainty that Yara provides worldwide. But it is typical to see lower premiums in a high price environment while overall margins expand. As such, the regions have delivered a strong commercial performance this quarter while upholding deliveries. We are, however, concerned for farmer profitability going forward with softer crop prices, trade disruptions and a high regulatory burden on farmers.

We continue to deliver a strong production performance, and I'm very pleased to see that yet again, we're setting new records, closing in on the 2025 target that we set back in 2019. Production of finished products has increased with 1.6 million tonnes since 2019, excluding portfolio effects. And this translates into an implied annual EBITDA increase of almost $250 million since 2019 using 2025 margins. And the positive EBITDA impact is mainly driven by premium products from our most profitable and future-proof plants. I note that these volumes reflect underlying production, not necessarily matching actual production as we adjust for any market-driven curtailments. The continued strong trend in production performance demonstrates that our sharpened focus on core operations is consistent and sustainable.

We continue our progress on reducing our greenhouse gas emission intensity as well, and we are on track to reach the 2025 target. Reduced greenhouse gas intensity is an important driver for sustainable market improvement, as higher efficiency leads to both lower gas costs and lower ETS costs. Combined, this represents an annual EBITDA improvement of over $100 million compared to 2018, our baseline year.

Our portfolio of more than 80 executed greenhouse gas emission reduction investments has contributed to profitably decarbonize Yara's operations. During 2025, the total investments for the combined portfolio were already paid back. Increasing our asset productivity is the most capital-efficient growth for Yara and drives higher returns.

I'll now hand over to our CFO, Magnus Ankarstrand.

Thank you, Svein Tore. As explained earlier, EBITDA, excluding special items, is up USD 230 million compared to last year, mainly reflecting improved margins and lower fixed cost. Following that strong underlying performance, earnings per share, excluding currency and special items, almost doubled to $1.33 for the quarter.

As we have already touched upon, the return on invested capital increased by 1.1 percentage points to 8% on a 12-month rolling basis, whereas the quarter in isolation was at 12.6%. That means that our run rate takes us above our target 10% ROIC over the cycle. However, we remain committed to further improvements to ensure we can sustainably stay at this level.

Looking to the cash flow. Cash from operations increased by USD 32 million compared to a year earlier as the higher operating income was offset by a buildup of operating capital in the quarter. Seasonal buildup of operating capital is common in the third quarter and fourth quarter, and the actual net change in operating capital depends on volume, but also price environment. The increase in net operating capital in the third quarter compared to last year partly reflects our improved production levels, but mostly the general increase in nitrogen and phosphate values through the quarter. On the investment side, our cash outflow decreased by USD 26 million compared to last year, reflecting our strict capital discipline.

Turning to the segment results. We saw improved EBITDA and return on invested capital across all segments, except for Global Production, which had a slight decline in ROIC. Rolling 12 months ROIC for Global Production is impacted by the fourth quarter settlement of a Dutch pension fund, which was a noncash event last year. Excluding this, the YGP ROIC would have been 7.8% and improved since last year.

Europe saw a strong increase in EBITDA following higher margin on nitrogen and phosphate and lower fixed costs. Returns in Europe the last 12 months are impacted by restructuring costs and environmental provisions. Looking at European ROIC for the last 12 months, excluding special items, we end up at 7.1%, reflecting the effects of the underlying improvements. However, this is still not at a satisfactory level, and core to increase this is to continue improving resource efficiency, optimize the asset portfolio and seek further margin expansion opportunities.

The Americas EBITDA increased by 33%, driven by higher margins and increased sales of premium products. And the region continues to deliver strong return on capital. Asia and Africa continued to deliver strong results with a 10% increase in EBITDA and a ROIC above 20% as strong commercial margins more than compensated for lower deliveries. The strong commercial performance and premiums in Asia continued this quarter and was a key contributor to the results. Please also note that the Pilbara plants no longer are reported as part of Yara Africa and Asia. And Pilbara Ammonia is now reported as part of Global Production, whereas Pilbara Nitrates is in the Industrial Solutions P&L.

And turning to YGP, we see a significant EBITDA improvement of more than 70%, reflecting record production levels, increased ammonia and urea prices, as well as improved phosphate upgrading margins. Industrial Solutions EBITDA increased by 8%, mainly reflecting one-off costs in Brunsbüttel last year. Lastly, Clean Ammonia delivered higher results following increased ammonia prices, higher deliveries and lower fixed costs. While returns are improving, we maintain our focus on increasing returns further to ensure delivery of our 10% through-the-cycle target.

Looking at deliveries for the quarter, they are in line with the year before as slightly higher Crop Nutrition and ammonia deliveries were offset by lower Industrial Solutions deliveries. Deliveries were mainly driven by higher nitrogen deliveries in Europe and higher NPK deliveries in Brazil. Maintaining deliveries during off-season in Europe and difficult farm economy environment is a significant achievement for this market.

Africa and Asia deliveries were down, driven by lower sales of nitrates in Africa and NPK in China, however, maintaining total margin in both markets. The lower industrial deliveries mainly reflect the hibernation of nonprofitable assets in Brazil and has limited EBITDA impact. The improvement program continues to deliver ahead of plan with a further reduction of USD 38 million in the last 12 months. This means that we are ahead and targeting to deliver a USD 180 million end of year run rate, excluding currency impact.

Through rigorous program management, we have streamlined our organizational setup and reduced activities in lower return areas without reducing the top line. In total, we have reduced our workforce with more than 1,650 FTEs compared to when we started the program. As we move into the fourth quarter, we expect additional cost reductions, with the full year effect of implemented measures materializing in addition to remaining measures, which will be partly offset by inflation, but we are confident that we will deliver beyond our target.

Looking at CapEx, the strict capital discipline continues, and we uphold the 2025 guidance of USD 1.1 billion. For 2026, we expect a CapEx level of USD 1.2 billion, in line with previous guidance, of which roughly USD 200 million is uncommitted and reserved for potential value-accretive growth projects. Strict discipline will ensure only projects with core strategic fit and double-digit returns are prioritized. Other growth for 2026 relates to ongoing high-return projects, mainly Sluiskil CCS, the new YaraVita plant in the U.K. and upgrade of sulfuric acid production in Finland.

In 2026, we will be at the higher end of our maintenance CapEx range due to major turnarounds in two of our largest ammonia plants, namely Belle Plaine and Pilbara. The improvement program remains a top priority for the organization and crucial to improving our EBIT margin and returns going forward. While we have delivered on our original targets, we will continue with strict resource discipline and evaluate further optimization opportunities continuously.

Looking at our net debt, we see a stable development as strong cash earnings were offset by seasonal operating capital build, driven mainly by a higher price environment. The Other category mainly reflects noncash items from new leases and currency translations.

Turning then our attention to the markets. We continue to see strong nitrogen fundamentals ahead. The urea market is demand-driven despite some softening over the last months. Price levels remain firmly above last year despite an expectation of around 4.2 million tonnes of Chinese export. As we anticipate the Chinese export window to close as they turn focus to the upcoming domestic season, India's fresh tender is supportive of global supply and demand balances. With the European season approaching and the trend of modest preseason imports in the U.S. over the last years, there are signs that Q1 2026 could become significantly tighter than this year.

Farmer economy, however, remain a concern with softening prices on most crops. This is driven by strong crop production and yields, which partially alleviate lower prices for the farmer. There is, however, a contango in the market with forward prices for 1 year ahead 10% to 15% above current crop prices, indicating some support for improving farmer economics. On a medium-term basis, we see that new urea capacity coming on stream looks to stay well below historic consumption growth. And given the lead time to get new urea projects to completion, the supply outlook looks increasingly firm towards 2030, suggesting a strong ammonia to urea operating margin in the medium term.

Adding to the farmers -- adding to the European farmers' burden is carbon taxation on imports, the so-called Carbon Border Adjustment Mechanism, which will be implemented in 2026. Today, 45% of EU's nitrogen consumption is imported, predominantly by urea, which makes up the marginal cost for European nitrogen imports. As a molecule, urea contains CO2. The carbon footprint is, therefore, inherent to urea as opposed to nitrates, which can be decarbonized through low-carbon ammonia. The inherent carbon content on imported urea, combined with CBAM, is likely to introduce a further spread on European nitrogen prices above global prices.

CBAM mirrors the European trading scheme on carbon and is an inseparable part of the scheme, as it levels the playing field between European producers and producers of imports to Europe, who so far have been able to compete without paying the same carbon cost as domestic production. The exact impact on nitrogen will depend on several factors such as carbon intensity, ETS prices and the benchmarks defined by the European Commission.

Yara has prepared for this implementation for several years and made adoptions where it has made financial sense. As an example, we have made investments to abate N2O emissions from our nitric acid plants and energy efficiency improvements, among others. These have been relatively minor investments where we now see the financial benefits. Being below emission benchmarks has allowed us to build a bank of free allowances valued at around USD 500 million at current ETS prices. These allowances can be utilized against ETS payments in plants where emissions exceed free allowances for the year or sold in the market, depending on what is more financially attractive.

In addition, our CCS investment in Sluiskil will be commissioned in 2026 and reduce our CO2 emissions by up to 800,000 tonnes annually. This reduction frees up quotas from the bank that can also be used against emissions elsewhere or sold. This demonstrates that Yara's investments in decarbonization have a clear financial return requirement which now can be monetized, and this policy will continue going forward.

With respect to CBAM, Yara's ammonia import system is set up with high flexibility. As we expect nitrogen prices in Europe to reflect the marginal import cost of urea, Yara will benefit from the adjustments made to our system over years. These benefits include duty suspension or duty voiding options for ammonia going into products re-export via in-boarding processing procedures, thus reducing our exposure. In addition, our largest export plant is located in Norway, which will not incur CBAM until this is implemented in 2027 at the earliest.

Going beyond next year, Yara's unrivaled ammonia import infrastructure in Europe positions us well for incorporation of decarbonized ammonia, underlying Yara's proactive yet cautious and disciplined approach to decarbonization. And with that, I give the word back to Svein Tore.

Thank you, Magnus. Our global ammonia system underlines our flexibility and opportunity space with regards to renewing our ammonia production. Yara has the largest import infrastructure for ammonia in Europe. And out of the 3 million tonnes that we consume for nitrate and NPK production, 50% is already imported. All of our European nitrate and NPK production capacity is fully flexible on where the ammonia is sourced from. And with structurally higher gas cost in Europe and increasing carbon taxation, capitalizing on this operational flexibility is key to unlock value and to increase margins.

Taking an equity stake in new U.S. ammonia production is still expected to be highly value accretive as it enables us to access low-cost gas and production economies of scale, lowering fixed cost and maintenance cost per tonne. This has always been a core part of Yara's success, and the latest example being our investment in Freeport, Texas, which has generated significant returns for Yara and our shareholders. Any investment in new production capacity must be profitable in itself, meaning that the attractiveness of an investment would be assessed based on the fundamental attractiveness of ammonia production itself. In addition, we expect synergies with our European premium production assets, first and foremost, through increased margins of nitrate-based products. And secondly, it would enable us to reduce our European carbon cost exposure.

With Yara being an attractive partner for any ammonia project, our key focus is to mature potential partnerships where we can match Yara's risk/reward appetite with that of a partner, considering CapEx exposure, price exposure, commercial exposure and volume offtake. This means that more importantly than defining whether we pursue one or two projects is maximizing returns through an optimal risk/reward exposure while staying committed to our capital allocation policy. Potential investments in the U.S. remain our key growth priority and our time lines remain unchanged, with the first half 2026 as a decision point.

I will also reiterate the message from the second quarter. Yara will size a potential equity investment to our capital allocation policy, aiming at maintaining shareholder returns also in an investment period where we do not plan for any equity raise as part of a final investment decision. We believe Yara has the value drivers in place to create significant shareholder value from an upstream equity position, but we need to be confident in the robustness of returns. Stress testing key assumptions is critical in addition to evaluating Yara's optimal risk/reward profile in such a project and to match this to a partner's risk/reward appetite. Double-digit returns remain a requirement for a potential final investment decision, which is planned for first half of 2026.

To wrap up the presentation, I would like to highlight the following points. The key focus of the whole organization is to ensure a safe working place, while at the same time, optimizing our core operations, increasing free cash flow and generating higher returns to fund improved shareholder returns and value-accretive growth. We continue to deliver increased returns to shareholders with increased resource efficiency through lower fixed cost and CapEx, and then also increased asset utilization and progressing on our portfolio optimization. Through strict prioritization and capital discipline, we have already over-delivered on the fixed cost and CapEx reductions that we targeted in the second quarter of 2024.

We're also progressing on our portfolio optimization and have taken the decision to mothball our ammonia asset in Tertre in Belgium, strengthening the long-term competitiveness of the premium product production at this plant. Ensuring a future-proof asset base is core to strengthening Yara's position and increasing our long-term competitiveness. Through strong commercial performance, we continue delivering strong premiums on our nitrate and NPKs in a high price environment with pressured farmer affordability. Both ammonia and premium product growth are key opportunities where we see potential for high returns and excellent strategic fit.

Through disciplined capital allocation and a strong focus on resource efficiency, Yara is enhancing returns. Going forward, we continue to take steps to expand margins by diversifying energy cost and leveraging scale and operational efficiencies across our global network. This will enable increased returns for shareholders.

I'll now hand back to Maria.

Thank you, Svein Tore. I would then like to announce that Yara will host the Capital Markets Day on January 9, 2026. This will be hosted as a hybrid event with the possibility to both participate digitally or physically in Oslo. The CMD agenda will focus on Yara's strategic priorities and value creation agenda. More information and details will come later. So for now, please save the date.

That concludes today's presentation. The Q&A will start at 1:00 p.m. Oslo time, and log-in details are found on our website under Investors. Thank you for watching.