Yara International ASA (OSL:YAR)

Q4 & CMD 2017

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Feb 8, 2018

Summary

Q4 EBITDA excluding special items rose 15% YoY, while the improvement program exceeded targets. Growth investments and operational gains support a $1.1bn 2020 earnings-improvement ambition, against volatile, supply-driven fertilizer markets.

A very good morning to all of you, and thank you for turning out this early winter morning to see our presentation. I and the whole Yara team are looking forward to update you on our business. We are more than 100 people in this room this morning. Should there be a safety issue, we have emergency exits in the back of the room. You go across the lobby, and then there is a gathering point at the roundabout outside the hotel. There are no fire drills planned for today, so if there is an alarm, it is real, and we need to leave the room in an orderly manner. Should you have another type of emergency, there are restrooms to the left outside the room and down the stairs. Today, we want to show you how we are improving, growing, and innovating. Our improvement program is making us stronger, more resilient, and it helps us tackle the turbulent market conditions and making us more agile. To us, this is much broader than an improvement program. It is about changing our way of working. It is about embedding continuous improvement. We are growing and expanding our operations, and today we want to give you more insight into our ongoing expansion progress, including the recent acquisitions in India and also in Brazil. Our company was founded 113 years ago, and we want to share with you today how we are continuing that legacy of innovating that our company was based on when it was started. We also want to show how we are strengthening our innovation culture and how we are grasping opportunities with new technology in different parts of our business. On the screen and also in your handouts, you can see our team of presenters who bring a diverse set of backgrounds and knowledge and experience to Yara. You will hear from Dag Tore Mo, who will give you the industry backdrop. Kajsa Ryttberg Wallgren will go through innovation. You will hear from Petter Østbø and Kristin Kaggerud on production and the Yara Productivity System. You will hear from Tove Andersen on our progress in the procurement area. Terje Knutsen and Stefan Fürnsinn will go through our farmer-centric strategy and what we are doing on digital farming. To conclude, Torgeir Kvidal will present the financial scenarios. As you can see on the screen, we will start up shortly with a look at our fourth quarter results and then move on to describe our industry backdrop and our business model and strategy, and finally, our scenarios. We will have a coffee break in about an hour and a half. Once we are done with the presentations, we will turn then to Q&A, and after that, we would like to offer you lunch here at the hotel. As always, we will start with safety, and safety is our license to operate. It is our responsibility as a company to make sure our employees can work and return home safely every day. Our goal is to reach zero injuries. We have grown significantly in the recent years, and today we are more than 16,000 employees in Yara worldwide. Still, we have managed to continuously drive down our performance in safety, and we have now reached the lowest level so far on recordable rate of 1.8 at the end of 2017. However, we did suffer from three tragic fatalities in Yara in 2017, and each of them was a tragic reminder of the importance of achieving a strong culture and strong processes around safety in all parts of our organization. We are confident that we are moving in the right direction and that our safety work is making good progress. But at the same time, we recognize that we still have a long journey ahead. We will continue on that journey, and safety is and will be our first priority. Turning to the results. Our results are up from a year earlier, mainly due to improved margins. The improvement is stronger on a reported basis since we had larger net negative special items charges in last year's result. We're still in a fundamentally supply-driven market, as evidenced by our cash return on gross investment, or CROGI. That was around 7% for the quarter and for the year in total as well. In this situation, we remain focused on improving our operations. We're therefore very pleased to report that our improvement program continues to deliver ahead of schedule. I also want to take this opportunity to highlight the performance in our industrial segment, which in a demanding market made the strongest underlying results performance in history. Our board will recommend to the annual general meeting a dividend of 6.5 Norwegian kroner per share, which is at the upper end of our policy range for cash distribution. Turning to the EBITDA bridge. EBITDA, excluding special items, was 15% higher compared to the fourth quarter in 2016, with improved margins, as already mentioned. Even though energy costs increased significantly, this was more than offset by higher realized prices. Within fertilizer, our realized nitrate prices increased the most, 20% up compared to the year before. Within industrial applications, realized ammonia prices were up the most, also around 20%. A weaker U.S. dollar is responsible for negative currency translation effect, while special items have a positive effect because we had larger negative items in 2016, as already mentioned. But if you look at the special items in isolation for 2017, they were also negative this year and included a charge of 278 million related to the discontinuation of a pilot plant for small-scale production of ammonium nitrate in Porsgrunn. Now it's time to move to the Capital Markets Day presentation. For those of you that would like to look further into the results, you'll find more detail in the text report and in the separate results presentation that we have also published this morning. In addition, we will also have a phone conference on the results at 4:30 this afternoon, Oslo time. Before we go into the industry backdrop of this presentation, I'd like to comment a bit on Yara and how we see ourselves related to the broader fertilizer industry. Our global footprint is unrivaled in the industry, especially in terms of distribution and marketing capabilities. There are no other players that even come close to our global setup. Also, commodity products are a smaller part of our portfolio, around one-third of our portfolio, while premium and blended products make up the majority of our portfolio. But even as a premium solutions provider, we are influenced by the larger commodity market. For the wider industry, as we see here, the situation is different. Commodity products make up almost three-fourths of the portfolio, as you can see here to your left. The commodity products typically have a lower efficiency than premium products, and they will also usually have a lower price. This means that, for instance, for a wheat farmer in France will be making a commercial decision about whether to buy a higher efficiency, higher priced fertilizer, or a lower priced, lower efficiency one. A bit simplistically, we could say that for the farmer, there are really three main factors determining the decision that she or he will make. It is the wheat price, it is the commodity nitrogen price, and the premium product price relative to the additional yields that the farmer will get. Let me then hand over to our Head of Market Intelligence, Dag Tore Mo. He will share his insights and thoughts related to the crop markets, commodity fertilizer, and also premium fertilizer. Dag Tore. Thank you. Thank you, Svein Tore. Given this, I will focus on the urea market. There are, of course, a lot of other things that we could talk about as well, but that is kind of as the commodity driver, the most important one on the income side for us. Of course, I guess a lot of people here in this room would find the short-term developments now very exciting, and we do as well, me particularly. I thought I will come back to that towards the end, but let us try to keep a little bit longer term focus initially. On the demand side, we know that there is a lot of talk about large grain stocks, low crop prices, grain prices, et cetera. That is correct, of course. Grain prices are low, and there have been some improvement over the last year, but that is mostly in dollar terms, benefiting American farmers. A lot of other currencies are still not much better than a year ago. I think that it is very important here to kind of remember the fundamental background is that the blue line, the consumption of food, is growing. It is growing quite fast. The trend rate there is 1.8% over this time period per year. So there is more nutrients needed to produce that food. What we also see is that particularly on the nitrogen side, there is a relatively low correlation between grain prices and nitrogen consumption, because as long as you need more produced, then you need also more nutrients as an input. Of course, in today's situation, the market is relatively balanced. There is a match between consumption and production, according to USDA this season. When consumption is increasing more going forward, there will also be need for more production to avoid building down the stocks. On that note, I am kind of glad that I am not responsible for crop price forecasting. Because if you look at what has happened, is that if you exclude China, there has not been an increase in grain stocks globally. It has been very flat and even a slight decline in the stocks to use ratio. My hunch is that it will not take a lot of negative news on the supply side to generate quite a lot of attention in these markets. I think we saw it even last year, that small blip you can see on the blue line here, it's not massive, but if you go back and look at the forward prices, wheat prices in the U.S., they spiked with 20% for two weeks in July last year just because there were some rumors of some problems. I think that this is also, although we get the feeling that this is very comfortable, I think that can change, and I think that weather issues are important. When it comes to the nitrogen status, of course, you may think that 2016 is a little bit far away behind us, but it's the last year we have complete statistics, so I thought it'd be nice for you to have an update on what the status is. You can see that the total nitrogen is still growing at high rates, 2.2% for this 10-year period. It was only 0.7% in 2016, but that's mainly due to India. If you outside India and China, 2016 was a very good year. I also wanted to show this because if you are new to this, if you are working on supply-demand for urea, you need to use a higher growth rate for urea than for total N because it's eating market share, because almost all new plants are urea plants. That's why the urea growth rate is higher than total N, 3% in this case for this period. This fact is, of course, also interesting with what Svein Tore said, that the fact that what is left between urea and total nitrogen is not growing is giving opportunities for differentiation and value added that is very interesting for us. I just also wanted to highlight so that you see that these are the same numbers. The apparent consumption or supply outside China increased by 3.1 million tons in 2016. The left-hand side is where it ended, and the right-hand side is where it was produced. You can see on the left-hand side that all regions actually consumed more urea in 2016, except for Asia, excluding China, and that's India, that dropped by 2.6 million tons, 2.7 million tons. If you didn't have the negative India effect, you would have almost twice as much consumption growth than what was actually achieved globally outside China. You can see that on the right-hand side, that there was a lot of contribution to the extra supply. There were new plants in North America, new plants in Africa, new plants in Russia, and there were also very good production from existing plants. The most important one is in the Africa category, where Egypt produced 2.2 million tons more because they got natural gas. It was also a very good year for utilization rates in general, so that if you add all those volumes, you get to 8 million tons more produced outside China, 3 million tons more consumed, so you needed a reduction in the Chinese exports of 5 million tons from 2015 to 2016. When we look at 2017, we don't have complete numbers, but we can start estimating because we have quite a lot of information. Because we know that the Chinese exports went down further from 9 million tons to 4.5. So you know that there was 4.5 million tons less coming from China. We know that there were quite a lot of production problems in 2017, like Algeria plants were suffering, that contributed quite a lot, others as well. So it looks like 2017 actually is a weaker year for consumption growth than 2016 was based on just looking at supply, basically, which does not look to be as strong in 2017 and in 2016, despite the new capacities. The supply-demand balance, as we have shown in the quarterly results, normally the same graph, based on CRU's capacity assessments. You can see that it's shown what I talked about in 2016. Quite a lot of supply in addition to new capacities. In 2017, we agree with CRU, the capacity list probably overstates what was actually supplied because of various production issues. We also then think that it's a reasonable assumption on 2018 to assume that maybe 2018 won't be much better from a supply-demand perspective outside China. Maybe there will be some new plants that are still not operating, that maybe have some supply overhang from plants that came on stream last year. Algeria is producing more, for instance, than they were in 2017. So, it does not look like the world will need more than 4.5 million tons from China this year compared to last year. But the question is more kind of, I guess, will it reach 4.5? Will it be a bit less? And in that case, how much less? When you look further, then you can see that from 2019 and onwards, you kind of get an impression that this market may start to tighten. Just to be a little bit careful here, because we are not comparing apples and apples. We're comparing apples and pears. Because the bars are new capacities, while the lines are production and consumption increases. The dotted line is consumption increase, if 3%, if equal to the earlier 10-year period. Then many are of the opinion that the future growth rates will be somewhat less than the historic ones, given biofuels affecting the last 10 years period, improved efficiency, and et cetera. That may be, but I think it's also interesting to see that a lot of these capacities from 2019 to 2022 are highly uncertain still. Most of these plants are connected with some kind of uncertainty. So I would be very surprised if actually supply from these new plants will reach these levels that are indicated by these bars. In addition, another factor is that could there be that new capacity not only have to cover consumption growth, but also replacement? I think that's an interesting issue, and I tried to do just an exercise just to see if I did exactly the same in 2010 as we now try to do now, how would that have looked? Because two-thirds of the ammonia industry is built more than 30 years ago, may not be a huge problem if it's well-maintained, but I think this is a factor I think you should be aware of. So what I did was that the red line is what has been actually produced in the period 2010 to 2016 outside China. The green line is what would have been produced if I removed these bars, if I removed the new capacities. That is kind of trending downward by roughly 1%. You may feel like I'm kind of overplaying this a little bit because 2016 was such a good year, and production almost the same as 2010. I think this is a factor that is relevant for going forward. This is an aging industry, and maintenance levels and so on can also be affected by the fact that there have been some years with relatively poor economics in the industry. Just to sum up this, I would agree with kind of what is the consensus view that it looks like 2019 and onwards are set for a tightening supply-demand balances ex-China based on the fact that the capacity is not as much, and it's highly uncertain. There will be continued consumption growth or even maybe not reach the historic average, but at least some consumption growth. I think there may be need for some replacement capacity. On the shorter term, this drop in Chinese exports, that's a consequence of worsening supply-demand balances, has kind of led to the green line, the global price of urea being more volatile. High when there is a need for Chinese urea, low when there is no need for Chinese urea on the short term. You can see also the black line, the price in China has gone up sharply, and that's of course very positive due to coal price increases, natural gas being diverted away from the industry, et cetera, so that they are running at low rates. We had a strong first quarter in 2017, as you can see. Then we had a relatively poor second and third quarter, with prices lower than the Chinese price. Then we got a very kind of a strong period again in September, October. Then because triggered by the cancellation of an India tender, the prices dropped back and the buyers pulled back later in the fourth quarter. I think that, and here, since Torgeir Kvidal is so good at producing scenarios, let me also produce a scenario. That is that we know that the U.S., for instance, is very late in their buying. We know that stocks in India is very low. Of course, they can wait. They don't really need product until June. That's when the first month when their local sales exceed their own production. They can wait. We think there are other buyers as well that are out there that has been kind of a little bit passive now as prices have been dropping after October, November. I think there is a plausible scenario that global prices have to move back up towards the Chinese price, for the short term. Let's see. That's of course one of the, I think, most exciting topics that I guess also you are kind of looking at, I'm sure. If that were to be the case, we know that China exported 4.5 million tons last year. It would be strange if there is no need this year overall. Then the question is, will those tons be available if they are required? That's the other extremely interesting topic, right? The fact that Chinese production has been dropping fast during the second half of 2017, the red line. I know at very low levels in both December and January. There is genuine concern about whether supply will be sufficient to meet spring demand in China. I think there is hardly anybody that sees an export push. It is more a question of how will they facilitate their own balance. Just looking at the numbers on the right-hand side, this concern was there a year ago also, a little bit less, but still there. You can see last year on the left side of the right-hand graph here, you can see that production first half last season was 27.6 million tons, 3.8 was exported, so the domestic supply was 24. If you just multiply that by two, say, so you are going to 48, and then you add a couple of million tons for what is not covered by this survey. That compares to a domestic consumption of between 50 and 55 million tons, roughly. That is what they consume, depending. It looked quite tight already last year, but our clear understanding is that there were inventories that they could draw down last season. That is not there this season. Even if supply so far this season is basically the same as a year ago for the July through December period, the tightness is perceived much stronger because of less inventories. Also the fact that current production rates are much lower than production rates this time last season, and the outlook for Q1 is not very positive. There are no signs of a material increase in production rates. They are basically losing half a million tons a month compared to last year if you do not adjust for the trade or exports, of course. I guess this is also what has triggered the. There has been a lot of attention. I am sure you have been looking at that also, this government purchasing program, for instance, want to buy all this product to make sure that supply is sufficient for spring. That is not a new thing. That is something they have done always. It has just gotten less attention over the last few years because supply has been so abundant. There has not been a focus on these governmental purchasing programs. That is how they used to secure supply for spring. What I do not understand is how that is going to help supply, the fact that government buys compared to distributors, unless it does something to supply. That is also a puzzle that is going to be very interesting to see how play out going forward. I see some speculation that could this end with China importing major volumes? That is also a bit difficult to see, because where would they find those without price spikes, the way the balance is outside China now. There are so many exciting issues, both short-term and long-term. I am very pleased that I have a few more years until retirement. This was what I thought I would just give you some thoughts on these issues. Of course, our aim here is to talk about our differentiation, what we do to improve production, purchasing, all these issues that Svein Tore mentioned. But we can't hide the fact that even this is just an example. I could have had many examples from Industrial and from Crop Nutrition on other products. These are just picked nitrates. You can see that the difference between the green area, which is our gas cost, and the yellow line, that's the commodity margin. What is on top of the yellow line is the differentiation value-added margin. So you clearly see that even for, as Svein Tore said, even for our differentiated product, the commodity margin is very important to us. That's why we thought spending these 18 minutes on the urea market was maybe worthwhile. So thanks for your attention, and Svein Tore, back to you. I'll take it from here. Thank you, Dag Tore. See if we can get the-- Yeah, there's the microphone on. I think I speak on behalf of all of us, Dag Tore, when I say that we're all pleased that there's quite a few years until your retirement, and we appreciate your passion on this topic and your insights. Just as a summary then of this, we see that we actually have a supply-driven market both for grains and urea at the moment. However, grain stocks outside China, as we heard, are not very high, and for nitrogen fertilizer, increasing production cost and lower production in China has increased the global price level. We've seen significant price volatility in 2017 and expect to see a similar picture also going forward. But let's move on now and look at how we think about strategy in Yara. In 2015, the UN launched what they call the Sustainable Development Goals. This is a set of 17 goals, as you see on this slide. It's also a framework to drive common policies for a better world. It's also a framework for business because it highlights areas where we need to develop, where we need to invest, and where coordinated efforts are needed. Two of these very obvious challenges related to us is on food production and carbon emissions, as you see on goal number 2, zero hunger, and 13 on climate action. I believe that we are uniquely positioned in Yara to deliver solutions for this that drive business opportunities. I can't think of any industry that has a bigger impact on the Sustainable Development Goals than agriculture. It's not just about the two goals that I mentioned on zero hunger and climate action. It makes an impression on all of them. I've seen it myself, and perhaps most highlighted in Africa, where you see smallholder farmers that are struggling to produce enough food to eat. The majority of the 800 million people that go to bed hungry every night are smallholder farmers. I have seen the impact that we can make when we work with them to increase their productivity, and how that increased productivity then leads to higher income, and how that income is spent. It's usually spent on education, to give education to the children, providing them with a more promising future. So we're actually impacting goal number 4 on quality education. We're impacting no poverty as well. It's all interlinked. At the broader scale, when we look at water usage, 70% of the freshwater use in the world today is to agriculture, and I think we are uniquely positioned to help to reduce that as well. Two years ago, a group called the Business and Sustainable Development Commission was formed. I have had the pleasure to work together with 34 leaders of industries and organizations. It was chaired by Lord Mark Malloch-Brown, and included members such as Paul Polman of Unilever, Jack Ma of Alibaba, and Ho Ching of Temasek, to name a few. Our conclusion while working on the Sustainable Development Goals and what it means for business is that if we change our mindset and we think much more holistically, if we think across industry sectors and think about this as a business opportunity rather than a limit to business, there are huge opportunities. When we calculate that, it has an annual potential of value creation of $12 trillion, and it can create 300 million just by embedding how the Sustainable Development Goals will work in strategy for businesses. $12 trillion, 300 million new jobs. In other words, there is money to be made from being responsible. Of this, $2.3 trillion is related to the food and agriculture industry, and we are actually now working on the roadmap for what that means for us, but also for the entire industry, and to create roadmaps for this. We are not the only ones seeing this. As you know, BlackRock is the world's largest investor. A couple of weeks ago, the CEO, Larry Fink, sent out new signals. BlackRock now expects companies to contribute more to society or risk losing their support. One of the largest shareholders in BlackRock is the Norwegian Oil Fund. Just last week, the CEO, Yngve Slyngstad, was in New York at the UN talking about climate risk and finance. This is happening at a broad scale right now. At Yara, sustainability has been an integrated way of working for a long time. What I believe sets us apart from most other companies is that we have put the UN Development Goals at the core of our business model. Our solutions help to fight poverty, they increase food production, and at the same time, they help to reduce emissions. We do so profitably. On the subject of emissions, last week I was in Germany to open up the new AdBlue facility that we have invested in there. I think this very well illustrates the potential in running businesses that respond to some of the biggest environmental challenges that we have. We have continued to see healthy sales growth in AdBlue, as you see illustrated here. Today, we are the number one producer of AdBlue worldwide. What AdBlue does is that it cleans NOx emissions from diesel engines, up to 96% reduction from this, turning it into vapor and nitrogen. The facility that we opened in Brunsbüttel last week, alone, the output from that plant will reduce NOx emissions at a level comparable to the entire NOx emissions from the transport sector in Germany, Switzerland, and Austria combined. That says something about the scale of this. It is possible to grow profitable growth and at the same time, do something that matters for the environment as well. In addition to this, I would like to also mention the catalyst technologies that have been developed in Yara, reducing laughing gas emissions that we also have licensed out to the rest of the industry. Every year, this reduces emissions by 23 million tons of CO2 equivalents. That is about 40% of the total CO2 emissions in Norway, to put that into perspective, based on catalyst developed by Yara engineers. When I speak about developing and growing our business by solving global challenges, this is really just a natural development of what we have done in Yara for decades. We were founded 113 years ago to help tackle the food crisis in the Western world, and this is very much in our DNA. Let me show you an example of how we work across the whole value chain, and that is illustrated in this film about the Farm to Market Alliance. The fact that Africa still needs to import food is a missed opportunity. Farm to Market Alliance is a partnership program between public and private sector, improving the lives of smallholder farmers by moving them from subsistence agriculture to commercial agriculture. Under the FTMA Alliance, we come in with knowledge, and we train all the farmers that are in the alliance. Most of the farmers do not use fertilizer because they do not have the knowledge. Through our various interventions on training, farmers know what type of fertilizer to use. They know the rate and when to apply. We have grown over the last three years from 5,000 to 50,000 farmers, and we will be growing to 250,000 farmers in the next two to three years. The idea is, over a period of 10 years, we reach out to 1 million plus farmers. I think this illustrates the impact that we can have by looking throughout the whole value chain. It is also important to measure and show what the numbers look like. As of the end of 2017, 136,000 farmers are part of this alliance. In total, their yields have increased by 32%. The farmer income has increased by 83%. It is showing real benefits to these farmers. When you then also calculate the number of people in their households, it is 700,000 people that are better off because of this. We are going to scale this up to 1.5 million, but to put it in a much bigger perspective, looking at Africa. Africa today imports food for between $40 billion and $50 billion per year. If the yields do not improve in African agriculture, this number will grow to $100 billion by 2025. That is in a continent that should be not only self-sufficient on food, but should be a major food exporter to the rest of the world. Developing a market, helping farmers to become more profitable is the right business for us as well. Africa will be a major market for Yara in the years to come, and it is important to position early. This is very much embedded in our mission, vision, and values that we have worked on in the recent two years. We have set a very clear direction, and our mission is both simple and ambitious: responsibly feed the world and protect the planet. Some of you might be a bit skeptic of vision and mission statements, but I can assure you that this is related to the way we run our business and very much embedded in how we do just that. It will lead to an increased pace of the global growth that we seek. Our thing is that there is no trade-off between business and making a profit, and also society benefiting at the same time. When we succeed in our business, society is better off, a win for us and a win for the society. We are already today helping to feed 300 million people through our crop nutrition solution products and knowledge, and you already saw how much we contribute on reducing emissions through AdBlue, as some examples of this. The combination of Yara’s high-efficiency fertilizer products and the related field and lab solutions already represent an attractive solution to the farmers in value terms. This proposition today is mainly focused on the value improvement for the farmer. In the future, we hope and we work very hard for driving more and more focus on the emissions side of this, helping to create transparency, helping to facilitate so that the farmers actually get paid for producing a product in an environmentally responsible way. Today, the farmers do not really get paid anything extra for running their farms responsibly from an environmental point of view. In the future, I believe it will be so, and we will do our work on this. I think that is another area, another lever for showing the value of using our products and our solutions. It is important to look at this holistically as well, and of course, we are doing a lot to reduce the emissions in our own production part of this. We have reduced emissions by 59% or more than that since 2004. But it is key to look at the whole value chain on food production, and then you see that the fertilizer production part is a smaller part of this. Also go even beyond the farm and look at if the crop yields do not increase, there is need for more land to produce food. Then that is done through deforestation. If you look at the impact that fertilizer has in order to intensify production compared to the result of having to chop down forests to make more land available, the calculation is extremely favorable to the use of fertilizers. A Stanford study from 2010 showed that by making agriculture more productive, there has been a saving of 590 gigatons of CO2 emissions between 1961 and 2005, just from making farming more high yielding and then less need for land. Reducing emissions from the use of our products is a high priority in Yara, and we are already ahead of the competition in that. Yara's globally integrated business model separates us from the other fertilizer companies. We work deeper in the markets than they do, and also both on the fertilizer side, but also in the industrial application side, working with the industrial customers to understand their needs and tailoring our products to that. That is how we can adjust our offerings in order to respond to that and create business opportunities. But being integrated towards production also gives security of supply, making sure that we have the product when we need it, and also to flex the production when needed. Making sure that we have the most value-creating product mix, and making sure that the integration between sales and production gives us a robust delivery of the product of the right quality and reducing then risk as we go into new markets. Also when we build new capacity that we actually have developed a marketplace for that. The integrated business model also creates flexibility through the commodity cycle. In a demand-driven market, the profitability moves more towards the production part of it, and in a supply-driven market, it is more margins towards the end consumer. The strategy in Yara is focused on strengthening our competitive edge, and we have visualized them here through the four competitive edges. To start with competitive raw materials, one example of that on competitive raw material costs would be the positioning of our plant in Canada, the Belle Plaine operation, where we have a strong cost position. It is to a lesser degree in our European assets, but we are better positioned than, say for instance, the Chinese swing producers. We are also systematically working in order to further improve our raw materials cost position, and the procurement project that we will dig into later on today is an example of how we work systematically on that. The knowledge margin is a very important source of advantage for Yara. Through the farmer-centric approach, our knowledge helps farmers become more profitable, and that enables us to realize a higher margin for our products than we otherwise would have been able to get. The same also applies for the industrial segment. Through global optimization and scale, our global downstream presence, and our large production footprint allows Yara to address the markets where we can place it at the best price throughout the year. Operational excellence, for me, is all about continuous improvement. It is about the Yara Productivity System and this is something that we will touch on later on today as well and go into more detail on. The strategy execution in Yara is really following two main levers. It is about improving returns on the capital that we already have in place, and it is about growth, both organic and through M&A. The main sections of today's presentation will be focused on how Yara works along the strategic responses in order to strengthen and sustain our sources of competitive edge. The Yara Improvement Program is all about improving returns, with initiatives that will improve on all four of sources of competitive edge. Our presentation today is structured along these four dimensions. Growth can strengthen Yara's competitive edge in several ways. A competitive edge could be to extract value when we acquire a business. An example of that would be the acquisition of Tata Chemicals urea business, where we are largely taking over a commodity business. But by applying our farmer-centric model, we can unlock a significant value through using that basis and that reach to increase our premium fertilizer sales in that market. But growth can also strengthen Yara's competitive edge, and an example of that is ATC or Adapt-N that you will see later on today, where we are acquiring intellectual property that is strengthening our knowledge margin. Lastly, another project that I would like to mention is the Freeport project in Texas, which is an example of establishing in order to strengthen our raw material cost position. So in Yara we have four different priorities for growth. It is expand premium fertilizer sales and supply. An example of that would be our expansion in Latin America, Brazil in particular, and how that facilitates for an expansion in premium products production in the Nordics and in Porsgrunn in particular. It is about expanding commodities scale based on attractive full cost positions and one example that I just mentioned of that would be Freeport in Texas. It is also about acting on opportunities to grow in industrial sales and supply and another very recent example that I just mentioned as well is the Brunsbüttel expansion that we inaugurated last week. It's structurally securing P and K exposure. The Salitre project in Brazil is one example on phosphates, and also on the Dallol on securing SOP supplies. Moving down a bit to India. Three weeks ago I was in India, and that was for the closing of our acquisition of the Tata plant in Babrala. Two weeks ago I had the opportunity to meet with Prime Minister Modi, in connection with the sessions in Davos. India is the world's second-largest fertilizer market, and agriculture is a very significant part of the GDP. It's also a significant source for growing GDP in India. Growth within agriculture is really vital for the continued growth of the Indian economy. Prime Minister Modi has made a bold statement, has a bold ambition, where he said that by year 2022, he wants to double farmer income. My message to him and Indian government is that that is absolutely within reach. Yara is positioned, and we're ready to deliver on this. I also said that it will require farmers to have access to premium fertilizer and to have balanced crop nutrition solutions. After being present now in India for more than 20 years, we have a solid foothold, and now with this presence that we have through our urea plant, we will use that and the experience that we have from other markets to continue to develop the Indian market. Brazil, I think serves as a good example of what we can do, where we moved from 8% market share just a few years back to 25% market share today. More importantly, we've been able to grow our premium fertilizers sales from a few hundred thousand tons to more than 2 million tons in 2017. Our experience in Brazil is very valuable, and we will use that now as we're moving forward in India, and our expectations for India are very high. What you see and what is common is that we then use a strong commodity base, and we build premium sales on top of that. Let me now turn to innovation. First, there will be a film about the ship Yara Birkeland, and after that, Kajsa Ryttberg Wallgren will come on stage and talk about how we work with innovation in Yara. To reduce 40,000 trucks from roads and improve the environment, Yara has teamed up with technical and maritime leaders to deliver an innovative transportation solution that will positively impact traffic, reduce CO2 emissions, and ultimately transform the maritime industry. Introducing Yara Birkeland, the world's first zero-emission, fully electric autonomous cargo feeder. Created from the need to solve climate, road safety, and traffic congestion challenges. This is a reason for why I joined Yara about one year ago. We are innovating with a purpose. In order to remain relevant for our customers, we must continuously evolve our offering to protect our current positions and gain market share from competition. In order to stay relevant in the long term and respect our planet, Yara aspires to be the disruptor of our industry. Therefore, we have during the last year increased our spending on long-term innovation activities to look beyond the obvious. We aspire to be at the forefront of innovation by leveraging the contribution of all our 16,000 employees. We do that through our R&D centers that are placed globally, focused ideation, and through our global incubation program. We also balance this with believing in accelerating our innovation efforts by utilizing knowhow available outside of our formal boundaries by investment in open innovation activities. We truly believe in creating ecosystems of change, where the system's constituents are considered as partners rather than supplier and customer. We are a strong believer in system innovation. Therefore, we are proactively searching for partners to collaborate with, such as research institutes, large corporations, and academia. Some examples of this is the PACE platform for circular economy. A couple of weeks ago, we inaugurated our collaboration with SINTEF, an innovation lab. I would also like to highlight the example that Svein Tore brought forward, Yara Birkeland, where the collaboration with Kongsberg and Marin Teknikk are key to make this a reality. We are also investing in the world's future innovation talent by supporting students and early ventures through open innovation challenges and through investment through our startup accelerator and investment fund, Yara Germinate. Yara is innovating with a purpose at all steps of the value chain, and we are measuring our innovation pipeline both in financial terms such as sales growth and EBIT impact from cost reduction and CO2 equivalent reduction, because we are innovating with a purpose. Currently, we have three areas where we put specific innovation focus. In terms of production and process technology, we focus on carbon neutral ammonia production, green ammonia, and also greening of our supply chain, where Yara Birkeland is one example. In this field, we also dedicate innovation efforts looking at more small scale production setups, decentralized setups at remote locations. In parallel to this, we are also assessing completely new markets that we could enter as the consequence of our green ammonia offering. Another field of research is for us, circular economy and the biocycle, where we really see an opportunity in how to retrieve nutrients from waste and bring them back to the market as organo mineral fertilizer. We also look at how we can bring back wasted nutrients back to our production setup and combine secondary sources with our primary production. As you will hear about more later today, innovation and digital solutions is really key for us. Looking downstream in crop nutrition, our focus on digital solutions that combine with our product offering enable efficient and sustainable farming. We also believe we can play an active role in the food value chain in completing the link between the farmer and the consumer. Technologies like blockchain is a great interest to us to enable that we can track and trace nutrition and also environmental impact throughout the food value chain. Finally, digital innovation in our production segment is mainly addressing Industry 4.0, focused on improving safety, reliability, and productivity. Yara innovates with a purpose to protect and disrupt. It is a true balancing act, which we make a reality through utilizing ecosystem of change. We combine the knowledge we have internally with our 16,000 employees with investments in open innovation activities. Back to you, Svein Tore. Thank you, Kajsa. I am then going to turn to what does this really mean when we talk about innovation, we talk about productivity, we talk about Farmer-centric, being close to an industrial customer. Because producing is one part, but it also needs to be sold. Being close to the farmer, being close to the industrial customer, and then to constantly show the value that we deliver, and it needs to be distributed and delivered to the customer. At the end of the day, all of that is summed up in a premium, and that is what we are showing right here. The premiums that we achieve, both in fertilizer and industrial markets, that are a result of this product portfolio, the market positions that we have, and also the innovation efforts that we are putting into our products and our marketing efforts. What I believe that you see here is the value of our integrated business model and how we work. Let me then turn to our improvement program. We launched that one year ago. It was based on the difficult market conditions that we saw at the time, and that we are living right now. It was very clear that we had to do something in order to counter these challenges. How we chose to respond to this was very much dictated by our values. We set an ambitious target of $500 million by year 2020. But more importantly, we made an improvement program. Not a cost-cutting program, it is an improvement program. By that, I really mean improvement of our people, by our people. In order to reach our target and to continue to improve beyond that, we are convinced that we need to continue to invest in our people. Increase people's competencies so that they have more influence on their workday. It is about making it easier to collaborate and share ideas. It is about focus on having a strong sense of curiosity and lower the bar of asking questions. Of course, there have been, and there will be difficult decisions to be made when it comes to improving our operations. But for me, it has been important to make this a program where we involve our entire organization, so that everyone, all our 16,000 employees, know what their part of contributing to our improvement program is. I think we have come very far on this, I have spent a lot of time traveling out to our locations to understand how we work on this. What really impresses me is how this is embedded all the way to the shop floor. When you see operators with great pride demonstrating how they changed their way of working and the results that they have gotten from this, after having worked in maybe other ways for decades, that makes a big impression, that says something about the power of the program. For those of you that joined us in Sluiskil for the deep dive on the productivity system, you met with Geir Sundbø and Tom de Smit, that is the Chair and the Deputy Chair of the European Works Council. It has always been our target that when we hold presentations about the productivity system, it should be the same story or speech, whether it is from me, or if it is from Petter from production, or if it is from the union. I think you had the opportunity to see a glimpse of that when we had our union representatives also talking passionately about how we are working on improvement in Yara. I believe that that is the only way that we can make improvement that is sustainable. Just simple cost-cutting will have an impact in one quarter and the next, and maybe the next year. It will not last over time. Then we need to change into continuous improvement, that is where we are heading. So far, we have delivered $242 million of annual sustained benefits, which is well ahead of our target for 2017 of $150 million. In addition, we have captured a total of $126 million of one-off benefits in the period 2016 to 2017. That is already surpassing the original target that we set in terms of that effect. The $242 million is measured on the 2015 margins, if we were to use the 2017 margins to compare, the result would be $180 million. We are ahead of schedule, thanks to strong delivery from really all products in the program, in particularly, on the strong reliability improvements in production, and also a very good traction in the procurement excellence project. Our target for 2020 remains unchanged at at least $500 million. The strong improvement that we have seen in the last year does not necessarily imply that it will be the same trajectory going forward for two reasons. Firstly, we are investing in long-term development, in reliability in our system, which by nature are incremental rather than large step changes. Second, while the current performance is very strong, individual accidents or incidents, such as the fire that we had in Porsgrunn, influences the total picture. Related to that, it is too early to now establish new targets for the improvement program. However, the pace has been stronger than originally planned, and we are therefore increasing the 2018 target by $50 million. The program consists of a number of activities across our whole company, and it is about strengthening our competitive edges, creating more for less in production, and adding value to our customers on the downstream part of the business. The Yara Productivity System and the procurement excellence products contribute the most to the bottom line or to the EBITDA that we have established at this point. However, there are a number of activities that have a significant impact that are not reflected in the financial benefits in this target. For example, we are improving our CapEx profile when it comes to maintenance and product delivery, and we are working on professionalizing our sales and marketing organizations even further. Before I hand over to Petter Østbø, who will go through the Yara Productivity System in production, I want to show you a video. The six projects we have already launched, they have all proven during the last year that they work and that they deliver results. It is now time to combine them all under the name of Yara Productivity System, so that we have one way of working across the sites, across the mines, across the research center, and across our project office. A productivity system is not driven by the bosses sitting in the head office. It is driven by the people in the plants and where it happens. It is what you do in the plant every day that makes a difference. It is the little thing that you see that can be improved. It is the thing that you see that can make a process a little bit faster and a little bit safer that come together. More than anything, the productivity system is a culture of curiosity that each and every one of us, every day, tries to find one way to do something a little bit better. And it is a culture of ambition, setting high targets that we might not reach, but that we find meaning in striving to achieve. Let me take a couple of examples of what I have seen when I have been visiting the plants. Through many small measures, Belle Plaine is now able to issue a permit in only nine minutes. They have not experienced any shutdowns since the implementation of the system, which is much better than the performance they used to have before. Another example is the way they work with the NPK production in Uusikaupunki, where before every grade, they now think about the bottlenecks that might come from this particular grade, and then adjust the process accordingly. I would also like to highlight the Sluiskil expansion project called Verbena, where the value engineering session managed to reduce the investment amount by a lot, but increased the NPV by even more, improving the value of the project by over EUR 100 million. And that, of course, takes a project from being difficult to do to being very profitable. He said it, everything really, so I do not have much more to add. It is a very good presentation. The Yara Improvement Program covers, of course, most of or all of Yara. The productivity system covers all of the operating units. So the guy talked about some plants, but it is not only the factories. We have now designed, during 2016 and 2017, the program and started implementing it for the chemical production plants, and the phosphate mines, and I have with me Kristin Kaggerud, who leads the 40 people now full-time doing that. She will give some examples from there. In addition, we are doing this for the project office and how we work with projects and the research center. The productivity system covers all these activities with a strong focus on training and leadership development. When we started this, we spent half a year to identify the potential. We went out and did analysis at 10 of our plants, and we did an estimate of how much we thought we would be able to gain. Now we have been to every plant and mine, doing a deep dive, so a thorough assessment, and we have fought a bit with the plant managers and signed off the targets. The signed-off targets, which we now call confirmed, are about 80% higher than the original potential. We think there is a lot of improvements that we can do. The majority of these come from reliability. I will bring this example from ammonia and finished fertilizer reliability. When we say uptime, this is then how much are you producing in terms of both hours and in terms of rate? It is a combination of those two. That combination, since 2015, for finished fertilizer, has gone up about 5%, and for ammonia, about 8%. For the equivalent production where we adjust for new builds and so on, that is about 730,000 tons extra produced. The funny thing is that is about equivalent to one of our medium-sized plants. We kind of got a plant extra, but without any manning or without any significant extra investments so far. At 2015 margins, that is $100 million. Sadly, we are at 2017 margins. It is about $66 million improvement, but that is still quite sizable. The guy on the video said this is really about a culture change, and he is right. There are many more effects than just uptime that we see. We brought just some of them here. I think what I particularly like is the safety rate. The injury rate has gone down about 60% from where it was, until a level which is now, if you benchmark it is almost world-class. We hope that will continue to come down. In addition, we have what we call here one-off improvements. These are cash effects, which in themselves will not come again, but the type of effects will come again. You should expect more one-off improvements also in the future. We have captured so far in 2017, $50 million of those. Also, of the plants we rolled YPS out to last year, seven out of eight plants that we finished last year saw a yearly production record. Mindful that we have only been to half of our plants yet, then some of the uptime improvements hopefully will continue. Let us look at some of these programs a little bit more in detail, starting with the capital projects, how we work with them. How we work with capital projects, we have identified 19 levers for working with it. It takes a lot of time. As you know, a major project can take up to five or six years from start to end. The impact of all of this will take some time to fully flow through. But as you will see, there are 19 levers. They cover everything from what we call hard things, like processes and ways of working, to more upskilling, training, and so on. The CapEx reduction that you saw there, and here on the slide, this is covering the 11 projects that we have run so-called value optimization, which is lever one. From one lever applied to these 11 projects, we see an average CapEx reduction of about 12%, like for like. You get the same project 12% cheaper. As the guy on the video said, the NPV of a particular project has increased, and that is because we are not looking for CapEx reductions, we are looking for NPV increases. Which means the actual CapEx might be even a little bit higher, but the value of the project increases even more. Which is what we are looking for. I brought an example of that from Siilinjärvi. Siilinjärvi is our mine in Finland, a phosphate mine. That is a so-called Okoshi project or a maintenance CapEx project. On the left side of the slide, you will see the average maintenance spend. It goes a bit up and down, but let us say it is $500 million to $600 million per year, and that is done by the plants. In addition, come the mega projects. This way of working also is applied for those smaller projects. In this particular case, I will go quickly through how it works in Siilinjärvi. What we do is we start with a learning and protection exercise, which is a little bit of training in how to open your mind. Then we start looking at the project requirements. Typically, we will start with something like washing bay for cars. Whereas what you really need to do is to remove mud and rocks from the carriage on the underside and blah. You go into what you actually need to do and not what are you trying to build. Then you look at, okay, what alternatives do you have in order to achieve exactly what you want to do and nothing else? For example, you need a heating system. Not really, you can just put on clothes, for example. Then you make what we call the minimal technical solution, which is the Stone Age version that is able to do exactly what you want to do and nothing more. That is the minimal CapEx that you can have. In this case, 42% below what the original project had. Parts of this, for example, is replacing a building with a tent. But then you need to look at, okay, what additional options bring more value? That is more CapEx, but it is even more value. In the case of Siilinjärvi, it can be minus 30 quite a lot of the time. A heating system means you can use the washing bay year round. 18% more brings you a heating system, but it brings much more value than that. The optimized project is about 30% lower in this case, but the NPV is much higher than that again. That is one small example of these many hundred projects and how we are trying to roll this out also. Or Kristin is rolling this out as she moves along the plants and mines. That is for the projects that we do, but we also work with YPS for which projects we do and how we innovate with them. Kajsa mentioned innovation. We have the system now operating in the research and development center, YTC. They are working on the long term, like Kajsa mentioned, with these green nitrates and other longer term process examples or process technologies. We also have, in the short term, a system where we go through each plant and we try to see what can we do to minimize energy consumption, minimize water consumption, and reduce pollution as much as possible. This example is a small one, but it is a nice little example of where, and you can read it in the notes, we needed to cool the product slightly in order to have maximum production rate. In this case, the innovation is what you see there. It is a simple plate cooler, but the important impact is it is a EUR 300,000, EUR 250,000 project with an impact of EUR 900,000 in this case. The payback is some 3 months. So far, it takes a bit of time and energy to do these assessments. We have been out to some of the plants, and on average, we find some 25 projects of this and much bigger scale, which then comes in addition to the savings we already identified. That is quite a lot of impact. Then I hand over to Kristin to take us through the biggest part of the program in the plants. Okay. Thank you. What is really YPS? It stands for Yara Productivity System. It is definitely driven by our thinking of continuously improving what we are doing. It is more than that. It is our new way of working. It is not that straightforward to ask someone to tomorrow change the way you work. This is a huge effort, right? It is a mindset change. The change effort here is not related to what we ask them to do, because that is quite straightforward and can be done by many. It is how we do it and how we make this a sustainable change, and that has to do with getting into the brains and hearts of the people. Yara Productivity System as our new way of working will be used across all our production. But I'll give you some examples from how this is being applied and also what we see of successes already now out at the plants and the mines. It's also a big project. We have 27 plants and mines across the globe. So just logistically having to cover all these sites is a massive effort. Petter mentioned we already now have 40 people in a core team working with this and going out and supporting the different sites for a couple of years. But of course, it's not about the 40 people that work with this as their job every day. It's about the people that we can engage out at the sites. So by the end of this year, we will have covered all the sites and mines that we have, which means that all 7,000 employees will have been through this program. To make that happen, we are educating or training more than 350 change leaders out there. Some of them even come and work with us for 3 months, half a year, 1 year to really understand what this is about, to be able to go back into the operations and work further with their employees. We're also engaging all our managers and training them, helping them understand what does it take to drive change. Because driving change is different from normal day-to-day operations. So this is a mindset change, and it's all about involvement of people. I visited Rio Grande earlier this year, and I was in a meeting, and one of the supervisors there came and sort of gave a fantastic explanation of how he's now able to work with his team because finally, he has the tools and ways of looking for improvements and looking for getting these improvement ideas that has been out there actually happening. Seeing how new heroes are arising from our colleagues is quite touching. We've now done diagnostics at all the sites. As Petter explained, we found a bigger potential than we thought initially. The potential is primarily driven by improving the volumes. So the biggest opportunities in bringing more value to the company lies in improving the volumes, which of course is good news. Much more fun to work with than having to lay off people. To do that, it's not straightforward, and one of the most important drivers behind that is to continuously work with how to improve reliability. That's not easy. It's not one thing which will help us improve reliability. We're approaching it from three different angles at the moment. One is to improve how we operate. How do each and every single one that's out there operating the plant do it, and do it in the same way so that we can improve? Secondly, we have ways of tackling the issues which happen, because of course there will be challenges, there will be production challenges that we'll need to solve. Thirdly, looking into the future, how can we prevent these things from happening? This example on the screen here, again from Rio Grande, where the team in the blending unit were looking at how can we reduce the weekly cleaning time. The less time we use on cleaning, the more time we will have available for producing the products, right? They started looking at it, and they saw, "We are doing it differently. One shift is doing it one way. Another shift is doing it the other way. By the way, the maintenance people, they are never available when we need them." They got together, they developed standard operating procedures, and this is the way we do it, worked together with maintenance, made schedules, and making sure that they are all there. Out of that came a 50% reduction in the weekly cleaning time. That is huge volumes in one year. These guys, they are so eager. I spoke with them yesterday, and they say, "You know what? We found even more." This is how continuous improvement works, right? It is not about this one improvement. It is about how this inspires the team to continuously look for more. Another example is from Belle Plaine. This is the site we have in Canada. We have had some challenges with reliability at the site for years, and we really needed to tackle that. What we introduced there was a team of people where we brought together people from operations, from maintenance, engineers, those that really knew reliability, and made a team. We call them SWAT teams. Their task is to assess the most critical equipment and look at what type of reoccurring issues do we have, and what is the root cause for those reoccurring issues, and then solve it. They are also looking into what can we do to prevent this from happening the next time, and it is about working through this methodology with the right people. I was lucky enough to be there on the first workshop that we had on root cause problem-solving. This picture is actually from that workshop. We have had a problem for a while with a valve that stopped working during startup. Of course, if valves are not working during startup and we need them, it takes longer before we get it back on stream, so it is quite critical. They had not really figured out what is the problem with this one. We took them into workshops. We took the actual valve, opened it, and they were all over and really loved looking at the valve, looked at the specifications for it and so on, and aha, there we have it. This valve was not produced for variable flow. It was produced for stable flow, and no one really asked that question before. Obviously, in startup phase, you have variable flow. So it was not fit for purpose, and we know how to tackle this problem now. After that, they have now conducted more than 30 additional workshops and tackled new problems, and come up with action plans and changed that. In addition, they are also being inspired to really involve the operators into this also. Operators are now trained in more simplified versions of root cause problem-solving, five times why and so on. Fantastic. It is extremely fun to be out there and see how this is inspiring people, and they really want to look for improvements. But now it is to make it sustainable, and that is of course, the challenging part. We have a long way in front of us to make it sustainable, but we are really well on track. Petter will also tell you then a little bit more about one of the elements we are doing to add on to this to make the likelihood of this being sustainable even higher, and that's on digital versions of it. Thank you, Kristin. I think we are both happy we are not pension yet. This is really exciting. You heard about the Yara Birkeland. I think we were all taken by surprise how much PR this ship got, and it's a fantastic project, but it's really one relatively small part for us about how we are working with the next level technologies. We just brought some examples of some of the pilots and some of the ways of working that we are currently using in Yara. Of course, this adds on top of the productivity system. We are so happy with the productivity system and so excited. We talk about that all the time. In the background, we are running a lot of new technology projects. The thing with this is first you need to spend some time to just make sure that they really work and that they have a business case, and then you can roll them out. We are going to do that. We have already started for some of this, and that, again, comes on top of the productivity system. I won't go into this yet, but maybe next time we can talk about some of them more in detail. To show that we really mean business with this high tech, in the break that comes up, we will be able to drive the N-Sensor in virtual reality. That's really high tech. We also have what looks like a man, but it's actually a robot making coffee, and that's making the Yara champion coffee from Brazil, which is free to everyone outside. Now I will communicate with the audience because I was told it's a 10-minute break and it ends at 10:10. That doesn't make sense to me because it's half past 9:00. Is it a 10-minute break, dear Thor? 30. It's a 30-minute break that ends then at 10:00. We can say 5 past. 5 past 10:00 everyone. Go meet our coffee robot and the virtual reality, and we will be back at 5 past 10:00. Nesse momento, o maior desafio dos citricultores brasileiros é cada vez produzir mais com menos área. In 2003, we decided to launch a trial which is important for the future production of citrus. It was based on fertigation, which was a new invention in agriculture to apply nutrients and water together. A Yara trouxe para o Brasil, na época, fertilizantes muito pouco utilizados na agricultura brasileira. Esses fertilizantes se mostraram extremamente eficientes para as culturas de citrus e café. We learned exactly which product to apply, what is the quantity, what is the result when reacting with the soil. So by this technique, fertigation in citrus, we manage to keep their yield utilizing a lot less water. Hoje nós temos uma produtividade média no Brasil três vezes maior. Um salto fantástico. Nós aumentamos em 300% a produtividade da citricultura brasileira, que hoje é a citricultura mais produtiva também do mundo. At Yara, we believe knowledge cannot grow in isolation. To meet the demands of a growing population, we are constantly collaborating with the greatest minds and institutions in an effort to fulfill our mission to responsibly feed the world and protect the planet. Good morning and welcome back. My name is Tove Andersen, and I am heading supply chain in Yara, and I will give you an introduction and an update to the procurement excellence initiative that we are running. A few key facts. First of all, we have set a target, and our target is to reach $150 million in real bottom-line savings by 2020 versus in 2015. If you look at our total external spend, we spend approximately $10.2 billion annually. If you then split it into what we call direct procurement, which are the raw material part, that is $6.5 billion, and indirect, which is then everything else, that is $3.7 billion. It is a significant spend, where small improvements can give really large benefits. The way that we run procurement excellence is that we do it category by category. In production, they do it plant by plant when they roll out the YPS. We do it category by category, but we create clusters of category, which we are doing in waves. In first half of 2017, we did wave one, where we then did five categories. When we do a category, what we do is that we put together a cross-functional team. We make a strategy looking at our internal demand and external supplier market, and we come up with different improvement initiatives to create value and savings. Second wave we kicked off last autumn, and we are now just in the phase of finalizing it, where we did eight categories. In total, by doing these two waves, we have identified more than 200 improvement IDs, and so far, we have realized $90 million in savings. But I think it's important to say that also procurement excellence, the same as on YPS, this is much more than just creating a one-off effect. It's really about establishing a culture and practices of continuous improvement. So also we will deliver savings after 2020 on an annual basis. To make this sustain, what we have done in procurement is that we have created a new operating model, a cross-functional operating model with three key building blocks. It's linked to processes, to tools, and to people. On the process side, what we have done is to develop now new processes within procurement which are really based on world-class best practices. This covers everything from how to actually make a good category strategy, to how to really run an efficient sourcing process. On the tools side, we have developed and implemented several tools. Examples of these are a new contract management system to ensure we do the sourcing initiatives in an efficient and compliant way. We have implemented a spend tool, which are now giving our category managers total transparency on his or her spend globally, so they can see what we are buying, where, from whom. We are also more category-specific tools that we have developed, everything from logistical optimization, should-cost models, and so forth. But at the heart of our new operating model is really the cross-functional teams. So what we do for each category, we put together category teams where we have representatives from the key functions that influence the spend of this category. This is really where the magic happens, because when you get these people from the different parts of the organization sitting together with idea generation, that's where we find the interesting potentials for improvement. So far, as I said, we have delivered approximately $90 million of bottom-line savings. If you look at the split so far, the majority of that has come from our raw material purchasing by working in win-win relationships with our key suppliers. So $68 million have come from that. So far, $21 million has come from the indirect categories. However, when we look forward to reach the 150, the majority of the future savings is expected to come from the indirect categories. We have now done these waves. We have identified the improvement initiatives. We are in the middle now on running and implementing those. Those will yield the benefits that we are going to see going forward. Then I wanted to show you a few examples just to give you a bit more feel for when we talk savings in this area, what are the actual savings that we are realizing. So the first example I wanted to show you is from Brazil. Packaging is a significant expense in Yara. Only in Brazil, we use $60 million annually on packaging. What we have done, or the category team in Brazil has done on packaging, is really looking at many different levers or way to get savings. One thing they did was to look at the actual bag. So we used to use a bag, a polypropylene bag with an inner liner, where we had to do manual stitching. By working with the suppliers and looking at alternatives, we have now changed the bag to a bag where the inner liner is glued to the outer bag and where there is no requirement for manual stitching. What this actually enables is that the supplier producing the bag can automate the process of actually producing the bag and making it significantly cheaper. It is a good way on how you can also, in this area, drive innovation together with the supplier. Also, one thing we have done on packaging in Brazil is that we have reduced the number of suppliers. Currently, we have gone from 17 to 11. By consolidating our demand on fewer suppliers and giving fewer suppliers more volume, we have then been able to improve the commercial terms. Another thing we are working on is the supplier power. How can we reduce the power of the supplier? In Brazil, for our big bags, we had one supplier that we were very dependent upon. We have actively worked with other suppliers to develop them and invite them in to create a competition. I think this is a good example on how we can work on many different levers. The results so far in Brazil is that we actually have reduced the annual expense on packaging through these different levers and some more with $10 million. You can really get significant savings out of this. We still have a long list of initiatives within packaging, both in Brazil and for the rest of the world, that will contribute going forward. Another example is linked to safety equipment. As you know, safety is top priority in Yara, but that also means that we have a quite significant spend on PPE, personal protective equipment, and safety equipment. Roughly, we spend $10 million annually on those kind of equipment. The category team, in this instance, has worked on looking at how can we attack this spend. The category team, in this instance, links then it will be somebody from production, it will be employee representatives, it will be HESQ employees and procurement employees together. One of the things that they looked at is what you see here, which is a self-retracting lifeline. This is then a lifeline that you mount to an anchorage point above you to avoid fall from height. What you see on the left-hand side was what we used to buy, which was a quite cheap equipment, which also meant that it had a short lifetime. Actually, after 2 months of usage, you needed to replace it. One of the sourcing ideas here, initiatives here to increase savings was actually to buy a higher quality equipment. The one you see on the right-hand side. It is 20% more expensive, but it has a much longer lifespan. It is a good example in procurement that we need to look at the total cost of ownership. It is not about cutting costs one place and then it will pop up somewhere else. Actually on these lifelines, the total cost of ownership on this change reduces the total cost with 50%. The last example I wanted to show you is linked to warehouses and terminals in Europe. In Europe, we rent approximately 180 external terminals and warehouses, and this represents a spend of approximately EUR 120 million. Again, we have put together a category team. In this instance, the category team consists of course, somebody from procurement, but it is also from industrial crop nutrition, the logistics department, so we can look at how can we manage this spend better. They have come up with many different initiatives, and I just wanted to highlight a couple of them. The picture you see here is from a port in southern France, in Marseille. What we do at that port is that we import product from Sluiskil. So it is industrial product that we import from Sluiskil close to the customers in that region. By looking at really the end-to-end cost, and we have developed a model here where we can simulate and estimate the end-to-end cost, including transportation. The idea came out that we can actually transport a much more concentrated product, and by that, reducing transport costs into this harbor, and that way offset the increased cost at the terminal to then do the last processing there. In this example, the total end-to-end cost is then reduced by 30%. Another example in this area is that we are reviewing the actual cost per ton and benchmarking that in all these terminals and warehouses. That results that we are renegotiating many contracts on, for example, committed volumes, because we see we do not need all the committed volumes. We are closing some of this because we see that it is not needed. But also we have developed a should cost model, which is the model to say how much it actually costs or estimate how much it costs for the supplier to operate this terminal, that we can then utilize when we are renegotiating the contract. That was a few concrete examples on the type of savings that you can see are building up the savings that you see in totality for the procurement excellence initiative. That was a short introduction to an update on how we work in the procurement area in a very systematic way in cross-functional teams to ensure that we do deliver value that also will sustain in the future. Thank you. Then I will hand over to Terje Knutsen, EVP Crop Nutrition, which will talk about profitable growth. Thank you, Tove. At the last Capital Markets Day, we presented our farmer-centric strategy. We also presented our aspiration of being the leading provider of sustainable crop nutrition solutions that really support the farmers' profitability through knowledge, quality, and productivity. The clue and the important part to achieve that is really to move beyond product and even move beyond crop and focus on the needs of the farmer in a much more holistic, but also in a more granular way. It is as simple but maybe as difficult as different farmers have different needs. So our growth success really requires that we have an in-depth knowledge on how we can provide a sustainable, profitable business for the farmer. But farmer needs are not static. The agricultural industry is impacted by global and also local trends that really shape the needs and requirements of both the farmers, but also along that value chain to distributors and even down to supermarkets. For us to succeed in our growth, it is very important to see those trends and follow those trends. The second part is segmentation in the middle here so that we can channel our resources where we really can add the most value. To do that, we focus on the crops. We focus very much on the farmer. That segmentation also helps us to prioritize how we use our resources and where we invest in people, in competence, in marketing, in tools, digital, but also in products, and as we will hear later, in our assets. The third element here is to work along the value chain to really understand what do the food processors need, what do the different players need, so that we can come across to farmers with something that can drive their profitability. The experience we have is that it doesn't only drive their profitability, it will drive the profitability of the food chain companies, of distributors, and obviously back to Yara. To decide where we focus and spend our resources is very important in order to achieve our growth. I will not go in detail in this, but the crop roadmap is how we try to engage our employees in crop nutrition. It's also how we try to move from a fairly conceptual strategy to very concrete targets and actions. We have about 200 crop country roadmaps, and that means that we can follow very systematically our progress in these segments. We believe that this systematic approach is key to deliver the growth, both when it comes to volume, but obviously also in value. We do grow. We have demonstrated over the last years a 5% growth in premium products, and that compares to an annual general growth in the market of 1.8%. We have had a significantly stronger growth in this segment than the general market. The biggest contributors to this has been Brazil, where we have had a cumulative average growth of 29%, followed by the remaining of Latin America, 13%. Our markets in Asia and Europe are moderately behind the growth roadmap. The forward look here, growth is already backed by announced capacity expansion projects and also third-party sourcing contracts. Obviously, volume growth is important, but maybe more importantly, value. To the left in this chart, we show how we realize premiums above the commodities. Again, how can we achieve that? We can only achieve that if we work deep in the market and systematically work with transferring knowledge and our segmentation. As you can see, the premiums are relatively stable. I think that is a consequence of us being active in many different crop segments and in many geographies. We can take out short-term fluctuations by working in this systematic way. To the right, in spite of a supply-driven market and, in many cases, low crop prices, we have been able to generate premiums at an average of EUR 1 billion annually the last years. That gives us confidence that we can continue to invest in the future and continue to grow. That brings me on to India. We have been in India, as was said earlier today, more than 20 years. But then we decided in 2010 to test out our global model. Global model means we work very deep with feet on the ground, very crop specific. We decided to go for the state Maharashtra, not all of India. India is big, complicated, many languages. So we focused on few key crops, basically the cash crops. This proved successful. We had 18 people on the ground at that time, so we decided to move south. We added crops like coffee, chili. Again, we could see that this worked. So when in 2016 the opportunity came to buy the Tata Chemicals urea business and the distribution, then we also expanded in the north. Now we are 600 employees, of which 200 are in the commercial field. Just to illustrate how we typically work, we segment the crops, and we look at where can we bring the most value. Second step is very much to engage with the farmer and to develop the best possible crop nutrition solution for that farmer to bring profitability to the farmer. We do that very much by sharing knowledge, tools and services, and to create the most value, again, for the farmer, dealer, and back to Yara. In India, being very unbalanced in nutrition, this is particularly important. Yara, more than any other company, I think can help solve that because we have a strong portfolio of all nutrients, and we have unique crop nutrition knowledge. But to reach so many farmers in a huge country like India, we need also to think how to develop new and better tools. In this, we are now very engaged in digital, both to reach more farmers, but also to become more relevant to farmers. That is the next topic we will present, but before doing that, let's have a look at a video from India. When I used to study, I thought I would not do farming. I would do some business or a good job. But the situation was such that I had to do farming. By doing farming, I am in touch with many people and have a name as well. I have quite a recognition. In that, it remains the same in whichever department I work. So there were many benefits from it. My younger daughter's father-in-law came in the month of July and said, "Brother, your sugarcane is much smaller than our sugarcane." So I felt that. I said, "Brother, when you come next time, I will show you the sugarcane." I had contact with the Yara people. I told them that I want to do this. Yara people said, "As we keep saying, keep applying it in the same way." Low sugar production is the biggest problem for the farmers. We are working with the aim of how we can give maximum knowledge to the farmer about nutrition, about crop management, how we can train him as much as possible, so that he can increase his production and his life. According to them, I worked under their guidance. My yield in this field, in 1 acre, about 600 quintal yield sugarcane will come out. It is more than double. We applied that, it increased our yield. When the yield increases, we will get good prices. Our income will increase. When the income increases, there will be happiness in the house. Everyone, the children will also be happy that brother, we got more money than before, so they will spend according to their own. The children will also be happy that we got this, we got that. People from here and there also praise a lot that brother, when Yara's product was applied, a very good yield was produced. Yesterday evening, around 5:00 P.M., I was standing in my field. Some farmers came there in a tractor trolley. They said, "Brother, we have heard a lot of praise for this sugarcane. We have come to see which sugarcane it is." I said to him that this is Co 0238 sugarcane. He looked and said, "Brother, this is not 238 sugarcane. It has a lot of 1st cane, the length of the sugarcane is very long." I said to those farmers that brother, this work has been done under their guidance. Whatever fertilizer I applied, I applied it at the behest of these Yara officials. I felt very happy to see my crop. My sugarcane was good. The farmer brothers who come to me, I would tell them the same that brother, hard work brings success. Hard work gets the support of Yara. Progress gets heart. My younger daughter's father-in-law came in September. He said, "What have you done to the sugarcane? It has become much bigger than our sugarcane." Mother, it is looking bold. I was working under their guidance. Applied Yara's product. This is their gift. The hard work is mine. He said, "Brother, the sugarcane has become much bigger than our sugarcane." After listening to him, mother, you used to say that you are a miser, you do not do anything. Mother, the result is in front of you. As you can imagine, I enjoy working in that market. In Yara, digital farming is very much a part of our core strategy. We have decided not to develop this as something fully on the sideline, but embedded in our four strategic responses. We have said that we want to develop farmer-centric solutions that integrate knowledge, but also tools, and there comes, of course, digital tools more and more into the picture. We have said that we want to have aligned market channel that can help us and enable us to transfer that knowledge. Again, digital is very important. We have said that we want to develop local and global partnerships along the value chain, and more and more, this becomes fact-based, and we need to be able to trace. Again, very important for digital. Again, the last pillar being in the forefront on innovation and R&D. We believe the digital part is moving so fast, this is something we need to be a part of. That will give us new offerings. It will give us the ability to communicate to more farmers, and it will give us an innovative edge. To present where we are and where we want to move in digital farming, I welcome Senior Vice President Stefan Fürnsinn, responsible for digital farming. Thanks, Terje. I am very excited to introduce our progress on another very dynamic part of Yara. The first question is: why care about digitization? The reason is we are in the middle of a transformational change in agriculture, as digitization in the way we communicate and interact comes together with a fundamental change in the production system on the field. This brings many new opportunities for farmers to optimize their behaviors, choices, and production, because we simply have much more insight on what is going on the field. We have it on a much smaller granularity, well below one square meter, which allows us to combine the economies of scale with a much deeper insight on the specifics on the field. That creates a lot of information that we are not able to process alone. With the combination of computer-driven systems, data analytics, machine learning, we can establish what we start to call computational agronomy. That is an aid to the farmer to make better choices, and not everybody individually try to solve the same problem based on their experience, but to tap deep into the knowledge and into the data that we have. Finally, it also connects farmers together, but it also connects them to an unmatched universe of pool of knowledge that has never been there before. This is particularly important to what we saw before, the smallholder farmers in Africa, in India, or in Asia. Not only for the farmer there are benefits in the way to make choices, but also with the real outcome. We see a step up in yield as we are able to apply products more effectively. We finally have a better toolbox to understand the concept of quality, what drives quality, and how the complex combination of nutrient programs can drive quality. We can protect the environment, as we will see. Finally, this opens a new and a significant value pool that we as Yara will take and want to take a part of. We have a rich history to build on in terms of our innovation, but also in terms of precision agriculture. Yara has been one of the first movers in the space of precision agriculture 20 years ago with the first prototypes of the N-Sensor. Maybe some of you have tested it. It is a device, was probably one of the first devices, that takes real-time information on the differences on the field to define a more optimized application of the product. Since 10 years, we have been able to build a broad portfolio of applications, from picture-driven applications to interaction and information tools for the farmer. We see a much bigger opportunity going forward, therefore have taken a strategic decision in Yara to step up our activities significantly with an ambitious but very concrete goal to be the digital leader globally in crop nutrition. How do we define our success? The first is impact. Impact in the difference we make on the farmer. That means we make a real difference. It is not just a digital textbook. Second is scale, reaching more farmers globally with our solution. Experience, which means we want to have, like all other digital industries, an easy and very rewarding, exciting information flow, too, with the farmer. Finally, value, because this is about creating a viable business for Yara. How do we get there? Our digital strategy in crop nutrition is built around our strengths. The first one is we have a unique insight into crop nutrition, that also means we focus on crop nutrition solutions in our digital strategy. We have a unique reach, as Svein Tore said, that sets us apart from anybody in the industry into 160 countries. We target all farmers. That is, farmers that are using our products, our fertilizer products, but also those that do not use our products. We tailor our offer in line with the farmer-centric strategy to the different needs in those geographies. We have a unique advantage over other players and startups in the way we can create value, building on the world-leading fertilizer business, which helps us, as I will explain in a second, to capture value in different ways. We are also very aware that we need to play the digital game like digital players do, this requires building the right capabilities and working with speed and scale as the core principles of our approach. On value creation, we tackle three distinctive areas. The first one is to support the farmer-centric strategy in our core business, which is by providing better insights on the farmer, new leads towards innovation, but also new ways to explain our value proposition and link that value proposition to the specifics of the field. That is one part. The other part is to offer services and digital products to all other farmers that are not using fertilizer products and to turn knowledge into a digital revenue stream. Finally, we have a unique opportunity to increase the effectiveness and efficiency of our processes and operations on the commercial side, but also on the supply chain side, by providing better insights, faster responses, and new tools to these functions. Where do we stand? I would like to paint a picture for you how I see us, which is Usain Bolt. Imagine Usain Bolt, that is probably the most successful sprinter in the world, getting out in a 100-meter final of the Olympics out of the start blocks, releasing a lot of energy, running with a high speed, very focused towards his goal. At the same time, we are at the start of the race. This picture is a bit how we are building up digital farming in Yara. We are adding capabilities, we are adding our activities, and we are doing this in a fast way. We are playing the game like the digital industry does. That means we operate in what we call startups in a grown-up. That means we have cross-functional teams that build our digital solutions in the way other digital companies do, in a very agile way, and we embed them into the knowledge of Yara. This means that these solution teams have the experts that we need globally embedded, working together to develop the solutions. Some concrete examples what agile means, some of the solutions we have started to work on. We did the first farmer testing in week one of the project. We have tested concepts within six weeks with more than 50 farmers, and we had to revise after four weeks the core hypothesis of what we are trying to build, because simply the farmer would not care about what we were trying to offer them, and we changed it very fast. We have established four digital hubs globally that are the center of our activities. These are combining, on the one side, the proximity to our markets, because farmer centricity means you need to be close and you need to be fast with testing our solutions, but also with the access to the best talent that we can get to make our digital operation successful. We are doing this by inspiring in an environment that is different and provides and inspires the innovation that we have heard is at the core of what we are doing. We are also working in a culture that enables taking risks and failing cheap and fast and learning quickly. In line with building up our capabilities, we are building our offers, the digital offers, and we are building a strong organic pipeline of digital products over these months. About every three months, we launch one to two such digital solution teams with the aim to develop one leading offer in the market. We are launching commercial pilots in this season in different markets to test and to learn and to innovate. Examples are taking sensor-driven nitrogen optimization in the field to another level, but also holistic nutrient optimization. How do we put more complex combinations of our nutrients optimized way to the individual field? Finally, to offer knowledge from a crop-specific angle to farmers so they can tap into a global knowledge pool that Yara has to offer. In addition to the organic buildup of our pipeline, we have been able to successfully acquire Adapt-N, which is the world leading nitrogen optimization platform stemming out of the U.S. What is very important, it is a proven platform that stems back from 15 years of deep scientific work. This focus on knowledge and science was the one thing that from the first day where we started the conversation, has resonated on Yara side, but also on the Adapt-N side, and is now the building block for expanding the functionality and the reach of this solution using the global footprint and the knowledge that we have within Yara. That brings proven benefits that go also beyond many of our competitor tools for the farmers in terms of efficiency and yield. But very importantly, as Svein Tore mentioned, it's not only about the productivity, it's also about the sustainability that we can achieve from digital tools and solutions. The impact of a tool like Adapt-N is very substantial. We were very excited to be able to celebrate the win of Adapt-N in the Tulane Nitrogen Challenge this year with a big focus on optimizing the sustainability of farming, particularly in North America. Let's hear what our team, but also more importantly, customers say about Adapt-N. Adapt-N is a cloud-based software system that helps farmers and their advisors identify the right amount of nitrogen to apply throughout the season to drive more profit on their farm while reducing their impact on the environment. It does this by taking into account the soil characteristics, how they manage their field, and all the weather data that's occurring to identify just how much nitrogen is needed without applying any excess. As an independent crop advisor, we work with 400 farms in Western Central New York into Northern Pennsylvania. Back in the late 1990s to early 2000, many of my farmers were putting nitrogen up front before planting happened. As we learned using the model, that's not the right way of doing it. Our association started working with Adapt-N to dial in the right rate of nitrogen to put on that field. So now a lot of my farmers I work with will put some nitrogen up front, but the majority of their nitrogen is put on when the corn is about hip high up to chest high with the application tools that we have to work with to put the right rate of nitrogen based on a particular year. If it was a year that we have a lot of moisture, then we might dial up the rate a little higher according to what the model says. On dry years, we cut back the rate. That saves the farmer a lot of money and also protects the environment. The point, number one thing here, is getting the nitrogen in the crop, not into the environmental to cause impact downstreams. Adapt-N's benefits have been proven through hundreds of replicated strip trials across many commercial farms in the U.S. Through these trials, we've identified a win-win ability to drive profit for the farmer on the order of $12-$15 per hectare, while also reducing the farmer's environmental impact by reducing nitrogen loss 35%-40%. That nitrogen loss reduction is made up of both reductions in leaching loss, which can help with the hypoxia problem, for example, in the Gulf of Mexico, and also through reducing gaseous losses of nitrous oxide, which can contribute to climate change. What's in it for Yara? First, it's a new way of working with the farmers. It takes our farmer-centric strategy to the next level by broadening the ability to interact with farmers and by deepening the engagement that we can have. It advances our knowledge leadership, where knowledge is at the core of the differentiation that we are aiming for in crop nutrition. It opens new doors for creating value, but very importantly, also in line with our mission, it provides new tools to address the challenges of responsibly feeding the planet. What lies ahead? This year, it's all about capability building, innovating, and piloting. in 2019, we will have commercial launches in our core markets of highly differentiated leading digital solutions, and from 2020 onwards, we will ultimately reach global scale and thereby also have the ability to drive the impact globally. In other words, I'm very much looking forward to the next year when we will have an opportunity to discuss the first implemented success of digital farming solutions. For the next session, I'd like to welcome our CFO, Torgeir Kvidal, up on the stage. Good morning to all of you from me, too. It's a pleasure for me to be here now, and my aim today is to show you the money my colleagues have presented to you now, Yara's plan for continuously improving our business and growing it profitably. I will give you then some more details on how we invest your money and what kind of profitability you can expect going forward from those investments, and in addition, showing you two scenarios on how our profitability can develop under different market assumptions. I may have to add a third one then based on Dag Tore's scenario, but we'll come back to that maybe later. If we start with how do we invest your money, we have quite a high investment activity ongoing to build profitable growth. You see that in 2017, we invested 11.1 billion NOK, and this year, 2018, we plan to invest 17.9 billion NOK. We continue with quite a significant maintenance CapEx to run our plants in a safe way, but also to steady improve regularity. We are also aiming to make this more and more efficient year by year, getting more maintenance out from every dollar, euro, or Norwegian kroner. Petter has described on how we work on this, making it better, cheaper, and faster. On top of those maintenance investments, we have a substantial growth portfolio. You see in 2017, we are doing two major acquisitions. One of them is the Babrala investment in India, which we executed in January, $420 million. We have announced that we will buy the remaining of Vale's fertilizer activity in Brazil for $255 million. That is the yellow box in the 2018 bar. We have quite a long list on ongoing greenfield, brownfield, and debottlenecking projects, which is also going to significantly increase our production capacity and capacity to sell products over the next years. On the right-hand side here, you see that we are increasing over the next years our finished fertilizer production and ammonia production with more than 30%. Let me then go a little bit more into detail on this growth portfolio and what kind of profitability you can expect from that. Here we have listed the nine ongoing growth projects, and also indicated the EBITDA that you can expect from those investments based on a number of market assumptions. Here we have used the 2015 market prices, and I will come back to that in the scenarios. You may, of course, over time choose to put in other prices, but we will give you more detail on each of these projects, so you are able to do those calculations yourself, or you can ask your nearest sell-side analyst, of course, to do it. We have provided in this presentation a one pager on each of these projects, giving volumes, giving the estimated EBITDA at 2015 level, so you should be able to do these sensitivity analysis. You see here that based on 2015 prices, these nine projects will add close to $600 million in EBITDA to Yara's business by 2021. Another comment on that is if you look at the portfolio combination of these projects, what we have said over the last years is that we have, in a way, foreseen, and it has not been difficult to foresee, that we could come in a situation with somewhat over capacity on commodity nitrogen in 2016, 2017, and 2018 with all the capacity being built. Based on that fact and the company that Yara are, with the marketing organization of Crop Nutrition and Industrial, we are clearly focused more money into investing in premium products. You see on the top group here of NPK expansions and also urea with sulfur, that constitute about one third of the EBITDA from these projects. We are also continuing to investing heavily into our industrial segment, which you also saw is giving very good premiums on top of fertilizer. We continue to invest into Brazil, where we are building a new mine and phosphate production to supply the growing business we have there. If I then go to some of the one pagers, I will not present all nine, but point to some of them. I will start with the expansion project in Porsgrunn. That project will start production in this quarter, first quarter 2018. We are investing $330 million there, and we will be able to increase production with 250,000 tons in Porsgrunn of NPK and calcium nitrate, mainly calcium nitrate. We will also have nitric acid available there that we ship off to Glomfjord and can also increase production in Glomfjord with another 100,000 tons. These are high margin products. Terje just pointed out that he is able to get a premium of 250% on top of commodity urea value when he sells calcium nitrate. He sells calcium nitrate with a 15.5% nitrogen content with a higher price than urea, showing the quality of that product being water-soluble nitrates, not ammonium, and with a very nice calcium source. Industrial with Yves Bonte is selling it at an even higher price with his application sales into water treatment and so on. You also have a nice internal competition there on who sells calcium nitrate at the highest price. Also, the NPK, you see we get a nice price on top of the commodity values. With these prices, we estimate an internal return after tax on this project of 16% based on 2015 prices. If I were a Brit, I would probably say not too bad profitability. If you go to the next project I would like to shortly dwell on then is the new ammonia plant that we build in Freeport in Texas. That ammonia plant is not based on natural gas. It is based on hydrogen that we get delivered from Praxair. When you base an ammonia plant on hydrogen, you do not need a primary reformer. You save half of the inside battery limit investments. This plant has a very competitive investment cost of $434 million for a full size ammonia plant. It also benefits from the integration, the Verbund at the BASF site in Freeport being operated by BASF. Based on 2015 ammonia prices, this plant will give a very nice return on 17% internal return after tax. The third project that I would like to present to you to be balanced is the technical ammonium nitrate plant for use into the mining industry in Pilbara in Australia. The plant is located next to our ammonia plant in Pilbara, so a very good raw material sourcing, and it is located in a huge iron ore region, and it is the only nitrate plant in that region. It has a very good competitive position. It is a 50/50 joint venture with Orica. Our 50% represent an investment of $360 million. If you look at the profitability at this plant with 2015 prices, on 2015 prices, it does not yet yield a good profitability. When we decided this in 2012, it showed a very good profitability, but we know that the mining industry has been through a tough time with the slowdown in the economy, probably hit the bottom in 2015 into 2016. We now see an improvement, and we are able to enter into quite some new contracts for this plant now as it starts up. It started up in the middle of 2017. It has been a little bit delayed, has had some technical problems, but we expect it up and running again now in a couple of months. Based on 2015 prices, it gives a return on 6%. We have good faith that this plant, with the competitive position it has and with the gradual cyclical improvement again in the mining sector as we have seen sign of since 2015, this will also turn out to be a profitable investment. The last of the nine projects that were listed on the previous page that will show the one page rule is the Salitre project in Brazil. Here we invest $575 million to be able to produce up to 1.5 million tons of SSP equivalents. There will be a broader product mix, but measured as SSP, 1.5 million tons. Brazil is a huge importer of phosphate fertilizer, and we also import phosphate fertilizer into Brazil. To have a local efficient mine there give huge logistical advantages that we are able to tap into. We look at the profitability of this mine and phosphate fertilizer production with 2015 prices. It gives a strong profitability of an internal rate of return of 24%. The last project that I will mention that we're not at the list yet, since we have not taken it over, is the acquisition of Vale's fertilizer assets in Cubatão, which constitute of an ammonia plant, a nitrate plant, and also phosphate fertilizer. In 2016, that plant had an EBITDA of $30 million. We see huge opportunities to improve that production. We plan to invest another $80 million over the next three years to improve operations and to be able to take out synergies about $25 million per year in operations by the improvements that Petter is doing in the rest of our production system. In addition, we see huge commercial synergies here by taking this technical ammonium nitrate into the marketing concept of industrial, and also to start to sell this fertilizer in a more agronomic-focused way, also gradually upgrading it to somewhat more premium products to add margins. Leaving the growth projects then and going over to the profitability of our improvement projects under different scenarios. I will go back a little bit to the effects of our improvement program, which my colleagues already have talked about. As we see from 2015 up to 2017, we have improved our EBITDA with $242 million in that program. That is based on 2015 prices. Svein Tore already mentioned that if you use 2017 prices, the value of the production improvements will be somewhat lower of those prices, and also the value of the gas savings will be somewhat lower since the gas price is lower in 2017 than 2015. That's also something I'm quite happy for, even if the savings are lower. It's $180 million on current or 2017 prices. Some of you ask then, for good reasons, where do I find this improvement in the quarterly reporting you do when you try to explain this year's results, quarterly results, towards last year's results? First you cannot then look at the full effect from 2015 to 2017. You have to look at the yearly effect. And if you take the Yara Improvement Program from 2016 to 2017 at the prices relevant for 2017, you here see that the improvement then was $145 million. Those you should find in the results from Yara from 2016 to 2017. There is also one-off costs related to that improvement program, which was also shown by a previous slide by Svein Tore. This program had a cost in 2017 of $49 million, up from $14 million in 2016 when we started it and started to scale it up. It is an extra cost in 2017 of $35 million, which will level off until 2020 when the program finalize. You can see the full EBITDA effect of the improvement program in 2017 versus 2016 is $110 million. Where do we find that in the variance analysis? Then we have to look at year-over-year and not only the snapshot of quarter-over-quarter, which Tore initially started to present the quarter on. We look at the improvement program year-over-year, taking the last 12 months and compare it with the previous 12 months. Here you see the variance analysis from 2016 to 2017 as it is described in our quarterly report, but with a couple of additions to highlight where the effect of the improvement program kicks in. It kicks in with Petter's production improvements, the $73 million, which is 600 million NOK, comes in as extra production volumes. You could say, of course, that in the variance analysis and the profit we show there, the profit is not based in a way on production volumes, it is based on sales volumes. You have to adjust for differences in change in sales volumes development versus production. While Petter contribute with 600 million Norwegian kroner on volumes, the increase in sales volumes have been slightly lower. One reason is that we are running more turnarounds on finished fertilizer this year than the previous year, and planned turnarounds is taken out of the accounting when Petter look at the improvements. He, of course, adjust for that. That is one explanation. The other is that we have had a small build up in inventories from 2016 to 2017. These turnarounds and inventories are, of course, phasings that will swing from year to year. Over time, our sales volume increases on own produced products should, of course, match the improvement that Petter is doing in addition to the growth projects which comes on top of that. Then you have the improvements in procurement that Tore presented. That is an effect of 540 million kroner, which comes into the margin effect as such. The last element is the fixed cost, the net effect of $35 million there, which is a cost effect as such, an investment in this project. With that explanation of how the improvement program is reflected in our running results, I would like to start to look a little bit forward and try to give you some reference points of how our profitability can develop over the next years. By doing that, I will not, as neither did Dag Tore, maybe started to allude then, but I will not start to give forecast on how we think fertilizer prices or market prices in general will develop. But I will pick a couple of scenarios for you to get reference points, give you the sensitivities, and then you or your sell side analyst or even buy side analyst can make your own projections also based on that. I will start the scenarios with the 2017 results, and here you see listed the most relevant prices for Yara, and you see what that was on average in 2017. Then the first scenario I will present to you is just to update the market prices with running market prices, the current market prices. So for instance, instead of using an average ammonia price of $267 FOB Black Sea in 2017, I will use the current about $300. Or for nitrates, instead of using the average $218, I will use the $254. That is one scenario. The other scenario I will present to you is the market prices of 2015. There are two reasons why I choose 2015. One is that that is also the basis for the improvement program, since we started that with a reference to 2015. But another, I think, good reason is also that if you look at the 2015 prices, they are not far away from last five-year average. So you can say that 2015 represent quite close to the average over the last five years. A third reason could also be that if you start to think about and start to make forecast of how long-term prices should look like, and we do that internally, although we do not share it with you externally. One reasoning would be that in a rational market, over time, prices should reflect full cost of providing those products. And if you start to calculate full cost, saying what kind of prices are needed to give a reasonable, not a very good, not a very bad, but a reasonable return on new assets, those calculations may not end up very far away from the 2015 average. It could be relevant also based on that. So these are the prices that we will use for the scenarios on nitrogen fertilizer, on phosphate fertilizer, and I also have a couple of assumptions on the next slides on energy prices and on currencies. And then I use these changes in prices, use them into Yara's sensitivities, which just reflect what is Yara's capacities on these variables. So these just say that when the urea price goes up with $10, everything else stay equal. Yara's EBITDA will increase with $54 million. It just says that Yara has a production capacity of production of 5.4 million ton urea equivalence. I call it now urea equivalence because it is 4.7 million tons of urea and 700,000 tons of UAN. And the same logic for our nitrate capacity. We have a 6.1 million ton nitrate capacity, but we also sell nitro phosphate, which includes nitrates equivalent of about 4 million ton and so on. So these are the sensitivities that I used then and that you may use when you make up your own mind based on different market assumptions. Then, one other kind of information before I present the scenarios. We have decided that going forward from the first quarter of 2018, we will change our reporting to U.S. dollar. That is not dramatic for us, but it simplifies a little bit for us, and I think it simplifies for you, and it better reflects our underlying business. Fertilizer, being a global business, is a U.S. dollar business. It better reflects our underlying business and it is also the way we work and think about it internally. Instead of having to worry about Norwegian, we mainly worry about the business in U.S. dollar terms, but we previously have to report it in Norwegian kroner. When we now can skip Norwegian kroner, we can use that mental capacity for something else. We will start by reporting the first quarter. We plan to remain with the listing in Norwegian kroner. We still have to save a little bit of the mental capacity for that, and we plan to continue to pay dividend in Norwegian kroner. By the end of February, we will publish our 2017 results also in U.S. dollar. There should not be any big surprises there, or there will not be big surprises, but it will of course be a tool for you and analysts to start to model the results going forward. Although, I think that 95% of your models already is U.S. dollar based, so you can just skip the last conversion part of it. With these market assumptions and the sensitivities, this is how the scenarios look like. We start with the 2017 earnings per share, excluding special items. We reported NOK 14.94 per share, Norwegian kroner. Converted to dollar, that is $1.8 per share. How will that look like going forward at current market prices? Well, one element that we need to adjust for is tax, which we do not call the special item as such, but we had quite a favorable tax rate in 2017 due to some one-offs. We had a 17% tax rate in 2017. Actually, we had a tax income in the fourth quarter. If we adjust for that, we have to take away $0.20. The U.S. dollar has weakened slightly toward other currencies over the last year. Although that does not influence much our revenue side anymore as we report now in U.S. dollar, you could say our cost base, which is partly in euros, Norwegian kroner, and reais increased slightly. So it has a small negative effect of roughly $0.10. Gas prices have increased lately compared with the average of 2017. In Europe, it has been up a dollar from slightly above $6 to slightly above $7. That makes roughly $0.60 down. Current market prices are higher than the average of 2017, as you saw in the previous assumption slide, and that adds $1.8 per share. With the current market prices adjusted for the tax effect, we could report $2.7 per share instead of the $1.8 that we reported for 2017. My last slide, taking this further on by saying that I do not use the current market prices, but let us use the 2015 market prices, which is not far away from the five-year average. Well, then you take back a little bit the currency again, so you have a positive effect of the currency if you use the last five-year average, and you have a further positive effect of higher fertilizer prices, both the commodity prices, but also the premiums that we are able to achieve on top of that. Those price scenarios give us an EPS per share of $4.4. Then we have what we do on ourselves to improve the business. If we add on the remaining part of the improvement program, which we have said should add in total at least $500 million, up from the $232 today, I am being careful, I just add 500, I do not add at least 500. That adds another $0.70. Then we have the committed growth, where I said we are close to $600 million EBITDA, which is roughly $0.80. That brings Yara's EPS up to $5.8. For those of us which have not fully get used to the reporting of Yara in dollar, I could say that that is NOK 47 per share while we reported ex special items 15 this year. With that, I leave the word to our CEO for his wrap-up. Thank you, Torgeir. We are at the very end, so I just wanted to show a couple of slides to round up. As you see here, on this slide, Yara's growth strategy has, over time, generated strong returns to our shareholders. What you have also seen and heard today is that our current returns are negatively impacted by two main things. It is a supply-driven market for commodity fertilizers, and we have a very high ongoing investment activity in growth projects that will have main effects starting partially this year, but gradually increasing in the next few years as Torgeir went through when he presented some of the specific cases to you. It is important to keep in mind that we are here to create long-term sustainable value, and we are continuing, or we are very confident that our strong overall track record of profitable growth also will be maintained going forward. I want to conclude today's presentation with an overview of the total earnings improvements that we are targeting in the next years. On the left-hand side, we have added them together, the investments that we are making in Yara, both in the improvement program and also in the committed expansion projects. On the right-hand side, you see the combined projected earnings improvement resulting from these investments on a 2015 baseline, totaling then for both of these, $1.1 billion by year 2020. That is equivalent to NOK 16 per share. Much more than the numbers that you see on this slide, I hope that today's presentations have given you a better feel for and confidence in the work and the projects and the people that are working to execute on this. I am really pleased with the engagement that I see in our organization now, both when it comes to engagement, its direction, and momentum. I am confident that we will continue to create shareholder value, both in the next years, but also beyond this period up to 2020. With that, I will conclude our presentations for today. I will turn over to Thor Giæver, our Head of Investor Relations, and he will then manage the Q&A session that we will get into now. Okay, thank you, Svein Tore. While we get our presenters ready in position, just a bit of information. We are due or officially supposed to start lunch at 11:30. I guess we will maybe take some extra minutes to do some Q&A here. We do have at the other end, several of you set up meetings at 12:30. We have signposts for that outside as well, so we will try and make sure we have time for lunch in between that. There will, of course, you are welcome to ask questions over lunch as well if you manage to get a strategic position next to someone you want to talk to. We will also have a phone conference at 4:30 today for those who want to listen to that as well. I think then we are ready. We have a couple of microphones that can be passed around in the audience. If you have a question, I think just raise your hand and we will make a start. Let us start out on the side here. Let us see. Yes. Thanks. Christian Faitz from Kepler Cheuvreux. I have a question on digitalization. My impression is that the entire value chain in agriculture claims they will be the winners of digitalization. For example, the wholesalers selling the product to the actual farmer. What is your view on that? Who will be the value capturer or the main winner out of that? Yeah. I would hope the main winner is, amongst others, the farmer, because we are here to drive value for the farmer and for, let's say, farmers in different regions. Second, I am convinced Yara will be a winner in this game because we are combining, as I said, knowledge with now the capabilities to do it. I think everybody in the value chain has room to use digitization to improve. I think at the moment, I don't see it as a battle who takes the cake. At the moment, I think we all have many opportunities to drive value in this space where we are. I think where it gets interesting is when we talk about new ways of collaborating along the value chain. If I can take a couple of examples on our side, one is how do we work with, let's say, the food chain? If I talk about quality improvements through digital tools, if Talia talks about what we're doing with our crop nutrition solutions, that has an impact on the value that we can create together with, let's say, a coffee supplier. These are scenarios we are working on. I think the second one is if we think about collaborations that we might enter that have to do, for example, with the equipment side, where we will not be the owner of all the equipment innovation that is happening, but where we can come together with such players and together drive, for example, the precision application solutions that we have. I believe for the moment we are in a good situation that we can exploit the potential. For our strategy thereby, it is also very important to implement and focus on our opportunities and collaborate and get capabilities from those that can help us in this. If I could just add a little bit to what Stefan said, I think as you rightly point out, it is about creating value for the farmers to have something that is valuable for them. With our starting point of being farmer-centric, being close to the farmers, we have been able, historically and also now, to extract premiums from understanding and creating value for the farmers. I think that is a good starting point for then translating that into a digital solution that offers that same value. As you rightly point out, there is a lot of talk about digital at the moment, but unless you have something that is of value to the farmers, it is going to be a very difficult game out there. I think we have that good starting point, and I am very confident in the work that is going on now in this segment. Yeah, that is fair. Hi, Tom Wrigglesworth from Citigroup. Two questions. Firstly, following on from digitalization, how do you quantify the amount of money that you are willing to commit up front? Most internet companies might burn cash to start off with returns coming later. How do you square the amount of money you are willing to spend in order to be part of that longer-term gain? A second question, which is unrelated. Obviously, a huge amount of internal focus to keep your competitive edge is the communication today. Could you just identify what are the main competitive threats that you see specifically in your specialty businesses, the nitrates and NPKs that you are making sure that you are competitive against? Thank you. Yeah. I think we can start by saying we have a quite clear strategy. Just to comment also to the previous question, we are really focused on crop nutrition. This is a space where we could go in many directions, but we need to be really good and really focused at what we can contribute with. We have decided to step up in digital. We are investing now in our own organization through the hubs that have been mentioned and very concrete projects. To just give some numbers on that, when we started off this, we were around 50 employees in digital. We are now around 120, and I think we will soon be around 200, maybe 200 plus, as organic-oriented development. This is quickly going into solutions. As was presented in 2018, we are pilot launching several of our new tools, starting to really generate an income stream in 2019, but we have to also be realistic that it is key here to get scale in order to tap into that value stream. That would be coming stronger, let's say, towards 2020 and obviously beyond. I think it's also important to say that we have these three angles. We drive our own products. Again, it's all about demonstrating productivity and quality for the farmer. Through precision farming, we can do that, simply applying less and achieve more. That might be a contradiction for someone who wants to grow, but we are fundamentally believing that if we do not drive that value for the farmer, we will need to grow. We rather expand our market space and do it optimally. We have the income stream from digital solutions as such. We have said that it will be roughly two-thirds in the beginning on product, but that ratio will hopefully shift as we move on. Question on threats to- There was a question on threats from the competitive landscape. In general. Yeah. Then you refer to digital or, in general? Yeah. Professional digitals. So- Do you want me to repeat the question? Okay. The question is, we could, of course, here in this space, see newcomers, maybe coming from totally outside of the industry, that will try to take a position in that value chain and offer services. Again, we think that if we are able to be relevant and bring value to the end user, then we will have a stronger possibility to really own that interface. There could come newcomers here, and there are newcomers that are trying to replace, for instance, distribution. The key is to come with a tangible value. We think that we are early in Europe. We think we will be early in Brazil. We are also, because of our footprint, maybe late in the States, but we think that we will come with solutions that are now innovative and new so that we can tap into also a value potential in North America. The main focus we have is therefore to bring the knowledge we have into Brazil, where we have a very strong position, and to be early to bring it into the European. That is for the professional market segment. Then we work more for small holder segment in markets like Asia, Africa, and the remaining of Latin America, where the focus is much more about reaching more farmers in a more efficient way with our knowledge. I think we have a question from UBS. Yeah, thanks. Andrew Stott, UBS. It is sort of a bigger picture question about the capital allocation as you go forward over the next 5-10 years. I mean, the change in sort of tone here over certainly the last 1-2 years at Yara is move away from the cost curve focus and low cost towards having local presence. So the India acquisition, all the assets and blending you have put in Brazil, and now you are talking about Africa as well. Can you just explain the philosophy? So the local presence versus the export strategy, why you feel that going towards the former is the better thing? Well, I can give a few introductory comments to that. I think what you will see is that this will flex over time, and it is also the value of having an integrated business model is that based on where we are at in the commodity cycle, we invest where we see the greatest value creation potential. If you look now recent three, four years, we have seen that we could at an attractive investment, make acquisitions in distribution and grow the sort of downstream part of the business to drive market opportunities for more premium production. Parallel to that, we have made significant investments in our upstream assets, especially in the Nordics, that are tailored for that. So we will constantly seek where we can create the largest return. But in recent years, it has been more on the downstream side than on the upstream side of our business. Thank you. Maybe if I could add also, Andrew, then you talk about the cost curve. One element there is, of course, that the cost curve is somewhat flattening out with the globalization of the gas market. That is one element of it. When you look at the cost curve, you also have to look at transport costs. So of course, being in the middle of India is a cost competitiveness on freight compared to the import as such. The third element is, of course, that, yes, everything else equal, you would like to have the lowest possible production cost, but you also have to look at capital. So when you buy a full-fledged ammonia urea plant with a very good efficiency at $420 million, including working capital, so below $300 million, that is a good buy as such. You would not build a new ammonia urea plant in India, but you would buy at that price, and they did. Okay, we've had several questions from the vision side of the hall, so I think we'll go to the mission side. Is there a question there? Hi, it's Jeremy Redenius from Bernstein. A couple of questions, please. The first one is just back on the digital bit. I guess, have you seen any evidence of digital agriculture, particularly on inefficiency, destroying demand or slowing demand growth? I guess at the global level, based on the data you show, you don't really see it. But when I talk to a lot of the other companies in the space, it seems like that's about the nitrogen efficiency, is about the only thing that they're actually successfully getting paid for right now. I'm thinking about FieldView, for example. The first question is, do you see bits of the industry where there actually is some cannibalization? The second one is back on a very early chart about the price delta in urea between Black Sea and China. I think I understand where the China price is today based on coal prices and the supply-demand picture there. I also heard you say that the Black Sea or Egypt price should increase to that level, and I was wondering the logic that you used to make that assumption or that assertion. Thanks. So maybe I take a go on the first question on the digitization. You mentioned the word nitrogen efficiency. So how do we make money and what does it mean for the demand? I think nitrogen efficiency is also what we believe in, but what we don't believe in, that this, in every case, means less nitrogen. In many cases, it means nitrogen optimized in the use, so that you actually drive up yield. In some cases, and that what we have seen, depending on exactly the optimization on the specific field, the field zone, the weather that you have, you might actually want to apply more nitrogen in certain elements to further drive productivity. Another big lever is obviously to reduce the waste that we have. So I think where exactly the balance will land is something that, I think, will come with the scaling of the tools. I think there are certainly areas and geographies where the efficiency part, in the sense of reducing waste and thereby application, is an area of, let's say, focus. Then there will be other areas and we have seen the story about India, where actually sort of applying more fertilizer or the right type of fertilizer, right time, is the focus. So I think what is our strategy is to say we want to commercialize the knowledge about what type of fertilizer to put when, and by that, decouple that from the actual volume. I think that should also increase the credibility versus farmers, because we don't want to go there and say, "We recommend that you always use more," but we want to come there credibly saying, "We want to optimize your field, whatever it takes." I think there can be then obviously a net impact on the overall, but that is something that is not the focus of the business model we are building and it's not something that strategically we are afraid of. Yeah. On your question about the pricing developments, my starting point was that if you exclude China, the world had a deficit of 4.5 million tons of urea in 2017, basically. So those 4.5 million tons was sourced from China. But that was not sufficient to have a very close correlation between the China price and the global prices for the whole of the year, because there were then pockets where there were very slow demand and where probably the supply-demand balance outside China was positive or neutral rather than negative. Then I think I could have added to that in hindsight, I think that quite a lot of those 4.5 million tons coming from China would not have been exported if the exporters knew what was happening. Of course, we don't know that, but there were urea that were shipped to ports aiming for exports, and then a little bit disappointing price in the end. But probably better than to take the product back, which is also costly, because right now we don't see any movements like that to ports in the hope that the export market is going to be favorable compared to the domestic market. So I just wanted to If I said should, I more meant could. If you again then get this situation that there is a deficit in the global supply-demand balance ex-China, like there was for large part of 2017, there is a lack of product, then the price is logical that this global price increase towards this Chinese price and then we kind of have to see what happens then. Because as I said, in this particular environment, the Chinese market itself is very tight. I do not know if that answered. Thank you. Okay, I think we will continue with a vision question. Yes. Hi, two questions. It is Ross Turner from Pelham Capital. Two questions for me. First of all, just on the EPS bridge, which you gave us, is it possible to say, because I guess one way of looking at it as an investor is take the 2.7 run rate of EPS and then just add on the committed growth and the remaining YIP, but obviously those numbers are at 2015 prices. Is it possible to say what the 0.8 and the 0.7 are at run rate conditions? I mean, I guess they are somewhat lower, but. Yeah. You could say that it is probably on the Yara Improvement Program, it is probably roughly proportional to the adjustment that you do on what you have realized so far then, taking it down from 240 to 180. You take away 25% with those prices then. Maybe 6 and 0.5 or something like that. Yeah. Then you are at sort of what, 3.8, 3.9 or something like that. Yeah Sort of run rate post. Take away 25% of it. Okay As I said, on the YIP. On the projects, you could say that varies then from project to project. I run through I run through four of them here, then we have another five in the backups. Some actually is better at the current run rate than at 2015. One example is the expansion in Sluiskil. The reason for that is that we remove, you can say, ammonia surplus capacity, and that surplus capacity has a lower value today than in the future. So there isn't a lot of sensitivity of many of these projects related to pricing, global pricing. So maybe the 0.8 would still be 0.8 then? Yeah, it wouldn't be much lower down. Okay, so maybe 0.8 and then a 0.5 or something like that. I didn't give you a number here then, but Okay. You get to about four anyway, I guess. But yeah. Okay. Secondly, just on the NPK premium, obviously I understand that it's looking forwards over into 2018, 2019, 2020, and I know that crop prices are a big driver, but was there any other things we should be thinking about as to what might drive that NPK premium other than crop prices and farmer profitability? Any kind of supply side things on NPK specifically, or? I would start by saying that we are very focused on nitrate-based NPKs that have very clear benefits. There are also other, let's say, clear benefits with the Yara products. NPK is not necessarily NPK. That is where the segmentation comes in and is very important. It is also why we go so deep, because there is no magic fertilizer. It is like food. You can have a very healthy food, but if you eat too much of it or you eat it at the complete wrong time, it won't do you any good. It is the same with the plants. We need to combine these attributes of our products. We need to communicate that and educate in those segments where we know that we can make a very clear difference in productivity and quality. With more and more sophisticated tools on how we can drive that productivity and quality, I am quite optimistic that this is a differentiation that is possible to maintain, hopefully even grow. It is not so easy for any other competitor to copy us in that. I have more than 4,000 employees. Some of our competitors that are very commodity-driven, they sell their product FOB without getting that knowledge margin. It is very much about focusing in the right segment where we can demonstrate really that we drive the productivity and quality, which will pay, again, the farmer, which will be able to give us that premium. If current conditions persist in the medium term, if anything, you would hope to improve that. There is no reason to think it would deteriorate. Yeah, I am optimistic that the work we do are focused and going after margins where we can demonstrate that value. I think it really depends, can we create demand? Can we demonstrate sufficiently, the benefit that we generate, and is the ratio between cost benefit sufficiently high? This is obviously something we monitor all the time, through all our sales agronomists. Thank you very much. Okay. Unfortunately, I think we need to stop there if we are going to get lunch at all. As I said, there are more opportunities. Feel free to keep asking us questions over lunch. We are available, of course, at other times as well. I have to correct myself, the phone conference later is at 4:00, not 4:30, as I said. One other piece of information. Feel free to pick up a bag of Yara coffee from Brazil on your way out. The food is to the right, a buffet when you come out, and there is also seating that way. I think the final message is then thank you very much for coming to Yara's Capital Markets Day.

Data Source: Quartr Last updated: Feb 8, 2018

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