BoD report 2008

In 2008, Yara achieved its best results so far. During the market slowdown caused by the global financial crisis at the end of the year, Yara benefited from its unique, flexible business model and is well positioned for both a recovery in demand and pursuit of further growth initiatives.

Yara has delivered strong results since its listing on the Oslo Stock Exchange in 2004, having implemented several projects to boost growth and taken an active role in the restructuring of the fertilizer industry. During 2008, Yara delivered on its industry shaper vision and growth ambitions with several important initiatives, the largest of which was the acquisition of the Canadian-based company Saskferco.

Yara managed to mitigate the effects of the financial crisis towards the end of 2008, benefiting from its flexible business model. Although production was temporarily curtailed, inventories were deliberately increased to prepare for a fertilizer market recovery in 2009. The Board of Directors considers the long-term fundamentals for fertilizer demand to remain strong and that Yara is well positioned to deliver in 2009 and beyond.

Strategy and execution

Yara is a chemical company that primarily focuses on the production, distribution and sale of nitrogen chemicals. The main application is fertilizers, while industrial uses are also an important segment. Yara uses its scale and flexibility to ensure reliable supplies of mineral fertilizer and related industrial products to customers worldwide.
Financial performance and operations

Net income after minority interest was NOK 8,228 million (NOK 28.27 per share) in 2008 [1], up from NOK 6,037 million (NOK 20.60 per share) in 2007. Yara’s after-tax measure for return on capital, CROGI (Cash Return On Gross Investment), was at 22.8 percent [2] compared to a target of minimum ten percent average over the business cycle.
Corporate citizenship

With its unique global presence, Yara is well positioned to influence key global issues. The company has adopted a corporate citizenship approach based on the role it plays – and can play – in society, contributing to major global challenges as energy supply, climate change, food security, and health concerns through its core business and corporate competence.
Governance and company

Yara believes good corporate governance drives sustainable business conduct and long-term value creation. Yara aims to exercise corporate governance in a manner representative of an ambitious and responsible multinational company, and has established practices adapted to the specific challenges facing it as the world’s largest global fertilizer company.
Outlook

The global financial turmoil is impacting economic growth. No industry can expect to be unaffected by the sharp economic slow-down, but food demand is less income-elastic than most consumer and investment goods, and world population growth is continuing.