Yara Cut to HOLD - A Call on the Cycle, Not the Quality

Research evidence excerpt

Yara Cut to HOLD - A Call on the Cycle, Not the Quality

entiment, and a lower

price deck leads us to take a more cautious view on the near to medium-term ag backdrop.

We forecast Q2 EBITDA of $1,074mn, up 65% yoy but 2% below VA cons.

Exhibit 1 - Corn, Soy, Wheat Farmer Net

IncomesStrategically, the core investment case remains intact. Yara continues to screen as one of 50%

the highest-quality nitrogen platforms globally, supported by its global production footprint, 40%30%20%

0%downstream nitrates integration, and optionality in clean/blue ammonia. The company’s -10%10%

improvement agenda and capital discipline remain credible, and we see no change to -20%-30%

-50% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026F 2027Fthe medium-term framework of value creation through cycle management and portfolio -40%

CSW Average Price Change (%) Average net profit margin (%) - ex Labour opp cost

optimisation. Our only nuance is around timing of FID. With management continuing to guide . SoyWheatfarmerfarmernetnetprofitprofitmarginmargin(%)(%)- ex- labourex labouroppoppcostcost Corn farmer net profit margin (%) - ex labour opp cost

to a 1H26 FID, we see a greater likelihood of slippage than before on capex inflation and/or Source: USDA, Factset, Bloomberg, Jefferies Research

policy uncertainty. Importantly, we view this as evidence of discipline in maintaining return Exhibit 2 - European Gas Price vs. US Gas

thresholds in a volatile macro environment. Price ($/mmbtu)

$60 8x

$50 7xFinancially, the model remains robust, but medium-term cash generation moderates. Our 6x

5x

lower nitrogen assumptions into the outer years translate into ~9% lower EBITDA on average $40$30 4x (EU/US)