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Oci Nv — Investor Presentation (October 2020)
32 slides from Oci Nv's investor presentation, October 2020
Slide 1: OCI NV Investor Presentation
OCI NV Investor Presentation October 2020
Slide 2: Disclaimer
Disclaimer This presentation ("Presentation") has been prepared by OCI N.V. (the "Company"). By accessing and reading the Presentation you agree to be bound by the following limitations: This Presentation does not constitute or form a part of, and should not be construed as, an offer for sale or sub
Slide 3: Agenda
Agenda 1 Key Investment Themes 2 Market Insights 3 Concluding Remarks 4 Appendix 3
Slide 4: Diversified Global Leader in Fertilizers and Industrial Chemicals
Diversified Global Leader in Fertilizers and Industrial Chemicals Significant Investments in New Capacity Diversified Product Portfolio State of the Art and Young Asset Base Completed OCI’s Capacity Growth 2008 – 2020 (mtpa) 2020 Production Capacity by Product 56% Youngest asset base relative to glo
Slide 5: Safety First: Commitment to Zero Injuries
Safety First: Commitment to Zero Injuries OCI is committed to providing a safe and healthy workplace for all employees and stakeholders by implementing the highest international safety standards to avoid any potential risks to people, communities, assets or the environment ▪ Goal to achieve leadersh
Slide 6: OCI N.V.'s Commitment to a Sustainable World
OCI N.V.’s Commitment to a Sustainable World 6
Slide 7: Investing in Sustainable Fuel Solutions and Industrial Precursors
Investing in Sustainable Fuel Solutions and Industrial Precursors Investing in developing products and initiatives to provide cleaner and more sustainable solutions to our customers Bio-Methanol / Methanol as an Alternative Fuel Decarbonizing our ammonia production ▪ Leading bio-methanol producer: O
Slide 8: Volume Growth Delivered; Price Recovery to Accelerate Deleveraging
Volume Growth Delivered; Price Recovery to Accelerate Deleveraging Deleveraging of $222 million in H1 2020 despite Trough Cycle Conditions Key Themes Delivering New Capacity Ramp-up Benefit from Competitive Cost Positions Well Positioned for Market Upsides Volume growth in 2020 and 2021 Cash convers
Slide 9: Nitrogen is a Main Driver of 2020 Volume Growth…
Nitrogen is a Main Driver of 2020 Volume Growth… Own-Produced Sales Volumes (Mt) Methanol expected to drive volume growth in 2021 Nitrogen main driver of growth in H1 2020: ▪ Strong operational performance ▪ On like-for-like basis H1 2020 nitrogen volumes improved 10% YoY 9.9 ▪ Completion of Fertigl
Slide 10: … Methanol Demonstrating Ramp-Up with Record Production in Q3 2020
… Methanol Demonstrating Ramp-Up with Record Production in Q3 2020 Total Methanol Production Volumes1 (Kt) Conversion into FCF Record methanol production despite pre- 700 emptive shutdown for hurricane Laura 600 500 400 300 200 100 0 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2
Slide 11: Capex Sustainably Low in Foreseeable Future
Capex Sustainably Low in Foreseeable Future Capex and Production Capacity Commentary Conversion intoQ4 FCF2019 Total capex (US$ m) Total capacity (Mtpa) End-2019 1,200 18 ▪ Sustainably low maintenance capex 1,000 15 ▪ Growth capex program finalized in 2019 ▪ Production capacity has doubled from c.8
Slide 12: Agenda
Agenda 1 Key Investment Themes 2 Market Insights 3 Concluding Remarks 4 Appendix 12
Slide 13: Outlook for Nitrogen Fertilizers into 2021 Considerably More Favourable
Outlook for Nitrogen Fertilizers into 2021 Considerably More Favourable Tightening Global Nitrogen Supply and Demand Balance Significant upside for prices: attractive supply-demand Prices reached trough cycle levels in Q2 2020 fundamentals and steepening cost curve Urea, CAN and UAN Pricing1 ($/t) M
Slide 14: Limited New Supply Additions to Support Improving Prices
Limited New Supply Additions to Support Improving Prices Urea capacity additions slow relative to 2015-19 Merchant ammonia market expected to significantly tighten Global urea capacity additions ex-China, Mt Global ammonia capacity additions ex-China ex-urea, Mt 4 24.1 Capacity additions over the ne
Slide 15: Higher Costs for Marginal Producers Supportive of Prices
Higher Costs for Marginal Producers Supportive of Prices Global Feedstock Prices 2016-2020F Cash Costs per ton of Ammonia 2016-2020F USD/MMBtu USD/t Marginal costs are Futures indicate annual 700 16 expected to escalate averages HH expected to on high end of cost 14 stay below $3 per MMBtu 600 curve
Slide 16: Industrial Demand is Recovering, Benefiting Industrial Nitrogen and Methanol
Industrial Demand is Recovering, Benefiting Industrial Nitrogen and Methanol Industrial nitrogen markets Methanol Ammonia1 ($/t) Methanol1 ($/t) 800 600 700 500 600 400 (19%) 500 (19%) 400 300 (34%) 300 200 200 Ammonia prices still near trough and US spot prices have rebounded since trough below cas
Slide 17: OCI has an Excellent Position on the Methanol Global Cost Curve
OCI has an Excellent Position on the Methanol Global Cost Curve Methanol global cost curve – August 2020 Low cost position attributable to advantageous access to Delivered cash cost to coastal China main ports (net available capacity) 1 feedstock and distribution infrastructure 450 Q3 2020 Annualize
Slide 18: Agenda
Agenda 1 Key Investment Themes 2 Market Insights 3 Concluding Remarks 4 Appendix 18
Slide 19: Conclusions
Conclusions Commentary Deleveraging Supported by Free Cash Flow Generation Volume growth substantially delivered Net Debt1 (US$ m) Deleveraging despite trough o Demonstrated deleveraging in trough market conditions pricing conditions Limited downside to selling prices 4,163 4,059 4,062 o Trough leve
Slide 20: Debt Maturity Profile – Pre and Post Refinancing October 2020
Debt Maturity Profile – Pre and Post Refinancing October 2020 Limited Debt Amortization and Ample Liquidity Reducing Refinancing Risk and Extending Maturity Profile Liquidity post refinancing @ 9 Oct 2020 (US$ m) Weighted Average Group Debt Maturity Profile: Extended by c. 0.5 years Cash 510 ▪ OCI N
Slide 21: Prudent Financial Policy, with a Focus on Deleveraging
Prudent Financial Policy, with a Focus on Deleveraging ▪ Focus on deleveraging towards 2.0x net leverage Financial Leverage ▪ Free cash flow will be prioritized to repay gross debt ▪ Senior executive management incentives are aligned with deleveraging objectives ▪ Continue to optimise and simplify c
Slide 22: Agenda
Agenda 1 Key Investment Themes 2 Market Insights 3 Concluding Remarks 4 Appendix 22
Slide 23: Appendix
Appendix A Company Information B Market Information 23
Slide 24: Leading Global Producer and Distributor of Nitrogen Products and Methanol
Leading Global Producer and Distributor of Nitrogen Products and Methanol Nitrogen Products Methanol % of Jun-20 79% 21% LTM Revenue1 Products Ammonia, urea, CAN, UAN, DEF and melamine Methanol # of Plants 6 3 ▪ 3rd largest global producer of nitrogen fertilizers ▪ 5th largest global methanol produc
Slide 25: Nitrogen Production Capacity and Commercial Footprint
Nitrogen Production Capacity and Commercial Footprint Nitrogen Footprint Iowa Fertilizer Company (IFCo) - Iowa, US Egyptian Fertilizer Co (EFC) – Egypt ▪ Production and sales started ▪ Acquired: 2008 April 2017 Product ktpa Product1 ktpa Urea 1,648 Ammonia (net) 195 UAN 1,832 Urea 438 DEF 1,019 Egyp
Slide 26: Fertiglobe Has Further Consolidated OCI's Global Position
Fertiglobe Has Further Consolidated OCI’s Global Position First-of-its Kind Export Platform Urea and Ammonia Global Seaborne Export League Table1 Sellable Ammonia and Urea Export League Table (Mtpa) 6.5 ▪ Fertiglobe commenced Sep 30th 2019: Player #2 6.3 o Abu Dhabi National Oil Company (ADNOC) and
Slide 27: Methanol Production Capacity and Commercial Footprint
Methanol Production Capacity and Commercial Footprint United States Global OCI Beaumont (Texas, US) OCI Methanol Marketing Product ktpa ✓ Wholly owned subsidiary marketing OCI’s 3.0Mt of Methanol 1,0041 methanol portfolio globally Ammonia 356 ✓ The distribution platform’s global footprint and distri
Slide 28: Flexible Production Capabilities to Maximize Returns
Flexible Production Capabilities to Maximize Returns Max. Proven Capacities¹ ('000 metric tons) Total Total Total2 Ammonia Ammonia Plant Country Urea UAN CAN Fertilizer Melamine4 DEF Nitrogen Methanol OCI NV (Gross) (Net)3 Iowa Fertilizer Company5 USA 926 195 438 1,832 - 2,465 - 1,019 3,484 - 3,484
Slide 29: Appendix
Appendix A Company Information B Market Information 29
Slide 30: Chinese Urea Exports Expected to Be Range Bound
Chinese Urea Exports Expected to Be Range Bound Chinese urea exports reach new normal... … originating from a high cost base Chinese urea exports, Mt Chinese urea costs and price, $/t 13.7 Anthracite Urea Cost to FOB FOB China Prills 13.6 Marginal exporter has proven to be 8.9 300 disciplined in 202
Slide 31: Robust Indian Demand and Imports
Robust Indian Demand and Imports Indian Urea Sales Reach Record Highs… …Leading to Higher Urea Import Demand Indian urea sales, 12 month moving average, Mt Indian urea imports, Mt 3-4 Mt expected 39 12 to be imported in Q4 Indian urea sales record consistent 37 long-term growth 10 35 8 33 6 31 4 29
Slide 32: For OCI N.V. investor relations enquiries contact
For OCI N.V. investor relations enquiries contact: Hans Zayed hans.zayed@oci.nl T +31 (0) 6 18 25 13 67 OCI N.V. corporate website: www.oci.nl 32