Fertiglobe Plc · ADX:FERTIGLB
Fertiglobe — Q2 2024 Earnings Presentation
33 slides from Fertiglobe's earnings presentation, Aug 1, 2024
Slide 1: Q2 2024 Investor Presentation
Q2 2024 Investor Presentation 1 August 2024 1
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or f
Slide 3: Table of Contents
Table of Contents Highlights Q2 2024 Financial Performance & Updates Market Outlook Appendix 3
Slide 4: Safety First
Safety First Commitment to Zero Injuries Target Zero Injuries at All Facilities 12-month rolling recordable incident rate to 30 June 2024 • Achieve leadership in safety and occupational standards 0.05 incidents per 200,000 manhours across the operations • Fostering a culture of zero injuries at all
Slide 5: Fertiglobe at a Glance
Fertiglobe at a Glance Leading Nitrogen Fertilizer Exporter Globally 4 World-class Strategically Located Production Facilities and Unique Ammonia Platform Early Mover in Current Ownership Structure Sustainable Global In-House Distribution Ammonia 50.0% Capabilities including ~1,000kt Storage Capacit
Slide 6: Executive Summary
Executive Summary ► Fertiglobe reported Q2 2024 revenues of $496m and adjusted EBITDA of $156m. H1 2024 revenues and adjusted EBITDA were $1,048m and $378m, respectively. ► Despite gas supply disruptions in Egypt, Q2 2024 own-produced sales volume were down only marginally by 2% Y-o-Y and were up 1%
Slide 7: A New Chapter in Fertiglobe's Journey
A New Chapter in Fertiglobe’s Journey ADNOC to Acquire OCI’s 50% stake in Fertiglobe ADNOC has agreed to acquire OCI’s 50% stake in Fertiglobe, making ADNOC the majority shareholder of Fertiglobe (86.2%) post closing, pending standard legal and regulatory approvals. The free float listed on ADX rema
Slide 8: Recent Price Increases Supported by Tighter Ammonia and Urea Markets
Recent Price Increases Supported by Tighter Ammonia and Urea Markets Ammonia prices hit $500+/t CFR Europe at start of Q3 on limited supply; Chinese export restrictions tighten urea markets Resilient prices backed by fundamental N demand Global ammonia trade recovery expected Healthy prospects for N
Slide 9: Fertiglobe Wins H2Global Bid for Supply of Renewable Ammonia into EU
Fertiglobe Wins H2Global Bid for Supply of Renewable Ammonia into EU First-of-its kind offtake contract for renewable ammonia Renewable Ammonia Output / Offtake Fertiglobe wins bid based on financial and extensive technical criteria in first-of- its-kind ‘double-auction’ mechanism, for a contract
Slide 10: Green Hydrogen and Ammonia Project in Egypt
Green Hydrogen and Ammonia Project in Egypt Project Milestones Securing first ever renewable ammonia offtake worth €397m Commissioning of first phase during COP27 in 2022 Completed shipment of ISCC Plus-certified renewable ammonia in 2023 Fertiglobe wins unique H2Global offtake contract to Eur
Slide 11: Ta'ziz Low Carbon Ammonia Project in the UAE
Ta’ziz Low Carbon Ammonia Project in the UAE Project Milestones World-scale 1mtpa low-carbon ammonia production Fertiglobe and partners have taken FID and construction contract awarded in Q2 2024, with capacity operations scheduled to commence in 2027. Attractive return profile with double digit
Slide 12: Fertiglobe's Key Investment Highlights
Fertiglobe’s Key Investment Highlights 1 Leading nitrogen fertilizer exporter globally and unique ammonia platform Strategically located asset base and global distribution capabilities driving structurally higher 2 realized prices High quality asset base at attractive cost curve position underpinned
Slide 13: Table of Contents
Table of Contents Highlights Q2 2024 Financial Performance & Updates Market Outlook Appendix 13
Slide 14: Q2 2024 Results Summary
Q2 2024 Results Summary Summary Key Financials1 and KPIs $ million unless otherwise stated Q2 2024 Q2 2023 %Δ H1 2024 H1 2023 %Δ • Notwithstanding significant gas supply disruptions in Egypt, which impacted overall Revenue 495.7 551.5 (10%) 1,047.6 1,245.2 (16%) output during the quarter, Fertiglobe
Slide 15: Q2 2024 Financial Summary
Q2 2024 Financial Summary Own-produced sales volumes (MT) Key Product Benchmark Prices, $/t Revenue ($m) Ammonia Middle East -10% 1.41 Urea Egypt 1.39 400 -4% +20% 0.29 0.32 350 300 552 496 250 200 1.12 1.07 335 321 307 0.99 256 150 0.95 100 50 0 Q2 2023 Q2 2024 Urea EgyptQ2 2024 Q2 2023 Ammonia Q2
Slide 16: Q2 2024 Free Cash Flow Build-Up
Q2 2024 Free Cash Flow Build-Up Reconciliation of Q2 2024 EBITDA to Free cash flow ($ million) 16
Slide 17: Strong Revenue Profile Translating Into Robust EBITDA and Cash Flow
Strong Revenue Profile Translating Into Robust EBITDA and Cash Flow Generation Through Low Capex EBITDA Margin and FCF Conversion Advantages Result in Ample Dividend Capacity Revenue Favourable geographical positioning and centralized commercial strategy leveraging on unique distribution platform al
Slide 18: Table of Contents
Table of Contents Highlights Q2 2024 Financial Performance & Updates Market Outlook Appendix 18
Slide 19: Nitrogen Markets Underpinned by Robust Upstream & Downstream Drivers
Nitrogen Markets Underpinned by Robust Upstream & Downstream Drivers Drivers Support Demand Driven Environment Current cycle 26% 2024/25 corn stocks-to-use ratio $4.4/bushel ROBUST CROP PRICES and AFFORDABILITY SUPPORT NITROGEN DEMAND AND PRICE LEVELS corn futures May24 – Dec261 10-Y average (excl.
Slide 20: Agricultural Fundamentals
Agricultural Fundamentals Grain stocks-to-use ratio below the 10-year average maintaining farm incomes and increased planted acreage to rebuild stocks, supportive of nitrogen demand prospects Crop prices supported by stocks:use ratio below 10-year average Urea affordability rangebound, better vis-à-
Slide 21: Limited Chinese Exports & Imports from Key Markets Supportive Of Urea Prices
Limited Chinese Exports & Imports from Key Markets Supportive Of Urea Prices Indian New Capacity Does not Cover Shortfall in Supply. Imports Chinese Exports Curtailed on Tighter Governmental Policy lower y-on-y, but at ≤5 Mt India remains among top 3 urea China urea exports, Mt India imports, Mt imp
Slide 22: Limited New Nitrogen Capacity, Offset by Higher Demand
Limited New Nitrogen Capacity, Offset by Higher Demand Slower pace of new urea capacity additions with good visibility given ~5- Merchant ammonia market expected to be underpinned by demand recovery year project lead time. Robust nitrogen demand for ag & tech use. & cost curve economics Ammonia capa
Slide 23: EU Gas Costs Remain Elevated vis-à-vis Major Export Hubs
EU Gas Costs Remain Elevated vis-à-vis Major Export Hubs & Production Centers Global Feedstock Prices 2017-2025F, $/MMBtu Cash Costs per ton of Ammonia 2017-202F, $/t Global differentials between US, North Africa and EU marginal costs remain wide 20 800 Arbitrage between international ammonia pricin
Slide 24: Fertiglobe Positioned on First Quartile of Nitrogen Cost Curves
Fertiglobe Positioned on First Quartile of Nitrogen Cost Curves Benefit from attractively priced, long-term gas contracts and low conversion costs Long-term attractive gas supply agreements with EGPC in Egypt, Sonatrach in Algeria, and ADNOC in Abu Dhabi supporting advantageous cost position You
Slide 25: Accelerating Low Carbon Ammonia Demand Driven by New Applications
Accelerating Low Carbon Ammonia Demand Driven by New Applications Demand from Low Carbon Application is Materialising Rapidly in the Near Term Million tonnes ammonia • Maritime Fuels (15% of Total 2030 Low Carbon Demand) 1• Maritime sector increasingly incentivised to adopt clean ~45 Mt fuels partly
Slide 26: Ammonia Bunkering Potential Upside Based on Engine Orders & Retrofits
Ammonia Bunkering Potential Upside Based on Engine Orders & Retrofits Ammonia Newbuild Vessels And Retrofit Conversions To Accelerate Ammonia Vessel Adoption Pathway Ammonia potential fuel uptake based on Lloyds 2023 estimates for ships (new build and retrofits) 1 Number of ammonia ready and ammonia
Slide 27: Low Carbon Ammonia Supply will be Slow to Commission
Low Carbon Ammonia Supply will be Slow to Commission <25% of Project Announcements Get Built, and <30% Realized on Time Significant Low Carbon Ammonia Supply Bottlenecks Firm nitrogen projects in 2008 pipeline, ex-China, Million Mt Firm US nitrogen projects in 2018 pipeline, Million Mt Bottleneck De
Slide 28: Table of Contents
Table of Contents Highlights Q2 2024 Financial Performance & Updates Market Outlook Appendix 28
Slide 29: June 2024 Leverage Position
June 2024 Leverage Position Fertiglobe Ends June 2024 with Net Debt of $881 million $ million 30-Jun-24 31-Dec-23 Cash and bank balances 726.2 759.8 Loans and borrowings - current 149.6 174.9 Loans and borrowings - non-current 1,457.2 1,490.2 Total borrowings 1,606.8 1,655.1 Net debt 880.6 905.3 Net
Slide 30: Reconciliation of Adjusted EBITDA and Adjusted Net Profit
Reconciliation of Adjusted EBITDA and Adjusted Net Profit Reconciliation of reported operating profit to adjusted EBITDA $ million Q2 2024 Q2 2023 H1 2024 H1 2023 Adjustment in P&L Operating profit as reported 84.9 148.4 231.2 376.2 Depreciation and amortization 69.4 68.9 138.3 136.3 EBITDA 154.3 21
Slide 31: Reconciliation of EBITDA to Free Cash Flow and Change in Net Debt
Reconciliation of EBITDA to Free Cash Flow and Change in Net Debt Reconciliation of EBITDA to Free Cash Flow and Change in Net Debt $ million Q2 2024 Q2 2023 H1 2024 H1 2023 EBITDA 154.3 217.3 369.5 512.5 Working capital 2.2 (16.7) 3.1 (6.8) Maintenance capital expenditure (16.2) (30.7) (34.8) (41.7
Slide 32: Fertiglobe Gas Contracts Overview
Fertiglobe Gas Contracts Overview Attractively Priced Fixed Gas Contracts Ensure Fertiglobe is Competitive Through the Nitrogen Cycle (1) Gas Supplier ADNOC GASCO(2) EGPC(2) Sonatrach Contract Start Date 2019 2005 - 2006 2008 2013 Contract End Date 2044 2030 - 2031 2028 2033 Annual Contract Volume 5
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