Oci Nv · EURONEXT:OCI
Oci Nv — BMO 13th Annual Farm to Market Conference 2018
30 slides from Oci Nv's conference presentation, May 17, 2018
Slide 1: Investor Presentation
Investor Presentation BMO 13th Annual Farm to Market Conference, New York 17 May 2018
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: OCI is a leading global provider and distributor of fertilizers and industrial chemicals
OCI is a leading global provider and distributor of fertilizers and industrial chemicals % of sales1 50% 50%2 Fertilizers Industrial Chemicals Products Ammonia, urea, CAN and UAN Methanol, melamine, DEF and industrial ammonia 4th largest global producer of nitrogen fertilizers by 5th largest global
Slide 4: A 10-year journey to become a globally diversified platform
A 10-year journey to become a globally diversified platform 2008 2013 Run-rate Site locations 1 5 8 Capacity: 1.3mtpa Capacity: 7.5mtpa Capacity: 13.4mtpa US (including 50% of Natgasoline) 13% North Africa Capacity split by 33% US geography1 Europe 39% 29% North North Africa Africa 58% Europe 100% 2
Slide 5: Production capacity footprint is well-positioned globally
Production capacity footprint is well-positioned globally1 US Europe Export Facilities Iowa Fertilizer Company (IFCo) - Iowa, US OCI Nitrogen – Netherlands Egyptian Fertilizer Co (EFC) – Egypt ▪ Production and sales ▪ Acquired: 2010 ▪ Acquired: 2008 started April 2017 ▪ 100% owned ▪ 100% owned ▪ 100
Slide 6: Key highlights
Key highlights 1 A global leader in nitrogen with excellent diversification 2 Favorable positioning on the cost curve with state-of-the-art asset base 3 Substantial cash generation ability post end of capex program with volume ramp up 4 Highly strategic locations allow for enhanced netback pricing g
Slide 7: Global leader in fertilizers and industrial chemicals
1 Global leader in fertilizers and industrial chemicals… Global Nitrogen fertilizer capacity in 20171 30 23.4 23.0 14.8 12.81 12.3 9.4 ✓ Globally competitive cost 25 positions Fertilizers 20 ✓ Advantageous selling price mtpa 15 10 position in the US Midwest Corn 5 Belt and US Gulf Industrial Hub, 0
Slide 8: … with excellent diversification across products and geographies
1 … with excellent diversification across products and geographies Production capacity by products 2016 maximum capacity Run-rate maximum capacity1 Fertilizer Fertilizer Industrial Industrial ammonia 12% ammonia ammonia ammonia 17% 9% DEF 6% 6% ✓ Different end-markets Melamine 3% Melamine Urea and s
Slide 9: Favourable positions on the global cost curve for fertilizers…
2 Favourable positions on the global cost curve for fertilizers… Urea global cost curve – Ex-Works or FOB plant production costs (2017) Key cost items ($/mt) $400 ▪ Energy (Natural gas) – Most important cost factor, with $350 OCI benefitting from excellent locations with low cost supply and favorabl
Slide 10: …as well as the global cost curve for methanol
2 …as well as the global cost curve for methanol Methanol global cost curve – 2018 delivered cash cost to coastal China main ports (net available capacity) $600 2018E China demand (Jan 18 update) $500 $400 ✓ Positioned at the low end of the Methanol cost curve2 US$ per metric ton CFR East China1: $3
Slide 11: OCI's low cost position attributable to advantageous access to feedstock and distribution infrastructure
2 OCI’s low cost position attributable to advantageous access to feedstock and distribution infrastructure… US Europe North Africa ✓ Access to natural ▪ Access to low ▪ Optionality to ▪ Access to low ▪ Top quartile ▪ Access to bio- ▪ 20-25 year gas ▪ 20 year take-or- gas feedstock cost US shale sour
Slide 12: …with high plant efficiency at the OCI Nitrogen facility
…with high plant efficiency at the OCI Nitrogen facility as a result of significant 2 investment Competitive energy efficiency of European ammonia plants1 (GJ/mt NH3 LHV) 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 39-49 36-38 33-35 32 32 32 32 32 33 31 31 31 30 30 30 28 29 29 25 1 2 3 4 5 6
Slide 13: Favorable feedstock price dynamics
2 Favorable feedstock price dynamics Abundant US shale gas development has pushed gas prices down 1 ($/mmBtu) $5.50 $5.00 2015 forward curve $4.50 $4.00 2017 forward curve $3.50 $3.00 $2.50 Current forward curve $2.00 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Jun-26 Jun-27 Excess LNG s
Slide 14: Benefitting from the youngest asset base relative to peers
2 Benefitting from the youngest asset base relative to peers OCI's capacity breakdown per vintage (% of total capacity) Based on OCI Capacity: 13.4mtpa1 (including 50% of Natgasoline) 2 3 OCI Nitrogen BioMCN EFC EBIC Sorfert OCIP IFCo Natgasoline Youngest asset base relative ▪ $5bn+ spent on new inv
Slide 15: Substantial cash generation ability post extensive capex program
Substantial cash generation ability post extensive capex program directed towards 3 deleveraging Increasing run rate capacity (million mtpa)1… 13.4 +49% Net ammonia ▪ Completion of major $5bn+ capex program Urea 9.0 – No remaining material growth capex other than CAN UAN restart of mothballed second
Slide 16: Global footprint allowing exports to achieve highest netbacks for products
4 Global footprint allowing exports to achieve highest netbacks for products A Global Placement Capabilities ▪ Strategic locations serving high demand regions ▪ Pipeline, rail and sea access ▪ 1.5mtpa of warehousing capacity globally 3.7 N America 10% Europe B 1.9 38% Asia North African facilities c
Slide 17: Commercial Strategy that Optimizes Storage Assets
4 Commercial Strategy that Optimizes Storage Assets Historically seasonally low prices in July / August each year UAN Seasonality (US Cornbelt UAN Spot Price) 315 US$ / short ton 265 215 165 Commercial Strategy 115 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Urea Seasonalit
Slide 18: Logistical advantages yielding inland premiums
4 Logistical advantages yielding inland premiums UAN and ammonia inland premia versus US Gulf coast prices ✓ 250 ($/mt) ▪ IFCo is positioned advantageously at the centre Ammonia US Midwest Premium 200 of the US Midwest Corn Belt 150 Average ▪ High transportation costs for products imported 100 into
Slide 19: Structural supply-demand imbalance expected to support fertilizer prices
5 Structural supply-demand imbalance expected to support fertilizer prices Global urea capacity additions (ex-China) to slow to below demand …positioning for fertilizer price recovery 1 growth… $ per mt 800 Nigeria India USA Egypt Europe & CIS Iran Indonesia Bolivia million mtpa 700 5.0 600 4.2 Mid-
Slide 20: Decline in Chinese urea exports on the back of new environmental regulations
Decline in Chinese urea exports on the back of new environmental regulations and 5 higher coal prices Historical Chinese urea exports and pricing ('000 mtpa) $/t 16,000 600 13,555 13,748 14,000 500 12,000 Chinese urea 8,265 400 10,000 8,871 exports in Q1 7,026 2018 were 8,000 6,948 300 ~295kmt vs. 5
Slide 21: Robust and growing global methanol market with limited supply coming on stream
5 Robust and growing global methanol market with limited supply coming on stream Methanol demand growth expected to significantly outstrip supply… …confirming highly favorable methanol price trajectory1 Million mt $/mt Supply and Demand Figures are Cumulative Significant structural 40 100% 700 short
Slide 22: Significant barriers to entry in Fertilizers and Industrial Chemicals
6 Significant barriers to entry in Fertilizers and Industrial Chemicals Total replacement costs1 (In $bn) ➢ Difficulty of raising equity and securing project financing Replacement costs – ➢ Difficulty of obtaining fixed price EPC contracts (many North 2.8 Scale difficult American projects have had s
Slide 23: OCI NV benefitting from a step change in capacity and favorable market backdrop
OCI NV benefitting from a step change in capacity and favorable market backdrop Continuous growth of own product sales volume (000s metric tons)… …with increasing average benchmark prices ($/mt)… Own product 3rd party Production Ammonia NW Europe CFR Granular Urea Egypt FOB CAGR ‘16- capacity (mtpa)
Slide 24: Further EBITDA contribution factors going forward
Further EBITDA contribution factors going forward Additional capacity and price recovery to further enhance profitability 1 Natgasoline expected to commence production in Q2 2018 ✓ Brand new state-of-the-art 1.8 mt methanol facility in Texas ✓ $1.9bn estimated total replacement cost ✓ 50% owned by O
Slide 25: Positive underlying free cash flow reflecting end of extensive capex program
Positive underlying free cash flow reflecting end of extensive capex program Adjusted EBITDA ($m) / Adjusted EBITDA Margin (%)1 34% 24% 28% 736 +36% 634 Step-up in FCF in Q1 2018 achieved ($m) 467 Q1 2018 Q1 2017 EBITDA 252.1 129.6 Less: Change in working capital (49.3) (72.4) Maintenance capital ex
Slide 26: Risk management
Prudent financial policy, with a short-term focus on deleveraging ▪ Focus on deleveraging towards 2.0x net leverage ▪ Free cash flow will be prioritized to deleveraging Capital structure ▪ Continue to optimise and simplify capital structure ▪ Reduce weighted average cost of debt and extend debt matu
Slide 27: Appendix
OCI Appendix 27
Slide 28: Growth Projects
Growth Projects Natgasoline - Overview BioMCN - Overview ▪ 50% owned by OCI NV ▪ Owned 100% by OCI NV and acquired in 2015 – Other 50% owned by CEL ▪ Located in the Chemiepark Delfzijl site in the north of the – Entity not consolidated by OCI NV, but reflected in investment Netherlands line in accou
Slide 29: Flexible production capabilities allow maximum production of most profitable products
Flexible production capabilities allow maximum production of most profitable products Max. Proven Capacities¹ Total Fertilizer Total Fertilizer ('000 metric tons) For Sale & Chemicals For Sale Plant Country Ownership2 Ammonia Ammonia Urea UAN CAN Methanol Melamine4 DEF Gross Net3 OCI Beaumont USA 88
Slide 30: 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 30