Slide 1: Q2 2023 Results Presentation
Q2 2023 Results Presentation 2 August 2023
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: 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 Conversion intoQ4 FCF2019
Slide 4: Executive Summary
Executive Summary Q2 ‘23 revenues $1.4 billion, adjusted EBITDA $326 million, adjusted net loss $7 million, operating FCF (before minority dividends) $211 million, consolidated net leverage 1.0x. Proposed interim dividend of €0.85 / share (c.$200 million) Nitrogen outlook: • Prices bottomed in Q2, s
Slide 5: LTM in numbers
LTM in numbers $7.3bn revenue $2.2bn adj. EBITDA $1.5bn capital returned to shareholders 13.8m tons sold >4,000 employees 0.06 LTIR 2.34 GHG intensity 5 (1) LTM refers to last twelve months to Q2 2023
Slide 6: Turning Point with Strong Rebound in Nitrogen Prices & Demand
Turning Point with Strong Rebound in Nitrogen Prices & Demand Urea prices have increased by 60% since the trough in early June Rebound in nitrogen fertilizer prices Tightening supply balance Drivers Urea granular, FOB Egypt: recent price movement, $/t New urea capacity additions, Million t ❑ Demand
Slide 7: Q2 2023 Financial Summary
Q2 2023 Financial Summary Own Produced Sales Volumes (million mt) Key Product Benchmark Prices ($/mt) Methanol Nitrogen Urea Egypt Methanol US contract 0.6 0.4 0.4 -58% -11% 2.6 2.7 2.7 803 632 533 561 390 337 Q2 2021 Q2 2022 Q2 2023 Q2 2021 Q2 2022 Q2 2023 Q2 2021 Q2 2022 Q2 2023 Net Revenue ($m) A
Slide 8: Q2 2023 Free Cash Flow and Net Debt Build-up
Q2 2023 Free Cash Flow and Net Debt Build-up Reconciliation of Q2 2023 Reported EBITDA to Free Cash Flow ($ million) 261 97 (62) (15) (26) (56) 211 12 (433) (222) Reported EBITDA Working Capital Maintenance Lease Payments Tax Paid Interest Paid Other Operating Free Fertiglobe Free Cash Flow Capex Ca
Slide 9: US Nitrogen Cash Conversion Consistently Among Highest in the Industry
US Nitrogen Cash Conversion Consistently Among Highest in the Industry IFCo achieves consistently higher EBITDA per nutrient ton and margins than US peers: US Midwest premium advantage IFCo cash conversion is among Adjusted EBITDA margin, % Adjusted EBITDA per nutrient metric ton highest in the indu
Slide 10: Establishing Green Methanol as the Low-Carbon Fuel of the Shipping Industry
Establishing Green Methanol as the Low-Carbon Fuel of the Shipping Industry OCI fuels first ever green methanol powered container ship on its maiden voyage, in partnership with Maersk Bunkering in Ulsan Port, Korea ❑ In July, OCI successfully bunkered the ship at the start of the voyage in Ulsan, Ko
Slide 11: Methanol As Marine Fuel Accelerating Exponentially
Methanol As Marine Fuel Accelerating Exponentially Methanol marine orderbook is increasing dramatically and set to accelerate further, increasing interest from the bulker segment and now also retrofits Current Confirmed Methanol DF Engines Orderbook Incremental Methanol Demand From Marine Fuels, Mt
Slide 12: Carbon Footprint of Low Carbon Methanol & Ammonia
Carbon Footprint of Low Carbon Methanol & Ammonia Carbon Footprint of Green Methanol & Green Ammonia vs. Conventional Fuels on a Well-to-Wake basis, gCO2eq/MJ IMO revised strategy E- Ammonia ❑ On 7 July 2023, the IMO adopted a revised strategy, setting E-Methanol out stronger ambitions, to reduce to
Slide 13: Texas Blue Ammonia: On Track For Early 2025 and Ahead of Other Projects
Texas Blue Ammonia: On Track For Early 2025 and Ahead of Other Projects Milestones ❑ OCI’s 1.1 mtpa blue ammonia plant ✓ First greenfield blue ammonia facility of this scale to come onstream in the US and globally ❑ Well underway and in key construction phase: ✓ Piling is complete ✓ Foundations and
Slide 14: Capital Allocation
Capital Allocation Maintain as priority, target of <2x net leverage through the cycle ➔ Supporting our Investment Grade credit rating Balanced deployment of capital from strong through-the-cycle FCF1 Invest in growth Capital returns to shareholders Invest in hydrogen / energy transition and Base dis
Slide 15: Appendix – Markets
e Lara I Global Appendix — Markets 15
Slide 16: Nitrogen Markets Bottomed During the Second Quarter and are Tightening
Nitrogen Markets Bottomed During the Second Quarter and are Tightening Current cycle (started in Drivers Support Demand Driven Environment Prior cycle (last 5-6 years) 2022) 30% 26% Corn stocks-to-use ratio 2022 corn stocks-to-use ratio HIGH CROP PRICES and AFFORDABILITY SUPPORT NITROGEN DEMAND and
Slide 17: Robust Agricultural Fundamentals at least until 2025
Robust Agricultural Fundamentals at least until 2025 Crop prices supported by stocks: use ratio below 10-year average Urea affordability +32% since Q2 2022, supporting demand recovery Crop price index, Jan 2006 = 100 Global grain and oilseed stocks: use ratio (ex-China), % Affordability Index, Jan 2
Slide 18: Lower Chinese Exports And Robust Indian Imports Supportive Of Nitrogen Prices
Lower Chinese Exports And Robust Indian Imports Supportive Of Nitrogen Prices Chinese Exports Curtailed on Domestic Demand and Closures Indian Imports Robust Despite New Capacity Commissioning China urea exports, Mt India imports, Mt 13.6 13.8 10.5 10.5 9.7 9.0 9.0 8.2 +30% 6.9 7.9 7.7 7.7 5.5 7.5 5
Slide 19: Limited New Nitrogen Capacity, offset by Higher Demand
Limited New Nitrogen Capacity, offset by Higher Demand Limited new urea capacity with good visibility given ~5-year project lead time Merchant ammonia market expected to be underpinned by cost curve economics Global urea net capacity additions and demand growth, ex-China, Mt1 Global ammonia net capa
Slide 20: Incremental Ammonia Demand From New Clean Energy Applications
Incremental Ammonia Demand From New Clean Energy Applications Accelerated demand growth potential post-2026 from new uses in power generation and marine fuels Outlook for incremental low-carbon ammonia demand by end-use to 2035, Million Mt Key Demand Drivers Emissions & carbon markets ~40 Mt 1 Devel
Slide 21: Ammonia Demand Snapshot
Ammonia Demand Snapshot Blue ammonia to dominate low-carbon NH3 market until 2030 due to higher cost for green / lack of concrete demand ❑ Market readiness = demand Blue Demand size (2030) Regulation Market readiness Green technology readiness, economic competitiveness High Existing uses - blue (EU)
Slide 22: Low Carbon Ammonia Supply Will Be Slow To Commission, OCI’s Texas Blue Ahead
Low Carbon Ammonia Supply Will Be Slow To Commission, OCI’s Texas Blue Ahead Only <15% of announcements get built given hurdles, and <30% of announced projects realized on time Firm nitrogen projects in 2008 pipeline, ex-China, Million Mt Similar trend in the US in 2014 – 2019: Low carbon ammonia 35
Slide 23: Elevated Costs for Marginal Producers Supportive of Nitrogen Prices
Elevated Costs for Marginal Producers Supportive of Nitrogen Prices Global Feedstock Prices 2017-2023F, $/MMBtu Cash Costs per ton of Ammonia 2017-2023F, $/t 80 Global differentials between US, North Africa and EU marginal costs remain wide 3,000 70 2,500 60 TTF futures are ~$15/MMBtu for 2023/2024
Slide 24: Significant Medium - Long-term Upside for Methanol
Significant Medium - Long-term Upside for Methanol Prices under pressure in Q2; Asian strength is optimistic Methanol supply & demand balance tightening Methanol capacity vs. demand growth, Million Mt Methanol spot prices, USD per metric ton Methanol market outlook 2023 Capacity additions in structu
Slide 25: Appendix – Select Hydrogen Growth Projects Overview
Appendix – Select Hydrogen Growth Projects Overview 25
Slide 26: A Global Nitrogen and Methanol Producer with State-of-the-Art Assets
A Global Nitrogen and Methanol Producer with State-of-the-Art Assets US 46% Europe 15% Middle East 39% IFCo IFCo - US Sorfert EFC & EBIC OCIN Fertil BioMCN Fertil - AD Natgasoline OCIB Natgasoline - US OCIB - US BioMCN - NL OCIN - NL Sorfert - AL EFC & EBIC - EG x% = 2022 Proportionate EBITDA4 by Ge
Slide 27: OCI Benefits From Structural Cost Advantages That Are Hard To Replicate
OCI Benefits From Structural Cost Advantages That Are Hard To Replicate Low-Cost Position Attributable to Advantageous Access to Feedstock, Young Age and Distribution Infrastructure ✓ Ammonia Global Cost Curve, FOB plant cash costs Y axis: Ammonia FOB costs in 2023, $/t ; X axis: Gross ammonia globa
Slide 28: OCI is at the forefront of the global Energy Transition
OCI is at the forefront of the global Energy Transition Our current portfolio comprises several sustainable & transformational growth projects BioMCN gasification Low-carbon ammonia UAE IFCo CCS Texas Blue Ammonia Egypt Green Hydrogen Structural market shifts: new demand Available sustainable soluti
Slide 29: Linde to Supply Clean Hydrogen and Nitrogen to OCI’s Blue Ammonia Project
Linde to Supply Clean Hydrogen and Nitrogen to OCI’s Blue Ammonia Project ▪ Linde to supply 100% of facility's needs ▪ Linde's total investment ~$1.8 billion - Connected to US Gulf Coast H2 pipeline network Blue NH3 Nitrogen Ammonia (NH3) ▪ Linde signed an agreement with ExxonMobil in April for CO2
Slide 30: OCI’s Texas Blue Ammonia Economics
OCI’s Texas Blue Ammonia Economics Unparalleled Global Ammonia Logistical Capabilities and Export Platform Disciplined Commercial Strategy Focused on Maximising Netbacks Regulatory pressures1 increasing marginal cost pressure and capacity rationing Optimal location in Texas with key infrastructure i
Slide 31: Appendix
e Lara I Global Appendix aL
Slide 32: Q2 2023 Results
Q2 2023 Results Summary Key Financials1 and KPIs $ million unless otherwise stated Q2 '23 Q2 '22 %Δ H1 ‘23 H1 ‘22 %Δ Strong operational performance across the platform Revenue 1,372.1 2,857.7 (52%) 2,743.4 5,185.5 (47%) Gross profit 199.5 1,169.4 (83%) 396.9 2,032.9 (80%) Own product sales volumes w
Slide 33: Sales Volumes by Segment (1/2)
Sales Volumes by Segment (1/2) '000 metric tons Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Nitrogen US1 Own Product 415 681 502 593 494 676 2,265 Ammonia 16 65 4 47 6 89 146 Urea 42 23 12 10 7 10 38 UAN 182 411 260 319 262 323 1,164 DEF 175 181 226 218 219 254 917 Traded Third Party 193 473 336 405
Slide 34: Sales Volumes by Segment (2/2)
Sales Volumes by Segment (2/2) '000 metric tons Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Methanol1 Own Product 247 501 370 417 401 369 1,557 Ammonia2 25 99 89 47 84 83 302 Methanol 222 402 282 370 317 286 1,255 Traded Third Party 143 119 144 74 78 109 405 Methanol 130 96 144 74 64 99 381 Ethanol
Slide 35: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income Reconciliation of Reported Operating Income to Adjusted EBITDA $ million Q2 '23 Q2 '22 Comment Operating profit as reported 108.8 1,082.7 Depreciation, amortization and impairment 152.7 146.5 EBITDA 261.5 1,229.2 APM adjustments for: Natgasol
Slide 36: Financial Statements – Income Statement
Financial Statements – Income Statement Three-month period ended Three-month period ended Six-month period ended Six-month period ended $ millions Note 30 June 2023 30 June 2022 30 June 2023 30 June 2022 Revenue (15) 1,372.1 2,857.7 2,743.4 5,185.5 Cost of sales (12) (1,172.6) (1,688.3) (2,346.5) (3
Slide 37: Financial Statements – Cash Flow Statement (1/2)
Financial Statements – Cash Flow Statement (1/2) Three-month period ended Three-month period ended Six-month period ended Six-month period ended $ millions Note 30 June 2023 30 June 2022 30 June 2023 30 June 2022 Net profit / (loss) (21.3) 887.8 14.6 1,587.0 Adjustments for: Depreciation, amortizati
Slide 38: Financial Statements – Cash Flow Statement (2/2)
Financial Statements – Cash Flow Statement (2/2) Three-month period ended Three-month period ended Six-month period ended Six-month period ended $ millions Note 30 June 2023 30 June 2022 30 June 2023 30 June 2022 Cash flow used in investing activities (169.8) (72.7) (333.6) (124.1) Proceeds from bor
Slide 39: 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 3,483 - 3,483
Slide 40: Csi Global
Csi Global Csi Global