Slide 1: Investor Presentation September 2018
Investor Presentation September 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 Monetizing natural gas through a broad range of essential products % of sales1 50% 50%2 Fertilizers Industrial Chemicals Products Ammonia, urea, CAN and UAN Methanol, melamine, DEF and industrial ammonia 4th lar
Slide 4: Overview H1 2018 Results
Overview H1 2018 Results Highlights second quarter and first half 2018 results Highlights Key financials Q2 2018 Q2 2017 %Δ H1 2018 H1 2017 %Δ Own-produced volumes sold +47% in Q2 2018 vs. Q2 2017 Revenue 792.7 552.8 43% 1,537.50 1,026.20 50% • To a record of 2.5 million metric tons Gross Profit 160
Slide 5: Recent Developments | Markets
Recent Developments | Markets Recent market developments Urea and ammonia benchmark price development ▪ OCI’s underlying end markets for all our products are on a positive 400 trajectory for the second half of 2018 and beyond: 350 – Fertilizer prices started to improve in Q3 2018 300 – Urea prices n
Slide 6: Recent Developments | OCI N.V.
Recent Developments | OCI N.V. ▪ Natgasoline successfully ramped up production within short time: – Reached full utilization shortly after initial start-up; – Has been running consistently above nameplate capacity in recent weeks; – Shipped already about 250 kt of methanol; – Achieved Provisional Ac
Slide 7: 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 8: Production Capacity Footprint is Well-positioned Globally
Production Capacity Footprint is Well-positioned Globally1 Methanol Production Footprint Fertilizer Production Footprint BioMCN – Netherlands OCI Nitrogen – Netherlands Egyptian Fertilizer Co (EFC) – Egypt ▪ Acquired: 2015 ▪ Acquired: 2010 ▪ Acquired: 2008 ▪ 100% owned ▪ 100% owned ▪ 100% owned Prod
Slide 9: Key Highlights
Key Highlights 1 A global leader in nitrogen and methanol with excellent diversification 2 Favourable 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 for the fertilizer and
Slide 10: 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 11: 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 ✓ Different end-markets ammonia 9% DEF 6% 17% 6% Melamine 3% Melamine Urea and s
Slide 12: 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 13: 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) ✓ Positioned at the low end of the methanol cost curve2 $500 ✓ Cost curve assumes delivery $400 costs to
Slide 14: Low Cost Position from Access to Feedstock and Distribution Infrastructure
2 OCI’s Low Cost Position Attributable to Advantageous Access to Feedstock and Distribution Infrastructure… US Europe North Africa ✓ Access to natural ▪ Access to low ▪ Optionality to ▪ Access to low ▪ Top quartile ▪ Access to bio- ▪ 20-25 year gas ▪ 20 year take-or- gas feedstock cost US shale sour
Slide 15: High Plant Efficiency at the OCI Nitrogen Facility
…with High Plant Efficiency at the OCI Nitrogen Facility as a Result of Significant 2 Investment Competitive energy efficiency of European ammonia plants1 (GJ/mt NH3 LHV) 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 39-49 36-38 33-35 32 32 32 32 32 33 31 31 31 30 30 30 28 29 29 25 1 2 3 4 5 6
Slide 16: Favorable Feedstock Price Dynamics
2 Favorable Feedstock Price Dynamics Abundant US shale gas development has pushed gas prices down 1 ($/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 17: 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 18: Strategic Locations for Fertilizer Facilities Allow Enhanced Netbacks
4 Strategic Locations for Fertilizer Facilities Allow Enhanced Netbacks for Products A global production and distribution footprint with domestic-focussed assets as well as an export-focused platform, supported by a coordinated commercial approach A Stable customer base in domestic-focused regions E
Slide 19: Global Commercial Fertilizer Strategy Across Domestic and Export Platforms
Global Commercial Fertilizer Strategy Across Domestic and Export Platforms that 4 Optimizes Storage Assets Historically seasonally low prices in July / August each year UAN Seasonality (US Cornbelt UAN Spot Price; USD/st) 315 265 215 165 Commercial Strategy 115 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr
Slide 20: Global Methanol Supply Platform with Efficient Distribution & Logistics Network
4 Global Methanol Supply Platform with Efficient Distribution & Logistics Network OCI Methanol Marketing (OMM) ▪ OCI Beaumont and Natgasoline Natgasoline both strategically located at heart of ▪ OMM, a wholly-owned subsidiary, markets Golden Triangle, providing access to OCI’s equity methanol portfo
Slide 21: Investing in Sustainable Fuel Solutions
Investing in Sustainable Fuel Solutions 4 Investing in developing products and initiatives to provide cleaner and more sustainable solutions to our customers Diesel Exhaust Fluid (AdBlue) Bio-Methanol / Methanol as an Alternative Fuel ▪ DEF, also known as AdBlue, is a urea solution that can be injec
Slide 22: 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 Bolivia Indonesia Iran Europe & CIS Egypt USA India Nigeria million mtpa 700 4.2 600 Mid-cycl
Slide 23: Decline in Chinese Urea Exports
Decline in Chinese Urea Exports on the Back of New Environmental Regulations 5 and Higher Coal Prices Historical Chinese urea exports and pricing ('000 mtpa) $/t 16,000 600 13,555 13,748 14,000 500 Chinese urea 12,000 exports from 8,265 400 January to July 10,000 7,026 8,871 2018 were 8,000 6,948 30
Slide 24: Robust and Growing Global Methanol Market with Limited Supply
Robust and Growing Global Methanol Market with Limited Supply Coming On- 5 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 700 40 shortness
Slide 25: Significant Barriers to Entry in Fertilizers and Industrial Chemicals
6 Significant Barriers to Entry in Fertilizers and Industrial Chemicals Total replacement costs1 (In $bn) ▪ Difficulty of raising equity and securing project financing Replacement costs – 2.8 ▪ Difficulty of obtaining fixed price EPC contracts (many North Scale difficult American projects have had s
Slide 26: Benefitting from a Step Change in Capacity and Favorable Market Backdrop
OCI NV Benefitting from a Step Change in Capacity and Favorable Market Backdrop Continuous growth of own product sales volume (000s metric tons)… …with increasing average benchmark prices ($/mt)… Own product 3rd party Production CAGR ‘16- Ammonia NW Europe CFR Granular Urea Egypt FOB capacity (mtpa)
Slide 27: Further Cash Flow and EBITDA Contribution Factors Going Forward
Further Cash Flow and EBITDA Contribution Factors Going Forward Additional capacity and price recovery to further enhance profitability 1 Natgasoline has started production in June 2018 ✓ Brand new state-of-the-art 1.8 mt methanol facility in Texas ✓ $1.9bn estimated total replacement cost ✓ 50% own
Slide 28: Positive Underlying Free Cash Flow Reflecting End of Extensive Capex Program
Positive Underlying Free Cash Flow Reflecting End of Extensive Capex Program Adjusted EBITDA ($m) / Adjusted EBITDA Margin (%)1 ▪ Completion of major $5bn+ capex program ▪ Low maintenance capex 34% 24% 28% ▪ Significant step-up of operational cash flows from 736 higher volumes +36% 634 ▪ Low effecti
Slide 29: Prudent Financial Policy, with a Short-term Focus on Deleveraging
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 30: Appendix
OCI Appendix 30
Slide 31: 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 10
Slide 32: Investor relations 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