Slide 1: Q2 and H1 2022 Results Presentation
Q2 and H1 2022 Results Presentationxx 2 August 2022 1
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: Second Quarter and First Half Highlights and Outlook
Second Quarter and First Half Highlights and Outlook Adjusted EBITDA of $1,290 million in Q2 2022 (+141%) and $3.8 billion LTM. Net debt declined $553 million to $708 million as of 30 June 2022. Trailing net debt / adjusted EBITDA was 0.2x as of 31 March 2022 Natural gas hedging strategy in the US:
Slide 4: Table of Contents
Table of Contents H2 Q2 and H1 2022 Market Outlook Capitalizing on the Appendix Financial Performance Hydrogen Opportunity 4
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 Conversion intoQ4 FCF2019
Slide 6: Q2 2022 Results
Q2 2022 Results Summary Key Financials1 and KPIs $ million unless otherwise stated Q2’22 Q2 ‘21 %Δ H1’22 H1 ‘21 %Δ Own-produced sales volumes sold in Q2 ‘22 vs. Q2 ’21: Revenue 2,857.7 1,462.9 95% 5,185.5 2,582.5 101% Gross Profit 1,169.4 404.6 189% 2,032.9 745.0 173% ➢ Nitrogen volumes up 2% compar
Slide 7: Q2 2022 Revenue Up 95% and Adjusted EBITDA Up 141% YoY
Q2 2022 Revenue Up 95% and Adjusted EBITDA Up 141% YoY Own-Produced Sales Volumes (Mt) Key Product Benchmark Prices, $/t Revenue ($m) Methanol Nitrogen +95% Urea Egypt Methanol US contract 0.6 0.4 2,858 +104% +19% 1,463 2.6 2.7 795 533 634 390 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021
Slide 8: Leading Position in Global Ammonia Markets and Flexible Business Model
Leading Position in Global Ammonia Markets and Flexible Business Model Segment consolidated revenues ($ m) Segment consolidated adj EBITDA ($ m) OCI NV Gas Consumption by Region % of total consumption in H1 2022 2,656 1,395 H1 2021 H1 2021 9% H1 2022 H1 2022 Q2 2021 Q2 2021 Q2 2022 Q2 2022 31% 770 6
Slide 9: Market Cap + Net Debt + Cash Distribution
Market cap growth largely reflection of net debt Capital Allocation Priorities reduction despite much improved outlook Low net leverage combined with significantly improved market backdrop De-risked balance sheet and positioned for growth offers number of opportunities Cash distribution to sharehold
Slide 10: Capital Allocation
Capital Allocation New capital returnPriorities policy Balance availability of funds and excess FCF Committed to a consistent base distribution + a variable component for dividend distribution while pursuing value based on surplus excess FCF1 accretive growth opportunities Strong balance sheet ▪ OCI
Slide 11: Q2 2022 Free cash flow and Net Debt Build-up
Q2 2022 Free cash flow and Net Debt Build-up Reconciliation of Q2 2022 reported EBITDA to Free Cash Flow 1,229 47 -45 -14 -82 -53 928 -250 97 EBITDA Working Capital Maintenance Lease Payments Tax Paid Interest Paid Dividends Other Free Cash Flow Capex Paid to NCI Change in Net Debt from 31 March 202
Slide 12: Table of Contents
Table of Contents H2 Q2 and H1 2022 Market Outlook Capitalizing on the Appendix Financial Performance Hydrogen Opportunity 12
Slide 13: Nitrogen Outlook Supported by Attractive Supply-Demand Dynamics
Nitrogen Outlook Supported by Attractive Supply-Demand Dynamics Supporting Strong Pricing Outlook For H2 2022 and Beyond as We Recover From a 5-year Downturn Bull Market Drivers Support Demand Driven Environment Prior cycle (last 5-6 years) Next cycle (starting in 2022) CROP PRICES SUPPORTIVE OF FAR
Slide 14: Nitrogen Fertilizer Pricing Supported by Demand-Driven Environment
Nitrogen Fertilizer Pricing Supported by Demand-Driven Environment Strong support for nitrogen prices to reset above mid-cycle levels, given low global crop inventories, strong farm economics and higher marginal costs Urea, Ammonia, CAN and UAN Prices (Monthly Averages, 2011 – Q3 20221), $/t Demand-
Slide 15: Low European nitrates stocks
New season outlook Low European nitrates stocks ✓ Nitrates demand in Western Europe in the last season saw Healthy nitrates fundamentals and high marginal costs supportive deliveries down only 5% against similar production declines, signalling strong farmer incomes and supportive of demand in EU-14
Slide 16: Agricultural Fundamentals Supports Robust Nitrogen Demand at Least Until 2024
Agricultural Fundamentals Supports Robust Nitrogen Demand at Least Until 2024 Crop prices supported by stocks : use ratio at 10 year lows, Tight grain stocks for corn and wheat at further risk given dry requiring at least until 2024 to replenish weather in the Northern Hemisphere and protectionist m
Slide 17: High Farm Incomes Supportive Of Demand
High Farm Incomes Supportive Of Demand Farm operating margins (revenue above operating costs), USD/ha 1 Supportive farm incomes in 22/23 : Farm margins are attractive in grain exporting US Brazil Brazil France regions as input costs have been offset by higher US Corn Soybeans Soybeans Corn Cereals c
Slide 18: Attractive Nitrogen Dynamics With Demand Expected To Exceed Capacity Additions
Attractive Nitrogen Dynamics With Demand Expected To Exceed Capacity Additions Ex-China urea capacity additions slow relative to 2015-19, Mt Merchant ammonia market structurally tightening Global ammonia net capacity additions and demand growth, ex-China ex-urea, Mt 22.9 4.5 Capacity additions Deman
Slide 19: Lower Chinese Exports And Robust Indian Imports Supportive Of Nitrogen Prices
Lower Chinese Exports And Robust Indian Imports Supportive Of Nitrogen Prices • Chinese market balances supported by: Chinese Exports Curtailed on Domestic Demand and Closures – Government measures to curb exports until at least H2 China urea exports, Mt 2023 and prioritise domestic supply including
Slide 20: Higher Costs for Marginal Producers Supportive of Nitrogen Prices
Higher Costs for Marginal Producers Supportive of Nitrogen Prices Global Feedstock Prices 2017-2022F, $/MMBtu Cash Costs per ton of Ammonia 2017-2022F, $/t 70 TTF futures are ~$60MMBtu for 2022 and 3,000 Marginal costs have escalated on high end of cost c.$36/MMBtu in 2023 & 2024 60 curve and not ex
Slide 21: Methanol Market Fundamentals Are Supportive, with Significant Long-term Upside
Methanol Market Fundamentals Are Supportive, with Significant Long-term Upside Methanol spot and contract prices Methanol supply & demand balance tightening Methanol contract and spot US prices, USD per metric ton Methanol capacity vs. demand growth, Million Mt USGC Contract US Gulf Coast Contract L
Slide 22: Methanol Uniquely Positioned as Alternative Fuel in Energy Mix
Methanol Uniquely Positioned as Alternative Fuel in Energy Mix ▪ Methanol is positioned as an economically advantageous fuel compared to alternatives Gasoline Blending Supported in the United States Product pricing, converted to HHV, $/MMBtu More than double the cost to use ✓ Crude oil futures point
Slide 23: Table of Contents
Table of Contents H2 Q2 and H1 2022 Market Outlook Capitalizing on the Appendix Financial Performance Hydrogen Opportunity 23
Slide 24: Significant Incremental Ammonia Demand From New Clean Energy Applications
Significant Incremental Ammonia Demand From New Clean Energy Applications Clean Hydrogen is strongly positioned to lead the world’s energy transition, and ammonia is the key enabler ▪ Clean hydrogen use in energy applications will be a major contributor to emission reduction across industries where
Slide 25: Marine fuel represents a substantial market opportunity for OCI
Marine fuel represents a substantial market opportunity for OCI ▪ Ammonia and methanol are the only practical alternatives for long-distance shipping, even without decarbonization technologies, since they have a lower environmental footprint than HFO o Ammonia burns cleanest when used as energy sour
Slide 26: OCI is Very Well Positioned to Capture the Hydrogen Potential
OCI is Very Well Positioned to Capture the Hydrogen Potential Located in Proximity to Renewable Energy Sources and Shipping Hubs Asset Base with Existing Access to the Entire Hydrogen Supply Chain Optimal solar/wind resources Upstream 3rd party providers Least Most Merchant Blue CO2 sequestration OC
Slide 27: Table of Contents
Table of Contents H2 Q2 and H1 2022 Market Outlook Capitalizing on the Appendix Financial Performance Hydrogen Opportunity 27
Slide 28: Appendix: Q2 and H1 2022 Results
Appendix Q2 and H1 2022 Results 28
Slide 29: 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 '22 Q2 ‘21 H1 '22 H1 ‘21 Comment / Adjustment in P&L Operating profit as reported 1,082.7 342.3 1,872.4 622.9 Depreciation, amortization and impairment 146.5 160.4 29
Slide 30: 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 '22 Q2 ‘21 H1 '22 H1 ‘21 EBITDA 1,229.2 502.7 2,164.9 933.5 Working capital 46.5 57.3 (149.9) 37.0 Maintenance capital expenditure (45.1) (29.5) (89.3) (85.4) Tax paid (82.1) (20.9) (139.5) (36.8) Interest paid (53.0) (90
Slide 31: Appendix: OCI: Structurally higher netbacks and profit optimization
Appendix OCI: Structurally higher netbacks and profit optimization 31
Slide 32: Structurally Higher Realised Netbacks in OCI
Structurally Higher Realised Netbacks in OCI Structural advantage supplemented by strong in-house Low-freight Costs, Duty-free Access, Direct-to-customer Strategy and Inland capabilities and trading platform Distribution in US and Europe Enables Structural Netback Advantages ✓ Low-freight costs, dut
Slide 33: 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 34: 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