Slide 1: Q4 2023 Results Presentation
Q4 2023 Results Presentation 14 February 2024
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: Agenda
Agenda I. Recap of Q4 2023 II. Update on Strategic Review and Use of Proceeds III. Overview of OCI post divestment of IFCo and Fertiglobe stake IV. Growth projects V. Valuation analysis VI. Industry update VII. Appendices 3
Slide 4: 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 5: Recap of Q4 2023
e Lara I Global Recap of Q4 2023
Slide 6: Q4 2023 and FY 2023 Financial Summary (Total Operations)
Q4 2023 and FY 2023 Financial Summary (Total Operations) Own Produced Sales Volumes (Mt) Ammonia NW Europe ($/t) Urea Egypt ($/t) Methanol US Contract ($/t) Nitrogen (discont.) -56% -49% -9% Nitrogen (cont.) -42% -6% -39% Methanol 756 616 7.7 7.5 1,221 378 386 581 606 1,109 549 553 1.9 1.7 1.9 1.7 6
Slide 7: Q4 2023 and FY 2023 Free Cash Flow and Net Debt movement
Q4 2023 and FY 2023 Free Cash Flow and Net Debt movement Change in net debt from 30th September 2023 to 31st December 2023 (continuing operations) $m +1,415 -1,740 3,740 94 194 152 (905) 991 2,326 (835) (16) 2,001 Total Net Debt 30 Operating FCF Dividend paid Growth Capex OCI dividend paid Others To
Slide 8: Update on Strategic Review
e FP Global ww. Update on Strategic Review
Slide 9: Strategic Review and Transaction Update
Strategic Review and Transaction Update $7.2 billion expected gross cash proceeds crystallized from two successive transactions in December 2023 • $6.2 billion net proceeds1/ ~€27 per share cash value2 • The Fertiglobe and IFCo transactions marked a transformational juncture for OCI • Helped deliver
Slide 10: Overview of OCI Global today
Overview of OCI Global today 10
Slide 11: OCI Asset Profile Post Divestments
OCI Asset Profile Post Divestments Methanol Assets US Ammonia Assets European Ammonia/Nitrogen Assets Trading / Distribution /Fuels Natgasoline Businesses BioMCN OCI Beaumont Methanol OCI Beaumont Ammonia Texas Blue Clean Ammonia Rotterdam Import Terminal OCI Nitrogen OCIB Ammonia is part of OCIB, w
Slide 12: OCI is at the Forefront of the Global Energy Transition
OCI is at the Forefront of the Global Energy Transition Targeting increasing earnings from our low carbon ammonia and methanol portfolio Growth Projects Europe OCI’s Available Sustainable Solutions Today Rotterdam Import Terminal and DEF / AdBlue@ 300 ktpa Q2 2024 Downstream Nitrogen • Green methano
Slide 13: OCI Mid-Cycle Potential
OCI Mid-Cycle Potential OCI Mid-cycle Volume Upside ~$500m Mid-cycle Adjusted EBITDA (exc Texas Blue Clean Ammonia) Methanol, plus Ammonia-equivalent own-produced sold tons or MPC, Mtpa Blue Ammonia • Asset Utilization: Nitrogen products (Ammonia-equivalent tons) ~90% for ammonia and methanol (wit
Slide 14: OCI Methanol
e Lara I Global OCI Methanol 14
Slide 15: OCI Methanol
OCI Methanol Platform well-positioned for future growth of clean energy OCI Methanol Group is 85% owned by OCI and 15% by strategic partners (ADQ and ADH) Key Competitive Advantages • US assets sit on the low end of the global cost curve (1st quartile) • Total capacity ~2 million metric tons in the
Slide 16: OCI Methanol: Historical quarterly EBITDA performance
OCI Methanol Historical quarterly EBITDA performance LTM performance is deteriorating in FY23 largely due to lower price and gas hedge loss 199 200 700 180 600 150 143 500 128 109 400 100 95 300 87 63 32 200 28 50 100 24 11 0 0 -100 -200 -50 -300 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 20
Slide 17: European Nitrogen (OCIN & OTE)
European Nitrogen (OCIN & OTE1) (1) OCI Terminal Europoort, OCI’s ammonia import terminal in Rotterdam, Netherlands 17
Slide 18: European Nitrogen
European Nitrogen Incumbent, well placed to take advantage of coming bunker, cracking and other demand OCI Nitrogen has Historically Had Stable Earnings Profile Leading European nitrates and melamine producer with an integrated site 1 Adjusted EBITDA, $m in Geleen, the Netherlands 2018-22 Avg Adj. E
Slide 19: European Nitrogen: Rotterdam import terminal
European Nitrogen Ammonia import terminal in the Port of Rotterdam facilitating access to the European market OCI Rotterdam Import Terminal Expansion Flexibility Rotterdam Current import capacity of ~400ktpa Optionality to expand throughput and capacity Only terminal in Rotterdam and leading Eur
Slide 20: European Nitrogen: Historical quarterly EBITDA performance
European Nitrogen Historical quarterly EBITDA performance LTM performance is improving – 2023 was trough Far left Y-axis: TTF day ahead , $/Mmbtu Right Y-axis: Last twelve months (LTM) Adj. EBITDA, $m Inner left Y-axis: Adjusted EBITDA, Impact of gas hedging , $m 60 200 500 50 134 400 150 133 Q4 202
Slide 21: Growth Projects
Growth Projects
Slide 22: The World's First Large-scale Greenfield Blue Ammonia Plant
The World’s First Large-scale Greenfield Blue Ammonia Plant 3,000 tpd 95%+ H1 2025 OCI’s Natgasoline Facility capacity (1.1 Mtpa) CO2 captured and sequestered start-up <0.5kg CO2e/kg NH3 ~$500m CI value(1) invested by OCI to date(2) New Ammonia Storage Loading Dock • World-class 3,000 tpd blue ammon
Slide 23: Project Update
Project Update Project execution well-progressed and on track for H1 2025 start-up Dec-22 1,045,995 Q4 2023 ground breaking manhours reached(1) first equipment deliveries 96% 25+ years’ experience of core engineering completed(1) Project team on average • Highest commitment to HSE, with no recordabl
Slide 24: Working with Leading Industrial and Technology Partners
Working with Leading Industrial and Technology Partners Leveraging deep expertise to de-risk the project Scope of OCI operations and capex •1 OCI Clean Ammonia Project is divided into two sections, with 1 OCI operations and capex limited to the back-end ammonia plant – Allows OCI to leverage Linde’s
Slide 25: Line 2 Potential Built into the Design
Line 2 Potential Built into the Design Providing Opportunity to Capitalize on Additional Clean Ammonia Demand at Low Development Cost Line 2 Optionality Built into the Design of OCI Clean Ammonia… Design Philosophy Overview: Readiness for Line 2 • Plot plan incorporates a reserved space for a second
Slide 26: Linde to Manage CCS Capabilities via Partnership with ExxonMobil
Linde to Manage CCS Capabilities via Partnership with ExxonMobil Providing Access to the Largest Owned and Operated CO2 Pipeline Network in the US ExxonMobil and Denbury Combined CCS Network • Linde signed an agreement with ExxonMobil in April 2023 for CO2 offtake and sequestration, enabling the sup
Slide 27: Texas Blue Clean Ammonia – Key Details
Texas Blue Clean Ammonia – Key Details Financial Profile • Start-up assumed in H1 2025 with volume ramping up throughout 2025 Production Production Volume • Production volumes 3,000 tp/d nameplate capacity; KBR technology Volume • Four year turn-around cycle • Prior to the beginning of carbon seques
Slide 28: Guidance Reset
Guidance Reset Special Dividend of Corporate cost target $30-$40 million Net Cash at least $3bn Per year by 2025 By 2024 year end Texas Blue Clean 2024 Growth Capex 2024 Maintenance Capex Ammonia H1 2025 ~$600 million ~$125 million Start-up Revised guidance based on completion of IFCo and Fertiglobe
Slide 29: Industry update
Industry update OCcI 29
Slide 30: Methanol
e FP Global ww. Methanol
Slide 31: Supply and Demand Dynamics Imply Significant Upside for Methanol
Supply and Demand Dynamics Imply Significant Upside for Methanol US and European Prices Maintain Premium Above China Methanol Supply & Demand Balance Tightening Methanol spot prices, USD per metric ton Methanol capacity vs. demand growth, million t 16 Additional Capacity 400 Additional Demand 11 375
Slide 32: Carbon Footprint of Low Carbon Methanol & Ammonia
Carbon Footprint of Low Carbon Methanol & Ammonia Clean fuels offer material reductions in emissions versus conventional fuels IMO revised strategy Carbon Footprint of Low Carbon Methanol & Low Carbon Ammonia vs. Conventional Fuels In July 2023, the IMO adopted an ambitious revised Well-to-Wake ba
Slide 33: Methanol as a Marine Fuel Continues to Accelerate
Methanol as a Marine Fuel Continues to Accelerate Methanol marine orderbook is ramping up due to increasing interest from the bulker segment and retrofits Current Confirmed Methanol DF Engines Orderbook Incremental Methanol Demand From Marine Fuels, Mt Other Bulk carrier 8% 6% >7Mt Support +1,807% 8
Slide 34: Practical Experience: Demonstrating Global Supply and Bunkering Possibilities
Practical Experience: Demonstrating Global Supply and Bunkering Possibilities • OCI was awarded the contract to supply the worlds first methanol dual fueled container vessel on her maiden voyage. • The vessel was delivered in Ulsan, Korea and made her way to NWE via Singapore, East Port Said and Rot
Slide 35: OCI HyFuels is the Largest Producer of Green Methanol
OCI HyFuels is the Largest Producer of Green Methanol OCI established its Fuels business in 2015 to provide customers with low-carbon methanol alternatives to meet evolving regulatory landscape. Pioneer and leader in green fuels… Key advantages of OCI’s fuel products • OCI HyFuels produces a suite o
Slide 36: Ammonia
e Lara I Global Ammonia 36
Slide 37: Limited New Ammonia Supply More Than Offset by Demand Growth
Limited New Ammonia Supply More Then Offset by Demand Growth Global Merchant (grey + blue + green) ammonia supply and demand, Mt1 million tonnes ammonia 80 Total grey merchant supply New project (Pre-FEED) 2023-26 New Project (FID) Total (grey + low carbon) demand • Merchant grey ammonia market is t
Slide 38: 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 1 Maritime Fuels ~45 Mt • Maritime sector increasingly incentivised to adopt ~25 Mt clean fuels partly due to FuelEU maritime regulati
Slide 39: Appendices
e Lara I Global Appendices 39
Slide 40: Financial Statements
e Lara I Global Financial Statements
Slide 41: Q4 2023 Results: Key Financials and KPIs
Q4 2023 Results Key Financials1 and KPIs Q4 '23 Q4 '22 %Δ 2023 2022 %Δ Cont. Cont. Cont. Cont. Cont. Cont. Total Total Total Total Total Total Disc. Disc. Disc. Disc. Disc. Disc. $ million unless otherwise stated Revenue 494.5 714.7 1,209.2 789.4 1,407.8 2,197.20 -37% -49% -45% 1,962.6 3,058.9 5,021
Slide 42: Sales Volumes by Segment (1/2)
Sales Volumes by Segment (1/2) '000 metric tons Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Nitrogen US1 Own Product 415 681 454 250 1,800 502 593 494 676 2,265 Ammonia 16 65 25 85 192 4 47 6 89 146 Urea 42 23 26 24 115 12 10 7 10 38 UAN 182 411 219 53 865 260 319 262 323 1,164 D
Slide 43: Sales Volumes by Segment (2/2)
Sales Volumes by Segment (2/2) '000 metric tons Q1'23 Q2'23 Q3'23 Q4'23 FY 2023 Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 Methanol1 Own Product 247 501 503 393 1,643 370 417 401 369 1,557 Ammonia2 25 99 75 87 285 89 47 84 83 302 Methanol 222 402 429 306 1,358 282 370 317 286 1,255 Traded Third Party 143 119 1
Slide 44: Reconciliation of Adjusted EBITDA and Adjusted Net Income
Reconciliation of Adjusted EBITDA and Adjusted Net Income Reconciliation of Reported Operating Income to Adjusted EBITDA Q4 '23 Q4 '22 2023 2022 Cont. Cont. Cont. Cont. Total Total Total Total Disc. Disc. Disc. Disc. $ million Comment Operating profit as reported (65.1) 146.8 81.7 (192.2) 520.9 328.
Slide 45: Financial Statements – Income Statement
Financial Statements – Income Statement $ millions Note 2023 2022 Revenue (28) 1,962.6 3,713.6 Cost of sales (23) (2,127.2) (3,291.4) Gross profit (164.6) 422.2 Other income (24) 18.5 6.1 Selling, general and administrative expenses (23) (188.9) (161.9) Other expenses (25) (36.8) (0.2) Operating pro
Slide 46: Financial Statements – Cash Flow Statement (1/2)
Financial Statements – Cash Flow Statement (1/2) Twelve-month Twelve-month period ended 31 period ended 31 $ millions Note December 2023 December 2022 Net profit / (loss) (475.0) 317.3 Adjustments for: Depreciation, amortization and impairment (23) 193.8 178.0 Interest income (26) (19.9) (35.9) Inte
Slide 47: Financial Statements – Cash Flow Statement (2/2)
Financial Statements – Cash Flow Statement (2/2) Twelve-month Twelve-month period ended 31 period ended 31 $ millions Note December 2023 December 2022 Cash flow used in investing activities (774.3) (390.8) Proceeds from borrowings (18) 1,676.6 148.2 Repayment of borrowings (18) (541.8) (407.2) Movem
Slide 48: Max. Proven Capacities
Max. Proven Capacities 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 OCI Nitrogen5 Netherlands 1,19
Slide 49: Adjusted EBITDA bridge FY2022 – FY2023
Selected Historical Financial and Key Operating Information Adjusted EBITDA bridge FY2022 – FY2023 Continuing Operations -699 675 36 Continued 1,004 99 211 12 -24 44 177 508 206 FY’22 Volume/ Mix/ Price Nitrogen* Volume/ Mix/ Price Methanol Gas Hedge Gas Price EU Gas Price US EUAs Other FY23 Prod Pr
Slide 50: Market Appendices
e Lara I Global Market Appendices
Slide 51: Ammonia Prices Softened at the Start of 2024; Downstream Prices (Urea) Increasing
Ammonia Prices Softened at the Start of 2024; Downstream Prices (Urea) Increasing Urea prices have increased from ≈$340/t levels in December to ≈$405/t by end January, supporting Nitrogen values Rebound in Urea Prices Global Ammonia Trade Recovery Expected Slowdown in Urea Capacity Additions Ammonia
Slide 52: Nitrogen Markets Underpinned by Robust Upstream & Downstream Drivers
Nitrogen Markets Underpinned by Robust Upstream & Downstream Drivers Prior cycle Drivers Support Demand Driven Environment Current cycle (2015-2019) 30% 26% Corn stocks-to-use ratio 2023/24 corn stocks-to-use ratio ROBUST CROP PRICES and AFFORDABILITY SUPPORT NITROGEN DEMAND and PRICE LEVELS $3.7/bu
Slide 53: Robust agricultural fundamentals
Robust agricultural fundamentals Grain stocks-to-use ratio below the 10-year average supports farm incomes and increased planted acreage to rebuild stocks and nitrogen demand recovery Crop prices supported by stocks:use ratio below 10-year average Urea affordability in Jan’24 improved by +21% since
Slide 54: Constrained Chinese Exports & Robust Indian Imports Supportive Of Nitrogen Prices
Constrained Chinese Exports & Robust Indian Imports Supportive Of Nitrogen Prices Chinese Exports Curtailed on Tighter Governmental Policy Indian Imports Robust As New Capacity Does not Cover the Shortfall in Supply China urea exports, Mt India imports, Mt India remains among top 3 urea importers gl
Slide 55: 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-year Merchant ammonia market expected to be underpinned by demand recovery & project lead time. Robust nitrogen demand for ag & tech use. cost curve economics Global urea n
Slide 56: EU gas costs remain elevated vis-à-vis major export hubs & production centers
EU gas costs remain elevated vis-à-vis major export hubs & production centers Global Feedstock Prices 2017-2024F, $/MMBtu Cash Costs per ton of Ammonia 2017-2024F, $/t Global differentials between US, North Africa and EU marginal costs remain wide Arbitrage between international ammonia pricing & do
Slide 57: Global Methanol Demand Overview
Global Methanol Demand Overview Positive Demand Outlook Global Methanol Demand by End Use 2022 Methanol Demand by End-Use1 Existing demand • Traditional chemical One of the most widely used industrial chemicals, used in MTO Methanol-to-Olefins a variety of applications, including wood products, pain
Slide 58: Global Ammonia Demand Overview
Global Ammonia Demand Overview Positive Demand Outlook Global Ammonia Demand by End Use Existing demand 2024 Ammonia Demand by End-Use1 • Conventional demand (food value chain) Ammonia is a primary source of Direct appication, 2% nitrogen (N), the most important crop nutrient supporting agribusiness
Slide 59: Low Carbon Ammonia Supply will be Slow to Commission
Low Carbon Ammonia Supply will be Slow to Commission OCI’s Texas Blue Clean Ammonia Project due 2025 is Ahead <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 nit
Slide 60: 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 technology readiness, economic Market readiness Green competitiveness High Existing uses - blue (EU)
Slide 61: Csi Global
Csi Global Csi Global