Fertiglobe Plc · ADX:FERTIGLB
Fertiglobe — Investor Presentation (September 2022)
44 slides from Fertiglobe's investor presentation, September 2022
Slide 1: Investor Presentation September 2022
Fertiglobe Investor Presentation September 2022
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or f
Slide 3: Fertiglobe at a Glance
Fertiglobe at a Glance(1) Leading Nitrogen Fertilizer Exporter Globally and Unique Ammonia Platform(2) 4 World-class Strategically Located Production Facilities 50% of Assets Younger Global In-House Distribution Capabilities, than 10 years 50.0% 36.2% 13.8% including ~1,000kt Storage Capacity 6.7mt
Slide 4: Fertiglobe is a Strategic Partnership With Strong Shareholder Support
Fertiglobe is a Strategic Partnership With Strong Shareholder Support Partnership Geared Towards Growth and Value Creation, Supported by Shareholders with a Strong Track Record OCI NV 50%(1) 36%(1) Abu Dhabi National Oil Company #3 global producer of nitrogen products(2) Leading integrated O&G compa
Slide 5: Key Fertiglobe Investment Highlights
Key Fertiglobe Investment Highlights 1 Leading nitrogen fertilizer exporter globally and unique ammonia platform Strategically located asset base and global distribution capabilities driving structurally higher realized 2 prices High quality asset base at attractive cost curve position underpinned b
Slide 6: Nitrogen Markets
Fertiglobe ‘An ADNOC and OCI Company Nitrogen Markets
Slide 7: 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)(2) CROP PRICES DRIVING HEALTH
Slide 8: 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 and Ammonia Prices (Monthly Averages, 2011 – Q3 20221, $/t Demand-driven Env
Slide 9: High Farm Incomes Supportive Of Demand
High Farm Incomes Supportive Of Demand 1 Supportive farm incomes in 2022: Farm margins are attractive in grain exporting regions as input costs have been offset by higher Farm operating margins (revenue above operating costs), USD/ha crop prices, incentivising farmers to plant more US Brazil Brazil
Slide 10: Agricultural Fundamentals Support Robust Nitrogen Demand Until 2024
Agricultural Fundamentals Support Robust Nitrogen Demand 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 weather requiring at least until 2024 to replenish in the Northern Hemisphere and protectionist measures Cr
Slide 11: 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 ~$55MMBtu for 2022 and 2023 3,000 60 Marginal costs have escalated on high end of cost and $28/MMBtu in 2024/25 curve and not
Slide 12: Fertiglobe Attractively Positioned on Urea and Ammonia Cost Curves
Fertiglobe Attractively Positioned on Urea and Ammonia Cost Curves Benefit from attractively priced, long-term feedstock gas contracts and low conversion costs Long-term attractive gas supply agreements with EGPC in Egypt, Sonatrach in Algeria, and ADNOC in Abu Dhabi supporting advantageous cost p
Slide 13: 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 Merchant ammonia market structurally tightening Mt Global ammonia net capacity additions and demand growth, ex-China ex-urea, Mt 22.9 4.5 Market deficit does not t
Slide 14: Lower Chinese Exports And Higher Indian Imports Supportive Of Prices
Lower Chinese Exports And Higher Indian Imports Supportive Of Prices • Chinese market balances supported by: Chinese Exports Curtailed on Domestic Demand and Closures – Government measures to curb exports until at China urea exports, Mt least H2 2023 and prioritise domestic supply including mandator
Slide 15: Hydrogen and Clean Ammonia Potential
Hydrogen and Clean Ammonia Potential
Slide 16: Ammonia is Well Positioned to Capture the Hydrogen Opportunity
Ammonia is Well Positioned to Capture the Hydrogen Opportunity With >40% of Grey Hydrogen Use Today, Ammonia is a Building Block in the Emerging H2 Economy Acting As Its Best Carrier Hydrogen Production Conversion to Ammonia Ammonia End Uses Conventional Uses Conventional Grey Fertilizer Natural Gas
Slide 17: Significant Incremental Ammonia Demand from New Clean Energy Applications
Significant Incremental Ammonia Demand in the Medium-Term from New Clean Energy Applications Clean Hydrogen is Strongly Positioned to Lead the World’s Energy Transition, and Ammonia is the Key Enabler for Such Clean Hydrogen Energy Clean hydrogen use in energy applications will be a major contribu
Slide 18: Marine Fuel Represents a Substantial Market Opportunity for Fertiglobe
Marine Fuel Represents a Substantial Market Opportunity for Fertiglobe Shipping Accounts for ~3% of GHG Emissions Worldwide Ammonia as a marine fuel is one of the most practical alternatives to Heavy Fuel Oil (HFO) - burns cleanest when used as an energy source vs. other fuels (>50% reduction in G
Slide 19: Fertiglobe is Very Well Positioned to Capture the Hydrogen Potential
Fertiglobe 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 sequestra
Slide 20: Fertiglobe Clean Ammonia Execution Roadmap
Fertiglobe Clean Ammonia Execution Roadmap(1) Early Mover in Low Carbon Ammonia – Allowing Access to Higher Product Premia at Minimal Capex ✓ ✓ ✓ Q2 2021 Q1 2022 Q3 2021 Debottlenecking Announcement Signed FID Blue Abu-Dhabi Blue at Fertil using a of Fertiglobe Production of collaboration Ammonia Am
Slide 21: Appendix: Q2 2022 Results
Fertiglobe ‘An ADNOC and OCI Company Appendix Q2 2022 Results
Slide 22: Fertiglobe Reports Strong Q2 2022 Results; H1 2022 Dividend Supported
Fertiglobe Reports Strong Q2 2022 Results; H1 2-22 Dividend Supported by Solid Free Cash Flow Generation • Q2 2022 revenues increased 105% YoY to $1,471 million and adjusted EBITDA +155% YoY to $770 million, driven by higher selling prices and higher own-produced sales volumes as some deliveries wer
Slide 23: Fertiglobe is Committed to Maintaining the Highest Safety Standards
Fertiglobe is Committed to Maintaining the Highest Safety Standards 12-month rolling recordable incident rate to 30 June 2022 0.29 incidents per 200,000 manhours Total TRIR (Total Recordable Injury Rate)(1) Target Zero Injuries at All Facilities Achieve leadership in safety and occupational standa
Slide 24: Fertiglobe Reports Strong Q2 2022 Underpinned by Robust Markets
Fertiglobe Reports Strong Q2 2022 Underpinned by Robust Markets Summary Key Financials1 and KPIs $ million unless otherwise stated Q2 2022 Q2 2021 %Δ H1 2022 H1 2021 %Δ Revenue 1,471.3 716.6 105% 2,656.1 1,260.0 111% Growth in Q2 2022 is driven by higher selling prices across Gross Profit 747.8 252.
Slide 25: Q2 2022 Results
Q2 2022 Results Own-Produced Sales Volumes (Mt) Key Product Benchmark Prices, $/t Revenue ($m) 1.54 +105% 1.44 Urea Egypt Ammonia Middle East 0.32 0.36 +104% +87% 1,471 1.12 1.18 965 795 717 390 516 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q1 2021 Q1 2022 Q2 2021 Q2 2022 Fertiglobe - Ammonia Fertiglobe - Ure
Slide 26: Strong Revenue Profile Translating Into Robust EBITDA and Cash Flow
Strong Revenue Profile Translating Into Robust EBITDA and Cash Flow Generation Through Low Capex EBITDA Margin and FCF Conversion Advantages Result in Ample Dividend Capacity ~$2.7bn Revenue Favourable geographical positioning and centralized commercial strategy H1 2022 leveraging on unique distribu
Slide 27: June 2022 Net Debt
30 June 2022 Net Debt H1 2022 Dividend Announced at $750 million $ million 30-Jun-22 31-Dec-21 Cash and bank balances 1,589.0 899.1 Loans and borrowings - current 61.1 59.6 Loans and borrowings - non-current 1,082.9 1,326.1 Total borrowings 1,144.0 1,385.7 Net debt (cash) (445.0) 486.6 Net debt / LT
Slide 28: Reconciliation of Adjusted EBITDA and Adjusted Net Profit
Reconciliation of Adjusted EBITDA and Adjusted Net Profit Reconciliation of reported operating profit to adjusted EBITDA $ million Q2 2022 Q2 2021 H1 2022 H1 2021 Adjustment in P&L Operating profit as reported 707.2 230.0 1,264.8 397.0 Depreciation and amortization 62.8 72.5 124.8 136.3 EBITDA 770.0
Slide 29: Reconciliation of EBITDA to Free Cash Flow and Change in Net Debt
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 2022 Q2 2021 H1 2022 H1 2021 EBITDA 770.0 302.5 1,389.6 533.3 Working capital 93.0 54.4 13.6 (4.8) Maintenance capital expenditure (13.0) (5.4) (19.8) (12.
Slide 30: Appendix: About Fertiglobe
Fertiglobe ‘An ADNOC and OCI Company Appendix About Fertiglobe
Slide 31: 4 World-Scale Assets Leveraging a Global Centralised Commercial Platform
4 World-Scale Assets Leveraging a Global Centralised Commercial Platform (1) Total Fertiglobe Capacity (mtpa) Gross ammonia 4.4 Urea 5.1 Net ammonia 1.5 DEF 0.5(3) UAE Egypt Algeria UAE Fertiglobe Distribution Fertil Egyptian Fertilizer Company Egypt Basic Industries Sorfert Distribution Business (1
Slide 32: Strategically Located Asset Base and Global Distribution Platform
Strategically Located Asset Base and Global Distribution Platform Diversified Production Footprint in Geographically Advantaged Positions Sorfert Fertil (51%) (100%) Egyptian Egypt Basic Fertilizer Industries Company Corporation (100%) (75%) Unique production platform in export-focused locations wit
Slide 33: Global In-House Commercial Capabilities in Ammonia & Urea
Global In-House Commercial Capabilities in Ammonia & Urea Strategy Focused on Selling Downstream to Customers and Limiting Role for Traders/Intermediaries, Leading to Structurally Higher Net-backs GCC Producer Baltic Producer Black Sea Producer 10% global market share of combined No import duties in
Slide 34: Leading Nitrogen Fertilizer and Ammonia Exporter Globally
Leading Nitrogen Fertilizer and Ammonia Exporter Globally ~10% of Combined Ammonia and Urea Global Seaborne Exports Significant Scale Advantages Ammonia and Urea Combined Export Production Capacity(1) Mtpa 1 Large scale strategically located platform with ability to direct volumes to highest 6.7 net
Slide 35: High Quality Asset Base with 50% of Capacity Younger than 10 Years
High Quality Asset Base with 50% of Capacity Younger than 10 Years Young Asset Base Drives Output, Cost and GHG Emission Advantages Asset Base Age(1) vs. Industry Average(2) GHG Young Assets allow for: EBITDA FCF 50% Emissions Higher reliability and onstream time ✓ ✓ ✓ 41% Better gas conversion ✓ ✓
Slide 36: Fertiglobe Gas Contracts Overview
Fertiglobe Gas Contracts Overview Attractively Priced Fixed Gas Contracts Ensure Fertiglobe is Competitive Through the Nitrogen Cycle (1) Gas Supplier ADNOC GASCO(2) EGPC(2) Sonatrach Contract Start Date 2019 2005 - 2006 2008 2013 Contract End Date 2044 2030 - 2031 2028 2033 Annual Contract Volume 5
Slide 37: Appendix: Additional Information
Appendix Additional Information
Slide 38: Nitrogen is One of the Most Widely Used Crop Nutrients Globally
Nitrogen is One of the Most Widely and Frequently Used Crop Nutrient Globally Broad Range of Applications in Addition to Fertilizers, Including Emerging Use Cases as a Hydrogen Carrier and Clean Fuel; Annual Application is a Must Nitrogen (N) End-Use Applications Examples Industry Sector Natural g
Slide 39: Fertiglobe's Vision and Strategy
Fertiglobe’s Vision and Strategy A Global Vision Nitrogen Powerhouse Well Positioned to Capture Value from Clean Energy Trends A B C H2 Growth Drivers Operational Excellence Commercial Strategy Low Carbon Ammonia Strategy Sustainability Reduce carbon footprint through the combination of operational
Slide 40: Operational Excellence Program is Founded on 3 Key Pillars
Fertiglobe’s Operational Excellence Program is Founded on 3 Key Pillars A Implementing Continuous Improvement Across All Our Plants Process Safety & Reliability Energy Efficiency Costs Optimization Site-led improvement programs Energy-efficient designs Capital deployment optimization and centr
Slide 41: Building the Leading Global Marketing Platform in Nitrogen Fertilizers
Fertiglobe is Building the Leading Global Marketing Platform in Nitrogen Fertilizers B Further maximizing netbacks Increase volume traded through Product expansion offering long through greater market penetration in-house distribution business term growth potential Accelerate global commercial exp
Slide 42: Conservative Financial Policy
Conservative Financial Policy The Company targets an investment grade credit rating and commensurate leverage Conservative balance sheet and ample liquidity allows for allocation of available funds to balance future growth opportunities Capital Structure with dividend distribution to its shareho
Slide 43: Profit Sharing Mechanisms – Sensitivity to Product Prices
Profit Sharing Mechanisms – Sensitivity to Product Prices Fertiglobe Has Profit Sharing Mechanisms that Provide the Egyptian and Algerian Governments with Greater Income Participation as Product Pricing Increases(1) Illustrative Impact of Product Prices on Reported EBITDA @ 2021A + Sensitized Pricin
Slide 44: Thank you
1 y | Thank you (33: > |