Slide 1: Q4 and FY 2022 Results Presentation
Q4 and FY 2022 Results Presentationxx 14 February 2023 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: 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: Highlights of 2022 Performance and Outlook
Highlights of 2022 Performance and Outlook Strong free cash flow of $1.9 billion in 2022, enabling OCI to deleverage (net leverage 0.3x as of 31 Dec 2022) and distribute $1.1 billion of cash to our shareholders Capital returns: additional semi-annual cash distribution for H2 2022 of €3.50 per share
Slide 5: OCI N.V. Overview – Transformational Growth Opportunities
OCI N.V. Overview – Transformational Growth Opportunities OCI N.V. listed on Euronext (Market Cap of $6.8bn2), Fertiglobe (50% owned by OCI) listed on ADX (Market Cap of $9.5bn2) Global leader in hydrogen products with history of growth and ample hydrogen growth opportunities Capacity (million metri
Slide 6: OCI is at the Forefront of the Global Energy Transition
OCI is at the Forefront of the Global Energy Transition Current Sustainable Portfolio and Transformational Growth Projects BioMCN Gasification Low carbon ammonia UAE IFCo CCS Texas Blue Ammonia Egypt Green Hydrogen Existing Sustainable Products / Operations Low Carbon Methanol Projects Low Carbon Am
Slide 7: Market Cap Growth Largely Reflection of Net Debt Reduction
Market Cap Growth Largely Reflection of Net Debt Reduction Capital Allocation Priorities Cash distribution to shareholders 1 Free cash flow generated in 2022: Market cap Net debt ✓ $1.9 billion Accelerated deleveraging in 2021 and 2022 Share price 2 De-risked and strong balance sheet offers Market C
Slide 8: Q4 2022 and FY 2022 Financial Summary
Q4 2022 and FY 2022 Financial Summary Own Produced Sales Volumes (million mt) Key Product Benchmark Prices ($/mt) Urea Egypt Methanol US contract Methanol Nitrogen 1.7 1.3 -31% -10% +9% +43% 9.7 9.6 895 645 756 581 557 606 0.3 0.3 616 529 2.4 2.4 Q4 2021 Q4 2022 FY 2021 FY 2022 Q4 2021 Q4 2022 FY 20
Slide 9: OCI NV Segments: Overview and Growth Drivers
OCI NV Segments: Overview and Growth Drivers US Nitrogen EU Nitrogen Methanol Group Fertiglobe ▪ Ownership: 100% ▪ Ownership: 100% ▪ Ownership: 85% ▪ Ownership: 50% ▪ Production capacity (pa): 3.5mt1 ▪ Production capacity (pa): 2.9mt1 ▪ Production capacity (pa): 3.3mt1,2 ▪ Production capacity (pa):
Slide 10: Nitrogen and Methanol Market Outlook
Nitrogen and Methanol Market Outlook 10
Slide 11: Tight Agricultural Fundamentals at least until 2025, Supporting Rebound in 2023
Tight Agricultural Fundamentals at least until 2025, Supporting Rebound in 2023 Crop prices supported by stocks: use ratio at 10 year lows Fertilizer affordability +33% since Jan-22, supporting demand recovery Crop price index, Jan 2006 = 100 Global grain and oilseed stocks: use ratio (ex-China), %
Slide 12: Nitrogen Outlook Supported by Attractive Supply-Demand Dynamics
Nitrogen Outlook Supported by Attractive Supply-Demand Dynamics Drivers Support Demand Driven Environment Prior cycle (last 5-6 years) Next cycle (started in 2022) 30% 26% Corn stocks-to-use ratio 2022 corn stocks-to-use ratio HIGH CROP PRICES and AFFORDABILITY SUPPORT NITROGEN DEMAND RECOVERY $3.7/
Slide 13: DEF / AdBlue: Expanding Global Footprint
DEF / AdBlue®: Expanding Global Footprint Attractive Fundamental Drivers for DEF Demand Global DEF Consumption, Million Metric Urea Equivalent Tons N-7 Joint Venture with Dakota Gasification Company: #2 in United States DEF production start Q1 2024 DEF demand set to grow +27% >8% per annum 8 7.7 7.3
Slide 14: Methanol Market Fundamentals Are Supportive, with Significant Long-term Upside
Methanol Market Fundamentals Are Supportive, with Significant Long-term Upside Methanol prices rebound by >10% in the last 2 months Methanol supply & demand balance tightening Methanol spot prices, USD per metric ton Methanol capacity vs. demand growth, Million Mt 550 China re-opening Methanol marke
Slide 15: Methanol Uniquely Positioned as More Economic Alternative Fuel in Energy Mix
Methanol Uniquely Positioned as More Economic Alternative Fuel in Energy Mix Energy and Gasoline Applications supported in Asia Product pricing, converted to HHV, $/MMBtu ▪ Methanol is economically advantaged fuel compared to alternatives Methanol benefitting from additional industrial fuels demand
Slide 16: Methanol As Marine Fuel Accelerating Exponentially
Methanol As Marine Fuel Accelerating Exponentially Methanol marine orderbook has increased dramatically recently, set to accelerate further, with >120 vessels on order and increasing interest from the bulker segment Current Confirmed Methanol DF Engines Orderbook Incremental Methanol Demand From Mar
Slide 17: Select Growth Projects
OcI Select Growth Projects 7
Slide 18: 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 Blue NH3 Nitrogen ▪ Linde's total investment ~$1.8 billion Ammonia (NH3) - Connected to US Gulf Coast H2 pipeline network Blue H2 H2 Pipeline Air O2 Auto- ▪ OCI’s total investment cos
Slide 19: Texas Blue Ammonia: on track to start early 2025
Texas Blue Ammonia: on track to start early 2025 Milestones ❑ OCI’s 1.1 mtpa blue ammonia plant ✓ First greenfield blue ammonia facility of this scale to come onstream in the US ❑ Well underway and in key construction phase: ✓ EP contract awarded in March 2022 ✓ All major contracts signed ✓ All long
Slide 20: Green Hydrogen and Ammonia Project in Egypt
Green Hydrogen and Ammonia Project in Egypt Africa’s first integrated green hydrogen plant Milestones ✓ Project started commissioning of the first phase during COP27 in November 2022 ✓ Evaluating engineering and technology choices for full- scale 100 MW plant: ✓ Final Investment Decision expected in
Slide 21: Ta'ziz Low Carbon Ammonia project in the UAE
Ta’ziz Low Carbon Ammonia project in the UAE World-scale 1 mpta low-carbon ammonia production capacity Milestones ✓ 2021: Announced world scale low-carbon ammonia facility in the MENA region in partnership with Low carbon ADNOC and ADQ (Ta'ziz), GS and Mitsui hydrogen production - hydrogen as by- Gl
Slide 22: Gasification Project in the Netherlands
Gasification Project in the Netherlands Addition of gasification complex to existing methanol facility, utilizing Milestones waste feedstocks to produce low-carbon, renewable methanol ✓ Will submit application for European Innovation Fund’s third large-scale project call Gasification ✓ Active collab
Slide 23: Hydrogen Regulation and Timing Key for Demand Uptake and Balances
Hydrogen Regulation and Timing Key for Demand Uptake and Balances Europe Key provisions in US Inflation Reduction Act ETS and CBAM: Carbon Border Clean Hydrogen Production Tax Credit: Adjustment Mechanism 2026+ taxing up to $3/kg for 10 years from start-up imports on embedded emissions, and free EU
Slide 24: Appendix
OcI Appendix 24
Slide 25: Q4 2022 Results
Q4 2022 Results Summary Key Financials1 and KPIs $ million unless otherwise stated Q4 '22 Q4 '21 %Δ 2022 2021 %Δ Own-produced sales volumes sold in Q4‘22 vs. Q4’21: Revenue 2,197.2 2,198.9 0% 9,713.1 6,318.7 54% Gross profit 443.5 811.3 (45%) 3,347.7 1,829.0 83% ➢ Nitrogen volumes at the same level
Slide 26: 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 Q4 '22 Q4 '21 2022 2021 Comment Operating profit as reported 328.7 734.7 3,004.3 1,562.8 Depreciation, amortization and impairment 166.1 264.8 599.9 891.6 EBITDA 494.8 9
Slide 27: 2022 Free Cash Flow and Net Debt Build-up
2022 Free Cash Flow and Net Debt Build-up Reconciliation of 2022 Reported EBITDA to Free Cash Flow ($ million) 3,604 (199) (264) (47) (227) (151) (1,127) 1,919 328 2 Reported EBITDA Working Capital Maintenance Capex Lease Payments Tax Paid Interest Paid Dividends Paid Dividends from equity Other Fre
Slide 28: Volumes by Segment
Volumes by Segment '000 metric tons Q1'22 Q2'22 Q3'22 Q4'22 FY 2022 FY 2021 Nitrogen US Own Product 502 593 494 676 2,265 1,796 Ammonia 4 47 6 89 146 82 Urea 12 10 7 10 38 43 UAN 260 319 262 323 1,164 1,059 DEF 226 218 219 254 917 612 Traded Third Party 336 405 495 261 1,498 1,001 Total 838 999 990
Slide 29: High Farm Profitability Supportive Of Nitrogen Demand Recovery in 2023
High Farm Profitability Supportive Of Nitrogen Demand Recovery in 2023 Farm operating margins (revenue above operating costs), USD/ha France US Corn US Soybeans Brazil Soybeans Brazil Corn Cereals Farm returns on corn higher than soybeans and incentive to plant more corn in the US and Brazil in 2022
Slide 30: 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 10.51 10.46 9.68 9.0 9.05 8.2 +30% 6.9 7.89 ~8 Mt 7.69 7
Slide 31: Marginal Costs Supportive of Nitrogen Prices
Marginal Costs 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 Marginal costs declined in Q4 2022, but remain at 70 high levels compared to
Slide 32: 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 33: Power Generation Poised To Become An Attractive Market For Clean Ammonia
Power Generation Poised To Become An Attractive Market For Clean Ammonia Countries with high power generation opportunities Main drivers for co-firing Source: Fertecon, Arkwright market study, OCI 33
Slide 34: 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 30% of announced projects realized on time, and <15% of announcements get built given hurdles Likely and probable nitrogen projects in pipeline 2002-2008 ex-China, Million Mt 52 Similar trend in 2014 – 2019, 9 US proje
Slide 35: 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 36: 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