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Oci Nv — Q1 2021 Earnings Presentation
32 slides from Oci Nv's earnings presentation, May 5, 2021
Slide 1: Q1 2021 Results Presentation
Q1 2021 Results Presentationxx 05 May 2021 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: Free cash flow accelerating in 2021, targets met early
Free cash flow accelerating in 2021, targets met early Record adjusted EBITDA of $452 million (+134%) achieved in Q1 2021, resulting in strong Free Cash Flow and deleveraging of $306 million Trailing net debt / adjusted EBITDA of 3.0x as of 31 March 2021, achieving our year-end net leverage target e
Slide 4: Table of Contents
Table of Contents H2 Q1 2021 Financial Favorable volume Market Outlook Capitalizing on the Appendix Performance and Pricing Outlook 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: Q1 2021 results: accelerating earnings, strong FCF and volume growth
Q1 2021 results: accelerating earnings, strong FCF and volume growth Highlights Summary Key Financials1 and KPIs $ million unless otherwise stated Q1 2021 Q1 2020 %Δ Own-produced volumes sold +9% in Q1 2021 vs. Q1 2020 Revenue 1,119.6 811.1 38% Gross Profit 340.4 77.3 340% • Nitrogen volumes +6% YoY
Slide 7: Fertiglobe performing as the leading global nitrogen exporter
Fertiglobe performing as the leading global nitrogen Fertiglobe unique competitive exporter strengths Adjusted EBITDA ($ million) and Adjusted EBITDA margin (%) 1 Largest nitrogen fertilizer export platform globally Adjusted EBITDA Adjusted EBITDA Margin 2 Strategically located, high quality assets
Slide 8: Accelerated deleveraging in 2021
Accelerated deleveraging in 2021 Accelerated deleveraging Focus on deleveraging towards 2x net leverage through the cycle o Year-end targets met early in Q1 2021, expect further Net Debt1 (US$ m) deleveraging in Q2 2021 Deleveraging despite trough pricing conditions Net debt Net debt / adj. EBITDA o
Slide 9: Table of Contents
Table of Contents H2 Q1 2021 Financial Favorable volume Market Outlook Capitalizing on the Appendix Performance and Pricing Outlook Hydrogen Opportunity 9
Slide 10: Healthy step-up in sales volumes in Q1 2021 despite winter freeze in the US
Healthy step-up in sales volumes in Q1 2021 despite winter freeze in the US Operational Excellence Program Own-Produced Volume Sold, Mt Focused on increasing on-stream time, higher capacity efficiency and extracting more value out of our young asset base to drive volume growth Methanol Nitrogen 12.2
Slide 11: Stronger Q2 driven by higher prices and volumes
Stronger Q2 driven by higher prices and volumes Fertilizer pricing - Urea, CAN and UAN, $/t Significant increase in 2021 prices Q1 2020 Q1 2021 Q2 2020 Q2 20211 500 +12% +12% o Robust fertilizer demand and higher crop prices +31% 400 +11% +10% driving sustained increase in fertilizer prices in Q2 30
Slide 12: Table of Contents
Table of Contents H2 Q1 2021 Financial Favorable volume Market Outlook Capitalizing on the Appendix Performance and Pricing Outlook Hydrogen Opportunity 12
Slide 13: Favourable outlook for nitrogen fertilizers
Favourable outlook for nitrogen fertilizers Attractive supply-demand fundamentals and Nitrogen prices recover to mid-cycle levels steepening cost curve Urea, CAN and UAN Pricing ($/t) Bull Market Drivers Expected to Support Higher Nitrogen Prices 600 CROP PRICES Rising crop prices and corn >$6/bushe
Slide 14: Global agricultural fundamentals set to remain positive
Global agricultural fundamentals set to remain positive Global crop prices1 rally setting the tone for a bullish 2021 China doubles corn imports with large purchases from the US 140 China corn imports by origin, Mt Corn Soy Wheat Corn + 51% since Jan at $7.32 Ukraine USA Laos Myanmar Other +148% 120
Slide 15: Methanol and ammonia prices have rebounded
Methanol and ammonia prices have rebounded Industrial nitrogen markets structurally tighten Methanol prices benefit from demand recovering Ammonia BulkGlobal Feedstock FOB Middle East Spot Prices 2016-2021F USGC Contract China CFR Main Ports Ammonia prices have room to rise further on Ammonia Bulk F
Slide 16: Higher costs for marginal producers supportive of prices
Higher costs for marginal producers supportive of prices Global Feedstock Prices 2016-2021F, $/MMBtu Cash Costs per ton of Ammonia 2016-2021F, $/t 600 14 Marginal costs have escalated 12 500 on high end of cost curve 10 400 8 300 6 200 4 2 100 0 0 Apr-20 Jan-18 Apr-18 Jul-18 Jan-19 Apr-19 Jul-19 Jan
Slide 17: Limited new supply additions to support improving prices
Limited new supply additions to support improving prices Urea capacity additions slow relative to 2015-19 Merchant ammonia market expected to significantly tighten Global ammonia capacity additions ex-China ex-urea, Mt Global urea capacity additions ex-China, Mt 4 Capacity additions 24 Capacity addi
Slide 18: Robust domestic demand in India and China
Robust domestic demand in India and China Indian Urea Sales to Have Another Record year supporting imports Indian supply in Q1 2021 down 9% YoY despite new plant commissioning Indian urea imports, Mt Indian tender volumes in 2021 expected > 10- Indian monthly domestic urea production, Mt Year Averag
Slide 19: Table of Contents
Table of Contents H2 Q1 2021 Financial Favorable volume Market Outlook Capitalizing on the Appendix Performance and Pricing Outlook Hydrogen Opportunity 19
Slide 20: Capitalizing on the Hydrogen Opportunity
Capitalizing on the Hydrogen Opportunity OCI’s unique strategic geographic and product footprint will drive the hydrogen transformation through value enhancing opportunities to decarbonize food, fuel, and feedstock Focus on value creation and maintaining strong capital discipline when pursuing decar
Slide 21: OCI's strategic footprint will capture the hydrogen potential
OCI’s strategic footprint will capture the hydrogen potential We are uniquely positioned to drive the hydrogen economy through our geographic OCI’s unique advantages presence & product mix Optimal solar/wind resources • One of the largest ammonia and Least Most methanol producers in the world OCI pr
Slide 22: OCI's commitment to a sustainable world
OCI’s commitment to a sustainable world OCI’s contribution to the Driving decarbonization with a focus on sustainable value creation and contributing to the UN SDGs Sustainable Development Goals (SDGs) Environmental Driving Committed to 20% GHG intensity reduction by 2030 and carbon 90% 76% sustai
Slide 23: Transition to hydrogen economy is key to global decarbonization
Transition to hydrogen economy is key to global decarbonization Ammonia and Methanol have a pivotal role in the Global Road-to-Zero Challenge As hydrogen carriers Multiple Blue/green decarbonized end Hydrogen as feedstock as green fuel and as production markets battery to store H2 Fuel cell vehicle
Slide 24: OCI's MENA assets ideally positioned to capitalize on renewable energy
OCI’s MENA assets ideally positioned to capitalize on abundant renewable energy and supply Europe’s hydrogen shortfall Capitalizing on execution track record with strong public and private partnerships in place OCI’s MENA assets • Existing ammonia facilities and infrastructure represent ideal platfo
Slide 25: OCI will capture the transition potential with numerous key initiatives underway
OCI will capture the transition potential with numerous key initiatives underway Strategic partnerships with industry leaders on announced projects in Europe, and lower carbon projects being developed across our global asset base Blue ammonia Blue and green ammonia Bio-fuels and bio- FUREC Renewable
Slide 26: Zero carbon shipping needs ammonia and methanol
Zero carbon shipping needs ammonia and methanol: exponential potential demand Grey and blue ammonia and methanol pathways close to cost parity1 Ammonia and methanol shipping demand by 20502 € mn per annum Metric ton xx 4 – 5x CO2 cost required to break even with HFO, EUR/ton 6 – 7x xx Additional pri
Slide 27: Capital Allocation Targets
We can achieve a large proportion of our ESG targets and generate positive returns with Capital Allocation Targets limited incremental capital spend Maintaining strong capital discipline o 45% of our GHG reduction commitment is zero to low capital expenditure, including Total Capex Spend (US $m) T
Slide 28: Appendix: About OCI
OcI Appendix About OCI 28
Slide 29: Nitrogen production capacity and commercial footprint
Nitrogen production capacity and commercial footprint Nitrogen Footprint Iowa Fertilizer Company (IFCo) - Iowa, US Egyptian Fertilizer Co (EFC) – Egypt ▪ Production and sales ▪ Acquired: 2008 started April 2017 Product ktpa Product1 ktpa Urea 1,648 Ammonia (net) 195 UAN 1,832 Urea 438 DEF 1,019 Egyp
Slide 30: Methanol production capacity and commercial footprint
Methanol production capacity and commercial footprint United States Global OCI Beaumont (Texas, US) OCI Methanol Marketing Product ktpa ✓ Wholly owned subsidiary marketing OCI’s 3.0Mt of methanol Methanol 1,0041 Ammonia 356 portfolio globally ✓ The distribution platform’s global footprint and distri
Slide 31: 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 32: 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