Oci Nv · EURONEXT:OCI
Oci Nv — Investor Presentation (September 2021)
36 slides from Oci Nv's investor presentation, September 2021
Slide 1: Investor Presentation September 2021
Investor Presentationxx September 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: Record earnings, free cash flow accelerating, net debt reduced by a further $390 million in Q2
Record earnings, free cash flow accelerating, net debt reduced by a further $390 million in Q2 Record adjusted EBITDA of $535 million (+144%) achieved in Q2 2021, resulting in accelerated Free Cash Flow Deleveraging of $390 million during Q2, resulting in a total reduction of $697 million since 31 D
Slide 4: Table of Contents
Table of Contents H2 Q2 2021 Financial Nitrogen and Capitalizing on the Fertiglobe Appendix Performance Methanol Hydrogen performing as the Market Outlook Opportunity leading global nitrogen exporter 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 2021 results: accelerating earnings and strong FCF
Q2 2021 results: accelerating earnings and strong FCF Summary Key Financials1 and KPIs $ million unless otherwise stated Q2 2021 Q2 2020 %Δ H1 2021 H1 2020 %Δ Own-produced volumes sold were flat in Q2 2021 vs. Q2 2020 Revenue 1,462.9 875.4 67% 2,582.5 1,686.5 53% Gross Profit 404.6 126.7 219% 745.0
Slide 7: Accelerated deleveraging in 2021
Accelerated deleveraging Accelerated deleveraging in 2021 ✓ C.$700 million deleveraging in H1 2021 and we expect a drop in net Focus on deleveraging towards 2x net leverage through the cycle leverage to below our target of 2x through the cycle by end of 2021 Net Debt1 (US$ m) Lower interest costs De
Slide 8: Table of Contents
Table of Contents H2 Q2 2021 Financial Nitrogen and Capitalizing on the Fertiglobe Appendix Performance Methanol Hydrogen performing as the Market Outlook Opportunity leading global nitrogen exporter 8
Slide 9: Nitrogen is most widely and frequently used crop nutrient globally
Nitrogen is most widely and frequently used crop nutrient globally Broad range of applications in addition to fertilizers, including emerging use cases as hydrogen carrier and clean fuel Nitrogen (N) End-Use Applications Examples Industry Sector ▪ Natural gas % of Global 57% Fertilizer Use(1) ▪ Key
Slide 10: Nitrogen outlook supported by attractive supply-demand dynamics
Nitrogen outlook supported by attractive supply-demand dynamics Supporting Strong Pricing Outlook For 2021 and Beyond as We Recover From a 5-year Downturn Bull Market Drivers Support Demand Driven Environment Prior cycle (last 5-6 years) 2021+ CROP PRICES SUPPORTIVE OF HIGHER AFFORDABILITY 30% 24% C
Slide 11: Robust agricultural fundamentals support farm incomes and corn expansion
Robust agricultural fundamentals support farm incomes and corn expansion Crop Prices Supported by “Stocks : Use” Ratio at 7 Year Lows, Chinese corn imports expected higher tightening global corn markets Requiring at Least Two More Growing Seasons to Replenish Chinese corn imports, Mt Crop price inde
Slide 12: 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 Positive net ammonia demand outlook before accounting for growth ✓ Demand growth expected to exceed supply growth, and new supply subject to delays and in blue
Slide 13: Supportive dynamics in China and India with declining marginal urea exports
Supportive dynamics in China and India with declining marginal urea exports and stable Indian domestic production Chinese Exports Curtailed on Domestic Demand and Closures • Chinese market balances supported by: China urea exports, Mt – Low-stocks to use ratio, high domestic crop prices and governme
Slide 14: Nitrogen fertilizer pricing supported by demand-driven environment
Nitrogen fertilizer pricing supported by demand-driven environment Strong Support for Current Nitrogen Price Levels from Low Global Crop Inventories, Strong Farm Economics, Continued Strong Fertilizer Demand and Recovering Industrial Demand Urea, Ammonia, CAN and UAN Prices (Monthly Averages, 2011 -
Slide 15: Methanol prices have rebounded and market fundamentals remain supportive
Methanol prices have rebounded and market fundamentals remain supportive Methanol prices benefit from demand recovering Methanol supply & demand balance tightening Global Feedstock USGC Contract USGC Spot Prices 2016-2021F Methanol capacity vs demand growth, Million Mt Capacity Demand New capacity a
Slide 16: Higher costs for marginal producers supportive of prices
Higher costs for marginal producers supportive of prices Global Feedstock Prices 2017-2022F, $/MMBtu Cash Costs per ton of Ammonia 2017-2022F, $/t 20 900 Marginal costs have escalated 18 800 on high end of cost curve 16 700 14 600 12 500 10 8 400 6 300 4 200 2 100 0 0 China Anthracite Coal US Henry
Slide 17: Table of Contents
Table of Contents H2 Q2 2021 Financial Nitrogen and Capitalizing on the Fertiglobe Appendix Performance Methanol Hydrogen performing as the Market Outlook Opportunity leading global nitrogen exporter 17
Slide 18: Green Hydrogen Is Expected to Grow 10x by 2030
Green Hydrogen Is Expected to Grow 10x by 2030 In a Decarbonized World by 2050, Hydrogen Demand Could Grow up to 10-fold, Supported by Drop in Production Costs and Regulatory Push to Address Climate Change Global Energy Demand Supplied with Hydrogen(1) Supportive Regulatory Environment EJ 78 Power ▪
Slide 19: 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 20: Clean ammonia market expected to experience substantial growth
Clean ammonia market expected to experience substantial growth Global clean ammonia demand is expected to reach 40mt by 2035 driven by Europe and Asia Europe Global Asia(1) <1% 5% 19% 28% <1% 5% 22% 28% 166 183 29% 31% 36% 38% 129 145 8 26 40 26 129 138 140 142 68 22 24 58 19 Today 2025 2030 2035 44
Slide 21: Zero carbon shipping needs ammonia and methanol: exponential potential demand
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 CO2 cost required to break even with HFO, EUR/ton 4 – 5x 6 – 7x xx Additional pri
Slide 22: Table of Contents
Table of Contents H2 Q2 2021 Financial Nitrogen and Capitalizing on the Fertiglobe Appendix Performance Methanol Hydrogen performing as the Market Outlook Opportunity leading global nitrogen exporter 22
Slide 23: 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 including ~1,000kt Storage Capacity 58% 42% 6.6mt Sellable V
Slide 24: A Strategic Partnership With Strong Shareholder Support
A Strategic Partnership With Strong Shareholder Support Partnership Geared Towards Growth and Value Creation, Supported by Shareholders with a Strong Track Record #3 global producer of nitrogen products #1 & #2 methanol producer in EU & US, respectively Leading integrated O&G company, entrusted to m
Slide 25: Fertiglobe performs as the leading global nitrogen exporter
Fertiglobe performs as the leading global nitrogen exporter Own-Produced Sales Volumes (Mt) Revenue ($m) 5.5 2,073 1.2 1.1 0.9 1,551 2.8 1,260 2.8 2.9 1,238 3.0 0.7 4.6 0.5 1,056 738 2.2 2.2 2.2 1.4 597 379 FY2018 FY2019 FY2020 H1-2020 H1-2021 FY2018 FY2019 FY2020 LTM June-21 H1-2020 H1-2021 OCI MEN
Slide 26: Largest nitrogen fertilizer exporter globally and unique ammonia platform
Largest nitrogen fertilizer exporter globally and Significant scale advantages unique ammonia platform ~10% of combined ammonia and urea global seaborne exports 1 Large scale strategically located platform with ability to direct volumes to highest 2020 Ammonia and Urea Combined Export Production, Mt
Slide 27: Structurally higher realised net-backs relative to other exporting regions
Structurally higher realised net-backs relative to other exporting regions Low-freight Costs, Duty-free Access to Key Importing Markets and Direct-to-customer Strategy Enables Structural Netback Advantages of Fertiglobe GCC Baltic Black Sea Producer Producer Producer No import duties into Europe/Sou
Slide 28: 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 conversio
Slide 29: Fertiglobe positioned in the 1st quartile of urea and ammonia cost curves
Fertiglobe positioned in the 1st quartile of urea and ammonia cost curves Fertiglobe Benefits From Attractively Priced, Long-term Fixed Feedstock Gas Contracts(1) and Low Conversion Costs, Positioning It in the 1st Quartile of the Ammonia and Urea Cost Curves(2) ▪ Long-term fixed gas supply agreemen
Slide 30: Fertiglobe is Ideally Positioned to Capitalize on the Hydrogen Opportunity
Fertiglobe is Ideally Positioned to Capitalize on the Hydrogen Opportunity Established exporter globally of seaborne merchant ammonia with trading expertise and infrastructure with ability to leverage existing OCI 4.4mtpa + Global platform gross ammonia trading, distribution & logistics platform Str
Slide 31: Fertiglobe is Plug-and-Play for Low Carbon Ammonia
Fertiglobe is Plug-and-Play for Low Carbon Ammonia Huge Competitive Advantage in Low Carbon Ammonia Relative to Greenfields Fertiglobe competitive advantage, accessed through low CAPEX Blue Ammonia Merchant CO2 EOR(1) Ammonia position sequestration + network Ammonia Ammonia storage Ammonia import On
Slide 32: Appendix About OCI
OcI Appendix About OCI 32
Slide 33: 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 1,714 Ammonia (net) 195 DEF 350 UAN 1,832 Urea 438 DEF 1,
Slide 34: 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 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