OCI NV Q3 2021 Results

Q3 2021 Results Report

Amsterdam, The Netherlands / 8 November 2021

OCI N.V. Reports Third Quarter 2021 Results

Highlights:

Financial and Outlook

• Revenues increased 104% to $1.5 billion and adjusted EBITDA increased 161% to $501 million in Q3 2021 as compared to Q3 2020, despite three sizeable turnarounds at our facilities in the US and Egypt
• Adjusted net income was $56 million in Q3 2021 compared to adjusted net loss of $67 million in Q3 2020
• We expect a meaningful step-up in adjusted EBITDA in Q4 compared to Q3 2021, driven by significantly higher selling prices and advantaged feedstock costs in MENA and the US
• Trailing net debt / adjusted EBITDA was 1.7x as of 30 September 2021; based on the current outlook for volumes and pricing, we expect a drop in net leverage to below 1.3x by year-end 2021 and to below 1.0x during Q1 2022
• OCI expects to start returning capital to shareholders from 2022 onwards, with a first semi-annual dividend expected to be announced in February and paid in April 2022

ESG and Business Updates

• On 27 October 2021 ADNOC and OCI successfully listed 13.8% of their partnership Fertiglobe on the Abu Dhabi Securities Exchange (ADX), generating gross proceeds to OCI of c.$461 million. Following the IPO, OCI continues to own a majority of Fertiglobe's share capital
• In October, Fertiglobe announced a partnership with Scatec and the Sovereign Fund of Egypt for a 50 - 100 MW electrolyzer to produce up to 90,000 metric tons of green ammonia in Egypt
• In November 2021, OCI further improved its capital structure by redeeming $540 million 5.25% Senior Secured
  Notes and €400 million 3.125% Senior Secured Notes, which results in a reduction in OCI N.V.'s cash interest of
  >$40 million per annum from 2022 onwards

Ahmed El-Hoshy,CEO of OCI NV commented: "This year has been transformational, as we begin reaping the rewards of our growth strategy and competitive business model. We have achieved our balance sheet goals which gives us the opportunity to start returning capital to shareholders and positions us well for future growth through targeted sustainability- driven projects.

Our order book gives us excellent visibility for Q4 and the upcoming season in H1 2022. The current low grain stocks around the world will take at least until 2023 to replenish. It's times like these that OCI with its low-cost global platform, world-scale young assets and strong logistics can help address these grain shortfalls and overall food security concerns by delivering essential nitrogen products to the agricultural markets.

We continue to enhance our ammonia logistics, further strengthening OCI's world-leading ammonia production and trading platform. We have added a dedicated fourth charter vessel and have increased throughput capabilities at our ammonia import terminal in Rotterdam, which has enabled us to continue our downstream production in Europe and weather volatility in feedstock prices by sourcing record volumes of ammonia from Fertiglobe and the US to our Dutch operations.

Our distribution capabilities, including the ability to manage inventories in relevant locations coupled with a disciplined commercial strategy, allows us to optimise benefits from rising prices such as in the recent India urea tender where

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Q3 2021 Results Report

Fertiglobe represented more than 70% of the total volumes at a price above $890/mt FOB. This bodes well for the outlook for in-season sales in the following quarters.

The outlook for our methanol group is also positive in a market that has strong pricing support. Our European plants remain shut because of the high gas prices, but the business has a global distribution network with access to key European and US markets, our US plants are positioned at the low end of the global cost curve and the business is a Clean Fuels leader. We expect improved operational performance at Natgasoline to result in cash dividends to the Group from 2022."

Strong earnings momentum for our nitrogen businesses is underpinned by healthy market fundamentals

OCI's earnings momentum has been underpinned by a number of factors which suggest a structural shift to a multi-yeardemand-driven environment for nitrogen products over the medium term.

• Demand is robust in key import markets with US, Europe, Latin America and India competing for product ahead of the spring season in Q2 2022. The USDA highlights tighter global grains markets in 2022 versus 2021, with strong support for corn in the $5/bushel range.
• Low grain inventory levels and stocks-to-use ratios globally, which need at least 2 years to replenish, amplify the need for nitrogen fertilizers application to ease food security concerns.
• In addition, several key recent events support attractive supply and demand dynamics: ongoing high feedstock prices have significantly raised EU ammonia import demand due to capacity being shut-in; urea export bans from China are limiting the participation of the marginal exporter in future Indian tenders; and, projected new urea capacities are below the level seen over the past five years and start-ups are being delayed.
• Russia, one of the bigger nitrogen exporting countries in the world, also recently announced it will place export quotas on urea and nitrates, which would tighten global nitrogen balances further.
• The US nitrogen outlook remains strong, supported by low inventories and strong demand with higher grains prices driving expanding crop area in the 2022 and 2023 seasons.
• In Europe, nitrates demand is strong with limited pre-buying this season. Sustained production curtailments due to high gas prices could lead to further market tightness in the spring season.
• Globally, higher marginal costs are also providing support to markets, with feedstock prices resetting at higher levels from the low levels in 2020 and providing support for selling prices over the medium-term.

Global recovery to drive significant demand for our industrial products

The ammonia market is structurally tightening over the medium term with limited net capacity additions and higher industrial demand. Further, there is significant upside for ammonia from the expected incremental demand for clean ammonia in new applications across a range of sectors including marine fuel and power, and as a hydrogen carrier.

Melamine markets have continued to tighten driven by strong demand from home renovation and construction markets, tight supply and low global inventories across the supply chain. Quarterly contract prices increased by 20% in Q3 2021 and OCI announced a €750/t increase in October with a further increase of €250/t in November.

The recovery in truck sales and freight activity has continued, which combined with higher urea sales prices, supports an improving trend for OCI's DEF sales in the US for the balance of 2021 and 2022. DEF now represents more than 30% of sales volumes from IFCo and we continue to grow our volumes and strengthen our market position. The higher netbacks for this product enable us to continue to enhance returns for our US nitrogen operations going forward.

Methanol market fundamentals remain positive. US spot and contract prices have been supported by low global inventories, demand continues to recover robustly, and new supply has been delayed and is slow to ramp up. Strong demand is set to

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Q3 2021 Results Report

continue, as operating rates for major derivatives segments particularly with traditional applications are reported to be near maximum rates and provides good visibility on our sales and prices in Q4 and into Q1 2022. In the long term, supply and demand fundamentals are tightening with demand growth expected to exceed capacity growth.

ESG - decarbonization initiatives continue

We continue to make good progress in our efforts to capture value creative opportunities from emerging demand for clean ammonia and methanol, as we evaluate blue and green projects across our platform which fit well in our ESG strategy.

Fertiglobe recently announced a 70,000 metric ton scale-up of blue ammonia capacity through a low-cost debottlenecking program in Abu Dhabi and partnered with ADNOC to sell blue ammonia from the UAE to customers in Japan. Fertiglobe will join ADNOC and ADQ as partner in a new world-scale 1 million metric tons per annum blue ammonia project at TA'ZIZ in Ruwais. In addition, we entered into an agreement with Scatec and the Sovereign Fund of Egypt to develop an electrolyzer facility of up to 100MW to produce green hydrogen as feedstock for up to 90,000 metric tons of additional green ammonia.

Dividend policy

In 2022, OCI intends to adopt a semi-annual dividend distribution policy, with a first dividend expected to be announced in February and paid in April 2022. Going forward OCI intends to maintain a robust and disciplined capital allocation policy designed to balance the availability of funds and excess free cash flow for dividend distribution while pursuing value accretive ESG and other growth opportunities, all within a target of 2x net leverage through the cycle and an investment grade debt profile.

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Q3 2021 Results Report

Consolidated Financial Results at a Glance1

Financial Highlights ($ million unless otherwise stated)

	$ million unless otherwise stated		Q3'21	Q3'20	%	9M'21	9M'20	%
	Revenue		1,537.3	751.9	104%	4,119.8	2,438.4	69%
	Gross Profit		272.7	80.4	239%	1,017.7	284.4	258%
	Gross profit margin		17.7%	10.7%		24.7%	11.7%
	Adjusted EBITDA2		500.6	191.5	161%	1,487.8	603.9	146%
	EBITDA		521.4	171.6	204%	1,454.9	569.2	156%
	EBITDA margin		33.9%	22.8%		35.3%	23.3%
	Adjusted net income (loss) attributable to shareholders2		56.1	(66.7)	nm	271.6	(168.6)	nm
	Reported net income (loss) attributable to shareholders		30.8	(37.0)	nm	275.7	(120.8)	nm
	Earnings / (loss) per share ($)
	Basic earnings per share		0.147	(0.176)		1.314	(0.576)
	Diluted earnings per share		0.146	(0.176)		1.306	(0.576)
	Adjusted earnings per share2)		0.267	(0.318)		1.294	(0.803)
	Capital expenditure		76.0	47.3	61%	163.6	211.1	(23%)
	Of which: Maintenance Capital Expenditure		64.6	46.4	39%	150.0	189.0	(21%)
	Free cash flow2, 3		81.9	(16.3)	nm	805.2	65.5	1,129%
			30-Sep'21	31-Dec'20
	Total Assets		9,040.5	9,097.0	(0%)
	Gross Interest-Bearing Debt		3,799.5	4,416.6	(14%)
	Net Debt		3,045.9	3,730.3	(18%)
			Q3'21	Q3'20	%	9M'21	9M'20	%
	Sales volumes ('000 metric tons)
	OCI Product Sold4
		2,528.8	2,848.9	(11%)	8,737.4	8,851.4	(1%)
	Third Party Traded		879.8	502.4	75%	2,222.5	1,738.1	28%
	Total Product Volumes		3,408.6	3,351.3	2%	10,959.9	10,589.5	3%

1. Unaudited
2. OCI presents certain financial measures when discussing OCI's performance, that are not measures of financial performance under IFRS. These non- IFRS measures of financial performance (also known as non-GAAP or alternative performance measures) are presented because management considers them important supplemental measures of OCI's performance and believes that similar measures are widely used in the industry in which OCI operates.
3. Free cash flow is an APM that is calculated as cash from operations less maintenance capital expenditures less distributions to non-controlling interests plus dividends from equity accounted investees, and before growth capital expenditures and lease payments.
4. Fully consolidated, not adjusted for OCI ownership stake in plants, except OCI's 50% share of Natgasoline volumes.

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Q3 2021 Results Report

Operational Highlights

Highlights

• 12-monthrolling recordable incident rate to 30 September 2021 0.38 incidents per 200,000 manhours
• OCI achieved a 161% increase in adjusted EBITDA in Q3 2021 compared to Q3 2020 due to significantly higher selling prices year-on-year for all products offset by lower volumes due to several turnarounds during the quieter summer period and the negative impact from higher gas prices in Europe and the US
• Own product sales volumes were lower at 2.5 million metric tons during Q3 2021:
• • Total own-produced nitrogen product volumes were down 2%, due to turnarounds at IFCo in the US and a urea line at EFC in Egypt, partially offset by growth in ammonia, urea and CAN
  • Fertiglobe total own-produced volumes increased 21%, driven by an increase in both ammonia and urea volumes
  • Total own-produced methanol sales volumes declined 46% due to planned turnarounds at Natgasoline and limited production from BioMCN partially offset by growth in OCI Beaumont volumes
• Selling prices improved significantly year-on-year for all products compared to both Q3 2020 and Q2 2020
• In Europe, significantly higher gas prices in Q3 2021 versus Q3 2020 resulted in a negative impact of c.$103 million
• In the US higher gas prices in Q3 2021 compared to a year ago resulted in a negative impact of around $32 million

Product Sales Volumes ('000 metric tons)

'000 metric tons	Q3 2021		Q3 2020	%	9M 2021	9M 2020	%
Own Product
Ammonia	542.4	388.5	40%	1,624.3	1,276.8	27%
Urea	1,091.2	933.8	17%	3,334.0	3,290.9	1%
Calcium Ammonium Nitrate (CAN)	250.5	240.3	4%	897.4	1,081.1	(17%)
Urea Ammonium Nitrate (UAN)	218.4	479.6	(54%)	942.1	1,315.7	(28%)
Total Fertilizer	2,102.5	2,042.3	3%	6,797.8	6,964.4	(2%)
Melamine	29.7	47.9	(38%)	96.7	107.6	(10%)
DEF	88.0	185.9	(53%)	424.7	455.2	(7%)
Total Nitrogen Products	2,220.2	2,276.0	(2%)	7,319.2	7,527.3	(3%)
Methanol1)	308.6	572.9	(46%)	1,418.2	1,324.2	7%
Total Own Product Sold	2,528.8	2,848.9	(11%)	8,737.4	8,851.4	(1%)
Traded Third Party
Ammonia	65.0	31.6	106%	186.2	176.2	6%
Urea	320.0	179.3	78%	1,042.4	635.4	64%
UAN	11.1	6.3	76%	31.6	18.7	69%
Methanol	216.0	35.2	514%	323.0	223.6	44%
AS	110.5	183.8	(40%)	343.3	512.0	(33%)
DEF	157.2	66.2	137%	296.0	172.2	72%
Total Traded Third Party	879.8	502.5	75%	2,222.5	1,738.1	28%
Total Own Product and Traded Third Party	3,408.6	3,351.4	2%	10,959.9	10,589.6	3%

1. Including OCI's 50% share of Natgasoline volumes

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